EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
USFREIGHTWAYS CORPORATION
A DELAWARE CORPORATION,
ZEUS ACQUISITION CORPORATION
A MINNESOTA CORPORATION
AND
TRANSPORT CORPORATION OF AMERICA, INC.
A MINNESOTA CORPORATION
DATED AS OF JANUARY 17, 2000
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 THE MERGER 6
1.1. Effective Time of the Merger.......................................6
1.2. Closing............................................................6
1.3. Effects of the Merger..............................................6
1.4. Directors and Officers.............................................7
ARTICLE 2 CONVERSION OF SECURITIES...........................................7
2.1. Conversion of Capital Stock........................................7
2.2. Exchange Of Certificates...........................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRANSPORT.......................10
3.1. Organization......................................................10
3.2. Transport Capital Structure.......................................10
3.3. Authority and Status..............................................12
3.4. No Conflict; Required Filings and Consents........................12
3.5. SEC Filings; Financial Statements; Books and Records..............13
3.6. Recent Events.....................................................13
3.7. Undisclosed Liabilities...........................................15
3.8. Tax Matters.......................................................15
3.9. Title and Condition of Properties.................................17
3.10. Intellectual Property.............................................18
3.11. Contracts.........................................................19
3.12. Notes and Accounts Receivable.....................................20
3.13. Litigation........................................................20
3.14. Employees; Employment Matters.....................................21
3.15. Employee Benefit Plans............................................21
3.16. Unlawful Payments.................................................24
3.17. Compliance with Laws..............................................24
3.18. Insurance.........................................................24
3.19. Environment, Health and Safety....................................25
3.20. Bank Accounts.....................................................26
3.21. Potential Conflicts of Interest...................................27
3.22. Pooling of Interests..............................................27
3.23. No Special Shareholder Rights.....................................27
3.24. Registration Statement; Proxy Statement/Prospectus................27
3.25. Compliance with MBCA..............................................28
3.26. Year 2000 Compliance..............................................28
3.27. Transport Rights Agreement........................................28
3.28. No Existing Discussions...........................................28
3.29. Opinion of Financial Advisor......................................28
3.30. Disclosure........................................................28
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF USF AND SUB.....................28
4.1. Organization......................................................29
4.2. USF Capital Structure.............................................29
4.3. Authority and Status..............................................30
4.4. No Conflict; Required Filings and Consents........................30
4.5. SEC Filings; Financial Statements.................................30
4.6. Registration Statement; Proxy Statement/Prospectus................31
4.7. Tax Representations...............................................31
4.8. Complete Disclosure...............................................32
4.9. Undisclosed Liabilities...........................................32
4.10. Litigation........................................................33
4.11. Compliance with Laws..............................................33
4.12. Pooling of Interests..............................................33
ARTICLE 5 COVENANTS PRIOR TO CLOSING........................................33
5.1. Conduct of Operations.............................................33
5.2. Prohibited Activities.............................................34
5.3. Covenants of USF..................................................36
5.4. Access to Records and Premises....................................36
5.5. Notice of Changes.................................................36
5.6. No Solicitation...................................................37
5.7. Proxy Statement/Prospectus; Registration Statement................37
5.8. Consents..........................................................38
5.9. Shareholders Meeting..............................................38
5.10. Public Disclosure.................................................38
5.11. Tax-Free Reorganization...........................................38
5.12. Pooling Accounting................................................39
5.13. Update Disclosure; Breaches.......................................39
5.14. Rule 145 Letter...................................................39
5.15. Nasdaq Quotation..................................................39
5.16. Brokers or Finders................................................39
5.17. Indemnification of Directors and Officers.........................40
5.18. Additional Agreements; Reasonable Efforts.........................40
5.19. Stock Option Agreements...........................................40
5.20. Employment Agreement..............................................40
5.21. Termination of Change in Control Severance Agreements.............40
5.22. Trading Prohibitions..............................................41
5.23. Legal Conditions to Merger........................................41
5.24. Voting Agreement..................................................41
5.25. HSR Filing........................................................41
5.26. Stock Options and Employee Benefits...............................41
ARTICLE 6 CONDITIONS TO MERGER..............................................42
6.1. Conditions to Each Party's Obligation to Effect the Merger........42
6.2. Additional Conditions to Obligations of USF.......................43
6.3. Additional Conditions to Obligations of Transport.................43
ii
6.4. Closing...........................................................44
ARTICLE 7 TERMINATION.......................................................45
7.1. Termination.......................................................45
7.2. Effect of Termination.............................................47
7.3. Fees and Expenses.................................................47
7.4. Amendment.........................................................48
7.5. Extension; Waiver.................................................48
ARTICLE 8 MISCELLANEOUS PROVISIONS..........................................49
8.1. Nonsurvival of Representations, Warranties and Agreements.........49
8.2. No Third Party Beneficiaries......................................49
8.3. Entire Agreement..................................................49
8.4. Succession and Assignment.........................................49
8.5. Counterparts......................................................49
8.6. Notices...........................................................49
8.7. Governing Law; Exclusive Jurisdiction.............................50
8.8. Amendments and Waivers............................................50
8.9. Severability......................................................50
8.10. Construction......................................................50
8.11. Incorporation of Exhibits and Schedules...........................51
8.12. Remedies..........................................................51
8.13. No Agreement Until Executed.......................................51
8.14. Enforcement Expenses..............................................51
8.15. Directly or Indirectly............................................51
8.16. Time of the Essence...............................................51
iii
EXHIBITS
Transport Disclosure Schedule
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Schedule 2.1 Holders of Put Option
Schedule 3.1 Organization
Schedule 3.2 Transport Capital Structure
Schedule 3.4 No Conflict; Required Filings and Consents
Schedule 3.5(d) SEC Filings; Financial Statements; Books and Records
Schedule 3.6 Recent Events
Schedule 3.8 Certain Tax Matters
Schedule 3.9 Title and Condition of Properties
Schedule 3.11 Contracts
Schedule 3.12 Notes and Accounts Receivable
Schedule 3.13 Litigation
Schedule 3.14 Employees; Employment Matters
Schedule 3.15 Employee Benefit Plans
Schedule 3.18 Insurance
Schedule 3.19 Environmental, Health and Safety
Schedule 3.20 Bank Accounts
Schedule 3.21 Conflicts of Interest
Schedule 3.23 Special Shareholder Rights
Exhibits
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Exhibit A Form of Rule 145 and Pooling Letter
Exhibit B Form of Employment Agreement
Exhibit C Form of Opinion of Transport's Counsel
Exhibit D Form of Opinion of USF's Counsel
iv
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") entered into as
of January 17, 2000 ("AGREEMENT DATE"), by and among USFreightways Corporation,
a Delaware corporation ("USF"), Zeus Acquisition Corporation, a Minnesota
corporation ("SUB") and a wholly-owned subsidiary of USF and Transport
Corporation of America, Inc., a Minnesota corporation ("TRANSPORT"). Each of
USF, Sub and Transport is referred to herein individually as a "PARTY" and
collectively as the "PARTIES."
RECITALS
A. The Boards of Directors of USF, Sub and Transport deem it
advisable and in the best interests of each corporation and its respective
stockholders or shareholders, as applicable, that USF and Transport combine in
order to advance the long-term business strategies, goals and interests of USF
and Transport;
B. The combination of USF and Transport shall be effected by the
terms of this Agreement through a transaction in which Sub will merge with and
into Transport, Transport will be the surviving corporation and will become a
wholly-owned subsidiary of USF, and the shareholders of Transport will become
stockholders of USF (the "MERGER");
C. The parties mutually intend that this Agreement will constitute a
plan of reorganization within the meaning of Section 368 of the Internal Revenue
Code of 1986, as amended (the "CODE"), and mutually intend for the Merger to
qualify as a reorganization under the provisions of Section 368 of the Code; and
D. The parties intend to cause the Merger to be accounted for as a
pooling of interests pursuant to APB Opinion No. 16, Staff Accounting Series
Releases 130, 135 and 146 and Staff Accounting Bulletins Topic Two.
NOW, THEREFORE, in consideration of the foregoing Recitals, and the
mutual promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the Parties hereby agree as follows:
DEFINITIONS
"AFFILIATE" means, with respect to any particular Person, any other
Person controlling, controlled by or under common control with such Person,
whether by ownership or control of voting securities, by contract or otherwise.
"BASIS" means any past or present fact, circumstance, status,
condition, activity, practice, plan, occurrence, event, action, failure to act,
or transaction that forms or could reasonably be expected to form the basis for
any specified consequence.
"BUSINESS DAY" means a Monday through Friday on which banks are
generally open for business in Illinois and Minnesota.
"ENVIRONMENTAL, HEALTH AND SAFETY LAWS" means all applicable
Federal, state, foreign and local laws, rules, regulations, relating to the
protection of health, safety and the environment, in each case as amended
including, without limitation, the Federal Water Pollution Control Act (33
U.S.C. ss. 1251 et seq.),
Resource Conservation and Recovery Act ("RCRA"; 42 U.S.C. ss. 6901 et seq.),
Safe Drinking Water Act (42 U.S.C. ss. 3000(f) et. seq.), Toxic Substances
Control Act (15 U.S.C. ss. 2601 et. seq.), Clean Air Act (42 U.S.C. ss. 7401 et.
seq.), Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"; 42 U.S.C. ss. 9601 et. seq.), together with all regulations
promulgated thereunder and any applicable judicial or administrative
interpretations of such laws, rules or regulations.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" means any corporation or other business entity
that is included in a controlled group of corporations within which Transport is
also included, as provided in Section 414(b) of the Code; or which is a trade or
business under common control with Transport, as provided in Section 414(c) of
the Code; or which constitutes a member of an affiliated service group within
which Transport is also included, as provided in Section 414(m) of the Code or
which is required to be aggregated with Transport pursuant to regulations issued
under Section 414(o) of the Code. All ERISA Affiliates are listed on the
Transport Disclosure Schedule.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FTC RULES" means the rules promulgated by the Federal Trade
Commission pursuant to the HSR Act.
"GAAP" means generally accepted accounting principles in the United
States consistently applied.
"HAZARDOUS MATERIAL" means
(i) any pollutant, contaminant, pesticide, solid waste
or hazardous or extremely hazardous, dangerous or toxic waste,
substance, chemical, or material within the meaning of the
Environmental, Health and Safety Laws, including but not limited to
(A) any "hazardous substance" as defined by CERCLA and all
amendments thereto and reauthorizations thereof; and (B) any
"hazardous waste" as defined by RCRA and all amendments thereto and
reauthorizations thereof;
(ii) even if not prohibited, limited or regulated by
Environmental, Health and Safety Laws, any pollutant, contaminant,
hazardous, dangerous or toxic chemical, material, waste or any other
substance, including without limitation, any industrial process
pollution control waste (whether or not hazardous within the meaning
of RCRA) which could reasonably be expected to pose a hazard to the
environment or the health and safety of any occupant, user or third
party at the Properties (as defined in Section 3.19) or any owner,
operator, occupant, user, tenant or third party at properties near
(but necessarily contiguous to) the Properties, or could presently
or at any time in the future reasonably be expected to cause a
detriment to, or impair the beneficial use and/or economic value of
the Properties, or any portion thereof in any material respect;
(iii) petroleum, crude oil or any fraction thereof;
(iv) natural gas, natural gas liquids, liquified natural
gas (all the foregoing collectively called "NATURAL GAS PRODUCTS"),
synthetic gas or mixtures of Natural Gas Products and synthetic gas;
(v) any radioactive material, including any source,
special nuclear or byproduct material, however produced, as defined
in the Atomic Energy Act, 42 U.S.C. ss.2011 et seq., the
Nuclear Waste Policy Act of 1982, 42 U.S.C. ss.10101 et seq., and
amendments thereto and reauthorizations thereof;
(vi) asbestos-containing materials in any form or
condition; or
(vii) chemicals subject to the OSHA Hazard Communication
Standard, 29 C.F.R. Section 1910.1200 et seq.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvement Act of
1976, as amended.
"INDEBTEDNESS" of any Person means all obligations of such Person
which should be classified upon a balance sheet of such Person as liabilities of
such entity, and in any event, shall include (i) all obligations of such Person
for borrowed money or which has been incurred in connection with the acquisition
of property or assets; (ii) obligations secured by any Security Interest upon
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations; (iii) obligations created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of the property; and (iv)
that portion of capitalized lease obligations properly classified as a liability
on a balance sheet in accordance with GAAP.
"KEY EMPLOYEE" means any officer, manager or any person employed by
Transport or any of its Subsidiaries whose annual salary exceeds $100,000.
"KNOWLEDGE" means the knowledge that any executive officer of
Transport acting as a reasonable person under similar circumstances would have
after investigation and inquiry.
"LIABILITY" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and whether due or
to become due), obligation or Indebtedness, including, any liability for Taxes.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
of Transport and its Subsidiaries, consistent with past custom and practice of
Transport and its Subsidiaries (including with respect to quantity and
frequency).
"PERSON" means any individual, trust, corporation, partnership,
limited partnership, limited liability company or other business association or
entity, court, governmental body or governmental agency.
"PLANS" means: (i) all employee benefit plans as defined in Section
3(3) of ERISA; and (ii) all other pension, retirement, group insurance,
severance pay, deferred compensation, excess or supplemental benefit, vacation,
stock, stock option, fringe benefit and incentive plans, contracts, schemes,
programs, funds, commitments, or arrangements of any kind, whether written or
oral, qualified or nonqualified, funded or unfunded, and including any that have
been frozen or terminated, which pertain to any employee, former employee,
partner, director, officer, shareholder, consultant, or independent contractor
of Transport or any ERISA Affiliate of Transport and (x) to which Transport or
any ERISA Affiliate of Transport are or has been a party or by which any of them
is or has been bound since January 1, 1990 or (y) with respect to which
Transport or any ERISA Affiliate of Transport have made any payments or
contributions since January 1, 1990 or (z) to which Transport or any ERISA
Affiliate of Transport may otherwise have any liability (including any such plan
or arrangement formerly maintained by Transport or any ERISA Affiliate of
Transport).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY INTEREST" means any mortgage, pledge, security interest,
charge, lien or other encumbrance or right of any third party.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity, whether incorporated or unincorporated, of which (i) such Person
or any other Subsidiary of such Person is a general partner (excluding
partnerships, the general partnership interests of which held by such Person or
any Subsidiary of such Person do not have a majority of the voting interest in
such partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
Board of Directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries.
"TAX" or "TAXES" means any Federal, state, local, or foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation and value added, transfer, franchise, withholding,
payroll recapture, employment, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such amounts and all
obligations under any agreements or arrangements with any other Person with
respect to such amounts and including any Liability for taxes of a predecessor
entity.
"TAX RETURN" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"USF MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, operations, employee or customer relations, properties, assets
(including intangible assets), liabilities (contingent or otherwise), financial
condition or results of operations of USF and its Subsidiaries taken as a whole.
"TRANSPORT MATERIAL ADVERSE EFFECT" means a material adverse effect
upon the business, operations, employee or customer relations, properties,
assets (including intangible assets), liabilities (contingent or otherwise),
financial condition or results of operations of Transport and its Subsidiaries
taken as a whole.
INDEX TO CERTAIN OTHER DEFINED TERMS
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TERM SECTION REFERENCE
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Affiliate 5.14
Alternative Transaction 7.3(g)
Approval 5.23
Articles of Merger 1.1
Certificate 2.2(b)
Certificates 2.2(b)
Closing 1.2
Closing Date 1.2
COBRA 3.14(b)
Competing Offer 5.6(a)
Confidentiality Agreement 5.6(a)
Constituent Corporations 1.3(a)
TERM SECTION REFERENCE
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Contracts 3.11
Deutsche Banc Alex. Brown 3.29
Deutsche Banc Alex. Brown Engagement Letter 5.16
Dissenters' Shares 2.1(c)
Dissenting Shareholder 2.1(c)
Effective Time 1.1
Exchange Act 3.4(b)
Exchange Agent 2.2(a)
Exchange Fund 2.2(a)
Exchange Numbers 2.1(b)
Transport Financial Statements 3.5(b)
Governmental Entity 3.4(b)
HSR Act 3.4(b)
Indemnified Parties 5.17(a)
Leased Premises 3.9(b)
MBCA 1.1
Most Recent Balance Sheet 3.5(b)
Most Recent Fiscal Year End 3.5(b)
Owned Real Estate 3.9(a)
Pension Plan 3.15(b)
Preferred Proposal 5.6(a)
Prior Owned or Leased Real Estate 3.19(c)
Properties 3.19(a)
Proxy Statement 3.24
Registration Statement 3.24
Rule 145 5.14
Rule 145 and Pooling Letter 5.14
SEC 3.4(b)
Securities Act 3.2(b)
Surviving Corporation 1.3(a)
Systems 3.26
Termination Fee 7.3(d)
Third Party 7.3(f)
Transport Common Stock 3.2(a)
Transport Disclosure Schedule 3.0
Transport Intellectual Property Rights 3.10(a)
Transport Junior Preferred Stock 3.2(a)
Transport Preferred Stock 3.2(a)
Transport Put Option 3.2(a)
Transport Rewards Plan 3.2(a)
Transport Rights Agreement 3.2(a)
Transport SEC Reports 3.5(a)
Transport Shareholders Meeting 3.24
Transport Stock Option 2.1(d)
Transport Stock Option Plans 2.1(d)
Transport Stock Purchase Plan 3.2(a)
USF Common Stock 4.2(a)
USF Disclosure Schedule 4.0
USF Financial Statements 4.5(b)
USF Preferred Stock 4.2(a)
TERM SECTION REFERENCE
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USF Rights Agreement 4.2(a)
USF SEC Reports 4.5(a)
USF Stock Option Plans 4.2(a)
USF Stock Purchase Plan 4.2(a)
WARN 3.14(b)
Welfare Plans 3.15(c)(ii)
Y-2000 Compliant 3.26
ARTICLE
1
THE MERGER
1.1. EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, articles of merger (the "ARTICLES OF MERGER") in such form as is
required by the relevant provisions of the Minnesota Business Corporation Act
(the "MBCA") shall be duly prepared, executed and acknowledged by Transport and
Sub and such other parties as may be appropriate, and thereafter delivered to
the Secretary of State of Minnesota for filing, as provided in the MBCA, on the
Closing Date (as defined in Section 1.2). The Merger shall become effective upon
the filing of the Articles of Merger with the Secretary of State of Minnesota or
such later time as may be provided in the Articles of Merger (the "EFFECTIVE
TIME").
1.2. CLOSING. The closing of the Merger (the "CLOSING") will take
place at 10:00 a.m., Central Time, on a date to be specified by USF and
Transport, which shall be no later than the second Business Day after the
satisfaction or, if permissible, waiver of the conditions set forth in Article 6
(the "CLOSING DATE"), at the offices of Robins, Kaplan, Miller & Ciresi L.L.P.,
2800 LaSalle Plaza, 800 LaSalle Avenue, Minneapolis, Minnesota 55402, unless
another date or place is agreed to in writing by USF and Transport.
1.3. EFFECTS OF THE MERGER.
(a) At the Effective Time, (i) the separate existence of Sub
shall cease and Sub shall be merged with and into Transport (Sub and Transport
are sometimes referred to herein as the "CONSTITUENT CORPORATIONS" and Transport
is sometimes referred to herein as the "SURVIVING CORPORATION"), (ii) the
Articles of Incorporation of Transport as in effect immediately prior to the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation, except that Article III of the Articles of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The total number of
shares of all classes of stock which the Corporation shall have authority to
issue is 1,000, all of which shall consist of Common Stock, par value $.01 per
share" and so that all series of Transport Preferred Stock (as defined in
Section 3.2) shall be extinguished and (iii) the Bylaws of Transport as in
effect immediately prior to the Effective Time shall be the Bylaws of the
Surviving Corporation.
(b) At and after the Effective Time, the effects of the Merger
shall be as provided in the applicable provisions of the MBCA. Without limiting
the generality of the foregoing, and subject thereto, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises of a public as
well as of a private nature, and be subject to all the restrictions,
disabilities and duties of each of the Constituent Corporations; and all and
singular rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, and all debts due to
either of the Constituent Corporations on whatever account, as well as for stock
subscriptions and all other things in action or belonging to each of the
Constituent Corporations, shall be vested in the Surviving Corporation,
and all property, rights, privileges, powers and franchises, and all and every
other interest shall be thereafter as effectually the property of the Surviving
Corporation as they were of the Constituent Corporations, and the title to any
real estate vested by deed or otherwise, in either of the Constituent
Corporations, shall not revert or be in any way impaired; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and all debts, liabilities and
duties of the Constituent Corporations shall thereafter attach to the Surviving
Corporation, and may be enforced against it to the same extent as if such debts
and liabilities had been incurred by it.
1.4. DIRECTORS AND OFFICERS. Beginning as of the Effective Time, the
directors of the Surviving Corporation shall be John Campbell Carruth,
Christopher L. Ellis and Robert J. Meyers to hold office in accordance with the
Articles of Incorporation and Bylaws of the Surviving Corporation until their
respective successors are duly elected or appointed. Beginning as of the
Effective Time, the officers of the Surviving Corporation shall be Robert J.
Meyers, President and Chief Executive Officer, and such other officers as
designated by the Board to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation until their respective
successors are duly elected and appointed.
ARTICLE
2
CONVERSION OF SECURITIES
2.1. CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Transport Common Stock (as defined in Section 3.2) or capital stock of
Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, $.01 per share, of the Surviving
Corporation.
(b) EXCHANGE OF USF COMMON STOCK FOR TRANSPORT COMMON STOCK.
Subject to Section 2.2, all of the issued and outstanding shares of Transport
Common Stock as of the Effective Time shall be exchanged for the right to
receive (i) .4171981 shares of USF Common Stock (as defined in Section 4.2) for
each share of Transport Common Stock with the Transport Put Option (as defined
in Section 3.2) held by the holders identified on Schedule 2.1 of the Transport
Disclosure Schedule (which number of shares of USF Common Stock to be issued
would be 481,864 if the Effective Date were the Agreement Date based on
1,155,000 shares of Transport Common Stock issued and outstanding as of the
Agreement Date) and (ii) .4122919 shares of USF Common Stock for each share of
Transport Common Stock held by all other holders of Transport Common Stock
(which number of shares of USF Common Stock to be issued would be 2,952,871 if
the Effective Date were the Agreement Date based on 7,162,088 shares of
Transport Common Stock issued and outstanding as of the Agreement Date)
(collectively the "EXCHANGE NUMBERS"). The Exchange Numbers will be adjusted for
the effect of any stock split, reverse split, stock dividend (including any
dividend or distribution of securities convertible into USF Common Stock or Sub
Common Stock), reorganization, recapitalization, or other like change with
respect to USF Common Stock occurring between or with an applicable record date
between the date of this Agreement and the Effective Time and the number of
shares of USF Common Stock issuable shall be increased to reflect any shares of
Transport Common Stock which are issued between the date of this Agreement and
the Effective Time pursuant to the Transport Stock Option Plans (as defined
herein), the Transport Stock Purchase Plan (as defined herein) and the Transport
Rewards Plan. All such shares of Transport Common Stock, when so exchanged,
shall no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive the shares of USF Common Stock and any cash in lieu of fractional shares
of USF Common Stock to be issued or paid in consideration therefor upon the
surrender of such certificate in accordance with Section 2.2, without interest.
(c) DISSENTERS' RIGHTS. The shares of Transport Common Stock
("DISSENTERS' SHARES") held by any shareholder of Transport who has properly
exercised dissenters' rights pursuant to the MBCA (a "DISSENTING SHAREHOLDER")
shall not be converted pursuant to the Merger unless and until the holder
thereof shall have failed to perfect or shall have effectively withdrawn or lost
such holder's rights to dissent from the Merger under the MBCA, and shall be
entitled to receive only the payment provided for by the MBCA. If any such
holder shall fail to perfect or shall have effectively withdrawn or lost the
right to dissent, the Dissenters' Shares held by such Dissenting Shareholder
shall thereupon be treated as though such shares had been converted into shares
of USF Common Stock pursuant to the terms hereof.
(d) TRANSPORT STOCK OPTIONS. At the Effective Time, each
outstanding option to purchase shares of Transport Common Stock (a "TRANSPORT
STOCK Option") under the stock option plans of Transport as amended and dated as
of March 21, 1995 and December 1, 1986, respectively (the "TRANSPORT STOCK
OPTION PLANS") shall be assumed by USF and shall be deemed to constitute an
option to acquire, on the same terms and conditions as were applicable under the
Transport Stock Option, the same number of shares of USF Common Stock as the
holder of such Transport Stock Option would have been entitled to receive
pursuant to the Merger had such holder exercised such option in full immediately
prior to the Effective Time (as if he were eligible to so exercise, rounded down
to the nearest whole share), without any vesting restrictions and at a price per
share (rounded up to the nearest whole cent) equal to (i) the aggregate exercise
price for the shares of Transport Common Stock otherwise purchasable pursuant to
such Transport Stock Option, divided by (ii) the number of full shares of USF
Common Stock deemed purchasable pursuant to such USF Stock Option in accordance
with the foregoing; provided, however, that in the case of any Transport Stock
Option to which Section 422 of the Code applies, the option price, the number of
shares purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in order to comply with Section
424(a) of the Code.
2.2. EXCHANGE OF CERTIFICATES. The procedures for exchanging
outstanding shares of Transport Common Stock for USF Common Stock pursuant to
the Merger shall be as follows:
(a) EXCHANGE AGENT. As of the Effective Time, USF shall
deposit with Harris Trust and Savings Bank (the "EXCHANGE AGENT"), for the
benefit of the holders of shares of Transport Common Stock, certificates
representing the shares of USF Common Stock issuable pursuant to Section 2.1 in
exchange for outstanding shares of Transport Common Stock together with the cash
necessary for the purpose of paying the fractional shares pursuant to Section
2.2(e) (such shares of USF Common Stock, together with any dividends or
distributions with respect thereto, and cash amounts being hereinafter referred
to as the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable
after the Effective Time, the Exchange Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Transport Common Stock (each a "CERTIFICATE"
and, collectively, the "CERTIFICATES") and which shares were converted pursuant
to Section 2.1 into the right to receive shares of USF Common Stock (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as USF and Transport may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of USF Common Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by USF, together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor (x) a certificate representing that number of
whole shares of USF Common Stock which such holder has the right to receive
pursuant to the provisions of this Section 2.2(b) and (y) as to any fractional
share, a check representing the cash consideration to which such holder shall
have become entitled pursuant to Section 2.2(e), and the Certificate so
surrendered shall immediately be canceled. In the event of a transfer of
ownership of Transport Common Stock which is not registered in the transfer
records of Transport, a certificate representing the proper number of shares of
USF Common Stock may be issued to a transferee if the Certificate representing
such Transport Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and by evidence that
any applicable stock transfer taxes have been paid or are not payable. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the certificate representing shares of USF Common
Stock and cash in lieu of any fractional shares of USF Common Stock as
contemplated by this Section 2.2. The instructions for effecting the surrender
of the Certificates shall set forth procedures that must be taken by the holder
of any Certificate that has been lost, destroyed or stolen. It shall be a
condition to the right of such holder to receive a certificate representing
shares of USF Common Stock that the Exchange Agent shall have received, along
with the letter of transmittal, a duly executed lost certificate affidavit,
including an agreement to indemnify USF, signed exactly as the name or names of
the registered holder or holders appeared on the books of Transport immediately
prior to the Effective Time, together with a customary bond and such other
documents as USF or the Exchange Agent may reasonably require in connection
therewith.
(c) DISTRIBUTIONS WITH RESPECT TO EXCHANGED SHARES. No
dividends or other distributions declared or made after the Effective Time with
respect to USF Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Certificate with respect to the shares
of USF Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to subsection (e)
below until the holder of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates representing
whole shares of USF Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of any cash payable in lieu of a
fractional share of USF Common Stock to which such holder is entitled pursuant
to subsection (e) below and the amount of dividends or other distributions with
a record date after the Effective Time previously paid with respect to such
whole shares of USF Common Stock and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of USF Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN TRANSPORT COMMON STOCK. All
shares of USF Common Stock issued upon the surrender for exchange of shares of
Transport Common Stock in accordance with the terms hereof (including any cash
paid pursuant to subsection (e) of this Section 2.2) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Transport Common Stock, subject, however to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a record
date prior to the Effective Time which may have been declared or made by
Transport on such shares of Transport Common Stock in accordance with the terms
of this Agreement on or prior to the date hereof and which remain unpaid at the
Effective Time and there shall be no further registration of transfers which
occurred after the Effective Time on the stock transfer books of the Surviving
Corporation of the shares of Transport Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged as provided in this Section 2.2.
(e) NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of USF Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to exercise any rights of a stockholder of USF.
Notwithstanding any other provision of this Agreement, each holder of shares of
Transport Common Stock exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of USF Common Stock (after taking
into account all Certificates delivered by such holder and after aggregating all
fractional shares of USF Common Stock to be received by such holder) shall
receive, in lieu thereof, cash (without interest) in an amount equal to such
fractional part of a share of USF Common Stock multiplied by the last reported
sale price of USF Common Stock, as reported on the Nasdaq National Market, on
the trading day immediately preceding the date of the Effective Time.
(f) TERMINATION OF EXCHANGE PERIOD. Any portion of the
Exchange Fund which remains undistributed to the shareholders of Transport for
one (1) year after the Effective Time shall be delivered to USF, and any
shareholders of Transport who have not previously complied with this Section 2.2
shall thereafter look only to USF for payment of their claim for USF Common
Stock, any cash in lieu of fractional shares of USF Common Stock and any
dividends or distributions with respect to Transport Common Stock or USF Common
Stock.
(g) NO LIABILITY. Neither USF nor Transport shall be liable to
any holder of shares of Transport Common Stock or USF Common Stock, as the case
may be, for such shares (or dividends or distributions with respect thereto)
delivered to a public official as required by any applicable abandoned property,
escheat or similar law.
ARTICLE
3
REPRESENTATIONS AND WARRANTIES OF TRANSPORT
Transport represents and warrants to USF and Sub that the statements
contained in this Article 3 are true and correct, except as set forth in the
disclosure schedule delivered by Transport to USF (the "TRANSPORT DISCLOSURE
SCHEDULE"). The Transport Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
3, and the disclosure in any paragraph shall qualify any relevant paragraph in
this Article 3 to the extent that it is reasonably apparent that such disclosure
pertains to the representations and warranties in such other paragraph.
3.1. ORGANIZATION. Each of Transport and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the respective jurisdiction of its incorporation, has all requisite corporate
power to own, lease and operate its property and to carry on its business as now
being conducted and as proposed to be conducted, and is duly qualified and/or
licensed to do business and is in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a Transport
Material Adverse Effect. Except as set forth on Schedule 3.1 of the Transport
Disclosure Schedule, neither Transport nor any of its Subsidiaries, directly or
indirectly, owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation, partnership, joint
venture or other business association or entity, excluding securities in any
publicly traded company held for investment by Transport and comprising less
than one percent (1%) of the outstanding stock of such company.
3.2. TRANSPORT CAPITAL STRUCTURE.
(a) The authorized capital stock of Transport consists of
15,000,000 shares of common stock, par value $0.01 per share ("TRANSPORT COMMON
STOCK") and 150,000 shares of Preferred Stock, par value $0.01 per share
("TRANSPORT PREFERRED STOCK"). As of January 10, 2000, (i) 8,317,088
shares of Transport Common Stock were issued and outstanding including 1,155,000
shares of Transport Common Stock with a put option ("TRANSPORT PUT OPTION") all
of which are duly authorized, validly issued, fully paid and nonassessable, (ii)
725,000 shares of Transport Common Stock were reserved for issuance of stock
options under the Transport Stock Option Plans, of which there are options
outstanding entitling the optionees thereunder upon valid exercise to acquire in
the aggregate 132,677 shares of Transport Common Stock at a weighted average
exercise price of $12.438 per share, (iii) no shares of Transport Common Stock
were held in the treasury of Transport or by any Subsidiary of Transport, (iv)
100,000 shares of Transport Common Stock were reserved for issuance under the
Transport Stock Purchase Plan effective as of February 1, 1996 ("TRANSPORT STOCK
PURCHASE PLAN"), of which 21,929 shares have been issued and are outstanding,
(v) 100,000 shares of Transport Common Stock were reserved for issuance under
the Transport Rewards Program - Stock Component ("TRANSPORT REWARDS PLAN"), of
which 7,471 shares have been issued and are outstanding and (vi) 75,000 shares
of Transport Series A Junior Participating Preferred Stock ("TRANSPORT JUNIOR
PREFERRED STOCK") were reserved for issuance under the Rights Agreement, as
amended, dated as of February 25, 1997 between Transport and Norwest Bank
Minnesota, N.A., as Rights Agent (the "TRANSPORT RIGHTS AGREEMENT"). No change
in such capitalization has occurred since such date other than the exercise and
termination of stock options outstanding or pursuant to the terms of the
Transport Stock Purchase Plan or the Transport Rewards Plan. As of the date of
this Agreement, no shares of Transport Junior Preferred Stock are issued and
outstanding. All shares of Transport Common Stock and Transport Junior Preferred
Stock subject to issuance as specified above, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable. Except
as set forth on Schedule 3.2 of the Transport Disclosure Schedule, there are no
obligations, contingent or otherwise, of Transport or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of Transport Common Stock or
the capital stock of any Subsidiary of Transport or make any investment (in the
form of a loan, capital contribution or otherwise) in any such Subsidiary or any
other entity. All of the outstanding shares of capital stock of each of
Transport's Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by Transport free and clear of all
Security Interests, agreements, preemptive rights, and/or limitations in
Transport's voting rights, charges or other restrictions of any nature.
(b) Except as set forth in this Section 3.2 or as reserved for
future grants of options under the Transport Stock Option Plans or future sale
under the Transport Stock Purchase Plan or the Transport Rewards Plan or for the
shares of Transport Junior Preferred Stock reserved for issuance under the
Transport Rights Agreement, there are no equity securities of any class of
Transport or any of its Subsidiaries, or any security exchangeable into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding. Except as set forth in this Section 3.2, there are no options,
warrants, equity securities, calls, rights, commitments or agreements of any
character to which Transport or any of its Subsidiaries is a party or by which
any of them are bound obligating Transport or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of Transport or any of its Subsidiaries or obligating Transport or
any of its Subsidiaries to grant, extend, accelerate the vesting of or enter
into any such option, warrant, equity security, call, right, commitment or
agreement. All Transport Stock Options that are not currently exercisable shall
become exercisable as a result of the consummation of the Merger. To the
Knowledge of Transport, there are no voting trusts, proxies or other agreements
or understandings with respect to the shares of capital stock of Transport. All
of the outstanding Transport Common Stock and Transport Stock Options were
either registered under the Securities Act of 1933, as amended (the "SECURITIES
ACT") or were issued pursuant to valid exemptions from registration. Transport
has taken all actions necessary such that after the Effective Time there will
not exist any rights of any nature granting any Person a right to acquire the
securities of Transport and/or its Subsidiaries.
3.3. AUTHORITY AND STATUS.
(a) The execution, delivery and performance by Transport of
this Agreement and each and every other agreement, document and instrument
provided for herein have been duly authorized and approved by the Board of
Directors of Transport subject only to the approval of the Merger by Transport's
shareholders under applicable provisions of Transport's Articles of
Incorporation and the MBCA. The Board of Directors of Transport has (i)
determined that the Merger is fair to and in the best interests of the
shareholders of Transport and (ii) resolved to submit the Merger to and
recommend approval of the Merger by the shareholders of Transport.
(b) Transport has the corporate power and authority to execute
and deliver this Agreement, to perform hereunder and, upon approval of the
transactions provided for herein by the shareholders of Transport, to consummate
the transactions contemplated hereby without any other corporate or shareholder
approval. Assuming this Agreement and each and every agreement, document or
instrument to be executed, delivered and performed by Transport in connection
herewith are valid and legally binding obligations of USF and Sub, this
Agreement and each and every agreement, document and instrument to be executed,
delivered and performed by Transport in connection herewith constitute or will,
when executed and delivered, constitute the valid and legally binding obligation
of Transport enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally.
3.4. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Transport
does not, and the consummation of the transactions contemplated by this
Agreement will not, (i) conflict with, or result in any violation or breach of,
any provision of the Articles of Incorporation or Bylaws of Transport; (ii)
except as set forth on Schedule 3.4 of the Transport Disclosure Schedule, result
in any violation or breach of, require any consent or approval under, or
constitute (with or without notice or lapse of time, or both) a default (or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of any material benefit) under any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, lease, contract or
other agreement, instrument or obligation to which Transport or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound; or (iii) subject to the consents, approvals, orders,
authorizations, filings and registrations specified in Section 3.4(b), conflict
with or violate any permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Transport or
any of its Subsidiaries or any of their properties or assets.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other Federal, state or local governmental authority or
instrumentality ("GOVERNMENTAL ENTITY") is required by or with respect to
Transport or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the pre-merger notification report under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"); (ii) the filing and declaration of effectiveness of the Registration
Statement of USF (as defined in Section 3.24) with the Securities and Exchange
Commission (the "SEC") in accordance with the Securities Act; (iii) the filing
of the Articles of Merger with the Secretary of State of Minnesota in accordance
with the MBCA; (iv) the filing of the Proxy Statement (as defined in Section
3.24) with the SEC in accordance with the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"); and (v) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable Federal and state securities laws or under any applicable requirement
of any other Governmental Agency.
3.5. SEC FILINGS; FINANCIAL STATEMENTS; BOOKS AND RECORDS.
(a) Transport has filed all forms, each registration
statement, schedule, report, proxy statement and document required to be filed
by Transport with the SEC since January 1, 1996 (collectively, the "TRANSPORT
SEC REPORTS"). The Transport SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact required to be stated in the Transport SEC
Reports or necessary in order to make the statements in the Transport SEC
Reports, in the light of the circumstances under which they were made, not
misleading. None of Transport's Subsidiaries is required to independently file
any forms, reports or other documents with the SEC. Since January 1, 1996,
Transport has made all filings with the SEC in a timely manner as required by
law and no event has occurred that requires an additional filing or any
amendment to a prior filing, except as may be required in connection with the
execution of this Agreement.
(b) Transport has provided USF with the following financial
statements (collectively, the "TRANSPORT FINANCIAL STATEMENTS"): (i) audited
consolidated balance sheet and related consolidated statement of income,
consolidated retained earnings and consolidated statement of cash flows of
Transport and its Subsidiaries as of and for each of the fiscal years ended
December 31, 1996, December 31, 1997 and December 31, 1998 (the "MOST RECENT
FISCAL YEAR END"); and (ii) unaudited balance sheet at September 30, 1999 (the
"MOST RECENT BALANCE SHEET") and related statement of income of Transport as of
and for the nine months ended September 30, 1999. The Transport Financial
Statements including any financial statements contained in the Transport SEC
Reports filed after the date of this Agreement until the Closing, complied or
will comply to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, are or will be correct and
complete in all material respects, have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments which were not or are not material in amount) the consolidated
financial condition and results of operations of Transport and its Subsidiaries
as of the times and for the periods referred to therein.
(c) The accounting records of Transport are and have been
prepared and maintained in form and substance adequate for the preparation of
the Transport Financial Statements in accordance with GAAP consistently applied
throughout the periods covered thereby, and fairly and accurately reflect all of
the assets and Liabilities of Transport and its Subsidiaries and all contracts
and transactions to which Transport and its Subsidiaries are or were parties or
by which the business or assets are or were affected, in each case to the extent
required by GAAP to be stated therein.
(d) Except as set forth on Schedule 3.5(d) of the Transport
Disclosure Schedule, the corporate minute books of each of Transport and its
Subsidiaries, copies of which have been made available to USF, correctly reflect
all resolutions adopted and all other material corporate actions taken at all
meetings or through consents of the directors (including committees thereof) and
consents of the shareholders of Transport and its Subsidiaries.
3.6. RECENT EVENTS. Since the Most Recent Fiscal Year End, Transport
and its Subsidiaries have not experienced or suffered any Transport Material
Adverse Effect. Without limiting the generality of the foregoing, except as
reflected on the Most Recent Balance Sheet or Schedule 3.6 of the Transport
Disclosure Schedule or, except as expressly disclosed in Transport SEC Reports
filed since the Most Recent Fiscal Year End, since the Most Recent Fiscal Year
End, none of Transport and its Subsidiaries have:
(a) sold, leased, transferred or assigned any of their assets,
tangible or intangible, other than in the Ordinary Course of Business for
consideration in excess of $100,000;
(b) accelerated, terminated, modified, canceled or committed
any material breach of any Contract, involving more than $100,000;
(c) canceled, compromised, waived, or released any
Indebtedness, right or claim (or series of related rights and claims) either
involving more than $100,000 or otherwise outside the Ordinary Course of
Business;
(d) granted any license or sublicense of any Transport
Intellectual Property Rights;
(e) experienced any damage, destruction or loss (whether or
not covered by insurance) exceeding $100,000 outside the Ordinary Course of
Business to any of their properties or assets (other than ordinary wear and tear
not caused by neglect);
(f) incurred any Indebtedness for borrowed money or created or
suffered to exist any Security Interest upon any of their material assets
outside the Ordinary Course of Business;
(g) changed the manner in which the business has been
conducted, including, without limitation, collection of accounts receivable or
payment of accounts payable, in any material respect;
(h) changed the accounting principles, methods or practices or
any change in the depreciation or amortization policies or rates;
(i) changed the relationships with any customer, supplier,
contractors or agents which might reasonably be expected to have a Transport
Material Adverse Effect;
(j) issued, sold, or otherwise disposed of any of its capital
stock, or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion or exercise) any of its capital stock, or any
securities convertible or exchangeable into any of its capital stock;
(k) declared, set aside, or paid any dividend or distribution
with respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(l) entered into any transaction, arrangement or contract
with, or distributed or transferred any cash, property or other assets (in each
case involving an amount in excess of $10,000) to, any officer, director,
stockholder, key employee, agent or other insider or Affiliate of Transport or
any of its Subsidiaries (other than wages, salaries and employee or outside
director benefits in the Ordinary Course of Business);
(m) made or committed to make any capital expenditures outside
the Ordinary Course of Business or entered into any other material transaction
outside the Ordinary Course of Business involving an expenditure in excess of
$500,000;
(n) entered into, amended or modified in any material respect
(beyond any amendments and modifications reflected in true and complete copies
of such Plans delivered to USF) any Plan;
(o) entered into any employment agreement or collective
bargaining agreement or granted any increase in excess of $25,000 in the salary
of any officer or employee or paid any bonus exceeding $25,000 to any officer or
employee;
(p) experienced any work interruptions, labor grievances or
claims, or any event or condition of any character, which could reasonably be
expected to result in a Transport Material Adverse Effect;
(q) consummated any material transaction outside the Ordinary
Course of Business; or
(r) committed (orally or in writing) to any of the foregoing.
3.7. UNDISCLOSED LIABILITIES. Neither Transport nor any of its
Subsidiaries has any Liability (and there is no Basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Transport or any of its Subsidiaries giving rise to any
Liability), except for (i) Liabilities set forth or reserved against on the face
of the Most Recent Balance Sheet; (ii) Liabilities, which have arisen after the
date of the Most Recent Balance Sheet in the Ordinary Course of Business (none
of which relates to any breach of contract, breach of warranty, tort,
environmental liability, product liability, infringement or violation of law or
arose out of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand); and (iii) Liabilities which do not have a
Transport Material Adverse Effect.
3.8. TAX MATTERS.
(a) Each of Transport and its Subsidiaries has filed all Tax
Returns that it was required to file on or prior to the date hereof. All such
Tax Returns were correct and complete in all material respects. All Taxes owed
and due by Transport and its Subsidiaries for results of operations through the
Effective Date (whether or not shown in any Tax Return) have been paid or have
been adequately reserved for on the Most Recent Balance Sheet in all material
respects. Neither Transport nor any of its Subsidiaries has received written
notice of any claim made by any authority in a jurisdiction where Transport or
any of its Subsidiaries does not file Tax Returns that such entity is or may be
subject to taxation by that jurisdiction. There are no Security Interests on any
of the assets of Transport or any of its Subsidiaries that arose in connection
with any failure (or alleged failure) to pay any Tax when due.
(b) Transport and its Subsidiaries have withheld and paid when
due all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, creditor, independent contractor or other third
party, except where such failure would not result in a Transport Material
Adverse Effect.
(c) To the Knowledge of Transport, there is no Basis on which
any taxing authority could assess any additional Taxes for any period for which
Tax Returns have been filed. There is no dispute or claim concerning any Tax
Liability of Transport or any of its Subsidiaries. Transport has previously made
available to USF correct copies of all Tax Returns filed with respect to
Transport and its Subsidiaries for taxable periods ended on or after December
31, 1996. Except as set forth on Schedule 3.8 of the Transport Disclosure
Schedule, none of such Tax Returns have been audited, and none currently are the
subject of audit, and there are no examination reports or statements of
deficiencies assessed against or agreed to by Transport or any of its
Subsidiaries for such taxable periods.
(d) Transport has disclosed on its consolidated Federal income
Tax Returns all positions taken therein that could give rise to a substantial
understatement of Federal income tax within
the meaning of Section 6662 of the Code except as would not result in a
Transport Material Adverse Effect. Neither Transport nor any of its Subsidiaries
has filed consents under Section 341(f) of the Code concerning collapsible
corporations. Neither Transport nor any of its Subsidiaries has made any
material payments, are not obligated to make any material payments, and are not
parties to any agreement that would obligate any of them to make any material
payments that will not be deductible under Section 280G of the Code. Neither
Transport nor any of its Subsidiaries is a party to any tax allocation or
sharing agreement. Neither Transport nor any of its Subsidiaries has any
Liability for Taxes owed by any Person (other than Transport and its
Subsidiaries), including, without limitation, (A) as a transferee, assignee or
other successor or (B) pursuant to a tax sharing agreement or other contract.
(e) Except as set forth on Schedule 3.8 of the Transport
Disclosure Schedule, neither Transport nor any of its Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any extension of
time with respect to any Tax assessment or deficiency.
(f) All providers of equipment and drivers treated as
independent contractors, including but not limited to owner-operators, by
Transport and its Subsidiaries qualify as independent contractors and not
employees under the Code, except where such failure to so qualify would not
result in a Transport Material Adverse Effect.
(g) Transport has a valid business purpose for undertaking the
Merger.
(h) The fair market value of USF Common Stock and other
consideration received by each Transport shareholder will be approximately equal
to the fair market value of Transport Common Stock surrendered in the Merger.
(i) To the Knowledge of Transport, there is no present plan or
intention by the shareholders of Transport to sell, exchange, or otherwise
dispose of to USF or any person related to USF a number of shares of USF Common
Stock received in the Merger that would reduce the Transport shareholders'
ownership of USF Common Stock to a number of shares having a value, as of the
date of the Merger, of less than 50 percent of the value, of all the formerly
outstanding stock of Transport as of the same date. For the purposes of this
representation, shares of Transport Common Stock exchanged for cash or other
property, surrendered by dissenters, or exchanged for cash in lieu of fractional
shares of USF stock will be treated as outstanding Transport Common Stock on the
date of the Merger. Moreover, shares of Transport Common Stock and shares of USF
Common Stock held by Transport shareholders and otherwise sold, redeemed or
disposed of to USF, Transport or any party related to either prior or subsequent
to the Merger will be considered in making this representation.
(j) Based on transactions occurring up to the Effective Time,
following the Merger, Transport will hold at least 90 percent of the fair market
value of its net assets and at least 70 percent of the fair market value of its
gross assets held immediately prior to the Merger. For purposes of this
representation, amounts paid by Transport to dissenters, amounts paid by
Transport to shareholders who receive cash or other property, amounts used by
Transport to pay reorganization expenses, and all redemptions and distributions
(except for regular, normal dividends) made by Transport will be included as
assets of Transport immediately prior to the Merger.
(k) Transport has no plan or intention to issue additional
shares of its stock that would result in USF losing control of Transport within
the meaning of Section 368(c) of the Code.
(l) The liabilities of Transport to which the assets of
Transport are subject at the time of the Merger were incurred by Transport in
the ordinary course of its business.
(m) There is no intercorporate indebtedness existing between
Transport and USF that was issued, acquired or will be settled at a discount.
(n) At the time of the Merger, Transport will not have
outstanding any warrants, options, convertible securities, or any type of right
pursuant to which any person could acquire stock in Transport that, if exercised
or converted, would affect USF's acquisition or retention of control in
Transport, as defined in Section 368(c) of the Code.
(o) Transport is not an "investment company" as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(p) Transport is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
(q) The fair market value of the assets of Transport will
equal or exceed the sum of the liabilities to which the assets are subject at
the time of the Merger.
(r) Based on transactions occurring up to the Effective Time,
after the Merger, either at least one significant line of Transport's historic
business will remain or a significant portion of Transport's assets will remain
in each case within the meaning of Section 1.368-1(d) of the Income Tax
Regulations.
3.9. TITLE AND CONDITION OF PROPERTIES.
(a) Schedule 3.9 of the Transport Disclosure Schedule contains
a true and correct list of all real estate owed by Transport (collectively, the
"OWNED REAL ESTATE"). Transport holds fee simple title to the Owned Real Estate,
subject only to real estate taxes not delinquent and to covenants, conditions,
restrictions and easements of record, none of which makes title to the Owned
Real Estate unmarketable and none of which are violated by Transport or will
materially interfere with the current use of the Owned Real Estate by Transport.
The Owned Real Estate is not subject to any leases or tenancies. None of the
improvements comprising the Owned Real Estate or the businesses conducted by
Transport thereon, are in violation of any use or occupancy restriction,
limitation, condition or covenant of record or any zoning or building law, code
or ordinance or public utility easement in any material respect. No substantial
or material capital expenditure (other than normal operating expenditures) are
required for repair or maintenance of the Owned Real Estate.
(b) Schedule 3.9 of the Transport Disclosure Schedule contains
a true and correct list of all the real estate leased or occupied by Transport
and its Subsidiaries other than the Owned Real Estate (collectively, the "LEASED
PREMISES"). Each of the leases relating to the Leased Premises is in full force
and effect and Transport holds a valid and existing leasehold interest
thereunder. Transport has delivered or made available to USF complete and
accurate copies of each of the leases and none of such leases has been modified
in any material respect, except to the extent that such modifications are
disclosed by the copies delivered to USF. To the Knowledge of Transport, none of
the improvements comprising the Leased Premises, or the businesses conducted by
Transport thereon, are in violation of any building line or use or occupancy
restriction, limitation, condition or covenant of record or any zoning or
building law, code or ordinance or public utility or other easements. Transport
is not in default under any term of any agreement relating to the Leased
Premises in any material respect nor, to the Knowledge of Transport, is any
other party thereto in default thereunder. No substantial or material
expenditures (other than normal operating expenditures) are required of
Transport for maintenance of the Leased Premises. The Leased Premises are
adequately insured against loss or damage. Transport holds no options to
purchase or sell any of the Leased Premises.
(c) There are no condemnation proceedings pending or, to the
Knowledge of Transport, threatened with respect to any portion of the Properties
(as defined in Section 3.19).
(d) There is no tax assessment (except for the normal, annual
general real estate tax assessment) for which Transport is liable (or which
affects Transport's payments under the leases pertaining to the Leased Premises)
pending or, to the Knowledge of Transport, threatened with respect to any
portion of the Properties.
(e) The continued maintenance, operation, use and occupancy by
Transport of the Properties is not dependent upon any other real estate and does
not violate any zoning, building, health, fire or similar law, ordinance or
regulation in any material respect.
(f) Except as set forth on Schedule 3.9 of the Transport
Disclosure Schedule, Transport and its Subsidiaries own good and marketable
title, free and clear of all Security Interests, to all of the personal property
and assets reflected as owned by Transport on the Most Recent Balance Sheet or
acquired after the date of the Most Recent Balance Sheet, except for (i)
Security Interests which secure Indebtedness set forth on the Most Recent
Balance Sheet; (ii) imperfections of title which are not, individually or in the
aggregate, material in character, amount or extent and which do not materially
detract from the value or materially interfere with the present or presently
contemplated use of the assets subject thereto or affected thereby; (iii)
Security Interests for current Taxes not yet due and payable, the Liability with
respect to which is reserved on the Most Recent Balance Sheet.
(g) Each of the leases of the equipment leased by Transport is
in full force and effect in all material respects. Neither Transport nor any of
its Subsidiaries is in default under any such leases in any material respect.
All leased equipment is maintained in accordance with the terms of applicable
leases in all material respects.
(h) All of the tractors, trailers, vehicles, computers,
telecommunications, satellite tracking, and other tangible personal property and
assets owned by Transport are in good condition and repair, except for ordinary
wear and tear not caused by neglect, and except as may be reserved on the Most
Recent Balance Sheet, and are useable in the Ordinary Course of Business. The
Owned Real Estate, personal property and assets shown on the Most Recent Balance
Sheet as owned by Transport or acquired after the date of the Most Recent
Balance Sheet, the lease rights under the leases relating to the Leased Premises
and the equipment leases, collectively include all assets material to the
conduct of the business as presently conducted or currently proposed to be
conducted.
3.10. INTELLECTUAL PROPERTY.
(a) Transport and its Subsidiaries own or license under valid,
assignable, fully paid licenses all trademarks, trade names, service marks,
copyrights and all applications for and registrations of such trademarks, trade
names and computer software programs, source code and tangible or intangible
proprietary information that is material or necessary to conduct its business
(the "TRANSPORT INTELLECTUAL PROPERTY RIGHTS"). The business of Transport and
its Subsidiaries as currently conducted does not infringe, misuse,
misappropriate or conflict with the intellectual property rights of any other
Person in a way that is likely to have a Transport Material Adverse Effect.
(b) All of the interests of Transport and its Subsidiaries in
the Transport Intellectual Property Rights are free and clear of all Security
Interests, and are not currently being challenged, infringed in any material way
or involved in any pending legal or administrative proceedings before any court
or Governmental Agency. No current licenses for the use of any Transport
Intellectual Property
Rights have been granted by Transport or its Subsidiaries to any third parties
and none of the Transport Intellectual Property Rights is being used by any
other Person.
(c) No employees or independent contractors of either
Transport or any of its Subsidiaries have any material claims or rights to any
of the Transport Intellectual Property Rights. To the Knowledge of Transport, no
employee of either Transport or any of its Subsidiaries is a party to or
otherwise bound by any agreement with or obligated to any other Person
(including, any former employer) which in any material respect conflicts with
any obligation, commitment or job responsibility of such employee to Transport
or its Subsidiaries under any agreement to which currently he or she is a party.
3.11. CONTRACTS. Schedule 3.11 of the Transport Disclosure Schedule
lists each of the following contracts, leases, subleases, licenses, sublicenses,
plans, arrangements, commitments and other documents and instruments
("CONTRACTS") to which Transport and its Subsidiaries are a party:
(a) any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties with
annual payments exceeding $100,000 or with a term exceeding one year;
(b) any written arrangement concerning a partnership or joint
venture;
(c) any written arrangement (or group of related written
arrangements) under which any of Transport or its Subsidiaries has (A) created,
incurred, assumed, or guaranteed (or may create, incur, assume, or guarantee)
Indebtedness in excess of $100,000 or (B) imposed (or may impose) a Security
Interest on any of its material assets, tangible or intangible;
(d) any written arrangement concerning a non-competition
obligation binding on Transport;
(e) any written arrangement not disclosed in the Transport
Disclosure Schedule pursuant to any other provision in this Section 3.11 under
which the consequences of a default or termination could reasonably be expected
to have a Transport Material Adverse Effect;
(f) any contract with any labor union or contract for the
employment of any officer, individual employee or other Person on a full-time,
part-time or consulting basis;
(g) any guaranty of any obligation for borrowed money or
otherwise, other than endorsements made for collection in the Ordinary Course of
Business;
(h) any material agreement or commitment with respect to the
lending or investing of funds to or in other Persons;
(i) any license or royalty agreement;
(j) any other contract or group of related contracts with the
same party (or group of related parties) either (A) requiring payments after the
date hereof to or by Transport or its Subsidiaries of more than $100,000 or (B)
not terminable by Transport or its Subsidiaries on sixty (60) days or less
notice;
(k) any agreement with any employee, the benefits of which are
contingent or the terms of which are materially altered upon the occurrence of a
transaction of the nature contemplated by this Agreement involving Transport or
its Subsidiaries;
(l) any agreement the benefits of which will be increased or
accelerated by the occurrence of the transactions contemplated by this
Agreement;
(m) any contract or agreement pertaining to the acquisition or
disposition of assets outside the Ordinary Course of Business; and
(n) any other written arrangement or group of related written
arrangements not entered into in the Ordinary Course of Business.
Except for the equipment leases, Transport has delivered or otherwise made
available to USF a correct and complete copy of each written arrangement
(including all amendments thereto) listed in Schedule 3.11 of the Transport
Disclosure Schedule. With respect to each written arrangement so listed: (i) the
written arrangement is legal, valid, binding and enforceable against Transport
or its Subsidiaries which is a party thereto and in full force and effect in all
material respects; (ii) assuming all consents required pursuant to Schedule 3.4
of the Transport Disclosure Schedule are obtained, the written arrangement will
continue to be legal, valid, binding and enforceable and in full force and
effect on identical terms immediately after the Closing Date in all material
respects; (iii) neither Transport nor its Subsidiaries or, to the Knowledge of
Transport, any other party is in material breach or default, and no event has
occurred which, with notice or lapse of time, or both, would constitute a breach
or default or permit termination, modification, or acceleration under the
written arrangement, except for any breaches, defaults, terminations,
modifications or accelerations which have been cured or waived or which would
not cause a Transport Material Adverse Effect; and (iv) to the Knowledge of
Transport, no party (other than Transport or its Subsidiaries) has repudiated
any provision of any such written arrangement. Neither Transport nor any of its
Subsidiaries is a party to any verbal contract, agreement or other arrangement
which, if reduced to written form, would be required to be listed in the
Transport Disclosure Schedule under the terms of this Section 3.11. No
confidentiality agreement executed in connection with potential acquisitions of
or by Transport or its Subsidiaries, other than USF, grants any party
exclusivity with respect to such acquisition. Transport or its Subsidiaries has
delivered or otherwise made available to USF correct and complete copies of the
general forms of customer invoices currently used by Transport and its
Subsidiaries.
3.12. NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts
receivable of Transport and its Subsidiaries reflected on the Most Recent
Balance Sheet (i) are valid receivables subject to no material set-offs or
counterclaims other than those effected in the Ordinary Course of Business; (ii)
are current and substantially collectible in the Ordinary Course of Business
using normal collection practices; (iii) will be collected substantially in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet;
and (iv) are recorded in accordance with GAAP. Since the date of the Most Recent
Balance Sheet, there has not been a material change in the aggregate amount of
the accounts receivable of the business or the aging thereof.
3.13. LITIGATION. Schedule 3.13 of the Transport Disclosure Schedule
sets forth each instance in which any of Transport or its Subsidiaries is (i)
subject to any material unsatisfied judgment, order, decree, stipulation,
injunction or charge or (ii) is a party to or, to the Knowledge of Transport, is
threatened to be made a party to, any material charge, complaint, action, suit,
proceeding, hearing, or investigation of or in any court or quasi-judicial or
administrative agency of any Federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the charges, complaints, actions, suits,
proceedings, hearings, and investigations set forth in Schedule 3.13 of the
Transport Disclosure Schedule could
reasonably be expected to result in any Transport Material Adverse Effect.
Except for claims arising out of accidents involving the operation of
Transport's tractors and trailers in the Ordinary Course of Business, to the
Knowledge of Transport, no Basis exists on which any such charge, complaint,
action, suit, proceeding, hearing or investigation may be brought or threatened
against Transport or any of its Subsidiaries.
3.14. EMPLOYEES; EMPLOYMENT MATTERS.
(a) To the Knowledge of Transport, no Key Employee or group of
Key Employees has any plans to terminate their employment with Transport or any
of its Subsidiaries as a result of the transactions contemplated hereby or
otherwise. Neither Transport nor any of its Subsidiaries is a party to or bound
by any collective bargaining agreements, and neither Transport nor any of its
Subsidiaries has experienced any strikes, grievances, other collective
bargaining disputes or claims of unfair labor practices. There is no
organizational effort presently being made or, to the Knowledge of Transport,
threatened by or on behalf of any labor union with respect to employees or
owner-operators of Transport or any of its Subsidiaries. Within the three (3)
year period preceding the date of this Agreement, neither Transport nor any of
its Subsidiaries has experienced any strike, slow-down, work stoppage or
lockout, by or with respect to any of its employees.
(b) Transport and its Subsidiaries have complied with all
applicable laws, rules and regulations relating to labor or employment,
including, but not limited to, any provisions thereof relating to equal
employment opportunity, wages, hours, employee safety, immigration control, drug
testing, termination pay, vacation pay, fringe benefits, collective bargaining,
discrimination, retaliation and the payment and/or accrual of the same and all
Taxes, insurance and all other costs and expenses applicable thereto, except in
each case where non-compliance would not have a Transport Material Adverse
Effect. Without limiting the generality of the foregoing, Transport and its
Subsidiaries have not incurred a violation of Part 6 of Subtitle B of Title I of
ERISA ("COBRA") or other applicable state insurance continuation law in any
material respect. No material COBRA or other state insurance continuation law
violation exists or will exist with respect to any employees of Transport or its
Subsidiaries prior to and including the Closing Date. Transport and its
Subsidiaries have not ever incurred, Liabilities, penalties or other charges
under the Workers Adjustment Retraining and Notification Act ("WARN").
(c) Except as set forth on Schedule 3.14 of the Transport
Disclosure Schedule, all persons employed by Transport and its Subsidiaries are
employees at will or otherwise employed such that Transport and its Subsidiaries
may lawfully terminate their employment at any time, with or without cause,
without creating any cause of action against Transport or its Subsidiaries or
otherwise giving rise to any material liability of Transport or its Subsidiaries
for wrongful discharge, breach of contract or tort or any other similar cause at
law or in equity.
3.15. EMPLOYEE BENEFIT PLANS.
(a) All Plans are listed on Schedule 3.15 of the Transport
Disclosure Schedule.
(b) Each Plan is in compliance in all material respects with
its terms and with ERISA and other applicable laws (including, without
limitation, compliance with the health care continuation requirements of COBRA
and any proposed regulations promulgated thereunder), and with any applicable
collective bargaining agreement and all other agreements and instruments
applicable to any Plan. Schedule 3.15 of the Transport Disclosure Schedule sets
forth each former employee of Transport and its ERISA Affiliates entitled to
COBRA benefits and the remaining period of such benefits. Except as set forth on
Schedule 3.15 of the Transport Disclosure Schedule, Transport and each
applicable ERISA Affiliate of Transport have received favorable determination
letters as to the qualification under the Code
of each pension plan, as defined in Section 3(2) of ERISA ("PENSION PLAN"), and
there have been no amendments or other developments since the date of such
determination letters which would cause the loss of such qualified status. No
violation of ERISA has at any time occurred in connection with the
administration of any of the Plans, and there are no actions, suits, or claims
(other than routine, non-contested claims for benefits) pending or, to the
Knowledge of Transport, threatened against the Plans, or any administrator or
fiduciary thereof, which could result in any material liability to Transport or
any ERISA Affiliate of Transport. Except as set forth on Schedule 3.15 of the
Transport Disclosure Schedule, each Plan can be terminated within thirty days,
without payment of any additional contribution or amount and, except as
otherwise mandated by ERISA, without the vesting or acceleration of any benefits
promised by such Plan.
(c) Transport and the ERISA Affiliates of Transport have
heretofore made available to USF accurate copies of:
(i) with respect to each written Plan, the Plan
documents (and any applicable trust agreement, investment management
agreement, administrative service contract or insurance contract)
and, with respect to each unwritten Plan, a description of the
substantive terms thereof;
(ii) the most recent Internal Revenue Service
determination letter relating to each of the Pension Plans and
welfare plans, as defined in Section 3(1) of ERISA ("WELFARE
PLANS"), referred to in Section 3.15(d) below;
(iii) the three (3) most recent Annual Reports (Form
5500 Series) and accompanying schedules for each of the Plans as
filed pursuant to applicable law;
(iv) the summary plan description (as currently in
effect) and any summary of material modification for each of the
Plans;
(v) the most recent summary annual report furnished for
each of the Plans;
(vi) the most recent actuarial valuations, if
applicable, and latest financial statements for each of the Plans;
and
(vii) all documents (other than those set forth in
Section 3.15(c)(iii) above) filed with the Internal Revenue Service,
Department of Labor or Pension Benefit Guaranty Corporation since
January 1, 1994.
There is and has been no material violation of ERISA known to Transport or any
ERISA Affiliate of Transport with respect to the filing of applicable reports,
documents, and notices regarding such Plans with the Secretary of Labor or the
Secretary of the Treasury or the furnishing of such documents to the
participants or beneficiaries of such Plans and no material adverse change has
occurred with respect to the matters covered by such reports, documents, and
notices.
(d) No Welfare Plan is intended to be qualified under Section
501(c)(9) or Section 501(c)(17) of the Code. Each insurance contract through
which benefits under a Plan are provided provides benefits only for employees
and dependents covered under the Plan. Each Plan is maintained by Transport or
any ERISA Affiliate of Transport under a plan document which does not provide
for other participating employers except for Transport or any ERISA Affiliate of
Transport; and, except as provided in Section 3.15, no Plan provides or has
provided credit with respect to service other than with Transport or any ERISA
Affiliate of Transport.
(e) Neither Transport nor any ERISA Affiliate of Transport nor
any of their employees, shareholders, or directors have engaged in any
transaction in connection with which Transport or any ERISA Affiliate of
Transport would be subject either to a civil penalty assessed pursuant to
Section 502 of ERISA or a tax imposed by Section 4975 of the Code. The execution
and performance of this Agreement will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Code.
(f) None of the assets of any of the Plans is or has been
invested in any property constituting employer real property or any employer
security within the meaning of Section 407(d) of ERISA.
(g) Full payment as of the Closing Date has been fully made or
adequately provided for on the books and consolidated financial statements of
Transport and its ERISA Affiliates with respect to: (i) all amounts and premiums
which Transport and any ERISA Affiliate of Transport are required, under the
terms of all Plans, to have paid as contributions to such Plans as of the last
day of the most recent fiscal year prior to the Closing Date and (ii) all pro
rata amounts which Transport and any ERISA Affiliate of Transport are required
to pay as contributions to each such Plan for the fiscal year that includes the
Closing Date. Further, no accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any Plan, nor has there been any lien imposed under Section 412(n) of
the Code. As of the date of the Most Recent Balance Sheet, neither Transport nor
any ERISA Affiliate of Transport had any liability under any Plan that was not
reflected in the Most Recent Balance Sheet in all material respects.
(h) Except as set forth on Schedule 3.15 of the Transport
Disclosure Schedule, the execution and performance of this Agreement will not
constitute a stated triggering event under any Plan or employment agreement that
will (i) result in any payment (whether of severance pay or otherwise) becoming
due to any employee of Transport or any ERISA Affiliate of Transport, (ii)
accelerate the time of payment or vesting or increase the amount of compensation
due under any Plan or employment agreement, (iii) cause any individual to accrue
or receive additional benefits, service or accelerated rights to payment of
benefits under any Plan or employment agreement, or (iv) directly or indirectly
cause Transport or any ERISA Affiliate of Transport to transfer or set aside any
assets to fund or otherwise provide for benefits for any individual.
(i) Except as set forth on Schedule 3.15 of the Transport
Disclosure Schedule, neither Transport nor any ERISA Affiliate of Transport
provides, nor do they have any commitment to provide, coverage under any Welfare
Plan (including, but not limited to, life insurance, disability, medical,
dental, prescription drugs, or accidental death or dismemberment) to any of
their retirees, other than any continuation or conversion coverage which any
such retiree may have purchased at his own expense. Neither Transport nor any
ERISA Affiliate of Transport has any liability for post-retirement benefits
other than pensions which are required to be disclosed in accordance with
Financial Accounting Statement 106 of the Financial Accounting Standards Board.
(j) With respect to every group health plan (as defined in
Section 607 of ERISA) maintained by or contributed to by Transport or any ERISA
Affiliate of Transport, neither Transport or any ERISA Affiliate of Transport
nor any of the executive officers of Transport nor, to the Knowledge of
Transport, any of the other officers, directors, employees or agents has engaged
in any action or failed to act in such a manner that, as a result of such act:
(x) the ability of Transport or any ERISA Affiliate of Transport to deduct
contributions to such a plan would be materially impaired, or (y) the ability of
any employee of Transport or any ERISA Affiliate of Transport to exclude from
income for federal income tax purposes employer-provided benefits under such a
plan would be materially impaired. Neither Transport or any ERISA Affiliate of
Transport nor, to the Knowledge of Zeus, any of its or their officers,
directors, employees or agents has engaged in any action or failed to act in any
manner that would subject Transport or any ERISA Affiliate of Transport to
material liability under the Medicare Secondary Payor Provisions of Section
1862(b) of the Social Security Act and Section 5000 of the Code.
(k) There have been no statements, either written or oral, or
communications made or materials provided to any employee or former employee of
Transport or any ERISA Affiliate of Transport by any person that provide for or
could be construed as a contract or promise by Transport or any ERISA Affiliate
to provide for any pension, welfare, or other insurance-type benefits to any
such employee or former employee, whether before or after retirement, other than
benefits under the Plans.
(l) Neither Transport nor any ERISA Affiliate of Transport
contributes, or at any time in the past has contributed to a multiemployer plan,
as defined in Section 3(37) of ERISA, or a defined benefit plan, as defined in
Section 3(35) of ERISA.
(m) No services are provided to Transport or any ERISA
Affiliate of Transport by any "leased employee," as that term is defined under
Section 414(n) of the Code.
(n) Neither Transport nor any ERISA Affiliate of Transport
provides any benefits to its or their employees through a "multiple employer
welfare arrangement," as defined in Section 3(40)(A) of ERISA.
3.16. UNLAWFUL PAYMENTS. No payments of either cash or other
consideration have been made to any Person by Transport or any of its
Subsidiaries or on behalf of Transport or any of its Subsidiaries by any agent,
employee, officer, director, stockholder or other Person, that were unlawful
under the laws of the United States or any state or any other foreign or
municipal government authority having appropriate jurisdiction over Transport
and its Subsidiaries.
3.17. COMPLIANCE WITH LAWS. Transport and its Subsidiaries are in
compliance with and have not in the past violated, in each case in any material
respects, any applicable law, rule or regulation of any Federal, state, local or
foreign government or agency thereof (including, but not limited to,
Environmental, Health and Safety Laws, common law, Federal and state regulations
respecting driver records and compliance practices and safe and legal operation
of a for-hire public carrier) and no written notice, claim, charge, complaint,
action, suit, proceeding, investigation or hearing has been received by
Transport and its Subsidiaries or filed, commenced or, to the Knowledge of
Transport, threatened against Transport and its Subsidiaries alleging any such
violation. Transport and its Subsidiaries have conducted and are conducting the
business in compliance with the material requirements, standards, criteria and
conditions set forth in applicable laws, statutes, ordinances, permits,
licenses, orders, approvals, authorizations, variances, rules, regulations,
judicial decrees, common law and civil law, of all jurisdictions having
authority over the business and the assets, and none of them is in violation of
any of the foregoing except where such non-compliance or violation would not
result in a Transport Material Adverse Effect, Transport has what Transport
believes are adequate safety management controls in place. Transport's safety
rating, pursuant to the rules and regulations of the U.S. Department of
Transportation, is satisfactory.
3.18. INSURANCE.
(a) Schedule 3.18 of the Transport Disclosure Schedule sets
forth the following information with respect to each insurance policy (including
policies providing property, casualty, Liability, workers' compensation coverage
and material bond and surety arrangements) to which Transport and its
Subsidiaries are or within the past five (5) years have been a party or a named
insured: (i) the name, address, and telephone number of the agent; (ii) the name
of the insurer, the name of the
policyholder; (iii) the policy number and the period of coverage; (iv) the scope
(including an indication of whether the coverage was on a claims made,
occurrence or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and (v) a
description of any retroactive premium adjustments or other loss-sharing
arrangements for any period including those relating to policies and claims
existing more than two (2) years prior to the date hereof. With respect to
Transport Subsidiaries, North Star Transport, Inc. and Robert Hansen Trucking,
Inc., Schedule 3.18 of the Transport Disclosure Schedule lists the insurance
coverage of such Subsidiaries at the time such Subsidiaries were acquired by
Transport and not for prior periods.
(b) With respect to each such insurance policy currently in
effect for Transport: (i) the policy is legal, valid, binding, enforceable and
in full force and effect; (ii) the policy will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms immediately
following the consummation of the transactions contemplated hereby; (iii)
neither Transport nor any of its Subsidiaries or any other party to the policy,
is in material breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, or both, would constitute such a breach or default, or
permit termination, material modification or acceleration, under the policy; and
(iv) no party to the policy has repudiated any provision thereof. The insurance
currently maintained by Transport and its Subsidiaries is customary and
reasonable in scope and amount for the business in which they are currently
engaged.
(c) Except as set forth on Schedule 3.18 of the Transport
Disclosure Schedule, there are no pending claims against such insurance policies
involving an amount in excess of $100,000. Transport has not received any notice
from its insurance carrier disclaiming coverage as to any material claims
pending against its insurance policies which would otherwise be within the scope
of such policies. Schedule 3.13 of the Transport Disclosure Schedule identifies
all claims paid or settled within the past three years or currently pending
against Transport's insurance policies, involving an amount in excess of
$100,000.
3.19. ENVIRONMENT, HEALTH AND SAFETY.
(a) Transport and its Subsidiaries are, and at all times have
been, in compliance in all material respects with and have no undischarged
material obligation under, any decree, order or arbitration award or law,
statute, or regulation or agreement with, or any license or permit from, any
Governmental Entity to which the Owned Real Estate and Leased Premises,
including, without limitation, all personalty, fixtures and trade fixtures
located in, on, under or about the Owned Real Estate and Leased Premises (the
"PROPERTIES") are subject or to which Transport or its Subsidiaries are subject,
including, without limitation, the Environmental, Health and Safety Laws,
including, without limitation, those relating to: (i) treatment, storage,
disposal, generation or transportation of any Hazardous Material; (ii) spills,
discharges, leaks, emissions, escapes, dumping or other releases or threatened
releases of any Hazardous Material into the environment, whether or not
notification or reporting to any federal, state or local agency was or is
required; (iii) air, water or noise pollution; (iv) surface or groundwater
contamination; (v) the protection of natural resources; (vi) wildlife, marine
sanctuaries and wetlands; (vii) storage tanks, vessels and related equipment;
(viii) abandoned or discarded barrels, containers and other receptacles; (ix)
health and safety of employees and other persons; (x) reporting and notification
regarding any Hazardous Material; and (xi) otherwise relating to the
manufacture, processing, use, distribution, treatment, storage, disposal,
transportation or handling of any Hazardous Material.
(b) Any written notice, complaint, citation, communication or
summons which Transport or its Subsidiaries have received in the last three (3)
years from any Governmental Entity in connection with any alleged violation of
any Environmental, Health and Safety Law are set forth in Schedule 3.19 of the
Transport Disclosure Schedule. Transport and its Subsidiaries have not received
any
other written notice of any alleged violation of any Environmental, Health and
Safety Law which has not been corrected and, to the Knowledge of Transport, no
Basis for any such notice exists.
(c) There has been no storage, treatment, generation,
discharge, transportation or disposal of any Hazardous Material by Transport or
its Subsidiaries (or any predecessors in interest) at, to or from the
Properties, or at any property previously owned or leased by Transport or its
Subsidiaries or, to the Knowledge of Transport, by any other person or entity
for which Transport or its Subsidiaries are or may be held responsible (the
"PRIOR OWNED OR LEASED REAL ESTATE") or any other real estate, including, but
not limited to, any off-site disposal site, in violation of, or giving rise to
any undischarged obligation under the Environmental, Health and Safety Laws
which could reasonably be expected to have a Transport Material Adverse Effect.
(d) Except as set forth on Schedule 3.19 of the Transport
Disclosure Schedule, there has been no material spill, discharge, leak,
emission, injection, escape, dumping, or release by or attributable to Transport
or its Subsidiaries (or, to the Knowledge of Transport, by others) of any kind
onto the Properties, the Prior Owned or Leased Real Estate, or any other real
estate, including, but not limited to, any off-site disposal site, or into the
environment surrounding the Properties, the Prior Owned or Leased Real Estate,
or any other real estate of any Hazardous Material.
(e) Schedule 3.19 of the Transport Disclosure Schedule sets
forth a complete list of all above-ground and underground storage tanks, vessels
and related equipment and containers that are or have been present in, under or
about the Properties (or which have been removed therefrom prior to the date
hereof) and sets forth their present or former location and present and past
contents. Schedule 3.19 of the Transport Disclosure Schedule also sets forth all
above-ground and underground tanks present in, under or about the Prior Owned or
Leased or Leased Real Estate for which Transport has a continuing obligation
under Environmental, Health and Safety Laws. In the period during which
Transport or its Subsidiaries occupied any of the Prior Owned or Leased Real
Estate, any fueling or treatment and handling of above-ground or underground
tanks was conducted by Transport and its Subsidiaries in accordance with
applicable law in all material respects and, to the Knowledge of Transport,
there is no Basis with regard to the use or occupancy by Transport or its
Subsidiaries of the Prior Owned or Leased Real Estate which could reasonably be
expected to result in a Transport Material Adverse Effect under Environmental,
Health and Safety Laws. Any such storage tanks, vessels or associated piping and
equipment previously removed by Transport or its Subsidiaries (or a predecessor
of any Subsidiary) from the Properties and the Prior Owned or Leased Real Estate
have been so removed in compliance with all applicable Environmental, Health and
Safety Laws.
(f) Transport and its Subsidiaries have all material licenses,
permits, registrations and governmental approvals and consents required under
Environmental, Health and Safety Laws for its activities and operations at the
Properties and for any past or ongoing alterations or improvements, including,
where applicable, governmental "closure letters" for any release or spill
incident, except as set forth on Schedule 3.19(e) of the Transport Disclosure
Schedule.
(g) Transport has provided and disclosed to USF all written
reports, information, notices and communications in Transport's possession or of
which Transport has Knowledge pertaining to the environmental condition of the
Properties and the Prior Owned or Leased Real Estate. There are no material
expenditures or other actions required of Transport to bring the Properties and
the Prior Owned or Leased Real Estate in compliance with the Environmental,
Health and Safety Laws.
3.20. BANK ACCOUNTS. Set forth on Schedule 3.20 of the Transport
Disclosure Schedule is a list of all of the bank accounts, safe deposit boxes
and lock boxes used in connection with the business (designating each authorized
signatory).
3.21. POTENTIAL CONFLICTS OF INTEREST. Except as set forth on
Schedule 3.21 of the Transport Disclosure Schedule, no officer or director or
member of the immediate family of such officer of director of Transport or any
of its Subsidiaries and to the Knowledge of Transport, no shareholder owning
greater than a five percent (5%) interest in Transport, no Affiliate or member
of the immediate family of any such shareholder: (i) possesses, directly or
indirectly, any interest in or is an officer, director, employee or consultant
of any Person which is a material lessor, lessee, customer or supplier of the
business of Transport (excepting not more than one percent (1%) stock holdings
solely for investment purposes in securities of publicly traded companies); (ii)
owns, directly or indirectly, in whole or in part, any Transport Intellectual
Property Rights which Transport and its Subsidiaries are using or the use of
which is necessary for the business; (iii) has any material cause of action or
other claim whatsoever against the business of Transport, except for claims in
the Ordinary Course of Business for accrued vacation pay, accrued benefits under
Plans and similar matters and agreements existing on the date hereof; (iv) has
made, on behalf of Transport and its Subsidiaries, any payment or commitment to
pay any commission, fee or other amount to, or purchase or obtain or otherwise
contract to purchase or obtain any goods or services from, any Person of which
any officer or director of Transport or any of its Subsidiaries is a partner or
stockholder (excepting not more than one percent (1%) stock holdings solely for
investment purposes in securities of publicly traded companies); (v) as of the
date hereof owes any money to Transport or any of its Subsidiaries; or (vi) as
of the date hereof is owed any money by Transport or any of its Subsidiaries.
3.22. POOLING OF INTERESTS. Transport is not aware of any facts or
circumstances in respect of it or its accounting procedures, or transactions in
its capital stock, which would have the effect of precluding accounting for the
transactions contemplated hereby as a "pooling of interests."
3.23. NO SPECIAL SHAREHOLDER RIGHTS. Except for the Put Option and
except as set forth on Schedule 3.23 of the Transport Disclosure Schedule,
Transport has no agreement with any individual or entity that grants such Person
any rights as a shareholder of Transport Common Stock that are in addition to
such holder's rights under Transport's Articles of Incorporation or Bylaws
(including, without limitation, registration rights, preemptive rights, put
rights, rights of co-sale or rights to Board representation).
3.24. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information supplied by Transport for inclusion in the registration statement on
Form S-4 pursuant to which shares of USF Common Stock issuable in the Merger
will be registered with the SEC (the "REGISTRATION STATEMENT") shall not at the
time the Registration Statement is declared effective by the SEC contain any
untrue statement of a material fact or omit to state any material fact required
to be stated in the Registration Statement or necessary in order to make the
statements in the Registration Statement, not misleading. The information
supplied by Transport for inclusion in the proxy statement (the "PROXY
STATEMENT") to be sent to the shareholders of Transport in connection with the
meeting of its shareholders to consider this Agreement and the Merger (the
"TRANSPORT SHAREHOLDERS MEETING") shall not, on the date the Proxy Statement is
first mailed to shareholders of Transport, at the time of the Transport
Shareholders Meeting and at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it was made, is false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements made in the Proxy Statement not false
or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Transport Shareholders Meeting which has become false or
misleading. If at any time prior to the Effective Time any event relating to
Transport or any of its Affiliates, officers or directors should be discovered
by Transport which should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, Transport shall promptly
inform USF.
3.25. COMPLIANCE WITH MBCA. The Board of Directors of Transport has
taken all necessary action so that the execution, delivery and performance of
this Agreement, and the consummation of the Merger and the other transactions
contemplated by this Agreement are approved for all purposes under Chapter 302A
of the MBCA, including without limitation the restrictions contained in Sections
671 and 673 of the MBCA applicable to a "business combination" (as defined in
Section 673).
3.26. YEAR 2000 COMPLIANCE. Transport and its Subsidiaries have
conducted a reasonable review of all operating codes, programs, utilities and
other software as well as all hardware and systems utilized by Transport and its
Subsidiaries (collectively, "SYSTEMS") to determine whether such Systems are
designed to record, store, process, and present calendar dates falling on or
after January 1, 2000 in the same manner, and with the same functionality, as
provided on or before December 31, 1999, and are designed to not lose
functionality or degrade in performance as a consequence of such software
operating at a date later than December 31, 1999 (such design and performance
being referred to as "Y-2000 COMPLIANT"). To the extent such review identified
Systems that are not Y-2000 Compliant, Transport and its Subsidiaries have
replaced such Systems with systems of similar functionality that contains either
(a) a vendor warranty that such Systems are Y-2000 Compliant or (b) a vendor
undertaking to replace, prior to December 31, 1999, all Systems that are not
Y-2000 Compliant with those that are. Transport has not experienced a Transport
Material Adverse Effect as a result of the "Y2K bug."
3.27. TRANSPORT RIGHTS AGREEMENT. Transport has adopted an amendment
to the Transport Rights Agreement with the effect that neither USF nor Sub shall
be deemed to be an Acquiring Person (as defined in the Transport Rights
Agreement), the Distribution Date (as defined in the Transport Rights Agreement)
shall not be deemed to occur and the Rights will not separate from the Transport
Common Stock, in each case as a result of Transport entering into this Agreement
or consummating the Merger in accordance with the terms of this Agreement. The
Transport Board of Directors has resolved to, and Transport will promptly after
the execution of this Agreement, take all action necessary to render the Rights
pursuant to the terms of the Transport Rights Agreement inapplicable to the
Merger and this Agreement and for the Rights to expire or be redeemed
immediately prior to the Effective Time.
3.28. NO EXISTING DISCUSSIONS. As of the date hereof, Transport is
not engaged, directly or indirectly, in any negotiations or discussions with any
other party with respect to a Competing Offer (as defined in Section 5.6).
3.29. OPINION OF FINANCIAL ADVISOR. The financial advisor of
Transport, Deutsche Bank Securities, Inc. ("DEUTSCHE BANC ALEX. BROWN"), has
delivered to the board of directors of Transport an opinion dated the date of
this Agreement to the effect that, as of such date, the Exchange Numbers are
fair, from a financial point of view, to the holders of Transport Common Stock.
3.30. DISCLOSURE. None of the representations and warranties of
Transport and its Subsidiaries contained herein, or any other statements by
Transport and its Subsidiaries in this Agreement or the Transport Disclosure
Schedule, contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances in which they were made, not misleading.
ARTICLE
4
REPRESENTATIONS AND WARRANTIES OF USF AND SUB
USF and Sub, jointly and severally, represent and warrant to
Transport that the statements contained in this Article 4 are true and correct.
4.1. ORGANIZATION. Each of USF and Sub and USF's other operating
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power and authority to own, lease and operate its property
and to carry on its business as now being conducted and as proposed to be
conducted, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the failure to be so qualified
would have a USF Material Adverse Effect. Except as set forth in the USF SEC
Reports (as defined in Section 4.5), neither USF nor any of its Subsidiaries
directly or indirectly owns any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any corporation,
partnership, joint venture or other business association or entity, excluding
securities in any publicly traded company held for investment by USF or any of
its Subsidiaries and comprising less than one percent (1%) of the outstanding
stock of such company.
4.2. USF CAPITAL STRUCTURE.
(a) The authorized capital stock of USF consists of 80,000,000
shares of USF Common Stock $0.01 par value per share ("USF COMMON STOCK") and
20,000,000 shares of Cumulative Preferred Stock, $0.01 par value per share ("USF
PREFERRED STOCK"). As of January 5 2000, (i) 26,498,976 shares of USF Common
Stock were issued and outstanding, all of which are duly authorized, validly
issued, fully paid and nonassessable and were issued in compliance with all
applicable Federal and state securities laws, (ii) 4,710,000 shares of USF
Common Stock were reserved for issuance of stock options under USF's stock
option plans of which there are options outstanding entitling the optionees
thereunder upon valid exercise to acquire in the aggregate 4,154,650 shares of
USF Common Stock (the "USF STOCK OPTION PLANS"), (iii) 56,840 shares of USF
Common Stock were held in the treasury of USF or by Subsidiaries of USF; (iv)
900,000 shares of USF Common Stock were reserved for issuance under the USF
Stock Purchase Plan effective as of January 28, 1993 (the "USF STOCK PURCHASE
PLAN"); and (v) 350,000 shares of USF Preferred Stock were designated and
reserved for issuance under the Rights Agreement, dated February 4, 1994,
between USF and Harris Trust and Savings Bank as Rights Agents (the "USF RIGHTS
AGREEMENT"). As of the date of this Agreement, no shares of USF Preferred Stock
are issued and outstanding. All shares of USF Common Stock subject to issuance
as specified above, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, and all shares of USF Common
Stock to be issued in connection with the Merger, when issued and delivered in
accordance with the terms hereunder, shall be duly authorized, validly issued,
fully paid and nonassessable and shall have the rights attached to them in
accordance with the USF Rights Agreement. There are no obligations, contingent
or otherwise, of USF or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of USF Common Stock or the capital stock of any
Subsidiary of USF. All of the outstanding shares of capital stock of each of
USF's Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by USF or a Subsidiary of USF free
and clear of all Security Interests, agreements, limitations in USF's voting
rights, charges or other restrictions of any nature.
(b) Except as set forth in this Section 4.2 or as reserved for
future grants of options under the USF Stock Option Plans or future sales under
the USF Stock Purchase Plan, there are no equity securities of any class of USF
or any of its respective Subsidiaries, or any security exchangeable into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding. Except as set forth in this Section 4.2, there are no options,
warrants, equity securities, calls, rights, commitments or agreements of any
character to which USF or any of its respective Subsidiaries is a party or by
which any of them are bound obligating USF or any of its respective Subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock of USF or any of its respective Subsidiaries or
obligating USF or any of its respective Subsidiaries to grant, extend,
accelerate the vesting of or enter into any such option, warrant, equity
security, call, right, commitment or agreement. To the knowledge of
USF, there are no voting trusts, proxies or other agreements or understandings
with respect to the shares of capital stock of USF.
4.3. AUTHORITY AND STATUS. The execution, delivery and performance
by USF of this Agreement and each and every other agreement, document and
instrument provided for herein have been duly authorized and approved by the
Board of Directors of USF. USF has the corporate power and authority to execute
and deliver this Agreement, to perform hereunder and to consummate the
transactions contemplated hereby without any other corporate or stockholder
approval. Assuming this Agreement and each and every agreement, document or
instrument to be executed, delivered and performed by USF and Sub in connection
herewith are valid and legally binding obligations of Transport, this Agreement
and each and every agreement, document and instrument to be executed, delivered
and performed by USF and Sub in connection herewith constitute or will, when
executed and delivered, constitute the valid and legally binding obligation of
USF and Sub enforceable against such entity in accordance with their respective
terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally.
4.4. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by USF does
not, and the consummation of the transactions contemplated by this Agreement
will not, (i) conflict with, or result in any violation or breach of, any
provision of the Certificate of Incorporation or Bylaws of USF; (ii) result in
any violation or breach of, require any consent or approval under, or constitute
(with or without notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any material benefit) under any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which USF or any of its Subsidiaries is a party or
by which any of them or any of their properties or assets may be bound; or (iii)
subject to the consents, approvals, orders, authorizations, filings and
registrations specified in Section 4.4(b), conflict with or violate any permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to USF or any of its Subsidiaries or
any of their properties or assets.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to USF or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) the filing of the pre-merger notification
report under the HSR Act; (ii) the filing and declaration of effectiveness of
the Registration Statement (as defined in Section 3.24) with the SEC in
accordance with the Securities Act; (iii) the filing of the Articles of Merger
with the Secretary of State of Minnesota in accordance with the MBCA; (iv) the
filing of the Proxy Statement with the SEC in accordance with the Exchange Act;
and (v) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable Federal and state
securities laws.
4.5. SEC FILINGS; FINANCIAL STATEMENTS.
(a) USF has filed all forms, reports and documents required to
be filed by USF with the SEC since January 1, 1997, (collectively, the "USF SEC
REPORTS"). The USF SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in the USF SEC
Reports or necessary in order to make the statements in the USF SEC Reports, in
the light of the circumstances under which they were made, not misleading. None
of USF's Subsidiaries is required to file any forms, reports or other documents
with the SEC. Since January 1, 1997, USF has made all filings with the SEC in a
timely manner as required by law and no event has occurred that requires an
additional filing or any amendment to a prior filing.
(b) USF has provided or made available to Transport with the
following financial statements (collectively the "USF FINANCIAL STATEMENTS"):
(i) audited consolidated balance sheet and related consolidated statement of
income, consolidated retained earnings and consolidated statement of cash flows
of USF and its Subsidiaries as of and for each of the fiscal years ended
December 31, 1996 and December 31, 1997 and December 31, 1998; and (ii)
unaudited balance sheet at September 30, 1999 and related statement of income of
USF as of and for the nine months ended September 30, 1999. The USF Financial
Statements including any financial statements contained in the USF SEC Reports
filed after the date of this Agreement until the Closing, complied or will
comply to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, are or will be correct and
complete, have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, and fairly present (subject, in the case
of the unaudited statements, to normal, recurring audit adjustments which were
not or are not material in amount) the consolidated financial condition and
results of operations of USF and its Subsidiaries as of the times and for the
periods referred to therein.
4.6. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information supplied by USF (including information concerning Sub) for inclusion
in the Registration Statement shall not at the time the Registration Statement
is declared effective by the SEC contain any untrue statement of a material fact
or omit to state any material fact required to be stated in the Registration
Statement or necessary in order to make the statements in the Registration
Statement, not misleading. The information supplied by USF (including
information concerning Sub) for inclusion in the Proxy Statement shall not, on
the date the Proxy Statement is first mailed to the shareholders of Transport,
at the time of the Transport Shareholders Meeting and at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it was made, is false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements made in the Proxy Statement not false or misleading, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Transport
Shareholders Meeting which has become false or misleading. If at any time prior
to the Effective Time any event relating to USF or any of its Affiliates,
officers or directors should be discovered by USF which should be set forth in
an amendment to the Registration Statement or a supplement to the Proxy
Statement, USF shall promptly inform Transport.
4.7. TAX REPRESENTATIONS.
(a) USF has a valid business purpose for undertaking the
Merger.
(b) The fair market value of the USF Common Stock and other
consideration received by each Transport shareholder will be approximately equal
to the fair market value of the Transport Common Stock surrendered in the
Merger.
(c) Following the Merger, Transport will hold at least 90
percent of the fair market value of its net assets and at least 70 percent of
the fair market value of its gross assets and at least 90 percent of the fair
market value of Sub's net assets and at least 70 percent of the fair market
value of Sub's gross assets held immediately prior to the Merger. For purposes
of this representation, amounts paid by Transport or Sub to dissenters, amounts
paid by Transport or Sub to shareholders who receive cash or other property,
amounts used by Transport or Sub to pay reorganization expenses, and all
redemptions and distributions (except for regular, normal dividends) made by
Transport will be included as assets of Transport or Sub, respectively,
immediately prior to the Merger.
(d) Prior to the Merger, USF will be in control of Sub within
the meaning of Section 368(c) of the Internal Revenue Code.
(e) USF has no plan or intention to reacquire any of its stock
issued in the Merger.
(f) USF has no plan or intention to liquidate Transport; to
merge Transport with or into another corporation (other than Sub); to sell or
otherwise dispose of the stock of Transport except for transfers of stock to
corporations controlled by USF; or to cause Transport to sell or otherwise
dispose of any of the assets of Transport or any of the assets acquired form
Sub, except for dispositions made in the ordinary course of business or in
transfers described in Section 368(a)(2)(C) of the Code.
(g) The liabilities of Sub assumed by Transport and the
liabilities to which the transferred assets of Sub are subject were incurred by
Sub in the ordinary course of its business.
(h) Following the Merger, USF will continue the historic
business of Transport or use a significant portion of Transport's historic
business assets in a business, within the meaning of Section 1.368-1(d) of the
Income Tax Regulations.
(i) USF will pay its respective expenses, if any, incurred in
connection with the Merger.
(j) In the Merger, shares of Transport Common Stock
representing control of Transport, as defined in Section 368(c) of the Code,
will be exchanged solely for voting stock of USF. For purposes of this
representation, shares of Transport Common Stock exchanged for cash or other
property originating with USF will be treated as outstanding Transport Common
Stock on the date of the Merger.
(k) There is no intercorporate indebtedness existing between
Transport and USF or Sub.
(l) Neither USF nor Sub is an "investment company" as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(m) Neither USF nor Sub owns, nor have they owned during the
past five years, any shares of Transport Common Stock.
4.8. COMPLETE DISCLOSURE. No statement contained herein or in any
certificate, schedule, list, exhibit or other instrument furnished or required
to be furnished to Transport pursuant to the provisions hereof contains, or will
at the time it is furnished contain, any untrue statement of any material fact
or omits or omit to state any fact necessary to make the statements herein or
therein not false or misleading.
4.9. UNDISCLOSED LIABILITIES. Neither USF nor any of its
Subsidiaries has any Liability (and there is no Basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against USF or any of its Subsidiaries giving rise to any Liability),
except for (i) Liabilities set forth or reserved against on the face of the
September 30, 1999 balance sheet; (ii) Liabilities, which have arisen after the
date of the September 30, 1999 balance sheet in the Ordinary Course of Business
(none of which relates to any breach of contract, breach of warranty, tort,
environmental liability, product liability, infringement, or violation of law or
arose out of any charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand);
and (iii) Liabilities which do not have a USF Material Adverse Effect.
4.10. LITIGATION. USF is not subject to any charges, complaints,
actions, suits, proceedings, hearings, and investigations which could reasonably
be expected to result in any USF Material Adverse Effect. To the knowledge of
USF, no Basis exists on which any such charge, complaint, action, suit,
proceeding, hearing or investigation may be brought or threatened against USF or
any of its Subsidiaries.
4.11. COMPLIANCE WITH LAWS. USF and its Subsidiaries are in
compliance with and have not in the past violated, in each case in any material
respects, any applicable law, rule or regulation of any Federal, state, local or
foreign government or agency thereof (including, but not limited to,
Environmental, Health and Safety Laws, common law, Federal and state regulations
respecting driver records and compliance practices, and safe and legal operation
of a for-hire public carrier) and no written notice, claim, charge, complaint,
action, suit, proceeding, investigation or hearing has been received by USF and
its Subsidiaries or filed, commenced or, to the knowledge of USF, threatened
against USF and its Subsidiaries alleging any such violation. USF and its
Subsidiaries have conducted and are conducting the business in compliance with
the material requirements, standards, criteria and conditions set forth in
applicable laws, statutes, ordinances, permits, licenses, orders, approvals,
authorizations, variances, rules, regulations, judicial decrees, common law and
civil law, of all jurisdictions having authority over the business and the
assets, and none of them is in violation of any of the foregoing except where
such non-compliance or violation would not result in a USF Material Adverse
Effect.
4.12. POOLING OF INTERESTS. USF is not aware of any facts or
circumstances in respect of it or its accounting procedures, or transactions in
its capital stock, which would have the effect of precluding accounting for the
transactions contemplated hereby as a "pooling of interests."
ARTICLE
5
COVENANTS PRIOR TO CLOSING
5.1. CONDUCT OF OPERATIONS. During the period from the Agreement
Date to the earlier of the termination of this Agreement or the Effective Time,
except to the extent USF shall otherwise consent in writing, the business shall
be operated solely in the Ordinary Course of Business and in compliance with the
terms of this Agreement and, in addition, Transport shall comply with the other
covenants described in this Article 5. Without limiting the generality of the
foregoing, at all times prior to the Closing, Transport shall unless the failure
to do so would not have a Transport Material Adverse Effect:
(a) carry on the business only in the Ordinary Course of
Business and not introduce any material new method of management, operation or
accounting;
(b) maintain the properties, facilities and assets of the
business, including those held under leases, in good working order and
condition, ordinary wear and tear excepted;
(c) perform all of its obligations under agreements relating
to or affecting the business;
(d) keep in full force and effect present insurance policies
or other comparable insurance coverage;
(e) maintain and preserve its business organization intact,
use reasonable best efforts to retain its present Key Employees, owner-operators
and contractors and maintain its relationships with suppliers, customers and
others having business relations with the business in all material respects;
(f) maintain compliance with all permits, and laws, rules and
regulations, consent orders, and all other orders of applicable courts,
regulatory agencies and similar governmental authorities in all material
respects;
(g) keep in full force and effect their corporate existence
and all permits, franchises and other rights material to the business;
(h) maintain the books, accounts and records of the business
in accordance with past custom and practice as used in connection with the
preparation of the Most Recent Balance Sheet;
(i) maintain in full force and effect the existence of all of
the Transport Intellectual Property Rights;
(j) continue to collect the accounts receivable and pay its
accounts payable in a commercially reasonable manner and in accordance with
present practice;
(k) take such actions as USF reasonably requests and otherwise
use its best efforts to cause fulfillment of all the conditions to which USF's
obligations are subject (including, without limitation, using its best efforts
to obtain all third party consents necessary to consummate the transactions
contemplated hereby and for USF to conduct the business following the Closing in
substantially the same manner conducted as of the Agreement Date); and
(l) promptly notify USF in writing if Transport is advised or
becomes aware that any material customer or supplier of the business intends to
cease doing business with Transport or any of its Subsidiaries.
5.2. PROHIBITED ACTIVITIES Prior to the Closing or the termination
of this Agreement, whichever is earlier, neither Transport nor its Subsidiaries
shall, without the prior written consent of USF, take any action or engage in
any action, engage in any practice, or enter into any transaction outside the
Ordinary Course of Business. Without limiting the generality of the foregoing,
Transport shall not:
(a) make any change in the articles of incorporation or
by-laws of Transport or any of its Subsidiaries except as contemplated by this
Agreement;
(b) issue any securities, options, warrants, calls, conversion
rights or other commitments relating to its securities of any kind other than
the grant of options to employees in the Ordinary Course of Business, the
issuance of shares pursuant to the exercise of options outstanding under the
Transport Stock Option Plans or the issuance of shares under the Transport Stock
Purchase Plan or Transport Rewards Plan;
(c) declare, set aside, or pay any dividend, distribution or
other payment of cash or assets upon or with respect to its capital stock or
redeem, purchase, or otherwise acquire any of its capital stock;
(d) enter into any transaction, arrangement or contract with
any officer, director, stockholder, employee, agent or other insider or
Affiliate of Transport or its Subsidiaries (other than wages, salaries, employee
benefits or other payments in the Ordinary Course of Business and other than
agreements and commitments that will not be binding upon and will not create any
continuing expectations of similar benefits from USF or the business);
(e) distribute or transfer any cash, property or other assets
to any officer, director, stockholder, employee, agent or other insider or
Affiliate of Transport or its Subsidiaries (other than the payment of wages,
salaries, employee benefits and other payments in the Ordinary Course of
Business or pursuant to agreements existing on the date hereof);
(f) enter into any Contract or commitment, or make any capital
expenditure for which it is not contractually bound as of the date hereof,
outside the Ordinary Course of Business and which involves an amount in excess
of $1,000,000.
(g) enter into any employment agreement or collective
bargaining agreement, or increase the compensation payable or to become payable
to any officer, director, Key Employee or agent, or make any bonus or management
fee payment to any such person except ordinary and customary salary increases to
employees in the Ordinary Course of Business or pursuant to agreements existing
on the date hereof;
(h) create, assume or permit to exist any Indebtedness for
borrowed money or Security Interest whether now owned or hereafter acquired,
except (i) with respect to purchase money liens incurred in connection with the
acquisition of equipment with an aggregate cost not in excess of $100,000
necessary for the conduct of the business and (ii) liens for Taxes either not
yet due or being contested in good faith and by appropriate proceedings (and for
which contested Taxes adequate reserves have been established and are being
maintained), or materialmen's, mechanics', workmen's, suppliers', builders',
repairmen's, employees' or other like liens arising in the Ordinary Course of
Business; and (iii) Indebtedness existing as of the date hereof;
(i) sell, assign, lease or otherwise transfer or dispose of
any of the assets in excess of $50,000, except in the Ordinary Course of
Business;
(j) acquire or negotiate for the acquisition of any business
or the start-up of any new business;
(k) merge or consolidate or agree to merge or consolidate with
or into any other entity;
(l) cancel, adjust, release or waive any Indebtedness or
rights or claims (or series of related rights or claims), or incur any Liability
outside of the Ordinary Course of Business, provided that Transport and its
Subsidiaries may negotiate and adjust bills in the course of good faith dispute
with customers in the Ordinary Course of Business;
(m) accelerate, terminate, modify, cancel or commit any
material breach of or amend or terminate any material Contract, Permit or other
right;
(n) materially change the manner in which the business has
been conducted, including, without limitation, collection of accounts
receivable, purchases of other Inventory or payment of accounts payable;
(o) materially change the accounting principles, methods or
practices or change the depreciation or amortization policies or rates;
(p) change the relationships with any customer or supplier
which might reasonably be expected to materially adversely affect any of the
assets, the business or the prospects of USF with respect to any of the
foregoing;
(q) enter into, amend or modify in any respect (beyond any
amendments and modifications reflected in true and complete copies of such Plans
delivered to USF) any Plan except as expressly required by this Agreement.
(r) take or permit any action that would require disclosure
pursuant to Section 5.5 below; or
(s) enter into any other transaction outside the Ordinary
Course of its business or take or permit any action which could reasonably be
expected to have a Transport Material Adverse Effect.
5.3. COVENANTS OF USF. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, USF agrees as to itself and its Subsidiaries (except to
the extent that Transport shall otherwise consent in writing), that USF shall
(and shall cause its Subsidiaries to) conduct their business in all material
respects in the ordinary course consistent with past practice and use their
commercially reasonable efforts to preserve intact their business organizations
and relationships with third parties and to keep available the services of the
present executive officers of USF. USF shall promptly notify Transport of any
event or occurrence which, in the reasonable judgement of USF, is not in the
ordinary course of business of USF. Except as expressly contemplated by this
Agreement, USF shall not (and shall not permit any of its Subsidiaries to),
without the prior written consent of Transport, (i) acquire or agree to acquire
by merging or consolidating with, or by purchasing a substantial equity interest
in or substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association, or other business organization or
division, or otherwise acquire or agree to acquire any assets which are
material, individually or in the aggregate, to the business of USF and its
Subsidiaries, taken as a whole, or (ii) sell all or substantially all of the
assets of USF or any of its Subsidiaries which are material, individually or in
the aggregate, to the business of USF and its Subsidiaries, taken as a whole,
where, in any case contemplated by the foregoing clauses (i) and (ii), such
action prior to consummation would require the approval of USF's stockholders or
would result in a change in control of USF. For purposes of this Section 5.3,
"change in control" shall mean a change in control which would be required to be
reported in response to Item 6(e) on Schedule 14A of Regulation 14A promulgated
under the Exchange Act.
5.4. ACCESS TO RECORDS AND PREMISES. From and after the date hereof,
Transport shall give to USF and its counsel, accountants and other
representatives, full access during normal business hours and upon reasonable
notice to all plants, offices, customers, suppliers, personnel or properties and
other books and records, of the business, so that USF may, at its expense,
investigate and inspect them, and Transport will furnish to USF copies of all
documents and information concerning the business as USF may reasonably request.
All information obtained shall be held subject to the Confidentiality Agreement
referred to in Section 5.6(a).
5.5. NOTICE OF CHANGES. Between the Agreement Date and the Closing
Date, Transport agrees to notify USF in writing promptly of any occurrence or
state of facts which will result in any of the warranties and representations
contained in Article 3 hereof not being true and correct if restated as of the
Effective Time.
5.6. NO SOLICITATION.
(a) Transport shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, through any officer, director,
employee, representative, agent or affiliate, (i) solicit, initiate, or
encourage (including by way of furnishing information) any inquiries or
proposals that constitute, or could reasonably be expected to lead to, a
proposal or offer for a merger, consolidation, business combination, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving
Transport, other than the transactions contemplated or permitted by this
Agreement (any of the foregoing inquiries or proposals being referred to in this
Agreement as a "COMPETING OFFER"), (ii) engage in negotiations or discussions
concerning, or provide any non-public information to any Person relating to, any
Competing Offer, or (iii) agree to, approve or recommend any Competing Offer.
Neither the board of directors of Transport, nor any committee thereof, shall
(a) withdraw or modify, or propose to withdraw or modify, in any manner adverse
to USF, the approval or recommendation of the board of directors of Transport of
the Merger or this Agreement, or (b) approve or recommend, or propose to approve
or recommend, any Competing Offer or any other acquisition of outstanding shares
of Transport, other than pursuant to the Merger or this Agreement.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
Transport or its board of directors from (A) furnishing non-public information
to, or entering into discussions or negotiations with, any Person, or taking any
other action deemed necessary, in connection with an unsolicited bona fide
written Competing Offer by such Person (including a new and unsolicited
Competing Offer received by Transport after the execution of this Agreement from
a Person whose initial contact with Transport may have been solicited by such
party prior to the execution of this Agreement) or recommending such an
unsolicited bona fide written Competing Offer to its stockholders, if and only
to the extent that (1) (x) Transport's board of directors determines in good
faith (after consultation with its financial advisor) that such Competing Offer
would, if consummated, result in a transaction more favorable to Transport's
stockholders than the transaction contemplated by this Agreement and that the
Person making such Preferred Proposal (as defined herein) has the financial
means, or the ability to obtain the necessary financing, to conclude such
transaction, and (y) the board of directors of Transport determines in good
faith (after consultation with its outside legal counsel) that such action is
necessary to comply with the fiduciary duties of the Board of Directors to its
stockholders under applicable law (any such more favorable Competing Offer being
referred to in this Agreement as a "PREFERRED PROPOSAL"); and (2) prior to
furnishing such non-public information to, or entering into discussions or
negotiations with, such Person, the board of directors of Transport receives
from such Person an executed confidentiality agreement with confidentiality
provisions not materially less favorable to such Person than those contained in
the Confidentiality Agreement dated as of August 26, 1999 between USF and
Transport (the "CONFIDENTIALITY AGREEMENT") or (B) complying with Rule 14d-9 and
Rule 14e-2 promulgated under the Exchange Act with regard to a Competing Offer.
Transport shall take no action with respect to the Competing Offer until 36
hours after notice is received by USF as required under Section 5.6(b) below.
(b) Transport shall notify USF no later than 24 hours after
receipt by Transport (or its advisors) of any Competing Offer or any request for
nonpublic information in connection with a Competing Offer or for access to the
properties, books or records of such party by any Person that informs such party
that it is considering making, or has made, a Competing Offer. Such notice to
USF shall be made orally and confirmed in writing and shall indicate in
reasonable detail the terms and conditions of such proposal, inquiry or contact.
5.7. PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT.
(a) As promptly as practicable after the execution of this
Agreement, Transport and USF shall prepare and file with the SEC the Proxy
Statement, and USF shall prepare and file with the SEC the Registration
Statement, in which the Proxy Statement will be included. USF and Transport
shall
use their best efforts to cause the Registration Statement to become effective
as soon after such filing as practicable, and the parties shall promptly furnish
a copy of the Proxy Statement/prospectus included in the Registration Statement
to the shareholders of Transport, after the Registration Statement has become
effective with the SEC.
(b) USF and Transport shall make all necessary filings with
respect to the Merger under the Securities Act and the Exchange Act and the
rules and regulations thereunder.
5.8. CONSENTS. Transport shall obtain all necessary consents,
waivers and approvals under its material agreements, contracts, licenses or
leases as may be necessary or advisable to consummate the Merger and the other
transactions contemplated by this Agreement.
5.9. SHAREHOLDERS MEETING. Transport shall call the Transport
Shareholders Meeting as promptly as practicable for the purpose of voting upon
this Agreement and the Merger. Subject to Sections 5.6 and 5.7, Transport will,
through its Board of Directors, recommend to its shareholders approval of such
matters and will coordinate and cooperate with respect to the timing of such
meeting and shall use its best efforts to hold such meeting as soon as
practicable after the date hereof.
5.10. PUBLIC DISCLOSURE. In the event that either party proposes to
issue, make or distribute any press release, public announcement or other
written publicity or disclosure prior to the Closing Date that refers to the
transactions contemplated herein, the party proposing to make such disclosure
shall provide a copy of such disclosure to the other parties and shall afford
the other parties reasonable opportunity (subject to any legal obligation of
prompt disclosure) to comment on and approve, which approval shall not be
unreasonably withheld, such disclosure or the portion thereof which refers to
the transactions contemplated herein prior to making such disclosure.
5.11. TAX-FREE REORGANIZATION. USF and Transport shall each use its
best efforts to cause the Merger to be treated as a reorganization within the
meaning of Section 368(a) of the Code and to obtain an opinion of its respective
counsel to such effect as contemplated by Sections 6.2(d) and 6.3(d),
respectively. For Federal and state tax purposes, USF and Transport shall report
the transactions contemplated by this Agreement as a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code and similar state
laws. Prior to the Effective Time, Transport will deliver to USF and Sub letters
from Transport and/or certain of its shareholders to the reasonable satisfaction
of USF and Sub that provide assurance that there is no plan or intention on the
part of the shareholders of Transport (or knowledge of such plan or intent to
the extent Transport provides a representation with respect to holders of less
than five percent (5%) of Transport Common Stock) to sell, exchange or otherwise
dispose of to USF or any person affiliated with USF a number of shares of USF
Common Stock received in the Merger that would reduce the Transport
shareholders' ownership of USF Common Stock received in the Merger to a number
of shares having a value, as of the Effective Time, of less than fifty percent
(50%) of the value of all of the outstanding stock of Transport immediately
prior to the Effective Time. Prior to the Effective Time, USF and Sub each will
deliver to Transport letters from USF and Sub and/or certain of their
stockholders to the reasonable satisfaction of Transport that provide assurance
that there is no plan or intention on the part of USF or Sub or the affiliates
or the stockholders of USF or Sub (or knowledge of such plan or intent to the
extent either USF or Sub provides a representation with respect to holders of
less than five percent (5%) of USF or Sub Common Stock) to buy or otherwise
acquire a number of shares of USF Common Stock issued in the Merger (other than
through purchases of shares on the public markets where the seller of the shares
is unknown to the buyer) that would reduce the Transport shareholders' ownership
of USF Common Stock received in the Merger to a number of shares having a value
as of the Effective Time, of less than fifty percent (50%) of the value of all
of the outstanding stock of Transport immediately prior to the Effective Time.
5.12. POOLING ACCOUNTING. USF and Transport shall each use its best
efforts to cause the business combination to be effected by the Merger to be
accounted for as a pooling of interests. Each of USF and Transport shall use its
best efforts (i) to cause its respective Affiliates (as defined in Section 5.14)
not to take any action that would adversely affect the ability of USF to account
for the business combination to be effected by the Merger as a pooling of
interests and (ii) to cause its respective Affiliates to sign and deliver to USF
twenty (20) days prior to the date of the Transport Shareholders Meeting the
Pooling Letter. No later than May 30, 2000, USF shall publish financial results
which shall include at least thirty (30) days of combined operations with
Transport, so long as the Closing has occurred prior to March 31, 2000.
5.13. UPDATE DISCLOSURE; BREACHES. From and after the date of this
Agreement until the Effective Time, each party hereto shall promptly notify the
other party, by written update to the Transport Disclosure Schedule, in the case
of notice by Transport and by written notice, in the case of notice by USF of
(i) the occurrence or non-occurrence of any event which would be likely to cause
any condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied, or (ii) the
failure of USF or Transport to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it pursuant to this Agreement
which would be likely to result in any condition to the obligations of any party
to effect the Merger and the other transactions contemplated by this Agreement
not to be satisfied. The delivery of any notice pursuant to this Section 5.13
shall not cure any breach of any representation or warranty requiring disclosure
of such matter prior to the date of this Agreement or otherwise limit or affect
the remedies available hereunder to the party receiving such notice, provided
that such party, within ten (10) Business Days after receipt of such notice,
advises the other party of its objection to the matter disclosed in such notice
and the nature of such objection.
5.14. RULE 145 LETTER. Upon the execution of this Agreement, USF and
Transport will provide each other with a list of those persons who are, in USF's
or Transport's respective reasonable judgment, "affiliates" of USF or Transport,
respectively, within the meaning of Rule 145 under the Securities Act ("RULE
145"). Each such Person who is an "affiliate" of USF or Transport within the
meaning of Rule 145 is referred to herein as an "AFFILIATE." USF and Transport
shall provide each other such information and documents as Transport or USF
shall reasonably request for purposes of reviewing such list and shall notify
the other party in writing regarding any change in the identity of its
Affiliates prior to the Closing Date. Transport shall use its best efforts to
cause to be delivered to USF not less than 20 days prior to the date of the
Transport Shareholders Meeting from each of the Affiliates of Transport, an
executed agreement, in the form attached hereto as Exhibit A ("RULE 145 AND
POOLING LETTER"). USF shall be entitled to place appropriate legends on the
certificates evidencing any USF Common Stock to be received by Affiliates of
Transport pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the USF Common Stock, consistent
with the terms of the Rule 145 and Pooling Letter.
5.15. NASDAQ QUOTATION. USF shall cause the shares of USF Common
Stock to be issued in the Merger to be listed or approved for listing on The
Nasdaq National Market, subject to official notice of issuance, prior to the
Closing Date.
5.16. BROKERS OR FINDERS. Each of USF and Transport represents, as
to itself, its Subsidiaries and its Affiliates, that no agent, broker,
investment banker, financial advisor or other firm or Person is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement except
(i) Deutsche Banc Alex. Brown, whose fees and expenses are set forth in a
certain engagement letter ("DEUTSCHE BANC ALEX. BROWN ENGAGEMENT LETTER")
between Deutsche Banc Alex. Brown and Transport, a copy of which has previously
been delivered to USF prior to the date of this Agreement, will be paid by
Transport in
accordance with the Deutsche Banc Alex. Brown Engagement Letter and (ii) William
Blair & Company, L.L.C. whose fees and expenses will be paid by USF in
accordance with an agreement between USF and William Blair & Company, L.L.C. and
each of USF and Transport agrees to indemnify and hold the other harmless from
and against any and all claims, liabilities or obligations with respect to any
other fees, commissions or expenses asserted by any Person on the basis of any
act or statement alleged to have been made by such party or its Affiliate.
5.17. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) After the Effective Time, Transport shall, to the fullest
extent permitted under applicable law Transport Articles, or Bylaws, indemnify
and hold harmless, each present and former director, officer, employee or agent
of Transport and its Subsidiaries (collectively, the "INDEMNIFIED PARTIES")
against all costs and expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and settlement amounts
paid in connection with any actual or threatened claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, arising out of or pertaining to any
action or omission in their capacity as an officer, director, employee or agent
of Transport or its Subsidiaries or is or was serving at the request of
Transport or any of its Subsidiaries as a director, officer, employee or agent
of another company, in each case occurring before the Effective Time (including
the transactions contemplated by this Agreement).
(b) In the event USF or its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity in such consolidation or merger or
(ii) transfers all or substantially all its properties and assets to any Person,
then, and in each case, proper provision shall be made so that the successors
and assigns of USF, as the case may be, honor the indemnification obligations
set forth in this Section 5.17.
5.18. ADDITIONAL AGREEMENTS; REASONABLE EFFORTS. Subject to the
terms and conditions of this Agreement, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, subject to the appropriate vote of the
shareholders of Transport described in Section 5.9, including cooperating fully
with the other party, including by provision of information and making all
necessary filings under the HSR Act. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either of
the Constituent Corporations, the proper officers and directors of each party to
this Agreement shall take all such necessary action. Transport and its Board of
Directors shall take all actions necessary or desirable to cause each Transport
Stock Option to become an Option to acquire USF Common Stock as contemplated by
Section 2.1(d).
5.19. STOCK OPTION AGREEMENTS. Transport and USF agree to fully
perform their respective obligations under their stock option agreements.
5.20. EMPLOYMENT AGREEMENT. Transport's President and Chief
Executive Officer shall enter into an employment agreement with Transport
substantially in the form of Exhibit B.
5.21. TERMINATION OF CHANGE IN CONTROL SEVERANCE AGREEMENTS.
Transport's President and Chief Executive Officer and Transport shall execute
and deliver at Closing an agreement terminating his change in control severance
agreement.
5.22. TRADING PROHIBITIONS. Each of USF, Sub and Transport hereby
acknowledges that as a result of disclosures by USF, Sub and Transport
contemplated under this Agreement, USF, Sub, Transport and its Subsidiaries and
their respective Affiliates may, from time to time, have material, non-public
information concerning each other. Each of USF, Sub and Transport confirms that
it and its respective Affiliates are aware, and that it has advised such persons
that, (i) the United States securities laws may prohibit a Person who has
material, non-public information from purchasing or selling securities of any
company to which such information relates, and (ii) material non-public
information shall not be communicated to any other Person except as permitted
herein.
5.23. LEGAL CONDITIONS TO MERGER. Each of USF and Transport will
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on itself with respect to the Merger (which
actions shall include, without limitation, furnishing all information required
under the HSR Act and in connection with approvals of or filings with any other
Governmental Entity) and will promptly cooperate with and will use their best
efforts to furnish information to each other in connection with any such
requirements imposed upon any of them in connection with the Merger. Each of USF
and Transport will: (i) take all reasonable actions necessary to obtain (and
will cooperate with each other in obtaining) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity or other third
party, required to be obtained or made by Transport or USF in connection with
the Merger (any of the foregoing an "APPROVAL") or the taking of any action
contemplated thereby or by this Agreement; (ii) diligently oppose or pursue any
rehearing, appeal or other challenge which may be available to it of any refusal
to issue any Approval or of any order or ruling of any Governmental Entity which
may adversely affect the ability of the parties hereto to consummate the Merger
or to take any action contemplated by any Approval or by this Agreement until
such time as such refusal to issue any Approval or any order or ruling has
become final and non-appealable; and (iii) diligently oppose any objections to,
appeals from or petitions to reconsider or reopen any Approval or the taking of
any action contemplated thereby or by this Agreement.
5.24. VOTING AGREEMENT. Contemporaneously with the execution of this
Agreement, Estate of James B. Aronson, Robert J. Meyers, Anton J. Christianson,
Kenneth J. Roering, Michael J. Paxton and William D. Slattery have executed a
voting agreement whereby each party to such agreement has agreed to vote in
favor of the Merger.
5.25. HSR FILING. Transport and USF shall file a Notification and
Report Form for Certain Mergers and Acquisitions with the Federal Trade
Commission and the Antitrust Division of the Department of Justice and any
additional information or documentary material relevant to the proposed
transaction if requested by either agency pursuant to the HSR Act or the FTC
Rules; and shall have used its best efforts to obtain clearance of the proposed
transaction. For purposes of any such filing, Transport shall be the "acquired
person" and USF the "acquiring person" under the provisions of the HSR Act and
FTC Rules.
5.26. STOCK OPTIONS AND EMPLOYEE BENEFITS.
(a) USF shall take all corporate action necessary to reserve
and make available for issuance a sufficient number of shares of USF Common
Stock for delivery under the Transport Stock Options assumed in accordance with
Section 2.1(d). Within twenty (20) business days after the Effective Time, USF
shall file a registration statement on Form S-8 (or any successor or other
appropriate forms) which will register the shares of USF Common Stock subject to
assumed options to the extent permitted by Federal securities laws and shall use
its reasonable efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.
(b) Outstanding purchase rights under the Transport Stock
Purchase Plan shall be exercised immediately prior to the Effective Time, and
each participant in the Transport Stock Purchase Plan shall accordingly be
issued shares of Transport Common Stock at that time which shall be converted
into shares of USF Common Stock in the Merger. The Transport Stock Purchase Plan
shall terminate as of the Effective Time, and no purchase rights shall be
subsequently granted or exercised under the Transport Stock Purchase Plan.
Employees of Transport as of the Effective Time shall be permitted to
participate in the USF Stock Purchase Plan commencing on the first enrollment
date of such plan following the Effective Time, subject to the eligibility
provisions of such plan (with Transport employees receiving credit for purposes
of such eligibility provisions for service with Transport or its Subsidiaries).
ARTICLE
6
CONDITIONS TO MERGER
6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) SHAREHOLDER APPROVAL. This Agreement and the Merger shall
have been approved and adopted by the affirmative vote of the holders of a
majority of the outstanding shares of Transport Common Stock entitled to vote
thereon at the Transport Shareholders Meeting.
(b) WAITING PERIODS. The waiting period applicable to the
consummation of the Merger under the HSR Act and any other waiting periods under
applicable laws shall have expired or been terminated.
(c) APPROVALS. Other than the filing provided for by Section
1.1, all authorizations, consents, orders or approvals of, or declarations or
filings with, or expirations of waiting periods imposed by, any Governmental
Entity the absence or nonoccurrence of which would be reasonably likely to have
a Transport Material Adverse Effect or a USF Material Adverse Effect shall have
been filed, occurred or been obtained.
(d) REGISTRATION STATEMENT. The Registration Statement shall
have become effective under the Securities Act and shall not be the subject of
any stop order or proceedings seeking a stop order.
(e) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger or limiting or restricting
the conduct or operation by USF of the business of USF or the Surviving
Corporation after the Merger shall have been issued, except for any such order,
injunction restraint or prohibition which would not be reasonably likely to have
a USF Material Adverse Effect; nor shall there be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger by any Governmental Entity which makes the consummation
of the Merger illegal.
(f) ACCOUNTANTS' POOLING LETTERS. USF and Transport shall have
received letters from Arthur Andersen LLP and KPMG LLP, respectively, each dated
the date of the Proxy Statement and confirmed in writing as of the Closing Date
and addressed to USF and Transport, respectively, stating that the Merger may be
accounted for as a pooling of interests transaction.
(g) NASDAQ APPROVAL. The shares of USF Common Stock to be
issued in the Merger shall have been listed or approved for listing on The
Nasdaq National Market.
6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF USF. The obligations of
USF to effect the Merger are subject to the satisfaction of each of the
following conditions, any of which may be waived in writing exclusively by USF:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Transport set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date; and USF shall have
received a certificate signed on behalf of Transport by the President and Chief
Executive Officer and the president of Transport to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF TRANSPORT. Transport shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date; and USF shall have
received a certificate signed on behalf of Transport by the President and Chief
Executive Officer and the chief financial officer of Transport to such effect.
(c) OPINION OF TRANSPORT'S COUNSEL. USF and Sub shall have
received an opinion of counsel for Transport in substantially the form attached
hereto as Exhibit C.
(d) TAX OPINION. USF shall have received a written opinion
from Sachnoff & Weaver, Ltd., counsel to USF, to the effect that the Merger will
be treated for Federal income tax purposes as a tax-free reorganization within
the meaning of Section 368(a) of the Code. In rendering such opinion, such
counsel may rely upon reasonable representations and certificates of USF,
Transport and certain shareholders or stockholders of Transport and USF; and USF
and Transport will make, and each of them agrees to use reasonable efforts to
cause such of its respective stockholders or shareholders to make, such
representations and deliver such certificates.
(e) NO ADVERSE CHANGE. Since the date of the Most Recent
Balance Sheet, there shall have occurred no event which has caused a Transport
Material Adverse Effect.
(f) RULE 145 AND POOLING LETTERS. Transport shall have used
its best efforts to cause to be delivered the Rule 145 and Pooling Letters to
USF not less than 20 days prior to the date of the Transport Shareholders
Meeting from each Affiliate of Transport pursuant to Section 5.14 hereof.
(g) NO CONSENT TO TRANSFER. The Board of Directors of
Transport shall not have consented to or approved any transfer or assignment of
any holder's right in the Transport Put Option.
6.3. ADDITIONAL CONDITIONS TO OBLIGATIONS OF TRANSPORT. The
obligation of Transport to effect the Merger is subject to the satisfaction of
each of the following conditions, any of which may be waived, in writing,
exclusively by Transport:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of USF set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and (except to the extent
such representations speak as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date; and Transport shall have received a
certificate signed on behalf of USF by the chief executive officer and the chief
financial officer of USF to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF USF. USF shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date; and Transport shall
have received a certificate signed on behalf of USF by the chief executive
officer and the chief financial officer of USF to such effect.
(c) OPINION OF USF'S COUNSEL. Transport shall have received an
opinion of counsel for USF and Sub in substantially the form attached hereto as
Exhibit D.
(d) TAX OPINION. Transport shall have received the opinion of
Robins, Kaplan, Miller & Ciresi, L.L.P., counsel to Transport, to the effect
that the Merger will be treated for Federal income tax purposes as a tax-free
reorganization within the meaning of Section 368(a) of the Code. In rendering
such opinions, such counsel may rely upon reasonable representations and
certificates of USF, Transport and certain shareholders or stockholders of
Transport and USF; and Transport and USF will make, and each of them agrees to
use reasonable efforts to cause such of its respective shareholders and
stockholders, as applicable, to make, such representations and deliver such
certificates.
(e) NO ADVERSE CHANGE. Since September 30, 1999, there shall
have occurred no event which has caused a USF Material Adverse Effect.
(f) CHANGE IN CONTROL AGREEMENTS. USF shall have assumed and
agreed to perform in full all Change in Control Severance Agreements with
employees of Transport existing as of the date of this Agreement.
6.4. CLOSING.
(a) TRANSACTIONS AT CLOSING. At the Closing, each of the
following transactions shall occur:
(b) PERFORMANCE BY TRANSPORT. At the Closing, Transport shall
deliver to USF the following:
(i) copies of the required third-party consents and
Approvals described in Section 3.4(a) and 3.4(b);
(ii) satisfactory evidence of the approval described in
Section 6.1(a);
(iii) the certificates described in Sections 6.2(a) and
6.2(b) to be delivered on the Closing Date;
(iv) certificates of compliance or certificates of good
standing of Transport and its Subsidiaries, as of the most recent
practicable date, from the appropriate governmental authority of the
jurisdiction of their respective incorporation;
(v) certified copies of resolutions of the Board of
Directors and shareholders of Transport approving the transactions
set forth in this Agreement;
(vi) certificates of incumbency for the officers of
Transport who are executing this Agreement and the other documents
contemplated hereby;
(vii) Articles of Merger, in form and content that
complies with the MBCA, executed by Transport;
(viii) the opinion of counsel for Transport, referenced
in Section 6.2(c);
(ix) the tax opinion described in Section 6.3(d);
(x) the letters described in the third sentence of
Section 5.11;
(xi) the letter from KPMG LLP to be delivered by the
Closing Date as described in Section 6.1(f);
(xii) the executed Employment Agreement as described in
Section 5.20; and
(xiii) such other evidence of the performance of all
covenants and satisfaction of all conditions required of Transport
by this Agreement, at or prior to the Closing, as USF or its counsel
may reasonably require.
(c) PERFORMANCE BY USF. At the Closing, USF shall deliver to
Transport the following:
(i) the certificates described in Sections 6.3 (a) and
6.3(b);
(ii) certificates of incumbency of the officers of USF
who are executing this Agreement and the other documents
contemplated hereunder;
(iii) certified copies of resolutions of the Board of
Directors of USF approving the transactions set forth in this
Agreement;
(iv) Articles of Merger in form and content that
complies with the MBCA, executed by USF;
(v) the opinion of counsel for USF referenced in Section
6.3(c); and
(vi) the tax opinion described in Section 6.2(d);
(vii) the letters described in the fourth sentence of
Section 5.11;
(viii) the letter from Arthur Andersen LLP to be
delivered by the Closing Date as described in Section 6.1(f);
(ix) the executed Employment Agreement as described in
Section 5.20; and
(x) such other evidence of the performance of all the
covenants and satisfaction of all of the conditions required of USF
by this Agreement at or before the Closing as Transport or its
counsel may reasonably require.
ARTICLE
7
TERMINATION
7.1. TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time (with respect to Sections 7.1(b) through 7.1(h), by
written notice by the terminating party to the other
party), whether before or after approval of the matters presented in connection
with the Merger by the shareholder of Sub or the shareholders of Transport, as
follows:
(a) by mutual written consent of USF and Transport; or
(b) by either USF or Transport if the Merger shall not have
been consummated within 180 days of the date hereof (provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before such date, and provided further, that this Agreement may be
extended up to 45 days by either party by written notice to the other party if
the Merger would have been consummated but for the absence of one or more
required Approvals or third-party consents, and such Approval(s) or consent(s)
can reasonably be expected to be obtained within such 45 day period); or
(c) by either USF or Transport if a court of competent
jurisdiction or other Governmental Entity shall have issued a final order,
decree or ruling, or taken any other action, having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger, and all appeals with
respect to such order or action have been exhausted or the time for appeal of
such order, decree, ruling or action shall have expired (provided, however, that
the right to terminate this Agreement under this Section 7.1(c) shall not be
available to any party which has not complied with its obligations under Section
5.23); or
(d) by either USF or Transport if, at the Transport
Shareholders Meeting (including any adjournment or postponement thereof), the
requisite vote of the shareholders of Transport in favor of this Agreement and
the Merger shall not have been obtained (provided, however, that the right to
terminate this Agreement under this Section 7.1(d) shall not be available to any
party which has not complied with its obligations hereunder); or
(e) by USF if (i) the board of directors of Transport shall
have withdrawn or modified its recommendation of this Agreement or the Merger in
a manner adverse to USF; (ii) an Alternative Transaction (as defined in Section
7.3(f)) involving Transport shall have taken place or the Board of Directors of
Transport shall have recommended such an Alternative Transaction to the
shareholders of Transport; or (iii) a tender offer or exchange offer for thirty
percent (30%) or more of the outstanding shares of Transport Common Stock shall
have been commenced or a registration statement with respect thereto shall have
been filed (other than by USF or an Affiliate thereof), and the board of
directors of Transport shall have (A) recommended that the shareholders of
Transport tender their shares of Transport Common Stock in such tender or
exchange offer or (B) resolved or publicly announced its intention to take no
position with respect to such tender or exchange offer; or
(f) by USF, if a breach of any representation, warranty,
covenant or agreement on the part of Transport set forth in this Agreement shall
have occurred which would cause the conditions set forth in Sections 6.2(a) or
6.2(b) not to be satisfied, and, that with respect to any breach of a covenant
or agreement hereunder, such covenant or agreement is incapable of being cured
or, if capable of being cured, shall not have been cured within ten (10)
Business Days following receipt by Transport of written notice of such breach
from USF; or
(g) by Transport, if the board of directors of Transport shall
have determined to recommend a Competing Offer to its shareholders after
determining, pursuant to Section 5.6, that such Competing Offer constitutes a
Preferred Proposal; provided, however, that the board of directors of Transport
shall provide USF with 36 hours prior written notice before recommending such
Competing Offer to its shareholders; or
(h) by Transport, if a breach of any representation, warranty,
covenant or agreement on the part of USF set forth in this Agreement shall have
occurred which would cause the conditions set forth Sections 6.3(a) or 6.3(b)
not to be satisfied, and, with respect to any breach of a covenant or agreement
hereunder, such covenant or agreement is incapable of being cured or, if capable
of being cured, shall not have been cured within ten (10) Business Days
following receipt by USF of written notice of such breach from Transport;
7.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to this Article 7, there shall be no Liability or obligation
on the part of USF, Transport, or their respective officers, directors,
stockholders or Affiliates, except as set forth in Section 7.3 and further
except to the extent that such termination results from the willful breach by a
party of any of its representations, warranties, covenants or agreements in this
Agreement; and provided, that the provisions of Section 7.3 of this Agreement
and the Confidentiality Agreement shall remain in full force and effect and
survive any termination of this Agreement.
7.3. FEES AND EXPENSES.
(a) Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Merger is consummated; provided, however, that USF and Transport
shall share equally the fees and expenses, other than attorneys', financial
advisors and accounting fees and expenses, incurred in relation to the printing
and filing of the Proxy Statement (including any related preliminary materials)
and the Registration Statement (including financial statements and exhibits) and
any amendments or supplements thereto.
(b) If this Agreement is terminated (i) by USF pursuant to
Section 7.1(f) as a result of a breach by Transport of any of its
representations, warranties, covenants or agreements or (ii) by USF or Transport
pursuant to Section 7.1(d) as a result of the failure to receive the requisite
vote for approval of this Agreement and the Merger by the shareholders of
Transport at the Transport Shareholders Meeting (provided USF shall not be
eligible to receive any expense reimbursement under this Section 7.3(b) if
Transport shall have terminated this Agreement pursuant to Section 7.1(d) and
USF shall not have been eligible to so terminate this Agreement hereunder), then
USF shall be entitled to reimbursement of its documented expenses relating to
this Agreement and the transactions contemplated hereby in an amount up to
$750,000, in cash within one (1) Business Day after such termination, and such
settlement shall be the exclusive compensation to which USF shall be entitled
for any and all claims and losses which it has had or may have incurred in
connection with this Agreement.
(c) If this Agreement is terminated by Transport pursuant to
Section 7.1(h) as a result of a breach by USF of any of its representations,
warranties, covenants or agreements, then Transport shall be entitled to
reimbursement of its documented expenses relating to this Agreement and the
transactions contemplated hereby in an amount up to $750,000, in cash, within
one (1) Business Day after such termination, and such settlement shall be the
exclusive compensation to which Transport shall be entitled for any and all
claims and losses which it has had or may have incurred in connection with this
Agreement.
(d) If this Agreement is terminated by USF pursuant to Section
7.1(e), Transport shall pay to USF a termination fee of $5,000,000, in cash,
(the "TERMINATION FEE") within one (1) Business Day of such termination and such
settlement shall be the exclusive compensation to which USF shall be entitled
for any and all claims and losses which it has, had or may have incurred in
connection with this Agreement.
(e) If this Agreement is terminated by Transport pursuant to
Section 7.1(g), Transport shall pay to USF the Termination Fee within one (1)
Business Day of such termination and such settlement shall be the exclusive
compensation to which USF shall be entitled for any and all claims and losses
which it has had or may have incurred in connection with this Agreement.
(f) As used in this Agreement, an "ALTERNATIVE TRANSACTION"
involving a specified party to this Agreement means: (i) a transaction or series
of transactions pursuant to which any Person or group (as such term is defined
under the Exchange Act) other than USF, Transport or Sub, or any affiliate
thereof, (a "THIRD PARTY") acquires or would acquire (upon completion of such
transaction or series of transactions) shares (or securities exercisable for or
convertible into shares) representing more than thirty percent (30%) of the
outstanding shares of Transport Common Stock, pursuant to a tender offer or
exchange offer or otherwise; (ii) a merger, consolidation, share exchange or
other business combination involving Transport or any of its material
Subsidiaries if, upon consummation of such merger, consolidation, share exchange
or other business combination such Third Party owns or would own more than
thirty percent (30%) of the outstanding equity securities of Transport or any of
its material Subsidiaries or the entity surviving such merger or business
combination or resulting from such consolidation; (iii) any other transaction or
series of transactions pursuant to which any Third Party acquires or would
acquire (upon completion of such transaction or series of transactions) control
of assets of Transport or any of its material Subsidiaries (including, for this
purpose, outstanding equity securities of Subsidiaries of such party) having a
fair market value equal to more than thirty percent (30%) of the fair market
value of all the consolidated assets of such party immediately prior to such
transaction or series of transactions; or (iv) any transaction or series of
transactions pursuant to which any Third Party acquires or would acquire (upon
completion of such transaction or series of transactions) control of the Board
of Directors of Transport or by which nominees of any Third Party are (or would
be) elected or appointed to a majority of the seats on the Board of Directors of
Transport.
(g) If either party fails to promptly pay to the other party
any fee or expense due hereunder, such breaching party shall pay the costs and
expenses (including reasonable legal fees and expenses) in connection with any
action, including the filing of any lawsuit or other legal action, taken to
collect payment, together with interest on the amount of any unpaid fee at the
publicly announced prime rate in the WALL STREET JOURNAL from the date such fee
was required to be paid.
7.4. AMENDMENT. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the shareholders of Transport, but, after any such approval, no
amendment shall be made which by law requires further approval by such
shareholders, without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
7.5. EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE
8
MISCELLANEOUS PROVISIONS
8.1. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None
of the representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing and
the Effective Time, except for covenants and agreements which, by their terms,
are to be performed after the Effective Time and the agreements of the
Affiliates of Transport delivered pursuant hereto.
8.2. NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
8.3. ENTIRE AGREEMENT. Except as otherwise specifically provided
herein, this Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes any prior communications,
understandings, agreements, or documents with regard thereto.
8.4. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign this Agreement or any of
such Party's rights, interests, or obligations hereunder without the prior
written approval of the other Parties.
8.5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together, when delivered, will constitute one and the same instrument.
8.6. NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given (i) three (3)
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid; (ii) one day after receipt is electronically
confirmed, if sent by fax (provided that a hard copy shall be promptly sent by
first class mail); or (iii) one (1) business day following deposit with a
recognized national overnight courier service for next day delivery, charges
prepaid, and, in each case, addressed to the intended recipient as set forth
below:
If to USF or Sub: With a Copy to:
- ----------------- ---------------
USFreightways Corporation Sachnoff & Weaver, Ltd.
9700 Higgins Road 30 South Wacker Drive
Suite 570 Suite 2900
Rosemont, Illinois 60018 Chicago, Illinois 60606
Attn: John Campbell Carruth Attn: William N. Weaver, Jr., Esq.
Fax: (847) 696-2080 Fax: (312) 207-6400
If to Transport: And a Copy To:
- ---------------- --------------
Transport Corporation of America, Inc. Robins, Kaplan, Miller & Ciresi, L.L.P.
1769 Yankee Doodle Road 2800 LaSalle Plaza
Eagan, Minnesota 55121 800 LaSalle Avenue
Minneapolis, Minnesota 55402
Attn: Robert J. Meyers Attn: John R. Houston, Esq.
Fax: (651) 686-2562 Fax: (612) 339-4181
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is delivered to the individual
for whom it is intended. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
8.7. GOVERNING LAW; EXCLUSIVE JURISDICTION. This Agreement shall be
governed by and construed in accordance with the domestic laws of the State of
Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Delaware.
8.8. AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by USF
and Transport. No waiver by any Party of any default, misrepresentation, breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent occurrence of such kind.
8.9. SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the invalid or unenforceable term or provision
in any other situation or in any other jurisdiction. If a final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
8.10. CONSTRUCTION. The Parties have jointly participated in the
negotiation and drafting of this Agreement. In the event of an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumptions or burdens of proof
shall arise favoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any Federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty and covenant contained herein
shall have independent significance. If any Party has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant. Each defined term used in this Agreement
has a comparable meaning when used in its plural or singular form. Each
gender-specific term used herein has a comparable meaning whether used in a
masculine, feminine or gender-neutral form. The term "include" and its
derivatives shall have the same construction as the phrase "include, without
limitation," and its derivatives. The section headings contained in this
Agreement are inserted for convenience or reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
8.11. INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and
Schedules hereto are incorporated herein by reference and made a part hereof.
8.12. REMEDIES. Each of the Parties acknowledges and agrees that
each other Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that each other
Party shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in any court of
competent jurisdiction, in addition to any other remedy to which it may be
entitled, at law or in equity. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies of
law or inequity.
8.13. NO AGREEMENT UNTIL EXECUTED. This Agreement shall not
constitute or be deemed to evidence a contract or agreement among the parties
hereto unless and until executed by all parties hereto, irrespective of
negotiations among the parties or the exchanging of drafts of this Agreement.
8.14. ENFORCEMENT EXPENSES. In the event of any dispute arising out
of the subject matter of this Agreement, the prevailing Party shall recover, in
addition to any other damages assessed, its reasonable attorneys' fees and costs
incurred in resolving such dispute.
8.15. DIRECTLY OR INDIRECTLY. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken by such Person, directly or indirectly, through one or more
intermediaries.
8.16. TIME OF THE ESSENCE. Time shall be of the essence of this
Agreement and of every part hereof.
* * * * *
IN WITNESS WHEREOF, USF, Sub and Transport hereto have caused this
Agreement and Plan of Merger to be executed by their respective officers
thereunto duly authorized as of the date first above written.
TRANSPORT CORPORATION OF USFREIGHTWAYS CORPORATION
AMERICA, INC.
By: /s/ Robert J. Meyers By: /s/ John Campbell Carruth
--------------------------------------------- ---------------------------------------------
Name: Robert J. Meyers Name: John Campbell Carruth
Title: President and Chief Executive Officer Title: Chairman and Chief Executive Officer
ZEUS ACQUISITION CORPORATION
By: /s/ John Campbell Carruth
---------------------------------------------
Name: John Campbell Carruth
Title: Chairman