ANNEX I
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (the "AGREEMENT"), dated as of July 7,
1998, by and among U.S. Xpress Enterprises, Inc., a Nevada corporation
("ENTERPRISES"), PST Acquisition Corp., a Nevada Corporation and wholly-owned
subsidiary of Enterprises ("MERGER SUB") and PST Vans, Inc., a Utah
corporation ("PST"):
Witnesseth:
Whereas, the Boards of Directors of Enterprises and Merger Sub and the Board
of Directors of PST have determined that the merger of PST with and into
Merger Sub (the "MERGER"), upon the terms and subject to the conditions set
forth in this Agreement is advisable and in the best interests of their
shareholders and PST's Board of Directors has recommended, or will recommend,
to PST5's shareholders that they approve of the Merger pursuant to the terms
and conditions of this Agreement;
Whereas, it is intended that for federal income tax purposes the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of
the Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder; and
Whereas, the parties hereto desire to make this Agreement for the purpose of
setting forth certain representations, warranties, covenants and agreements in
connection with the Merger.
Now, Therefore, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
legal sufficiency of such consideration being hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
The Merger
1.1 The Merger. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined in Section 1.2 hereof), in
accordance with the applicable provisions of the General Corporation Law of
Nevada and the Utah Revised Business Corporation Act (the "URBCA"), PST shall
be merged with and into Merger Sub in accordance with this Agreement, Articles
of Merger substantially in the form attached hereto as Exhibit 1.1(a) and
Exhibit 1.1(b) (the "ARTICLES OF MERGER") shall be filed with the Nevada
Secretary of State and the Utah Division of Corporations and Commercial Code,
respectively, and the separate existence of PST shall thereupon cease. The
Merger Sub shall be the surviving corporation in the Merger (hereinafter
sometimes referred to as the "SURVIVING CORPORATION").
1.2 Effective Time of the Merger. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VII hereof the
parties shall cause the Merger to be consummated. The Merger shall become
effective at such time (the "EFFECTIVE TIME") as copies of the duly completed
Articles of Merger are delivered to the Nevada Secretary of State and the Utah
Division of Corporations and Commercial Code for filing and the filing thereof
is completed by such authorities, or at such later time as the parties may
agree to specify in the Articles of Merger.
1.3 Effects of the Merger. The Merger shall have the effects set forth in
Nevada Revised Statutes Section 92A.250. The parties hereto intend that the
Merger qualify as a reorganization under Code Section 368(a) and agree to
treat the Merger as such for federal income tax purposes. This Agreement shall
constitute a plan of reorganization pursuant to which the Code Section 368(a)
reorganization shall occur.
1.4 Articles of Incorporation, Bylaws and Directors and Officers. From and
after the Effective Time: (i) the Articles of Incorporation of Merger Sub as
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, except that Article First thereof
shall be promptly amended to read as follows: "First: The name of the
corporation is PST Vans, Inc.,"; (ii) the Bylaws of Merger
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Sub as in effect immediately prior to the Effective Time shall be the Bylaws
of the Surviving Corporation; and (iii) the Board of Directors and officers of
the Merger Sub shall be the Board of Directors and officers of the Surviving
Corporation.
ARTICLE II
Conversion Of Shares At Effective Time
2.1 Conversion of Shares of PST Common Stock.
(a) Subject to Section 2.1(b) below, each share of PST's Common Stock, $.001
par value (the "PST COMMON STOCK"), issued and outstanding immediately prior
to the Effective Time (other than any shares of such stock held by Enterprises
or PST (or by subsidiaries of either), which shall be canceled, and other than
Dissenting Shares, if any, as defined in Section 6.9 hereof) shall, as of the
Effective Time, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive consideration
consisting of (i) a fraction of a share of Enterprises Class A common stock,
$.01 par value per share (the "ENTERPRISES COMMON STOCK") determined by
dividing One Million, One Hundred Thousand (1,100,000) by a number consisting
of (A) the number of issued and outstanding shares of PST Common Stock as of
the date hereof PLUS (B) the number of shares subject to outstanding options
to acquire PST Common Stock as of the date hereof (assuming the conversion of
all options to acquire PST Common Stock) and (ii) cash in the amount
determined by dividing Twelve Million, Five Hundred Thousand Dollars
($12,500,000.00) by a number consisting of (A) the number of issued and
outstanding shares of PST Common Stock as of the date hereof PLUS (B) the
number of shares subject to outstanding options to acquire PST Common Stock as
of the date hereof (assuming the conversion of all options to acquire PST
Common Stock). The Common Stock and cash to be received upon the conversion of
the PST Common Stock pursuant to the Merger are collectively referred to
herein as the "MERGER CONSIDERATION." No fraction of a share of Enterprises
Common Stock shall be issued. Each holder of PST Common Stock who would
otherwise be entitled to receive a fractional share of Enterprises Common
Stock shall receive, in lieu thereof, cash in an amount equal to such
fractional part of a share multiplied by the average Closing Price of
Enterprises Common Stock for the twenty (20) trading day period ending on the
day prior to the Closing Date (the "20-DAY AVERAGE PRICE"). "CLOSING PRICE"
shall mean, on any day, the last reported sale price of one share of
Enterprises Common Stock on the NASDAQ National Market. All cash payments
shall be rounded to the nearest cent. Each share of PST Common Stock, if any,
held by Enterprises or held by PST in its treasury immediately prior to the
Effective Time shall be canceled, and no Merger Consideration shall be payable
in respect thereof.
(b) No later than the Effective Time, Enterprises shall make available to
BankBoston, NA (the "EXCHANGE AGENT") certificates evidencing sufficient
shares of Enterprises Common Stock and a sufficient amount of cash to pay the
Merger Consideration determined pursuant to Section 2.1(a) hereof (such
amounts being hereinafter referred to as the "EXCHANGE FUND"). The Exchange
Agent shall, pursuant to irrevocable instructions from Enterprises, pay the
Merger Consideration out of the Exchange Fund. The Exchange Agent shall invest
the cash portion of the Exchange Fund as Enterprises directs. Any portion of
the Exchange Fund (including the proceeds of any investments thereof) that
remains unclaimed by the shareholders of PST for six (6) months after the
Effective Time shall be returned to Enterprises. Subject to the effects of any
applicable unclaimed property, escheat or other applicable laws, PST
Shareholders shall thereafter look only to Enterprises for payment of their
claim for the Merger Consideration and shall not be entitled to any interest
thereon.
2.2 Status of Securities After Effective Time.
(a) From and after the Effective Time, and until surrendered and exchanged,
each outstanding certificate formerly representing shares of PST Common Stock
shall be deemed for all purposes to represent only the right conferred upon
the holders of such shares in accordance with Section 2.1 above to receive the
Merger Consideration. No dividends or other distributions declared or made
after the Effective Time with respect to shares of Enterprises Common Stock
with a record date after the Effective Time shall be paid to the holder of an
unsurrendered certificate formerly representing shares of PST Common Stock
with respect to the shares of
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Enterprises Common Stock represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until the surrender of
such certificate by such holder. Subject to the effects of any applicable
unclaimed property, escheat or other applicable laws, upon surrender and
exchange of each outstanding certificate theretofore representing shares of
PST Common Stock, there shall be paid to the record holders thereof the
certificate or certificates of Enterprises Common Stock issued in exchange
therefor plus the amount, without interest thereon, of dividends and other
distributions, if any, declared and paid, subsequent to the Effective Time and
prior to the date such shares are surrendered, to shareholders of record with
respect to the number of whole shares of Enterprises Common Stock represented
thereby, together with the cash (without interest or dividends thereon)
payable in lieu of any fractional shares of Enterprises Common Stock in
accordance with Section 2.1(a).
(b) As promptly as practicable after the Effective Time, Enterprises shall
send or cause to be sent to each former shareholder of record of PST (as well
as to each holder of PST Options as provided in Section 2.4 below) transmittal
materials for use in exchanging his or her certificates formerly representing
shares of PST Common Stock for the Merger Consideration. The letter of
transmittal will contain instructions with respect to the surrender of
certificates formerly representing shares of PST Common Stock (and PST
Options, as applicable) and the distribution of the certificates representing
Enterprises Common Stock as well as the cash portion of the Merger
Consideration.
(c) If any certificate evidencing shares of Enterprises Common Stock is to
be registered in any name other than that in which the certificate formerly
representing shares of PST Common Stock surrendered in exchange therefor is
registered, it shall be a condition of such registration that the certificate
so surrendered shall be properly endorsed and otherwise in proper form for
transfer, as determined by the Exchange Agent or Enterprises, that any
applicable securities laws are complied with, and that the person requesting
such exchange either shall pay to the Exchange Agent or to Enterprises, as the
case may be, any transfer or other taxes required by reason of the issuance of
a certificate for shares of Enterprises Common Stock in any name other than
that of the registered holder of the certificate surrendered or shall
establish to the satisfaction of such Exchange Agent or of Enterprises, as the
case may be, that such tax has been paid or is not payable.
(d) From and after the Effective Time, the stock transfer books of PST shall
be closed, and no transfer of shares of PST Common Stock on the books of PST
shall be made.
(e) Neither Enterprises, Merger Sub, nor PST shall be liable to any holder
of PST Common Stock for any Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat, execution,
garnishment or similar law.
(f) The Exchange Agent shall be entitled to deduct and withhold from the
Merger Consideration otherwise payable pursuant to this Agreement such amounts
as the Exchange Agent is required to deduct and withhold with respect to the
making of such payments under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares in respect of which such deduction and
withholding was made.
2.3 Stock Dividends, etc. If Enterprises shall, at any time before the
Effective Time, (i) issue a dividend in shares of Enterprises Common Stock,
(ii) combine the outstanding Enterprises Common Stock into a smaller number of
shares, (iii) subdivide the outstanding Enterprises Common Stock, or (iv)
reclassify the Enterprises Common Stock, then, in such event, the Merger
Consideration shall be adjusted, so that each PST shareholder shall be
entitled to receive such Merger Consideration as such shareholder would have
been entitled to receive if the Effective Time had occurred prior to the
happening of such event (or, if applicable, the record date in respect
thereof), and appropriate and proportionate adjustment shall be made to the
calculation of the Merger Consideration.
2.4 Treatment of PST Stock Options. As of the date of this Agreement,
directors, officers, and certain key employees of PST hold outstanding options
(both vested and unvested) to acquire a total of 347,000 shares
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of PST Common Stock, as reflected on Schedule 4.4 hereof (the "PST OPTIONS").
As of the Effective Time, all of the PST Options (whether vested or unvested
prior to the Merger) shall become immediately vested and exercisable in full.
The transmittal materials described in Section 2.2(b) above shall include a
means for allowing the holders of the PST Options to exercise such options in
accordance with their original terms (including, to the extent applicable,
payment of the option exercise price either in cash or through the surrender
(or deemed surrender, as applicable) of shares of PST Common Stock already
owned by the option holder or subject to the option, or any combination of the
foregoing). To the extent that holders of the PST Options elect to exercise
such options pursuant to the mechanism provided in the letter of transmittal,
they thereby shall become entitled to receive the Merger Consideration in lieu
of the shares of PST Common Stock which would have been issuable upon exercise
of the PST Options prior to the Merger, with the same effect as if such
options had been exercised immediately prior to the Effective Time and such
shares tendered in accordance with Section 2.2(a) hereof. Any PST Options not
exercised in accordance with this Section 2.4 within six (6) months of the
Effective Time, as well as any outstanding options or warrants to acquire PST
Common Stock other than the PST Options, shall be deemed null and void and
shall not be exercisable or exchangeable in any manner for the Merger
Consideration and, except as otherwise expressly provided in this Section 2.4,
from and after the Effective Time, neither Enterprises nor the Surviving
Corporation shall have any obligation or liability of any kind with respect to
any such securities.
2.5 Closing. Unless this Agreement shall have been terminated and the
transactions contemplated herein shall have been abandoned pursuant to Article
VIII and subject to satisfaction or waiver of the conditions to closing set
forth in Article VII, the closing (the "CLOSING") of the transactions
contemplated by this Agreement shall take place at the offices of Xxxx,
Xxxxxxx & Xxxxxxxx, P.C., 0000 XxxXxxxx Xxxx Xxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx,
at 10:00 a.m., E.D.T., as promptly as practicable, (and in any event on the
second business day immediately following the meeting of the shareholders of
PST to be held to consider the Merger), or at such other time and place as
Enterprises and PST shall agree. The date on which the Closing occurs is
referred to herein as the "CLOSING DATE."
ARTICLE III
Representations and Warranties of Enterprises and Merger Sub
In order to induce PST to enter into this Agreement and consummate the
transactions contemplated hereby, Enterprises and Merger Sub represent and
warrant that as of the date hereof and as of the Closing Date, the following
representations and warranties are true, complete and accurate.
3.1 Organization of Enterprises and Merger Sub. Enterprises and Merger Sub
are corporations duly organized, validly existing, and in good standing under
the laws of the State of Nevada and have full power and authority, corporate
and other, to conduct the business in which they are engaged.
3.2 Authorization of Transaction. Enterprises and Merger Sub have full power
and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Enterprises and Merger Sub, enforceable in
accordance with its terms and conditions, except that (i) such enforcement may
be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. Except as set forth on
Schedule 3.2 and compliance with the provisions of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act and except for filing the Registration Statement
required by Section 6.2(b) below, and except for filing the Articles of Merger
as provided herein, Enterprises and Merger Sub need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
3.3 Noncontravention. Except as set forth on Schedule 3.3, neither the
execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (a) violate any constitution,
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statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or court
to which Enterprises or Merger Sub is subject or any provision of its charter
or bylaws or (b) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Enterprises or Merger Sub is a party or by which it or any of its assets is
bound.
3.4 Brokers' Fees. Enterprises and Merger Sub have no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which PST could
become liable or obligated, and no broker, finder, agent or other party had
any involvement with this transaction on behalf of Enterprises or Merger Sub
that could entitle such party to any commission or other form of remuneration
for bringing about the negotiation and execution of this Agreement.
3.5 Financial Statements and SEC Reports. Except as disclosed on Schedule
3.5, Enterprises has timely filed all required forms, reports, statements and
documents with the Securities and Exchange Commission (the "COMMISSION") since
May 31, 1997, all of which have complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act.
Enterprises heretofore has delivered to PST true and complete copies of: (i)
its Annual Reports on Form 10-K (including all amendments thereto) for the
fiscal years ended March 31, 1996 and March 31, 1997, and for the nine (9)
month transition period ended December 31, 1997; (ii) its Quarterly Reports on
Form 10-Q (including all amendments thereto) for the fiscal quarters ended
June 30, 1996, September 30, 1996, December 31, 1996, June 30, 1997, September
30, 1997 and March 31, 1998; (iii) its definitive proxy statements relating to
all meetings of its shareholders (whether annual or special) held since March
31, 1996; and (iv) all other reports, statements and registration statements
filed or required to be filed by it with the Commission since March 31, 1996
(the documents referred to in clauses (i), (ii), (iii), and (iv) being
hereinafter referred to as the "ENTERPRISES SEC REPORTS"). As of their
respective dates, the Enterprises SEC Reports were prepared in all material
respects in accordance with the requirements of the Securities Act and the
Exchange Act, as the case may be, and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements
(including any related notes) of Enterprises included in the Enterprises SEC
Reports were prepared in conformity with generally accepted accounting
principles applied on a consistent basis (except as otherwise stated in such
financial statements or, in the case of audited statements, the related report
of Xxxxxx Xxxxxxxx LLP, independent public accountants for Enterprises), and
present fairly in all material respects the consolidated financial position,
results of operations and cash flows of Enterprises as of the dates and for
the periods indicated, subject, in the case of unaudited interim consolidated
financial statements, to condensation, the absence of notes not required for
quarterly financial statements thereto and normal year-end audit adjustments.
3.6 Registration Statement; Proxy Statement; Other Filings. None of the
information supplied or to be supplied by Enterprises expressly for inclusion
in (i) the Registration Statement (as defined in Section 6.2(b)), (ii) the
Proxy Statement (as defined in Section 6.2(a)), or (iii) any other documents
to be filed with the Commission or any regulatory agency in connection with
the transactions contemplated hereby, will, at the respective times such
documents are filed, and, in the case of the Registration Statement, when it
becomes effective and at all times necessary for the issuance of the shares of
Enterprises Common Stock in the Merger, fail to comply with the Securities
Act, or, with respect to the Proxy Statement, when mailed and at all times
through the date of the Shareholders' Meeting (as defined in Section 6.3),
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or necessary to correct any statement in any earlier communication
with respect to the Shareholders' Meeting which has become false or
misleading. All documents which Enterprises files with the Commission and any
regulatory agency in connection with the Merger will comply in all material
respects with the applicable provisions of the Securities Act, the Exchange
Act and state securities laws and the rules and regulations thereunder. The
monthly and quarterly consolidated financial statements for January 1998
through April 1998 furnished by Enterprises to PST were
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prepared in a manner consistent with the consolidated financial statements
contained in the Enterprises SEC Reports, and present fairly in all material
respects the consolidated results of its operations for the period indicated,
except that such statements are subject to normal and recurring quarterly
year-end adjustments, which were not or are not expected to be material in
amount.
ARTICLE IV
Representations and Warranties of PST
In order to induce Enterprises and Merger Sub to enter into this Agreement
and consummate the transactions contemplated hereby, PST represents and
warrants that as of the date hereof and as of the Closing Date, the following
representations and warranties are true, complete and accurate, unless the
context of the representation or warranty provides that it is made as of some
other date, and except as set forth in the Disclosure Schedules attached
hereto and made a part hereof.
4.1 Corporate Organization and Good Standing. PST is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Utah, with all requisite corporate power and authority to own, operate and
lease its properties and to carry on its business as it is now being
conducted, and is qualified or licensed to do business and is in good standing
in each jurisdiction in which the ownership or leasing of property by it or
the conduct of its business requires such licensing or qualification and where
the failure to be so qualified or licensed individually, or in the aggregate,
would have a PST Material Adverse Effect. For the purposes of this Agreement,
"PST MATERIAL ADVERSE EFFECT" shall mean any change, effect or circumstance
that individually or when taken together with all such other changes, effects
or circumstances (including such changes, events or circumstances that are
reasonably likely to occur), shall have or may reasonably be anticipated to
have a materially adverse effect on the business, assets, financial condition,
results of operations or stockholders' equity of PST.
4.2 Authorization; Binding Agreement.
(a) Subject only to obtaining the approval of its shareholders as described
below, PST has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement by PST, and the
consummation by PST of the transactions contemplated hereby, have been
unanimously approved and duly authorized by PST's Board of Directors and no
other corporate action or proceeding on the part of PST is necessary for the
execution, delivery and performance of this Agreement by PST and the
consummation of the transactions contemplated hereby, except for obtaining the
requisite approval of this Agreement by the holders of at least two-thirds
(2/3) of the issued and outstanding shares of PST in accordance with the URBCA
and PST's charter documents and by-laws. PST's Board of Directors has
unanimously determined that the Merger is advisable and that it is in the best
interests of PST's shareholders for PST to enter into this Agreement and to
consummate this Agreement, and shall recommend to the shareholders of PST that
they approve the Merger in accordance with this Agreement. This Agreement has
been duly and validly executed and delivered by PST and is a legal, valid and
binding obligation of PST, enforceable against it in accordance with its terms
and conditions, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(b) Except as set forth in Schedule 4.2(b), PST is not in default and there
exists no event, condition or occurrence that, with notice, lapse of time or
both, would constitute a default, under any agreement to which PST is a party
where such default or defaults would, individually or in the aggregate,
constitute a PST Material Adverse Effect.
4.3 No Conflict. Except as set forth on Schedule 4.3, neither the execution
and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute,
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regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
PST is subject or any provision of the charter, bylaws or other organizational
document of PST. Except as set forth on Schedule 4.3 (or where none of the
following events, individually or in the aggregate, would constitute or be
expected to result in a PST Material Adverse Effect), neither the execution
and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify, cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
PST is a party or by which it is bound or to which any of PST's assets are
subject or (ii) result in the imposition of any lien, charge, encumbrance or
other security interest upon any of PST's assets. PST is not required to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the parties to
consummate the transactions contemplated by this Agreement, other than
compliance with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act, the filing of the Proxy Statement required by Section 6.2(a) with the
Commission and the filing of the Articles of Merger.
4.4 Capital Stock and Stockholder Relations. The authorized Capital Stock of
PST consists solely of Twenty Million (20,000,000) shares of common stock,
$.001 par value per share, of which Four Million, Two Hundred Sixty-Nine
Thousand, Four Hundred Eighty-Two (4,269,482) shares of PST Common Stock are
issued and outstanding and no shares of PST Common Stock are held in treasury,
and Five Million (5,000,000) shares of preferred stock no par value, of which
no shares have been issued. All issued and outstanding PST Common Stock has
been duly authorized, validly issued, fully paid, and is nonassessable. The
PST Common Stock constitutes all of the issued and outstanding shares of PST
equity securities. Except as set forth on Schedule 4.4: (i) there are no
outstanding options, warrants, contracts, preemptive or subscription rights,
proxies, calls, commitments, demands or understandings of any character
obligating PST to issue any PST Common Stock, any options, warrants or rights
with respect to PST Common Stock, or any other securities, and there are no
existing or outstanding securities of any kind convertible into or
exchangeable for PST Common Stock; (ii) there are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights
with respect to PST; (iii) there are no outstanding obligations of PST to
repurchase, redeem or otherwise acquire any PST Common Stock; and (iv) there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of PST. Except as set forth on
Schedule 4.4: (a) there are no pending or threatened claims or causes of
action whatsoever against PST brought by any current or former stockholder of
PST or of any corporation heretofore merged with or into PST arising out of or
in any way connected with any occurrence or state of facts in existence prior
to the Closing Date and (b) no director or officer of PST has any knowledge of
any events having occurred which would be reasonably expected to cause any
such present or former stockholder to come to have any such claim or cause of
action against PST, or any officer, director or stockholder of PST, by virtue
of, or in any way connected with, the transactions contemplated by this
Agreement or otherwise.
4.5 Organizational Documents. PST has delivered to Enterprises correct,
complete and certified copies of the charter documents and bylaws of PST (as
amended and in effect as of the date hereof), the minute books (containing
complete, correct and true records of meetings of the stockholders, the Board
of Directors, and any committees of the Board of Directors). Schedule 4.5
contains a true and complete list of all of the current officers and directors
of PST.
4.6 Brokers' Fees. PST has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Enterprises or Merger Sub could
become liable or obligated, and no broker, finder, agent or other party had
any involvement with this transaction on behalf of PST that could entitle such
party to any commission or other form of remuneration for bringing about the
negotiation and execution of this Agreement.
4.7 Title to Assets. Except as set forth on Schedule 4.7, PST has good and
marketable title to, or a valid leasehold interest in, the properties and
assets used by it, wherever located, including those shown on the audited
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financial statements listed in PST's annual report on Form 10-K for the fiscal
year ended December 31, 1997 (the "MOST RECENT FINANCIAL STATEMENTS"), or
acquired after the date thereof, free and clear of all security interests,
except for properties and assets disposed of in the ordinary course of
business since the date of the aforesaid Most Recent Financial Statements.
4.8 Subsidiaries and Affiliates. Except as set forth on Schedule 4.8, PST
does not have any subsidiaries or affiliated businesses or operations, and
there are no other material assets, operations, personnel, know-how or the
like owned, employed or used by PST in the operation of PST's business that
would not inure to the benefit of PST as a wholly-owned subsidiary of
Enterprises upon consummation of the transactions contemplated by this
Agreement on the same basis as owned, employed or used by PST prior to the
Merger.
4.9 Financial Statements and SEC Reports. Except as disclosed on Schedule
4.9, PST has timely filed all required forms, reports, statements and
documents with the Commission since May 31, 1997, all of which have complied
in all material respects with all applicable requirements of the Securities
Act and the Exchange Act. PST heretofore has delivered to Enterprises true and
complete copies of: (i) its Annual Reports on Form 10-K (including all
amendments thereto) for the fiscal years ended December 31, 1995, December 31,
1996 and December 31, 1997; (ii) its Quarterly Reports on Form 10-Q (including
all amendments thereto) for the fiscal quarters ended March 31, 1995, June 30,
1995, September 30, 1995, March 31, 1996, June 30, 1996, September 30, 1996,
March 31, 1997, June 30, 1997, September 30, 1997 and March 31, 1998; (iii)
its definitive proxy statements relating to all meetings of its shareholders
(whether annual or special) held since December 31, 1994; and (iv) all other
reports, statements and registration statements filed or required to be filed
by it with the Commission since December 31, 1994 (the documents referred to
in clauses (i), (ii), (iii), and (iv) being hereinafter referred to as the
"PST SEC REPORTS"). As of their respective dates, the PST SEC Reports were
prepared in all material respects in accordance with the requirements of the
Securities Act and the Exchange Act, as the case may be, and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements (including any related notes) of PST included in the PST
SEC Reports were prepared in conformity with generally accepted accounting
principles applied on a consistent basis (except as otherwise stated in such
financial statements or, in the case of audited statements, the related report
of Xxxxxx Xxxxxxxx LLP, independent public accountants for PST), and present
fairly in all material respects the financial position, results of operations
and cash flows of PST as of the dates and for the periods indicated, subject,
in the case of unaudited interim financial statements, to condensation, the
absence of notes not required for quarterly financial statements thereto and
normal year-end audit adjustments.
4.10 Events Subsequent to Most Recent Fiscal Year End. Since December 31,
1997, and other than as set forth in Schedule 4.10, PST has conducted its
business in the ordinary course, and there has not been any change in the
business, financial condition, operations, results of operations,
relationships with any suppliers or customers or future prospects of PST which
would constitute or be expected to result in a PST Material Adverse Effect.
Without limiting the generality of the foregoing, since that date and except
as set forth on Schedule 4.10:
(a) PST has not sold, leased, transferred, or assigned any of its assets,
tangible or intangible, other than for a fair consideration in the ordinary
course of business;
(b) PST has not entered into any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) outside the
ordinary course of business;
(c) no party (including PST) has accelerated, terminated, modified, or
canceled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses), outside the ordinary course of
business, to which PST is a party or by which PST is bound;
(d) Except as disclosed on Schedule 4.7 or Schedule 4.10 hereto, PST has not
granted or allowed to be imposed any lien, claim, charge, security interest or
other encumbrance upon any of its assets, other than equipment operating
leases entered into in the ordinary course of business, nor has PST issued any
note, bond,
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or other debt instrument or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation;
(e) PST has not made any capital expenditure (or series of related capital
expenditures) outside the ordinary course of business;
(f) PST has not made any capital investment in, or any acquisition of the
securities or assets of, any third party;
(g) PST has not materially delayed or postponed the payment of accounts
payable or other liabilities beyond the payment terms applicable to said
accounts payable or liabilities, other than in the ordinary course of business
consistent with past practice;
(h) PST has not canceled, compromised, waived, or released any right or
claim (or series of related rights and claims) outside the ordinary course of
business;
(i) PST has not granted any license or sublicense of any rights under or
with respect to any of its intellectual property;
(j) there has been no change made or authorized in the charter or bylaws of
PST;
(k) PST has not issued, sold, or otherwise disposed of any of the PST Common
Stock, or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion, exchange, or exercise) any of the PST Common
Stock, other than the exercise in the ordinary course of business of any
previously outstanding stock options in accordance with their terms;
(l) PST has not declared, set aside, nor paid any dividend or made any
distribution with respect to the PST Common Stock (whether in cash or in kind)
or redeemed, purchased, or otherwise acquired any of the PST Common Stock;
(m) PST has not experienced any damage, destruction, or loss (whether or not
covered by insurance) materially adversely affecting its properties or
business, taken as a whole;
(n) PST has not made any loan to, or entered into any other transaction with
or on behalf of (including but not limited to guarantees of debt), any of its
directors, officers, and employees other than normal salary, bonuses and
employee benefits paid or granted in the ordinary course of business
consistent with past practice;
(o) PST has not granted any increase in the base compensation of, and has
not granted any bonus, dividend, or other form of compensation to, any of its
directors, officers, and employees outside the ordinary course of business,
and has not adopted, amended, modified, or terminated any bonus, profit-
sharing, incentive, severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, and employees (or taken any such
action with respect to any other Employee Benefit Plan);
(p) PST has not made any other change in employment terms for any of its
directors, officers, and key employees;
(q) PST has not made or pledged to make any charitable or other capital
contribution;
(r) there has not been any other occurrence, event, incident, action,
failure to act, or transaction outside the ordinary course of business
involving PST (except where any such events, individually or in the aggregate,
would not constitute or be expected to result in a PST Material Adverse
Effect), and PST has conducted its business in the ordinary and usual course
and in a reasonable business manner;
(s) PST has not incurred any liability, contingent or otherwise, except in
the ordinary and usual course of business;
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(t) PST has not made any change in any method of accounting or principle of
accounting; and
(u) PST has not committed to take any action that would result (or would
reasonably be expected to result) in any of the foregoing.
4.11 Undisclosed Liabilities. Except as set forth on Schedule 4.11, PST does
not have any material liability or obligation, whether accrued, absolute,
contingent or otherwise (and, to the knowledge of PST, there is no basis for
any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it giving rise to any liability),
except for (i) liabilities set forth and adequately reserved against in the
Most Recent Financial Statements (or disclosed in any notes thereto) and (ii)
liabilities which have arisen after the Most Recent Financial Statements in
the ordinary course of business and all of which are disclosed on Schedule
4.11. When used in this Agreement, "TO THE KNOWLEDGE OF PST" or "TO THE
KNOWLEDGE OF PST'S OFFICERS AND DIRECTORS" means knowledge of a particular
fact or matter to the extent that either (i) any of PST's officers or
directors possess actual knowledge thereof or (ii) a prudent individual in the
position of any of PST's officers and directors could be expected to discover
or otherwise become aware of such fact or other matter in the ordinary course
of their duties as an officer or director of PST.
4.12 Legal Compliance. Except as set forth on Schedule 4.12, PST has
complied in all material respects with all applicable laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof), except where the failure to so comply would not have a
PST Material Adverse Affect, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice has been filed,
commenced or threatened against it alleging any failure so to comply.
4.13 Tax Matters. For purposes of this Agreement, "TAX" or "TAXES" shall
mean taxes, fees, levies, duties, tariffs, imposts, and governmental
impositions or charges of any kind in the nature of (or similar to) taxes,
payable to any federal, state, local or foreign taxing authority, including
without limitation (i) income, franchise, profits, gross receipts, ad valorem,
net worth, value added, sales, use, service, real or personal property,
special assessments, capital stock, license, payroll, withholding, employment,
social security, workers' compensation, unemployment compensation, utility,
severance, production, excise, stamp, occupation, premiums, windfall profits,
transfer and gains taxes and additions to tax imposed with respect thereto;
and "TAX RETURNS" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the IRS or any other taxing
authority, domestic or foreign, including, without limitation, consolidated,
combined and unitary tax returns. Except as disclosed in any exceptions listed
on Schedule 4.13:
(a) PST has filed all Tax Returns and reports that it was required to file.
All such Tax Returns and reports were correct and complete in all material
respects. All Taxes owed by PST (whether or not shown on any Tax Return) have
been paid or accrued on the Most Recent Financial Statements. PST currently is
not the beneficiary of any extension of time within which to file any Tax
Return or report or to make any Tax payment. No claim has ever been made by an
authority in a jurisdiction where PST does not file Tax Returns or reports
that PST is or may be subject to taxation by that jurisdiction.
(b) PST has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid to any employee, independent contractor,
creditor, stockholder, or other third party.
(c) No director or officer (or employee responsible for Tax matters) of PST
expects any authority to 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 PST either (i) claimed or raised by any authority in writing or
(ii) as to which any of the officers and employees of PST responsible for Tax
matters has been notified or has knowledge based upon personal contact with
any agent of such authority. As concerns income tax, Schedule 4.13(c) sets
forth all federal, state and local Tax Returns filed with respect to PST for
taxable periods ended on or after March 31, 1995, indicates those Tax Returns
that have been audited, and indicates those Tax Returns that currently are the
subject of audit, investigation or other inquiry.
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(d) PST has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency.
(e) PST has not filed a consent under Code (S)341(f) concerning collapsible
corporations. PST has not made any payments, is not obligated to make any
payments, nor is a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under Code
(S)280G. PST has not been a United States real property holding corporation
within the meaning of Code (S)897(c)(2) during the applicable period specified
in Code (S)897(c)(1)(A)(ii). PST is not a party to any tax allocation or
sharing agreement. PST (A) has not been a member of an affiliated group filing
a consolidated federal income Tax Return and (B) has no liability for the
Taxes of any person or entity (other than PST) under Reg. (S)1.1502-6 (or any
similar provision of state or local law), as a transferee or successor, by
contract, or otherwise.
(f) Schedule 4.13(f) sets forth the following information with respect to
PST as of the most recent practicable date: (i) the basis of PST in its
assets; and (ii) the amount of any net operating loss, net capital loss,
unused investment or other credit, unused foreign tax, or excess charitable
contribution allocable to PST (with such amounts being estimated for purposes
of preparing PST's 1997 federal tax return).
(g) The unpaid Taxes of PST (i) did not, as of the Most Recent Financial
Statements, exceed the reserve for tax liability set forth on the face of the
Most Recent Financial Statements (rather than in any notes thereto) and (ii)
do not exceed that reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of PST in filing
Tax Returns.
4.14 Real Property. Schedule 4.14 lists all real property that PST leases or
owns for the operation of its terminal, general offices and drop yards (the
"REAL ESTATE"). For all leased Real Estate, Schedule 4.14 sets forth (i) the
address of the property, (ii) the name of the landlord, to whom the rent is
payable and their address, (iii) the amount of the rent per payment period,
(iv) the remaining current term of the lease, (v) any renewal options, (vi)
any notice windows or other deadlines within or by which notice of applicable
renewals must be given, and (vii) a description of any sub-leases of any
portion of the property to a third party. A true and correct copy of each such
lease is also attached as part of Schedule 4.14, together with either (A) an
estoppel letter from the landlord in the form attached hereto as Exhibit 4.14
or (B) a full description of the current status of negotiations and any other
relevant facts with respect to any landlord which has failed or refused to
execute such estoppel letter. For all owned Real Estate, Schedule 4.14 sets
forth (i) the address of the property, (ii) a description of any leases of any
portion of the property to another and (iii) the amount of any liens or
encumbrances on the property.
(a) General. Except for the Real Estate, there is no real property owned,
leased or occupied by PST.
(b) Codes, Ordinances, Use and Notice of Condemnation. There are no
existing, pending, or to the knowledge of PST proposed material violations of
any fire or health codes, building ordinances, or rules of the Board of Fire
Underwriters (or organization exercising functions similar thereto), with
respect to the Real Estate, nor to the knowledge of PST is there, any defect
in the Real Estate which would render all or any part thereof unsuitable for
its continued use by PST in the manner historically used by PST. PST has not
received any notice and has no knowledge of any condemnation, zoning or land
use proceedings or deliberations in process or proposed that would affect the
Real Estate. PST shall advise Enterprises forthwith of any notice concerning
violations, condemnation proceeding, and tax or utility rate increases that
may affect the Real Estate.
(c) Licenses and Permits. PST holds all licenses, certificates, permits,
franchises and rights from all appropriate federal, state, local, foreign and
other public authorities necessary for the conduct of its current operations,
which licenses, certificates, permits, franchises and rights are specified on
Schedule 4.14(c), except where the failure to obtain any such license,
certificate, permit, franchise or right would not constitute or be expected to
result in a PST Material Adverse Effect.
(d) No Notice of Violations. PST is in material compliance with all
applicable laws, rules and regulations relating to its occupancy and use of
the Real Estate. PST has not received any notice of violations of any federal,
state, local, or foreign laws, ordinances, rules, regulations or orders
relating to its occupancy and use of the Real Estate.
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(e) Utility Connections. All public utility connections located on or
serving the Real Estate have been completed, installed, activated, paid for
and are in operational condition and to the knowledge of PST are in compliance
with all appropriate codes, rules and regulations.
(f) Taxes and Utilities. PST is not aware of, nor has it received, any
notice or information of any condition which would result in an increase in
the assessments covering the Real Estate or utility rates affecting the Real
Estate.
(g) Access. PST presently has the right to use all accesses from the Real
Estate to and from public thoroughfares, as such accesses are presently
configured and utilized, except as disclosed on Schedule 4.14 or where any
such encumbrance would not constitute or be expected to result in a PST
Material Adverse Effect.
(h) Right to Operate. PST has the legal right to operate all parts of the
Real Estate in the manner in which it is currently being operated.
(i) Good Title. Except as set forth on Schedule 4.14(i), PST has good and
marketable title to each parcel of Real Estate, free and clear of any liens,
mortgages, deeds to secure debt, security interests, easement, covenant, or
other restriction, except for recorded easements, covenants, and other
restrictions which do not materially impair the current use, occupancy, or
value, or the marketability of title, of the property subject thereto.
(j) No Other Leases. Except as set forth on Schedule 4.14(j), there are no
leases, subleases, licenses, concessions, or other agreements, written or
oral, granting to any party or parties, other than PST, the right of use or
occupancy of any portion of the Real Estate.
4.15 Intellectual Property. Set forth on Schedule 4.15 is a complete and
accurate list of all intellectual property rights owned by or licensed to PST,
including but not limited to all rights in and to servicemarks, trademarks,
tradenames (including the name "PST Vans" and all variations thereof),
copyrights, patents and the like whether or not subject to registration, but
excluding any licenses pertaining to the use of computer software applications
(other than any such applications, or any customized variations thereof, which
have been specifically designed for and licensed to PST for use in its
business) (collectively the "PST INTELLECTUAL PROPERTY").
(a) There are no other forms of intellectual property rights necessary for
the operation of the businesses of PST as presently conducted other than PST
Intellectual Property. Except as set forth on Schedule 4.15(a) each item of
PST Intellectual Property owned or used by PST immediately prior to the
Closing hereunder will be owned or available for use by the surviving
corporation on identical terms and conditions immediately subsequent to the
Closing hereunder.
(b) Except as set forth on Schedule 4.15(b), to the knowledge of PST, PST
has never interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any intellectual property rights of third parties, and PST
has not received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation (including any
claim that PST must license or refrain from using any intellectual property
rights of any third party). To the knowledge of PST, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any of the PST Intellectual Property. To the knowledge of PST,
PST and the surviving corporation after giving effect to the transactions
contemplated by this Agreement, will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any intellectual
property rights of third parties as a result of the continued operation of its
businesses as presently conducted.
(c) With regard to each item of the PST Intellectual Property:
(i) to the knowledge of PST, PST possesses all right, title, and interest
in and to the item, free and clear of any security interest, license, or
other restriction other than the licensee restrictions contained in those
items of PST Intellectual Property licensed to PST;
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(ii) to the knowledge of PST, the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(iii) to the knowledge of PST, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or threatened
which challenges the legality, validity, enforceability, use, or ownership
of the item; and
(iv) PST has never agreed to indemnify any third party for or against any
interference, infringement, misappropriation, or other conflict with
respect to the item.
4.16 Rolling Stock and Other Tangible Assets. Other than property subject to
equipment leases (which leases are in good standing, valid and effective in
accordance with their terms, and as to which there is not existing any
material default or event of default or, to the knowledge of PST, event which
with notice or lapse of time would constitute a default), except as set forth
on Schedule 4.16, PST has good, valid and marketable title to all personal and
mixed, tangible and intangible properties and assets, all machinery,
equipment, and other tangible assets (including but not limited to the Rolling
Stock (as defined below)) used in its business as presently conducted or which
it otherwise purports to own, free and clear of all liens, claims, charges and
encumbrances whatsoever. The tangible assets, as a group have been maintained
in accordance with PST's normal practice, in the ordinary course, as a group
are in good operating condition and repair (subject to normal wear and tear
and normal maintenance requirements), are suitable for the purposes for which
they are presently being used and, to the knowledge of PST, are free from
material defects other than defects which, in the aggregate, would not have a
PST Material Adverse Effect. Schedule 4.16(a) sets forth a list (by make,
model, year, license plate/registration number and vehicle identification
number) of all power units and trailers owned or leased by PST (the "ROLLING
STOCK"). Except as set forth on Schedule 4.16(a), the Rolling Stock is in
material compliance with all applicable safety requirements (either by
regulatory requirement or industry practice) and is materially road-worthy,
except for any individual units of the Rolling Stock which are temporarily out
of service due to customary repair and maintenance requirements or major
repairs, as needed (which units do not constitute more than 3% of the total
Rolling Stock as of the date hereof). Except as set forth on Schedule 4.16(a),
all items of Rolling Stock are under manufacturer's warranty. Schedule 4.16(b)
sets forth a list (by make, model, year, license plate/registration number and
vehicle identification number) of all other motor vehicles and equipment
(other than Rolling Stock) owned or leased by PST. Schedule 4.16(c) sets forth
a list all other material items of personal property owned by PST. The
location of all the Rolling Stock and other personal property located on
Schedule 4.16(a), Schedule 4.16(b) and Schedule 4.16(c) is known to PST except
to the extent noted on such schedules.
4.17 Contracts. Schedule 4.17 sets forth all material oral or written
contracts and other agreements to which PST is a party, including but not
limited to:
(a) any agreement (or group of related agreements) for the lease of personal
property providing for lease payments in excess of Fifty Thousand Dollars
($50,000) per annum;
(b) any agreement (or group of related agreements) for the purchase or sale
of supplies, products, or other personal property, or for the furnishing or
receipt of services, the performance of which will involve consideration in
excess of Fifty Thousand Dollars ($50,000);
(c) any agreement concerning a partnership or joint venture;
(d) any agreement (or group of related agreements) under which PST has
created, incurred, assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of Fifty Thousand Dollars
($50,000) or under which it has imposed a lien on any of its assets, tangible
or intangible;
(e) any agreement concerning confidentiality or noncompetition;
(f) any agreement for the employment of any individual on a full-time, part-
time, consulting, or other basis providing annual compensation in excess of
Fifty Thousand Dollars ($50,000) or providing severance benefits or other
post-employment benefits of any amounts;
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(g) any agreement under which it has advanced or loaned any amount to any of
its directors, officers, and employees;
(h) any other agreement (or group of related agreements) the performance of
which involves consideration in excess of Fifty Thousand Dollars ($50,000); or
(i) any trucking, carrier, shipper, dedicated service, broker and transport
contracts.
PST has delivered to Enterprises a correct and complete copy of each written
agreement set forth on Schedule 4.17 (as amended to date) and a written
summary setting forth the terms and conditions of each oral agreement referred
to in Schedule 4.17. Except as set forth on Schedule 4.17, with respect to
each such agreement: (i) the agreement is legal, valid, binding, enforceable,
(except that (1) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditor's rights and (2) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought) and in full force and effect; (ii) the agreement will
continue to be legal, valid, binding, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (iii) PST is not, and to the knowledge of PST no party
thereto is, in material breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; (iv) PST has
not, and to the knowledge of PST no party thereto has, repudiated any
provision of the agreement; and (v) PST is not, and to the knowledge of PST no
party thereto is, the subject of bankruptcy proceedings, has had a trustee
appointed on its behalf or is insolvent.
4.18 Employee Arrangements, Union Agreements and Benefit Plans and
Government Compliance.
(a) Schedule 4.18(a) sets forth a complete and accurate list and description
of all oral or written employment, consulting or collective bargaining
contracts, deferred compensation, change in control agreements, golden
parachute agreements, profit-sharing, bonus, option, share purchase or other
benefit or compensation commitments, plans, arrangements or policies,
including all welfare plans of or pertaining to the present or former
employees, directors or consultants of PST or of any other entity which is a
member of a controlled group including PST or which is under common control
with PST. Except as set forth on Schedule 4.18(a), PST has complied in all
material respects with all of its respective obligations, including the
payment of all contributions, the filing of all reports, and the payment or
accrual of all expenses for the period between the end of the previous plan
year and the Closing Date, with respect to such contracts, commitments,
arrangements and plans. The plans have been maintained in compliance with all
applicable laws and regulations. The levels of insurance reserves and accrued
liabilities with regard to all such plans are reasonable and are sufficient to
provide for all incurred but unreported claims and any retroactive premium
adjustments.
(b) Schedule 4.18(b) sets forth the name of each salaried employee of PST
and such employee's annual salary, position and hire date.
(c) Except as disclosed on Schedule 4.18(c), PST is in material compliance
with all worker compensation laws and requirements of all applicable states.
(d) Except to the extent set forth in Schedule 4.18(d):
(i) To PST's knowledge, PST is in material compliance with all applicable
laws and collective bargaining agreements respecting employment (if any)
and terms and conditions of employment and wages and hours and occupational
safety and health;
(ii) There is no unfair labor practice, charge or complaint or any other
matter against or involving PST or pending or, to the knowledge of PST,
threatened before the National Labor Relations Board or any court of law;
(iii) There is no labor strike, dispute, slowdown or stoppage actually
pending or, to the knowledge of PST, threatened against PST;
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(iv) To the knowledge of PST, no certification or decertification
question or organizational drive exists or has existed within the past
twenty-four (24) months respecting the employees of PST;
(v) No grievance proceeding or arbitration proceeding arising out of or
under any collective bargaining agreement is pending against PST, or, to
the knowledge of PST, threatened; and, to the knowledge of PST, no basis
for any claim therefor exists;
(vi) Except for general labor relation laws, no agreement (including any
collective bargaining agreement), arbitration or court decision or
governmental order which is binding on PST in any way limits or restricts
PST from relocating or closing any of its operations;
(vii) PST has not experienced any organized work stoppage or other labor
difficulty since December 31, 1997; and
(viii) There are no charges, or known administrative proceedings or
formal complaints of discrimination (including discrimination based upon
sex, age, marital status, race, national origin, sexual preference,
handicap or veteran status) pending or, to the knowledge of PST, threatened
before the Equal Employment Opportunity Commission or any federal, state or
local agency or court against PST. Except as disclosed in Schedule 4.18(d),
there have been no governmental audits of the equal employment opportunity
practices of PST.
4.19 Employee Benefit Plans. Except as set forth on Schedule 4.19:
(a) The only employee pension benefit plan as defined in Section 3(2) of
Employee Retirement Income Security Act of 1974 ("ERISA") and including all
trusts executed in connection therewith, adopted or sponsored or maintained or
contributed to by PST with respect to which or as the result of which PST has
or may have had or may have any liability (specifically including, but not
limited to, any liability for a partial or complete withdrawal from a "MULTI-
EMPLOYER PLAN" as defined in Sections 3(37) and 4001(a)(3) of ERISA and any
other liability arising under Title IV of ERISA) during the last five (5)
years is the "PST 401(k) Plan" (the "RETIREMENT PLAN"). The term "PST"
specifically includes for the purposes of this Section 4.19 PST and any member
of a controlled group with PST under Section 414(b),(c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (the "CODE") or any organization to which PST is a successor or
parent corporation within the meaning of Section 4069(b) of ERISA. Except as
set forth on Schedule 4.19(a), PST has never been required to make nor has it
made any contribution to any Multi-employer Plan.
(b) The Retirement Plan is a qualified plan under Section 401(a) of the
Code, the trust with respect to such plan is exempt from taxation under
Section 501(a) of the Code and is subject to a favorable determination letter
which will be in effect at the Closing Date; and all amendments made to the
Retirement Plan prior to the Closing Date have been considered in the
determination letter. No action has been taken (or failure to take action has
occurred) which would cause such determination letter to be revoked. The
Retirement Plan has been administered and operated in accordance with its
terms and in a manner so as to preserve such qualification, including those
provisions required by all subsequent laws (including the Uniformed Services
Employment and Re-employment Rights Act of 1994) whose effective date is prior
to the Closing Date. All Notices of Reportable Events required to be filed
with the Pension Benefit Guaranty Corporation have been timely filed. The
Retirement Plan will be fully funded on a termination basis as of Closing so
that if the Retirement Plan were terminated as of Closing there would be
sufficient assets to pay for all liabilities accrued as of that date (assuming
that all participants would be fully vested).
(c) Schedule 4.19(c) lists any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA maintained or contributed to by PST during
the last five (5) years and with respect to any group health plan subject to
COBRA, maintained or contributed to by PST during the last five (5) years.
"COBRA" means the provisions for the continuation of health care enacted by
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, as set
forth in Section 4080B of the Code (and any amendments or predecessor or
successor provisions) and Sections 601 through 608 of ERISA (and any
amendments or predecessor or successor provisions), including any regulations
promulgated under the applicable provisions of the Code and ERISA. As
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of the Closing Date, each of the employee benefit plans set forth in Schedule
4.19(c) and the Retirement Plan (collectively, the "EMPLOYEE BENEFIT PLANS")
are in material compliance with, and have been administered in material
compliance with, the provisions of ERISA and the Code.
(d) In connection with each Employee Benefit Plan:
(i) PST has provided to the Buyer true, complete and correct copies of
(A) each Employee Benefit Plan (or, in the case of any unwritten Employee
Benefit Plan, a description thereof), (B) each trust agreement, group
annuity contract, and any other contract relating to any Employee Benefit
Plan, (C) the three (3) most recent Forms 990 and the three (3) most recent
Annual Reports, including all schedules, exhibits, and audits (Form 5500)
filed for each Employee Benefit Plan for which such a filing is required;
and there has been no material change or amendment to any of such documents
or filings relating to the Employee Benefit Plans as of the Closing Date;
(D) the most recent Summary Plan Descriptions and all Summary of Material
Modifications prepared subsequent to such Summary Plan Descriptions, (E)
the three (3) most recent Summary Annual Reports prepared and distributed
for each Employee Benefit Plan for which such document is required, (F) all
Notices of Reportable Events filed with the Pension Benefit Guaranty
Corporation.
(ii) Neither PST nor any fiduciary as defined in Section 3(21) of ERISA
has taken any action or failed to take any action which would result in any
liability to PST after the Closing Date for matters prior to the Closing
Date with respect to any Employee Benefit Plan, other than the payment of
the specified benefits.
(iii) There is not any contract, plan or commitment or legal requirement
(other than the funding requirement of ERISA with respect to the Retirement
Plan), that would require PST to create any additional employee benefit
plan to provide or designed to provide benefits for any its employees or
their dependents or beneficiaries or that would require PST to make any
additional contribution to or to pay any expense of the Retirement Plan or
to any Employee Benefit Plan for matters occurring prior to the Closing
Date.
(iv) There is no action, suit, grievance, arbitration or other manner of
litigation, or claim with respect to the assets of any Employee Benefit
Plan (other than routine claims for benefits made in the ordinary course of
Employee Benefit Plan administration for which administrative review
procedures have not been exhausted) pending, threatened or imminent against
or with respect to the Employee Benefit Plan, PST or any other fiduciary
(as defined in Section 3(21) of ERISA) of any Employee Benefit Plan
(including any action, suit, grievance, arbitration or other manner of
litigation, or claim regarding conduct which allegedly interferes with the
attainment of rights under any Employee Benefit Plan).
(v) Neither PST nor any other fiduciary (as defined in Section 3(21) of
ERISA) has any knowledge of any facts which would give rise to or could
give rise to any action, suit, grievance, arbitration or other manner of
litigation, or claim with respect to any Employee Benefit Plan.
(e) Except to the extent that the names of individual claimants or employees
have been excised in order to avoid breaching any obligation of PST to protect
the confidentiality of such information under any applicable legal or
contractual requirement, Schedule 4.19(e) sets forth the names of claimants,
the relationship to the employee and amount of all claims made under any
policy or plan of health benefits sponsored by PST, whether or not insured,
during the last five (5) years that aggregate Thirty-Five Thousand Dollars
($35,000) or more with respect to any claimant.
4.20 Notes and Accounts Receivable. All notes and accounts receivable of PST
are reflected properly on its books and records, subject only to the reserve
for bad debts set forth on the face of the Most Recent Financial Statements as
adjusted for the passage of time through the Closing Date in accordance with
the past custom and practice of PST. More particularly, and without limiting
the preceding statement, as of the Closing Date the total of (i) the amount of
such reserve for bad debts plus (ii) all notes and accounts receivable of PST
which do not satisfy the definition of "Eligible Accounts" as set forth in
Section 1.6 of that certain Loan and Security Agreement by and between
Congress Financial Corporation (Northwest) as Lender and PST as Borrower dated
August 6, 1996 (as amended), shall not exceed Three Million, Five Hundred
Thousand Dollars ($3,500,000).
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4.21 Powers of Attorney. All outstanding powers of attorney executed on
behalf of PST (including copies thereof) are set forth on Schedule 4.21.
4.22 Insurance. Schedule 4.22 sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which PST has been a party, a named insured, or otherwise the
beneficiary of coverage at any time within the past five (5) years:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policyholder, and the name of
each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the coverage was on a
claims made, occurrence, or other basis) and amount (including a description
of deductibles and ceilings); and
(e) a description of any retroactive premium adjustments or other loss-
sharing arrangements.
With respect to each such insurance policy, except as otherwise set forth on
Schedule 4.22: (i) the policy is (or was) legal, valid, binding, enforceable,
and in full force and effect during the periods indicated; (ii) the current
policies in force will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the consummation of the
transactions contemplated hereby (subject to (A) the terms of the policy, (B)
the payment of premiums and (C) no notice of cancellation by PST subsequent to
the Closing); (iii) neither PST nor, to the knowledge of PST, any other party
to the policy is in 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, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the policy; and (iv)
no party to the policy has repudiated any provision thereof. PST has been
covered during the past five (5) years by insurance in scope and amount which
PST's officers and directors believe to be adequate for the businesses in
which it has engaged during the aforementioned period, based upon PST's
business experience. Schedule 4.22 describes any self-insurance arrangements
affecting PST.
4.23 Litigation and Claims. Schedule 4.23(a) sets forth each instance in
which PST (i) is subject to any outstanding injunction, judgment, order,
decree, ruling, asserted claim or charge, or (ii) is a party or is threatened
to be made a party to any action, claim, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator. Set forth on Schedule 4.23(b) are copies of all accident registers
and loss runs relating to all open matters not totally resolved and closed.
Set forth on Schedule 4.23(c) are copies of the cargo loss log relating to all
open matters not totally resolved and closed. Schedule 4.23(d) sets out in
reasonable detail, the facts of which PST is aware involving any bodily
injury, property, vehicular or cargo incident between PST and a third party
occurring since January 1, 1998, where no claim has yet been made or
threatened and which is not reflected on either Schedule 4.23(a), Schedule
4.23(b) or Schedule 4.23(c). Schedule 4.23(a), Schedule 4.23(b) and Schedule
4.23(c) each set forth in individual detail all liabilities recorded in the
financial statements, including booked reserves and accruals relating to each
entry.
4.24 Guaranties. PST is not a guarantor or otherwise is liable for any
liability or obligation (including indebtedness) of any other person or
entity.
4.25 Environmental, Health, and Safety Matters; Environmental
Protection. PST has obtained all material permits, licenses and other
authorizations and filed all notices and reports which are required to be
obtained or filed by it for the operation of its business under federal,
state, local and foreign laws relating to environmental matters, health and
safety, pollution, or protection of the environment (the "HSE LAWS"). A list
and copies of the foregoing, including the location of all underground storage
tanks ("USTS") and all environmental surveys related to all properties, if
any, are attached hereto as Exhibit 4.25. Except as disclosed
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on Schedule 4.25, PST is in compliance in all material respects with all terms
and conditions of such required permits, licenses and authorizations. Except
as disclosed on Schedule 4.25, PST is in compliance in all material respects
with all other applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
the HSE Laws or contained in any law, regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder. In addition to the foregoing, PST specifically warrants that all
underground storage tanks presently or previously located on the Real Estate
which were used by PST or which were located on the Real Estate while it was
owned by PST at all times were in compliance in all material respects with the
HSE Laws while used or owned by PST or that any violations have been properly
corrected to the satisfaction of the appropriate governmental authority, and
further represents that all USTs presently on the Real Estate are in
compliance with the UST upgrade requirements through December 31, 1998. Except
as disclosed on Schedule 4.25, to the knowledge of PST, there are no past or
present events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance in
all material respects with, or which may give rise to any material common law
or statutory liability, or otherwise form the basis of any material claim,
action, suit, notice of violation, proceeding, or hearing pursuant to the HSE
Laws, nor has there been any distribution, use, treatment, storage, disposal,
transport, handling, emission, discharge, release or threatened release into
the environment of any pollutant, contaminant, or hazardous or toxic material
or waste with respect to PST or its business. Except as disclosed on Schedule
4.25, PST has received no notice of violation or the like or any complaint or
other threat of any actions by any party related in any way to the HSE laws.
To the knowledge of PST, the Real Estate does not contain any asbestos, urea-
formaldehyde, lead-based paint, or PCBs in any form.
4.26 Absence of Certain Payments. Other than for services legitimately and
openly performed under applicable law, business discounts customarily granted
in the ordinary course of business and nominal non-cash gifts (with a total
per donee retail value of less than One Hundred Dollars ($100) in any year),
neither PST nor any agent, employee or representative of PST has made or
offered to make to any customer, supplier, government official, insurance
carrier, referral source, employee or agent or any other person or entity, any
payment, gratuity, gift, service or thing of material value. For purposes of
this Section, "material" shall mean a fair market value of One Hundred Dollars
($100.00) or more.
4.27 Antitrust Matters. PST is and throughout any applicable statutory
period of limitation has been in compliance with all laws, regulations and/or
ordinances, whether federal, state or municipal, pertaining or relating in any
way to the regulation of competition or trade among or between business
entities, including but not limited to, Sections 1 and 2 of the Xxxxxxx Act,
Section 3 of the Xxxxxxx Act, the Xxxxxxxx-Xxxxxx Act, the Xxxxxx Act, Section
5 of the Federal Trade Commission Act and applicable state or municipal
antitrust and trade laws, regulations and/or ordinances. The business and
operations of PST, or, to PST's knowledge, any predecessor, affiliate, parent
or subsidiary thereof, have been conducted in full and complete compliance
with any and all such laws, regulations and/or ordinances.
4.28 Safety Rating. Except as noted in Schedule 4.28, PST holds a
Satisfactory safety rating from the United States Department of Transportation
and has always held same since such ratings were first issued.
4.29 Organizations and Clubs. Set forth on Schedule 4.29 is a listing of all
organizations, clubs, sporting activities and facilities, events or other
perquisites or personal benefits of which PST is a member or to which it pays
dues or fees on behalf of itself or otherwise provides to any person, which
person shall be identified in the schedule.
4.30 Bank Accounts. Schedule 4.30 sets forth a complete and accurate list of
each bank or financial institution at which PST has an account or safe deposit
box (giving the address and account numbers) and the names of the persons
authorized to draw thereon or to have access thereto.
4.31 Major Suppliers and Customers. Schedule 4.31 sets forth a list of PST's
fifty (50) largest suppliers and fifty (50) largest customers for the year
ended December 31, 1997, together with in each case the amount paid or billed
during such period. To the knowledge of PST, PST is not engaged in any dispute
with any of such
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suppliers or customers. None of the officers or directors of PST, or any
lineal ancestor or descendant of any officer or director of PST, or any
company or other organization in which any officer or director of PST (or any
lineal ancestor or descendant thereof) has a direct or indirect financial
interest, has any material financial interest in any supplier or customer of
PST.
4.32 Disclosure. The representations and warranties contained in this
Article IV do not contain any untrue statement of a material fact nor omit to
state any material fact necessary in order to make the statements and
information contained in this Article IV not misleading.
4.33 Registration Statement; Proxy Statement; Other Filings. None of the
information related to PST whether included directly therein or incorporated
by reference in (i) the Registration Statement (as defined in Section 6.2(b)),
(ii) the Proxy Statement (as defined in Section 6.2(b)), or (iii) any other
documents to be filed with the Commission or any regulatory agency in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, and, in the case of the Registration
Statement, when it becomes effective and at all times necessary for the
issuance of the shares of Enterprises Common Stock in the Merger, fail to
comply with the Securities Act, or, with respect to the Proxy Statement, when
mailed and at all times through the date of the Shareholders' Meeting (as
defined in Section 6.3), contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, or necessary to correct any statement in any
earlier communication with respect to the Shareholders' Meeting which has
become false or misleading. All documents which PST files with the Commission
and any regulatory agency in connection with the Merger will comply in all
material respects with the applicable provisions of the Securities Act, the
Exchange Act and state securities laws and the rules and regulations
thereunder. The monthly and quarterly consolidated financial statements for
January 1998 through April 1998 furnished by PST to Enterprises were prepared
in a manner consistent with the consolidated financial statements contained in
the PST SEC Reports, and present fairly in all material respects the
consolidated results of its operations for the period indicated, except that
such statements are subject to normal and recurring quarterly year-end
adjustments, which were not or are not expected to be material in amount.
4.34 Statutory Provisions; Articles of Incorporation. Except for Part 13 of
the URBCA and Article 2 of PST's Amended and Restated Bylaws, there are no
other provisions of applicable law or of PST's corporate governance documents
which apply to this Agreement, the Articles of Merger, the Merger or to the
transactions contemplated hereby, to require any vote of PST's Shareholders
other than as set forth in Section 4.35 below, or to require any consideration
to be paid to PST's Shareholders other than the Merger Consideration as
defined herein.
4.35 Vote. The affirmative vote of two-thirds (2/3) of the votes that
holders of the outstanding shares of PST Common Stock are entitled to cast, is
the only vote or approval of the holders of PST's capital stock necessary to
approve this Agreement and the Articles of Merger and the transactions
contemplated hereby and thereby.
4.36 Revenue Per Loaded Mile. PST has provided to Enterprises data
reasonably requested by Enterprises necessary to verify the revenue per loaded
mile representations heretofore provided to Enterprises, and such data is
accurate in all material respects as of the date provided to Enterprises.
ARTICLE V
Conduct of Business Pending the Merger
Except as otherwise contemplated hereby or as set forth on Schedule 5, after
the date hereof and prior to the Effective Time or earlier termination of this
Agreement, unless Enterprises shall otherwise agree in writing or as otherwise
expressly contemplated by this Agreement (it being agreed, however, that PST
shall be solely responsible for its operations in accordance with the
provisions of this Agreement), PST shall:
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(a) conduct its businesses in the ordinary and usual course of business and
consistent with past practice;
(b) not (i) amend or propose to amend its charter or by-laws, or (ii) split,
combine or reclassify its outstanding capital stock or declare, set aside or
pay any dividend or distribution payable in cash, stock, property or
otherwise;
(c) not (i) authorize the issuance of, or issue, sell, grant, pledge or
dispose of, or agree to issue, sell, grant, pledge or dispose of, any
additional shares of, or any options, warrants or rights of any kind to
acquire any shares of, its capital stock of any class or any debt or equity
securities convertible into or exchangeable for such capital stock, except
issuances of shares of PST Common Stock pursuant to the exercise of stock
options outstanding on the date hereof; amend or agree to amend any stock
option plans or agreements; sell (including, without limitation, by sale-
leaseback), pledge, dispose of or encumber any material assets or interests
therein, other than in the ordinary course of business and consistent with
past practice; (iii) redeem, purchase, acquire or offer to purchase or acquire
any shares of its capital stock; or (iv) enter into any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(d) use its commercially reasonable efforts to preserve intact its business
organizations and goodwill, keep available the services of its present
officers, employees, and independent contractors, and preserve the goodwill
and business relationships with suppliers, distributors, customers, and others
having business relationships with PST;
(e) use its commercially reasonable efforts to insure compliance with all
applicable statutes and regulations, and preserve and xxxxxx good
relationships with governmental agencies having jurisdiction over PST;
(f) confer on a regular basis as requested by Enterprises with one or more
representatives of Enterprises to discuss operational and business matters of
materiality and the general status of ongoing operations and business;
(g) promptly notify Enterprises of any significant changes in the business,
properties, assets, condition (financial or other), results of operations or
prospects of PST, including but not limited to any pending or threatened
claims, suits, actions or other potential liabilities;
(h) not acquire, or publicly propose to acquire, all or any substantial part
of the business and properties or capital stock of any person not a party to
this Agreement, whether by Merger, purchase of assets, tender offer or
otherwise;
(i) not initiate, solicit, or encourage, and will not directly through any
officer, director or employee, investment banker, attorney, accountant or
other agent employed or retained by PST or any of its subsidiaries initiate,
solicit or encourage, any proposal or offer to acquire all or any substantial
part of the business and properties or capital stock of PST or any of its
subsidiaries, whether by Merger, purchase of assets, tender offer or
otherwise; provided, however, that PST may furnish information concerning its
business, properties or assets to a corporation, partnership, person or other
entity or group (a "THIRD PARTY") which has expressed an interest in making a
bona fide offer or proposal to PST to acquire PST and which in the opinion of
PST has the financial capability to consummate such an acquisition subject to
receipt of appropriate information regarding PST (and when PST has not
initiated the offer or proposal and has not solicited or encouraged such third
party to express such offer or proposal in breach of this subsection (i) and,
following receipt of such expression of interest, may negotiate and take any
of the actions otherwise prohibited by this subsection (i), including without
limitation, entering into appropriate agreements with such Third Party if the
Board of Directors believes in good faith, after consultations with its
financial advisor, that such actions may result in a superior financial
transaction for shareholders and if outside counsel to PST provides a written
opinion to the Board of Directors of PST to the effect that the failure to
furnish such information, or to negotiate or enter into appropriate agreements
with such Third Party could subject PST's directors to a substantial risk of
liability for breach of their fiduciary duties or for failure to conform to
the requirements of the securities laws. In the event PST shall receive an
expression of interest or offer of the type referred to in this subsection
(i), it shall promptly inform Enterprises as to (and provide Enterprises with
copies of) any such inquiry, offer or proposal;
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(j) not approve, accept or recommend any offer from a Third Party with
respect to any Merger, consolidation, or sale of substantially all of its
assets that will treat Enterprises or shares of PST Common Stock owned by
Enterprises any less favorably than other shareholders of PST or their shares
of common stock of PST;
(k) not commence litigation, adopt any shareholder rights plan or comparable
arrangement, or take any other action that is intended to prevent Enterprises
from acquiring the PST Common Stock other than enforcing the terms of this
Agreement;
(l) not enter into or amend any employment, severance, bonus, special pay
arrangement with respect to hiring, termination of employment or other similar
arrangements or agreements with any directors, officers or key employees;
(m) with the exception of routine employee raises granted in the ordinary
course of business and consistent with past practice, not adopt, enter into or
amend any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, health care, employment or other employee
benefit plan, agreement, trust, fund or arrangement for the benefit or welfare
of any employee, retiree, or terminated employee, except as required to comply
with changes in applicable law;
(n) other than in the ordinary course of business and consistent with past
practice, not incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or make any loans or
advances;
(o) not agree in writing, or otherwise, to take any of the foregoing actions
or any other action which would make any representation or warranty contained
in Article IV untrue or incorrect in any material respect as of the Closing
Date; and
(p) not authorize or resolve to adopt any plan or proposal that would grant
any right to PST's shareholders to dissent from and obtain an appraisal of
their shares as a consequence of the Merger or this Agreement and the
transaction contemplated thereby apart from, or in addition to, the statutory
rights of PST shareholders prescribed by Part 13 of the URBCA.
ARTICLE VI
Additional Agreements
6.1 Access to Information. PST shall afford to Enterprises and its
accountants, counsel, lenders and other representatives reasonable access
during normal business hours and upon reasonable notice throughout the period
prior to the Effective Time to all of their respective properties, books,
contracts, commitments and records (including, but not limited to, tax
returns) and, during such period, shall furnish promptly to Enterprises (i) a
copy of each report, schedule and other document filed or received by any of
them pursuant to the requirements of federal or state tax or securities laws
or the HSR Act or filed with or received by any of them from the SEC, Federal
Trade Commission, Department of Justice or any Federal or state tax authority
and (ii) all other information and documents concerning its businesses,
properties and personnel as Enterprises may reasonably request; provided that
no investigation pursuant to this Section 6.1 or otherwise shall affect any
representations or warranties made herein or the conditions to the obligations
of the respective parties to consummate the Merger. PST shall promptly advise
Enterprises in writing of any change or occurrence of any event after the date
of this Agreement having, or which, insofar as can reasonably be foreseen, in
the future may have, a PST Material Adverse Effect.
6.2 Proxy Statement; Registration Statement; Other Filings.
(a) PST shall cooperate with Enterprises and its counsel in the preparation
and filing with the Commission as promptly as practicable, and shall use all
reasonable efforts to have cleared and declared effective by the Commission, a
proxy statement/prospectus with respect to the Shareholders' Meeting referred
to in Section 6.3
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and the issuance of the Enterprises Common Stock described in Article II. The
term "PROXY STATEMENT" shall mean such proxy statement/prospectus at the time
it initially is mailed to PST's shareholders and all amendments or supplements
thereto duly filed and similarly mailed. PST agrees to correct promptly (but
in no event later than the date of the Shareholders' Meeting referred to in
Section 6.3) any information related to PST whether included directly therein
or incorporated by reference, in the Proxy Statement which contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy Statement
shall be used in the prospectus of Enterprises to be included in the
Registration Statement described in Subsection (b) below. Enterprises and PST
shall cooperate with each other in the preparation of such Proxy Statement and
Registration Statement. The Proxy Statement shall include the recommendations
of the Board of Directors of PST in favor of the Merger, unless an offer as
described on Article V hereof shall have been made (and not been withdrawn)
prior to such mailing.
(b) Enterprises (with the cooperation and assistance of PST) shall prepare
and shall file with the Commission, as promptly as practicable after the
furnishing by PST of all information regarding PST required to be contained
therein, a Registration Statement on Form S-4 under the Securities Act
covering the Enterprises Common Stock to be issued in the Merger, which
Registration Statement shall include the Proxy Statement referenced in Section
6.2(a) above and shall use all reasonable efforts to have the Registration
Statement declared effective by the Commission as promptly as practicable.
Enterprises shall also take such action as is reasonably required to be taken
with respect to the issuance of Enterprises Common Stock in the Merger under
state blue sky or securities laws. The term "REGISTRATION STATEMENT" shall
mean such Registration Statement at the time it becomes effective and all
amendments or supplements thereto duly filed. Enterprises agrees to correct
promptly (but in no event later than the date of the Shareholders' Meetings
referred to in Section 6.3) any information provided by it for use in the
Registration Statement which contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) As soon as practicable after the date hereof, PST and Enterprises shall
promptly prepare and file any other filings required under the Exchange Act,
the Securities Act or any other federal or state securities laws relating to
the Merger and the transactions contemplated herein ("OTHER FILINGS").
6.3 Shareholders' Approval. PST, in accordance with applicable law and the
terms of this Agreement, shall promptly submit this Agreement and the
transactions contemplated hereby for the approval of PST's shareholders at a
special meeting of shareholders (the "SHAREHOLDERS' MEETING") to be held as
soon as practicable after the Registration Statement is declared effective by
the Commission and, subject to the fiduciary duties of the Board of Directors
of PST under applicable law and as otherwise provided herein, shall use its
commercially reasonable efforts to obtain shareholder approval of this
Agreement and the transactions contemplated hereby; subject to the provisions
of Article V hereof.
6.4 Expenses; Termination Fee. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses; provided, however, if this Agreement is terminated pursuant to
Section 8.1(d)(ii) hereof, or if a tender or exchange offer for any shares of
capital stock of PST or any business combination shall have been made or
publicly proposed to be made by any person, entity or group (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
other than Enterprises, and the Board of Directors of PST shall have announced
a position in favor of such tender or exchange offer or business combination,
then PST shall pay to Enterprises a termination fee of Three Million Dollars
($3,000,000) plus Enterprises' actual out-of-pocket expenses relating to the
transactions contemplated by this Agreement (including, but not limited to
fees and expenses of counsel and accountant and financial advisors), subject
to a limit on such expenses of Five Hundred Thousand Dollars ($500,000). Such
payment is intended by the parties to constitute liquidated damages and not a
penalty. If this Agreement is terminated pursuant to Section 8.1(c) (except
for a termination under Section 8.1(c)(ii)(y) or (z) due to a breach or event,
as the case may be, which occurs after the signing of this Agreement but prior
to the Closing Date as a result of the actions of one or more third parties),
then PST shall
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pay Enterprises' actual out-of-pocket expenses relating to the transactions
contemplated by this Agreement (including, but not limited to fees and
expenses of counsel and accountant and financial advisors), subject to a limit
on such expenses of Five Hundred Thousand Dollars ($500,000). Notwithstanding
any other provision of this Section, PST shall not become obligated for
payment to Enterprises of any termination fee or out-of-pocket expenses if
this Agreement is terminated under Section 7.2(e) or Section 8.1(d)(i) hereof.
If Enterprises wrongfully refuses to close the transactions contemplated by
this Agreement (which expressly shall not include any refusal pursuant to the
exercise of Enterprises' rights under Sections 7.1 or 7.3 hereof), then
Enterprises shall pay PST's actual out-of-pocket expenses relating to the
transactions contemplated by this Agreement (including, but not limited to,
fees and expenses of counsel, accountants, and financial advisors), subject to
a limit on such expenses of Five Hundred Thousand Dollars ($500,000).
6.5 Agreement to Cooperate. Subject to the terms and conditions herein
provided, each of the parties hereto shall use all commercially reasonable
efforts to take, or cause to be taken, all action 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, including using its commercially reasonable efforts to obtain
all necessary or appropriate waivers, consents and approvals, to effect all
necessary registrations and filings (including, but not limited to, filings
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act and the Other Filings),
to enter into negotiations, provide information or propose settlements
reasonably calculated to avoid or eliminate any impediment under any antitrust
law that may be asserted by any governmental authority and to prevent the
commencement of proceedings to enjoin or delay consummation of the Merger by
such governmental authority or, if such proceedings are commenced, to
thereafter prevent the entry of any injunction or other order delaying or
preventing the Merger, and to lift any injunction or other legal bar to the
Merger (and, in such case, to proceed with the Merger as expeditiously as
possible), subject, however, to receiving the requisite vote of the
shareholders of PST. Each party hereto agrees to allow the other to review
each regulatory filing, including the Other Filings made by such party prior
to the filing thereof during the term of this Agreement.
6.6 Public Statements. The parties shall consult with each other prior to
issuing any public announcement or statement with respect to this Agreement or
the transactions contemplated hereby and shall not issue any such public
announcement or statement prior to such consultation, except as may be
required by law or either party's listing agreement with the NASDAQ/NMS.
6.7 Accountants' Letters. Each of Enterprises and PST agrees to use its
commercially reasonable efforts to cause to be delivered to the other letters
of Xxxxxx Xxxxxxxx LLP, independent auditors for PST and Xxxxxx Xxxxxxxx LLP,
independent auditors for Enterprises, respectively, dated the date of the
Proxy Statement/Prospectus, the effective date of the Registration Statement
and the Closing Date (or such other dates reasonably acceptable to the
parties) with respect to certain financial statements and other financial
information included in the Registration Statement, which letters shall be in
form and substance reasonably satisfactory to the addressee.
6.8 Stock Options. As of the Effective Time, all options to purchase PST
Common Stock outstanding as of the date hereof under any employee benefit plan
of PST, whether vested or unvested, shall be deemed immediately vested and
exercisable in full. The letter of transmittal for use by PST shareholders in
obtaining the Merger Consideration shall provide a mechanism for allowing
holders of such options to exercise their options and thereby obtain the
Merger Consideration issuable with respect to the number of shares of PST
Common Stock for which the option is exercised. Any such options to purchase
shares of PST Common Stock which are not so exercised by the holders thereof
in accordance with the procedures set forth in the letter of transmittal shall
thereafter be deemed null and void.
6.9 Dissenting Shareholders. PST shall give Enterprises prompt notice of any
demands received by PST for appraisal of shares pursuant to Section 16-10a-
1302 of the Utah Code Annotated, and Enterprises shall have the right to
direct all negotiations and proceedings with respect to such demands.
6.10 Directors' and Officers' Insurance. Enterprises shall cause to be
maintained, for a period of not less than six (6) years after the Closing
Date, directors' and officers' insurance and indemnification policies in
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such coverage and amounts as is substantially equivalent to the coverage
maintained by PST as of the date hereof, to the extent that such policies
provide coverage for events occurring prior to the Closing Date (collectively,
the "D & O INSURANCE") for all persons who are directors of or officers of PST
on the date hereof. To the extent that the D & O Insurance provides such
coverage subject to deductible amounts, Enterprises shall indemnify such
directors and officers for the amount of any such deductible with respect to
liability incurred by them for events occurring prior to the Closing Date
otherwise covered by such insurance.
ARTICLE VII
Conditions
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) This Agreement and the transactions contemplated hereby shall have been
approved and adopted by the requisite vote of the shareholders of PST under
applicable law;
(b) Each of Enterprises, Merger Sub, and PST shall have delivered or caused
to be delivered to the other resolutions of their respective Boards of
Directors duly adopted by unanimous vote or consent, certified by the
Secretary of such party as of the Closing Date, authorizing and approving the
execution and delivery of this Agreement on behalf of such party and the
consummation of the transactions contemplated herein and authorizing and
approving all other necessary and desirable corporate actions to enable the
parties to comply with the terms hereof;
(c) The waiting period applicable to the consummation of the Merger under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act shall have expired or been
terminated;
(d) The Registration Statement shall have become effective in accordance
with the provisions of the Securities Act, and no stop order suspending such
effectiveness shall have been issued and remain in effect and no proceedings
for that purpose in respect of the Registration Statement shall have been
initiated or threatened;
(e) No preliminary or permanent injunction or other order or decree by any
federal or state court which prevents the consummation of the Merger shall
have been issued and remain in effect (each party agreeing to use all
commercially reasonable efforts to have any such injunction, order or decree
lifted); and
(f) There shall not have been instituted, pending or threatened any action
or proceeding (or any investigation or other inquiry that might result in such
an action or proceeding) by any governmental authority or administrative
agency before any governmental authority, administrative agency or court of
competent jurisdiction, domestic or foreign, nor shall there be in effect any
judgment, decree or order of any governmental authority, administrative agency
or court of competent jurisdiction, or any other legal restraint (i)
preventing or seeking to prevent consummation of the Merger, (ii) prohibiting
or seeking to prohibit or limiting or seeking to limit, Enterprises from
exercising all material rights and privileges pertaining to its ownership of
the Surviving Corporation or ownership or operation by Enterprises or any of
its subsidiaries of all or a material portion of the business assets of
Enterprises or any of its subsidiaries, or (iii) compelling or seeking to
compel Enterprises or any of its subsidiaries to dispose or hold separate all
or any material portion of the business or assets of Enterprises or any of its
subsidiaries, as a result of the Merger or the transactions contemplated by
this Agreement.
7.2 Conditions to Obligation of PST to Effect the Merger. The obligation of
PST to effect the Merger shall be subject to the fulfillment at or prior to
the Effective Time of the following additional conditions:
(a) Enterprises shall have performed in all material respects its agreements
contained in this Agreement required to be performed at or prior to the
Effective Time and the representations and warranties of Enterprises
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contained in this Agreement shall be true and correct in all material respects
on and as of the date of this Agreement and at and as of the Effective Time as
if made on and as of such date or time, except as otherwise contemplated or
permitted by this Agreement, and PST shall have received a certificate of the
President or any Executive Vice-President of Enterprises to that effect;
(b) PST shall have received an opinion addressed to PST from Xxxx, Xxxxxxx &
Xxxxxxxx, P.C., counsel to Enterprises, dated the date on which the Effective
Time shall occur, substantially to the effect set forth in Exhibit 7.2(b)
hereto;
(c) PST shall have received the letter of Xxxxxx Xxxxxxxx LLP contemplated
by Section 6.7 hereof;
(d) The Board of Directors of PST on or prior to the date hereof has been
advised by Xxxxxx Xxxxxx to the effect that the Merger Consideration is fair
from a financial standpoint to PST's shareholders. Xxxxxx Xxxxxx has consented
to the inclusion of their opinion in the Proxy Statement. Xxxxxx Xxxxxx'x
fairness opinion shall be confirmed in writing prior to the mailing of the
Proxy Statement to PST's Shareholders and shall be further confirmed in
writing immediately prior to the Closing.
(e) Since the date hereof, no change, effect, or circumstance that
individually or when taken together with all other changes, effects or
circumstances has occurred (including such changes, events, or circumstances
that are reasonably likely to occur), which has or may be reasonably expected
to have a material adverse effect on the business, assets, financial
condition, results of operations or stockholders equity of Enterprises taken
as a whole.
7.3 Conditions to Obligation of Enterprises to Effect the Merger. The
obligation of Enterprises and Merger Sub to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the additional
following conditions:
(a) PST shall have performed in all material respects its agreements
contained in this Agreement required to be performed at or prior to the
Effective Time and the representations and warranties of PST contained in this
Agreement shall be true and correct in all material respects on and as of the
date of this Agreement and at and as of the Effective Time as if made on and
as of such date or time, except as otherwise contemplated or permitted by this
Agreement and Enterprises shall have received a Certificate of the Chairman of
the Board and Chief Executive Officer, or President and Chief Operating
Officer of PST to that effect;
(b) Enterprises shall have received an opinion from Parr, Waddoups, Xxxxx,
Xxx & Xxxxxxxx, counsel to PST, dated as of the date on which the Effective
Time shall occur, substantially to the effect set forth in Exhibit 7.3(b)
hereto;
(c) Enterprises shall have received the estoppel letters specified in
Section 4.14 hereof and the letter of Xxxxxx Xxxxxxxx LLP contemplated by
Section 6.7 hereof;
(d) Since the date hereof, no PST Material Adverse Effect shall have
occurred;
(e) As of the date hereof, and as of the Effective Time there shall have
occurred no default or condition which, with the passage of time, would
constitute a default under any loan agreement to which PST or any subsidiary
is a party which would permit the acceleration of any amounts due thereunder;
(f) PST's Board of Directors shall have unanimously approved and recommended
to PST's shareholders, the Merger and the transactions contemplated thereby
(in addition to the approval of shareholders required by Section 7.1(a)
hereof) and persons holding more than ten percent (10%) of the outstanding PST
Common Stock as of the Effective Time shall not have perfected their right to
dissent from the Merger and receive payment for their shares under Section 16-
10a-1302 of the Utah Code Annotated;
(g) Each of the officers and directors of PST as set forth on Schedule 4.5
shall have delivered to Enterprises by the Closing Date a release in the form
attached hereto as Exhibit 7.3(g);
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(h) By the Closing Date, Xxxxxxx X. Xxxxxx ("NORTON") and Enterprises shall
have entered into an agreement of non-competition in a form substantially
equivalent to that attached hereto as Exhibit 7.3(h);
(i) The Agreement for Outsourcing Services between PST Vans, Inc. and The
Sabre Group Inc. will be discussed among the parties prior to closing and if
such service is to be terminated it shall be done at a cost to PST of not more
than One Million One Hundred Thirty-Seven Thousand Dollars ($1,137,000). If
the cost of such termination exceeds, or would exceed such amount,
notwithstanding PST's efforts to negotiate a lower amount, then this condition
will be deemed not to have been met, and Enterprises and Merger Sub will not
be obligated to effect the Merger. PST will use commercially reasonable
efforts to negotiate and execute a definitive termination agreement with the
Sabre Group, Inc. prior to closing; and
(j) Prior to the Closing Date, PST shall identify all persons or entities
who were, at the time of the PST Shareholders' Meeting held in accordance with
Section 6.3 hereof, "affiliates" of PST for purposes of Rule 145 under the
Securities Act (the "Affiliates"). PST shall use its commercially reasonable
efforts to cause each person or entity identified as an Affiliate to deliver
to Enterprises, on or prior to the Closing Date, a written agreement
(substantially in the form attached hereto as Exhibit 7.3(j)) stating that
such affiliate will not offer to sell, sell, transfer, or otherwise dispose of
any shares of Enterprises Common Stock received in the Merger except: (i)
pursuant to an effective registration statement; (ii) in compliance with
Securities Act Rule 145; or (iii) if, in the opinion of counsel reasonably
acceptable to Enterprises or pursuant to a "no action" letter obtained by the
undersigned from the staff of the Commission, such offer to sell, sale,
transfer or other disposition is otherwise exempt from registration under the
Act. Receipt of such signed agreements from each such potential Affiliate
shall be a condition precedent to the obligations of Enterprises and Merger
Sub to effect the Merger.
ARTICLE VIII
Termination, Amendment and Waiver
8.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
whether before or after approval by the shareholders of PST:
(a) by mutual consent of Enterprises and PST; or
(b) by either Enterprises or PST if (i) the Merger shall not have been
consummated on or before October 31, 1998 (the "TERMINATION DATE"), (ii) the
requisite vote of the shareholders of PST to approve this Agreement and the
transactions contemplated hereby shall not be obtained at the Shareholders'
Meeting, or any adjournment thereof, called therefor, or (iii) any court of
competent jurisdiction in the United States or any State shall have issued an
order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment or decree shall have become final and nonappealable; provided that
the right to terminate this Agreement under this Section 8.1(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 Effective
Time to occur on or before the Termination Date; or
(c) by Enterprises (i) if the Board of Directors of PST shall have withdrawn
or modified in a manner adverse to Enterprises its approval or recommendation
of the Merger, this Agreement or the transactions contemplated hereby, or
shall have resolved to do any of the foregoing, or (ii) there has been (x) a
material breach of any covenant or agreement herein on the part of PST which
has not been cured or adequate assurance (acceptable to Enterprises in its
sole discretion) of cure given, in either case within fifteen (15) business
days following receipt of notice of such breach, or (y) a breach of a
representation or warranty of PST herein which by its nature cannot be cured
prior to the Termination Date other than such breach that has not had or would
not reasonably be expected to have a PST Material Adverse Effect; or (z) a PST
Material Adverse Effect has occurred; or
(d) by PST if (i) there has been (x) a material breach of any covenant or
agreement herein on the part of Enterprises which has not been cured or
adequate assurance (acceptable to PST in its reasonable discretion) of
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cure given, in either case within fifteen (15) business days following receipt
of notice of such breach, or (y) a breach of a representation or warranty of
Enterprises herein which by its nature cannot be cured prior to the
Termination Date other than such breach that has not had or would not
reasonably be expected to have a material adverse effect on the business of
Enterprises taken as a whole, or (ii) the Board of Directors of PST, pursuant
to the actions permitted by the proviso of Article V subsection (i), shall
have authorized PST to enter into an agreement with any Third Party with
respect to a Merger of PST or the sale of all or substantially all of the
assets of PST or recommended approval of a tender offer or any other form of
business combination.
8.2 Effect of Termination. In the event of termination of this Agreement by
either Enterprises or PST, as provided in Section 8.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the
part of either PST or Enterprises or their respective officers or directors,
except as set forth in Section 6.4 which shall survive the termination and
except for the confidentiality provisions incorporated in Section 11.3, which
shall survive termination. Nothing in this Section 8.2 shall relieve any party
from liability for any breach of this Agreement.
8.3 Amendment. This Agreement may be amended by the parties hereto, at any
time before or after approval hereof by the shareholders of PST, but, after
any such approval, no amendment shall be made which reduces the Merger
Consideration or alters the form thereof or in any way materially adversely
affects the rights of the shareholders of PST without the further approval of
such shareholders, but the parties may agree to increase the Merger
Consideration without the approval of the PST shareholders. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
8.4 Waiver. At any time prior to the Effective Time, the parties hereto may
(a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto (made by the other parties hereto) and (c) waive compliance
with any of the agreements or conditions contained herein (required of the
other parties hereto); provided, however, that waiver of compliance with any
agreements or conditions herein shall not limit the parties' obligations to
comply with all other agreements or conditions herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid if set
forth in an instrument in writing signed on behalf of such party.
ARTICLE IX
Survival
All representations, warranties and agreements in this Agreement shall
expire as of the Effective Time.
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ARTICLE X
Definitions, Schedules, and Exhibits
10.1 Definitions.
DEFINED TERM SECTION WHERE DEFINED
------------ ---------------------
20-Day Average Price.............................. Section 2.1(a)
Agreement......................................... Preamble
Articles of Merger................................ Section 1.1
Closing........................................... Section 2.5
Closing Date...................................... Section 2.5
Closing Price..................................... Section 2.1(a)
COBRA............................................. Section 4.19(c)
Commission........................................ Section 3.5
Code.............................................. Section 4.19(a)
D&O Insurance..................................... Section 6.10
Effective Time.................................... Section 1.2
Employee Benefits Plans........................... Section 4.19(c)
Enterprises....................................... Preamble
Enterprises Common Stock.......................... Section 2.1(a)
Enterprises SEC Reports........................... Section 3.5
ERISA............................................. Section 4.19(a)
Exchange Agent.................................... Section 2.1(c)
Exchange Fund..................................... Section 2.1(c)
HSE Laws.......................................... Section 4.25
Merger............................................ Preamble
Merger Consideration.............................. Section 2.1(a)
Merger Sub........................................ Preamble
Most Recent Financial Statements.................. Section 4.7
Multi-employer Plan............................... Section 4.19(a)
Norton............................................ Section 7.3(h)
Other Filings..................................... Section 6.2(c)
Proxy Statement................................... Section 6.2(a)
PST............................................... Preamble
PST Common Stock.................................. Section 2.1(a)
PST Intellectual Property......................... Section 4.15
PST Material Adverse Effect....................... Section 4.1
PST Options....................................... Section 2.4
PST SEC Reports................................... Section 4.9
Real Estate....................................... Section 4.14
Registration Statement............................ Section 6.2(b)
Retirement Plan................................... Section 4.19(a)
Rolling Stock..................................... Section 4.16
Shareholders' Meeting............................. Section 6.3
Surviving Corporation............................. Section 1.1
Tax, Taxes........................................ Section 4.13
Tax Returns....................................... Section 4.13
Termination Date.................................. Section 8.1(b)
Third Party....................................... Section 5(i)
To the knowledge of PST, to the knowledge of PST's
officers and directors........................... Section 4.11
URBCA............................................. Section 1.1
USTs.............................................. Section 4.25
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10.2 List of Schedules and Exhibits.
SCHEDULES DESCRIPTION
--------- -----------
Schedule 3.2............ Authorization of Transaction
Schedule 3.3............ Noncontravention
Schedule 3.5............ Enterprises Financial Statements and SEC Reports
Schedule 4.2(b)......... Defaults
Schedule 4.3............ No Conflict
Schedule 4.4............ Capital Stock and Stockholder Relations
Schedule 4.5............ Officers and Directors
Schedule 4.7............ Title to Assets
Schedule 4.8............ Subsidiaries and Affiliates
Schedule 4.9............ PST Financial Statements and SEC Reports
Schedule 4.10........... Events Subsequent to Most Recent Fiscal Year End
Schedule 4.11........... Undisclosed Liabilities
Schedule 4.12........... Legal Compliance
Schedule 4.13........... Tax Matters--Exceptions
Schedule 4.13(c)........ Filed Tax Returns
Schedule 4.13(f)........ Asset Basis, etc.
Schedule 4.14........... Real Property
Schedule 4.14(c)........ Licenses & Permits
Schedule 4.14(i)........ Good Title
Schedule 4.14(j)........ Other Leases
Schedule 4.15........... Intellectual Property
Availability of Intellectual Property to Surviving
Schedule 4.15(a)........ Corporation
Schedule 4.15(b)........ Infringement of Intellectual Property Rights
Schedule 4.16........... Rolling Stock and other Tangible Assets
Schedule 4.16(a)........ List of Tractors and Trailers
Schedule 4.16(b)........ Other Motor Vehicles and Equipment
Schedule 4.16(c)........ Other Personal Property
Schedule 4.17........... Contracts
Schedule 4.18(a)........ Employment Agreements
Schedule 4.18(b)........ List of Salaried Employees
Schedule 4.18(c)........ Worker Compensation
Schedule 4.18(d)........ Labor Compliance
Schedule 4.19........... Employee Benefit Plans
Schedule 4.19(a)........ Multi-employer Plan Contribution
Schedule 4.19(c)........ Welfare Benefit Plans
Schedule 4.19(e)........ Health Benefit Claimants
Schedule 4.21........... Outstanding Powers of Attorney
Schedule 4.22........... Insurance Policies
Schedule 4.23(a)........ List of Litigation Matters
Schedule 4.23(b)........ Accident Registers and Loss Runs
Schedule 4.23(c)........ Cargo Loss
Schedule 4.23(d)........ Personal and Property Damage
Schedule 4.25........... Environmental, Health, and Safety Matters
Schedule 4.28........... Safety Rating
Schedule 4.29........... Organizations and Clubs
Schedule 4.30........... Bank Accounts
Schedule 4.31........... Major Suppliers and Customers
Schedule 5.............. Conduct of Business Pending Merger
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EXHIBITS DESCRIPTION
-------- -----------
Exhibit 1.1(a), (b)..... Articles of Merger
Exhibit 4.14............ Form of Landlord Estoppel Letter
Exhibit 4.25............ Environmental, Health, and Safety Matters
Exhibit 7.2(b).......... Opinion of Xxxx, Xxxxxxx & Xxxxxxxx, P.C.
Exhibit 7.3(b).......... Opinion of PST Counsel
Exhibit 7.3(g).......... Form of Resignation
Exhibit 7.3(h).......... Form of Agreement of Non-Competition
Exhibit 7.3(j).......... Affiliates
ARTICLE XI
General Provisions
11.1 Notices. Any notice, demand, request, consent, approval or other
communications required or permitted to be given hereunder shall be in writing
and shall be delivered personally or sent either by facsimile transmission, or
nationally recognized overnight courier (utilizing guaranteed next business
morning or day delivery), addressed to the party to be notified at the
following address, or to such other address as such party shall specify by
like notice:
(a) If to Enterprises, to:
U.S. Xpress Enterprises, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxxx X. Xxxxx and Xxx X. Xxxxxx
with copies to:
Xxxx, Xxxxxxx & Xxxxxxxx, P.C.
0000 XxxXxxxx Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxx X. Xxxxx, III, Esq.
(b) If to Merger Sub, to:
PST Acquisition Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxxx X. Xxxxx and Xxx X. Xxxxxx
with copies to:
Xxxx, Xxxxxxx & Xxxxxxxx, P.C.
0000 XxxXxxxx Xxxx Xxxxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000)000-0000
Attention: Xxxxxx X. Xxxxx, III, Esq.
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(c) If to PST, to:
PST Vans, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Parr, Waddoups, Xxxxx, Gee & Xxxxxxxx, P.C.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
11.2 Interpretation. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring 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 word "including" shall mean including without limitation. 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. Any
matter disclosed in a Schedule shall not be deemed disclosed in any other
Schedule absent a specific cross-reference.
11.3 Miscellaneous. This Agreement (including the documents and instruments
referred to herein) (a) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof (other than
the confidentiality provisions of Paragraph 9 of that certain Letter of Intent
among the parties hereto dated June 1, 1998, which provisions are hereby
deemed incorporated into this Agreement as of the date hereof); (b) is not
intended to confer upon any other person any rights or remedies hereunder; (c)
shall not be assigned by operation of law or otherwise; and (d) shall be
governed in all respects, including validity, interpretation and effect, by
the laws of the State of Tennessee (without giving effect to the provisions
thereof relating to conflicts of law).
11.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement. This Agreement may be
executed by delivery of faxed signature pages, promptly followed by exchange
of originals.
11.5 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party.
11.6 Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or a part thereof, not essential
to the commercial purpose of this Agreement shall be held to be illegal,
invalid or unenforceable by a court of competent jurisdiction, it is the
intention of the parties that the remaining terms hereof, or a part thereof,
shall remain in full force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this Agreement shall be
replaced by a valid provision which will implement the commercial purpose of
the illegal, invalid or unenforceable provision so that the parties will each
enjoy the benefit of their bargain hereunder.
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In Witness Whereof, Enterprises, Merger Sub and PST have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the date first written above.
U.S. Xpress Enterprises, Inc.
/s/ Xxxxxxx X. Xxxxx
By___________________________________
Xxxxxxx X. Xxxxx, President
_____________________________________
/s/ Xxx X. Xxxxxx
Attest:______________________________
Xxx X. Xxxxxx, Assistant Secretary
PST Acquisition Corporation
/s/ Xxxxxxx X. Xxxxx
By___________________________________
Xxxxxxx X. Xxxxx, President
_____________________________________
/s/ Xxx X. Xxxxxx
Attest:______________________________
Xxx X. Xxxxxx, Assistant Secretary
PST Vans, Inc.
/s/ Xxxxxxx X. Xxxxxx
By___________________________________
CEO
/s/ Xxxx X. Xxx
Attest:______________________________
Xxxx X. Xxx, Secretary
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