Knight-Swift Transportation Holdings Inc 8-K, filed Mar 21, 2023
Knight-Swift Transportation Holdings Inc. (KNX)
8-K
2023-03-21
For: 2023-03-20
View Original
Added on
April 08, 2026
About this 8-K
Knight-Swift Transportation Holdings Inc filed this 8-K on March 21, 2023, reporting on events of March 20, 2023.
Items reported
- Item 1.01: Entered into a material agreement
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 20, 2023
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of principal executive offices and zip code)
(602 )
269-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
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ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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Agreement and Plan of Merger
On March 20, 2023, Knight-Swift Transportation Holdings Inc., a Delaware corporation (“KNX”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with U.S. Xpress Enterprises, Inc., a Nevada corporation (“USX”) and Liberty Merger
Sub Inc., a Nevada corporation and an indirect wholly owned subsidiary of KNX (“Merger Sub”). The Merger Agreement provides, among other things, and subject to the terms and conditions set forth
therein, that Merger Sub will be merged with and into USX, with USX surviving as an indirect wholly owned subsidiary of KNX (the “Merger”).
KNX’s board of directors (the “KNX Board”) has unanimously approved the Merger Agreement
and the transactions contemplated thereby, including the Merger. An independent and disinterested special committee of USX’s board of directors (the “USX Special Committee)
has unanimously approved and declared it advisable to enter into the Merger Agreement and resolved to recommend that USX’s stockholders approve the adoption of the Merger Agreement and the transactions contemplated thereby, including the Merger.
At the Effective Time (as defined in the Merger Agreement), and as a result of the Merger:
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each share of USX’s Class A common stock (the “USX Class A Common Stock”), par value $0.01 per share, and USX Class B common stock (the “USX Class B Common Stock”), par value $0.01 per share (together with the USX Class A Common Stock, the “USX Common Stock”), that is issued and
outstanding immediately prior to the Effective Time, other than the Rollover Shares (as defined below) and certain other shares, will be converted into the right to receive $6.15 in cash, without
interest (the “Per Share Price”), in connection with the consummation of the Merger; and
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all unvested outstanding equity awards of USX will be assumed by KNX and converted into outstanding equity awards of KNX.
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Assuming the satisfaction of the conditions set forth in the Merger Agreement, KNX expects the Merger to close late in the second quarter or early in the
third quarter of 2023.
The closing of the Merger is subject to various conditions, including:
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the adoption of the Merger Agreement and the Merger by a majority of the voting power of the USX Common Stock entitled to vote on the Merger Agreement and the Merger (the “Single Class Vote”);
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the adoption of the Merger Agreement and the Merger by holders of a majority of the outstanding shares of USX Class B Common Stock (voting as a single class) entitled to vote on the Merger
Agreement and the Merger (the “Class B Vote” and together with the Single Class Vote, the “Statutory Merger Stockholder Approvals”);
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the adoption of an amendment to USX’s amended and restated articles of incorporation (the “Charter Amendment”) by (i) a majority of the voting
power of the USX Common Stock entitled to vote on the Charter Amendment, (ii) the holders of a majority of the outstanding shares of USX Class A Common Stock (voting as a single class) entitled to vote on the Charter Amendment, and (iii)
the holders of a majority of the outstanding shares of USX Class B Common Stock (voting as a single class) entitled to vote on the Charter Amendment, (collectively, the “Statutory Charter Amendment
Stockholder Approvals”);
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in connection with the Single Class Vote, a majority of the outstanding shares of USX Common Stock (other than the shares owned by (i) the Rollover Holders (as hereinafter defined), certain
trusts and entities and family members of USX’s Executive Chairman, Max L. Fuller, and USX’s Chief Executive Officer, William E. Fuller, and their Affiliates (as defined in the Merger Agreement), (ii) KNX and its Affiliates, and (iii) the
directors and executive officers of USX), having been cast in favor of the Merger Agreement and the Merger, with each share of USX Common Stock counted equally for this purpose (the “Majority-of-the-Minority-Approval
Condition” and, together with the Statutory Merger Stockholder Approvals and the Statutory Charter Amendment Stockholder Approvals, the “Requisite Stockholder Approval”);
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the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
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the absence of any outstanding law, regulation, or order, enacted, entered, or enforced by any governmental entity that prevents, materially restrains,
materially impairs, or makes illegal the consummation of the Charter Amendment or the Merger;
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the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, as of the date of the closing of the Merger (except to
the extent that any such representation or warranty expressly speaks as of an earlier date); and
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compliance in all material respects with the covenants and obligations contained in the Merger Agreement required to be performed and complied with at or prior to closing. In addition, the
obligation of KNX and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement).
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The closing of the Merger is not subject to a financing condition. Under the terms of the Merger Agreement, consummation of the Merger
will occur on the third business day following the satisfaction or waiver of the conditions to closing of the Merger other than those conditions to be satisfied at closing.
Each of USX, KNX and Merger Sub have made customary representations and warranties and covenants in the Merger Agreement.
In addition, USX has agreed to customary covenants regarding the operation of the business of USX and its subsidiaries prior to the
Effective Time.
The Merger Agreement contains covenants that USX will not, directly or indirectly, (i) solicit, initiate, propose, or induce the making,
submission, or announcement of, or knowingly encourage, facilitate, or assist, any offer, inquiry, indication of interest, or
proposal that constitutes, or is reasonably expected to lead to, an Acquisition Proposal (as defined in the Merger Agreement); (ii) furnish to any third party any non-public information relating to USX or any of its subsidiaries or afford to any
third party access to the business, properties, assets, books, records, or other non-public information, or to any personnel, of USX or any of its subsidiaries, in any such case in connection with any
Acquisition Proposal or with the intent to induce the making, submission, or announcement of, or to knowingly encourage, facilitate, or assist, an Acquisition Proposal or
the making of any offer, inquiry, indication of interest, or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal; (iii) participate or engage in discussions or
negotiations with any third party with respect to an Acquisition Proposal or with respect to any inquiries from third parties relating to any offer, indication of interest, or proposal relating to an
Acquisition Proposal; (iv) approve, endorse, or recommend any offer, inquiry, indication of interest, or proposal that constitutes, or would reasonably be expected to
lead to, an Acquisition Proposal; (v) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, or other contract relating to an Acquisition Proposal or Acquisition Transaction (as defined in the
Merger Agreement), other than, in each case, an Acceptable Confidentiality Agreement (as defined in the Merger Agreement); or (vi) authorize or commit to do any of the foregoing.
Notwithstanding these limitations, prior to obtaining the Requisite Stockholder Approval, if (i) USX has received an Acquisition
Proposal that was not the result of any material breach of Section 5.4(a) of the Merger Agreement and (ii) the USX Special Committee determines in good faith (after consultation with its financial advisor and outside legal counsel) that such
Acquisition Proposal either constitutes a Superior Proposal (as defined in the Merger Agreement) or would be reasonably likely to lead to a Superior Proposal and the failure to take certain actions regarding such Acquisition Proposal would be
inconsistent with its fiduciary duties under applicable law then USX, the USX Special Committee, and USX representatives are permitted, subject to the terms and conditions set forth in the Merger Agreement,
to (i) participate or engage in discussions or negotiations with the party making the Acquisition Proposal (including affording such party access to the business, properties, assets, books, records, or other
non-public information, or to any personnel, of USX or its subsidiaries), and (ii) terminate the Merger Agreement and change its recommendation to USX’s stockholders regarding the vote to approve the Merger Agreement in connection with a Superior
Proposal (subject to certain notification and matching rights in favor of KNX).
The Merger Agreement contains certain termination rights for the parties, including the right of either party, subject to specified
limitations, to terminate the Merger Agreement if the Merger is not consummated by December 20, 2023 (the “Termination Date”).
The Merger Agreement provides that USX will be required to pay KNX a termination fee of $6.3 million (the “Termination Fee”) if
USX terminates the Merger Agreement within 45 days of signing of the Merger Agreement (or such extended period if required to comply with the Notice Period (as defined in the Merger Agreement)) to enter into an acquisition agreement with
respect to a Superior Proposal. After such initial period, the Termination Fee payable by USX is increased to $12.6 million and becomes payable if USX terminates the Merger Agreement to accept a Superior Proposal, if KNX terminates the Merger
Agreement following a change in recommendation by the USX Special Committee and in other customary circumstances.
The foregoing description of the Merger Agreement, the Merger, and the transactions contemplated thereby, does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated by reference herein.
Rollover Agreement and Limited Liability Company Agreement
In connection with the Merger, USX’s Executive Chairman, Max L. Fuller, and USX’s Chief Executive Officer, William E. Fuller, and certain of their Affiliates, including
without limitation, FSBSPE 1, LLC, FSBSPE 2, LLC, FSBSPE 3, LLC, Fuller Family Enterprises, LLC, Max L. Fuller 2008 Irrevocable
Trust FBO William E. Fuller, and Max Fuller Family Limited Partnership (collectively, the “Rollover Holders”) will roll over approximately one-third of their USX
Common Stock (the “Rollover Shares”) as set forth in a separate Rollover Agreement (the “Rollover Agreement”). The Rollover Shares will not be converted
into the right to receive the Per Share Price, but instead, immediately prior to the Effective Time, will be contributed to Liberty Holdings Topco LLC, a Delaware limited liability company (“Holdings”),
in exchange for membership interests intended to be approximately equivalent to a 10% equity position in the entity that will hold the USX business unit of KNX after consummation of the Merger (the “USX Unit”).
Under the amended and restated limited liability company operating agreement (the “LLC Agreement”), the membership interests received by the Rollover Holders will be granted limited consent rights,
and will be subject to certain optional and mandatory purchase provisions during the five-year period post-closing. One class of membership interests will be subject to put and call rights at a defined fair market value measure in favor of the
Rollover Holders and KNX, respectively and will be purchased by KNX at that defined fair market value measure if outstanding at the fifth anniversary of the Merger. In order for the put right to become exercisable, it is subject to a $175
million minimum adjusted operating income threshold for the USX Unit. In addition, KNX will have a call right, exercisable only within the first 15 months after closing, at an exercise price of approximately $140 million. The second class of
membership interests will be repurchased by KNX for $40 million if the USX Unit achieves $250 million in adjusted operating income for a trailing annual period at or prior to the fifth anniversary of closing. If such threshold is not met, the
second class of interests will be forfeited for no value.
The Rollover Agreement also contains certain non-compete and non-solicit restrictive covenants, which limit the Rollover Shareholders’
actions, for a period of five years, with respect to the transportation industry and the businesses of USX, KNX, and their subsidiaries.
The Rollover Agreement terminates upon the earliest to occur of (i) the valid termination of the Merger Agreement in accordance with its
terms or (ii) the mutual written consent of KNX and the Rollover Holders.
The foregoing description of the Rollover Agreement and the LLC Agreement does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Rollover Agreement and the form of LLC Agreement, copies of which are attached hereto as Exhibit 99.1 and 99.2 respectively, and incorporated by reference herein.
Support Agreement
The Rollover Holders collectively hold approximately 58% of the voting power of USX Common Stock.
In connection with the Merger, the Rollover Holders have
each entered into an Irrevocable Proxy and Agreement (the “Support Agreement”), pursuant to which, among other things, the Rollover Holders have granted an irrevocable proxy in favor of the USX Special Committee (acting as a majority) to
vote the shares owned by the Rollover Holders: (i) in favor of (a) the approval of the Charter Amendment, (b) the adoption of the Merger Agreement and the approval of the Merger, (c) the approval of any advisory proposal with respect to “golden
parachute compensation,” (d) the approval of any proposal to adjourn or postpone any stockholder meeting relating to the Merger to a later date if USX proposes or requests such postponement or adjournment, and (e) the approval of any other
proposal to be voted upon or consented to by USX stockholders at any stockholder meeting relating to the Merger or at other meeting of stockholders or in respect of any proposed action by written consent, the approval of which is necessary for
the consummation of the Merger and the other transactions contemplated by the Merger Agreement, but only to the extent that such Rollover Shares are entitled to be voted on or consent to such proposal, and (ii) against (a) any proposal, action,
or agreement that would reasonably be expected to result in a breach of any covenant, representation, or warranty or other obligation or agreement of USX contained in the Merger Agreement or that would reasonably be expected to result in any
condition set forth in the Merger Agreement not being satisfied or not being fulfilled prior to the Termination Date, (b) any proposal to amend the articles of incorporation or bylaws of USX, other than the Charter Amendment, (c) any
Acquisition Proposal, (d) any reorganization, dissolution, liquidation, winding up, or similar extraordinary transaction involving USX (except as contemplated by the Merger Agreement), and (e) any other proposal, action, or agreement that would
reasonably be expected to prevent or materially impede or materially delay the approval of the Charter Amendment or the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement.
Under the Merger Agreement, USX has agreed to (i) cause the proxy holder to cause the shares subject to the Support Agreement to appear
at and be counted as present for purposes of establishing a quorum and to vote or consent pursuant to the terms of the Support Agreement, and (ii) enforce the terms of the Support Agreement, and not amend, modify, waive, or terminate any
provision of the Support Agreement without the prior written consent of KNX.
The Support Agreement terminates upon the earliest to occur of (i) the valid termination of the Merger Agreement in accordance with its
terms or (ii) the Effective Time.
The foregoing description of the Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by,
the full text of the Support Agreement, a copy of which is attached hereto as Exhibit 99.3 and incorporated by reference herein.
Cautionary Statement Regarding Disclosures
The Merger Agreement, the Rollover Agreement, the LLC Agreement, and the Support Agreement have been included as exhibits to this
Current Report on Form 8-K to provide investors with information regarding their terms. These documents are not intended to provide any other factual information about USX, KNX, Merger Sub, Holdings, or their respective affiliates. The
representations, warranties, and covenants contained in such documents were made only for purposes of such documents as of the specific dates specified therein, were solely for the benefit of the parties thereto, may be subject to limitations
agreed upon by the parties thereto, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties instead of establishing these matters as facts, and may be subject to standards of
materiality applicable to the parties thereto that differ from those applicable to investors. Investors should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of
facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which
subsequent information may or may not be reflected in KNX’s or USX’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the Rollover Agreement, the LLC Agreement, the Support Agreement, and the other information regarding USX, KNX, Merger Sub, and Holdings, and the transactions contemplated by the Merger Agreement that will be contained in or attached as an annex to the
proxy statement that USX will file in connection with the Merger Agreement and the transactions contemplated thereby, as well as in the other filings that KNX and USX will make with the U.S. Securities and Exchange Commission (the “SEC”).
Cautionary Statement Regarding Forward-Looking Statements
The information contained in this Current Report and the exhibits hereto are “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 that provides a safe harbor for forward-looking statements, including statements relating to the completion of the transaction, all
statements that do not relate solely to historical or current facts, and expectations, intentions or strategies regarding the future. These forward-looking statements are generally denoted by the use of words such as “anticipate,” “believe,”
“expect,” “intend,” “aim,” “target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,” “should,” “could,” “would,” “predict,” “potential,” “ongoing,” “goal,” “can,” “seek,” “designed,” “likely,” “foresee,” “forecast,” “project,” “hope,”
“strategy,” “objective,” “mission,” “continue,” “outlook,” “potential,” “feel,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Statements in this
announcement that are forward looking may include, but are not limited to, statements regarding the benefits of the proposed transaction with U.S. Xpress and the associated integration plans, expected synergies and revenue opportunities, expected
branding, anticipated future operating performance and results of Knight-Swift, including statements regarding anticipated earnings, margins, and cash flows, anticipated future liquidity, anticipated availability of future resources, financial or
otherwise, anticipated growth opportunities, anticipated fleet size, the availability of the merger consideration, the expected management and governance of U.S. Xpress following the transaction and the expected timing of the closing of the
proposed transaction and other transactions contemplated by the proposed transaction. By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are
difficult to predict and/or quantify. Such risks and uncertainties include, but are not limited to: the occurrence of any event, change or other circumstance that could give rise to the right of Knight-Swift or U.S. Xpress or both of them to
terminate the Merger Agreement, including circumstances requiring U.S. Xpress to pay Knight-Swift a termination fee pursuant to the merger agreement; the failure to obtain applicable regulatory or U.S. Xpress stockholder approval in a timely
manner or otherwise; the risk that the transaction may not close in the anticipated timeframe or at all due to one or more of the other closing conditions to the transaction not being satisfied or waived; the risk that there may be unexpected
costs, charges or expenses resulting from the proposed transaction; risks related to the ability of Knight-Swift and U.S. Xpress to successfully integrate the businesses and achieve the expected synergies and operating efficiencies within the
expected timeframes or at all and the possibility that such integration may be more difficult, time consuming or costly than expected; risks that the proposed transaction disrupts Knight-Swift’s or U.S. Xpress’ current plans and operations; the
risk that certain restrictions during the pendency of the proposed transaction may impact Knight-Swift’s or U.S. Xpress’ ability to pursue certain business opportunities or strategic transactions; risks related to disruption of each company’s
management’s time and attention from ongoing business operations due to the proposed transaction; continued and sufficient availability of capital and financing; the risk that any announcements relating to the proposed transaction could have
adverse effects on the market price of Knight-Swift’s and/or U.S. Xpress’ common stock or operating results; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of Knight-Swift and U.S. Xpress
to retain and hire key personnel, to retain customers and to maintain relationships with each of their respective business partners, suppliers and customers and on their respective operating results and businesses generally; the risk of
litigation that could be instituted against the parties to the Merger Agreement or their respective directors, affiliated persons or officers and/or regulatory actions related to the proposed transaction, including the effects of any outcomes
related thereto; risks related to changes in accounting standards or tax rates, laws or regulations; risks related to unpredictable and severe or catastrophic events, including but not limited to acts of terrorism, war or hostilities (including
effects of the conflict in Ukraine), cyber-attacks, or the impact of the COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide on Knight-Swift’s or U.S. Xpress’ business,
financial condition and results of operations, as well as the response thereto by each company; and other business effects, including the effects of industry, market, economic (including the effect of inflation), political or regulatory
conditions. Also, Knight-Swift’s and U.S. Xpress’ actual results may differ materially from those contemplated by the forward-looking statements for a number of additional reasons as described in Knight-Swift’s and U.S. Xpress’ respective SEC
filings, including those set forth in the Risk Factors section and under any “Forward-Looking Statements” or similar heading in Knight-Swift’s or U.S. Xpress’ respective most recently filed Annual Report on Form 10-K for the year ended December
31, 2022 and Knight-Swift’s and U.S. Xpress’ Current Reports on Form 8-K.
You are cautioned not to place undue reliance on Knight-Swift’s or U.S. Xpress’ forward-looking statements. Knight-Swift’s or U.S. Xpress’ respective forward-looking statements
are and will be based upon each company’s management’s then-current views and assumptions regarding Knight-Swift’s proposed transaction with U.S. Xpress, future events and operating performance, and are applicable only as of the dates of such
statements. Neither Knight-Swift nor U.S. Xpress assumes any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.
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ITEM 8.01
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OTHER EVENTS
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On March 21, 2023, KNX and USX announced that they had entered into the Merger Agreement. A copy of the press release is attached hereto
as Exhibit 99.4 and incorporated by reference herein.
Also on March 21, 2023, KNX and USX each posted a joint investor
presentation to their respective investor relations websites related to the transactions contemplated by the Merger Agreement. The presentation is attached hereto as Exhibit 99.5.
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ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits
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Exhibit
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Description
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Agreement and Plan of Merger, dated as of March 20, 2023, by and among KNX, USX, and Merger
Sub.*
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Rollover Agreement.
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Form of LLC Agreement.
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Support Agreement.
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Press release announcing the Merger Agreement, dated as of March 21, 2023.
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Investor presentation dated March 21, 2023 regarding the Merger Agreement, the Merger, and
the transactions contemplated thereby.
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Exhibit 104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. KNX hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the
SEC.
The information contained in Items 8.01 and 9.01 of this Current Report, including the exhibits hereto, shall not be deemed "filed" for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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Knight-Swift Transportation Holdings Inc. |
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(Registrant) |
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| Date: March 21, 2023 |
/s/ Adam W. Miller |
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Adam W. Miller |
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Chief Financial Officer |
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
U.S. XPRESS ENTERPRISES, INC.
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
and
LIBERTY MERGER SUB INC.
Dated as of March 20, 2023
TABLE OF CONTENTS
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ARTICLE I
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DEFINITIONS & INTERPRETATIONS
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Section 1.1
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Certain Definitions
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2
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Section 1.2
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Additional Definitions
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Section 1.3
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Certain Interpretations
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Section 1.4
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Company Disclosure Letter
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ARTICLE II
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THE MERGER
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Section 2.1
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The Charter Amendment
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Section 2.2
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The Merger
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Section 2.3
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The Charter Amendment Effective Time
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Section 2.4
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The Effective Time
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Section 2.5
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The Closing
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Section 2.6
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Effect of the Merger
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Section 2.7
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Articles of Incorporation and Bylaws of the Surviving Corporation
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Section 2.8
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Directors and Officers of the Surviving Corporation
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Section 2.9
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Effect on Capital Stock
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Section 2.10
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Equity Awards / ESPP
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Section 2.11
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Exchange of Certificates
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Section 2.12
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No Further Ownership Rights in Company Common Stock
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Section 2.13
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Lost, Stolen or Destroyed Certificates
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Section 2.14
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Required Withholding
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Section 2.15
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Necessary Further Actions
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section 3.1
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Organization; Good Standing
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Section 3.2
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Corporate Power; Enforceability
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Section 3.3
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Company Special Committee Approval; Fairness Opinion; Anti-Takeover Laws
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Section 3.4
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Requisite Stockholder Approval
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Section 3.5
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Non-Contravention
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Section 3.6
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Requisite Governmental Approvals
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Section 3.7
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Company Capitalization
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Section 3.8
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Subsidiaries
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Section 3.9
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Company SEC Reports
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Section 3.10
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Company Financial Statements; Internal Controls; Indebtedness
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Section 3.11
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No Undisclosed Liabilities
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Section 3.12
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Absence of Certain Changes
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Section 3.13
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Material Contracts
|
41
|
i
|
Section 3.14
|
Government Contracts
|
42
|
|
Section 3.15
|
Real Property
|
42
|
|
Section 3.16
|
Environmental Matters
|
43
|
|
Section 3.17
|
Intellectual Property; Privacy
|
43
|
|
Section 3.18
|
Tax Matters
|
45
|
|
Section 3.19
|
Employee Plans
|
47
|
|
Section 3.20
|
Labor Matters
|
49
|
|
Section 3.21
|
Permits; Safety Rating
|
50
|
|
Section 3.22
|
Compliance with Laws
|
50
|
|
Section 3.23
|
Legal Proceedings; Orders
|
51
|
|
Section 3.24
|
Insurance
|
51
|
|
Section 3.25
|
Related Person Transactions
|
52
|
|
Section 3.26
|
Brokers
|
52
|
|
ARTICLE IV
|
||
|
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
|
||
|
Section 4.1
|
Organization; Good Standing
|
52
|
|
Section 4.2
|
Power; Enforceability
|
53
|
|
Section 4.3
|
Non-Contravention
|
53
|
|
Section 4.4
|
Requisite Governmental Approvals
|
53
|
|
Section 4.5
|
Legal Proceedings; Orders
|
54
|
|
Section 4.6
|
Ownership of Company Capital Stock
|
54
|
|
Section 4.7
|
Brokers
|
54
|
|
Section 4.8
|
No Parent Vote or Approval Required
|
54
|
|
Section 4.9
|
Available Funds; Solvency
|
54
|
|
Section 4.10
|
Certain Arrangements
|
55
|
|
Section 4.11
|
Exclusivity of Representations and Warranties; Non-Reliance
|
55
|
|
ARTICLE V
|
||
|
INTERIM OPERATIONS OF THE COMPANY
|
||
|
|
||
|
Section 5.1
|
Affirmative Obligations
|
56
|
|
Section 5.2
|
Forbearance Covenants
|
56
|
|
Section 5.3
|
Consents for Covenant Forbearance; No Control
|
59
|
|
Section 5.4
|
No Solicitation of Acquisition Proposals
|
60 |
|
ARTICLE VI
|
||
|
ADDITIONAL COVENANTS
|
||
|
Section 6.1
|
Efforts; Required Action and Forbearance
|
64
|
|
Section 6.2
|
Antitrust Filings
|
66
|
|
Section 6.3
|
Proxy Statement
|
67
|
|
Section 6.4
|
Company Stockholder Meeting
|
69
|
|
Section 6.5
|
Financing Cooperation
|
70
|
|
Section 6.6
|
Anti-Takeover Laws
|
71
|
|
Section 6.7
|
Information Access During the Pre-Closing Period
|
72
|
|
Section 6.8
|
Section 16(b) Exemption
|
72
|
ii
|
Section 6.9
|
Directors’ and Officers’ Exculpation, Indemnification and Insurance
|
72
|
|
Section 6.10
|
Employee Matters
|
75
|
|
Section 6.11
|
Obligations
|
77
|
|
Section 6.12
|
Notification of Certain Matters
|
77
|
|
Section 6.13
|
Public Statements and Disclosure
|
78
|
|
Section 6.14
|
Transaction Litigation
|
78
|
|
Section 6.15
|
Stock Exchange Delisting; Deregistration
|
79
|
|
Section 6.16
|
Additional Agreements
|
79
|
|
Section 6.17
|
Payoff of Credit Agreement
|
79
|
|
Section 6.18
|
Merger Sub Stockholder Consent
|
79
|
|
Section 6.19
|
FIRPTA Certificate
|
79
|
|
ARTICLE VII
|
||
|
CONDITIONS OF THE MERGER
|
||
|
Section 7.1
|
Conditions to Each Party’s Obligations to Effect the Charter Amendment and the Merger
|
80
|
|
Section 7.2
|
Conditions to the Obligations of Parent and Merger Sub
|
80
|
|
Section 7.3
|
Conditions to the Company’s Obligations to Effect the Merger
|
81
|
|
ARTICLE VIII
|
||
|
TERMINATION
|
||
|
Section 8.1
|
Termination
|
82
|
|
Section 8.2
|
Manner and Notice of Termination; Effect of Termination
|
83
|
|
Section 8.3
|
Fees and Expenses
|
84
|
|
ARTICLE IX
|
||
|
GENERAL PROVISIONS
|
||
|
Section 9.1
|
Survival of Representations, Warranties and Covenants and Obligations
|
85
|
|
Section 9.2
|
Notices
|
85
|
|
Section 9.3
|
Amendment
|
87
|
|
Section 9.4
|
Extension; Waiver
|
87
|
|
Section 9.5
|
Assignment
|
87
|
|
Section 9.6
|
Entire Agreement
|
87
|
|
Section 9.7
|
No Third-Party Rights
|
88
|
|
Section 9.8
|
Severability
|
88
|
|
Section 9.9
|
Remedies
|
88
|
|
Section 9.10
|
Governing Law
|
89
|
|
Section 9.11
|
Consent to Jurisdiction
|
89
|
|
Section 9.12
|
WAIVER OF JURY TRIAL
|
90
|
|
Section 9.13
|
Counterparts
|
90
|
|
Section 9.14
|
Non-recourse
|
90
|
|
Section 9.15
|
Company Special Committee Matters
|
90
|
iii
|
EXHIBITS
|
|
|
Exhibit A – Company Charter Amendment Certificate
|
|
|
Exhibit B – Surviving Corporation Articles of Incorporation
|
|
|
Exhibit C – Surviving Corporation Bylaws
|
|
iv
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this “Agreement”) is
made and entered into as of March 20, 2023, by and among U.S. Xpress Enterprises, Inc., a Nevada corporation (the “Company”), Knight-Swift
Transportation Holdings Inc., a Delaware corporation (“Parent”), and Liberty Merger Sub Inc., a Nevada corporation and an indirect wholly owned
subsidiary of Parent (“Merger Sub”). Each of Parent, Merger Sub and the Company are sometimes referred to as a “Party” and collectively as the “Parties.” All capitalized terms that are
used in this Agreement have the meanings given to them in Article I.
RECITALS
A. The Company Board has established a special committee of the Company Board, comprised solely of independent and disinterested directors (the “Company Special Committee”), to, among other things, (i) review, evaluate and negotiate a strategic transaction in which one or more significant stockholders of the
Company may have an interest that is in addition to, and/or different from, the interests of the Company’s stockholders as a whole, and (ii) determine what action should be taken by the Company, if any, with respect to such transactions.
B. The Company Special Committee has unanimously (i) determined that this Agreement, the Support Agreement, and the other transactions
contemplated by this Agreement, including the Charter Amendment and the merger of Merger Sub with and into the Company (all such transactions, collectively, the “Merger”),
with the Company surviving the Merger as the surviving corporation (the “Surviving Corporation”), are advisable, fair to, and in the best interests of the Company and
its stockholders (other than the Rollover Stockholders); (ii) adopted this Agreement pursuant to NRS 92A.120 and approved this Agreement, the Rollover Agreement, the Support Agreement and the transactions contemplated hereby and thereby, including
the Charter Amendment and the Merger, and determined that this Agreement, the Rollover Agreement, the Support Agreement and the transactions contemplated hereby and thereby, including the Charter Amendment and the Merger, are advisable, fair to, and
in the best interests of the Company and its stockholders (other than the Rollover Stockholders); (iii) approved the execution and delivery of this Agreement by the Company, the performance by the Company of its covenants and other obligations in
this Agreement, and the consummation of the Charter Amendment and the Merger upon the terms and subject to the conditions set forth in this Agreement; and (iv) resolved, subject to Section
5.4, to submit this Agreement and the Merger to the stockholders of the Company for their approval at a meeting of the Company Stockholders and recommend that the stockholders of the Company vote in favor of the approval of this
Agreement and the Merger and the approval of the Charter Amendment, in each case, in accordance with the NRS.
C. Each of the board of directors of Parent and the board of directors of Merger Sub have (i) adopted this Agreement pursuant to NRS 92A.120 and
approved and declared advisable this Agreement and the transactions contemplated hereby, including the Merger; (ii) approved the execution and delivery of this Agreement, the performance of their respective covenants and other obligations under this
Agreement, and the consummation of the Merger upon the terms and subject to the conditions set forth in this Agreement; (iii) in the case of Merger Sub only, directed that this Agreement and the Merger be submitted to a vote of Merger Sub’s sole
stockholder, which is an indirect Subsidiary of Parent; and (iv) in the case of Merger Sub only, recommended that Merger Sub’s sole stockholder vote in favor of the approval of this Agreement and the Merger in accordance with the NRS.
1
D. Concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent and Merger Sub
to enter into this Agreement, Parent, a Subsidiary of Parent and the Rollover Stockholders are entering into a Rollover Agreement (the “Rollover Agreement”), wherein immediately prior to the Effective Time, the Rollover Stockholders shall transfer and contribute,
directly or indirectly, a portion of the shares of Company Common Stock (the “Rollover Shares”) held by them to such Subsidiary of Parent as specified in the Rollover
Agreement.
E. Concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent, Merger Sub and
the Company to enter into this Agreement, each of the Supporting Stockholders is granting to the members of the Company Special Committee (acting by a majority) (in their capacity as such, collectively, the “Proxy Holder”) an irrevocable proxy and entering into an agreement with the Proxy Holder and the Company (such proxy and agreement, collectively, the “Support Agreement”), pursuant to which, subject to the terms and conditions therein, and among other things, the Supporting Stockholders irrevocably appoint the Proxy Holder as their proxy to vote all
of the shares of Company Common Stock owned by them in favor of the approval and adoption of this Agreement and the Merger and the approval of the Charter Amendment.
AGREEMENT
The Parties therefore agree as follows:
ARTICLE I
DEFINITIONS & INTERPRETATIONS
DEFINITIONS & INTERPRETATIONS
Section 1.1 Certain Definitions. For all purposes
of this Agreement, the following capitalized terms have the following respective meanings:
(a) “Acceptable Confidentiality Agreement” means a customary confidentiality agreement (whether in effect as of the execution of this Agreement or executed after the
execution of this Agreement) (i) containing terms no less restrictive in any material respect to the counterparty than those contained in the Confidentiality Agreement, and (ii) that does not prohibit the Company from providing any information to
Parent in accordance with, or otherwise complying with Section 5.4, it being understood that such confidentiality agreement need not contain any “standstill” or similar
provisions or otherwise prohibit the making of, or amendment to, any Acquisition Proposal.
(b) “Acquisition Proposal” means any inquiry, offer, proposal or indication of interest to the Company or the Company Board (or any committee thereof, including the Company
Special Committee) or publicly made to the stockholders of the Company with respect to, or otherwise relating to, an Acquisition Transaction or possible Acquisition Transaction.
(c) “Acquisition Transaction” means any transaction or series of related transactions (other than the Merger) involving:
2
(i) any direct or indirect purchase or other acquisition by any Person or Group (other than Parent or Merger Sub or any of their Affiliates), whether from the Company or any other Person, of securities representing more than 15 percent of the
total outstanding voting power or economic interest of the equity securities of the Company after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any Person or
Group that, if consummated in accordance with its terms, would result in such Person or Group beneficially owning more than 15 percent of the total outstanding voting power or economic interest of the equity securities of the Company after giving
effect to the consummation of such tender offer or exchange offer;
(ii) any direct or indirect license (other than non-exclusive licenses entered into in the ordinary course of business), lease,
purchase or other acquisition by any Person or Group (other than Parent or Merger Sub or any of their Affiliates) of assets (including equity securities of the Company’s Subsidiaries) constituting or accounting for more than 15 percent of the
consolidated revenue, consolidated net income or consolidated assets of the Company and its Subsidiaries, taken as a whole; or
(iii) any merger, consolidation, business combination, exchange, recapitalization, reorganization, liquidation, dissolution, joint
venture or other transaction involving the Company or any of its Subsidiaries after giving effect to which (A) any Person or Group (other than Parent or Merger Sub or any of their Affiliates) would (x) hold securities representing more than 15
percent of the total outstanding voting power or economic interest of the equity securities of the Company (or the surviving company) outstanding after giving effect to the consummation of such transaction or (y) acquire assets (including equity
securities of the Company’s Subsidiaries) constituting or accounting for more than 15 percent of the consolidated revenue, consolidated net income or consolidated assets of the Company and its Subsidiaries, taken as a whole or (B) the stockholders
of the Company immediately preceding such transaction hold less than 85 percent of the total outstanding equity securities (by vote or economic interests) in the surviving or resulting entity of such transaction.
(d) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For
purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or economic interest, by contract or otherwise (provided that none of Parent or Merger Sub or any of their
respective Subsidiaries shall be deemed to be Affiliates of (i) the Company or any of its Subsidiaries or (ii) any of the stockholder counterparties to the Support Agreement or the Rollover Agreement).
(e) “Antitrust Law” means, collectively, the Sherman Antitrust Act of 1890, as amended, the Clayton Antitrust Act of 1914, as amended, the HSR Act, the Federal Trade
Commission Act of 1914, as amended, and all other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or significant impediments or lessening of
competition or the creation or strengthening of a dominant position through merger or acquisition, in any case that are applicable to the Merger.
3
(f) “Audited Company Balance Sheet” means the consolidated balance sheet (and the notes thereto) of the Company and its consolidated Subsidiaries as of December 31, 2022,
set forth in the Company’s annual report on Form 10-K filed by the Company with the SEC for the fiscal year ended December 31, 2022.
(g) “Business Day” means each day that is not a Saturday, Sunday or other day on which banks are required or authorized by Law to be closed in (i) New York, New York, (ii)
Las Vegas, Nevada or (iii) Phoenix, Arizona.
(h) “Bylaws” means the Third Amended and Restated Bylaws of the Company in effect as of the date of this Agreement.
(i) “Capitalization Date” means 5:00 p.m. on March 17, 2023.
(j) “CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act of 2020.
(k) “Charter” means the Third Amended and Restated Articles of Incorporation of the Company in effect as of the date of this Agreement.
(l) “Charter Amendment” means the amendment to the Charter in the form reflected in the Company Charter Amendment Certificate.
(m) “Chosen Courts” means the state courts of the State of Nevada sitting in Clark County, Nevada and any state appellate court therefrom within the State of Nevada (or, if
such courts of the State of Nevada do not have subject matter jurisdiction, the United States District Court for the District of Nevada sitting in Clark County, Nevada).
(n) “Code” means the Internal Revenue Code of 1986, as amended.
(o) “Company Benefit Plan” means any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, bonus, stock option, stock
purchase, restricted stock, restricted stock unit, stock appreciation, phantom equity, or other equity or equity-based award, performance award, incentive compensation, profit sharing, savings, retirement, disability, life insurance, health or
medical benefits, employee assistance program, sick leave, vacation, deferred compensation, employment, consulting, severance, separation or termination pay, post-employment welfare, retirement, retention, commissions, stay bonuses, change of
control or transaction or other similar compensation, fringe, welfare or any other employee benefit or remuneration of any kind, whether or not in writing, whether funded or unfunded, including each “employee benefit plan” within the meaning of
Section 3(3) of ERISA, in each case, that is maintained or contributed to by the Company or any of its Subsidiaries or with respect to which the Company or any of its Subsidiaries has any liability, contingent or otherwise, including on account of
an ERISA Affiliate.
(p) “Company Board” means the board of directors of the Company.
4
(q) “Company Capital Stock” means the Company Common Stock and the Company Preferred Stock.
(r) “Company Class A Common Stock” means the Class A Common Stock, par value $0.01 per share, of the Company.
(s) “Company Class B Common Stock” means the Class B Common Stock, par value $0.01 per share, of the Company.
(t) “Company Common Stock” means the Company Class A Common Stock and the Company Class B Common Stock.
(u) “Company Equity Plans” means the compensatory equity plans of the Company or any of its Subsidiaries that provide for the issuance of any Company Equity-Based Awards.
(v) “Company Equity-Based Award” means the Company RSUs, Company Restricted Shares, Company PSUs and Company Options.
(w) “Company IT Assets” means all software, systems, servers, websites, computers, hardware, firmware, middleware, networks, data communications lines, routers, hubs,
switches and all other information technology equipment owned, licensed, leased or used and controlled by the Company or any of its Subsidiaries and operated by in the business the Company and its Subsidiaries as currently conducted.
(x) “Company Material Adverse Effect” means any change, event, condition, development, effect, occurrence or circumstance (each, an “Effect”) that, individually or taken together with all other Effects that exist or have occurred prior to the date of determination of the occurrence of the Company Material Adverse Effect, (i) has
had or would reasonably be expected to have a material adverse effect on the business, assets, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole or (ii) has had or would reasonably be expected to
prevent or materially delay the Company’s ability to consummate the Merger. With respect to clause (i) of the foregoing sentence, none of the following, and no Effects arising out of, relating to, or resulting from the following (in each case, by
themselves or when aggregated) will be deemed to be or constitute a Company Material Adverse Effect or will be taken into account when determining whether a Company Material Adverse Effect has occurred or may, would or could occur (subject to the
limitations set forth below):
(i)
changes in general economic conditions in the United States or any region thereof, or changes in conditions in the global economy generally (except to the extent that such Effect has had or would reasonably be
expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate adverse impact may be
taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
(ii) changes in conditions in the financial markets, credit markets, equity markets, debt
markets, currency markets or capital markets in the United States or any region thereof or globally, including (a) changes in interest rates or credit ratings in the United States or any other country; or (b) any suspension of trading in securities
(whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States (except, in each case, to the extent that such Effect has had or would reasonably be expected to
have a disproportionate adverse effect on the Company and its Subsidiaries relative to other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate adverse impact may be taken into account
in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
5
(iii) changes in general conditions in the trucking industry or in any specific jurisdiction
or geographical area in which the Company and its Subsidiaries conduct business (except to the extent that such Effect has had or would reasonably be expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to
other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred or would
reasonably be expected to occur);
(iv) changes in Law (including the interpretation thereof) or in regulatory, legislative or
political conditions in the United States or any region thereof or globally (except to the extent that such Effect has had or would reasonably be expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to
other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred or would
reasonably be expected to occur);
(v) changes in any geopolitical conditions, outbreak of hostilities, armed conflicts, acts of
war (whether or not declared), sabotage, terrorism (including cyber-terrorism), military actions or acts of armed hostility (including, in each case, any escalation or worsening of any of the foregoing) anywhere in the world, including an outbreak
or escalation of hostilities involving the United States or any other Governmental Authority or the declaration by the United States or any other Governmental Authority of a national emergency or war (except to the extent that such Effect has had
or would reasonably be expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate
adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
(vi) earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires, volcanic
eruptions, nuclear incidents or other natural or man-made disasters or weather conditions or other force majeure events anywhere in the world (or escalation or worsening of any such events or occurrences, including, in each case, the response of
Governmental Authorities) (except to the extent that such Effect has had or would reasonably be expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to other asset-based truckload carriers operating in the
United States, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur);
6
(vii) pandemics (including the COVID-19 pandemic and the taking of any COVID-19 Measures),
epidemics, plagues, contagious disease outbreaks, public health emergencies or other comparable events (except to the extent that such Effect has had or would reasonably be expected to have a disproportionate adverse effect on the Company and its
Subsidiaries relative to other asset-based truckload carriers operating in the United States, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has
occurred or would reasonably be expected to occur);
(viii) the execution, announcement or performance of this Agreement (including with respect to
the identity of Parent, Merger Sub or any of their respective Affiliates) or the pendency or consummation of the Charter Amendment or the Merger, including the impact thereof on the relationships, contractual or otherwise, of the Company and its
Subsidiaries with employees, suppliers, customers, partners, lenders, lessors, vendors, Governmental Authorities or any other third Person (provided that the exception in this clause (viii) shall not apply to any representation or warranty
contained in Section 3.5, Section 3.6 or any other representation or warranty of the Company that
speaks directly to the effect of the execution or delivery of this Agreement, the performance of covenants or obligations under this Agreement, and/or the consummation of the Charter Amendment or the Merger);
(ix) any action taken or refrained from being taken by the Company or any of its
Subsidiaries, in each case, at the express written direction, or with the prior written consent, of Parent or Merger Sub (including by email) or as expressly required by this Agreement;
(x) changes or proposed changes in GAAP or other accounting standards or Law (or the official
interpretation of any of the foregoing) (except to the extent that such Effect has had or would reasonably be expected to have a disproportionate adverse effect on the Company and its Subsidiaries relative to other asset-based truckload carriers
operating in the United States, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
(xi) changes in the price or trading volume of the Company Class A Common Stock, in each case
in and of itself (it being understood that the cause of such change may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has
occurred or would reasonably be expected to occur to the extent not otherwise excluded under this definition);
(xii) any failure, in and of itself, by the Company and its Subsidiaries to meet (a) any
estimates of the Company’s revenue, earnings or other financial performance or results of operations for any period; or (b) any budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of
operations (it being understood that the cause of any such failure in clause (a) or (b) may be deemed to constitute a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has
occurred or would be reasonably expected to occur to the extent not otherwise excluded under this definition); or
7
(xiii) any Transaction Litigation in respect of which the Company has complied in all
material respects with Section 6.14.
(y) “Company Options”
means any options to purchase shares of Company Common Stock outstanding pursuant to any of the Company Equity Plans, other than the ESPP.
(z) “Company Owned Intellectual Property” means any Intellectual Property that is owned, or purported to be owned, by the Company or any of its Subsidiaries.
(aa) “Company Owned Real Property Leases” means
all leases, licenses or other agreements (written or oral) pursuant to which the Company or any of its Subsidiaries conveys or grants to any Person a leasehold estate in, or the right to use or occupy, any Company Owned Real Property or portion
thereof, including the right to all security deposits and other amounts and instruments deposited with or on behalf of the Company or any of its Subsidiaries thereunder.
(bb) “Company Preferred Stock” means the Preferred Stock, par value $0.01 per share, of the Company.
(cc) “Company Real Property” means the Company Owned Real Property and the Company Leased Real Property.
(dd) “Company Registered Intellectual Property” means all of the Company Owned Intellectual Property that is Registered Intellectual Property.
(ee) “Company Related Parties” means, collectively, (i) the Company and its Subsidiaries; and (ii) the former, current and future holders of any equity, controlling persons,
Representatives, Affiliates, members, managers, general or limited partners, stockholders and assignees of each of the Company, its Subsidiaries and each of their respective Affiliates.
(ff) “Company Restricted Shares” means shares of Company Common Stock granted under a Company Equity Plan, or issued upon “early exercise” of an option granted under a
Company Equity Plan, that remain subject to one or more unsatisfied vesting or vesting-equivalent forfeiture or repurchase conditions.
(gg) “Company Special Committee Financial Advisor” means J.P. Morgan Securities LLC.
(hh) “Company Stockholders” means the holders of shares of Company Common Stock.
8
(ii) “Company Termination Fee” means an amount in cash equal to $12,600,000; provided, however, that in the event the Company Termination Fee becomes payable as a result of the termination of this Agreement
prior to the Reduced Termination Fee End Time by the Company pursuant to Section 8.1(h) to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal, then the “Company Termination Fee” means an amount in
cash equal to $6,300,000.
(jj) “Confidentiality Agreement” has the meaning set forth on Section 1.1(jj) of the Company Disclosure Letter.
(kk) “Consent” means any consent, approval, clearance, waiver, Permit or order.
(ll) “Continuing Employees” means employees employed by the Company or its Subsidiaries immediately prior to the Effective Time who continue to be so employed as of
immediately following the Effective Time.
(mm) “Contract” means
any binding contract, lease, license, indenture, note, bond, agreement or other binding instrument.
(nn) “COVID-19” means SARS-CoV-2 or COVID-19, and any variants, evolutions or mutations thereof, or any related or associated epidemics, pandemics or disease outbreaks, or
any escalation or worsening of any of the foregoing (including any subsequent waves).
(oo) “COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” social distancing, sequester, safety or similar Law, directive, guideline, response or
recommendation of or promulgated by any Governmental Authority, including the Centers for Disease Control and Prevention and the World Health Organization, including, in each case, any changes in any such Law, directive, guidance, response or
recommendation and any actions taken, or not taken, by the Company or any of its Subsidiaries to extent that such action (or non-action) is reasonably necessary to ensure compliance by the Company and its Subsidiaries and its and their respective
directors, officers and employees with any such Laws, directives, guidelines, responses or recommendations.
(pp) “Credit Agreement” means the Credit Agreement, dated as of January 28, 2020, by and among the Company and certain Subsidiaries of the Company, as borrowers, certain
other of the Company’s direct and indirect wholly owned subsidiaries as guarantors, and Bank of America, N.A., as administrative agent, swingline lender, and L/C issuer.
(qq) “D&O Insurance” means the Company’s current directors’ and officers’ liability insurance as of the date hereof in the form made available by the Company to Parent
prior to the date hereof.
(rr) “Deferred Payroll Taxes” means (i) any “applicable employment taxes” the payment of which has been deferred pursuant to Section 2302 of the CARES Act and (ii) any
payroll Tax liability deferred from a taxable period (or portion thereof) prior to the Closing and payable following the Closing.
9
(ss) “DGCL” means the General Corporation Law of
the State of Delaware.
(tt) “DOJ” means the United States Department of Justice.
(uu) “Environmental Law” means all applicable foreign, federal, national, state, provincial or local Laws relating to pollution, public health and safety (with respect to
exposure to Hazardous Substances) or worker health and safety (including with respect to exposure to Hazardous Substances), and protection of the environment or natural resources (including ambient or indoor air, surface water, groundwater, land
surface or subsurface strata).
(vv) “ERISA” means the Employee Retirement Income Security Act of 1974.
(ww) “ERISA Affiliate” means any Person under common control with the Company or any Subsidiary or that, together with the Company, could be deemed a “single employer” within
the meaning of Section 4001(b)(1) of ERISA or within the meaning of Section 414(b), (c), (m) or (o) of the Code.
(xx) “ESPP” means the Company’s Employee Stock Purchase Plan, as amended.
(yy) “Exchange Act” means the Securities Exchange Act of 1934.
(zz) “Exchange Ratio” means a fraction (i) the numerator of which is the Per Share Price and (ii) the denominator of which is the Parent Stock Price, rounded to four decimal
places (with amounts 0.00005 and above rounded up).
(aaa) “FCPA” means the United States Foreign Corrupt Practices Act of 1977.
(bbb) “FTC” means the United States Federal Trade Commission.
(ccc) “GAAP” means generally accepted accounting principles in the United States.
(ddd) “Government Contract” means any Contract that is between the Company or any of its Subsidiaries on the one hand and a Governmental Authority on the other or entered into
by the Company or any of its Subsidiaries as a subcontractor at any tier in connection with a Contract between another Person and a Governmental Authority.
(eee) “Governmental Authority” means (i) any federal, national, state, provincial or local, whether domestic or foreign, government, authority, or other political subdivision
thereof, or (ii) any governmental or quasi-governmental body, agency, authority (including any central bank, Tax authority or trans-governmental or supranational entity or authority), minister or instrumentality exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government or any court of competent jurisdiction, arbitrator or arbitral body (public or private), stock exchange, administrative agency or commission of any governmental
authority or other governmental authority or instrumentality, whether domestic, foreign or supranational, including in each case, any political subdivision thereof.
10
(fff) “Group” means a “group” (as defined pursuant to Section 13(d) of the Exchange Act) of Persons.
(ggg) “Hazardous Substance” means any substance, material or waste for which liability or standards of conduct may be imposed under, or that is otherwise characterized or
regulated by a Governmental Authority pursuant to, any Environmental Law as “hazardous,” a “pollutant,” a “contaminant,” “toxic” or “radioactive,” including petroleum and petroleum products, polychlorinated biphenyls, per- and polyfluoroalkyl
substances and friable asbestos.
(hhh) “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(iii) “Incidental License” means any (i) permitted use right to confidential information in a non-disclosure agreement; (ii) Contract for commercially-available software that
is generally licensed under standard license or subscription terms; or (iii) non-exclusive license that is not material to the business of the Company and its Subsidiaries as currently conducted by the Company and its Subsidiaries and merely
incidental to the transaction contemplated in the Contract, the commercial purpose of which is primarily for something other than such license, such as any: (A) Contract for the sale of advertising; (B) sales or marketing or similar Contract that
includes a license to use the trademarks and copyrights of the Company or any of its Subsidiaries for the purposes of promoting products or services; and (C) vendor Contract that includes permission for the vendor to identify the Company or any of
its Subsidiaries as a customer of the vendor.
(jjj) “Indebtedness” means, with respect to any Person, at a particular time of determination, without duplication, (i) all obligations of such Person for borrowed money
(including any principal, premium, accrued and unpaid interest, prepayment penalties, commitment and other fees, sale or liquidity participation amounts, reimbursements, indemnities and all other amounts payable in connection with such borrowed
money), or with respect to deposits or advances of any kind to such Person; (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (iii) all capitalized finance and operating lease obligations of such
Person required to be reflected on such Person’s balance sheet in accordance with GAAP and all obligations of such Person to pay the deferred and unpaid purchase price of property, equipment and software (other than ordinary course trade payables);
(iv) all obligations of such Person pursuant to securitization or factoring programs or arrangements; (v) all liabilities and obligations for unfunded defined benefit pension or similar plans or arrangements; (vi) all guarantees and arrangements
having the economic effect of a guarantee of such Person of any Indebtedness of any other Person of a type descried in clauses (i) through (v); (vii) net cash payment obligations of such Person under swaps, options, derivatives and other hedging
agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination); or (viii) reimbursement obligations with respect to letters of credit, bank guarantees, and other similar
contractual obligations, to the extent drawn, entered into by or on behalf of such Person.
(kkk) “Intellectual Property” means all intellectual property and proprietary rights anywhere in the world, including: (i) patents and applications therefor, inventions
(whether or not reduced to practice), and all reissues, continuations, continuations-in-part, revisions, divisional, extensions, and reexaminations in connection therewith (“Patents”); (ii) copyrights, copyright registrations and applications therefor and all other corresponding rights in work of authorship (“Copyrights”);
(iii) trademarks, trade names, corporate names, logos, and service marks, and trademark and service mark registrations and applications therefor and corresponding rights in indicia of origin together with the goodwill associated therewith (“Marks”); (iv) trade secrets rights and corresponding rights in confidential information and know-how (“Trade Secrets”); (v) moral rights; (vi) rights in software; and (vii) any similar, corresponding or equivalent rights to any of the foregoing.
11
(lll) “International Employee Plan” means each Company Benefit Plan that is maintained primarily for the benefit of any Service Provider whose primary work location is based
outside of the United States.
(mmm) “Intervening Event” means any Effect, or any material consequence of such Effect, occurring after the date of this Agreement, that (i) was not known or reasonably
foreseeable, in each case based on facts known to the Company Special Committee as of the date of this Agreement; and (ii) does not relate to (A) an Acquisition Proposal, (B) any change in the Company Common Stock price, in and of itself (it being
understood that the cause of such change may be taken into consideration unless otherwise excluded pursuant to this definition), or (C) the fact that the Company’s performance exceeds (x) any public estimates of the Company’s revenue, earnings or
other financial performance or results of operations for any period; or (y) any internal budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that the cause
of such performance may be taken into consideration with respect to clauses (x) and (y) unless otherwise excluded pursuant to this definition).
(nnn) “IRS” means the United States Internal Revenue Service.
(ooo) “Knowledge” means, with respect to the Company, the actual knowledge of the individuals set forth on Section 1.1(ooo) of the Company Disclosure Letter, in each case
after reasonable inquiry of their direct reports who would reasonably be expected to have knowledge of the matter in question.
(ppp) “Landlord Leases” means the Leased Real Property Subleases and the Company Owned Real Property Leases.
(qqq) “Law” means any statute, act, code, law (including common law), ordinance, rule, regulation, order, judgment, decree, injunction, ruling, award, writ, ordinance or stock
exchange rule or listing requirement of any Governmental Authority.
(rrr) “Leased Real Property Subleases” means all subleases, licenses or other agreements (together with all amendments and modifications thereto) pursuant to which the Company
or any of its Subsidiaries conveys or grants to any Person a subleasehold estate in, or the right to use or occupy, any Company Leased Real Property or material portion thereof.
(sss) “Legal Proceeding” means any claim, action, charge, lawsuit, complaint, investigation, audit, prosecution, suit, inquiry, litigation or other similarly formal
enforcement, regulatory, administrative or other legal proceeding brought or initiated by or pending before any Governmental Authority, arbitrator or other tribunal.
12
(ttt) “Lookback Date” means January 1, 2021.
(uuu) “Material Contract” means any of the following Contracts:
(i)
any “material contract” (as defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii) of Regulation S-K) with
respect to the Company and its Subsidiaries;
(ii) any material Contract with any of the top 20 customers of the Company or its
Subsidiaries, taken as a whole, measured by the annual revenue of the Company and its Subsidiaries for the 12 months ending December 31, 2022, attributable to any such customer;
(iii) any material Contract with any of the top 15 suppliers to the Company and its
Subsidiaries, taken as a whole, determined on the basis of expenditures by the Company and its Subsidiaries, taken as a whole, for the 12 months ending December 31, 2022;
(iv) any Contract containing any covenant or other provision (A) prohibiting or materially
limiting (or purporting to prohibit or limit) the right of the Company or any of its Subsidiaries to engage in or to compete with any Person, in any line of business, or in any geographic area, (B) granting the other party or any other Person, or
would require (or purports to require) the Company or any of its Subsidiaries to grant to the other party or any other Person “most favored nation” status, (C) containing (or purporting to contain) any “exclusivity provision”, right of first
refusal, right of first negotiation or offer, or similar material covenants, or (D) materially restricting (or purporting to restrict) the right of the Company or any of its Subsidiaries to sell to or purchase from any Person or to hire or engage
any Person in a manner that materially affects the business of Company, other than, in each case, any such Contracts that may be cancelled without material liability to the Company or its Subsidiaries upon notice of 90 days or less;
(v) any Contract (A) relating to the disposition or acquisition, directly or indirectly (by
merger or otherwise), of assets or capital stock or other equity interests by the Company or any of its Subsidiaries (in one or a series of transactions) (x) with a value greater than $5,000,000 after the date of this Agreement other than
dispositions or acquisitions of inventory, supplies and equipment in the ordinary course of business or (y) pursuant to which the Company has any outstanding indemnification, earn-out or other similar material liabilities or obligations; or (B)
pursuant to which the Company or any of its Subsidiaries is required to, or has the right to, acquire any ownership interest in, or make any material loans, advances or capital contributions to, any Person (other than any Subsidiary of the Company)
after the date of this Agreement;
(vi) any mortgages, indentures, guarantees, loans or credit agreements, security agreements
or other Contracts relating to the incurrence of Indebtedness or extension of credit, in one or a series of transactions, in each case in excess of $5,000,000 other than (A) accounts receivables and payables in the ordinary course of business; (B)
pursuant to the Credit Agreement in the ordinary course of business; and (C) loans to wholly-owned Subsidiaries of the Company in the ordinary course of business;
13
(vii) any Landlord Lease or Leased Real Property Lease;
(viii) any joint venture, legal partnership or similar material Contract that includes the
sharing of profits and losses with another Person (other than solely between or among the Company and any of its wholly owned Subsidiaries);
(ix) any Contract with respect to any material Intellectual Property rights pursuant to
which the Company or any of its Subsidiaries is a licensee or licensor (other than Incidental Licenses); and
(x) any Contract that is an agreement in settlement of a dispute that imposes material
obligations on the Company or any of its Subsidiaries after the date of this Agreement.
(vvv) “NRS” means the Nevada Revised Statutes.
(www) “NYSE” means the New York Stock Exchange.
(xxx) “Order” means any order, writ, decree, judgment, award, injunction, ruling, settlement or stipulation issued, promulgated, made, rendered or entered into by or with any
Governmental Authority.
(yyy) “Parent Common Stock” means the common stock, par value $0.01 per share, of Parent.
(zzz) “Parent Material Adverse Effect” means any Effect that, individually or taken together with all other Effects that exist or have occurred prior to the date of
determination of the occurrence of the Parent Material Adverse Effect, has or would reasonably be expected to prevent or materially impair or materially delay Parent or Merger Sub’s ability to consummate the Merger.
(aaaa) “Parent Related Parties” means, collectively, (i) Parent or Merger Sub; and (ii) the former, current and future holders of any equity, controlling persons,
Representatives, Affiliates (other than Parent or Merger Sub), members, managers, general or limited partners, stockholders and assignees of each of Parent and Merger Sub.
(bbbb) “Parent Stock Price” means an amount equal to the volume weighted average price per share rounded to four decimal places (with amounts 0.00005 and above rounded up) of
Parent Common Stock on NYSE (as reported by Bloomberg L.P. or another authoritative source mutually selected by Parent and the Company) for the ten consecutive trading days ending with the last trading day ending immediately prior to the Closing
Date.
(cccc) “Permit” means any permits, licenses, registrations, certificates, variances, clearances, consents, commissions, franchises, exemptions, orders and approvals from
Governmental Authorities.
14
(dddd) “Permitted Lien” means any of the following: (i) liens for Taxes, assessments and governmental charges or levies either not yet delinquent, or that may thereafter be
paid without interest or penalty, or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established to the extent required by GAAP; (ii) mechanics, carriers’, workmen’s, warehouseman’s,
repairmen’s, materialmen’s or other similar liens or security interests incurred in the ordinary course of business that are not yet delinquent or that are being contested in good faith and by appropriate proceedings; (iii) third Person leases,
subleases and licenses (other than capital leases and leases underlying sale and leaseback transactions) entered into in the ordinary course of business under which there exists no material default; (iv) pledges or deposits to secure obligations
pursuant to workers’ compensation Laws or similar legislation or to secure public or statutory obligations entered into in the ordinary course of business; (v) pledges and deposits to secure the performance of bids, trade contracts, leases, surety
and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (vi) conditions, defects, imperfections or irregularities in title, easements, covenants and rights of way (unrecorded
and of record) and other similar liens (or other encumbrances of any type), in each case that do not, and are not reasonably likely to, adversely affect in any material respect the current use or occupancy of the applicable property owned, leased,
used or held for use by the Company or any of its Subsidiaries; (vii) zoning, building and other similar codes or restrictions that are not violated in any material respect by the Company’s or its Subsidiaries’ current use or occupancy of the real
property subject thereto; (viii) liens the existence of which are disclosed in the notes to the consolidated financial statements of the Company included in the Company SEC Reports; (ix) non-exclusive licenses to Company Intellectual Property in
the ordinary course of business; (x) statutory, common law or contractual liens of landlords under real property leases; (xi) liens against the fee interests of the landlord or owner of any Company properties unless caused by the Company or any of
its Subsidiaries; (xii) liens or encumbrances imposed on the underlying fee interest in real property leased, subleased or otherwise occupied by the Company or any of its Subsidiaries; (xiii) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in the preceding clause (xii); and (xiv) liens (other than liens securing Indebtedness for borrowed money), defects or irregularities in title that would not reasonably be expected to,
individually or in the aggregate, materially impair the continued use and operation of the assets to which they relate in the business of the Company and its Subsidiaries.
(eeee) “Person” means any individual, corporation (including any non-profit corporation), limited liability company, joint stock company, general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust, firm, Governmental Authority or other enterprise, association, organization or entity.
(ffff) “Personal Information”
means any data or information that is defined as “personal information,” “personally identifiable information,” “personal data,” or any equivalent term under applicable Privacy Laws, including any such information that identifies or is reasonably
capable of being associated with, directly or indirectly, with a particular individual or household.
(gggg) “Pre-Closing Period” means the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the (i) termination of
this Agreement pursuant to, and in accordance with, Article VIII and (ii) Effective Time.
(hhhh) “Privacy Laws” means all applicable Laws, governmental orders, and regulations
issued by any Governmental Authority concerning the privacy, security, or Processing of Personal Information.
15
(iiii) “Process” means the access, creation, collection, use, storage, maintenance, processing, recording, sharing, distribution, transfer, transmission, receipt, import,
export, protection, safeguarding, access, disposal or disclosure or other activity regarding data (whether electronically or in any other form or medium).
(jjjj) “Reduced Termination Fee End Time” means 11:59 p.m. on the later of (i) May 4, 2023 and (ii) in the event that any Notice Period properly commenced pursuant to Section 5.4(d)(ii)(3) begins on or prior to May 4, 2023, the next Business Day following the expiration of such Notice Period (as it may be extended pursuant to Section 5.4(d)(ii)(4)).
(kkkk) “Registered Intellectual Property” means all (i) issued Patents and published applications therefor; (ii) registered Marks; and (iii) registered Copyrights.
(llll) “Representatives” means the Affiliates, directors, officers, employees, consultants, agents, attorneys, representatives and advisors of a Party.
(mmmm) “Requisite Stockholder Approval” means, collectively, the Statutory Stockholder Approvals and the Additional Approval Condition.
(nnnn) “Rollover Stockholders” means, collectively, Max L. Fuller; FSBSPE 1, LLC; FSBSPE 2, LLC; FSBSPE 3, LLC; Fuller Family Enterprises, LLC; William E. Fuller; Max L. Fuller
2008 Irrevocable Trust FBO William E. Fuller; and Max Fuller Family Limited Partnership.
(oooo) “Sanctioned Country” means any country or region or government thereof that is, or has been in the last five years, the subject or target of a comprehensive embargo
under Sanctions (including Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, and the so-called Donetsk People’s Republic and so-called Luhansk People’s Republic regions of Ukraine).
(pppp) “Sanctioned Person” means any Person that is the subject or target of Sanctions, including: (i) any Person listed on any U.S. or non-U.S. sanctions list, including the
U.S. Department of the Treasury Office of Foreign Assets Control’s (“OFAC”) List of Specially Designated Nationals and Blocked Persons, or any other
sanctions-related list maintained by OFAC or the U.S. Department of State; (ii) any Person that is, in the aggregate, 50 percent or greater owned, directly or indirectly, or otherwise controlled by any Person or Persons described in clause (i); or
(iii) any Person located, organized, or resident in a Sanctioned Country.
(qqqq) “Sanctions” means all U.S. and non-U.S. Laws relating to economic or trade sanctions, including the Laws administered or enforced by the United States (including by
OFAC, BIS, or the U.S. Department of State), His Majesty’s Treasury of the United Kingdom, the European Union, and the United Nations Security Council.
(rrrr) “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
(ssss) “SEC” means the United States Securities and Exchange Commission.
16
(tttt) “Securities Act” means the Securities Act of 1933.
(uuuu) “Service Provider” means any current or former employee, officer, consultant, independent contractor, or member of the board of directors of the Company or any of its
Subsidiaries.
(vvvv) “Subsidiary” of any Person means (i) a corporation more than 50 percent of the combined voting power of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person; (ii) a partnership of which such Person or one or more other Subsidiaries of such Person or such
Person and one or more other Subsidiaries thereof, directly or indirectly, is the general partner and has the power to direct the policies, management and affairs of such partnership; (iii) a limited liability company of which such Person or one or
more other Subsidiaries of such Person or such Person and one or more other Subsidiaries of such Person, directly or indirectly, is the managing member and has the power to direct the policies, management and affairs of such company; and (iv) any
other Person (other than a corporation, partnership or limited liability company) in which such Person or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries of such Person, directly or indirectly, has at
least a majority ownership or the power to direct the policies, management and affairs thereof (including by contract).
(wwww) “Superior Proposal” means any bona fide written Acquisition Proposal on terms that the Company Special Committee has determined in good faith (after consultation with
its financial advisor and outside legal counsel) would be more favorable to the Company Stockholders (in their capacity as such) from a financial point of view than the Merger (taking into account (i) any revisions to this Agreement and the
Transaction Documents made or proposed in writing by Parent prior to the time of such determination; (ii) the availability of financing (to the extent applicable), likelihood of consummation in accordance with the terms of such Acquisition Proposal
and regulatory considerations; and (iii) those other factors and matters deemed relevant in good faith by the Company Special Committee, which factors may include the (A) identity of the Person making the proposal; and (B) legal, financial, timing
and other aspects of such Acquisition Proposal). For purposes of the reference to an “Acquisition Proposal” in this definition, all references to “15 percent” in the definition of “Acquisition Transaction” will be deemed to be references to “50
percent” and all references to “85 percent” in the definition of “Acquisition Transaction” will be deemed to be references to “50 percent.”
(xxxx) “Supporting Stockholders” means the Rollover Stockholders.
(yyyy) “Tax” means all federal, state, local or non-U.S. income, alternative or add-on minimum, gross income, gross receipts, property, sales, use, transfer, gains, license,
excise, employment, payroll, withholding or minimum taxes, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount
imposed by any Governmental Authority, whether disputed or not.
(zzzz) “Tax Returns” means all Tax returns, declarations, statements, reports, schedules, forms and information returns, or similar filings, including any attachments thereto
and amendments thereof, filed or required to be filed with any Governmental Authority relating to Taxes.
17
(aaaaa) “Transaction Documents” means, collectively, this Agreement, the Support Agreement, the Rollover Agreement, the Confidentiality Agreement, and any other document
contemplated by those agreements, or any document or instrument delivered in connection with this Agreement or those agreements.
(bbbbb) “Transaction Litigation” means any Legal Proceeding (including any class action or derivative litigation) asserted, commenced or threatened by, on behalf of or in the
name of, against or otherwise involving the Company or any of its Subsidiaries, Affiliates, directors or employees, in each case in connection with, arising from or otherwise relating, directly or indirectly, to the Merger, including any Legal
Proceeding based on allegations or assertions (x) that the Company’s entry into this Agreement or the terms and conditions of this Agreement or any related transaction constituted a breach of the fiduciary duties of any member of the Company Board,
any member of the Company Special Committee, any member of the board of directors of any of the Company’s Subsidiaries or any officer of the Company or any of its Subsidiaries or (y) any misrepresentation or omission in the Proxy Statement or any
other communications to the Company Stockholders, in each case other than any Legal Proceedings solely among the Parties or their respective Affiliates with respect to the Transaction Documents and the Merger.
(ccccc) “WARN Act” means the federal Worker Adjustment and Retraining Notification Act of 1988 or any similar Laws.
(ddddd) “Willful Breach” means, with respect to any covenant, representation, warranty or other agreement set forth in this Agreement, a material breach that is a consequence of
an act or failure to act undertaken or omitted to be taken by the breaching Party with the actual knowledge that the taking of such act or failure to take such act would cause, or constitute, a breach of the relevant covenant, representation,
warranty or other agreement.
Section 1.2
Additional Definitions. The following capitalized terms have the respective meanings
given to them in the respective Sections of this Agreement set forth opposite each of the capitalized terms below:
|
Term
|
Section Reference
|
|
Additional Approval Condition
|
3.4(b)
|
|
Agreement
|
Preamble
|
|
Alternative Acquisition Agreement
|
5.4(a)
|
|
Anti-Bribery Laws
|
3.22(c)
|
|
Articles of Merger
|
2.4(a)
|
|
Certificates
|
2.9(c)(i)
|
|
Charter Amendment Effective Time
|
2.3
|
|
Closing
|
2.5
|
|
Closing Date
|
2.5
|
|
Company
|
Preamble
|
|
Company Charter Amendment Certificate
|
2.1
|
18
| Term |
Section Reference |
|
Company Disclosure Letter
|
1.4
|
|
Company Intellectual Property
|
3.17(b)
|
|
Company Leased Real Property
|
3.15(b)
|
|
Company Option
|
2.8(c)(i)
|
|
Company Owned Real Property
|
3.15(a)
|
|
Company PSU
|
2.10(c)(i)
|
|
Company Recommendation
|
3.3(a)
|
|
Company Recommendation Change
|
5.4(c)(i)
|
|
Company RSU
|
2.10(a)(i)
|
|
Company SEC Reports
|
3.8(d)
|
|
Company Securities
|
3.7(b)
|
|
Company Special Committee
|
Recitals
|
|
Company Stockholder Meeting
|
6.4(a)
|
|
Converted PSU Award
|
2.10(c)(ii)
|
|
Converted Restricted Share Award
|
2.10(b)
|
|
Converted RSU Award
|
2.10(a)(ii)
|
|
Copyrights
|
1.1(kkk)
|
|
Covenant Exceptions
|
5.1(a)
|
|
Data Privacy/Security Requirements
|
3.17(g)
|
|
Effect
|
1.1(x)
|
|
Effective Time
|
2.4(b)
|
|
Electronic Delivery
|
9.13
|
|
Enforcement Expenses
|
8.3(d)
|
|
Ex-Im Laws
|
3.22(c)
|
|
Exchange Fund
|
2.9(b)
|
|
Excluded Arrangements
|
6.10(a)
|
|
FHWA
|
3.21(b)
|
|
Financing
|
6.5(a)
|
|
FMCSA
|
3.21(b)
|
|
Indemnified Party Proceeding
|
6.9(b)
|
|
Indemnified Persons
|
6.9(a)
|
|
Labor Agreements
|
3.20(a)
|
|
Leased Real Property Leases
|
3.15(b)
|
|
Marks
|
1.1(kkk)
|
|
Maximum Premium
|
6.9(b)
|
|
Merger
|
Recitals
|
|
Merger Sub
|
Preamble
|
|
Merger Sub Stockholder Approval
|
6.16
|
| Net Debt |
5.2(h)(i)
|
|
New Plans
|
6.9(a)
|
|
Notice Period
|
5.4(d)(ii)(3)
|
|
Old Plans
|
6.9(a)
|
|
Owned Company Shares
|
2.9(a)(ii)
|
|
Parent
|
Preamble
|
|
Party or Parties
|
Preamble
|
|
Patents
|
1.1(kkk)
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19
| Term |
Section Reference |
|
Payment Agent
|
2.9(a)
|
|
Per Share Price
|
2.9(a)(iii)
|
|
Proxy Holder
|
Recitals
|
|
Proxy Statement
|
6.3(a)
|
|
Required Permits
|
3.20(c)
|
|
Restraint
|
7.1(b)
|
|
Rollover Agreement
|
Recitals
|
|
Rollover Shares
|
Recitals
|
|
Statutory Charter Amendment Stockholder Approvals
|
3.4(a)
|
|
Statutory Merger Stockholder Approval
|
3.4(a)
|
|
Statutory Stockholder Approvals
|
3.4(a)
|
|
Support Agreement
|
Recitals
|
|
Surviving Corporation
|
Recitals
|
|
Tail Policy
|
6.9(b)
|
|
Termination Date
|
8.1(b)
|
|
Trade Secrets
|
1.1(kkk)
|
|
Transaction Matters
|
9.11(a)
|
|
Uncertificated Shares
|
2.9(c)(ii)
|
|
Union
|
3.20(a)
|
|
Vested Company PSU
|
2.10(c)(i)
|
|
Vested Company RSU
|
2.10(a)(i)
|
Section 1.3 Certain Interpretations.
(a) References to this Agreement. Unless the context of this
Agreement otherwise requires, (i) when a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, that reference is to an Article, Section, Schedule or Exhibit to this Agreement, as applicable, and (ii) references to
“paragraphs” or “clauses” are to separate paragraphs or clauses of the Section or subsection in which the reference occurs. References to this Agreement (in this Agreement or any Transaction Document) mean this Agreement as amended, supplemented or
otherwise modified from time to time in accordance with Section 9.3.
(b) Hereof, Including, etc. When used in this Agreement, (i)
the words “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) the phrase “the date hereof” means
“the date of this Agreement;” and (iii) the words “include,” “includes” and “including” will be deemed in each case to be followed by the words “without limitation.”
(c) Neither, etc. Not Exclusive. Unless the context of this
Agreement otherwise requires, “neither,” “nor,” “any,” “either” and “or” are not exclusive.
(d) Extent. The phrase “to the extent” means the degree to
which a subject or other thing extends, and does not simply mean “if.”
20
(e) Dollars. When used in this Agreement, references to “$”
or “Dollars” are references to United States dollars. All amounts in this Agreement will be paid in Dollars, and if any amounts, costs, fees or expenses incurred by any Party pursuant to this Agreement are denominated in a currency other than
Dollars, to the extent applicable, the Dollar equivalent for such costs, fees and expenses will be determined by converting such other currency to Dollars at the foreign exchange rates published by Bloomberg or, if not reported thereby, another
authoritative source reasonably determined by the Company, in effect at the time that such amount, cost, fee or expense is incurred. If the resulting conversion yields a number that extends beyond two decimal points, it will be rounded to the nearest
penny.
(f) Meaning of Terms. The meaning assigned to each
capitalized term defined and used in this Agreement is equally applicable to both the singular and the plural forms of such term, and words denoting any gender include all genders. Where a word or phrase is defined in this Agreement, each of its
other grammatical forms has a corresponding meaning. All terms defined in this Agreement will have the defined meanings when used in any certificate or other document made or delivered pursuant to this Agreement unless otherwise defined in such
certificate or document. References to the “United States” or abbreviations thereof mean the United States of America and its states, territories and possessions.
(g) References to Persons. References to any Person
(including any Party) include references to such Person’s predecessors and successors and permitted assigns, and, in the case of any Governmental Authority, to any Person succeeding to its functions and capacities.
(h) References to Subsidiaries. Unless the context otherwise
requires, all references in this Agreement to the Subsidiaries of a Person will be deemed to include all direct and indirect Subsidiaries of such Person.
(i) Writings. References to “writing” mean the representation
or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether in electronic form or otherwise, and including writings delivered by Electronic Delivery. “Written” will be construed in the
same manner.
(j) Legislation; Contracts. A reference to any specific
legislation or to any provision of any legislation includes any amendment to, and any modification, re-enactment or successor thereof, any legislative provision substituted therefor and all rules, regulations and statutory instruments issued
thereunder or pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as a specific date, references to any specific legislation will be deemed to refer to such legislation or provision (and
all rules, regulations, and statutory instruments and applicable guidance, guidelines, bulletins or policies issued or made in connection therewith by a Governmental Authority) as of such date. References to any agreement or Contract are to that
agreement or Contract, and any amendments, modifications, supplements, exhibits, schedules, annexes, statements of work, riders and other documents attached thereto, provided that with respect to the agreements and Contracts scheduled in the Company
Disclosure Letter, solely to the extent made available to Parent prior to the date hereof.
(k) Accounting Matters. Except as otherwise provided in this
Agreement, all accounting terms used in this Agreement will be interpreted, and all accounting determinations hereunder will be made, in accordance with GAAP. An item arising with respect to a specific representation or warranty will be deemed to be
“reflected on” or “set forth in” a balance sheet or financial statements, to the extent that any such phrase appears in such representation or warranty, if there is a specific reserve, accrual or other similar item underlying a number on such balance
sheet or financial statements and it is apparent from the face of such balance sheet or financial statement (including the notes thereto) that the reserve, accrual or similar item is specifically related to the subject matter of such representation
or warranty.
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(l) Headings. The table of contents and headings set forth in
this Agreement are for convenience of reference purposes only and will not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision of this Agreement.
(m) Applicable Time.
Unless otherwise indicated, all references to a specific time are to the then-applicable local time in Phoenix, Arizona.
(n) Calculation of Time Periods. Unless otherwise indicated,
(i) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded; (ii) if any action
must be taken on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day; (iii) the measure of a period of one month or year for purposes of this Agreement will be the day of the
following month or year corresponding to the starting date; and (iv) if no corresponding date exists, then the end date of such period being measured will be the next actual day of the following month or year (for example, one month following
February 18 is March 18 and one month following March 31 is May 1). References to “from” or “through” any date mean, unless otherwise specified, from and including or through and including such date, respectively.
(o) Nature of Days and Months. Whenever this Agreement refers
to a number of days, that number will refer to calendar days unless Business Days are specified. Any reference to a “month” means a calendar month.
(p) Joint Drafting. The Parties agree that they have been
represented by legal counsel during the negotiation and execution of this Agreement. Accordingly, the Parties irrevocably waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
(q) No Admission. The information contained in this Agreement
and in the Company Disclosure Letter is disclosed solely for purposes of this Agreement, and no information contained in this Agreement or in the Company Disclosure Letter will be deemed to be an admission by any Party to any third Person of any
matter whatsoever, including (i) any violation of Law or breach of Contract; or (ii) that such information is material or is required to be referred to or disclosed under this Agreement. Disclosure of any information or document in the Company
Disclosure Letter is not a statement or admission that it is material or required to be disclosed in the Company Disclosure Letter. Nothing in the Company Disclosure Letter constitutes an admission against the Company’s interest or represents the
Company’s legal position or legal rights on the matter so disclosed. No reference in this Agreement to dollar amount thresholds will be deemed to be evidence of a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable, or
materiality.
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(r) Nature of Information Disclosed. It is understood and
agreed that (i) the specification of any dollar amount in the representations and warranties contained in this Agreement is not intended to imply that such amounts (or higher or lower amounts) are or are not material; and (ii) the inclusion of any
specific item in the Company Disclosure Letter is not intended to imply that such items are or are not material or are within or outside of the ordinary course of business.
(s) No Reliance by Others on Representations. The
representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties in accordance
with Section 9.4 without notice or liability to any other Person. In some instances, the representations and warranties in this Agreement may represent an allocation among the
Parties of risks associated with particular matters regardless of the knowledge of any of the Parties. Consequently, Persons other than the Parties may not rely on the representations and warranties in this Agreement as characterizations of facts or
circumstances as of the date of this Agreement or as of any other date.
(t) Made Available. The phrases “furnished,” “provided,”
“delivered” or “made available” or words of similar import when used with respect to documents or other information means that such documents or information have been physically or electronically delivered to the relevant Party prior to the date of
this Agreement by being (i) posted to the virtual data room managed by the Company in connection with the Merger, (ii) filed with or furnished to the SEC and available in its Electronic Data Gathering, Analysis and Retrieval (EDGAR) database or (iii)
as electronically delivered via email by the Company’s outside counsel to Parent’s outside counsel, in each case, solely to the extent made available by 3:00 p.m. on the date hereof.
(u) Covenants. References to covenants in this Agreement are
not limited to the matters included in Article V and Article VI, but also include all other covenants of
the Parties in this Agreement.
Section 1.4 Company Disclosure Letter. The
information set forth in the disclosure letter delivered by the Company to Parent and Merger Sub on the date of this Agreement (the “Company Disclosure Letter”) is
disclosed under separate Section and subsection references that correspond to the Sections and subsections of this Agreement to which such information relates. The information set forth in each Section or subsection of the Company Disclosure Letter
will be deemed to be an exception to (or, as applicable, a disclosure for purposes of) (a) the representations, warranties or covenants of the Company or Parent and Merger Sub, as applicable, that are set forth in the corresponding Section or
subsection of this Agreement; and (b) any other representations, warranties or covenants of the Company or Parent and Merger Sub, as applicable, that are set forth in this Agreement, but in the case of this clause (b) only if the relevance of that
disclosure as an exception to (or a disclosure for purposes of) such other representations, warranties or covenants is reasonably apparent on the face of such disclosure.
23
ARTICLE II
THE MERGER
THE MERGER
Section 2.1 The Charter Amendment. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the NRS, at the Charter Amendment Effective Time, the Charter as in effect immediately prior
to the Charter Amendment Effective Time will be amended as set forth in the certificate attached as Exhibit A hereto (the “Company Charter Amendment Certificate”), and, the Charter, as so amended, will be the articles of incorporation of the Company until thereafter amended in accordance with the applicable provisions of
this Agreement, the NRS and such articles of incorporation, subject to the provisions of Section 6.9(a).
Section 2.2 The Merger. Upon the terms and
subject to the conditions set forth in this Agreement and the applicable provisions of the NRS, at the Effective Time, (a) Merger Sub will be merged with and into the Company; (b) the separate corporate existence of Merger Sub will cease; and (c) the
Company will continue as the Surviving Corporation of the Merger and an indirect Subsidiary of Parent.
Section 2.3 The Charter Amendment Effective Time.
Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Company shall cause the Company Charter Amendment Certificate to be duly executed and filed with the Nevada Secretary of State in accordance with the
relevant provisions of the NRS. The Charter Amendment shall become effective upon the filing of the Company Charter Amendment Certificate with the Office of the Nevada Secretary of State of the State, or at such later time as shall be agreed upon in
writing by Parent and the Company and specified in the Company Charter Amendment Certificate in accordance with the NRS (the effective time of the Charter Amendment is referred to as the “Charter Amendment Effective Time”); provided that in no event shall the Charter Amendment Effective Time occur simultaneously with or after the Effective Time.
Section 2.4 The Effective Time.
(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, Parent, Merger Sub and the Company shall cause articles of merger with respect to the Merger prepared and executed in accordance with the relevant provisions of the NRS (the “Articles of Merger”) to be executed and filed with the Office of the Nevada Secretary of State.
(b) The Merger shall become effective upon the filing of the Articles of Merger with the Office of the Nevada Secretary of State, or at such later
time as shall be agreed upon in writing by Parent and the Company and specified in the Articles of Merger in accordance with the NRS (such date and time being hereinafter referred to as the “Effective Time”).
Section 2.5 The Closing. Upon the terms and
subject to the conditions set forth in this Agreement, the closing of the Merger shall take place at a closing (the “Closing”) (a) via the remote electronic exchange
of electronic copies of documents and signatures (including by Electronic Delivery), on a date to be agreed upon by Parent and the Company that is no later than the third Business Day after the satisfaction or waiver (to the extent permitted under
this Agreement) of the last to be satisfied or waived of the conditions set forth in Article VII (other than those conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or waiver (to the extent permitted under this Agreement) of such conditions at the Closing); or (b) such other time, location and date as Parent and the Company mutually agree in writing. The date on which the
Closing actually occurs is referred to as the “Closing Date.”
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Section 2.6 Effect of the Merger. From and after
the Effective Time, the Merger shall have the effects set forth in this Agreement and the applicable provisions of the NRS. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the property, rights,
privileges, powers and franchises of each of Merger Sub and the Company shall vest in the Surviving Corporation, and all debts, liabilities obligations, restrictions, disabilities and duties of each of Merger Sub and the Company shall become the
debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation, all as provided under the NRS. This Agreement (excluding the Company Disclosure Letter) constitutes a “plan of merger” as contemplated by NRS
92A.100.
Section 2.7 Articles of Incorporation and Bylaws of the
Surviving Corporation.
(a) Articles of Incorporation. At the Effective Time, subject
to the provisions of Section 6.9(a), the Charter as amended by the Charter Amendment will be amended and restated in its entirety to read as set forth in Exhibit B hereto, and, as so amended and restated, will be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with the applicable
provisions of the NRS and such articles of incorporation.
(b) Bylaws. At the Effective Time, subject to the provisions
of Section 6.9(a), the bylaws of the Company as in effect immediately prior to the Effective Time will be amended and restated in their entirety to read as set forth in Exhibit C hereto, and, as so amended and restated, will be the bylaws of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of the NRS,
the articles of incorporation of the Surviving Corporation and such bylaws.
Section 2.8 Directors and Officers of the Surviving
Corporation.
(a) Directors. At the Effective Time, the only directors of
the Surviving Corporation will be the directors of Merger Sub as of immediately prior to the Effective Time, each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation until their respective
successors are duly elected and qualified, or until their earlier death, resignation or removal.
(b) Officers. At the Effective Time, the only officers of the
Surviving Corporation will be officers of the Company as of immediately prior to the Effective Time (other than such officers of the Company in respect of which Parent provides written notice to the Company prior to Closing that such Person shall not
be an officer of the Surviving Corporation at the Effective Time), each to hold office in accordance with the articles of incorporation and bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and
qualified, or until their earlier death, resignation or removal.
25
Section 2.9 Effect on Capital Stock.
(a) Capital Stock. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holders of any of the securities of Parent, Merger Sub or the Company:
(i) each share of common stock, par value $0.01 per share, of Merger Sub that is outstanding as of immediately prior to the Effective Time will be converted into one validly issued, fully paid and nonassessable share of
common stock, par value $0.01 per share, of the Surviving Corporation;
(ii) each share of Company Common Stock that is (A) held by the Company as treasury stock; (B) owned by Parent or
Merger Sub; or (C) owned by any direct or indirect wholly owned Subsidiary of Parent or Merger Sub (including the Rollover Shares), in each case, as of immediately prior to the Effective Time (collectively, the “Owned Company Shares”) will automatically be cancelled and will cease to exist without any conversion thereof or consideration paid in exchange therefor; and
(iii) each share of Company Common Stock that is issued and outstanding as of immediately prior to the Effective
Time (other than Owned Company Shares and Company Restricted Shares) will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $6.15, without interest thereon (the “Per Share Price”), in accordance with the provisions of Section 2.9 (or in the case of a lost, stolen or destroyed
certificate, upon delivery of an affidavit (and bond, if required) in accordance with the provisions of Section 2.13).
(b) Rollover Shares. The Rollover Shares shall not be
entitled to receive the Per Share Price and shall, immediately prior to the Closing, be contributed to a Subsidiary of Parent pursuant to the terms of the Rollover Agreement and treated in accordance with Section 2.9(a)(ii).
(c) Adjustment to the Per Share Price. The Per Share Price
will be adjusted appropriately to fully reflect the effect of any stock split, reverse stock split, stock distribution or stock dividend (including any dividend or other distribution of securities convertible into Company Common Stock),
reorganization, recapitalization, reclassification, combination, exchange of shares or other similar change with respect to the Company Common Stock occurring on or after the date of this Agreement and prior to the Effective Time.
(d) No Dissenter’s Rights. Pursuant to NRS 92A.390, no holder of any shares of Company Capital Stock will have or be entitled to assert dissenter’s rights or any other
rights of appraisal, pursuant to the NRS or otherwise, as a result of or in connection with the transactions contemplated by this Agreement, including the Merger.
Section 2.10 Equity Awards / ESPP.
(a) Company RSUs.
26
(i) Vested Company RSUs. At the Effective Time, each outstanding restricted stock unit granted
pursuant to a Company Equity Plan that is subject to time-based vesting only (a “Company RSU”) and that is vested immediately prior to the Effective Time (but not
yet settled) or that vests solely as a result of the consummation of transactions contemplated by this Agreement (each, a “Vested Company RSU”) will,
automatically and without any required action on the part of the holder thereof, be cancelled and converted into the right to receive an amount in cash (without interest) equal to (x) the total number of shares of Company Common Stock subject to
such Vested Company RSU immediately prior to the Effective Time multiplied by (y) the Per Share Price, less applicable Taxes required to be withheld with
respect to such payment.
(ii) Unvested Company RSUs.
At the Effective Time, each award of Company RSUs (or portion thereof) that is not a Vested Company RSU will, automatically and without any required action on the part of the holder thereof, be assumed by Parent and converted into an award of
restricted stock units denominated in shares of Parent Common Stock (a “Converted RSU Award”). Except as otherwise agreed by the holder and Parent, each Converted
RSU Award assumed and converted pursuant to this Section 2.10 will continue to have, and will be subject to, the same terms and conditions (including vesting, acceleration and
forfeiture provisions) as applied to the corresponding award of Company RSUs immediately prior to the Effective Time, except (A) such award shall cover that number of shares of Parent Common Stock equal to the product (rounded down to the nearest
whole number) of (x) the number of shares of Company Common Stock subject to the unvested portion of the corresponding award of Company RSUs at the Effective Time multiplied
by (y) the Exchange Ratio and (B) as to terms (x) rendered inoperative by reason of the transactions contemplated by this Agreement, or (y) such other immaterial administrative or ministerial changes as Parent’s board of directors may
determine in good faith are appropriate to effectuate the administration of the Converted RSU Award.
(b) Company Restricted Shares. At the Effective Time, each
outstanding award of Company Restricted Shares (or portion thereof) that is unvested immediately prior to the Effective Time and that will not vest as a result of the consummation of transactions contemplated by this Agreement will, automatically and
without any required action on the part of the holder thereof, be assumed by Parent and converted into an award of restricted shares denominated in shares of Parent Common Stock (a “Converted Restricted Share Award”). Except as otherwise agreed by the holder and Parent, each Converted Restricted Share Award assumed and converted pursuant to this Section 2.10 will continue to have, and will be subject to, the same terms and conditions (including vesting, acceleration and forfeiture provisions) as applied to the corresponding award of Company Restricted
Shares immediately prior to the Effective Time, except (A) each Converted Restricted Share Award shall cover that number of shares of Parent Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of
Company Common Stock subject to such award of Company Restricted Shares multiplied by (y) the Exchange Ratio and (B) as to terms (x) rendered inoperative by reason
of the transactions contemplated by this Agreement, or (y) such other immaterial administrative or ministerial changes as Parent’s board of directors may determine in good faith are appropriate to effectuate the administration of the Converted
Restricted Share Award.
(c) Company PSUs.
27
(i) Vested Company PSUs. At the Effective Time, each outstanding restricted stock unit granted pursuant to a Company Equity
Plan that is subject to outstanding performance-based vesting (a “Company PSU”) and that is vested (but not yet settled) at the Effective Time or that vests
solely as a result of the consummation of transactions contemplated by this Agreement (each, a “Vested Company PSU”) will, automatically and without any required
action on the part of the holder thereof, be cancelled and converted into the right to receive an amount in cash (without interest) equal to (x) the total number of shares of Company Common Stock subject to such Vested Company PSU immediately
prior to the Effective Time (as determined in accordance with the terms of the applicable award agreement) multiplied by (y) the Per Share Price, less
applicable Taxes required to be withheld with respect to such payment.
(ii) Unvested Company PSUs.
At the Effective Time, each outstanding award of Company PSUs (or portion thereof) that is not a Vested Company PSU will, automatically and without any required action on the part of the holder thereof, be assumed by Parent and converted into an
award of restricted stock units denominated in shares of Parent Common Stock (a “Converted PSU Award”). Except as otherwise agreed by the holder and Parent, each
Converted PSU Award assumed and converted pursuant to this Section 2.10 will continue to have, and will be subject to, the same terms and conditions (including time-based
vesting, acceleration and forfeiture provisions) as applied to the corresponding award of Company PSUs immediately prior to the Effective Time, except (A) such award shall cover that number of shares of Parent Common Stock equal to the product
(rounded down to the nearest whole number) of (x) the number of shares of Company Common Stock subject to the unvested portion of the corresponding award of Company PSUs at the Effective Time (with, for the avoidance of doubt, the performance-based
vesting conditions deemed satisfied at 100% of target level of achievement) multiplied by (y) the Exchange Ratio and (B) as to terms (x) rendered inoperative by
reason of the transactions contemplated by this Agreement (including any performance-based vesting conditions), or (y) such other immaterial administrative or ministerial changes as Parent’s board of directors may determine in good faith are
appropriate to effectuate the administration of the Converted PSU Award.
(d) Company Options. All Company Options will be cancelled at
the Effective Time for no consideration or payment.
(e) Payment Timing. As promptly as reasonably practicable
following the Closing Date, but in no event later than the second regularly scheduled payroll date following the Closing Date, the applicable former holders of Vested Company RSUs and Vested Company PSUs will receive a payment from the Surviving
Corporation. Notwithstanding anything herein to the contrary, with respect to any Company Equity-Based Award, Converted RSU Award or Converted PSU Award that constitutes a nonqualified deferred compensation plan subject to Section 409A of the Code,
payments will be made at the time(s) permitted under the applicable award agreement that will not trigger a Tax or penalty under Section 409A of the Code.
(f) Necessary Further Actions. Prior to the Effective Time,
the Company Board (or, if appropriate, any committee thereof) will take all action reasonably necessary to give effect to this Section 2.10 (including the satisfaction of the
requirements of Rule 16b-3(e) promulgated under the Exchange Act). Promptly after the Effective Time (but in no event later than 15 Business Days following the Effective Time), if available for use by Parent, Parent shall prepare and file with the
SEC a registration statement on Form S-8 (or other appropriate form) relating the shares of Parent Common Stock issuable with respect to assumed Company Equity-Based Awards under this Section
2.10.
28
(g) Treatment of ESPP. On or as soon as practicable following
the date of this Agreement, the Company will take all actions that are reasonably necessary to (i) provide that no new participants will commence participation in the ESPP after the date of this Agreement; (ii) provide that no payroll contributions
or separate non-payroll contributions may be made on or following the date of this Agreement; (iii) provide that no new offering period or purchase period will commence or be extended pursuant to the ESPP, in each case, after the date of this
Agreement; (iv) cause any outstanding offering period or purchase period under the ESPP to be terminated prior to the next Purchase Date (as defined in the ESPP) occurring after the date of this Agreement; (v) provide that no shares of Company Common
Stock will be issued under the ESPP following the date of this Agreement; and (vi) cause all amounts then credited to participants’ accounts to be returned to the participants (without interest thereon) as soon as administratively practicable.
Immediately prior to and effective as of the Effective Time (but subject to the consummation of the Merger), the Company will terminate the ESPP.
Section 2.11 Exchange of Certificates.
(a) Payment Agent. Prior to the Closing, Parent will (i)
select a bank or trust company reasonably acceptable to the Company to act as the payment agent for the Merger (the “Payment Agent”); and (ii) enter into a payment
agent agreement, in form and substance reasonably acceptable to the Company, with such Payment Agent.
(b) Exchange Fund. At or prior to the Closing, Parent will
deposit (or cause to be deposited) with the Payment Agent, by wire transfer of immediately available funds, for payment to the holders of shares of Company Common Stock pursuant to Section
2.9, an amount of cash equal to the aggregate consideration to which such holders of Company Common Stock become entitled pursuant to Section 2.9. Until disbursed
in accordance with the terms and conditions of this Agreement, such cash will be invested by the Payment Agent, as directed by Parent or the Surviving Corporation, in (i) obligations of or fully guaranteed by the United States or any agency or
instrumentality thereof and backed by the full faith and credit of the United States with a maturity of no more than 30 days; (ii) commercial paper obligations rated A 1 or P 1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s
Corporation, respectively; or (iii) certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $10,000,000,000 (based on the most recent financial statements of such bank that are then
publicly available) (such cash and any proceeds thereon, the “Exchange Fund”). To the extent that (A) there are any losses with respect to any investments of the
Exchange Fund; (B) the Exchange Fund diminishes for any reason below the level required for the Payment Agent to promptly pay the aggregate cash amounts contemplated by Section 2.9;
or (C) all or any portion of the Exchange Fund is unavailable for Parent (or the Payment Agent on behalf of Parent) to promptly pay the aggregate cash amounts contemplated by Section 2.9
for any reason, then Parent will, or will cause the Surviving Corporation to, promptly replace or restore the amount of cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times fully available for distribution and maintained
at a level sufficient for the Payment Agent to make the payments contemplated by Section 2.9. Any interest or other income from investment of the Exchange Fund will be payable
to Parent or the Surviving Corporation, as Parent directs.
29
(c) Exchange and Payment Procedures.
(i) Certificated Shares. Promptly following the Effective Time (and in any event within three Business Days), Parent and
the Surviving Corporation will cause the Payment Agent to mail to each holder of record (as of immediately prior to the Effective Time) of a certificate (the “Certificates”)
that immediately prior to the Effective Time represented outstanding shares of Company Common Stock (other than Owned Company Shares) whose shares of Company Common Stock were converted into the right to receive the consideration payable in
respect thereof pursuant to Section 2.9, (A) a letter of transmittal in customary form and reasonably acceptable to the Company (which will specify that delivery will be
effected, and risk of loss and title to the Certificates will pass, only upon delivery of the Certificates to the Payment Agent (or affidavits of loss in lieu thereof as provided in Section
2.13)); and (B) instructions for use in effecting the surrender of the Certificates in exchange for the consideration payable in respect thereof pursuant to Section 2.9.
Upon surrender to the Payment Agent of a Certificate (or affidavit of loss in lieu of a Certificate as provided in Section 2.13) for cancellation, together with such letter
of transmittal, duly completed and validly executed, in accordance with the terms of such materials and instructions, the holder of such Certificate will be entitled to receive in exchange for the number of shares represented by such Certificate
(and Parent will cause the Payment Agent to pay and deliver in exchange therefor as promptly as practicable) an amount in cash (less any applicable withholding Taxes payable in respect thereof) equal to the product obtained by multiplying (1) the
aggregate number of shares of Company Common Stock represented by such Certificate by (2) the Per Share Price. The Certificate so surrendered will be cancelled. The Payment Agent will accept Certificates upon compliance with such reasonable terms
and conditions as the Payment Agent may impose to cause an orderly exchange thereof in accordance with customary exchange practices. No interest will be paid or accrued for the benefit of any holder of Certificates on the amount payable upon the
surrender of such Certificates pursuant to this Section 2.11(c)(i). Until so surrendered, the Certificates will be deemed from and after the Effective Time to evidence only
the right to receive the consideration payable in respect thereof pursuant to Section 2.9.
(ii) Uncertificated Shares.
Notwithstanding anything to the contrary in this Agreement, any holder of shares of Company Common Stock held in book-entry form (the “Uncertificated Shares”) will
not be required to deliver a Certificate or an executed letter of transmittal to the Payment Agent to receive the consideration payable in respect thereof pursuant to Section 2.9.
In lieu thereof, each holder of record (as of immediately prior to the Effective Time) of an Uncertificated Share that immediately prior to the Effective Time represented an outstanding share of Company Common Stock (other than Owned Company
Shares) whose shares of Company Common Stock were converted into the right to receive the consideration payable in respect thereof pursuant to Section 2.9 will, upon receipt
of an “agent’s message” in customary form (it being understood that the holders of Uncertificated Shares will be deemed to have surrendered such Uncertificated Shares upon receipt of an “agent’s message” or such other evidence, if any, as the
Payment Agent may reasonably request) at the Effective Time, be entitled to receive (and Parent will cause the Payment Agent to pay and deliver as promptly as practicable) an amount in cash (less any applicable withholding Taxes payable in respect
thereof) equal to the product obtained by multiplying (A) the aggregate number of shares of Company Common Stock represented by such holder’s transferred Uncertificated Shares by (B) the Per Share Price. The Uncertificated Shares so surrendered
will be cancelled. The Payment Agent will accept transferred Uncertificated Shares upon compliance with such reasonable terms and conditions as the Payment Agent may impose to cause an orderly exchange thereof in accordance with customary exchange
practices. No interest will be paid or accrued for the benefit of any holder of Uncertificated Shares on the amount payable upon the surrender of such Uncertificated Shares pursuant to this Section
2.11(c)(ii). Until so surrendered, Uncertificated Shares will be deemed from and after the Effective Time to evidence only the right to receive the consideration payable in respect thereof pursuant to Section 2.9.
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(d) Transfers of Ownership. If a transfer of ownership of
shares of Company Common Stock is not registered in the stock transfer books or ledger of the Company, or if the consideration payable is to be paid in a name other than that in which the Certificates surrendered or transferred in exchange therefor
are registered in the stock transfer books or ledger of the Company, then the aggregate consideration payable pursuant to Section 2.9 may be paid to a Person other than the
Person in whose name the Certificate so surrendered or transferred is registered in the stock transfer books or ledger of the Company only if such Certificate is properly endorsed and otherwise in proper form for surrender and transfer and the Person
requesting such payment has paid to Parent (or any agent designated by Parent) any transfer Taxes required by reason of the payment of the Per Share Price to a Person other than the registered holder of such Certificate, or established to the
satisfaction of Parent (or any agent designated by Parent) that such transfer Taxes have been paid or are otherwise not payable. Payment of the consideration payable with respect to Uncertificated Shares will only be made to the Person in whose name
such Uncertificated Shares are registered.
(e) Escheat. Notwithstanding anything to the contrary set
forth in this Agreement, none of the Payment Agent, Parent, the Surviving Corporation or any other Party will be liable to a Company Stockholder for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat
or similar Law. If any Certificates or Uncertificated Shares have not been surrendered immediately prior to the date on which any cash in respect of such Certificate or Uncertificated Share would otherwise escheat to or become the property of any
Governmental Authority, then any such cash in respect of such Certificate or Uncertificated Share will, to the extent permitted by applicable Law, become the property of Parent, free and clear of all claims or interest of any Person previously
entitled thereto.
(f) Distribution of Exchange Fund to Parent. Any portion of
the Exchange Fund that remains undistributed to the holders of the Certificates or Uncertificated Shares on the date that is nine months after the Effective Time will be delivered to Parent upon demand, and any holders of shares of Company Common
Stock that were issued and outstanding immediately prior to the Effective Time who have not theretofore surrendered or transferred their Certificates or Uncertificated Shares representing such shares of Company Common Stock for exchange pursuant to Section 2.11(c) will thereafter look for payment of the Per Share Price payable in respect of the shares of Company Common Stock represented by such Certificates or Uncertificated
Shares solely to Parent (subject to abandoned property, escheat or similar Laws), solely as general creditors thereof, for any claim to the Per Share Price to which such holders may be entitled pursuant to Section 2.9.
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Section 2.12 No Further Ownership Rights in Company
Common Stock. From and after the Effective Time, (a) all shares of Company Common Stock will no longer be outstanding and will automatically be cancelled and cease to exist; and (b) each holder of a Certificate or Uncertificated Shares
previously representing any shares of Company Common Stock will cease to have any rights with respect thereto, except the right to receive the consideration payable therefor in accordance with Section 2.9. The consideration paid in accordance with the terms of this Article II upon conversion of any shares of Company Common Stock
will be deemed to have been paid in full satisfaction of all rights pertaining to such shares of Company Common Stock. From and after the Effective Time, there will be no further registration of transfers on the records of the Surviving Corporation
of shares of Company Common Stock that were issued and outstanding immediately prior to the Effective Time, other than transfers to reflect, in accordance with customary settlement procedures, trades effected prior to the Effective Time. If, after
the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation for any reason, they will (subject to compliance with the exchange procedures of Section
2.11(c)) be cancelled and exchanged as provided in this Article II.
Section 2.13 Lost, Stolen or Destroyed Certificates.
In the event that any Certificates have been lost, stolen or destroyed, the Payment Agent will issue in exchange therefor, upon the making of an affidavit in customary form of that fact by the holder thereof, the Per Share Price payable in respect
thereof pursuant to Section 2.9. Parent or the Payment Agent may, in its discretion and as a condition precedent to the payment of such Per Share Price, require the owners of
such lost, stolen or destroyed Certificates to deliver a bond in such reasonable amount as it may direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Payment Agent with respect to the Certificates
alleged to have been lost, stolen or destroyed.
Section 2.14 Required Withholding. Each of the
Payment Agent, Parent, the Company and the Surviving Corporation, and any Subsidiary of Parent, the Company or the Surviving Corporation, will be entitled to deduct and withhold from any amounts payable pursuant to this Agreement such amounts as are
required to be deducted or withheld therefrom. To the extent that such amounts are so deducted or withheld, such amounts will be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and
withholding was made. If the Payment Agent, Parent, the Company, or the Surviving Corporation determines that any amounts are required to be deducted or withheld (other than any deduction or withholding with respect to any payments constituting
compensation for services), the Payment Agent, Parent, the Company, or the Surviving Corporation, as the case may be, will consider in good faith any forms or documentation timely provided to
obtain exemptions from, or reductions of, any Taxes required to be withheld from amounts payable pursuant to this Agreement.
Section 2.15 Necessary Further Actions. If, at any
time after the Effective Time, any further action is determined by Parent to be necessary or desirable to vest the Surviving Corporation with the full right, title and possession of and to all rights and property of Merger Sub and the Company, then
the officers and directors of the Surviving Corporation and Parent will be fully authorized (in the name of Merger Sub, in the name of the Company, and otherwise) to take such action.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
With respect to any Section of this Article III,
except (a) as disclosed in the Company SEC Reports filed publicly no later than one Business Day prior to the date of this Agreement (other than (i) with respect to Section 3.2, Section 3.3, Section 3.4 or Section 3.7,
or (ii) any disclosures contained or referenced therein under the captions “Risk Factors,” “Forward-Looking Statements,” “Quantitative and Qualitative Disclosures About Market Risk” and any other disclosures contained or referenced therein of
information, factors or risks that are predictive, cautionary or forward-looking in nature); or (b) subject to the terms of Section 1.3(t), as set forth in the Company Disclosure
Letter, the Company represents and warrants to Parent and Merger Sub as follows:
Section 3.1 Organization; Good Standing. The
Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. The Company (a) has the requisite corporate power and authority to own, lease or operate its properties and assets and to conduct
its business as it is presently being conducted, and (b) is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except where the failure to have such power and authority or the failure to
be so qualified or in good standing would not, individually or the aggregate, have a Company Material Adverse Effect. The Company has made available to Parent true, correct and complete copies of the Charter and the Bylaws, each as amended to date.
The Company is not in violation of the Charter or the Bylaws.
Section 3.2 Corporate Power; Enforceability. The
Company has the requisite corporate power and authority to (i) execute and deliver this Agreement and the Support Agreement; (ii) perform its covenants and obligations under this Agreement and the Support Agreement; and (iii) subject to receiving the
Requisite Stockholder Approval, effectuate the Charter Amendment and consummate the Merger. The effectuation of the Charter Amendment and the consummation of the Merger has been duly authorized by all necessary corporate action on the part of the
Company, subject to receiving the Requisite Stockholder Approval. The execution and delivery of this Agreement and the Support Agreement by the Company, the performance by the Company of its covenants and obligations under this Agreement and the
Support Agreement, and, subject to receiving the Requisite Stockholder Approval, the effectuation of the Charter Amendment and the consummation of the Merger and each of the other transactions contemplated by this Agreement have been duly authorized
and approved by all necessary corporate action on the part of the Company and no additional corporate actions on the part of the Company are necessary to authorize (i) the execution and delivery of this Agreement or the Support Agreement by the
Company; (ii) the performance by the Company of its covenants and obligations under this Agreement and the Support Agreement; or (iii) subject to the receipt of the Requisite Stockholder Approval, the effectuation of the Charter Amendment and the
consummation of the Merger. This Agreement and the Support Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by Parent and Merger Sub and the Support Agreement
by the applicable Supporting Stockholder, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability (A) may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally; and (B) is subject to general principles of equity.
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Section 3.3 Company Special Committee Approval; Fairness
Opinion; Anti-Takeover Laws.
(a) Company Special Committee Approval. The Company Board has
duly established the Company Special Committee and has granted and vested in it the power and authority of the Company Board to review, evaluate, negotiate, approve and adopt a transaction, including taking the actions set forth in the next sentence.
The Company Special Committee has (i) determined that this Agreement, the Rollover Agreement, Support Agreement and the transactions contemplated hereby and thereby, including the Charter Amendment and the Merger, are advisable, fair to and in the
best interests of the Company and its stockholders (other than the Rollover Stockholders); (ii) adopted this Agreement and approved and declared advisable this Agreement, the Rollover Agreement, the Support Agreement and the transactions contemplated
by this Agreement, including the Charter Amendment and the Merger; (iii) approved the execution and delivery of this Agreement and the Support Agreement by the Company, the performance by the Company of its covenants and other obligations in this
Agreement and the Support Agreement, the effectuation of the Charter Amendment and the consummation of the Merger upon the terms and subject to the conditions set forth in this Agreement; (iv) resolved, subject to Section 5.4, to submit this Agreement and the Merger and the Charter Amendment to a vote of the Company Stockholders at a meeting of the Company Stockholders; (v) resolved, subject to Section 5.4, to recommend that the Company Stockholders vote in favor of the approval of this Agreement and the Merger and the approval of the Charter Amendment in accordance with
the NRS (clause (v), the “Company Recommendation”), which Company Recommendation has not been withdrawn, rescinded or modified in any way as of the date hereof; and
(vi) resolved to exercise the proxy granted pursuant to the Support Agreement at any such meeting of the Company Stockholders in accordance with the terms and conditions of the Support Agreement.
(b) Fairness Opinion. The Company Special Committee received
the written opinion (or an oral opinion to be confirmed in writing) of the Company Special Committee Financial Advisor to the effect that, as of the date of such opinion and based upon and subject to the various matters, limitations, conditions,
qualifications and assumptions set forth therein, the Per Share Price to be received by the holders of shares of the Company Common Stock (other than the holders of the Rollover Shares with respect to such shares) in the Merger pursuant to this
Agreement is fair, from a financial point of view, to such holders of shares of the Company Common Stock. The Company shall, promptly following the execution and delivery of this Agreement, furnish a true, correct and complete written copy of such
opinion to Parent on a non-reliance basis and solely for informational purposes.
(c) Anti-Takeover Laws. The Company Special Committee has
taken all necessary actions so that the restrictions on business combinations set forth in the Charter and any other applicable “anti-takeover” Law (including, without limitation, NRS 78.378 to 78.3793, inclusive, and NRS 78.411 to 78.444, inclusive)
will not be applicable to this Agreement, the Rollover Agreement, the Support Agreement, the transactions contemplated hereby and thereby, including the Merger.
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Section 3.4 Requisite Stockholder Approval.
(a) Statutory Stockholder Approvals. The affirmative vote of
the holders of a majority of the voting power of the outstanding shares of Company Common Stock (voting together as a single class, with the holders of Company Common Stock entitled to one vote for each share of Company Class A Common Stock and five
votes for each share of Company Class B Common Stock, held by them) entitled to vote on this Agreement and the Merger and the affirmative vote of the holders of a majority of the outstanding shares of Company Class B Common Stock (voting as a single
class) entitled to vote on this Agreement and the Merger (collectively, the “Statutory Merger Stockholder Approvals”) are the only votes of the holders of any class
or series of Company Capital Stock that is required pursuant to applicable Law, the Charter or the Bylaws to consummate the Merger. The affirmative vote of the holders of a majority of the voting power of the outstanding shares of Company Common
Stock (voting together as a single class, with the holders of Company Common Stock entitled to one vote for each share of Company Class A Common Stock, and five votes for each share of Company Class B Common Stock, held by them) entitled to vote on
the Charter Amendment, the affirmative vote of the holders of a majority of the outstanding shares of Company Class A Common Stock (voting as a single class) entitled to vote on the Charter Amendment and the affirmative vote of the holders of a
majority of the outstanding shares of Company Class B Common Stock (voting as a single class) entitled to vote on the Charter Amendment (collectively, the “Statutory Charter
Amendment Stockholder Approvals,” and together with the Statutory Merger Stockholder Approvals, the “Statutory Stockholder Approvals”) are the only votes of
the holders of any class or series of Company Capital Stock that are required pursuant to applicable Law, the Charter or the Bylaws to consummate the Charter Amendment.
(b) Additional Approval Condition. In addition, the Merger
shall be subject to the consent of the holders of a majority of the outstanding shares of Company Common Stock (excluding shares of Company Common Stock held by the Rollover Stockholders, any Family Member, Permitted Entity or Permitted Trust (each
as defined in the Charter) of Max L. Fuller or William Eric Fuller, Parent and their respective Affiliates and the directors and executive officers of the Company), with each holder of Company Common Stock entitled for this purpose to cast a number
of consents equal to the number of shares of Company Class A Common Stock and/or Company Class B Common Stock held by such holder, for purposes of the granting of this approval (the “Additional Approval Condition”).
Section 3.5 Non-Contravention. The execution and
delivery of this Agreement and the Support Agreement by the Company, the performance by the Company of its covenants and obligations under this Agreement and the Support Agreement, and the effectuation of the Charter Amendment and the consummation of
the Merger and the other transactions contemplated by this Agreement and the other Transaction Documents will not (a) violate or conflict with any provision of the Charter or the Bylaws or the equivalent organizational or governing documents of any
Subsidiary of the Company; (b) violate, conflict with, result in the breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) pursuant to, require any consent by any Person under, result in the
termination of, accelerate the performance required by, result in the loss of a benefit under, or result in a right of termination or acceleration pursuant to any Contract to which the Company or any of its Subsidiaries is a party or by which any of
their respective properties or assets are bound; (c) assuming compliance with the matters referred to in Section 3.6 and, in the case of the effectuation of the Charter
Amendment and the consummation of the Merger, subject to obtaining the Requisite Stockholder Approval, violate or conflict with any Law applicable to the Company or any of its Subsidiaries or by which any of their respective properties or assets are
bound; or (d) result in the creation of any lien (other than Permitted Liens) upon any of the properties or assets of the Company or any of its Subsidiaries, except in the case of each of clauses (b), (c) and (d) for such violations, conflicts,
breaches, defaults, consents, terminations, accelerations, loss of benefits or liens that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
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Section 3.6 Requisite Governmental Approvals. No
Consent, authorization of, filing or registration with, or notification to any Governmental Authority is required on the part of the Company in connection with the (a) execution and delivery of this Agreement or the Support Agreement by the Company;
(b) performance by the Company of its covenants and obligations pursuant to this Agreement or the Support Agreement; or (c) effectuation of the Charter Amendment and consummation of the Merger and the other transactions contemplated by this Agreement
and the other Transaction Documents, except (i) the filing of the Articles of Merger and the Amended Company Charter Certificate with the Office of the Nevada Secretary of State; (ii)
such filings and approvals as may be required by any applicable federal or state securities Laws, including compliance with any applicable requirements of the Exchange Act, the NRS and the applicable rules and regulations of the SEC and the NYSE;
(iii) compliance with any applicable requirements of the HSR Act; and (iv) such other Consents the failure of which to obtain would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.7 Company Capitalization.
(a) Capital Stock and Related Matters.
(i) Authorized Capital Stock and Stock Reservation. The authorized capital stock of the Company consists of (A) 140,000,000
shares of Company Class A Common Stock; (B) 35,000,000 shares of Company Class B Common Stock; and (C) 9,333,333 shares of Company Preferred Stock. As of the Capitalization Date, the Company has reserved 7,984,327 shares of Company Class A Common
Stock for issuance pursuant to the Company Equity Plans.
(ii) Current Capitalization.
As of the Capitalization Date, (A) 36,678,357 shares of Company Class A Common Stock were issued and outstanding, of which no shares constituted Company Restricted Shares; (B) 15,897,077 shares of Company Class B Common Stock were issued and
outstanding; (C) no shares of Company Preferred Stock were issued and outstanding; (D) no shares of Company Class A Common Stock were held by the Company as treasury shares; (E) no shares of Company Class B Common Stock were held by the Company as
treasury shares; (F) Company Equity-Based Awards (other than Company Options) representing the right to receive up to 3,789,149 shares of Company Class A Common Stock were outstanding; (G) there are no Company Options to acquire shares of Company
Common Stock with an exercise price per share less than the Per Share Price outstanding; and (H) 2,300,000 shares of Company Class A Common Stock were reserved for issuance pursuant to the ESPP.
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(iii) Company Equity-Based Awards. Section 3.7(a)(iii) of the Company
Disclosure Letter sets forth a complete and accurate list as of the Capitalization Date of all Company Equity-Based Awards granted under any Company Equity Plan or otherwise, indicating, with respect to each Company Equity-Based Award the following
(as applicable): the holder’s name, the holder’s jurisdiction of residence, the type of award granted, the number of shares of Company Common Stock subject to such award (with the target and maximum number of shares of Company Common Stock subject
to such award of Company PSUs), the Company Equity Plan under which such award was granted, the exercise or purchase price, date of grant, date of modification, vesting commencement date, vesting schedule, vested and unvested status, single- or
double-trigger vesting provisions, whether such award is a nonqualified deferred compensation plan subject to Section 409A of the Code, and whether such award is intended to constitute an “incentive stock option” within the meaning of Section 422
of the Code.
(iv) Validity; No Other Issuances. All
outstanding shares of Company Common Stock are validly issued, fully paid, nonassessable and free of any preemptive rights. Since the close of business on the Capitalization Date until the date of this Agreement, the Company has not issued or granted
any Company Securities other than pursuant to the exercise, vesting, or settlement of Company Equity-Based Awards granted prior to the date of this Agreement, or the conversion of shares of Company Class B Common Stock into shares of Company Class A
Common Stock pursuant to the terms of the Charter.
(b) No Other Company Securities. As of the Capitalization
Date there were (i) no outstanding shares of capital stock of, or other equity or voting interest in, the Company; (ii) no outstanding securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock
of, or other equity or voting interest (including any voting debt) in, the Company; (iii) no outstanding options, warrants or other rights or binding arrangements to acquire from the Company or any of its Subsidiaries, or that obligate the Company or
any of its Subsidiaries to issue, any capital stock of, or other equity or voting interest (including any voting debt) in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest
(including any voting debt) in, the Company; (iv) no obligations of the Company or any of its Subsidiaries to grant, extend or enter into any subscription, warrant, right, convertible, exchangeable or exercisable security, or other similar Contract
relating to any capital stock of, or other equity or voting interest (including any voting debt) in, the Company; (v) no outstanding shares of restricted stock, restricted stock units, stock appreciation rights, performance shares, contingent value
rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other securities or ownership interests in, the Company
(the items in clauses (i), (ii), (iii), (iv) and (v), collectively with the Company Capital Stock, the “Company Securities”); (vi) no voting trusts, proxies or
similar arrangements or understandings to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of, or other equity or voting
interest (including any voting debt) in, the Company; (vii) no obligations or binding commitments of any character restricting the transfer of any shares of capital stock of, or other equity or voting interest (including any voting debt) in, the
Company to which the Company or any of its Subsidiaries is a party or by which it is bound; and (viii) no other obligations by the Company or any of its Subsidiaries to make any cash settlements or payments based on the price or value of any Company
Securities. Subject to the terms of the Charter, neither the Company nor any of its Subsidiaries is a party to any Contract that obligates it to repurchase, redeem or otherwise acquire any Company Securities. There are no accrued and unpaid dividends
with respect to any outstanding shares of Company Capital Stock. The Company does not have a stockholder rights plan in effect.
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(c) No Other Rights. Neither the Company nor any of its
Subsidiaries is a party to any Contract relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to any Company Securities.
Section 3.8 Subsidiaries.
(a) Subsidiaries. Section 3.8(a) of the Company Disclosure
Letter contains a true, correct and complete list of the name and jurisdiction of organization or formation of each Subsidiary of the Company and any joint ventures, partnerships, portfolio companies or similar arrangements in which the Company or
its Subsidiaries has a limited liability, partnership or other equity interest (and the amount and percentage of any such interest). Each Subsidiary of the Company has the requisite corporate or entity power and authority to own, lease or operate its
respective properties and assets and to carry on its respective business as it is presently being conducted. Each Subsidiary of the Company is duly qualified to do business and is in good standing in each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. The Company has made available to Parent true, correct and complete copies of the
certificates of incorporation, bylaws and other similar organizational documents of each Subsidiary of the Company, each as amended to date. No Subsidiary of the Company is in violation of its charter, bylaws or other similar organizational
documents, except for such violations that would not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) Capital Stock of Subsidiaries. All of the outstanding
capital stock of, or other equity or voting interest in, each Subsidiary of the Company (i) has been duly authorized, validly issued and is fully paid and nonassessable (to the extent such concepts are applicable and recognized); and (ii) except as
set forth on Section 3.8(b) of the Company Disclosure Letter, is owned, directly or indirectly, by the Company, free and clear of all liens (other than Permitted Liens) and any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other equity interest (including any voting debt) that would prevent such Subsidiary from conducting its business as of the Effective Time in substantially the same manner that such business is conducted as on the date of this
Agreement.
(c) No Other Interests in Subsidiaries. There are no
outstanding (i) securities convertible into or exchangeable or exercisable for shares of capital stock of, or other equity or voting interest (including any voting debt) in, any Subsidiary of the Company; (ii) options, warrants or other rights or
arrangements obligating the Company or any of its Subsidiaries to acquire or redeem from any Subsidiary of the Company, or that obligate the Company or any Subsidiary of the Company to issue, any capital stock of, or other equity or voting interest
(including any voting debt) in, or any securities convertible into or exchangeable for, shares of capital stock of, or other equity or voting interest (including any voting debt) in, any Subsidiary of the Company; or (iii) obligations of the Company
or any Subsidiary of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security, or other similar Contract relating to any capital stock of, or other equity or voting interest (including any
voting debt) in, any Subsidiary of the Company to any Person other than the Company or one of its wholly owned Subsidiaries.
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(d) Other Investments. Other than equity securities held in
the ordinary course of business for cash management purposes or in Subsidiaries of the Company, neither the Company nor any of its Subsidiaries owns or holds the right to acquire any equity securities, ownership interest or voting interests of, or
securities exchangeable or exercisable therefor, or investments in, any other Person that is not a wholly owned Subsidiary of the Company.
Section 3.9 Company SEC Reports. The Company has
filed with or furnished to the SEC all forms, reports and documents that have been required to be filed by it pursuant to applicable Laws since the Lookback Date and prior to the date of this Agreement (such forms, reports and documents, the “Company SEC Reports”). Each Company SEC Report complied, as of its filing date, or, if amended or superseded by a subsequent filing made prior to the date of this
Agreement, as of the date of the last such amendment or superseding filing prior to the date of this Agreement, in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect
on the date that such Company SEC Report was filed. As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing), each Company SEC Report did not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No Subsidiary of the Company is required to
file any forms, reports or documents with the SEC. As of the date hereof, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Company SEC Reports. As of the date hereof, none of the Company SEC
Reports (other than confidential treatment requests) is, to the Company’s Knowledge, the subject of ongoing SEC review.
Section 3.10 Company Financial Statements; Internal
Controls; Indebtedness.
(a) Company Financial Statements. The consolidated financial
statements (including any related notes and schedules) of the Company and its Subsidiaries filed with the Company SEC Reports (i) were prepared in accordance with GAAP (except as may be indicated in the notes thereto or as otherwise permitted by Form
10-Q or other rules and regulations of the SEC); and (ii) fairly present, in all material respects, the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and the consolidated results of operations and cash
flows for the periods then ended (except, with respect to unaudited quarterly financial statements, subject to normal year-end audit adjustments, which adjustments would not be material, individually or in the aggregate). Except as have been
described in the Company SEC Reports, there are no unconsolidated Subsidiaries of the Company or any off-balance sheet arrangements of the type required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K promulgated by the SEC.
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(b) Disclosure Controls and Procedures. The Company has
established and maintains “disclosure controls and procedures” and “internal control over financial reporting” (in each case as defined pursuant to Rule 13a-15 and Rule 15d-15 promulgated under the Exchange Act). The Company’s disclosure controls and
procedures are reasonably designed to provide reasonable assurance that all (i) material information required to be disclosed by the Company in the reports and other documents that it files or furnishes pursuant to the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the rules and forms of the SEC; and (ii) such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding
required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Company’s management has completed an assessment of the effectiveness of the Company’s internal control over financial
reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the fiscal year ended December 31, 2022, and such assessment concluded that such system was effective. The Company’s independent registered public accounting
firm has issued (and not subsequently withdrawn or qualified) an attestation report concluding that the Company maintained effective internal control over financial reporting as of December 31, 2022. Since the Lookback Date, and through the date of
this Agreement, to the Knowledge of the Company, no events have occurred such that management would not be able to complete its assessment of the effectiveness of the Company’s internal control over financial reporting in compliance with the
requirements of Section 404 of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022, and conclude, after such assessment, that such system was effective. Each of the principal executive officer and principal financial officer of the
Company has made all certifications required by the Sarbanes-Oxley Act to be made by him or her. Neither the Company nor its principal executive officer or principal financial officer has received written notice from any Governmental Authority
challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(c) Internal Controls. The Company has established and
maintains a system of internal accounting controls that are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Neither the Company nor, to
the Knowledge of the Company, the Company’s independent registered public accounting firm has identified or been made aware of (A) any significant deficiency or material weakness (each as defined in Rule 13a-15(f) of the Exchange Act) in the system
of internal control over financial reporting utilized by the Company and its Subsidiaries that has not been subsequently remediated; or (B) any fraud that involves the Company’s management or other employees who have a role in the preparation of
financial statements or the internal control over financial reporting utilized by the Company and its Subsidiaries.
(d) Indebtedness. Section 3.10(d) of the Company Disclosure
Letter contains a true, correct and complete list of all Indebtedness of the Company and its Subsidiaries as of March 17, 2023.
Section 3.11 No Undisclosed Liabilities. Neither
the Company nor any of its Subsidiaries has any liabilities of a nature required to be reflected or reserved against on a balance sheet (or the notes thereto) prepared in accordance with GAAP, other than liabilities (a) reflected or otherwise
reserved against in the Audited Company Balance Sheet or in the consolidated financial statements of the Company and its Subsidiaries (including the notes thereto) included in the Company SEC Reports filed prior to the date of this Agreement; (b)
arising pursuant to this Agreement or incurred in connection with the Merger; (c) incurred in the ordinary course of business on or after January 1, 2022 (none of which is a material Legal Proceeding or material obligation or liability which results
from or was caused by any breach of Contract); or (d) that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
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Section 3.12 Absence of Certain Changes.
(a) No Company Material Adverse Effect. Since January 1, 2022
through the date of this Agreement, there has not occurred a Company Material Adverse Effect.
(b) Business Operations. Since January 1, 2022, through the
date of this Agreement, (i) the business of the Company and its Subsidiaries has been conducted, in all material respects, in the ordinary course of business; and (ii) the Company has not taken any action that, if taken or proposed to be taken after
the date of this Agreement, would be prohibited by Section 5.2(a), Section 5.2(b), Section 5.2(d), Section 5.2(e), Section 5.2(f),
Section 5.2(g), Section 5.2(h), Section
5.2(j), Section 5.2(l), Section 5.2(m), Section 5.2(n) and Section 5.2(o).
Section 3.13 Material Contracts.
(a) Material Contracts. Section 3.13(a) of the Company
Disclosure Letter contains a true, correct and complete list of all Material Contracts to or by which the Company or any of its Subsidiaries is a party or is bound as of the date hereof and the Company has made available to Parent a true, correct and
complete copy of each such Material Contract.
(b) Validity. Each Material Contract is valid and binding on
the Company or each such Subsidiary of the Company party thereto and, to the Company’s Knowledge, each other party thereto and is in full force and effect and to the Company’s Knowledge is enforceable against each party thereto, except for such
failures to be in full force and effect that would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. None of the Company, any of its Subsidiaries party thereto nor, to the Knowledge of the
Company, any other party thereto, is in breach of or default pursuant to any Material Contract, and neither the Company nor, to the Knowledge of the Company, any other Person that is a party to a Material Contract has taken or failed to take any
action that with or without notice, lapse of time or both would reasonably be expected to constitute a material breach of or default under any Material Contract or give rise to a right to terminate or modify in any material respect any Material
Contract, except in any such event as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect. Since December 31, 2021 to of the date of this Agreement, the Company has not waived in writing any
rights under any Material Contract, the waiver of which would have, individually or in the aggregate, a Company Material Adverse Effect. Since December 31, 2021 to of the date of this Agreement, the Company has not received any written notice
alleging any material violation or breach or default by the Company or its applicable Subsidiary under any Material Contract that has not since been resolved or cured. To the Knowledge of the Company, since December 31, 2021 to the date hereof, the
Company has not received any notice in writing from or on behalf of any party to a Material Contract indicating that such party intends to terminate, or not renew, any such Material Contract.
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Section 3.14 Government Contracts. Since the
Lookback Date, neither the Company nor its Subsidiaries have (a) materially breached any Government Contract; (b) been suspended or debarred from bidding on government contracts by a Governmental Authority; (c) been audited or investigated by any
Governmental Authority with respect to any Government Contract; (d) conducted or initiated any internal investigation or made any material disclosure with respect to any alleged or potential irregularity, misstatement or omission arising under or
relating to a Government Contract; (e) received from any Governmental Authority or any other Person any written notice of breach, cure, show cause or default with respect to any Government Contract; or (f) had any Government Contract terminated by
any Governmental Authority or any other Person for default or failure to perform. The Company and its Subsidiaries have established and maintain reasonably adequate internal controls for compliance with their respective Government Contracts. There
are no material outstanding claims or disputes in connection with any of the Company’s or any of its Subsidiaries’ Government Contracts. To the Knowledge of the Company, there are no outstanding or unsettled allegations of fraud, false claims or
overpayments nor any investigations or audits by any Governmental Authority with regard to any of the Company’s or its Subsidiaries’ Government Contracts.
Section 3.15 Real Property.
(a) Owned Real Property. Section 3.15(a) of the Company
Disclosure Letter sets forth a true and complete list of all real property owned in fee by the Company or any of its Subsidiaries as of the date hereof (collectively, the “Company
Owned Real Property”) and the address for each parcel of Company Owned Real Property. The Company or any of its Subsidiaries, as the case may be, holds good and valid fee simple title to the Company Owned Real Property, free and clear of all
liens, except for Permitted Liens.
(b) Leased Real Property. Section 3.15(b) of the Company
Disclosure Letter sets forth (i) a true and complete list of all real property leased, subleased or otherwise occupied pursuant to a similar agreement (expressly excluding easements, rights of way and similar agreements) by the Company or any of its
Subsidiaries as of the date hereof (collectively, the “Company Leased Real Property”), and (ii) the address for each parcel of Company Leased Real Property. Each
lease, sublease, or other occupancy agreement with respect to the Company Leased Real Property, including all amendments thereto (collectively the “Leased Real Property
Leases”) is in full force and effect, and the Company Leased Real Property is not subject to any liens, other than Permitted Liens. The Company or any of its Subsidiaries, as the case may be, holds a good and valid leasehold estate in all
Company Leased Real Property pursuant to the Leased Real Property Leases, and the Company Leased Real Property is not subject to any liens, other than Permitted Liens. As of the date hereof, the Company has delivered to or made available to Parent a
true and complete copy of each Leased Real Property Lease.
(c) Landlord Leases. Section 3.15(c) of the Company
Disclosure Letter contains a complete and accurate list of each Landlord Lease to which the Company or any of its Subsidiaries is a party as of the date hereof, the Company or Subsidiary that is party thereto, and the portion of the Company Real
Property that is leased or subleased pursuant thereto.
(d) Compliance. Except as has not had and would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each parcel of Company Real Property is in compliance with all existing Laws applicable to such Company Real Property, (ii) neither the Company
nor any of its Subsidiaries has received written notice of any Legal Proceedings in eminent domain, condemnation or other similar Legal Proceedings that are pending, (iii) to the Knowledge of the Company, there are no such Legal Proceedings
threatened affecting any portion of the Company Real Property, and (iv) no casualty event has occurred with respect to all or any portion of the Company Real Property that has not been fully remedied in all material respects. No Person has been
granted the right to lease or sublease all or any portion of the Company Real Property, except pursuant to Landlord Leases.
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(e) Title. The Company or a Subsidiary of the Company has
good and marketable title to, or a valid and binding leasehold or other interest in, all tangible personal property necessary for the conduct of the business of the Company and its Subsidiaries, taken as a whole, as currently conducted, free and
clear of all liens (except for Permitted Liens) except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 3.16 Environmental Matters. Except as
would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a whole, neither the Company nor any of its Subsidiaries (a) has failed to comply with any Environmental Law; (b) has
received any written notice, report or other information alleging that the Company or any Subsidiary has violated, or has any liability under, any applicable Environmental Law; (c) has transported, distributed, produced, processed, manufactured,
generated, used, treated, handled, stored, released, disposed or arranged for the disposal of any Hazardous Substances in violation of, or as has given or would reasonably be expected to give rise to liability under, any applicable Environmental Law;
(d) has exposed any employee or other Person to Hazardous Substances or otherwise owned, leased or operated any real property (including any structures thereon) from which there has been a release of Hazardous Substances, in each case, in violation
of, or as has given or would reasonably be expected to give rise to liability under, any applicable Environmental Law; (e) is a party to or is the subject of any pending or, to the Knowledge of the Company, threatened Legal Proceeding that is (i)
alleging the noncompliance by the Company or any of its Subsidiaries with any Environmental Law; or (ii) seeking to impose any financial responsibility for any investigation, cleanup, removal or remediation pursuant to, or liability under, any
Environmental Law; (f) except for customary indemnification provisions in Material Contracts, has assumed, undertaken, provided an indemnity with respect to, or otherwise become subject to, the liability of any other Person under any Environmental
Law; or (g) is aware of any environmental site assessments or any other material documents or correspondence in the possession, custody or control of the Company or any of its Subsidiaries relating to Environmental Law with respect to compliance with
Environmental Law by the Company or its Subsidiaries (or any of their respective predecessors) or the environmental condition of any real property currently or formerly owned, leased or operated by the Company or any of its Subsidiaries (or any of
their respective predecessors) that have not been provided or made available to Parent.
Section 3.17 Intellectual Property; Privacy.
(a) Registered Intellectual Property; Proceedings. Section
3.17(a) of the Company Disclosure Letter sets forth a true, correct and complete list as of the date of this Agreement of all Company Registered Intellectual Property and material Internet domain name registrations registered by or in the name of the
Company or any of its Subsidiaries. Except as has not been and would not be material to the Company and its Subsidiaries, taken as a whole, all material Company Registered Intellectual Property is valid, subsisting, and enforceable.
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(b) Ownership. The Company and its Subsidiaries solely and
exclusively own all right, title, and interest, free and clear of all encumbrances other than Permitted Liens, in and to the Company Owned Intellectual Property and have a valid and enforceable license or other legal right to use all other material
Intellectual Property that is used in or necessary for the operation of the business of the Company and its Subsidiaries as currently conducted by the Company and its Subsidiaries (together with the Company Owned Intellectual Property, the “Company Intellectual Property”), except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) No Order. No material Company Owned Intellectual Property
is subject to any (i) pending or, to the Knowledge of the Company, threatened Legal Proceeding against the Company challenging the legality, validity, enforceability, or registrations thereof, except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, or (ii) outstanding order against the Company, in effect as of the date of this Agreement, prohibiting or materially restricting the Company from using, enforcing, exploiting, disposing of, transferring, or
licensing such material Company Owned Intellectual Property, except for any such prohibitions or restrictions that would not reasonably be likely to, individually or in the aggregate, have a Company Material Adverse Effect.
(d) No Infringement. The operation of the business as
presently conducted is not infringing (i) any present Intellectual Property rights (excluding patent rights) of any third party and (ii) to the Knowledge of the Company, any present patent rights of any third party, except, where such infringement
has not been and would not be material to the Company and its Subsidiaries, taken as a whole. To the Knowledge of the Company, no third party is infringing, diluting, violating, or misappropriating the Company Owned Intellectual Property, except, in
each case, where such infringement, dilution, violation, or misappropriation, has not been and would not be material to the Company and its Subsidiaries, taken as a whole. Except as has not been and would not be material to the Company and its
Subsidiaries, taken as a whole, no employee of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any outside contractor of the Company or any of its Subsidiaries have in the 12-month period prior to the date of this
Agreement misappropriated any Trade Secrets or other confidential information of any other Person in the course of the performance of his or her duties as an employee or outside contractor of the Company or any of its Subsidiaries.
(e) IP Protection. Except as has not been and would not be
material to the Company and its Subsidiaries, taken as a whole, the Company and its Subsidiaries take commercially reasonable steps designed to maintain and protect the material Company Owned Intellectual Property, including the secrecy, value, and
confidentiality of all Trade Secrets included in the material Company Owned Intellectual Property.
(f) Information Technology. Except as has not been and would
not be material to the Company and its Subsidiaries, taken as a whole, the Company IT Assets (i) are adequate for, and operate and perform in all material respects in connection with, the Company’s and its Subsidiaries’ business as it is currently
conducted, (ii) to the Knowledge of the Company, are free from material bugs, errors or other defects, (iii) have not materially malfunctioned, crashed, failed or experienced continued substandard performance since the Lookback Date, and (iv) to the
Knowledge of the Company, do not contain any virus, malware, ransomware, Trojan horse, worm, back door, time bomb, drop dead device, spyware or adware, or similar devices. The Company and each of its Subsidiaries have implemented data backup,
information technology security, business continuity, and disaster recovery measures a consistent with commercially reasonable practices, except, in each case, where a failure to implement such measures has not been and would not be material to the
Company and its Subsidiaries, taken as a whole.
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(g) Privacy, Data Protection and Data Security. The Company
and its Subsidiaries comply with, and have since the Lookback Date complied, in all material respects with: (i) its internal and external privacy and data security policies, (ii) applicable industry standards concerning the Processing of Personal
Information and codes of conduct, including the Payment Card Industry Data Security Standard (PCI DSS), (iii) all applicable Privacy Laws, and (v) all material contractual obligations of the Company and its Subsidiaries concerning information
security and data privacy (collectively, the “Data Privacy/Security Requirements”), except, in each case, where any non-compliance, has not been, and would not be
material to the Company and its Subsidiaries, taken as a whole. To the Knowledge of the Company, all vendors, processors, subcontractors and other Persons acting for or on behalf of the Company and its Subsidiaries in connection with the Processing
of Personal Information or that otherwise have been authorized to have access to the Company IT Assets or the Personal Information in the possession or control of the Company and its Subsidiaries comply with, and have since the Lookback Date
complied, with the Data Privacy/Security Requirements. To the Knowledge of the Company, neither the negotiation nor consummation of the transactions contemplated by this Agreement, nor any disclosure or transfer of Personal Information in connection
therewith, will breach or otherwise cause any violation of any Data Privacy/Security Requirement or require the consent, waiver or authorization of, or declaration, filing or notification to, any Person under any such Data Privacy/Security
Requirement. Except as has not been and would not be material to the Company and its Subsidiaries, taken as a whole, there are no, and have not been since the Lookback Date, any Legal Proceedings pending by or threatened in writing against the
Company or any of its Subsidiaries concerning any Data Privacy/Security Requirement or compliance therewith or violation thereof.
(h) Security Breaches. Except as has not been and would not
be material to the Company and its Subsidiaries, taken as a whole, since the Lookback Date, to the Knowledge of the Company: (i) there has been no loss, damage, misuse or unauthorized use, access, modification, destruction, or disclosure, or other
breach of security of the Personal Information maintained by or on behalf of the Company or any of its Subsidiaries (including, but not limited to, any event that would give rise to a breach or incident for which notification by the Company or any of
its Subsidiaries to individuals and/or Governmental Authorities is required under Data Privacy/Security Requirements); and (ii) there have been no material breaches or unauthorized access or use by any third-party of the Personal Information
Processed by any Company IT Asset used and controlled by the Company or any of its Subsidiaries.
Section 3.18 Tax Matters.
(a) Tax Returns, Payments and Reserves. The Company and each
of its Subsidiaries have (i) timely filed (taking into account valid extensions) all income and other material Tax Returns required to be filed by any of them and all such Tax Returns were, at the time of filing, and remain true and complete in all
material respects; and (ii) paid, or have reserved in accordance with GAAP for the payment of, all income and other material Taxes that are required to be paid. The most recent financial statements contained in the Company SEC Reports reflect a
reserve in accordance with GAAP for all material Taxes accrued but not then payable by the Company and its Subsidiaries through the date of such financial statements.
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(b) No Waivers. Neither the Company nor any of its
Subsidiaries has executed any waiver of any statute of limitations on, or extended the period for the assessment or collection of, any material Tax, in each case that has not since expired. There is no agreement with any Governmental Authority to any extension of time for filing any Tax Return of the Company or any of its Subsidiaries which has not been filed, other than automatic extensions of time to file such Tax Returns obtained
in the ordinary course of business.
(c) Withholding Taxes. The Company and each of its
Subsidiaries have (i) withheld all material Taxes required to be withheld; and (ii) timely paid over any amounts so withheld to the appropriate Tax authority.
(d) No Audits. No deficiencies, claims, investigations,
proceedings, audits or other examinations with respect to material Taxes of the Company or any of its Subsidiaries are presently in progress or have been asserted or proposed in writing. Since the Lookback Date, no written claim has been made by a
Governmental Authority in a jurisdiction in which the Company or any of its Subsidiaries does not file Tax Returns that the Company or such Subsidiary, as the case may be, is or may be subject to tax in that jurisdiction.
(e) No Spin-offs. During the two years prior to the date of
this Agreement, neither the Company nor any of its Subsidiaries has constituted (i) either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment pursuant to Section 355 of the
Code or (ii) distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 361 of the Code.
(f) No Listed Transactions. Neither the Company nor any of
its Subsidiaries has engaged in a “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).
(g) No Tax Agreements. Neither the Company nor any of its
Subsidiaries (i) is a party to or bound by, or currently has any material liability pursuant to, any Tax sharing, allocation or indemnification agreement or obligation, other than any such agreement or obligation (A) entered into in the ordinary
course of business the primary purpose of which is unrelated to Taxes or (B) solely by and among any of the Company and its Subsidiaries; (ii) has been a member of a consolidated, combined, unitary or aggregate group of which the Company was not the
common parent; (iii) is a party to or bound by any “closing agreement” described in Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law); or (iv) has any material liability for the Taxes of any Person other than the
Company and its Subsidiaries pursuant to Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Law) or as a transferee or successor.
(h) COVID Relief. Neither the Company nor any of its
Subsidiaries has (i) any Deferred Payroll Taxes, (ii) received any credits under Sections 7001 through 7005 of the Families First Coronavirus Response Act or Section 2301 of the CARES Act, or (iii) otherwise availed itself of any COVID-19 relief
measures that would reasonably be expected to impact the Tax payment and/or reporting obligations of the Company or any of its Subsidiaries after the Closing.
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(i) Liens. There are no liens for Taxes on any assets of the
Company or any of its Subsidiaries, other than liens for Taxes not yet delinquent.
(j) Post-Closing Tax Periods. Neither the Company nor any of
its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the Closing Date as a result of any (i) adjustment
under Section 481 of the Code (or any similar provision of state, local or non-U.S. Law) required as a result of a change in method of accounting made prior to the Closing, (ii) “closing agreement” as described in Section 7121 of the Code (or any
similar provision of state, local or non-U.S. Law) executed prior to the Closing, (iii) installment sale or open transaction disposition made prior to the Closing, (iv) prepaid or deposit amount received, or deferred revenue accrued, prior to the
Closing, (v) any “intercompany transaction” effected prior to the Closing or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state, local or non-U.S. Law) or (vi) the application
of Section 1400Z-2 or Section 965 of the Code.
(k) Transfer Pricing. The Company and each of its
Subsidiaries are in compliance in all material respects with all applicable transfer pricing Laws and regulations (including, for the avoidance of doubt, Section 482 of the Code and the Treasury Regulations promulgated thereunder (and any
corresponding provision of state, local or non-U.S. Law, as applicable)).
(l) Permanent Establishments. Neither the Company nor any of
its Subsidiaries has a permanent establishment, fixed place of business or other nexus in a jurisdiction other than the jurisdiction in which it is tax resident.
Section 3.19 Employee Plans.
(a) Company Benefit Plans. Section 3.19(a) of the Company
Disclosure Letter sets forth, as of the date of this Agreement, a true, complete and correct list of each material Company Benefit Plan. With respect to each material Company Benefit Plan, to the extent applicable, the Company has made available to
Parent true, correct and complete copies of (i) the most recent annual report on Form 5500 required to have been filed with the IRS for each Company Benefit Plan; (ii) the most recent determination letter, if any, from the IRS for any Company Benefit
Plan that is intended to qualify pursuant to Section 401(a) of the Code; (iii) the current plan documents (including all amendments thereto) and summary plan descriptions; (iv) any related trust agreements; and (v) any notices or non-routine
correspondence to or from the IRS, the United States Department of Labor or any Governmental Authority relating to any Company Benefit Plan dated within the past three years.
(b) Absence of Certain Plans. Neither the Company nor any of
its ERISA Affiliates has previously maintained, sponsored or contributed to (or been required to contribute to) or currently maintains, sponsors or participates in, or contributes to (or is required to contribute to), (i) a “multiemployer plan” (as
defined in Section 3(37) of ERISA); (ii) a “multiple employer plan” (as defined in Section 4063 or Section 4064 of ERISA); (iii) a defined benefit pension plan (whether or not subject to ERISA) or any plan subject to Section 302 of Title I of ERISA,
Section 412 of the Code or Title IV of ERISA; or (iv) an International Employee Plan.
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(c) Compliance. Each Company Benefit Plan has been
maintained, funded, operated and administered in all material respects in accordance with its terms and with all applicable Law, including the applicable provisions of ERISA, the Code and any applicable regulatory guidance issued by any Governmental
Authority. Neither the Company nor any Subsidiary has incurred (whether or not assessed) any penalty or Tax under Sections 4980B, 4980D, 4980H, 6721 or 6722 of the Code and to the Knowledge of the Company, no circumstances exist or events have
occurred that could result in the imposition of any such penalties or Taxes. All contributions, premiums or other payments that are due have been paid on a timely basis with respect to each Company Benefit Plan or, to the extent not yet due, accrued
in accordance with GAAP. Each Company Benefit Plan that is intended to meet the requirements of a “qualified plan” under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that such Company Benefit
Plan meets the requirements of Section 401(a) of the Code and to the Knowledge of the Company, no event has occurred and no condition exists with respect to the form or operation of such Company Benefit Plan which would reasonably be expected to
cause the loss of such qualification or exemption or the imposition of any material liability, penalty or tax under ERISA or the Code.
(d) Company Benefit Plan Legal Proceedings. Except as would
not result in material liability to the Company and its Subsidiaries, taken as a whole, there are no claims, disputes or Legal Proceedings pending or, to the Knowledge of the Company, threatened on behalf of or against any Company Benefit Plan, the
assets of any trust pursuant to any Company Benefit Plan, or the plan sponsor, plan administrator or any fiduciary or any Company Benefit Plan with respect to the administration or operation of such plans, other than routine claims for benefits that
have been or are being handled through an administrative claims procedure.
(e) No Prohibited Transactions. Except as could not result in
a material liability to the Company and its Subsidiaries, taken as a whole, none of the Company, any of its Subsidiaries or, to the Knowledge of the Company, any of their respective directors, officers, employees or agents has, with respect to any
Company Benefit Plan, engaged in or been a party to any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA) that could reasonably be expected to result in the imposition of a penalty assessed pursuant
to Section 502(i) of ERISA or a Tax imposed by Section 4975 of the Code, in each case applicable to the Company, any of its Subsidiaries or any Company Benefit Plan, or for which the Company or any of its Subsidiaries has any indemnification
obligation.
(f) No Post-Employment or Retiree Welfare Benefits. No
Company Benefit Plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA) provides, nor does the Company or any Subsidiary have any current or potential obligation to provide post-employment or retiree life, health or other welfare
benefits to any person, except as may be required by Section 4980B of the Code or any similar Law for which the covered individuals pay the full premium cost of coverage.
(g) Section 280G. No payment or benefit that could be, or has
been, made to any Service Provider as a result of the execution of this Agreement or the transactions contemplated hereby (either alone or in combination with any other event) could be characterized as a parachute payment within the meaning of
Section 280G(b)(2) of the Code.
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(h) Gross-Ups. There is no contract, agreement, plan or
arrangement to which the Company or any of its Subsidiaries is bound to provide a gross-up or otherwise reimburse any Service Provider or other person for Taxes paid by such Service Provider or other person.
(i) Section 409A. Each Company Benefit Plan that constitutes
in any part a “nonqualified deferred compensation plan” (as defined under Section 409A(d)(1) of the Code) subject to Section 409A of the Code has been operated and administered in compliance with Section 409A of the Code.
(j) Consummation of the Transaction. Except as set forth on
Section 3.19(j) of the Company Disclosure Letter, neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated hereby or by the other Transaction Documents, either alone or in conjunction with any other
event, could (i) result in any payment (whether a payment of cash or payment of property) or benefit becoming due to any Service Provider, (ii) increase any compensation or benefits otherwise payable under any Company Benefit Plan or otherwise, (iii)
accelerate the timing of vesting, funding, delivery of, or payment, or increase the amount or value, of any payment or benefits to any Service Provider, or (iv) require a contribution by the Company or any of its Subsidiaries to any Company Benefit
Plan.
Section 3.20 Labor Matters.
(a) Union Activities. Neither the Company nor any of its
Subsidiaries is party to, bound by, or negotiating any collective bargaining agreement or other Contract (“Labor Agreements”) with any labor or trade union, works
council, or other labor organization (collectively, “Union”), and, to the Knowledge of the Company, no Union represents or purports to represent any employee of the
Company or its Subsidiaries. To the Knowledge of the Company, and for the past five years, no Union or group of employees is seeking, or has sought, to organize employees for the purpose of collective bargaining with the Company or any of its
Subsidiaries. There are, and for the past five years have been, no pending or, to the Knowledge of the Company, threatened material labor disputes or disruptions directed at the Company or any of its Subsidiaries. With respect to the transactions
contemplated by this Agreement, the Company and its Subsidiaries have no duty to notify or bargain with any Union.
(b) Employment Law Compliance. The Company and its
Subsidiaries are in compliance in all material respects with applicable Laws and Orders regarding labor relations, employment, and employment practices (including applicable Laws and Orders regarding terms and conditions of employment, wages and
hours of work, minimum wage and overtime compensation, meal and break periods, employee and independent contractor classification, immigration and employment authorization, hiring, equal employment opportunity, discrimination, harassment,
retaliation, employee health and safety, collective bargaining, whistleblowing, disability rights or benefits, layoffs (including the WARN Act), employee trainings and notices, workers’ compensation, leaves of absence, COVID-19, affirmative action
and unemployment insurance).
(c) Service Provider Payments. Except as would not result in
material liability for the Company and its Subsidiaries, taken as a whole, (i) the Company and each of its Subsidiaries have fully and timely paid, as applicable, all wages, salaries, overtime, wage premiums, commissions, bonuses, severance and
termination payments, fees, and other compensation that have come due and payable to their Service Providers under applicable Laws and Orders, Contract or Company policy for services performed on or before the date hereof; and (ii) since the Lookback
Date, each Person classified and treated by the Company or any of its Subsidiaries as an independent contractor, consultant or other contingent worker has been properly treated as such under applicable Laws and Orders.
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(d) Sexual and Other Harassment. There are, and since the
Lookback Date have been, no Legal Proceedings pending or, to the Company’s Knowledge, threatened against the Company or any of its Subsidiaries regarding any allegations of sexual harassment, sexual misconduct, or other illegal harassment by any
current or former director, officer, employee, or independent contractor of the Company or any of its Subsidiaries. Since the Lookback Date, neither the Company nor any of its Subsidiaries have entered into any settlement agreements related to
allegations of sexual harassment, sexual misconduct, or other illegal harassment by any current or former director, officer, employee, or independent contractor of the Company or any of its Subsidiaries.
Section 3.21 Permits; Safety Rating.
(a) Except as would not have a Company Material Adverse Effect, as of the date of this Agreement, the Company and its Subsidiaries hold, to the
extent legally required, all Permits that are required for the operation of the business of the Company and its Subsidiaries as currently conducted (such Permits, the “Required
Permits”). Except as would not have a Company Material Adverse Effect, as of the date of this Agreement, (a) the Company and its Subsidiaries are in compliance with the terms of the Required Permits; and (b) no suspension or cancellation of
any of the Required Permits is pending or, to the Knowledge of the Company, threatened.
(b) Except as would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries, taken as a
whole: (i) the tractors and trailers operated by the Company or its Subsidiaries are properly licensed and registered with applicable authorities in accordance with applicable Laws, and such licenses and registrations are current; and (ii) since the Lookback Date, none of the Company or its Subsidiaries has received, in writing (and there is no proceeding pending or, to the Company’s Knowledge, threatened that
would reasonably be expected to result in), an unsatisfactory or conditional safety and fitness rating from the Federal Motor Carrier Safety Commission (the “FMCSA”),
or its predecessor, the Federal Highway Administration (the “FHWA”), as a result of a compliance review for any of the factors that are considered by the FMCSA or
FHWA.
Section 3.22 Compliance with Laws.
(a) General Compliance. Except as would not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse Effect, the Company and each of its Subsidiaries is, and since the Lookback Date, has been in compliance with all Laws that are applicable to the Company or its
Subsidiaries or to the conduct of the business or operations of the Company or its Subsidiaries.
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(b) Sanctions. Neither the Company, nor any Subsidiary, nor
any of their respective officers, directors or employees, nor, to the Knowledge of the Company, any agent or other third party representative acting on behalf of the Company or any Subsidiary is currently, or has been in the last five years (i) a
Sanctioned Person; or (ii) engaging in any dealings or transactions on behalf of the Company or any Subsidiary with, on behalf of, or for the benefit of any Sanctioned Person or in any Sanctioned Country during the period in which it was subject to
Sanctions.
(c) Export and Import Laws. Neither the Company, nor any
Subsidiary, is currently, or in the last five years has been, in violation of Laws related to the export or import of goods and services or of the U.S. anti-boycott Laws (“Ex-Im
Laws”) in any material respect.
(d) Anti-Bribery Laws. In the last five years, the Company
and each of its Subsidiaries, including each of their respective directors, officers or employees, and, to the Knowledge of the Company, each agent or other third party representative acting on behalf of the Company and each of its Subsidiaries, (i)
have materially complied with all applicable U.S. and non-U.S. Laws relating to the prevention of bribery and corruption and money laundering, including the FCPA (collectively, “Anti-Bribery Laws”); and (ii) have not made, offered, promised, authorized, or received any payment or gift of any money or anything of value to any “foreign official” (as defined by the FCPA), foreign political party or official
thereof, political campaign, or public international organization to unlawfully obtain business, direct business to any person, or secure an improper advantage, or otherwise in violation of any Anti-Bribery Laws.
(e) No Allegations, Investigations, or Claims. In the last
five years, the Company has not, in connection with or relating to the business of the Company or any Subsidiary, received from any Governmental Authority any written notice, or to the Company’s Knowledge, oral inquiry or allegation, and neither the
Company nor any Subsidiary has made any voluntary or involuntary disclosure to a Governmental Authority, or conducted any internal investigation or audit concerning any actual or potential violation or wrongdoing related to Sanctions, Ex-Im Laws or
Anti-Bribery Laws. There are no pending or, to the Company’s Knowledge, threatened claims against the Company or any Subsidiary with respect to Sanctions, Ex-Im Laws or Anti-Bribery Laws.
Section 3.23 Legal Proceedings; Orders.
(a) No Legal Proceedings. As of the date hereof, there are no
material Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or against any present or former officer, executive or director of the Company or any of its Subsidiaries in such
individual’s capacity as such.
(b) No Orders. Neither the Company nor any of its
Subsidiaries is subject to any Order of any kind or nature, except as would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.24 Insurance.
(a) Policies. Section 3.24 of the Company Disclosure Letter
sets forth a correct and complete list of all material insurance policies and self-insurance arrangements held by or for the benefit of the Company and any of its Subsidiaries. Except as
would not reasonably be expected to, individually or in the aggregate, have a Company Material Adverse Effect, the Company and its Subsidiaries maintain insurance coverage in such amounts and covering such risks as are in accordance in all
material respects with normal industry practice or as is required by Law, and all premiums due and payable thereon have been paid. Except as would not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect, each of the insurance policies and arrangements relating to the business, assets and operations of the Company and its Subsidiaries is in full force and effect.
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(b) No Cancellation. As of the date of this Agreement, except
as would not reasonably be expected to, individually or the in the aggregate, have a Company Material Adverse Effect, since the Lookback Date, neither the Company nor any of its Subsidiaries have received any written notice regarding any
cancellation, invalidation or material modification of any such insurance policy other than in connection with ordinary renewals, and there is no existing material default by any insured thereunder and there is no material claim pending under any of
the Company’s insurance policies as to which coverage has been questioned, denied or disrupted by the underwriters of such policies.
Section 3.25 Related Person Transactions. Except
for indemnification, compensation or other employment arrangements in the ordinary course of business, there are no Contracts, transactions, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any
Affiliate (including any director or officer) thereof, but not including any wholly owned Subsidiary of the Company, on the other hand, that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC in the
Company’s Form 10-K or proxy statement pertaining to an annual meeting of stockholders.
Section 3.26 Brokers. Except for the Company
Special Committee Financial Advisor, there is no financial advisor, investment banker, broker, finder, agent or other Person that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who is entitled to any
financial advisor, investment banking, brokerage, finder’s or other similar fee or commission in connection with the Merger. The Company has made available to Parent a true, correct and complete copy of the engagement letter with the Company Special
Committee Financial Advisor.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
Section 4.1 Organization; Good Standing.
(a) Parent. Parent (i) is a corporation duly organized,
validly existing and in good standing pursuant to the DGCL; and (ii) has the requisite corporate power and authority to conduct its business as it is presently being conducted and to own, lease or operate its properties and assets.
(b) Merger Sub. Merger Sub (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of Nevada; and (ii) has the requisite corporate power and authority to conduct its business as it is
presently being conducted and to own, lease or operate its properties and assets. Merger Sub has been formed solely for the purpose of engaging in the Merger and, prior to the Effective Time, Merger Sub will not have engaged in any other business
activities and will have incurred no material liabilities or obligations other than as contemplated by the Transaction Documents. Parent is the sole record and beneficial stockholder of Merger Sub.
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Section 4.2 Power; Enforceability. Each of Parent
and Merger Sub has the requisite corporate power and authority to (a) execute and deliver this Agreement; (b) perform its covenants and obligations under this Agreement; and (c) subject to receiving the Merger Sub Stockholder Approval, consummate the
Merger. The consummation of the Merger has been duly authorized by all necessary corporate or other action on the part of each of Parent and Merger Sub. This Agreement has been duly executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the Company, constitutes a legal, valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, except as such
enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally; and (ii) is subject to general principles of equity.
Section 4.3 Non-Contravention. The execution and
delivery of this Agreement by each of Parent and Merger Sub, the performance by each of Parent and Merger Sub of their respective covenants and obligations under this Agreement, and the consummation of the Merger and the other transactions
contemplated by this Agreement and the other Transaction Documents will not (a) violate or conflict with any provision of the certificate of incorporation, bylaws or other similar organizational documents of Parent or Merger Sub; (b) violate,
conflict with, result in the breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) pursuant to, or result in the termination of, or accelerate the performance required by, result in the loss
of a benefit under, or result in a right of termination or acceleration pursuant to any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which
Parent or Merger Sub is a party or by which Parent, Merger Sub or any of their properties or assets may be bound; (c) assuming the consents, approvals and authorizations referred to in Section
4.4 have been obtained and, in the case of the consummation of the Merger, subject to obtaining the Merger Sub Stockholder Approval, violate or conflict with any Law applicable to Parent or Merger Sub or by which any of their
properties or assets are bound; or (d) result in the creation of any lien (other than Permitted Liens) upon any of the properties or assets of Parent or Merger Sub, except in the case of each of clauses (b), (c) and (d) for such violations,
conflicts, breaches, defaults, terminations, accelerations, loss of benefits or liens that would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 4.4 Requisite Governmental Approvals. No
Consent of any Governmental Authority is required on the part of Parent, Merger Sub or any of their Affiliates in connection with the (a) execution and delivery of this Agreement by each of Parent and Merger Sub; (b) performance by each of Parent and
Merger Sub of their respective covenants and obligations pursuant to this Agreement; or (c) consummation of the Merger, except (i) the filing of the Articles of Merger with the Office of the Nevada Secretary of State; (ii) such filings and approvals
as may be required by any federal or state securities Laws, including compliance with any applicable requirements of the Exchange Act, the DGCL, the NRS and the applicable rules and regulations of the SEC and the NYSE; (iii) compliance with any
applicable requirements of the HSR Act; and (iv) such other Consents the failure of which to obtain would not, individually or in the aggregate, have a Parent Material Adverse Effect.
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Section 4.5 Legal Proceedings; Orders.
(a) No Legal Proceedings. As of the date hereof, there are no
Legal Proceedings pending or, to the knowledge of Parent or any of its Affiliates, threatened against Parent or Merger Sub, except as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
(b) No Orders. Neither Parent nor Merger Sub is subject to
any order of any kind or nature, except as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 4.6 Ownership of Company Capital Stock.
None of Parent, Merger Sub or any of their respective Subsidiaries or the “affiliates” or “associates” of any such Person is, and at no time during the last two years has been, an “interested stockholder” of the Company (in each case, as such terms
are defined in NRS Chapter 78). Neither Parent nor Merger Sub is a “stockholder of record” or “beneficial owner” (in each case, as such terms are defined in NRS Chapter 78) of any shares of capital stock of, or any security convertible or
exchangeable for any shares of capital stock of, the Company other than as a result of this Agreement.
Section 4.7 Brokers. No financial advisor,
investment banker, broker, finder, agent or other Person that has been retained by or is authorized to act on behalf of Parent, Merger Sub or any of their Affiliates who is entitled to any financial advisor, investment banking, brokerage, finder’s or
other similar fee or commission in connection with the Merger for which the Company or any of its Subsidiaries or stockholders would be liable.
Section 4.8 No Parent Vote or Approval Required.
No vote or consent of the holders of any capital stock of, or other equity or voting interest in, Parent is necessary to approve this Agreement or the Merger.
Section 4.9 Available Funds; Solvency. As of the
date hereof, Parent has available unrestricted cash and/or available borrowing under its existing revolving credit facility and at the Effective Time, Parent and Merger Sub will have available, all of the funds necessary in U.S. dollars to consummate
the Merger, to pay all fees and expenses in connection therewith, to make payments pursuant to Section 2.10 and to perform their respective obligations under this Agreement.
Parent and Merger Sub expressly acknowledge and agree that their obligations under this Agreement, including their obligations to consummate the Merger, and any other transactions contemplated by this Agreement, are not subject to, or conditioned on,
the receipt or availability of any funds or financing. Neither Parent nor Merger Sub is entering into this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or any of the Subsidiaries of the
Company. Each of Parent and Merger Sub are solvent as of the date hereof, and assuming the Company’s representations and warranties in this Agreement are true and correct, each of Parent and the Surviving Corporation and its Subsidiaries (on a
consolidated basis) will, after giving effect to the Merger and the other transactions contemplated hereby, and payment of all fees and expenses, be solvent immediately following the Closing.
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Section 4.10 Certain Arrangements. Other than the
Rollover Agreement and the Support Agreement, there are no Contracts or commitments to enter into Contracts (a) between Parent or Merger Sub, or any of their respective Affiliates, on the one hand, and any director, officer or employee of the Company
or any of its Subsidiaries, on the other hand, or (b) pursuant to which any stockholder of the Company would be entitled to receive consideration of a different amount or nature than as provided by this Agreement or pursuant to which any stockholder
of the Company agrees to vote or approve this Agreement, the Charter Amendment or the Merger or vote against any Superior Proposal.
Section 4.11 Exclusivity of Representations and
Warranties; Non-Reliance.
(a) No Other Representations and Warranties. Each of Parent
and Merger Sub, on behalf of itself and its respective Affiliates and Subsidiaries, acknowledges and agrees that, except for the representations and warranties of the Company expressly made to Parent and Merger Sub and set forth in Article III of this Agreement:
(i) neither the Company nor any of its Subsidiaries or Affiliates (or any other Person) makes, or has made, any representation or warranty relating to the Company, its Subsidiaries or any of their businesses, operations or
otherwise in connection with this Agreement or the Merger;
(ii) no Person has been authorized by the Company, any of its Subsidiaries or Affiliates or any of its or their
respective Representatives to make any representation or warranty relating to the Company, its Subsidiaries or any of their businesses or operations or otherwise in connection with this Agreement or the Merger; and
(iii) the representations and warranties made by the Company in this Agreement are in lieu of and are exclusive of
all other representations and warranties, and the Company and its Subsidiaries and Affiliates disclaim any other representations or warranties, whether express or implied, notwithstanding the delivery or disclosure to Parent, Merger Sub or any of
their respective Affiliates or Representatives of any documentation or other information (including any financial information, supplemental data or projections, forecasts, estimates, budgets or other forward-looking statements or prospective
information).
(b) Parent and Merger Sub, on behalf of itself and its respective Affiliates and Subsidiaries, hereby acknowledge and agree that (i) they are not
entitled to rely on, and expressly confirm that they are not relying on, representations and warranties of the Company other than those expressly made to Parent and Merger Sub and set forth in Article III of this Agreement; and (ii) they have had the satisfactory opportunity to meet with management of the Company and to discuss the business, assets and liabilities of the Company and its Subsidiaries,
and have been afforded the satisfactory opportunity to ask questions of and receive answers from the officers of the Company, and have completed their own independent investigation of the Company and its Subsidiaries, and their respective businesses,
assets and liabilities and the transactions contemplated by this Agreement.
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ARTICLE V
INTERIM OPERATIONS OF THE COMPANY
Section 5.1 Affirmative Obligations.
(a) Ordinary Course Operation. During the Pre-Closing Period,
the Company will, and will cause each of its Subsidiaries to, conduct its business and operations in the ordinary course of business consistent with past practice and maintain its existence in good standing pursuant to applicable Law. The obligations
of the Company and its Subsidiaries pursuant to the previous sentence are subject to the following exceptions: (i) as expressly contemplated by this Agreement; (ii) as set forth in Section 5.1 of the Company Disclosure Letter or Section 5.2 of the
Company Disclosure Letter; (iii) as required by applicable Law; (iv) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed) (all such exceptions in clauses (i) through (iv), the “Covenant Exceptions”); or (v) for any actions taken reasonably and in good faith to respond to any COVID-19 Measures (it being understood that prior to taking any
material actions in reliance on this clause (v), the Company will use its reasonable best efforts to provide reasonable advance notice to, and consult, with Parent (if reasonably practicable and legally permissible) prior to taking such actions).
(b) Additional Affirmative Obligations. During the
Pre-Closing Period, the Company will, and will cause each of its Subsidiaries to, subject to Covenant Exceptions, use its reasonable best efforts to (i) preserve intact in all material respects its assets, properties, business organizations and
ongoing business; (ii) keep available the services of its current officers and key employees; and (iii) preserve in all material respects its relationships with its customers, suppliers, distributors, lessors, licensors, licensees, creditors,
contractors and other Persons with whom the Company or any of its Subsidiaries has material business relations.
Section 5.2 Forbearance Covenants. During the
Pre-Closing Period and in each case subject to the Covenant Exceptions (including, for the avoidance of doubt, the items set forth in Section 5.2 of the Company Disclosure Letter), the Company will not, and will cause its Subsidiaries not to:
(a) amend or otherwise change the Charter, the Bylaws or any other similar organizational document or governing documents;
(b) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization;
(c) issue, sell, grant, pledge, encumber, transfer or deliver, or agree or commit to issue, sell, grant, pledge, encumber, transfer or deliver,
any of equity securities of the Company or any of its Subsidiaries (whether through the issuance or granting of options, equity-based awards, warrants, commitments, subscriptions, rights to purchase or otherwise), except (i) for the issuance,
delivery or sale of shares of Company Class A Common Stock or Company Class B Common Stock pursuant to Company Equity-Based Awards outstanding as of the date of this Agreement or pursuant to the ESPP, in each case in accordance with and as required
by their terms; or (ii) in connection with a conversion of shares of Company Class B Common Stock into Company Class A Common Stock pursuant to the terms of the Charter;
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(d) directly or indirectly acquire, repurchase or redeem any equity securities of the Company or any of its Subsidiaries, except, in each case,
(i) as required pursuant to the terms and conditions of Company Equity-Based Awards outstanding as of the date of this Agreement in accordance with their terms; (ii) in connection with a conversion of shares of Company Class B Common Stock into
Company Class A Common Stock pursuant to the terms of the Charter; or (iii) for transactions solely between or among the Company and its wholly owned Subsidiaries;
(e) (i) adjust, split, subdivide, combine or reclassify any of its capital stock or other equity or voting interests; (ii) declare, set aside,
establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of its capital stock or other equity or voting interests, or make any other
actual, constructive or deemed distribution in respect of its capital stock or other equity or voting interests, except for cash dividends made by any Subsidiary of the Company to the Company or one of its other Subsidiaries; (iii) pledge or encumber
any of its capital stock or other equity or voting interests; or (iv) modify the terms of any of its capital stock or other equity or voting interests;
(f) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any assets, business, Person that is an entity or any equity
interest in such Person, make any equity investment in any Person that is an entity and not a wholly owned Subsidiary of the Company, enter into any joint venture, partnership, limited liability company or similar arrangement with any Person (except
for acquisitions of inventory, supplies and equipment in the ordinary course of business consistent with past practice and acquisitions of assets for consideration not in excess of $2,000,000 individually or $4,000,000 in the aggregate);
(g) (i) sell, transfer, mortgage, lease, license, pledge, abandon, encumber or otherwise dispose of any of its tangible properties or tangible
assets, other than (A) sales of tangible properties or tangible assets with a value not in excess of $2,000,000 individually or $4,000,000 in the aggregate, (B) non-exclusive licenses and other Incidental Licenses granted in the ordinary course of
business, and (C) dispositions of assets that are obsolete, worn-out, surplus or no longer used and useful in the conduct of the business of the Company and its Subsidiaries or (ii) waive, cancel, forgive, release, settle or assign any material
Indebtedness owed to the Company or any of its Subsidiaries or any material claims held by the Company or any of its Subsidiaries against any Person;
(h) (i) incur or assume any Indebtedness or issue any debt securities, except, in each case, for loans or advances between or among
wholly owned Subsidiaries of the Company or between or among the Company and its wholly owned Subsidiaries or the incurrence of Indebtedness in the ordinary course under finance and operating leases and/or the revolving credit facility under the Credit
Agreement, provided that in no event will the Company or its Subsidiaries be permitted to incur additional Indebtedness if such incurrence would increase Net Debt, as of the end of any calendar month following the date hereof until the Effective Time,
by more than $50,000,000 in excess of the amount of Net Debt as of the date of this Agreement; provided, further that, for purposes of this Section 5.2(h)(i), “Net Debt” means, for the Company and its Subsidiaries, the sum of (A) Indebtedness outstanding under the Credit Agreement, plus (B) all additional finance and
operating leases required to be reflected on the Company’s consolidated balance sheet in accordance with GAAP, if any, less (C) all cash and marketable securities held by the Company and its Subsidiaries; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for the obligations of any Person, except with respect to obligations of wholly owned Subsidiaries of the Company; (iii) make any loans, advances or capital contributions to, or
investments in, any Person; or (iv) mortgage, pledge or otherwise encumber any assets, tangible or intangible, or create any lien thereon (other than Permitted Liens);
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(i) except as required under the terms of any Company Benefit Plan as in effect on the date hereof, (i) establish, adopt, enter into, terminate or
amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any Company Benefit Plan or any other benefit or compensation plan, agreement, contract, program, policy or arrangement that would be a
Company Benefit Plan if in existence on the date of this Agreement; (ii) grant to director or officer of the Company or any Service Provider whose annual cash compensation exceeds $150,000, in the aggregate, any increase in cash or equity or
equity-based incentive awards, compensation, bonus, severance, or material fringe or other material benefits, and, in the case of any Service Provider whose annual cash compensation is equal to or less than $150,000, in the aggregate, grant any such
increase in cash or equity or equity-based incentive awards outside of the ordinary course of business consistent with past practice; (iii) grant to any Service Provider any increase in change in control, retention, severance or termination pay; (iv)
hire or engage any Service Provider with an annual cash compensation in excess of $150,000, in the aggregate; (v) enter into or amend any employment, consulting, change in control, retention or severance agreement with, or (vi) terminate, furlough or
temporarily lay off any Service Provider whose annual cash compensation would exceed $150,000, in the aggregate;
(j) (i) negotiate, modify, extend, terminate, or enter into any Labor Agreement or (ii) recognize or certify any Union as the bargaining representative for any employees of the Company or its Subsidiaries;
(k) waive or release any noncompetition, non-solicitation, nondisclosure, noninterference, non-disparagement, or other restrictive covenant
obligation of any Service Provider except where required by applicable Law or Order;
(l) settle, release, waive or compromise any pending or threatened Legal Proceeding, including any claim that provides for any injunctive or other
non-monetary relief, except for the settlement of any Legal Proceedings (i) (1) regarding an automobile accident or incident, solely for monetary damages in an amount not to exceed $3,000,000 individually or $7,000,000 in the aggregate and without an
admission of guilt and (2) with respect to any Legal Proceeding not covered by the foregoing clause (1), solely for monetary damages in an amount not in excess of $500,000 individually or $1,000,000 in the aggregate and without an admission of any
guilt; or (ii) settled in compliance with Section 6.14, in the case of each of clauses (i)(2) and (ii), solely to the extent that prior written notice has been provided to
Parent describing the material details of such settlement;
(m) except
as required by applicable Law or GAAP, make any change in any of its accounting principles or practices;
(n) except as expressly contemplated by this Agreement, (i) make, change, or revoke any material Tax election; (ii) settle or compromise any
material Tax claim or assessment; (iii) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment; (iv) amend any income or other material Tax Return; (v) surrender any right to claim a refund of
a material amount of Taxes; or (vi) enter into a closing agreement with any Governmental Authority regarding Taxes;
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(o) sell, assign, license, abandon, or otherwise dispose of, allow to lapse, terminate or expire, or maintain or protect, any of the material
Company Owned Intellectual Property, or any portion thereof, except in the ordinary course of business;
(p) modify in any material respect (i) any of its policies related to Data Privacy/Security Requirements, or (ii) any administrative, technical or
physical safeguards primarily related to privacy or data security, except, in each case of (i) and (ii), (A) to remediate any privacy or security issue, (B) to enhance data security or integrity, (C) to comply with Data Privacy/Security Requirements,
or (D) as otherwise directed or required by a Governmental Authority;
(q) incur, authorize or commit to incur any capital expenditures other than (i) as set forth in Section 5.2(q) of the Company Disclosure Letter (provided, that, with respect to the months and categories set forth on Annex 5.2(q) of Section 5.2(q) of the Company Disclosure Letter, the capital expenditures incurred per category per month shall not exceed the amount
therefor set forth on such Annex 5.2(q)) or (ii) expenditures that do not exceed $3,000,000 in the aggregate;
(r) (i) enter into any Contract that would constitute a Material Contract under clauses (i), (iv), (v), (vi), (vii), (viii) or (ix) of the
definition of “Material Contract” if it were in effect as of the date of this Agreement or, outside the ordinary course of business consistent with past practice, enter into any other Contract that would constitute a Material Contract if it were in
effect as of the date of this Agreement, (ii) amend, modify, renew, terminate, cancel or extend in any material adverse respect any Material Contract (other than terminations thereof upon the expiration of any such Material Contract in accordance
with its terms and renewals of existing Contracts on substantially similar terms), or (iii) waive, release, assign or otherwise forego any material right or claim of the Company or any of its Subsidiaries under any Material Contract;
(s) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(t) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person
covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;
(u) implement, announce or effectuate a “plant closing” or “mass layoff” (each as defined in the WARN Act) or other mass employee layoff event
affecting in whole or in part any site of employment, facility or operating unit; or
(v) enter into, or agree or commit to enter into, a Contract to take any of the actions prohibited by this Section 5.2.
Section 5.3 Consents for Covenant Forbearance; No
Control. Parent shall respond with reasonable promptness to any requests for consent pursuant to Section 5.2 (provided that if Parent has not responded to any such
written request for consent within five Business Days from the date of such receipt, Parent will be deemed to have given its consent for purposes of Section 5.2). The Parties
acknowledge and agree that the obligations and restrictions set forth in Sections 5.1 and 5.2 of this
Agreement are not intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the business or operations of the Company or any of its Subsidiaries at any time prior to the Effective Time. Prior to the Effective Time,
the Company and its Subsidiaries will exercise, consistent with the terms, conditions and restrictions of this Agreement, complete control and supervision over their respective businesses and operations.
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Section 5.4 No Solicitation of Acquisition Proposals.
(a) No Solicitation. Subject to Section 5.4(b), immediately following execution of this Agreement and throughout the remainder of the Pre-Closing Period, the Company will cease and cause to be terminated any discussions or
negotiations with, and terminate any data room access (or other access to diligence) of, any Person and its Representatives relating to an Acquisition Transaction or Acquisition Proposal that would otherwise be prohibited by this Section 5.4(a). Unless the Company has already so requested, promptly following the date of this Agreement, the Company
will request that each Person (other than Parent and its Representatives) that has executed a confidentiality agreement with the Company or any of its Subsidiaries in connection with its consideration of an Acquisition Transaction or Acquisition
Proposal promptly return or destroy, in accordance with the terms of such confidentiality agreement, all non-public information furnished to such Person by or on behalf of the Company or its Subsidiaries prior to the date of this Agreement. Subject
to this Section 5.4(a) and Section 5.4(b), during the Pre-Closing Period, the Company and its
Subsidiaries, and their respective directors and officers, will not, and the Company will not authorize or direct, and will use its reasonable best efforts to cause its and its Subsidiaries’ other employees, consultants and other Representatives not
to, directly or indirectly, (i) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any offer, inquiry, indication of interest or proposal that constitutes, or is reasonably
expected to lead to, an Acquisition Proposal; (ii) furnish to any Person or Group (other than Parent, its Subsidiaries or any of their respective Representatives in their capacity as such) any non-public information relating to the Company or any of
its Subsidiaries or afford to any Person or Group (other than Parent, its Subsidiaries or any of their respective Representatives in their capacity as such) access to the business, properties, assets, books, records or other non-public information,
or to any personnel, of the Company or any of its Subsidiaries, in any such case in connection with any Acquisition Proposal or with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an
Acquisition Proposal or the making of any offer, inquiry, indication of interest or proposal that constitutes or would reasonably be expected to lead to an Acquisition Proposal; (iii) participate or engage in discussions or negotiations with any
Person or Group with respect to an Acquisition Proposal or with respect to any inquiries from Persons relating to any offer, indication of interest or proposal relating to an Acquisition Proposal (other than informing such Persons of the provisions
contained in this Section 5.4); (iv) approve, endorse or recommend any offer, inquiry, indication of interest or proposal that constitutes, or would reasonably be expected to
lead to, an Acquisition Proposal; (v) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other Contract (whether written, oral, binding or non-binding) relating to an Acquisition Proposal or
Acquisition Transaction, other than, in each case, an Acceptable Confidentiality Agreement (any such letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other Contract relating to an Acquisition Proposal or
Acquisition Transaction, an “Alternative Acquisition Agreement”); or (vi) authorize or commit to do any of the foregoing.
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(b) Permitted Conduct Related to Certain Proposals.
Notwithstanding anything to the contrary in this Section 5.4, from the date of this Agreement until the Company’s receipt of the Requisite Stockholder Approval, the Company and
the Company Special Committee may, directly or indirectly through one or more of their respective Representatives (including the Company Special Committee Financial Advisor), following the execution and delivery of an Acceptable Confidentiality
Agreement, (i) participate or engage in discussions or negotiations with; or (ii) (1) furnish any non-public information relating to the Company or any of its Subsidiaries to or (2) afford access to the business, properties, assets, books, records or
other non-public information, or to any personnel, of the Company or any of its Subsidiaries to, in each case, any Person or Group or their respective Representatives that has made, renewed or delivered to the Company a bona fide written Acquisition
Proposal after the date of this Agreement that did not result from a material breach of Section 5.4(a). The Company and the Company Special Committee may only take the actions
contemplated by the preceding sentence if the Company Special Committee has determined in good faith (after consultation with its financial advisor and outside legal counsel) that such Acquisition Proposal either constitutes a Superior Proposal or is
reasonably likely to lead to a Superior Proposal. During the Pre-Closing Period, the Company will promptly (and, in any event, within 36 hours following the disclosure thereof) make
available to Parent and its Representatives any such non-public information concerning the Company and its Subsidiaries that is provided to any such Person or its Representatives that was not previously made available to Parent.
(c) No Company Recommendation Change or Entry into an Alternative
Acquisition Agreement. Except as provided by Section 5.4(d), at no time after the date of this Agreement may the Company Special Committee:
(i) (A) withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the Company Recommendation in a manner adverse to Parent; (B) adopt,
approve, endorse, declare advisable, recommend or publicly propose to adopt, approve, endorse or recommend an Acquisition Proposal; (C) if an Acquisition Proposal has been publicly disclosed, fail to publicly reaffirm the Company Recommendation
within seven (7) Business Days after Parent so reasonably requests in writing (provided, that if an Acquisition Proposal is a tender or exchange offer, the Company Special
Committee will have ten (10) Business Days after the commencement thereof to reaffirm the Company Recommendation); (D) make any recommendation or public statement in connection with a tender or exchange offer, other than a recommendation against
such offer or the issuance of a “stop, look and listen” communication by the Company Special Committee to the Company Stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication); (E) fail
to recommend against acceptance of any third party tender or exchange offer for the shares of Company Common Stock within 10 Business Days after commencement of such offer pursuant to Rule 14d-2 of the Exchange Act; (F) fail to include the
Company Recommendation in the Proxy Statement; or (G) resolve or publicly propose to take any action described in the foregoing clauses (A) through (F) (any action described in clauses (A) through (G), a “Company Recommendation Change”), it being understood that none of (1) the determination in and of itself by the Company Special Committee that an Acquisition Proposal constitutes, or is reasonably
expected to lead to, a Superior Proposal; (2) the delivery, in and of itself, by the Company to Parent and its Representatives of any notice contemplated by Section 5.4(d);
or (3) the public disclosure, in and of itself, of the items in clauses (1) and (2) if required by applicable Law, will constitute a Company Recommendation Change or violate this Section
5.4; or
(ii) cause or permit the Company or any of its Subsidiaries to enter into an Alternative Acquisition Agreement.
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(d) Permissible Company Recommendation Change and Entry into
Alternative Acquisition Agreement.
(i) Intervening Events. Notwithstanding anything to the contrary set forth in this Agreement, at
any time prior to obtaining the Requisite Stockholder Approval, other than in connection with an Acquisition Proposal, the Company Special Committee may effect a Company Recommendation Change of the type described in clauses (A), (C), (F) and (G)
(but clause (G) solely with respect to clauses (A), (C) and (F)) thereof, in response to an Intervening Event if and only if:
(1) the Company Special Committee determines in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to take such action would be inconsistent with
its fiduciary duties pursuant to applicable Law;
(2) the Company has provided prior written notice to Parent at least four Business Days in advance to the effect
that the Company Special Committee has (A) so determined and (B) resolved to effect a Company Recommendation Change pursuant to this Section 5.4(d)(i), which notice will
describe the Intervening Event in reasonable detail; and
(3) prior to effecting such Company Recommendation Change, the Company and its Representatives, until 5:00 p.m.
at the end of such four Business Day period, have negotiated with Parent and its Representatives in good faith (to the extent that Parent requests to negotiate) to make such adjustments to the terms and conditions of this Agreement and the
Transaction Documents so that the failure to make a Company Recommendation Change in response to such Intervening Event would no longer be inconsistent with the Company Special Committee’s fiduciary duties pursuant to applicable Law, as determined
in good faith by the Company Special Committee (after consultation with its financial advisor and outside legal counsel), it being understood that at the end of such four Business Day period, the Company Special Committee must have in good faith
(after consultation with its financial advisor and outside legal counsel) reaffirmed its determination that the failure to take such action would be inconsistent with its fiduciary duties pursuant to applicable Law.
(ii) Superior Proposals. Notwithstanding anything to the contrary
set forth in this Agreement, at any time prior to obtaining the Requisite Stockholder Approval, if the Company has received a bona fide written Acquisition Proposal that the Company Special Committee has concluded in good faith (after
consultation with its financial advisor and outside legal counsel) is a Superior Proposal, then the Company Special Committee may (A) effect a Company Recommendation Change with respect to such Superior Proposal or (B) authorize the Company to
terminate this Agreement pursuant to Section 8.1(h) to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal, in each case if and only if:
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(1) the Company Special Committee determines in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to take such action would be inconsistent with
its fiduciary duties pursuant to applicable Law;
(2) the Company has complied in all material respects
with its obligations pursuant to this Section 5.4 with respect to such Acquisition Proposal;
(3) the Company has provided prior written notice to Parent at least four Business Days in advance (the “Notice Period”) to the effect that the Company Special Committee has (A) received a bona fide written Acquisition Proposal that has not been withdrawn; (B) concluded in
good faith (after consultation with its financial advisor and outside legal counsel) that such Acquisition Proposal constitutes a Superior Proposal; and (C) resolved to effect a Company Recommendation Change or to terminate this Agreement pursuant
to Section 8.1(h), which notice will describe the basis for such Company Recommendation Change or termination (but which notice will not in and of itself constitute a Company
Recommendation Change), including the identity of the Person or Group making such Acquisition Proposal and the material terms of such Acquisition Proposal and include copies of all documents relating to such Acquisition Proposal (including any
financing commitments); and
(4) prior to effecting such Company Recommendation Change or termination, the Company and its Representatives,
until 5:00 p.m. on the last day of the Notice Period, have (A) negotiated with Parent and its Representatives in good faith (to the extent that Parent requests to negotiate) to make such adjustments to the terms and conditions of this Agreement and
the Transaction Documents so that such Acquisition Proposal would cease to constitute a Superior Proposal; and (B) permitted Parent and its Representatives to make a presentation to the Company Special Committee regarding this Agreement and any
adjustments with respect thereto (to the extent that Parent requests to make such a presentation), it being understood that (a) in the event of any change to the form or amount of consideration or any other material revision, amendment, update or
supplement to such Acquisition Proposal, the Company will be required to deliver a new written notice to Parent and to comply with the requirements of this Section 5.4(d)(ii)(4)
with respect to such new written notice (with the “Notice Period” in respect of such new written notice being two Business Days); and (b) at the end of the Notice Period, the Company Special Committee must have in good faith (after consultation
with its financial advisor and outside legal counsel) reaffirmed its determination that such bona fide written Acquisition Proposal is a Superior Proposal.
(e) Notice to Parent of Acquisition Proposals. During the
Pre-Closing Period, the Company will promptly (and, in any event, within 36 hours from the receipt thereof) notify Parent in writing if an Acquisition Proposal is received by, any non-public information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, the Company, any of its Subsidiaries or any of their Representatives with respect to an Acquisition Proposal or potential Acquisition Proposal. Such notice must include (A) the identity of
the Person or Group making such Acquisition Proposal, request or seeking of discussions or negotiations; and (B) a summary of the material terms, conditions or other aspects of such Acquisition Proposal, request or seeking of discussions or
negotiations and, if in writing, a copy thereof and all written materials received in connection therewith. Thereafter, the Company must keep Parent reasonably informed, on a reasonably prompt basis (and in any event within 24 hours), of the status
and terms of, any developments regarding, any such Acquisition Proposal (including any amendments thereto) and the status of any such discussions or negotiations, including by providing copies
of all written materials (other than non-substantive written communications) sent to or from the Company or any of its Representatives relating to such Acquisition Proposal.
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(f) Permitted Disclosures by the Company and the Company Special
Committee. So long as the Company Special Committee expressly reaffirms the Company Recommendation in such public disclosure (other than in a customary “stop, look and listen” communication to the Company Stockholders pursuant to Rule 14d-9
promulgated under the Exchange Act), subject to compliance with Section 6.13, nothing in this Agreement will prohibit the Company Special Committee from (A) taking and
disclosing to the Company Stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or complying with Rule 14d-9 promulgated under the Exchange Act, including making a “stop, look and listen” communication by the
Company Special Committee to the Company Stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication); (B) complying with Item 1012(a) of Regulation M-A promulgated under the Exchange Act; or
(C) making any disclosure to the Company Stockholders (including factually accurate disclosure regarding the business, financial condition or results of operations of the Company and its Subsidiaries) that the Company Special Committee, after
consultation with its outside legal counsel, has determined in good faith is consistent with applicable Law (it being understood that any such action or disclosure that constitutes a Company Recommendation Change shall be made only in compliance with
the applicable provisions of this Section 5.4).
(g) Breach of No-Solicitation Obligations by Representatives of the
Company. The Company agrees that it (i) will not authorize, direct or permit any director, officer employee or other Representative of the Company or any of its Subsidiaries to breach this Section 5.4 and (ii) upon becoming aware of any breach or threatened breach of this Section 5.4 by any director, officer, employee or other
Representative of the Company or any of its Subsidiaries, shall use its reasonable best efforts promptly to stop such breach or threatened breach.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Efforts; Required Action and Forbearance.
(a) Reasonable Best Efforts. Subject to Section 6.2, upon the terms and subject to the conditions set forth in this Agreement, Parent and Merger Sub, on the one hand, and the Company, on the other hand, will use their
respective reasonable best efforts to (A) take (or cause to be taken) all actions; (B) do (or cause to be done) all things; and (C) assist and cooperate with the other Parties in doing (or causing to be done) all things, in each case as are
necessary, proper or advisable pursuant to applicable Law or otherwise to consummate and make effective, the Charter Amendment and the Merger, including by using:
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(i) reasonable best efforts to cause the conditions set forth in Article VII to be satisfied;
(ii) reasonable best efforts to (1) seek to obtain all consents, waivers, approvals, orders and
authorizations from Governmental Authorities and (2) make all registrations, declarations and filings with Governmental Authorities, in each case that are necessary or advisable to consummate the Merger; and
(iii) commercially reasonable efforts to (1) seek to obtain all consents, waivers and approvals
and (2) deliver all notifications, in each case pursuant to any Material Contracts in connection with this Agreement and the consummation of the Merger so as to seek to maintain and preserve the benefits to the Surviving Corporation of such
Material Contracts as of and following the consummation of the Merger.
(b) No Failure to Take Necessary Action. Subject to the terms
and conditions of this Agreement, Parent or Merger Sub, on the one hand, and the Company and its Subsidiaries, on the other hand, shall not, from the date of this Agreement to the Effective Time, take any action (or fail to take any action) that
would reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Merger. For the avoidance of doubt, (x) no action by either Party taken (or failed to be taken) in compliance with this
Agreement will be considered a violation of this Section 6.1, (y) nothing in this Section 6.1(b) shall
limit the rights of the Parties under any other provision of this Agreement (including Article VIII) and (z) this Section
6.1(b) shall not require any Party to take any action with respect to any filing with respect to Antitrust Laws that is not expressly required by Section 6.2.
(c) No Consent Fee. Notwithstanding anything to the contrary
set forth in this Section 6.1 or elsewhere in this Agreement, the Company and its Subsidiaries shall not agree to the payment of a consent fee, payment or other consideration
(including increased or accelerated payments), or the provision of additional security (including a guaranty) in connection with obtaining any consent pursuant to any Contract or Indebtedness, except to the extent reasonably requested by Parent, in
which case, to the extent reasonably requested by Parent, the Company shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to obtain any such consent (and any such fee, payment or other consideration, or the
provision of additional security, shall only be payable in connection with the consummation of the Merger).
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Section 6.2 Antitrust Filings.
(a) Filings Under the HSR Act and Other Applicable Antitrust Laws.
Each of Parent and Merger Sub (and their respective Affiliates, if applicable), on the one hand, and the Company and its Subsidiaries, on the other hand, will use (and will cause its respective Affiliates, if applicable, to use) their respective
reasonable best efforts to (i) file a Notification and Report Form relating to this Agreement and the Merger as required by the HSR Act with the FTC and the Antitrust Division of the DOJ as promptly as reasonably practicable (and, in any event within
10 Business Days following the date of this Agreement); and (ii) to the extent necessary, promptly file comparable pre-merger or post-merger notification filings, forms and submissions with any Governmental Authority pursuant to other applicable
Antitrust Laws in connection with the Merger. Each of Parent and the Company will (and will cause each of its respective Representatives, as applicable, to) (A) reasonably cooperate and coordinate with the other in the making of such filings; (B) use
its respective reasonable best efforts to supply the other (or cause the other to be supplied) any information that may be required in order to make such filings; (C) use its respective reasonable best efforts to supply (or cause the other to be
supplied) with any additional information that reasonably may be required or requested by the FTC, the DOJ or the Governmental Authorities of any other applicable jurisdiction in connection with such filings; and (D) use its respective reasonable
best efforts to, as soon as reasonably practicable, (1) cause the expiration or termination of the applicable waiting periods pursuant to the HSR Act and any other Antitrust Laws applicable to the Merger; and (2) obtain any required consents pursuant
to any Antitrust Laws applicable to the Merger. If any Party receives a request for additional information or documentary material from any Governmental Authority with respect to the Merger pursuant to the HSR Act or any other Antitrust Laws
applicable to the Merger, then such Party will make (or cause to be made, if applicable), as soon as reasonably practicable and after consultation with the other Parties, an appropriate response in compliance with such request.
(b) Divestitures. Without limiting the foregoing, to the
extent necessary to obtain clearance of the Merger pursuant to the HSR Act, each of Parent and Merger Sub shall offer, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, (i) the sale, divestiture, license or other
disposition of any and all of the capital stock or other equity or voting interests, assets (whether tangible or intangible), rights or businesses of Parent, the Company or any of their respective Subsidiaries and (ii) any other restrictions on the
activities of Parent, the Company and their respective Subsidiaries.
(c) Limitations. Notwithstanding anything in this Agreement
to the contrary, neither Parent nor Merger Sub shall have an obligation to offer, negotiate, commit to or effect any action (1) that is not conditioned upon the consummation of the Merger or
(2) that, when taken together with all other actions, efforts or agreements set forth under Section 6.1 and this Section 6.2 would reasonably be expected to have a material adverse effect on the business, operations, financial
condition or results of operations of Parent and its Subsidiaries (including the Company and its Subsidiaries), taken as a whole (assuming for purposes of such analysis that Parent and its Subsidiaries (including the Company and its Subsidiaries),
taken as a whole, were the same size, with the same financial profile, as the Company and its Subsidiaries, taken as a whole). The Company and its Subsidiaries shall not, prior to the Effective Time, propose, negotiate, commit to, effect, or agree
to any actions, efforts or agreements pursuant to Section 6.1 or Section 6.2, except at the request of Parent or with Parent’s prior written consent. Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement shall require the Company or any of its Subsidiaries to commit to or effect any action, effort, or agreement that is not conditioned upon the consummation of the Merger.
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(d) Cooperation. In furtherance and not in limitation of Section 6.2(a) and Section 6.2(b), the Company will (and will cause its Subsidiaries to), and Parent and
Merger Sub will, in each case, subject to any restrictions under applicable Law, (i) promptly notify the other Parties of (and, if in writing, furnish them with copies of (or, in the case of oral communications, advise them of the contents of)) any
material communication received by such Person from a Governmental Authority in connection with the Merger and permit the other Parties to review and discuss in advance (and to consider in good faith any comments made by the other Parties in relation
to) any proposed draft notifications, formal notifications, filings, submissions or other written communications (and any analyses, memoranda, white papers, presentations, correspondence or other documents submitted therewith) made in connection with
the Merger to a Governmental Authority; (ii) keep the other Parties reasonably informed with respect to the status of any such submissions and filings to any Governmental Authority in connection with the Merger and any developments, meetings or
discussions with any Governmental Authority in respect thereof, including with respect to (A) the receipt of any non-action, action, clearance, consent, approval or waiver; (B) the expiration of any waiting period; (C) the commencement or proposed or
threatened commencement of any investigation, litigation or administrative or judicial action or proceeding under applicable Law; and (D) the nature and status of any objections raised or proposed or threatened to be raised by any Governmental
Authority with respect to the Merger; and (iii) not independently participate in any meeting, hearing, proceeding or discussions with or before any Governmental Authority in respect of the Merger without giving the other Parties reasonable prior
notice of such meeting, hearing, proceeding or discussion, and, unless prohibited by such Governmental Authority or applicable Law, the opportunity to attend or participate. However, each of the Company, Parent and Merger Sub may designate any
non-public information provided to any Governmental Authority as restricted to “outside counsel” only and any such information will not be shared with the Representatives of the other Party (other than its outside counsel) without approval of the
Party providing the non-public information. Each of the Company, Parent and Merger Sub may redact any valuation and related information before sharing any information provided to any Governmental Authority with another Party on an “outside counsel”
only basis. Notwithstanding anything to the contrary herein, Parent shall determine the strategy to be pursued for obtaining and lead the effort to obtain all necessary waiting period expirations or terminations, actions or nonactions, or consents
from Governmental Authorities in connection with the Merger and the other transactions contemplated by this Agreement and the Company shall take all reasonable actions to support Parent in connection therewith.
Section 6.3 Proxy Statement.
(a) Preparation. Promptly after the execution of this
Agreement, the Company will prepare (with Parent’s reasonable cooperation) and will file with the SEC a preliminary proxy statement to be sent to the Company Stockholders in connection with the Company Stockholder Meeting (the proxy statement,
including any amendments or supplements thereto, the “Proxy Statement”). The Company will not file the Proxy Statement with the SEC without first providing Parent and
its counsel a reasonable opportunity to review and comment thereon, and the Company will give good faith consideration to all reasonable additions, deletions or changes suggested by Parent or its counsel. Subject to Section 5.4 and unless there has been a Company Recommendation Change, the Company will (i) include the Company Recommendation in the Proxy Statement; and (ii) subject to applicable Law, use reasonable best
efforts to solicit proxies to obtain the Requisite Stockholder Approval and take all action reasonably necessary or advisable to secure the vote of the holders of shares of Company Common Stock required by applicable Law to effect the Charter
Amendment and the Merger. Subject to applicable Law, the Company shall use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company Stockholders as promptly as reasonably practicable following confirmation from the SEC
that it will not review, or that it has completed its review of, the Proxy Statement, which confirmation will be deemed to have occurred if the SEC has not affirmatively notified the Company by 11:59 p.m. on the tenth calendar day following such
filing with the SEC that the SEC will or will not be reviewing the Proxy Statement.
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(b) Mutual Assistance. Each of the Company, Parent and Merger
Sub will furnish all information concerning such Person and its Affiliates to the other, and provide such other assistance, as may be reasonably requested by such other party to be included therein and will otherwise reasonably assist and cooperate
with the other in the preparation, filing and distribution of the Proxy Statement and the resolution of any comments to either received from the SEC.
(c) SEC Correspondence. The Parties will notify each other as
promptly as reasonably practicable upon the receipt of any comments, whether written or oral, from the SEC and of any request by the SEC for amendments or supplements to the Proxy Statement, or for additional information, and will supply each other
with copies of all correspondence between it or any of its Representatives, on the one hand, and the SEC, on the other hand, with respect to such filings. The Parties will use their respective reasonable best efforts to resolve all SEC comments, if
any, with respect to the Proxy Statement as promptly as practicable after the receipt thereof.
(d) No Amendments to Proxy Statement. Except in connection
with a Company Recommendation Change or, subject to compliance with the other provisions of this Section 6.3, to address SEC comments or as necessary to ensure that the Proxy
Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not
misleading, no amendment or supplement to the Proxy Statement will be made by the Company without the approval of Parent, which approval will not be unreasonably withheld, conditioned or delayed.
(e) Accuracy; Supplied Information.
(i) By the Company. On the date of filing with the SEC, the date of mailing to the Company
Stockholders (if applicable) of the Proxy Statement, and at the time of the Company Stockholder Meeting, the Proxy Statement will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they are made, not false or misleading. Notwithstanding the foregoing, no covenant is made by the Company with respect to any information supplied by
Parent, Merger Sub or any of their Affiliates for inclusion or incorporation by reference in the Proxy Statement. The information supplied by the Company for inclusion or incorporation by reference in the Proxy Statement will not, at the time
that the Proxy Statement is filed with the SEC, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(ii) By Parent. The
information supplied by Parent, Merger Sub and their respective Affiliates for inclusion or incorporation by reference in the Proxy Statement will not, at the time that the Proxy Statement is filed with the SEC, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.
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Section 6.4 Company Stockholder Meeting.
(a) Call of Company Stockholder Meeting. The Company will
take all action necessary in accordance with applicable Law, the Charter and the Bylaws to establish a record date for (including conducting, as promptly as practicable and in consultation with Parent, one or more “broker searches” in accordance with
Rule 14a-13 of the Exchange Act to enable such record date to be so set), duly call, give notice of, convene and hold a meeting of the Company Stockholders (including any adjournment, postponement or other delay thereof, the “Company Stockholder Meeting”) as promptly as reasonably practicable following the mailing of the Proxy Statement to the Company Stockholders (provided that the Company
will not be required to hold the Company Stockholder Meeting at any time prior to the 15th Business Day following the mailing of the Proxy Statement to the Company Stockholders) for the purpose of, among other things, (i) seeking the
Requisite Stockholder Approval; and (ii) in accordance with Regulation 14A under the Exchange Act, seeking advisory approval of a proposal in connection with a non-binding, advisory vote to approve certain compensation that may become payable to the
Company’s named executive officers in connection with the consummation of the Merger and a customary proposal regarding the adjournment of the Company Stockholder Meeting. Unless this Agreement shall have been terminated in accordance with its terms
or the Company Special Committee has made a Company Recommendation Change in accordance with the terms of Section 5.4(d)(ii), the Company will (A) submit this Agreement, the
Merger and the Charter Amendment for approval by votes of the Company Stockholders at the Company Stockholder Meeting necessary to obtain the Requisite Stockholder Approval; and (B) use reasonable best efforts to solicit proxies to obtain the
Requisite Stockholder Approval.
(b) Adjournment of Company Stockholder Meeting.
Notwithstanding anything to the contrary in this Agreement, the Company will be permitted to postpone or adjourn the Company Stockholder Meeting if (i) there are holders of insufficient shares of any class or series of the Company Common Stock
present or represented by proxy at the Company Stockholder Meeting to constitute a quorum at the Company Stockholder Meeting; (ii) the Company is required to postpone or adjourn the Company Stockholder Meeting by applicable Law, order or a request
from the SEC; (iii) to ensure that any supplement or amendment to the Proxy Statement required by applicable Law is provided to the holders of shares of Company Common Stock with a reasonable amount of time in advance of the Company Stockholder
Meeting; (iv) Parent has so consented in writing; or (v) to allow additional time for the solicitation of votes in order to obtain the Requisite Stockholder Approval (provided that the Company Stockholder Meeting shall not be postponed or adjourned
by more than 10 Business Days pursuant to this clause (v)). If requested by Parent in order to allow additional time for the solicitation of votes in order to obtain the Requisite Stockholder Approval, the Company shall postpone or adjourn the
meeting for up to 10 Business Days. Without the prior written consent of Parent (which will not be unreasonably withheld, conditioned or delayed), the Company Stockholder Meeting will not be postponed or adjourned by more than 10 Business Days for
each event giving rise to such a postponement or adjournment. In no event will the record date of the Company Stockholder Meeting be changed without Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned or
delayed), unless required by applicable Law.
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(c) Support Agreement. At the Company Stockholder Meeting and
at every other meeting of Company Stockholders, including any postponement, recess or adjournment thereof, or in any other circumstance, however called, the Company shall cause the Proxy Holder to (i) appear at each such meeting or otherwise cause
all of the shares of Company Common Stock subject to the Support Agreement to be counted as present thereat for purposes of establishing a quorum and (ii) vote or consent in respect of, or cause to be voted or consents to be executed in respect of,
all such shares of Company Common Stock in accordance with the terms and conditions of the Support Agreement. The Company shall enforce the terms and conditions of, and without the prior written consent of Parent (which may be granted or withheld in
Parent’s sole discretion), shall not amend or modify, waive, or terminate any provision of, the Support Agreement.
Section 6.5 Financing Cooperation.
(a) Cooperation by the Company with the Financing. Prior to
the Effective Time, the Company will use reasonable best efforts, and will cause each of its Subsidiaries and their respective Representatives to use their reasonable best efforts, to reasonably cooperate as may be customary and reasonably requested
by Parent, and at the sole expense of Parent, in connection with the arrangement of any financing to be obtained by Parent and its Subsidiaries in connection with the Merger (the “Financing”); provided that the Company and its Subsidiaries shall not be required to: (i) waive or amend any terms of this Agreement or agree to pay any fees or reimburse any expenses for which it has not received prior reimbursement
from Parent; (ii) enter into any definitive agreement to be effective prior to the Closing; (iii) provide access to or disclose information which would result in waiving any attorney-client privilege or work-product privilege; or (iv) pay any
commitment or other similar fee or incur any other cost or liability in connection with the Financing prior to the Closing (unless Parent agrees to reimburse the Company therefor), except for any liabilities that are conditioned on the Closing having
occurred.
(b) Parent shall promptly upon request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs and expenses
incurred by the Company or its Subsidiaries, in connection with such cooperation. Parent shall defend, indemnify and hold harmless the Company, its Subsidiaries, and their Affiliates, for and against any and all losses suffered or incurred by them in
connection with the arrangement of Financing and any information utilized in connection therewith (other than information provided by the Company expressly for use in connection therewith).
(c) All nonpublic or other confidential information provided by the Company or any of its Representatives pursuant to this Agreement shall be kept
confidential in accordance with the Confidentiality Agreement, except that Parent and Merger Sub will be permitted to disclose such information to any financing sources or prospective financing sources and other financial institutions and investors
that are or may become parties to the Financing and to any underwriters, initial purchasers or placement agents in connection with the Financing (and, in each case, to their respective counsel and auditors), so long as such Persons agree in writing
to be bound by the Confidentiality Agreement as if parties thereto in advance of any such information being shared with such Persons.
(d) The Company and its counsel shall be given a reasonable opportunity to review and comment on any materials that are to be presented during any
road shows or bank presentations conducted in connection with the Financing that contain confidential information about the Company or any of its Subsidiaries, and Parent shall give due consideration to all reasonable additions, deletions or changes
suggested thereto by the Company and its counsel.
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(e) No Financing Condition. Parent and Merger Sub each
acknowledge and agree that obtaining the Financing is not a condition to the Closing. If the Financing has not been obtained, Parent and Merger Sub will each continue to be obligated, subject to the satisfaction or waiver of the conditions set forth
in Article VII, to consummate the Merger. Notwithstanding anything herein to the contrary, none of Parent, its Subsidiaries, or their respective Affiliates shall enter into
exclusive arrangements with potential financing sources that would by their terms or otherwise materially impair, delay or prevent any Person from financing any Acquisition Proposal contemplated by Section 5.4(a).
Section 6.6 Anti-Takeover Laws. Neither Parent
nor the Company will take any action that would cause any restrictions on business combinations set forth in the Charter or any “takeover” Law to become applicable to this Agreement, the Support Agreement, the transactions contemplated hereby or
thereby or the Merger. Each of Parent, the Company and the Company Special Committee will, subject to applicable Law, (a) take all actions within their power to ensure that any restrictions on business combinations set forth in the Charter or any
“anti-takeover” Law (including, without limitation, NRS 78.378 to 78.3793, inclusive, and NRS 78.411 to 78.444, inclusive) are not or do not become applicable to this Agreement, the
Rollover Agreement, the Support Agreement, the transactions contemplated hereby or thereby, or the Merger; and (b) if any restriction on business combinations set forth in the Charter or applicable “anti-takeover” Law is or becomes applicable to this
Agreement, the Support Agreement, the transactions contemplated hereby or thereby, or the Merger, take all action within their power to ensure that this Agreement, the Support Agreement, the transactions contemplated hereby or thereby, and the Merger
may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such restriction or Law on this Agreement, the Support Agreement, the transactions contemplated hereby or
thereby, and the Merger.
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Section 6.7 Information Access During the Pre-Closing
Period. During the Pre-Closing Period, the Company will, and will cause its Subsidiaries to, for purposes of consummating the Merger and the other transactions contemplated hereby or planning with respect to post-closing integration or operations, afford Parent and its Representatives reasonable access during normal business hours, upon reasonable advance written notice, to the properties, books and records,
and personnel of the Company and its Subsidiaries as reasonably requested by Parent or its Representatives and reasonably promptly provide Parent and its Representatives with all reasonably requested information regarding the business of the Company
and its Subsidiaries and such additional information regarding the Company and its Subsidiaries as Parent may reasonably request. Notwithstanding the prior sentence, the Company may restrict or otherwise prohibit access to any documents or
information (including by redacting any such documents or information) to the extent that (a) any applicable Law requires the Company to restrict or otherwise prohibit access to such documents or information; (b) access to such documents or
information would give rise to a material risk of waiving any attorney-client privilege, work product doctrine or other privilege applicable to such documents or information; (c) such documents or information are subject to a confidentiality Contract
or arrangement to which the Company or any of its Subsidiaries entered into prior to the date hereof; or (d) reasonably pertinent to any Legal Proceeding between the Company and its Affiliates, on the one hand, and Parent and its Affiliates, on the
other hand, provided, however, that in such instances (other than with respect to clause (d)), the Company shall inform Parent of the general nature of the information being withheld and, upon Parent’s request, reasonably cooperate with Parent to
provide such information, in whole or in part, in a manner that would not result in any of the outcomes described in the foregoing clauses (a) through (c). Any investigation conducted pursuant to the access contemplated by this Section 6.7 will be conducted in a manner that does not unreasonably interfere with the conduct of the business of the Company and its Subsidiaries or create a risk of damage or
destruction to any property or assets of the Company or its Subsidiaries. Any access to the properties or personnel of the Company and its Subsidiaries will be subject to the Company’s reasonable security measures, health and safety measures, and
insurance requirements, and will not include the right to perform any “invasive” testing or soil, air or groundwater sampling, including any Phase II environmental assessments without the prior written consent of the Company. Notwithstanding anything
to the contrary contained herein, the Company may, as it deems advisable and necessary, reasonably designate any competitively sensitive material provided under this Section 6.7
as “Outside Counsel Only Material.” Outside Counsel Only Material and the information contained therein shall be given only to the outside counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, directors or
other Representatives of the recipient unless express written permission is obtained in advance from the Company or its outside legal counsel. Parent and Merger Sub will hold, and will cause their Affiliates and direct their Representatives to hold,
any nonpublic information, including any information exchanged pursuant to this Section 6.7, in confidence to the extent required by and in accordance with, and will otherwise
comply with the terms of, the Confidentiality Agreement.
Section 6.8 Section 16(b) Exemption. Prior to the
Effective Time, the Company will take all actions reasonably necessary to cause the Merger, and any dispositions of equity securities of the Company (including derivative securities) in connection with the Merger by each individual who is a director
or executive officer of the Company to be exempt pursuant to Rule 16b-3 promulgated under the Exchange Act.
Section 6.9 Directors’ and Officers’ Exculpation,
Indemnification and Insurance.
(a) Indemnified Persons. The Surviving Corporation and its
Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) honor and fulfill, in all respects, the obligations of the Company and its Subsidiaries pursuant to (i) the articles of incorporation, bylaws and other
similar organizational documents and (ii) any indemnification agreements or the indemnification provisions of any other Contract containing indemnification provisions (including employment agreements) between the Company and any of its Subsidiaries,
on the one hand, and any of their respective current or former directors or officers (and any person who becomes a director or officer of the Company or any of its Subsidiaries prior to the Effective Time, collectively, the “Indemnified Persons”), on the other hand, provided that, in the case of foregoing clause (ii), only to the extent such indemnification agreement or other Contract is in effect as of the date
of this Agreement. In addition, during the period commencing at the Effective Time and ending on the sixth anniversary of the Effective Time, the Surviving Corporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its
Subsidiaries to) cause the articles of incorporation, bylaws and other similar organizational documents of the Surviving Corporation to contain provisions with respect to indemnification, exculpation and the advancement of expenses that are at least
as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the Charter and the Bylaws as of the date of this Agreement. During such six-year period or such period in which an Indemnified Person is asserting a
claim for indemnification pursuant to Section 6.9(b), whichever is longer, such provisions may not be repealed, amended or otherwise modified in any manner that would adversely
affect any right to indemnification, exculpation or advancement of expenses thereunder of any such Indemnified Person except as required by applicable Law.
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(b) Indemnification Obligation. Without limiting the
generality of Section 6.9(a), during the period commencing at the Effective Time and ending on the sixth anniversary of the Effective Time, the Surviving Corporation will (and
Parent will cause the Surviving Corporation to) indemnify and hold harmless, to the fullest extent permitted by applicable Law, each Indemnified Person (in their capacity as such) from and against any costs, fees and expenses (including attorneys’
fees and investigation expenses), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement or compromise in connection with any Legal Proceeding, whether civil, criminal, administrative or investigative, to the extent
that such Legal Proceeding is based on, arises from, or directly or indirectly, out of (i) any action or omission, or alleged action or omission, in such Indemnified Person’s capacity as a director or officer of the Company or any of its Subsidiaries
(regardless of whether such action or omission, or alleged action or omission, occurred prior to, at or after the Effective Time) and (ii) the fact that such Indemnified Person is or was a director (including in a capacity as a member of any board
committee) or officer of the Company, and of its Subsidiaries or any of their respective predecessors (any such Legal Proceeding, an “Indemnified Party Proceeding”).
Notwithstanding the foregoing, if, at any time prior to the sixth anniversary of the Effective Time, any Indemnified Person delivers to Parent a written notice asserting a claim for indemnification pursuant to this Section 6.9(b), then the claim asserted in such notice will survive the sixth anniversary of the Effective Time until such claim is fully and finally resolved. In connection with an Indemnified Party
Proceeding, (A) the Surviving Corporation will have the right to control the defense thereof after the Effective Time; (B) upon receipt of an undertaking by or on behalf of such Indemnified Person to repay any amount if it is ultimately determined by
a court of competent jurisdiction in a final, non-appealable order or judgment that such Indemnified Person is not entitled to indemnification, the Surviving Corporation will advance all fees and expenses (including fees and expenses of any counsel)
as incurred by an Indemnified Person in the defense of such Indemnified Party Proceeding, whether or not the Surviving Corporation elects to control the defense of any such Indemnified Party Proceeding; and (C) no Indemnified Person will be liable
for any settlement, compromise or arrangement regarding such Legal Proceeding effected without his or her prior written consent (not to be unreasonably withheld, conditioned or delayed). Notwithstanding anything to the contrary in this Agreement,
none of Parent, the Surviving Corporation or any of their respective Affiliates will settle, compromise or consent to the entry of any judgment with respect to, or otherwise seek the termination of, any Legal Proceeding for which indemnification may
be sought by an Indemnified Person pursuant to this Agreement unless such settlement, compromise, consent or termination includes an unconditional release of all Indemnified Persons from all liability arising out of such Indemnified Party Proceeding
with no admission of liability with respect to such Indemnified Person or such Indemnified Person approves in writing of such settlement, compromise or consent (such approval not to be unreasonably withheld, conditioned or delayed). No Indemnified
Person shall compromise, settle or consent to an arrangement regarding, or agree to compromise, settle or consent to an arrangement regarding, any Indemnified Party Proceeding for which indemnification is or will be sought under this Section 6.9(b) unless Parent has consented thereto in writing and Parent and the Surviving Corporation shall not have any liability for any such compromise, settlement or arrangement
effected without Parent’s prior written consent. Notwithstanding the foregoing, the provisions of this Section 6.9(b) shall not modify, amend, remove or otherwise alter, but
shall be in addition to, any obligations of the Surviving Corporation and its Subsidiaries pursuant to the articles of incorporation, bylaws and other similar organizational documents or any indemnification agreements or the indemnification
provisions of other Contracts containing indemnification provisions (including employee agreements) between the Company and any of its Subsidiaries, on the one hand, and an Indemnified Person, on the other hand.
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(c) D&O Insurance. During the period commencing at the
Effective Time and ending on the sixth anniversary of the Effective Time, the Surviving Corporation will (and Parent will cause the Surviving Corporation to) maintain in effect the D&O Insurance in respect of acts or omissions occurring at or
prior to the Effective Time (including claims with respect to the adoption of this Agreement and the consummation of the transactions contemplated hereby, including the Merger and the Charter Amendment). In satisfying its obligations pursuant to this
Section 6.9(c), the Surviving Corporation will not be obligated to pay aggregate premiums in excess of 300 percent of the amount paid by the Company for coverage for its last
full fiscal year (such 300 percent amount, the “Maximum Premium”). If the aggregate premiums of such insurance coverage exceed the Maximum Premium, then the Surviving
Corporation will be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the Maximum Premium from an insurance carrier with the same or better credit rating as the Company’s current directors’ and officers’
liability insurance carrier. Prior to the Effective Time, and in lieu of maintaining the D&O Insurance pursuant to this Section 6.9(c), the Company may (and, at Parent’s
request, shall) purchase a prepaid “tail” policy (the “Tail Policy”) with respect to the D&O Insurance from an insurance carrier with the same or better credit
rating as the Company’s current directors’ and officers’ liability insurance carrier so long as the aggregate cost for the Tail Policy does not exceed the Maximum Premium, it being understood that if the aggregate cost would exceed that limit, the
Company may (and, at Parent’s request, shall) purchase as much coverage as reasonably practicable up to such limit. If the Company does not purchase a Tail Policy prior to the Closing, Parent shall have the right, in lieu of maintaining the D&O
Insurance pursuant to this Section 6.9(c), to purchase a Tail Policy with respect to the D&O Insurance from an insurance carrier with the same or better credit rating as the
Company’s current directors’ and officers’ liability insurance carrier. If the Company purchases the Tail Policy prior to the Effective Time, then the Surviving Corporation will (and Parent will cause the Surviving Corporation to) maintain the Tail
Policy in full force and effect and continue to honor its obligations thereunder for so long as the Tail Policy is in full force and effect.
(d) Successors and Assigns. Proper provisions will be made so
that the successors and assigns of Parent, the Surviving Corporation or any of their respective successors or assigns will assume all of the obligations of Parent and the Surviving Corporation set forth in this Section 6.9 (including this Section 6.9(d)) if Parent, the Surviving Corporation or any of their respective successors or assigns either (i)
consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity in such consolidation or merger; or (ii) transfers all or substantially all of its properties and assets to any Person.
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(e) No Impairment; Third-Party Beneficiary Rights. The
obligations set forth in this Section 6.9 may not be terminated, amended or otherwise modified in any manner that adversely affects any Indemnified Person without the prior
written consent of such affected Indemnified Person. Each of the Indemnified Persons are third-party beneficiaries of this Section 6.9, with full rights of enforcement. The
rights of the Indemnified Persons pursuant to this Section 6.9 will be in addition to, and not in substitution for, any other rights that such persons may have pursuant to (i)
the Charter and Bylaws; (ii) the similar organizational documents of the Subsidiaries of the Company; (iii) any and all indemnification agreements or the indemnification provisions of other Contracts containing indemnification provisions (including
employment agreements) entered into with the Company or any of its Subsidiaries; or (iv) applicable Law.
(f) Other Claims. Nothing in this Agreement is intended to,
or will be construed to, release, waive or impair any rights to directors’ and officers’ insurance claims pursuant to any applicable insurance policy or indemnification agreement that is or has been in existence with respect to the Company or any of
its Subsidiaries for any of their respective directors, officers or other employees, it being understood and agreed that the indemnification provided for in this Section 6.9 is
not prior to or in substitution for, but in addition to, any such claims pursuant to such policies or agreements.
Section 6.10 Employee Matters.
(a) Benefits.
(i) If the Effective Time occurs in calendar year 2023, from the Effective Time and through December 31, 2023, the Surviving Corporation and its Subsidiaries will (and Parent will cause the
Surviving Corporation and its Subsidiaries to) provide Continuing Employees with (i) base salary or hourly wages which are no less than the base salary or hourly wages provided by the Company or its Subsidiaries immediately prior to the Closing
Date, (ii) target bonus opportunities which are no less favorable than the target bonus opportunities provided by the Company or its Subsidiaries immediately prior to the Closing Date, (iii) employee benefits (excluding employee stock purchase
plans, equity or equity-based benefits, retention, change in control, nonqualified deferred compensation, incentive, bonus, transaction benefits, defined benefit pension, severance, termination pay, or post-employment health and welfare benefit
plans or arrangements (collectively, the “Excluded Arrangements”)) that are no less favorable, in the aggregate, to those in effect at the Company or its
Subsidiaries on the date of this Agreement under the Company Benefit Plans set forth under Section 3.19(a) of the Company Disclosure Letter and (iv) severance benefits that are no less favorable than those in effect at the Company or its
Subsidiaries on the date of this Agreement under the Company Benefit Plans set forth under Section 3.19(a) of the Company Disclosure Letter.
(ii) From the later of the Effective Time and January 1, 2024 through the date that is 12 months following the
Effective Time, the Surviving Corporation and its Subsidiaries will (and Parent will cause the Surviving Corporation and its Subsidiaries to) provide Continuing Employees with (A) base salary or hourly wages that are no less favorable than the base
salary or hourly wages, as applicable, provided by either (as determined by Parent in its discretion) (1) the Company or its Subsidiaries to the Continuing Employee immediately prior to the Closing Date or (2) Parent or its Subsidiaries to
similarly situated employees of Parent or its Subsidiaries; (B) employee benefits (excluding Excluded Arrangements) that are no less favorable than either (as determined by Parent in its discretion) the employee benefits (excluding Excluded
Arrangements) (1) in effect at the Company or its Subsidiaries on the date of this Agreement under the Company Benefit Plans set forth under Section 3.19(a) of the Company Disclosure Letter or (2) provided by Parent or its Subsidiaries to similarly
situated employees of Parent or its Subsidiaries; and (C) severance benefits that are no less favorable than either (as determined by Parent in its discretion) the severance benefits (1) in effect at the Company or its Subsidiaries on the date of
this Agreement under the Company Benefit Plans set forth under Section 3.19(a) of the Company Disclosure Letter or (2) provided by Parent or its Subsidiaries to similarly situated employees of Parent or its Subsidiaries.
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(b) New Plans. Parent and the Surviving Corporation will use
commercially reasonable efforts to cause (i) each Continuing Employee to be immediately eligible to participate, without any waiting period, in any and all employee benefit plans sponsored by Parent and its Subsidiaries (other than the Company
Benefit Plans) (such plans, the “New Plans”) to the extent that coverage pursuant to any New Plan replaces coverage pursuant to a comparable Company Benefit Plan in
which such Continuing Employee participates immediately before the Effective Time (such plans, the “Old Plans”) and (ii) for purposes of each New Plan providing
medical, dental, pharmaceutical, vision, disability or other welfare benefits to any Continuing Employee, all waiting periods, pre-existing conditions or limitations, physical examination requirements, evidence of insurability requirements and
actively-at-work or similar requirements of such New Plan to be waived for such Continuing Employee and his or her covered dependents (to the same extent such conditions, limitations or requirements were met or otherwise not applicable to such
Continuing Employee under the Old Plans as of the Effective Time), and any eligible expenses incurred by such Continuing Employee and his or her covered dependents under an Old Plan providing group health benefits during the portion of the plan year
of the Old Plan ending on the date that such Continuing Employee’s participation in the corresponding New Plan begins to be given full credit pursuant to such New Plan for purposes of satisfying all deductible, co-payments, coinsurance, offset and
maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) Termination of Company Benefit Plans. Effective no later
than the day immediately preceding the Closing Date, the Company shall terminate, or cause to be terminated, any Company Benefit Plan that Parent has requested to be terminated by providing written notice to the Company at least 15 days prior to the
Closing Date. In the event that Parent requests termination of a Company Benefit Plan, the Company, or its applicable Subsidiary, shall adopt written resolutions, the form and substance of which shall be satisfactory to Parent, to terminate such
Company Benefit Plan, and the Company shall take, or shall cause to be taken, such other actions as are reasonably requested by Parent to effectuate such termination. No later than the day immediately preceding the Closing Date, the Company shall
provide Parent with evidence that such Company Benefit Plans have been terminated.
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(d) No Third Person Beneficiary Rights. Notwithstanding
anything to the contrary set forth in this Agreement, neither this Section 6.10 nor any provisions of this Agreement relating to Company Benefit Plans or Continuing Employees
will be deemed to (i) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Subsidiaries to terminate any Continuing Employee for any reason; (ii) require Parent, the
Surviving Corporation or any of their respective Subsidiaries to maintain or continue any Company Benefit Plan or prevent the amendment, modification, suspension or termination thereof or under any other compensation or benefit plan or arrangement
after the Effective Time; (iii) create any third party beneficiary rights in any Person; or (iv) be treated as establishment of or an amendment of, or undertaking to amend, any Company Benefit Plan or other compensation or benefit plan or
arrangement.
(e) Employee Communications and Consultations. From and after
the date hereof until the Closing, the Company shall give Parent the reasonable opportunity to review and comment on any broad-based communications to be distributed to or shared with Service Providers relating to the transactions contemplated by
this Agreement or terms of employment (and shall consider and incorporate in good faith any comments so provided by Parent).
Section 6.11 Obligations. Parent will take all
action necessary to cause Merger Sub and the Surviving Corporation to perform their respective obligations pursuant to this Agreement and to consummate the Merger upon the terms and subject to the conditions set forth in this Agreement. The Company
will take all action necessary to cause its Subsidiaries to perform their respective obligations pursuant to this Agreement and to consummate the Merger upon the terms and subject to the conditions set forth in this Agreement.
Section 6.12 Notification of Certain Matters.
(a) Notification by the Company. During the Pre-Closing
Period, the Company will give prompt notice to Parent upon becoming aware that any representation or warranty made by it in this Agreement has become untrue or inaccurate in any material respect, in each case if and only to the extent that such
untruth or inaccuracy would reasonably be expected to cause any of the conditions to the obligations of Parent and Merger Sub to consummate the Merger set forth in Section 7.2(a)
or Section 7.2(b) to fail to be satisfied at the Closing. No such notification will affect or be deemed to modify any representation or warranty of the Company that is set forth
in this Agreement or the conditions to the obligations of Parent and Merger Sub to consummate the Merger or the remedies available to the Parties under this Agreement.
(b) Notification by Parent. During the Pre-Closing Period,
Parent will give prompt notice to the Company upon becoming aware that any representation or warranty made by Parent or Merger Sub in this Agreement has become untrue or inaccurate in any material respect, in each case if and only to the extent that
such untruth or inaccuracy would reasonably be expected to cause any of the conditions to the obligations of the Company to consummate the Merger set forth in Section 7.3(a) or
Section 7.3(b) to fail to be satisfied at the Closing. No such notification will affect or be deemed to modify any representation or warranty of Parent or Merger Sub that is set
forth in this Agreement or the conditions to the obligations of the Company to consummate the Merger or the remedies available to the Parties under this Agreement.
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Section 6.13 Public Statements and Disclosure. The
initial press release concerning this Agreement and the Merger will be a joint press release reasonably acceptable to the Company and Parent and will be issued promptly following the execution and delivery of this Agreement. Thereafter, unless the
Company Special Committee has made a Company Recommendation Change, the Company and its Representatives, on the one hand, and Parent and Merger Sub and their respective Representatives, on the other hand, will consult with the other Parties before
(a) participating in any media interviews; (b) engaging in any meetings or calls with analysts, institutional investors or other similar Persons; or (c) providing any statements that are public or are reasonably likely to become public, in each case
to the extent relating to this Agreement or the Merger and neither party shall issue any press release or make any public announcement or statement without the consent of the other party, which shall not be unreasonably withheld, conditioned or
delayed; provided, that to the extent such release or announcement is required by applicable Law or any listing agreement with or rule of any national securities exchange or association upon which the securities of the Company are listed, the party
required to make the release, announcement or statement shall use reasonable best efforts to consult with the other Party about, and allow the other Party reasonable time (taking into account the circumstances) to comment on, such release,
announcement or statement in advance of such issuance. Notwithstanding the foregoing, neither Parent nor the Company will be obligated to engage in such consultation with respect to communications that are (i) principally directed to its employees,
drivers, suppliers, customers, partners or vendors so long as such communications are consistent with prior communications previously agreed to by Parent and the Company and do not add additional material information not included in such previous
communication (in which case such communications may be made consistent with such plan); (ii) related to a Superior Proposal or Company Recommendation Change or, in each case, any action taken pursuant thereto; (iii) with respect to any dispute or
Legal Proceeding solely among the Parties or their respective Affiliates related to this Agreement or the Transaction Documents; or (iv) substantively consistent with previous public disclosures made by the Parties in compliance with this Section 6.13 and which do not add additional material information not included in such previous disclosure. Parent will not be obligated to engage in such consultation with respect
to communications that are principally directed to its existing or prospective equity holders and investors of Parent or its Affiliates, so long as such communications are consistent with prior communications previously agreed to by Parent and the
Company and do not add additional material information not included in such previous communication.
Section 6.14 Transaction Litigation.
(a) Notice. During the Pre-Closing Period, the Company will
provide Parent with prompt notice of all Transaction Litigation (including by providing copies of all pleadings with respect thereto) and keep Parent reasonably informed with respect to the status thereof.
(b) Cooperation. The Company will control the defense of any
Transaction Litigation. The Company (i) will (A) give Parent the reasonable opportunity to participate in the defense, settlement or prosecution of any Transaction Litigation; (B) consult with Parent with respect to the defense, settlement and
prosecution of any Transaction Litigation; and (C) consider in good faith Parent’s advice with respect to any Transaction Litigation; and (ii) may not compromise or settle, or agree to compromise or settle, any Transaction Litigation unless Parent
has consented thereto in writing (which consent will not be unreasonably withheld, conditioned or delayed). For purposes of this Section 6.14(b), “participate” means that Parent
will be kept apprised of proposed strategy and other significant decisions with respect to the Transaction Litigation by the Company, and Parent may offer comments or suggestions with respect to such Transaction Litigation, which the Company shall
consider in good faith.
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Section 6.15 Stock Exchange Delisting; Deregistration.
Prior to the Effective Time, the Company will cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable on its part pursuant
to applicable Law to cause (a) the delisting of the Company Class A Common Stock from the NYSE as promptly as practicable after (and not prior to) the Effective Time; and (b) the deregistration of the Company Class A Common Stock pursuant to the
Exchange Act as promptly as practicable after (and not prior to) such delisting.
Section 6.16 Additional Agreements. If at any time
after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of either
of the Company or Merger Sub, then the proper officers and directors of each Party will use their reasonable best efforts to take such action.
Section 6.17 Payoff of Credit Agreement. At or
prior to the Effective Time, Parent will provide (or cause to be provided) to the Company funds in an amount equal to the amount necessary for the Company to repay and discharge in full all amounts outstanding under the terms of the Credit Agreement.
Promptly following the Effective Time, the Company will repay and discharge such indebtedness (other than any contingent obligations for which no claim has been asserted) in a manner reasonably acceptable to the parties to the Credit Agreement and
Parent.
Section 6.18 Merger Sub Stockholder Consent.
Promptly following the execution and delivery of this Agreement (but in any event within 24 hours of the date of this Agreement), the sole stockholder of Merger Sub, will execute and deliver to Merger Sub (with a copy also sent simultaneously to the
Company) a written consent approving this Agreement and the Merger in accordance with the NRS and the organizational documents of Merger Sub (such adoption and approval, the “Merger Sub Stockholder Approval”).
Section 6.19 FIRPTA Certificate. Prior to the
Closing, the Company will deliver to Parent (a) a certificate duly executed by an authorized officer of the Company satisfying the requirements of Treasury Regulations Section
1.1445-2(c)(3) and certifying that the Company was not a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code at any time during the five-year period ending on the Closing Date and (b) a notice to the
IRS in accordance with Treasury Regulations Section 1.897-2(h)(2) to be delivered to the IRS by the Surviving Corporation after the Closing Date.
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ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to Each Party’s Obligations to
Effect the Charter Amendment and the Merger. The respective obligations of Parent, Merger Sub and the Company to effectuate the Charter Amendment and consummate the Merger are subject to the satisfaction or waiver (where permissible pursuant
to applicable Law and except with respect to Section 7.1(a), which will not be waivable) at or prior to the Closing of each of the following conditions:
(a) Requisite Stockholder Approval. The Requisite Stockholder
Approval will have been obtained at the Company Stockholder Meeting.
(b) Antitrust Laws. The waiting periods (and any extensions
thereof), if any, applicable to the Merger pursuant to the HSR Act will have expired or otherwise been terminated.
(c) No Prohibitive Injunctions or Laws. No (i) temporary
restraining order, preliminary or permanent injunction issued by any court of competent jurisdiction or other Order, legal or regulatory restraint or prohibition preventing the consummation of the Charter Amendment or the Merger will be in effect,
(ii) action will have been taken by any Governmental Authority of competent jurisdiction and (iii) Law will have been enacted, entered, enforced, or deemed applicable to the Merger, that, in the case of each of the foregoing clauses (i), (ii) or
(iii), prevents, materially restrains, materially impairs, or makes illegal the consummation of the Charter Amendment or the Merger, or would otherwise have such effect (any such Order, injunction, restraint, prohibition, action or Law, a “Restraint”).
Section 7.2 Conditions to the Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to consummate the Merger will be subject to the satisfaction or waiver (where permissible pursuant to applicable Law) at or prior to the Effective Time of each of the following conditions,
any of which may be waived exclusively by Parent:
(a) Representations and Warranties.
(i) In General. Other than the representations and warranties listed in Section 7.2(a)(ii) and Section 7.2(a)(iii), the representations and warranties of the Company set forth
in this Agreement shall be true and correct (without giving effect to any materiality or Company Material Adverse Effect qualifications set forth therein) as of the Closing Date as if made at and as of the Closing Date (except to the extent that
any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date), except for such failures to be true and correct that would not have a
Company Material Adverse Effect.
(ii) Specified Representations and
Warranties. The representations and warranties set forth in Section 3.1, Section 3.2, Section 3.3(a), Section 3.3(c), Section 3.4, Section 3.7(c), Section 3.8(c), Section
3.12(a) and Section 3.26 that (A) are not qualified by a Company Material Adverse Effect qualification will be true and correct in all material respects as of
the Closing Date, as if made at and as of the Closing Date (without giving effect to any materiality qualification set forth therein) (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which
case such representation and warranty will be true and correct in all material respects as of such earlier date) and (B) that are qualified by a Company Material Adverse Effect qualification will be true and correct in all respects (without
disregarding such Company Material Adverse Effect qualifications) as of the Closing Date as if made at and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case
such representation and warranty will be true and correct in all respects as of such earlier date).
(iii) Capitalization. The
representations and warranties set forth in Section 3.7(a) and Section 3.7(b) will be true and correct
as of the date hereof and as of the Closing Date as if made at and as of the Closing Date, subject only to de minimis inaccuracies (except to the extent that any
such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty will be true and correct as of such earlier date).
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(b) Performance of Covenants and Obligations. The Company
will have performed and complied in all material respects with all covenants and obligations in this Agreement required to be performed and complied with by it at or prior to the Closing.
(c) Officer’s Certificate. Parent and Merger Sub will have
received a certificate of the Company, validly executed for and on behalf of the Company and in its name by a duly authorized executive officer, certifying that the conditions set forth in Section
7.2(a), Section 7.2(b) and Section 7.2(d) have been satisfied.
(d) Company Material Adverse Effect. No Company Material
Adverse Effect shall have occurred after the date of this Agreement.
Section 7.3 Conditions to the Company’s Obligations to
Effect the Merger. The obligations of the Company to consummate the Merger are subject to the satisfaction or waiver (where permissible pursuant to applicable Law) at or prior to the Effective Time of each of the following conditions, any of
which may be waived exclusively by the Company:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub set forth in Section 4.1 and Section 4.2 will be true and correct in
all material respects as of the Closing Date as if made at and as of the Closing Date and all other representations and warranties in this Agreement will be true and correct (without giving effect to any materiality or Parent Material Adverse Effect
qualifications set forth therein) as of the Closing Date as if made at and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty
will be true and correct as of such earlier date), except for such failures to be true and correct that would not have a Parent Material Adverse Effect.
(b) Performance of Covenants and Obligations of Parent and Merger
Sub. Parent and Merger Sub will have performed and complied in all material respects with all covenants and obligations in this Agreement required to be performed and complied with by Parent and Merger Sub at or prior to the Closing.
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(c) Officer’s Certificate. The Company will have received a
certificate of Parent and Merger Sub, validly executed for and on behalf of Parent and Merger Sub and in their respective names by a duly authorized officer, certifying that the conditions set forth in Section 7.3(a) and Section 7.3(b) have been satisfied.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after the receipt of the Requisite Stockholder Approval (except as provided in this Agreement), as follows:
(a) by mutual written agreement of Parent and the Company;
(b) by either Parent or the Company if any Restraint has become final and non-appealable, except that the right to terminate this Agreement
pursuant to this Section 8.1(b) will not be available to any Party that has materially breached its obligations in this Agreement and such breach has been the primary cause of
or primarily resulted in the final non-appealable Restraint;
(c) by either Parent or the Company if the Effective Time has not occurred by 11:59 p.m. on December 20, 2023, (the “Termination Date”); provided, that in the event that at the Termination Date, all of the conditions in Article VII other than Section 7.1(b) or Section
7.1(c) (to the extent that the failure of such condition arises from or relates to Antitrust Laws) have been satisfied (except for those conditions that by their nature are to be satisfied at the Closing) or have been irrevocably
waived by Parent and Merger Sub or the Company, as applicable, then either the Company or Parent may, in its respective sole discretion, elect to extend the Termination Date to March 20, 2024, and such date shall become the Termination Date for purposes of this Agreement, by delivering written notice to the other Party no later than the Termination Date; it being understood that the right to terminate this
Agreement pursuant to this Section 8.1(c) will not be available to any Party whose action or failure to act (which action or failure to act constitutes a breach by such Party of
this Agreement) has been the primary cause of, or primarily resulted in the failure of the Effective Time to have occurred prior to the then-scheduled Termination Date;
(d) by either Parent or the Company if the Company fails to obtain the Requisite Stockholder Approval at the Company Stockholder Meeting
(including any adjournments and postponements thereof) at which a vote is taken on the adoption and approval of this Agreement and the Merger or on the approval of the Charter Amendment;
(e) by Parent if any of the representations or warranties of the Company contained in this Agreement shall have been inaccurate when made or shall
have become inaccurate thereafter or the Company has breached or failed to perform any of its obligations or covenants contained in this Agreement, which inaccuracy or breach or failure to perform would result in the failure of a condition set forth
in Section 7.2(a) or Section 7.2(b), except that (i) if such breach or failure to perform is capable of
being cured by the Termination Date, Parent will not be entitled to terminate this Agreement pursuant to this Section 8.1(e) prior to the earlier of (A) 30 days after delivery
by Parent to the Company of written notice of such breach or failure to perform, or (B) the Termination Date, it being understood that Parent will not be entitled to terminate this Agreement if such breach or failure to perform has been cured prior
to termination; and (ii) Parent will not be entitled to terminate this Agreement pursuant to this Section 8.1(e) if any of the representations or warranties of the Parent
contained in this Agreement shall then be inaccurate or Parent is then in breach in any material respect of any of its covenants or other agreements contained in this Agreement such that the Company would be entitled to terminate pursuant to Section 8.1(g) (disregarding for this purpose whether any applicable cure period required by Section 8.1(g)
has been completed);
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(f) by Parent if, prior to the Company obtaining the Requisite Stockholder Approval, the Company Special Committee or the Company Board has
effected a Company Recommendation Change;
(g) by the Company if any of the representations or warranties of Parent or Merger Sub contained in this Agreement shall have been inaccurate when
made or shall have become inaccurate thereafter or Parent or Merger Sub has breached or failed to perform any of its respective obligations or covenants contained in this Agreement, which inaccuracy, breach or failure to perform would result in a
failure of a condition set forth in Section 7.3(a) or Section 7.3(b), except that (i) if such breach or
failure to perform is capable of being cured by the Termination Date, the Company will not be entitled to terminate this Agreement pursuant to this Section 8.1(g) prior to the
earlier of (A) 30 days after delivery by the Company to Parent of written notice of such breach or failure to perform, or (B) the Termination Date, it being understood that the Company will not be entitled to terminate this Agreement if such breach
or failure to perform has been cured prior to termination; and (ii) the Company will not be entitled to terminate this Agreement pursuant to this Section 8.1(g) if any of the
representations or warranties of the Company contained in this Agreement shall then be inaccurate or the Company is then in breach in any material respect of any of its representations, warranties, covenants or other agreements contained in this
Agreement such that Parent would be entitled to terminate pursuant to Section 8.1(e) (disregarding for this purpose whether any applicable cure period required by Section 8.1(e) has been completed); or
(h) by the Company (at any time prior to receiving the Requisite Stockholder Approval) if (i) the Company has received a Superior Proposal; (ii)
the Company Special Committee has authorized the Company to enter into an Alternative Acquisition Agreement to consummate the Acquisition Transaction contemplated by that Superior Proposal; (iii) the Company has complied in all material respects with
Section 5.4 with respect to such Superior Proposal; and (iv) the Company pays, or causes to be paid, to Parent or its designee the Company Termination Fee pursuant to and in
accordance with Section 8.3(b)(iii).
Section 8.2 Manner and Notice of Termination; Effect of
Termination.
(a) Manner of Termination. The Party terminating this
Agreement pursuant to Section 8.1 (other than pursuant to Section 8.1(a)) must deliver prompt written
notice thereof to the other Parties setting forth in reasonable detail the provision of Section 8.1 pursuant to which this Agreement is being terminated and reasonably detailed
facts and circumstances forming the basis for such termination.
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(b) Effect of Termination. Any valid termination of this
Agreement pursuant to Section 8.1 will be effective immediately upon the mutual written agreement of Parent and the Company or the delivery of written notice by the terminating
Party to the other Parties, as applicable. Following the termination of this Agreement pursuant to Section 8.1, this Agreement will be of no further force or effect without
liability of any Party (or any equity holder, controlling person, partner, member, manager, stockholder, director, officer, employee, agent or other Representative of such Party) to the other Parties, as applicable, except that Section 6.5(b), Section 8.3, Article IX
and this Section 8.2 (and the definitions of all defined terms appearing in such sections) will each survive the termination of this Agreement, in each case in accordance with
their respective terms. Notwithstanding the previous sentence, but subject to Section 8.3(e), nothing in this Agreement will relieve any Party from any liability for any fraud
or Willful Breach of this Agreement prior to the termination of this Agreement. No termination of this Agreement will affect the rights or obligations of any Party pursuant to the Confidentiality Agreement, which rights, obligations and agreements
will survive the termination of this Agreement in accordance with its terms.
Section 8.3 Fees and Expenses.
(a) General. Except as set forth in Section 6.5(b) and this Section 8.3, all fees and expenses incurred in connection with this Agreement and the
Merger will be paid by the Party incurring such fees and expenses whether or not the Merger is consummated.
(b) Company Payments.
(i) Future Transactions. If (A) this Agreement is validly terminated pursuant to Section 8.1(c), Section 8.1(d) or Section
8.1(e); (B) following the execution and delivery of this Agreement and prior to the termination of this Agreement pursuant to Section 8.1(c), Section 8.1(d) or Section 8.1(e), a “bona fide” Acquisition Proposal shall have been made to the Company,
the Company Board or the Company Special Committee or shall have been publicly announced or publicly disclosed; and (C) within one year of the termination of this Agreement pursuant to Section
8.1(c), Section 8.1(d) or Section 8.1(e), as applicable, either an Acquisition
Transaction is consummated or the Company enters into a definitive agreement providing for the consummation of an Acquisition Transaction that is subsequently consummated, then the Company shall, concurrently with the earlier of the consummation
of such Acquisition Transaction or the entry into a definitive agreement with respect to such Acquisition Transaction, pay or cause to be paid to Parent or its designee an amount equal to the Company Termination Fee by wire transfer of
immediately available funds to an account designated by Parent. For purposes of this Section 8.3(b)(i) (other than with respect to clause (B) all references to “15 percent”
and “85 percent” in the definition of “Acquisition Transaction” will be deemed to be references to “50 percent”).
(ii) Company Recommendation Change.
If this Agreement is validly terminated pursuant to Section 8.1(f), then the Company shall, within three Business Days following such termination, pay or cause to be paid to
Parent or its designee the Company Termination Fee by wire transfer of immediately available funds to an account designated by Parent.
(iii) Superior Proposal. If
this Agreement is validly terminated pursuant to Section 8.1(h), then the Company shall, concurrently with such termination, pay or cause to be paid to Parent or its designee
the Company Termination Fee by wire transfer of immediately available funds to an account designated by Parent.
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(c) Single Payment Only; Liquidated Damages. The Parties
acknowledge and agree that in no event will the Company be required to pay the Company Termination Fee on more than one occasion, whether or not the Company Termination Fee may be payable pursuant to more than one provision of this Agreement at the
same or at different times and upon the occurrence of different events. The Parties acknowledge and agree that (i) the agreements contained in this Section 8.3 are an integral
part of the transactions contemplated by this Agreement; (ii) the damages resulting from the termination of this Agreement under circumstances where the Company Termination Fee is payable are uncertain and incapable of accurate calculation; and (iii)
without these agreements, the Parties would not enter into this Agreement. Therefore, the Company Termination Fee if, as and when required to be paid pursuant to this Section 8.3
will not constitute a penalty but rather liquidated damages in a reasonable amount that will compensate Parent and Merger Sub in the circumstances in which it is payable for the efforts and resources expended and opportunities foregone while
negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Merger.
(d) Payments; Default. The Parties acknowledge and agree that
the agreements contained in this Section 8.3 are an integral part of this Agreement and that, without these agreements, the Parties would not enter into this Agreement.
Accordingly, if the Company fails to promptly pay any amount due pursuant to Section 8.3(b) and, in order to obtain such payment, Parent commences a Legal Proceeding that
results in a judgment against the Company for the amount set forth in Section 8.3(b) or any portion thereof, then the Company will pay or cause to be paid to Parent the
reasonable and documented out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees) of Parent in connection with such Legal Proceeding, together with interest on such amount or portion thereof at an annual rate equal to
the prime rate (as published in The Wall Street Journal or, if not published in The
Wall Street Journal, another authoritative source, on the date that such payment or portion thereof was required to be made) through the date that such payment or portion thereof was actually received, or a lesser rate that is the maximum
permitted by applicable Law (collectively, “Enforcement Expenses”).
(e) Sole and Exclusive Remedy. If this Agreement is validly
terminated pursuant to Section 8.1 in a situation in which the Company Termination Fee is payable pursuant to Section
8.3(b) and the Company Termination Fee is paid, Parent’s receipt of the Company Termination Fee and any Enforcement Expenses to the extent owed will be the sole and exclusive remedies of the Parent Related Parties against the Company
Related Parties in respect of this Agreement, the Transaction Documents, the transactions contemplated by this Agreement or the Transaction Documents, the termination of this Agreement, any matters forming the basis of such termination, or the
failure to consummate the Merger. Following the valid termination of this Agreement pursuant to Section 8.1, including upon payment of the Company Termination Fee and any
Enforcement Expenses in a situation in which the Company Termination Fee is payable and is paid, none of the Company Related Parties will have any further liability or obligation to any of the Parent Related Parties relating to or arising out of this
Agreement, the Transaction Documents and the Confidentiality Agreement or the transactions contemplated by this Agreement, the failure to consummate the Merger or any claims or actions under applicable Law arising therefrom. Notwithstanding the
foregoing, this Section 8.3(e) will not relieve the Company from any liability for any fraud or Willful Breach of this Agreement or pursuant to Section 8.3(a), as applicable.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Survival of Representations, Warranties and
Covenants and Obligations. The representations, warranties and covenants of the Company, Parent and Merger Sub contained in this Agreement will terminate at the Effective Time, except that any covenants or obligations that by their terms
survive the Effective Time will survive the Effective Time in accordance with their respective terms.
Section 9.2 Notices.
(a) Addresses for Notice. All notices and other
communications under this Agreement must be in writing and, subject to Section 9.2(b), will be deemed to have been duly delivered and received using one or a combination of the
following methods: (i) four Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid; (ii) one Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide
overnight courier service; (iii) immediately upon delivery by hand; or (iv) on the date sent by email (except that notice given by email will not be effective unless the receiving Party delivers a written confirmation of receipt of such notice either
by email or any other method described in this Section 9.2 (excluding “out of office” or other automated replies)). In each case, the intended recipient is set forth below:
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if to Parent, Merger Sub or the Surviving Corporation to:
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Knight-Swift Transportation Holdings Inc.
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2002 West Wahalla Lane
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Phoenix, Arizona 85027
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Attention:
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Todd F. Carlson, General Counsel and Secretary
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Email :
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with copies (which will not constitute notice) to:
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Scudder Law Firm, P.C., L.L.O.
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411 South 13th Street, Second Floor
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Lincoln, NE 68508
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Attention:
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Mark A. Scudder | |
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Email:
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and
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Fried, Frank, Harris, Shriver & Jacobson LLP
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One New York Plaza
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New York, NY 10004
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Attention:
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Philip Richter | |
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Email:
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if to the Company (prior to the Effective Time) to:
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U.S. Xpress Enterprises, Inc.
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4080 Jenkins Road
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Chattanooga, TN 37421
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Attention:
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Nathan Harwell, EVP, Chief Legal Officer and Corporate Secretary
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Email:
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with a copy (which will not constitute notice) to:
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King & Spalding LLP
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1180 Peachtree Street, NE
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Suite 1600
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Atlanta, GA 30309
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Attention:
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Erik Belenky; Keith Townsend | |
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Email:
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(b) Additional Procedures Related to Notices. Rejection or
other refusal to accept, or the inability to deliver because of changed address or other details of which no notice is given, will be deemed to be receipt of any notice pursuant to this Section
9.2 as of the date of rejection, refusal or inability to deliver. Any notice received by the addressee on any Business Day after 5:00 p.m., addressee’s local time, or on any day that is not a Business Day will be deemed to have been
received at 9:00 a.m., addressee’s local time, on the next Business Day. From time to time, any Party may provide notice to the other Parties of a change in its address or any of the other details specified in or pursuant to this Section 9.2 through a notice given in accordance with this Section 9.2, except that notice of any such change
will not be deemed to have been received until, and will be deemed to have been received upon, the later of the date (i) specified in such notice or (ii) the Business Day after such notice would otherwise be deemed to have been received pursuant to
this Section 9.2.
Section 9.3 Amendment. Subject to applicable Law
and the other provisions of this Agreement, this Agreement may be amended by the Parties at any time by execution of an instrument in writing signed on behalf of each of Parent, Merger Sub and the Company (pursuant to authorized action by the Company
Special Committee), except that if the Company has received the Requisite Stockholder Approval, then no amendment may be made to this Agreement that requires the approval of the Company Stockholders pursuant to the NRS without receiving such
approval. The Company may not take or authorize any such action without the prior approval of the Company Special Committee.
Section 9.4 Extension; Waiver. At any time and
from time to time prior to the Effective Time, any Party may, to the extent legally allowed and except as otherwise set forth in this Agreement, (a) extend the time for the performance of any of the obligations or other acts of the other Parties, as
applicable; (b) waive any inaccuracies in the representations and warranties made to such Party in this Agreement; and (c) subject to the requirements of applicable Law, waive compliance with any of the agreements or conditions for the benefit of
such Party contained in this Agreement. Any agreement by a Party to any such extension or waiver will be valid only if set forth in an instrument in writing signed by such Party. Any delay in exercising any right pursuant to this Agreement will not
constitute a waiver of such right. The Company may not take any of the actions contemplated by this Section 9.4 without the prior approval of the Company Special Committee.
Section 9.5 Assignment. No Party may assign
either this Agreement or any of its rights, interests, or obligations under this Agreement without the prior written approval of the other Parties, except that Parent and Merger Sub will have the right to assign all or any portion of their respective
rights and obligations pursuant to this Agreement from and after the Effective Time (a) in connection with a merger or consolidation involving Parent or Merger Sub or other disposition of all or substantially all of the assets of Parent, Merger Sub
or the Surviving Corporation or (b) to any of their respective Affiliates. This Agreement will be binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns. No assignment by any Party will relieve
such Party of any of its obligations under this Agreement. The Company may not take any of the actions contemplated by this Section 9.5 without the prior approval of the Company
Special Committee.
Section 9.6 Entire Agreement. This Agreement and
the documents and instruments and other agreements among the Parties as contemplated by or referred to in this Agreement, including the Confidentiality Agreement, the Rollover Agreement, the Support Agreement and the Company Disclosure Letter,
constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this
Agreement. Notwithstanding anything to the contrary in this Agreement, the Confidentiality Agreement will (a) not be superseded; (b) survive any termination of this Agreement; and (c) continue in full force and effect until the earlier to occur of
the (i) Effective Time and (ii) date on which the Confidentiality Agreement expires in accordance with its terms or is validly terminated in accordance with its terms.
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Section 9.7 No Third-Party Rights. Except as set
forth in Section 6.9 and this Section 9.7, the Parties agree that their respective representations,
warranties and covenants and obligations set forth in this Agreement are solely for the benefit of the other Parties in accordance with and subject to the terms of this Agreement. This Agreement is not intended to, and will not, confer upon any other
Person any rights or remedies under this Agreement, except (a) as set forth in or contemplated by Section 6.9 and this Section
9.7; and (b) from and after the Effective Time, the rights of the holders of shares of Company Common Stock to receive the merger consideration set forth in Article II.
Section 9.8 Severability. In the event that any
provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of
such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties. The Parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
Section 9.9 Remedies.
(a) Remedies Cumulative. Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred by this Agreement or by applicable Law on such Party, and the exercise by a Party of any one remedy will
not preclude the exercise of any other remedy.
(b) Specific Performance.
(i) Irreparable Damage. The Parties agree that irreparable damage for which monetary damages,
even if available, would not be an adequate remedy would occur in the event that the Parties do not perform the provisions of this Agreement (including any Party failing to take such actions that are required of it by this Agreement in order to
consummate the Merger) in accordance with its specified terms or otherwise breach such provisions. The Parties acknowledge and agree unless and until this Agreement is validly terminated in accordance with Section 8.1, that (A) the Parties will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent
breaches (or threatened breaches) of this Agreement or to enforce specifically the terms of this Agreement, (B) the Parties will not assert that a remedy of monetary damages would provide an adequate remedy for such breach and (C) the right of
specific enforcement is an integral part of the Merger and without that right, neither the Company nor Parent would have entered into this Agreement. Each of the Parties hereto agrees that it will not oppose the granting of an injunction,
specific performance or other equitable relief on the basis that any other of such parties has an adequate remedy at law or that any such injunction or award of specific performance or other equitable relief is not an appropriate remedy.
(ii) No Objections; Cooperation.
Subject in all respects to Section 9.9(b)(i), the Parties agree not to raise any objections to (A) the granting of an injunction, specific performance or other equitable
relief to prevent or restrain breaches or threatened breaches of this Agreement by the Company, on the one hand, or Parent and Merger Sub, on the other hand; and (B) the specific performance of the terms and provisions of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the covenants, obligations and agreements of the Parties pursuant to this Agreement. Any Party seeking an injunction or injunctions to prevent breaches (or threatened breaches) of
this Agreement or to enforce specifically the terms and provisions of this Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each Party irrevocably waives any right that it
may have to require the obtaining, furnishing or posting of any such bond or other security. Each Party agrees that it will use its reasonable best efforts to cooperate with the other Parties in seeking and agreeing to an expedited schedule in any
litigation seeking an injunction or order of specific performance.
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Section 9.10 Governing Law. This Agreement and all
actions, proceedings, causes of action, claims or counterclaims (whether based on contract, tort, statute or otherwise) based upon, arising out of or relating to this Agreement or the actions of Parent, Merger Sub or the Company in the negotiation,
administration, performance and enforcement thereof (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in connection with this Agreement or as an inducement to enter into this
Agreement), is governed by and construed in accordance with the Laws of the State of Nevada including its statute of limitations without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other
jurisdiction) that would cause or permit the application of laws including any statute of limitations of any jurisdictions other than those of the State of Nevada.
Section 9.11 Consent to Jurisdiction.
(a) General Jurisdiction. Each of the Parties (i) irrevocably
consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts) in any Legal Proceeding arising out of or relating to this Agreement, the other Transaction
Documents, the Merger and the other transactions contemplated by this Agreement or the actions of any Party in the negotiation, administration, performance and enforcement hereof and thereof (the “Transaction Matters”), for and on behalf of itself or any of its properties or assets, in accordance with Section 9.2 or in such
other manner as may be permitted by applicable Law, but nothing in this Section 9.11 will affect the right of any Party to serve legal process in any other manner permitted by
applicable Law; (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any Legal Proceeding to the exclusive general jurisdiction of the Chosen Courts in the event that any dispute or controversy arises out
of or relates to the Transaction Matters; (iii) irrevocably and unconditionally agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court; (iv) agrees that any Legal
Proceeding arising out of or relating to the Transaction Matters will be brought, tried and determined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such Legal Proceeding in the Chosen
Courts or that such Legal Proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and (vi) agrees that it will not bring any Legal Proceeding arising out of or relating to the Transaction Matters in any court other
than the Chosen Courts. Each of Parent, Merger Sub and the Company agrees that a final judgment in any Legal Proceeding in the Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by applicable Law.
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Section 9.12 WAIVER OF JURY TRIAL. EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY
RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE TRANSACTION MATTERS. EACH PARTY CERTIFIES
AND AGREES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (b) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (c) IT MAKES THIS WAIVER VOLUNTARILY; AND (d) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.
Section 9.13 Counterparts. This Agreement and any
amendments to this Agreement may be executed in one or more textually identical counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the Parties
and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. Any such counterpart, to the extent delivered by fax or .pdf, .tif, .gif, .jpg or similar attachment to electronic mail or through an
electronic signature service (any such delivery, an “Electronic Delivery”), will be treated in all manner and respects as an original executed counterpart and will be
considered to have the same binding legal effect as if it were the original signed version delivered in person. No Party may raise the use of Electronic Delivery to deliver a signature, or the fact that any signature, agreement or instrument was
transmitted or communicated through the use of an Electronic Delivery, as a defense to the formation of a contract, and each Party forever waives any such defense.
Section 9.14 Non-recourse. In no event will the
Company, whether prior to or after termination of this Agreement, seek or obtain, nor will it permit any of its Representatives to seek or obtain, nor will any Person be entitled to seek or obtain, any monetary recovery or monetary award against any
party or file or assert any claim with respect to this Agreement or the transactions contemplated hereby and thereby (including any breach by Parent or Merger Sub), the termination of this Agreement, the failure to consummate the transactions
contemplated hereby or any claims or actions under applicable Law arising out of or relating to any such breach, termination or failure, other than from Parent or Merger Sub to the extent expressly provided for in this Agreement.
Section 9.15 Company Special Committee Matters. Prior to the Effective
Time, for all purposes hereunder, the Company shall act, including with respect to the granting of any consent, permission or waiver or the making of any determination in connection with this Agreement, the Rollover Agreement, the Support Agreement
and the transactions contemplated hereby and thereby only as directed by the Company Special Committee or its designees, and the Company Board shall not (a) eliminate, revoke or diminish the power or authority of the Company Special Committee or (b)
without the approval of the Company Special Committee, remove or cause the removal of any director of the Company Board that is a member of the Company Special Committee as a member of the Company Special Committee.
[Signature page follows.]
90
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties
hereto as of the date first written above.
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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
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President and Chief Executive Officer
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LIBERTY MERGER SUB INC. | |
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President
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U.S. XPRESS ENTERPRISES, INC.
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Eric Fuller |
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President and CEO |
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[Signature Page to Agreement and Plan of Merger]
EXHIBIT A
COMPANY CHARTER
AMENDMENT CERTIFICATE
FRANCISCO V. AGUILAR Secretary of State 202
North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708Website: www.nvsos.gov Profit Corporation: Certificate of Amendment (PURSUANT TO NRS 78.380 & 78.385/78.390) Certificate to Accompany Restated Articles or Amended and Restated
Articles (PURSUANT TO NRS 78.403) Officer's Statement (PURSUANT TO NRS 80.030) TYPE OR PRINT -USE DARK INK ONLY - DO NOT HIGHLIGHT Page 1 of 2 Revised: 12/15/2022 1.Entity information: U.S. XPRESS ENTERPRISES, INC. Name of entity as on file
with the Nevada Secretary of State: This form must be accompanied by appropriate fees. Certificate to Accompany Restated Articles or Amended and Restated Articles Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.385 and
78.390 - After Issuance of Stock) The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the
case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is: More than XX% Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.380
- Before Issuance of Stock) The undersigned declare that they constitute at least two-thirds of the following: (Check only one box) incorporators board of directors The undersigned affirmatively declare that to the date of this certificate, no
stock of the corporation has been issued Officer's Statement (foreign qualified entities only) -Name in home state, if using a modified name in Nevada: Jurisdiction of formation: Changes to takes the following effect: The entity name has been
amended. The purpose of the entity has been amended. The authorized shares have been amended. Other: (specify changes) *Officer's Statement must be submitted with either a certified copy of or a certificate evidencing the filing of any
document, amendatory or otherwise, relating to the original articles in the place of the corporations creation. Dissolution Merger Conversion 3.Type of Amendment Filing Being Completed:(Select only one box) (If amending, complete section 1, 3,
5 and 6.) 2.Restated or Amended and Restated Articles:(Select one) (If amending and restating only, complete section 1,2 3, 5 and 6) Amended and Restated Articles *Restated or Amended and Restated Articles must be included with this filing
type. Entity or Nevada Business Identification Number (NVID): C218-1989 Restated Articles - No amendments; articles are restated only and are signed by an officer of the corporation who has been authorized to execute the certificate by
resolution of the board of directors adopted on: The certificate correctly sets forth the text of the articles or certificate as amended to the date of the certificate.
FRANCISCO V. AGUILAR
Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov Profit Corporation: Certificate of Amendment (PURSUANT TO NRS 78.380 & 78.385/78.390) Certificate to Accompany
Restated Articles or Amended and Restated Articles (PURSUANT TO NRS 78.403) Officer's Statement (PURSUANT TO NRS 80.030) Time: Date: 4.Effective Date and Time: (Optional) (must not be later than 90 days after the certificate is filed)
5.Information Being Changed (Domestic corporations only) Changes to takes the following effect: The entity name has been amended. The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) The purpose of
the entity has been amended. The authorized shares have been amended. The directors, managers or general partners have been amended. IRS tax language has been added. Articles have been added. Articles have been deleted. Other. The articles have
been amended as follows: (provide article numbers, if available) (attach additional page(s) if necessary) Article III is amended as set forth on Annex A attached hereto. 6.Signature: (Required) X Signature of Officer or Authorized Signer Title
X Signature of Officer or Authorized Signer Title *If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote,
in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.
Please include any required or optional information in space below: (attach additional page(s) if necessary) Article III of the Corporation's Third Amended and Restated Articles of Incorporation is hereby amended as set forth on Annex A attached
hereto, which is incorporated herein by this reference. [See attached page.] This form must be accompanied by appropriate fees. Page 2 of 2 Revised: 12/15/2022
U.S. XPRESS ENTERPRISES, INC.
CERTIFICATE OF AMENDMENT
Annex A
Article III of the Corporation’s Third Amended and Restated Articles of Incorporation is hereby amended by adding
the following new Section 3.2(i) thereto:
“(i) Proposed Transactions. Notwithstanding anything to the contrary in Section
3.2(e) or elsewhere in these Third Amended and Restated Articles of Incorporation or otherwise, to the extent that (x) the Agreement and Plan of Merger, by and among the Corporation, Knight-Swift Transportation Holdings Inc. and Liberty Merger Sub
Inc., dated as of March 20, 2023 (the “Merger Agreement”) or the Rollover Agreement, by and among Knight-Swift Transportation Holdings Inc., Liberty Holdings
Topco LLC and the other parties thereto, dated as of March 20, 2023 (the “Rollover Agreement”) entered into in connection with the Merger Agreement, or (y)
any of the transactions contemplated by the Merger Agreement or the Rollover Agreement (collectively, the “Contemplated Transactions”) or (z) the
consideration to be paid to the holders of Class A Common Stock or Class B Common Stock pursuant to the Merger Agreement or the Rollover Agreement (collectively, the “Contemplated
Consideration”), are inconsistent with Section 3.2(e) or any provisions thereof, Section 3.2(e) or such provisions thereof, as applicable, shall not apply to the Merger Agreement, the Rollover Agreement, the Contemplated Transactions
or the Contemplated Consideration.”
* * * *
EXHIBIT B
SURVIVING CORPORATION
ARTICLES OF INCORPORATION
FOURTH AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
U.S. XPRESS ENTERPRISES, INC.
ARTICLE I
NAME
The name of the corporation is U.S. Xpress Enterprises, Inc. (the “Corporation”).
ARTICLE II
REGISTERED OFFICE
The Corporation may, from time to time, in the manner provided by law, change the registered agent and registered
office within the State of Nevada. The Corporation may also maintain an office or offices for the conduct of its business, either within or without the State of Nevada.
ARTICLE III
AUTHORIZED CAPITAL STOCK
The total authorized capital stock of the Corporation shall consist of one thousand (1,000) shares of common stock,
$0.01 par value.
ARTICLE IV
DIRECTORS
The members of the governing board of the Corporation are styled as directors. The Board of
Directors shall be elected in such manner as shall be provided in the Fourth Amended and Restated Bylaws of the Corporation (the “Bylaws”). The number of
directors may be changed from time to time in such manner as shall be provided in the Bylaws of the Corporation.
ARTICLE V
LIMITATION OF LIABILITY
To the fullest extent permitted by Chapter 78 of the Nevada Revised Statutes, as may be amended from time to
time, a director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary or other damages for breach of fiduciary duties as a director or officer. No repeal, amendment, or modification of this Article
V, nor the adoption of any provision of these Fourth Amended and Restated Articles of Incorporation inconsistent with this Article V, shall directly or indirectly eliminate or reduce the effect of this Article V with respect to any act or omission
of a director or officer of the Corporation occurring prior to such repeal, amendment, modification, or adoption of an inconsistent provision.
ARTICLE VI
INDEMNIFICATION
Section 6.1. In General. Subject to the case by case determination required to be made under Section 6.3 hereof, the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (except an action by or in the right of the Corporation) by reason
of the fact that such person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer, of its subsidiaries, against expenses (including attorneys’ fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred in connection with such action, suit, or proceeding if such person: (a) is not liable for a breach of fiduciary duties that involved intentional misconduct, fraud, or a
knowing violation of law; or (b) acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful; provided, however,
that the termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person is liable for a breach of
fiduciary duties or did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, or that, with respect to any criminal action or proceeding, he or she had
reasonable cause to believe that his or her conduct was unlawful.
Section 6.2 Derivative Actions. Subject to the case by case determination required to be made under Section 6.3 hereof, the Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director, or
officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of its subsidiaries, against expenses (including amounts paid in settlement and attorneys’ fees) actually and reasonably incurred in
connection with the defense or settlement of the action or suit if such person: (i) is not liable for a breach of fiduciary duties that involved intentional misconduct, fraud or a knowing violation of law or (ii) acted in good faith and in a
manner that he or she reasonably believed to be in or not opposed to the best interests of the corporation; provided, however, that such indemnification may not be made for any claim, issue, or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion
of all appeals, to be liable to the Corporation or for amounts paid in settlement to the Corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Section 6.3. Case-by-Case Determination. Any indemnification under Sections 6.1 and 6.2 hereof, unless ordered by a court, shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.1 or 6.2. Such
determination shall be made: (a) the stockholders; (b) by the Board of Directors by majority vote of a quorum consisting of directors who were not parties to such act, suit, or proceeding; (c) if such a quorum of disinterested directors so
orders, by independent legal counsel in a written opinion; or (d) if such a quorum of disinterested directors cannot be obtained, by independent legal counsel in a written opinion.
Section 6.4. Mandatory Indemnification. To the extent that a director or officer of the Corporation has been successful on the merits or otherwise in defense of
any action, suit, or proceeding referred to in Sections 6.1 or 6.2, or in defense of any claim, issue, or matter therein, he or she shall be indemnified by the Corporation against expenses, including attorneys’ fees, actually and reasonably
incurred by him or her in connection with such defense.
Section 6.5. Advancement of Expenses. Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as authorized in this Article VI.
Section 6.6 Other Rights. The indemnification provided by this Article VI does not exclude any other rights to which any director or officer seeking indemnification may be
entitled under any law, Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. The indemnification provided
by this Article VI shall continue as to a person who has ceased to be a director or officer, and shall inure to the benefit of the heirs, executors, and administrators of such person. No amendment to repeal of this Article VI shall apply to or
have any effect on, the rights of any director or officer under this Article VI which rights come into existence by virtue of acts or omissions of such director or officer occurring prior to such amendment or repeal.
Section 6.7. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director or officer of its subsidiaries against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VI.
Section 6.8. Definition of Corporation. For the purposes of this Article VI, references to “the Corporation” include, in addition to the resulting corporation,
all constituent corporations (including any constituent of a constituent) absorbed in consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officer so that any
person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director or officer of a subsidiary of such constituent corporation, shall stand in the same
position under the provisions of this Article VI with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
Section 6.9. Definition of Subsidiary. For the purposes of this Article VI, references to a “subsidiary” of a person shall mean (i) a corporation more than 50
percent of the combined voting power of the outstanding voting stock of which is owned, directly or indirectly, by such person or by one or more other subsidiaries of such person or by such person and one or more other subsidiaries of such
person; (ii) a partnership of which such person or one or more other subsidiaries of such person or such person and one or more other subsidiaries thereof, directly or indirectly, is the general partner and has the power to direct the policies,
management and affairs of such partnership; (iii) a limited liability company of which such person or one or more other subsidiaries of such person or such person and one or more other subsidiaries of such person, directly or indirectly, is the
managing member and has the power to direct the policies, management and affairs of such company; and (iv) any other person (other than a corporation, partnership or limited liability company) in which such person or one or more other
subsidiaries of such person or such person and one or more other subsidiaries of such person, directly or indirectly, has at least a majority ownership or the power to direct the policies, management and affairs thereof (including by contract).
Section 6.10. Other Definitions. For purposes of this Article VI, references to “other enterprise” shall include employee benefit plans; references to “fine”
shall include any excise tax assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director or officer of the Corporation which imposes duties
on, or involves services by, such director or officer with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VI.
ARTICLE VII
AMENDMENT
The Corporation reserves the right to amend, alter, change, or repeal any provision contained in these Fourth
Amended and Restated Articles of Incorporation in the manner now or hereafter prescribed by statute, or by these Fourth Amended and Restated Articles of Incorporation.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF, the
undersigned authorized officer of the Corporation has executed these Fourth Amended and Restated Articles of Incorporation, certifying that the facts herein stated are true, this [•] day of [•], 2023.
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[Signature Page to Fourth Amended and Restated Articles of Incorporation]
EXHIBIT C
SURVIVING CORPORATION
BYLAWS
FOURTH AMENDED AND RESTATED
BYLAWS
OF
U.S. XPRESS ENTERPRISES, INC.
ARTICLE I
OFFICES
Section 1.01 Offices. The registered office of U.S.
Xpress Enterprises, Inc. (the “Corporation”) shall be National Registered Agents, Inc., 701 South Carson Street, Suite 200, Carson City, Nevada 89701, USA.
The name of its registered agent at such address is National Registered Agents, Inc. The Corporation may have other offices, both within and without the State of Nevada, as the board of directors of the Corporation (the “Board of Directors”) from time to time shall determine or the business of the Corporation may require.
Section 1.02 Books and Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on
any information storage device or method.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 2.01 Place of Meetings. Except as otherwise provided in these Fourth Amended and Restated Bylaws (the “Bylaws”),
all meetings of the stockholders shall be held on such dates and at such times and places, within or without the State of Nevada, as shall be determined by the Board of Directors and as shall be stated in the notice of the meeting or in waivers
of notice thereof. If the place of any meeting is not so fixed, it shall be held at the registered office of the Corporation in the State of Nevada.
Section 2.02 Annual Meeting. The annual meeting of stockholders for the election of directors and the transaction of such other proper business as may be brought before the meeting shall be held on
such date after the close of the Corporation’s fiscal year, and at such time, as the Board of Directors may from time to time determine.
Section 2.03 Special Meetings. Special meetings of the stockholders, for any purpose or purposes, may be called by the Board of Directors and shall be called by the president or the secretary upon
the written request of a majority of the directors. The request shall state the date, time, place and purpose or purposes of the proposed meeting.
Section 2.04 Adjournments. Any meeting of the stockholders, annual or special, may be adjourned from time to time to reconvene at the same or some other place, if any, and notice need not be given of
any such adjourned meeting if the time, place, if any, thereof and the means of remote communication, if any, are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business
which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new
record date is fixed for stockholders entitled to vote at the adjourned meeting, the Board of Directors shall fix a new record date for notice of the adjourned meeting and shall give notice of the adjourned meeting to each stockholder of record
entitled to vote at the adjourned meeting as of the record date fixed for notice of the adjourned meeting.
Section 2.05 Notice of Meetings. Notice of the place, if any, date, hour, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record
date for stockholders entitled to notice of the meeting) and means of remote communication, if any, of every meeting of stockholders shall be given by the Corporation not less than ten days nor more than 60 days before the meeting (unless a
different time is specified by law) to every stockholder entitled to vote at the meeting as of the record date for determining the stockholders entitled to notice of the meeting. Notices of special meetings shall also specify the purpose or
purposes for which the meeting has been called. Except as otherwise provided herein or permitted by applicable law, notice to stockholders shall be in writing and delivered personally or mailed to the stockholders at their address appearing on
the books of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, notice of meetings may be given to stockholders by means of electronic transmission in accordance with applicable law.
Notice of any meeting need not be given to any stockholder who shall, either before or after the meeting, submit a waiver of notice or who shall attend such meeting, except when the stockholder attends for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of the meeting shall be bound by the proceedings of the meeting in all respects as if due
notice thereof had been given.
Section 2.06 List of Stockholders. The officer of the Corporation who has charge of the stock ledger shall prepare a complete list of the stockholders entitled to vote at any meeting of stockholders
(provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date),
arranged in alphabetical order, and showing the address of each stockholder and the number of shares of each class of capital stock of the Corporation registered in the name of each stockholder at least ten days before any meeting of the
stockholders. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network if the information required to gain access to such list was provided with the
notice of the meeting or during ordinary business hours, at the principal place of business of the Corporation for a period of at least ten days before the meeting. If the meeting is to be held at a place, the list shall also be produced and kept
at the time and place of the meeting the whole time thereof and may be inspected by any stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection by any stockholder
during the whole time of the meeting as provided by applicable law. Except as provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger and the
list of stockholders or to vote in person or by proxy at any meeting of stockholders.
Section 2.07 Quorum. Unless otherwise required by law, the Corporation’s Articles of Incorporation (the “Articles
of Incorporation”) or these Bylaws, at each meeting of the stockholders, a majority of the outstanding shares of the Corporation entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum.
If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in
the manner provided in Section 2.04, until a quorum shall be present or represented. A quorum, once established, shall not be broken by the subsequent withdrawal of enough votes to leave less than a quorum. At any such adjourned meeting at which
there is a quorum, any business may be transacted that might have been transacted at the meeting originally called.
Section 2.08 Conduct of Meetings. At each meeting of the stockholders, the president or, in his or her absence, any one of the vice presidents, in order of their seniority, shall act as chairman of
the meeting. The secretary or, in his or her absence, any person appointed by the chairman of the meeting shall act as secretary of the meeting and shall keep the minutes thereof. The order of business at all meetings of the stockholders shall be
as determined by the chairman of the meeting.
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Section 2.09 Voting; Proxies. Unless otherwise required by law or the Articles of Incorporation, the election of directors shall be decided by a plurality of the votes cast at a meeting of the
stockholders by the holders of stock entitled to vote in the election. Unless otherwise required by law, the Articles of Incorporation or these Bylaws, any matter, other than the election of directors, brought before any meeting of stockholders
shall be decided by the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the matter. Each stockholder entitled to vote at a meeting of stockholders or to express consent
to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy that is not irrevocable by
attending the meeting and voting in person or by delivering to the secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of stockholders need not be by written ballot.
Section 2.10 Written Consent of Stockholders Without a Meeting. Unless otherwise provided in the Articles of Incorporation of the Corporation, any action required to be taken or which may be taken at any annual
or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed, in person or by proxy, by the holders of
outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted in person or by proxy and shall be
delivered to the Corporation as required by law. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.
Section 2.11 Fixing the Record Date.
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less
than ten days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the
time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the
meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting and in such case shall also fix as the record date for
stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for the determination of stockholders entitled to vote therewith at the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten days after the date upon which
the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a
meeting: (i) when no prior action by the Board of Directors is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery (by hand, or by certified or registered mail, return receipt requested) to its registered office in the State of Nevada, its principal place of business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded; and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors
adopts the resolution taking such prior action.
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(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution relating thereto.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may adopt such rules and
procedures, not inconsistent with the Articles of Incorporation, these Bylaws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.
Section 3.02 Number; Term of Office. Except as otherwise provided by the Articles of Incorporation of the Corporation, until such time as the Board of Directors determines otherwise,
the number of directors shall be no less than one (1). Each director shall hold office until a successor is duly elected and qualified or until the director’s earlier death, resignation, disqualification or removal.
Section 3.03 Newly Created Directorships and Vacancies. Any newly created directorships resulting from an increase in the authorized number of directors and any vacancies occurring in the Board of
Directors, maybe filled by the affirmative votes of a majority of the remaining members of the Board of Directors, although less than a quorum. A director so elected shall be elected to hold office until the earlier of the expiration of the term
of office of the director whom he or she has replaced, a successor is duly elected and qualified or the earlier of such director’s death, resignation or removal.
Section 3.04 Resignation. Any director may resign at any time by notice given in writing or by electronic transmission to the Corporation. Such resignation shall take effect at the date of receipt
of such notice by the Corporation or at such later time as is therein specified.
Section 3.05 Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such times and at such places as may be determined from time to time by the Board of
Directors or its chairman. Notice of regular meetings need not be given, except as otherwise required by law.
Section 3.06 Special Meetings. Special meetings of the Board of Directors, for any purpose or purposes, may be called by the president and shall be called by the president or the secretary upon the
written request of a majority of the directors. The request shall state the date, time, place and purpose or purposes of the proposed meeting.
Section 3.07 Telephone Meetings. Board of Directors or Board of Directors committee meetings may be held by means of telephone conference or other communications equipment by means of which all
persons participating in the meeting can hear each other and be heard. Participation by a director in a meeting pursuant to this Section shall constitute presence in person at such meeting.
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Section 3.08 Adjourned Meetings. A majority of the directors present at any meeting of the Board of Directors, including an adjourned meeting, whether or not a quorum is present, may adjourn and
reconvene such meeting to another time and place. At least 24 hours notice of any adjourned meeting of the Board of Directors shall be given to each director whether or not present at the time of the adjournment, if such notice shall be given by
one of the means specified in Section 3.09 hereof other than by mail, or at least three days notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.
Section 3.09 Notices. Subject to Section 3.06, Section 3.08 and Section 3.10 hereof, whenever notice is required to be given to any director by applicable law, the Articles of Incorporation or
these Bylaws, such notice shall be deemed given effectively if given in person or by telephone, mail addressed to such director at such director’s address as it appears on the records of the Corporation, facsimile, e-mail or by other means of
electronic transmission.
Section 3.10 Waiver of Notice. Whenever the giving of any notice to directors is required by applicable law, the Articles of Incorporation or these Bylaws, a waiver thereof, given by the director
entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a director at a meeting shall constitute a waiver of notice of such meeting except when the director attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any
regular or special Board of Directors or committee meeting need be specified in any waiver of notice.
Section 3.11 Organization. At each meeting of the Board of Directors, the chairman or, in his or her absence, another director selected by the Board of Directors shall preside. The secretary shall
act as secretary at each meeting of the Board of Directors. If the secretary is absent from any meeting of the Board of Directors, an assistant secretary shall perform the duties of secretary at such meeting; and in the absence from any such
meeting of the secretary and all assistant secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.
Section 3.12 Quorum of Directors. The presence of a majority of the Board of Directors shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the
Board of Directors.
Section 3.13 Action By Majority Vote. Except as otherwise expressly required by these Bylaws, the Articles of Incorporation or by applicable law, the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board of Directors.
Section 3.14 Action Without Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if all of the directors or members of such committee, except to the extent that the consent of a director or committee member is not required by Nevada law, consent
thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee in accordance with applicable law.
Section 3.15 Committees of the Board of Directors. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board
of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If a member of a committee shall be absent from any meeting, or
disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, shall have and may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board of Directors. Unless the Board of Directors provides
otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting
at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board of Directors provides otherwise, each committee designated by the Board of Directors may make, alter and
repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article III.
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ARTICLE IV
OFFICERS
Section 4.01 Positions and Election. The officers of the Corporation shall be elected by the Board of Directors and shall include a president, a treasurer and a secretary. The Board of
Directors, in its discretion, may also elect a chairman (who must be a director), one or more vice chairmen (who must be directors) and one or more vice presidents, assistant treasurers, assistant secretaries and other officers. Any individual
may be elected to, and may hold, more than one office of the Corporation.
Section 4.02 Term. Each officer of the Corporation shall hold office until such officer’s successor is elected and qualified or until such officer’s earlier death, resignation or removal. Any
officer elected or appointed by the Board of Directors may be removed by the Board of Directors at any time with or without cause by the majority vote of the members of the Board of Directors then in office. The removal of an officer shall be
without prejudice to his or her contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. Any officer of the Corporation may resign at any time by giving written notice of his or her
resignation to the president or the secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to make it effective. Should any vacancy occur among the officers, the position shall be filled for the unexpired portion of the term by appointment made by the Board of
Directors.
Section 4.03 The President. The president shall have general supervision over the business of the Corporation and other duties incident to the office of president, and any other duties as may be from
time to time assigned to the president by the Board of Directors and subject to the control of the Board of Directors in each case.
Section 4.04 Vice Presidents. Each vice president shall have such powers and perform such duties as may be assigned to him or her from time to time by the chairman of the Board of Directors or the
president.
Section 4.05 The Secretary. The secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to
be kept for that purpose, and shall perform like duties for committees when required. He or she shall give, or cause to be given, notice of all meetings of the stockholders and meetings of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or the president. The secretary shall keep in safe custody the seal of the Corporation and have authority to affix the seal to all documents requiring it and attest to the same.
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Section 4.06 The Treasurer. The treasurer shall have the custody of the corporate funds and securities, except as otherwise provided by the Board of Directors, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of
Directors. The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and the directors, at the regular meetings of the
Board of Directors, or whenever they may require it, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.
Section 4.07 Duties of Officers May be Delegated. In case any officer is absent, or for any other reason that the Board of Directors may deem sufficient, the president or the Board of Directors may
delegate for the time being the powers or duties of such officer to any other officer or to any director.
ARTICLE V
STOCK CERTIFICATES AND THEIR TRANSFER
Section 5.01 Certificates Representing Shares. The
shares of the Corporation shall not be represented by certificates; provided, that the Board of Directors may provide by resolution or resolutions after the date hereof that some or all of any or all classes or series of stock shall be
represented by certificates. Certificates for the Corporation’s capital stock, if any, shall be in such form as required by law and as approved by the Board of Directors. Each certificate, if any, shall be signed in the name of the Corporation by
the president or any vice president and by the secretary, the treasurer, any assistant secretary or any assistant treasurer. Any or all of the signatures on a certificate may be a facsimile or other electronic format (e.g., PDF). In case any
officer, transfer agent or registrar who shall have signed or whose facsimile signature shall have been placed on any certificate shall have ceased to be such officer, transfer agent or registrar before the certificate shall be issued, the
certificate may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.
Section 5.02 Transfers of Stock. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation
only by the holder of record thereof, by such person’s attorney lawfully constituted in writing and, in the case of certificated shares, upon the surrender of the certificate thereof, which shall be cancelled before a new certificate or
uncertificated shares shall be issued. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. To
the extent designated by the president or any vice president or the treasurer of the Corporation, the Corporation may recognize the transfer of fractional uncertificated shares, but shall not otherwise be required to recognize the transfer of
fractional shares.
Section 5.03 Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars.
Section 5.04 Lost, Stolen or Destroyed Certificates. The Board of Directors may direct a new certificate or uncertificated shares to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the owner of the allegedly lost, stolen or destroyed certificate. When authorizing such issue of a new certificate or uncertificated
shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of the lost, stolen or destroyed certificate, or the owner’s legal representative to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed or the issuance of such new certificate or uncertificated shares.
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ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall indemnify its directors and officers to the maximum extent permitted by the Chapter 78 of
the Nevada Revised Statutes, as may be amended from time to time. Indemnification shall be provided unless it is ultimately determined by a court of competent jurisdiction that (i) the indemnified party did not act in a manner he or she believed in
good faith to be in, or not opposed to, the best interests of the Corporation and, (ii) with respect to any criminal action or proceeding, the indemnified party had no reasonable cause to believe his or her conduct was lawful. Expenses shall be
advanced to an indemnified party upon written confirmation that he or she has not acted in a manner that would preclude indemnification above and an undertaking to return any advances if it is ultimately determined by a court of competent
jurisdiction that the party is not entitled to indemnification under the standard set forth herein.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01 Seal. The seal of the Corporation shall be in such form as shall be approved by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed
or affixed or reproduced or otherwise, as may be prescribed by law or custom or by the Board of Directors.
Section 7.02 Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.
Section 7.03 Voting Shares in Other Corporations. Unless otherwise directed by the Board of Directors, shares in other corporations which are held by the Corporation shall be represented and voted only by the
president or by a proxy or proxies appointed by him or her.
Section 7.04 Dividends. Subject to applicable law and the Articles of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any
regular or special meeting of the Board of Directors. Dividends may be paid in cash, in property or in shares of the Corporation’s capital stock, unless otherwise provided by applicable law or the Articles of Incorporation.
Section 7.05 Forum Selection. Unless the Corporation
consents in writing to the selection of an alternative forum, the Eighth Judicial District Court in and for the County of Clark, State of Nevada shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any
derivative action or proceeding brought on behalf of the corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the corporation to the
corporation or the corporation’s stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (c) any action asserting a claim arising pursuant to any provision of the NRS, the Articles
of Incorporation or these Bylaws (as each may be amended from time to time) or as to which the NRS confers jurisdiction on the Eighth Judicial District Court in and for the County of Clark, State of Nevada or (d) any action asserting a claim
governed by the internal affairs doctrine or other “internal action” as defined in Section 78.046 of the NRS. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the corporation shall be
deemed to have notice of and consented to the provisions of this Section 7.05.
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Section 7.06 Interpretation. Unless the context of a
Section of these Bylaws otherwise requires, the terms used in these Bylaws shall have the meanings provided in, and these Bylaws shall be construed in accordance with, the Nevada statutes relating to private corporations, as found in Chapter 78
of the NRS or any subsequent statute.
Section 7.07 Provisions contrary to Provisions of Law.
Any article, section, subsections, subdivision, sentence, clause, or phrase of these Bylaws which is contrary or inconsistent with any applicable provisions of law, will not apply so long as such provisions of law remain in effect, but such
result will not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws would have been adopted and each article, section, subsection, subdivision, sentence, clause, or phrase
thereof, irrespective of the fact that any one or more articles, sections, subsections, subdivisions, sentences, clauses, or phrase is or are illegal.
ARTICLE VIII
AMENDMENTS
Section 8.01 Stockholder Amendments.
These Bylaws may be adopted, amended or repealed by the affirmative vote of not less than a majority of the outstanding shares of the Corporation entitled to vote.
Section 8.02 Amendments by Board of Directors.
Subject to the right of the stockholders as provided in Section 8.01 of this Article VIII, Bylaws may be adopted, amended or repealed by the Board of Directors.
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Exhibit 99.1
ROLLOVER AGREEMENT
This Rollover Agreement (this “Agreement”),
dated as of March 20, 2023, is entered into by and among Knight-Swift Transportation Holdings Inc., a Delaware corporation (“Parent”), Liberty Holdings Topco LLC, a Delaware
limited liability company and wholly owned subsidiary of Parent (“Holdings”), Max L. Fuller and William Eric Fuller (each a “Key Stockholder”) and each of the other Persons set forth on Schedule A (each, a “Stockholder” and, together with the Key Stockholders, collectively, the “Stockholders”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, concurrently with the execution and delivery of this Agreement, (i) U.S. Xpress Enterprises, Inc., a
Nevada corporation (“East”), (ii) Parent and (iii) Liberty Merger Sub Inc., a Nevada corporation and indirect wholly owned subsidiary of Parent (“Merger Sub”), are entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”),
which provides for the merger of Merger Sub with and into East (the “Merger”), with East surviving the Merger as an indirect wholly owned subsidiary of Holdings and Parent;
WHEREAS, in connection with the consummation of the transactions contemplated by the Merger Agreement, each
Stockholder will contribute and transfer to Holdings, on the Closing Date effective immediately prior to the Effective Time (the “Exchange Time”), the aggregate number of
shares of Company Class A Common Stock and/or Company Class B Common Stock then set forth opposite such Stockholder’s name on Schedule A hereto under the heading “Rollover
Shares” (such shares, with respect to each Stockholder, such Stockholder’s “Rollover Shares”), in exchange for a number of Class A Units of Holdings and a number of Class B
Units of Holdings equal to the number of Rollover Shares contributed by such Stockholder at the Exchange Time (the Class A Units and Class B Units of Holdings to be issued to each Stockholder in exchange for such Stockholder’s Rollover Shares are
referred to herein as such Stockholder’s “Exchange Units”);
WHEREAS, at the Exchange Time, Parent, Holdings and the Stockholders desire to enter into an Amended and Restated
Limited Liability Company Agreement of Holdings substantially in the form attached as Schedule B hereto (the “Holdings
LLCA”) that, among other things, sets forth the rights associated with the Exchange Units to be issued to the Stockholders and certain provisions relating to the governance of Holdings from and after the Exchange Time; and
WHEREAS, as a condition to the willingness of Parent to enter into the Merger Agreement and as an inducement and in
consideration therefor, Parent has required that each Key Stockholder and each of the other Stockholders agree, and each Key Stockholder and each of the other Stockholders has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, Parent, Holdings and the Stockholders hereby agree as follows:
1. Exchange of Rollover Shares for Exchange Units.
1.1 Contribution and Exchange. Subject to satisfaction of the
conditions to consummation of the Exchange set forth in this Agreement, effective at the Exchange Time, each Stockholder shall contribute, assign, transfer, convey and deliver to Holdings all of such Stockholder’s Rollover Shares, free and clear
of any and all liens, except as may exist by reason of this Agreement, the Merger Agreement and applicable securities laws, and in exchange, Holdings shall issue to such Stockholder all of such Stockholder’s Exchange Units (such exchange, such
Stockholder’s “Exchange”). From and after the Exchange Time, each Stockholder shall have no right, title or interest in or to such Stockholder’s Rollover Shares, which shall
be owned and held by Holdings.
1.2 Conditions to the Exchanges.
(a) The obligations of each Stockholder to consummate such Stockholder’s Exchange is subject to the satisfaction (or waiver by such
Stockholder in writing) of the following conditions:
(i) the conditions to the obligations of Parent and Merger Sub to consummate the Merger
specified in the Merger Agreement shall have been satisfied or waived in accordance with the provisions of the Merger Agreement and the Merger will occur immediately following the Exchange Time;
(ii) the representations and warranties of Parent and Holdings contained in this Agreement shall
be true and correct in all material respects as of the date hereof and as of immediately prior to the Exchange Time;
(iii) Parent and Holdings shall have performed in all material respects all of their respective
covenants, agreements and obligations contained in this Agreement that are required to be performed by Parent or Holdings, as applicable, under this Agreement at or prior to the Exchange Time; and
(iv) no Law enacted, entered, promulgated, enforced or issued by any Governmental Authority
shall be in effect preventing the consummation of, or otherwise making illegal, such Stockholder’s Exchange.
(b) The obligations of Holdings to consummate each Stockholder’s Exchange is subject to the satisfaction (or waiver by Holdings in writing) of
the following conditions:
(i) the conditions to the obligations of East to consummate the Merger specified in the Merger
Agreement shall have been satisfied or waived in accordance with the provisions of the Merger Agreement and the Merger will occur immediately following the Exchange Time;
(ii) the representations and warranties of each Stockholder contained in this Agreement shall be
true and correct in all material respects as of the date hereof and as of immediately prior to the Exchange Time;
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(iii) the Stockholders shall have performed all of their respective covenants, agreements and
obligations contained in this Agreement that are required to be performed by the Stockholders under this Agreement at or prior to the Exchange Time;
(iv) no Law enacted, entered, promulgated, enforced or issued by any Governmental Authority
shall be in effect preventing the consummation of, or otherwise making illegal, the Exchange of any Stockholder; and
(v) each Stockholder’s Exchange will occur simultaneously at the Exchange Time.
2. Termination. This Agreement shall terminate automatically and
without further action at any time prior to the Exchange Time, upon the earliest to occur of: (a) the valid termination of the Merger Agreement in accordance with its terms, and (b) the mutual written agreement of Parent and the Key Stockholders
(such date, the “Termination Date”); provided that the termination of this Agreement shall not
prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for that party’s Willful Breach of this Agreement that may have occurred on or before such termination. For the purpose hereof, “Willful Breach” means a breach of any covenant or agreement in this Agreement that is a consequence of an act or
failure to act undertaken or omitted to be taken by or on behalf of the breaching party with the actual knowledge that the taking of such act or failure to take such act would cause or constitute a breach of the relevant covenant or agreement
in this Agreement.
3. Certain Covenants.
3.1 Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and
agrees that, except as expressly permitted by this Agreement, (a) such Stockholder shall not, directly or indirectly (i) tender any shares of Company Class A Common Stock and/or Company Class B Common Stock into any tender or exchange offer, (ii)
offer, sell, transfer, assign, exchange, pledge, hypothecate, encumber, or otherwise dispose of (collectively, “Transfer”) or enter into any contract, option, agreement,
understanding or other arrangement with respect to the Transfer of, any shares of Company Class A Common Stock and/or Company Class B Common Stock or beneficial ownership, voting power or any other interest thereof or therein (including by
operation of law), except for (A) the contribution, assignment, transfer, conveyance and delivery to Holdings of such Stockholder’s Rollover Shares in accordance with Section 1,
and (B) the Support Agreement, (iii) grant any proxies or powers of attorney, deposit any shares of Company Class A Common Stock and/or Company Class B Common Stock into a voting trust or enter into a voting agreement with respect to any shares
of Company Class A Common Stock and/or Company Class B Common Stock that is inconsistent with this Agreement, (iv) take an action that would reasonably be expected to prevent or materially impair or materially delay the consummation of the
transactions contemplated by this Agreement or the Merger Agreement or (v) commit or agree to take any of the foregoing actions. Notwithstanding anything to the contrary in this Agreement, each Stockholder may Transfer any or all of the Rollover
Shares, (1) subject to the prior written consent of Parent, in its reasonable discretion, for estate planning purposes of such Stockholder or (2) otherwise with the prior written consent of Parent, which may be granted or withheld by Parent in
its sole discretion; provided, that prior to and as a condition to the effectiveness of any Transfer of Rollover Shares, the Person to whom any of such Rollover Shares or
any interest in any of such Rollover Shares is or may be transferred shall, unless otherwise agreed by Parent, have executed and delivered to Parent a counterpart of this Agreement pursuant to which such Affiliate shall be bound by all of the
terms and provisions of this Agreement. Any Transfer in violation of this Section 3.1 shall be void ab initio.
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3.2 Documentation and Information. Each Stockholder shall permit and hereby consents to and authorizes East and
Parent to publish and disclose in all documents and schedules filed with the SEC, and any press release or other disclosure document that Parent reasonably determines to be necessary in connection with the Merger Agreement and any of the
transactions contemplated by the Merger Agreement, including a copy of this Agreement, the identity of each Stockholder and their respective ownership of Rollover Shares and the nature of the Stockholders’ commitments and obligations under this
Agreement. Subject to applicable law, Parent shall use commercially reasonable efforts to permit the Key Stockholders to review references to the Key Stockholders included in written public communications made by Parent to its investors.
3.3 Adoption of Holdings LLCA. Each of Parent, Holdings and the Stockholders receiving Exchange Units
hereunder shall each execute and deliver to one another the Holdings LLCA concurrently with the issuance of the Exchange Units at the Exchange Time.
3.4 Additional
Collaboration Matters. Each of Parent and the Key Stockholders shall use commercially reasonable efforts to collaborate on the matters set forth on Schedule E.
4. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants to Parent
and Holdings as follows:
4.1 Due Authority. Such Stockholder, if not a natural person, is a legal entity duly organized, validly
existing and in good standing under the Laws of its jurisdiction of formation. Such Stockholder has all requisite corporate or other similar power and authority and has taken all corporate or other similar action necessary (including approval by
the board of directors or applicable governing bodies) to execute, deliver, comply with and perform its obligations under this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other
action on the part of or vote of holders of any securities of, or interests in such Stockholder is necessary to authorize the execution and delivery of, compliance with and performance by such Stockholder of this Agreement. This Agreement has
been duly executed and delivered by the Stockholder and, assuming the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a legal, valid and binding agreement of such Stockholder enforceable against such
Stockholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally.
4.2 No Conflict. The execution and delivery of, compliance with and performance of this Agreement by such
Stockholder do not and will not (i) if not a natural person, conflict with or result in any violation or breach of any provision of the certificate of formation or operating agreement or similar organizational documents of such Stockholder, (ii)
conflict with or result in a violation or breach of any applicable Law, or (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under,
or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which such Stockholder is entitled, under any Contract binding upon such Stockholder, or to which any of its properties,
rights or other assets are subject, except in the case of clauses (ii) and (iii) above, any such violation, breach, conflict, consent, default, termination, acceleration,
cancellation or loss that would not prevent or impair the ability of such Stockholder to perform its obligations under this Agreement.
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4.3 Consents. To such Stockholder’s knowledge, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Authority or any other Person, is required by or with respect to such Stockholder in connection with the execution and delivery of this Agreement or,
except as disclosed on Schedule F, the consummation by such Stockholder of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under the Exchange
Act, the Securities Act, or state securities, takeover and “blue sky” laws, (b) compliance with any applicable requirements of the HSR Act, or (c) as required by the applicable rules and regulations of the SEC or any applicable stock exchange.
4.4 Ownership. Such Stockholder is the owner of the shares of Company Class A Common Stock and/or Company Class B Common Stock set forth under “Total Held Shares” opposite such
Stockholder’s name on Schedule A, representing all beneficially owned shares of Company Common Stock held by such Stockholder, all of which are free and clear of any liens, other than as set forth on Schedule F or in the Schedule 13D filed by Max L. Fuller and the other filers with the SEC on July 26, 2018 (as amended through the date
hereof, the “Schedule 13D”) and those arising under applicable securities laws or created by (a) this Agreement and the Support Agreement, (b) the Voting Agreement, dated June 13, 2018, by and among the East stockholders party
thereto (the “Voting Agreement”), (c) the Registration Rights Agreement, dated June 13, 2018, by and among East and the East stockholders party thereto (the “Registration Rights Agreement”), and (d) the Stockholders’ Agreement, dated June 13, 2018, by and among East and the East stockholders party thereto, as amended by the Amendment
to Stockholders’ Agreement, dated May 24, 2019, and as further amended by the Second Amendment to Stockholders’ Agreement, dated March 20, 2023 (collectively, the “Stockholders’
Agreement”). Such Stockholder has the full legal right, power and authority to deliver such Stockholder’s Rollover Shares to Holdings pursuant to Section 1 in
exchange for the Exchange Units. Such Stockholder has the sole right to contribute, assign, transfer, convey and deliver to Holdings in accordance with this Agreement all of such Stockholder’s Rollover Shares, free and clear of any and all liens,
except as may exist by reason of this Agreement, the Merger Agreement and applicable securities laws, and none of such Rollover Shares is subject to any pledge, disposition, transfer or other agreement, arrangement or restriction, except as
contemplated by this Agreement, the Support Agreement, the Voting Agreement, the Registration Rights Agreement, the Stockholders’ Agreement, or as set forth on Schedule F or
in the Schedule 13D. Such Stockholder has not entered into any agreement to Transfer any Rollover Shares (other than this Agreement) and no person has any right to acquire any of the Rollover Shares held by such Stockholder.
4.5 Absence of Litigation. There is no legal action pending against, or, to the knowledge of such Stockholder, threatened against such Stockholder that would reasonably be expected to (i) create or result in any lien on such Stockholder’s Rollover Shares or (ii) prevent, or impair the
ability of such Stockholder to perform its obligations under this Agreement.
4.6 Investment. The Exchange Units to be acquired by such Stockholder pursuant to this Agreement will be
acquired for such Stockholder’s own account and not with a view to, or intention of, distribution thereof in violation of any applicable state securities laws. Such Stockholder is an “accredited investor” within the meaning of Rule 501 of
Regulation D of the SEC. Such Stockholder is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in such Stockholder’s Exchange Units. Such Stockholder is able to bear the economic risk of its
investment in such Stockholder’s Exchange Units for an indefinite period of time because such Stockholder’s Exchange Units will be subject to restrictions on Transfer under the Holdings LLCA and have not been and will not be registered under the
Securities Act and, therefore, cannot be sold other than in accordance with the Holdings LLCA and under an exemption from such registration is available. Such Stockholder has had an opportunity to ask questions and receive answers concerning the
terms and conditions applicable to such Stockholder’s Exchange Units, has reviewed (with those of such Stockholder’s advisors it has chosen to consult) and understands the terms, conditions, rights and obligations set out in the Holdings LLCA,
and has had access to such other information concerning Holdings as such Stockholder has requested.
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4.7 Finders Fees. No broker, investment bank, financial advisor or other person is entitled to any broker’s,
finder’s, financial adviser’s or similar fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of such Stockholder.
5. Representations and Warranties of Parent and Holdings. Parent and
Holdings hereby represent and warrant to the Stockholders as follows:
5.1 Due Authority. Each of Parent and Holdings is a legal entity duly incorporated or otherwise organized,
validly existing and in good standing under the Laws of its jurisdiction of formation. Each of Parent and Holdings has all requisite corporate or similar power and authority and has taken all corporate or similar action necessary (including
approval by the board of directors or applicable governing bodies) to execute, deliver and perform its obligations under this Agreement in accordance with the terms hereof and no other corporate or similar action by Parent or Holdings or vote of
holders of any class of the capital stock or equity interests of Parent or Holdings is necessary to approve and adopt this Agreement. This Agreement has been duly executed and delivered by Parent and Holdings and, assuming the due execution and
delivery of this Agreement by all of the other parties hereto, constitutes a valid and binding agreement of each of Parent and Holdings enforceable against each of them in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally.
5.2 No Conflict. The execution, delivery and performance by each of Parent and Holdings of this Agreement do
not and will not, other than as provided in the Merger Agreement with respect to the Merger and the other transactions contemplated thereby, (i) conflict with or result in any violation or breach of any provision of the certificate of
incorporation or bylaws of Parent or the similar organizational documents of Holdings, (ii) conflict with or result in a violation or breach of any applicable Law, or (iii) require any consent by any Person under, constitute a default, or an
event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which Parent and any of its
Subsidiaries are entitled, under any Contract binding upon Parent or any of its Subsidiaries, or to which any of their respective properties, rights or other assets are subject, except in the case of clauses (ii) and (iii) above, any such
violation, breach, conflict, consent, default, termination, acceleration, cancellation or loss that would not prevent or
impair the ability of Parent or Holdings to perform its obligations under this Agreement.
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5.3 Consents. No consent, approval, order or authorization of, or registration, declaration or filing with,
any Governmental Authority or any other Person, is required by or with respect to Parent or Holdings in connection with the execution and delivery of this Agreement or the consummation by Parent and Holdings of the transactions contemplated
hereby, except (a) as required by the rules and regulations promulgated under the Exchange Act, the Securities Act, or state securities, takeover and “blue sky” laws, (b) compliance with any applicable requirements of the HSR Act, or (c) as
required by the applicable rules and regulations of the SEC or any applicable stock exchange.
5.4 Absence of Litigation. There is no legal action pending against, or, to the knowledge of Parent,
threatened against or affecting Parent or Holdings that would reasonably be expected to prevent, or impair the ability of Parent or Holdings to perform its obligations under this Agreement.
5.5 Exchange Units. The Exchange Units, when issued to the Stockholders at the Exchange Time and consummation
of the Exchange, will be duly authorized, validly issued and outstanding, and issued free and clear of any liens created by Parent or Holdings (other than those arising under the Holdings LLCA or this Agreement) or arising under applicable
securities laws.
5.6 Ownership Structure. Holdings is a direct wholly owned subsidiary of Parent. Liberty Holdings Midco
Inc., a Delaware corporation (“Midco”), is a direct wholly owned subsidiary of Holdings. Immediately prior to the Exchange Time, Merger Sub is a direct wholly owned
subsidiary of Midco. Immediately after the Exchange Time, East will be a direct wholly owned subsidiary of Midco.
6. Stockholder Capacity. This Agreement is being entered into by each
Stockholder solely in its capacity as a record and/or beneficial owner of the Rollover Shares, and nothing in this Agreement shall restrict or limit the ability of such Stockholder or any of its Affiliates or Representatives who is a director or
officer of East or any of East’s subsidiaries to take, or refrain from taking, any action in his or her capacity as a director or officer of East or any of its affiliates, including the exercise of fiduciary duties to East or its stockholders,
and any such action taken in such capacity or any such inaction shall not constitute a breach of this Agreement.
7. Restrictive Covenants.
7.1 Each Key Stockholder agrees and acknowledges that (i) by virtue of his and his Affiliates’ significant ownership of
shares of Company Class A Common Stock and/or Company Class B Common Stock, he and they will receive substantial value in the Merger and by virtue of this Agreement and pursuant to the Holdings LLCA; (ii) by nature of such Key Stockholder’s position with, and significant control over, East, such Key Stockholder has significant knowledge of, and experience relating to, the business and operations of East and its
Subsidiaries, which, if exploited by such Key Stockholder in contravention of this Section 7, would seriously and adversely affect the ability of Parent and its Subsidiaries to derive the benefit and value from East and its Subsidiaries
for which it is purchasing in the Merger and by virtue of this Agreement and pursuant to the Holdings LLCA; (iii) such Key Stockholder’s commitments under this Section 7
are a material inducement to enter into the Merger Agreement and this Agreement and to consummate the transactions contemplated hereby and thereby, and Parent and Holdings have a legitimate business interest in seeking and obtaining the
commitments under this Section 7; and (iv) Parent and Holdings would not be willing to enter into the Merger Agreement and this Agreement and to consummate the transactions
contemplated hereby and thereby absent the Key Stockholders’ commitments under this Section 7.
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7.2 Each Key Stockholder agrees that, during the Restricted Period, such Key Stockholder shall not, directly or indirectly, in whole or in part, own, manage, control, operate,
endorse, support, be employed by, perform services for, consult with, solicit business for, participate in, provide or facilitate any financing for, or in any other way engage in, any Restricted Activity (as defined below). Notwithstanding the
foregoing, nothing in this Section 7 shall prohibit or in any way restrict a Key Stockholder from (w) making or maintaining passive investments of no more than five percent
(5%) of the outstanding equity securities of any class of equity securities of any entity engaged in the Restricted Activity that is listed for trading on any recognized national securities exchange, (x) owning Exchange Units or exercising its
rights or complying with its obligations under the Holdings LLCA, (y) upon request by Parent, engaging in activities on behalf of Parent or any of its Subsidiaries, and (z) with written consent by Parent, which may be withheld in Parent’s sole
discretion.
7.3 Each Key Stockholder agrees that, during the Restricted Period, such Key Stockholder shall not, directly or indirectly,
whether for such Key Stockholder’s own account or for the account of any other Person:
(a) solicit or communicate with, attempt to communicate with, or meet with any of the current, former or prospective
customers of East or any of its Subsidiaries for any Restricted Activity; or
(b) urge, induce, or seek to urge or induce any of East or any of its Subsidiaries’ current or former customers or
any other Person with whom East or any of its Subsidiaries has had any business relationship to terminate any business relationship with any of East or any of its Subsidiaries or, to such Key Stockholder’s knowledge, Parent or any of its
Subsidiaries or to cancel, reduce, limit or in any manner interfere with the business relationship of East or any of its Subsidiaries or, to Key Stockholder’s knowledge, Parent or any of its Subsidiaries with any customer of any of them or any
other Person with whom East or any of its Subsidiaries or, to Key Stockholder’s knowledge, Parent or any of its Subsidiaries has any business relationship.
7.4 Each Key Stockholder agrees that, during the Restricted Period, such Key Stockholder shall not, directly or indirectly, whether for such Key Stockholder’s own account or for the
account of any other Person, (i) solicit, offer employment to or hire, or encourage, facilitate or assist any other Person in connection with the solicitation, offering of employment to or hiring of, any individual who is or was an officer or
employee of East or any of its Subsidiaries or Parent or any of its Subsidiaries, except (A) for such individuals who have (1) ceased to be an officer or employee of East, Parent and their respective Subsidiaries for at least nine (9) months or
(2) have been a Terminated Employee for at least three (3) months following the date of such Terminated Employee’s termination of employment or (B) as set forth on Schedule C
hereto, or (ii) encourage, facilitate or assist any such individual in connection with the termination of his or her employment with East, Parent or any of their Subsidiaries; provided,
however, that no Key Stockholder shall be prohibited from (i) initiating searches for employees through the use of general advertisement or through the engagement of firms to conduct searches that are not targeted or focused on the employees or
officers of East, Parent or any of their Subsidiaries or (ii) offering employment to, or hiring the other Key Stockholder. “Terminated Employee” means an officer or employee
of East or any of its Subsidiaries or Parent or any of its Subsidiaries whose employment was terminated without “cause” (or term of similar import, as defined in any applicable
agreement or arrangement between such officer or employee and East, Parent or any of their respective Subsidiaries) by East or any of its Subsidiaries or Parent or any of its Subsidiaries.
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7.5 For purposes of this Section 7, the following terms shall have the following meanings:
(a) “Restricted Period” means the period from the Exchange Time until the fifth (5th) anniversary
of the Closing Date; provided that, solely for purposes of Section 7.3(b) and Section 7.4, the Restricted Period shall include the period beginning on the date of this Agreement and ending on the Termination Date, but during such period, such provisions
shall be read to exclude references to Parent and its Subsidiaries.
(b) “Restricted Activity” means any activity requiring FMCSA Authority. Notwithstanding the foregoing, “Restricted
Activity” shall not include any of the following activities: (i) involvement with Transcard Payments, LLC (including its FreightX platform), DriverTech LLC and Freightwaves, Inc (so long as such entities and their Affiliates do not engage in
any activity that requires FMCSA Authority) and (ii) being employed by, providing services to, investing in, or otherwise being associated with any autonomous driving, electric powered, or hydrogen powered, heavy duty truck original equipment
manufacturing company, but only so long as such company and its Affiliates do not engage in any activity that requires FMCSA Authority other than FMCSA Authority that is incidental to the operation of their autonomous driving, electric powered,
or hydrogen powered products. “FMCSA Authority” means operating authority for freight transportation, brokerage, or forwarding that is granted by the Federal Motor Carrier Safety Administration for carrier, broker or freight forwarder
operations.
7.6 The Restricted Period, as to each Key Stockholder, will be tolled for any period during which such Key Stockholder is in breach of any of the restrictions set forth in this Section 7.
7.7 Each Key Stockholder agrees that any breach of the terms of this Section 7 would result in irreparable
injury and damage to Parent and its Affiliates for which Parent and its Affiliates would have no adequate remedy at law; such Key Stockholder therefore also agrees that in the event of said breach or any threat of breach, Parent shall be entitled
to seek an immediate injunction and restraining order to prevent such breach or threatened breach or continued breach by such Key Stockholder without having to prove damages, in addition to any other remedies to which Parent may be entitled at
law or in equity. The terms of this Section 7 shall not prevent Parent from pursuing any other available remedies for any breach or threatened breach of this Section 7, including, without limitation, the recovery of damages from the breaching Key Stockholder.
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7.8 The nature and scope of the foregoing provisions of this Section 7 have been carefully considered by
each Key Stockholder and Parent. The Key Stockholders and Parent agree and acknowledge that (i) the duration, scope and geographic areas applicable to such provisions are fair, reasonable and necessary to protect the goodwill of Parent and its
Subsidiaries, including East as the Surviving Corporation and its Subsidiaries, from and after the date hereof, and (ii) adequate compensation has been received, directly or indirectly, by each Key Stockholder for such obligations. Each Key
Stockholder acknowledges and agrees that such Key Stockholder will not assert or claim, or raise as a defense, in any judicial proceeding or otherwise, that any of such provisions are unenforceable as a matter of public policy or otherwise or
that any of the duration, scope and geographic areas applicable to such provisions is or was not fair, reasonable or necessary or that adequate compensation was not received by such Key Stockholder, directly or indirectly, for such obligations.
If, however, for any reason any court determines that any such provisions are or were not fair, reasonable or necessary or that consideration was inadequate, such provisions shall be interpreted, modified or rewritten to include as much of the
duration, scope and geographic area identified in this Section 7 as will render such restrictions valid and enforceable. Furthermore, each Key Stockholder acknowledges and
agrees that the law of Nevada shall govern the construction, validity and enforceability of this Section 7 and all of such Key Stockholder’s obligations arising hereunder
and such Key Stockholder agrees not to claim or assert that the law or policies of any jurisdiction other than Nevada governs the construction, validity or enforceability of this Section
7.
8. Release. Effective on the Closing Date, each Stockholder, for and
on behalf of itself and each of its Affiliates, heirs, administrators, executors and assigns (each of the foregoing, a “Releasing Party”), hereby irrevocably and
unconditionally releases and forever discharges East and its Subsidiaries and each other Person who is now, or who will have been at any time prior to the Closing, an officer, director, direct or indirect stockholder, general partner, member or
manager of East and its Affiliates or any of their present or former Subsidiaries or Affiliates (or a fiduciary of any employee benefit plan of East or any of its Subsidiaries), and each Person controlling any of the foregoing Persons (each of the foregoing, a “Released Party”), from any and all claims, rights, obligations, debts, liabilities,
actions or causes of action of every kind and nature, whether foreseen or unforeseen, contingent or actual, and whether now known or hereafter discovered, which any of the Releasing Parties had, now has or may in the future have, at law or in
equity, against any Released Party arising through the date of this Agreement. Notwithstanding the foregoing, this release will not be deemed to waive and release any claims or
rights of such Stockholder (i) as an officer or director of East or any of its Subsidiaries with respect to any claims or rights to indemnification, exculpation, reimbursement or advances of expenses under their respective organizational
documents, each as amended to date, under any agreement to which such Stockholder is a party or under the Merger Agreement, (ii) for accrued and earned, but unpaid wages through the date
of such Stockholder’s termination of employment with East and its Subsidiaries, (iii) for unpaid reimbursements for duly incurred business expenses through the date of such Stockholder’s termination of employment with East and its Subsidiaries
in accordance with applicable policies of East and its Subsidiaries, (iv) to participate in continuation coverage under the medical plans of East and its Subsidiaries pursuant to COBRA, or (v) that may not be waived under applicable Law (items
(i) through (v) are “Carveouts”).
9. Resignation. Each of the Key Stockholders hereby voluntarily
resigns from all positions he holds at East or any of its Subsidiaries, including all positions as a director, officer and employee of East or any of its Subsidiaries, effective as of immediately prior to the Closing. Each Key Stockholder hereby
agrees and acknowledges that such resignation shall not be for “good reason” (or term of similar import, as defined in any applicable agreement or arrangement between such Key
Stockholder and East or any of its Subsidiaries), nor shall it constitute an involuntary termination of employment without “cause” (or term of similar import, as defined in any applicable
agreement or arrangement between such Key Stockholder and East or any of its Subsidiaries), nor shall it give rise to any severance benefits or other entitlements (other than, if applicable, the Carveouts and the Cooperation Provisions).
For the avoidance of doubt, in connection with the foregoing resignations, (i) neither Key Stockholder shall be required to, and Parent shall cause East to waive, the 90-day notice requirements set forth in the first sentence of Section 5 of the
Amended and Restated Executive Employment Agreement, dated April 30, 2018, by and between Max L. Fuller, East, and New Mountain Lake Holdings, LLC (the “M. Fuller Employment Agreement”)
and in the first sentence of Section 5 of the Amended and Restated Executive Employment Agreement, dated April 30, 2018, by and between William Eric Fuller, East, and New Mountain Lake Holdings, LLC (the “E. Fuller Employment Agreement”), as applicable. In addition, Parent agrees from and after the effective time of the foregoing resignations, the obligations of each of the Key Stockholders set forth in Sections 8.2, 8.3 and 8.4 of the M. Fuller Employment Agreement or the E. Fuller Employment Agreement, as applicable, shall
be superseded by the obligations of the Key Stockholders under Section 7 of this Agreement. “Cooperation Provisions” mean obligations of East to reimburse Key Stockholders for
cooperation with respect to certain matters occurring during that Key Stockholder’s employment with East or any of its Subsidiaries set forth in Section 6 of the M. Fuller Employment Agreement or the E. Fuller Employment Agreement, as
applicable.
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10. Certain Adjustments. In the event of a stock split, stock dividend
or distribution, or any change in the Company Common Stock by reason of any split-up, reverse stock split, recapitalization, combination, reclassification, exchange of shares or the like, the terms “Company Common Stock” and “Rollover Shares”
shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.
11. Certain Tax Matters. The parties’ agreement with respect to
certain tax matters is described on Schedule D hereto.
12. Further Assurances. The Stockholders shall, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as Parent may reasonably request to the extent necessary to effect the transactions contemplated by this Agreement.
13. Notices. All notices and other communications under this Agreement
must be in writing and will be deemed to have been duly delivered and received using one or a combination of the following methods: (i) four (4) Business Days after being sent by registered or certified mail, return receipt requested, postage
prepaid; (ii) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service; (iii) immediately upon delivery by hand or by fax; or (iv) on the date sent by email. In each
case, the intended recipient is set forth below:
| if to Parent or Holdings to: |
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Knight-Swift Transportation Holdings Inc.
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2002 West Wahalla Lane
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Phoenix, AZ 85027
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| Attention: |
Todd F. Carlson, General Counsel
|
| Email: |
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| with copies (which will not constitute notice) to: | |
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Scudder Law Firm, P.C., L.L.O.
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411 South 13th Street, Second Floor
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Lincoln, NE 68508
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| Attention: |
Mark A. Scudder
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| Email: |
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| and | |
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Fried, Frank, Harris, Shriver & Jacobson LLP
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One New York Plaza
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New York, NY 10004
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| Attention: |
Philip Richter
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| E-mail: |
|
if to the Stockholders, to the address, email or fax set forth on Schedule A for each Stockholder.
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14. Interpretation. Where a reference in this Agreement is made to a
section or schedule, such reference shall be to a section of or schedule to this Agreement unless otherwise indicated. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of
speech (such as a verb). Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa, and the definitions of terms contained in this Agreement
are applicable to the singular as well as the plural forms of such terms. The words “includes” or “including” shall mean “including without limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall
refer to this Agreement as a whole and not any particular section or article in which such words appear, the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and such phrase shall not
mean simply “if,” any reference to a Law shall include any rules and regulations promulgated thereunder, and any reference to any Law in this Agreement shall mean such Law as from time to time amended, modified or supplemented. Each reference to
a “wholly owned Subsidiary” or “wholly owned Subsidiaries” of a Person shall be deemed to include any Subsidiary of such Person where all of the equity interests of such Subsidiary are directly or indirectly owned by such Person (other than
directors qualifying shares, nominee shares or other equity interests that are required by law or regulation to be held by a director or nominee).
15. Entire Agreement. This Agreement (along with the documents
referenced herein), the Merger Agreement and the Support Agreement collectively constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral, among the parties
hereto, with respect to the subject matter hereof.
16. No Third-Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement, except that the Released Parties shall be express third party beneficiaries of Section 8 and Section 9 hereof.
17. Governing Law; Waiver of Jury Trial. This Agreement is governed by
and construed in accordance with the Laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause or permit the application of
laws of any jurisdictions other than those of the State of Nevada. Each of the parties (i) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the
Chosen Courts) in any Legal Proceeding arising out of or relating to this Agreement, for and on behalf of itself or any of its properties or assets, in accordance with Section 13
or in such other manner as may be permitted by applicable Law, but nothing in this Section 17 will affect the right of any party to serve legal process in any other manner
permitted by applicable Law; (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any Legal Proceeding to the exclusive general jurisdiction of the Chosen Courts in the event that any dispute or
controversy arises out of or relates to this Agreement; (iii) irrevocably and unconditionally agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court; (iv) agrees
that any Legal Proceeding arising out of or relating to this Agreement will be brought, tried and determined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such Legal Proceeding in the
Chosen Courts or that such Legal Proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and (vi) agrees that it will not bring any Legal Proceeding arising out of or relating to this Agreement in any court
other than the Chosen Courts. Each of the parties agrees that a final judgment in any Legal Proceeding in the Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
applicable Law. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND AGREES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (b) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (c) IT MAKES THIS WAIVER VOLUNTARILY; AND (d) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 17.
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18. Assignment; Successors. Other than as provided herein, neither
this Agreement nor any of the rights, interests or obligations under this Agreement (including those set forth in Section 1.1(a)) may be assigned or delegated, in whole or
in part, by operation of Law or otherwise, by any party hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.
19. Enforcement. The parties hereto agree that irreparable damage for
which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties hereto do not perform the provisions of this Agreement (including any party hereto failing to take such actions that are required
of it hereunder in order to consummate this Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties hereto acknowledge and agree that (a) the parties hereto will be entitled, in addition to any other
remedy to which they are entitled at law or in equity, to seek an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of this Agreement or to enforce specifically the terms and provisions
hereof, (b) the parties hereto will not assert that a remedy of monetary damages would provide an adequate remedy for such breach and (c) the right of specific enforcement is an integral part of the transactions contemplated hereby and without
that right, none of Parent, Holdings or the Stockholders would have entered into this Agreement.
20. Severability. In the event that any provision of this Agreement,
or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other
Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties hereto further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
21. Counterparts. This Agreement and any amendments hereto may be
executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it
being understood that all parties hereto need not sign the same counterpart. Any such counterpart, to the extent delivered by electronic delivery, will be treated in all manners and respects as an original executed counterpart and will be
considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto may raise the use of an electronic delivery to deliver a signature, or the fact that any signature or
agreement or instrument was transmitted or communicated through the use of an electronic delivery, as a defense to the formation of a contract, and each party hereto forever waives any such defense, except to the extent such defense relates to
lack of authenticity.
22. Amendment; Waiver. This Agreement may be amended by the parties
hereto, and the terms and conditions hereof may be waived, only by an instrument in writing signed on behalf of each of the parties hereto, or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance. No failure
or delay on the part of a party in the exercise of any right or remedy hereunder shall impair such right or power or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude any other or further exercise thereof or of any other right or power.
23. No Presumption Against Drafting Party. Parent, Holdings and the
Stockholders acknowledge that each party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.
24. No Agreement until Executed. This Agreement shall not be effective
unless and until the Company Board has approved, for purposes of any applicable anti-takeover laws and regulations, and any applicable provision of the Charter or Bylaws, the Merger Agreement, the Support Agreement and the transactions
contemplated by the Merger Agreement and the Support Agreement, including the Merger.
[Signature pages follow]
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered on the date and year first above written.
|
PARENT
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||
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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.
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||
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By:
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/s/ David A. Jackson |
|
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Name:
|
David A. Jackson
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|
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Title:
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President and Chief Executive Officer
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|
|
HOLDINGS
|
||
|
LIBERTY HOLDINGS TOPCO LLC
By: Knight-Swift Transportation Holdings Inc, its sole Member
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||
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By:
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/s/ David A. Jackson |
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Name:
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David A. Jackson
|
|
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Title:
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President and Chief Executive Officer
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|
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KEY STOCKHOLDERS
|
||
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MAX L. FULLER
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||
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By:
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/s/ Max Fuller |
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WILLIAM E. FULLER
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||
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By:
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/s/ William E. Fuller |
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STOCKHOLDERS
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||
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FSBSPE 1, LLC
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||
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By:
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/s/ Max Fuller |
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Name:
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Max L. Fuller
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Title:
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Manager
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[Signature Page to Rollover Agreement]
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FSBSPE 2, LLC
|
||
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By:
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/s/ Max Fuller |
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Name:
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Max L. Fuller
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|
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Title:
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Manager
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FSBSPE 3, LLC
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||
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By:
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/s/ Max Fuller |
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Name:
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Max L. Fuller
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Title:
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Manager
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FULLER FAMILY ENTERPRISES, LLC
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||
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By:
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/s/ Janice Fuller |
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Name:
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Janice B. Fuller
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Title:
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Managing Member
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By:
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/s/ Max Fuller |
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Name:
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Max L. Fuller
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Title:
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Managing Member
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MAX L. FULLER FAMILY LIMTED PARTNERSHIP
|
||
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By:
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/s/ William E. Fuller |
|
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Name:
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William E. Fuller
|
|
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Title:
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Managing General Partner
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MAX L. FULLER 2008 IRREVOCABLE TRUST FBO WILLIAM E. FULLER
|
||
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By:
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/s/ William E. Fuller |
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|
Name:
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William E. Fuller
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Title:
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Trustee
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|
[Signature Page to Rollover Agreement]
Exhibit 99.2
Amended and Restated Limited Liability Company
Agreement
of
Liberty Holdings Topco LLC
of
Liberty Holdings Topco LLC
A Delaware Limited Liability Company
[●], 2023
THE LIMITED LIABILITY COMPANY MEMBERSHIP UNITS REPRESENTED BY THIS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES ACTS OR LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS UNDER THOSE ACTS.
THE SALE OR OTHER DISPOSITION OF SUCH MEMBERSHIP UNITS IS RESTRICTED AS STATED IN THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, AND IN ANY EVENT IS PROHIBITED UNLESS, TO THE EXTENT REQUIRED HEREUNDER, THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT AND ITS COUNSEL THAT SUCH SALE OR OTHER DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES ACTS AND LAWS. BY ACQUIRING
MEMBERSHIP UNITS REPRESENTED BY THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, EACH MEMBER REPRESENTS THAT IT WILL NOT SELL OR OTHERWISE DISPOSE OF ITS MEMBERSHIP UNITS WITHOUT COMPLYING WITH THE PROVISIONS OF THIS AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT AND REGISTRATION OR OTHER COMPLIANCE WITH THE AFORESAID ACTS AND THE RULES AND REGULATIONS ISSUED THEREUNDER.
Table of Contents
|
ARTICLE I FORMATION
|
1
|
|
|
SECTION 1.1
|
Formation; General Terms; Effective Date
|
1
|
|
SECTION 1.2
|
Name
|
2
|
|
SECTION 1.3
|
Purposes
|
2
|
|
SECTION 1.4
|
Registered Agent; Registered Office
|
2
|
|
SECTION 1.5
|
Commencement and Term
|
2
|
|
ARTICLE II EQUITY INTERESTS AND CAPITAL CONTRIBUTIONS
|
2
|
|
|
SECTION 2.1
|
Initial Interests
|
2
|
|
SECTION 2.2
|
Authority to Issue Additional Securities
|
3
|
|
SECTION 2.3
|
Liability of Members
|
3
|
|
SECTION 2.4
|
Withdrawals; Interest
|
3
|
|
SECTION 2.5
|
Classes of Units
|
3
|
|
ARTICLE II DISTRIBUTIONS
|
4
|
|
|
SECTION 3.1
|
Distributions
|
4
|
|
ARTICLE IV MANAGEMENT OF THE COMPANY
|
4
|
|
|
SECTION 4.1
|
Manager; Certain Authorization; Delegation of Authority
|
4
|
|
SECTION 4.2
|
Limitation of Liability
|
8
|
|
SECTION 4.3
|
Indemnification
|
9
|
|
ARTICLE V TRANSFER OF INTERESTS; RESTRICTIVE COVENANTS
|
9
|
|
|
SECTION 5.1
|
In General
|
9
|
|
SECTION 5.2
|
Transfer of Common Units and Rollover Units
|
9
|
|
SECTION 5.3
|
Admission as a Member
|
10
|
|
SECTION 5.4
|
Class A Call Option; Class A Put Option; Mandatory Purchase Obligations
|
10
|
|
SECTION 5.5
|
Tag Along Rights
|
13
|
|
SECTION 5.6
|
Drag Along Rights
|
14
|
|
ARTICLE VI CESSATION OF MEMBERSHIP
|
15
|
|
|
SECTION 6.1
|
When Membership Ceases
|
15
|
|
SECTION 6.2
|
Deceased, Incompetent or Dissolved Members
|
16
|
|
SECTION 6.3
|
Consequences of Cessation of Membership
|
16
|
|
ARTICLE VII DISSOLUTION, WINDING UP AND LIQUIDATING DISTRIBUTIONS
|
16
|
|
|
SECTION 7.1
|
Dissolution Triggers
|
16
|
|
SECTION 7.2
|
Winding Up
|
16
|
|
SECTION 7.3
|
Liquidating Distributions
|
16
|
|
SECTION 7.4
|
Waiver of Dissolution and Liquidator Rights
|
17
|
i
|
ARTICLE VIII COVENANTS
|
17
|
|
|
SECTION 8.1
|
Taxable Year
|
17
|
|
SECTION 8.2
|
Information; Confidentiality
|
17
|
|
SECTION 8.3
|
Initial Public Offering
|
20
|
|
ARTICLE IX MISCELLANEOUS
|
22
|
|
|
SECTION 9.1
|
Notices
|
22
|
|
SECTION 9.2
|
Binding Effect
|
22
|
|
SECTION 9.3
|
Construction
|
22
|
|
SECTION 9.4
|
Entire Agreement; No Oral Agreements; Amendments to this Agreement
|
22
|
|
SECTION 9.5
|
Headings
|
23
|
|
SECTION 9.6
|
Severability
|
23
|
|
SECTION 9.7
|
Additional Documents
|
23
|
|
SECTION 9.8
|
Variation of Pronouns
|
23
|
|
SECTION 9.9
|
Governing Law; Consent to Exclusive Jurisdiction
|
23
|
|
SECTION 9.10
|
Waiver of Action for Partition
|
23
|
|
SECTION 9.11
|
Counterparts
|
24
|
|
SECTION 9.12
|
Tax Matters
|
24
|
|
SECTION 9.13
|
Exhibits and Schedules
|
24
|
|
Exhibit A: Glossary of Terms
|
||
| Schedule A: Schedule of Members |
||
| Schedule B: Indemnification Schedule |
||
|
Schedule C: Registration Rights Agreement Term Sheet
|
||
ii
THIS AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Liberty Holdings Topco LLC, a
Delaware limited liability company (the “Company”), is made and entered into by and among the Company and the Persons whose names and
addresses are from time to time listed on the Schedule of Members attached hereto as Schedule A (the “Schedule of Members”), effective as of [●], 2023 (the “Effective Date”). Unless otherwise indicated, capitalized words and phrases in this Agreement shall have the meanings set forth in the Glossary of Terms attached hereto as Exhibit A.
RECITALS:
The Company was formed pursuant to the Act on March 16, 2023 and on such date, Knight-Swift Transportation Holdings
Inc., a Delaware corporation (referred to herein as “Parent” or the “West Member”), entered into the Limited Liability Company Agreement of the Company (the “Initial LLC Agreement”)
as the sole member of the Company and holds all of the Common Units.
In connection with the consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as
of March [●], 2023 (the “Merger Agreement”), by and among U.S. Xpress Enterprises, Inc., a Nevada corporation (“East”), Parent and Liberty Merger Sub Inc., a Nevada corporation and indirect wholly owned subsidiary of Parent (“Merger Sub”), and the Rollover Agreement (as defined in the Merger Agreement): (a) immediately prior to the Effective Time (as defined in the Merger Agreement, and hereinafter the “Merger Effective Time”), and on the Effective Date, (i) the Company is issuing to the initial Rollover Members, in exchange for the contribution by
the initial Rollover Members to the Company of their respective Rollover Shares (as defined in the Rollover Agreement) pursuant to and in accordance with the terms of the Rollover Agreement, a number of Class A Units and Class B Units equal to the
number of Rollover Shares contributed by such initial Rollover Members, and (ii) the West Member is contributing cash to the Company to be used for payment of the merger consideration in respect of the East Common Stock pursuant to the Merger
Agreement in exchange for a number of Common Units equal to the number of shares of East Common Stock outstanding on a fully diluted basis (excluding the Rollover Shares) immediately prior to the Merger Effective Time, (b) at the Merger Effective
Time, Merger Sub merged with and into East, with East as the surviving corporation and indirect wholly owned subsidiary of the Company (“Surviving
EastCo”), and (c) the parties desire to amend and restate the Initial LLC Agreement in its entirety as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally
bound, do hereby agree as follows:
ARTICLE I
FORMATION
SECTION 1.1 Formation; General Terms; Effective Date. The Company was formed on March 16, 2023 upon the filing of the Certificate of Formation with
the Secretary of State of the State of Delaware and the adoption of the Initial LLC Agreement. This Agreement amends and restates the Initial LLC Agreement in its
entirety as of the Effective Date. Each Person from time to time listed on the Schedule of Members shall be a Member of the Company and shall be bound by all of the terms and conditions of this Agreement as evidenced by such Member’s execution of
this Agreement, a joinder agreement or other instrument, as the case may be.
The rights and obligations of the Members and the terms and conditions of the Company shall be governed by the Act
and this Agreement. To the extent the Act and this Agreement are inconsistent with respect to any subject matter covered in this Agreement, this Agreement shall govern to the extent permitted by the Act.
The Manager shall cause to be executed and filed on behalf of the Company all other instruments or documents, and
shall do or cause to be done all such filing, recording or other acts as may be necessary or appropriate from time to time to comply with the requirements of law for the continuation and operation of a limited liability company in Delaware and in
the other states and jurisdictions in which the Company shall transact business.
SECTION 1.2 Name. The name of the Company shall be “Liberty Holdings Topco LLC”. Unless otherwise determined by the Manager, the name of the Company
shall be the exclusive property of the Company, and no Member shall have any rights in the Company’s name or any derivation thereof. The Company’s name may be changed by an amendment to the Certificate of Formation as approved by the Manager.
SECTION 1.3 Purposes. The Company is formed for the object and purpose of (a) indirectly owning all of the outstanding equity interests of Surviving
EastCo, (b) overseeing, managing, operating and controlling the business, property and affairs of the Company and its Subsidiaries, including Surviving EastCo and its Subsidiaries, and (c) engaging in any lawful act or activity incidental or
related to the purpose described in the foregoing clauses (a) and (b).
SECTION 1.4 Registered Agent; Registered Office. The Company’s registered agent and registered office are set forth in the Certificate of Formation
and may be changed from time to time by the Manager pursuant to the provisions of the Act.
SECTION 1.5 Commencement and Term. The Company commenced upon the filing of the Certificate of Formation and shall continue until it is dissolved, its
affairs are wound up, final liquidating distributions are made pursuant to this Agreement and the Certificate of Formation is cancelled upon the filing of a certificate of cancellation with the Secretary of State of the State of Delaware.
ARTICLE II
EQUITY INTERESTS AND CAPITAL CONTRIBUTIONS
SECTION 2.1 Initial Interests.
(a) The class and number of Units of each Member as of the Effective Date is as set forth opposite such Member’s name on the Schedule of Members
attached hereto.
(b) After the Effective Date, the Company shall update the Schedule of Members from time to time to reflect all issuances and Transfers of Units in
accordance with this Agreement. Except for the initial contributions of the Members in connection with the Closing, no Member shall have any obligation to contribute capital to the Company.
2
SECTION 2.2 Authority to Issue Additional Securities. From and after the Effective Date, but subject to Section 4.1(b), the Manager may from time to time authorize and create and cause the Company to issue additional Units or classes of Units or Interests or other Equity Interests of the Company, debt
obligations of the Company convertible into Interests or other Equity Interests, options or warrants to purchase Interests or other Equity Interests, or any combination of the foregoing (collectively, “New Securities”) with such terms and conditions and in exchange for such cash or other property as it may determine, and in connection therewith shall have authority to amend
this Agreement in accordance with Section 9.4 below.
SECTION 2.3 Liability of Members. No Member shall be liable for any debts, liabilities, obligations or losses of the Company or any of its Subsidiaries
or be required to guarantee the liabilities of the Company or any of its Subsidiaries. No Member shall be required to contribute or lend funds to the Company or any of its Subsidiaries.
SECTION 2.4 Withdrawals; Interest. No Member shall be entitled to receive any distribution with respect to its Interest except as provided in this
Agreement. No Member shall be entitled to receive any interest on its capital contributions to the Company. Each Member shall look solely to the assets of the Company for the return of its capital contributions and distributions with respect to
its Interest and, except as otherwise provided in this Agreement, shall have no right or power to demand or receive any property or cash from the Company. No Member shall have priority over any other Member as to the return of its capital
contributions or distributions, except as provided in this Agreement.
SECTION 2.5 Classes of Units.
(a) Each Member shall hold an Interest. The relative rights, privileges, preferences and/or obligations of an Interest holder with respect to distributions, voting and other matters
set forth in this Agreement (as this Agreement may be amended from time to time) shall be determined under this Agreement to the extent herein provided based upon the number and the class of Units held by such Member with respect to its Interest.
Unless otherwise determined by the Manager, Units shall be evidenced by this Agreement and not by a certificate or other instrument.
(b) Common Units shall consist of those Common Units held by the Common Members listed on the Schedule of Members as holding such Units, as the same may be amended from time to time
as authorized hereunder. Common Units shall have such rights, privileges and obligations as are specifically provided for in this Agreement for Common Units, and as may otherwise be generally applicable to all classes of Units, unless such
application is specifically limited to one or more other classes of Units.
(c) The Class A Units and the Class B Units are referred to collectively herein as the “Rollover Units”. Each class of Rollover Units shall have such rights, privileges and obligations as are specifically provided for in this Agreement for such class of Rollover Units, and as may otherwise be generally applicable
to all classes of Units, unless such application is specifically limited to one or more other classes of Units. Except as expressly set forth in Article IV, the Rollover
Members shall not be entitled to vote on or consent to any matter submitted to holders of Equity Interests of the Company for a vote or consent.
3
ARTICLE III
DISTRIBUTIONS
DISTRIBUTIONS
SECTION 3.1 Distributions. Prior to dissolution and subject to Section 4.1(b),
distributions shall be made by the Company to the West Member at such times, in such amounts and as of such record dates as the Manager shall determine, in its sole discretion, provided that, notwithstanding anything herein to the contrary, no later than five Business Days before the due date of federal estimated taxes for corporations with respect to each Tax Estimation Period, the Company shall
make a cash payment to the West Member in an amount sufficient to permit the West Member to pay any U.S. federal, state, local and foreign income or similar taxes imposed on the West Member that are attributable to the income of the Company
Accounting Group (“Tax Payment”). No Rollover Member shall be entitled to any distributions from the Company.
ARTICLE IV
MANAGEMENT OF THE COMPANY
MANAGEMENT OF THE COMPANY
SECTION 4.1 Manager; Certain Authorization; Delegation of Authority.
(a) Manager. The
business, property and affairs of the Company shall be managed by the West Member (in its capacity as manager, the “Manager”). Subject to Section 4.1(b), the Manager shall have full, complete and exclusive authority, power and discretion to oversee, manage, operate and control the business, property and affairs of
the Company and its Subsidiaries, to make all decisions regarding those matters and to supervise, direct and control the actions of the Officers of the Company and to perform any and all other actions customary or incident to the management of
the business, property and affairs of the Company and its Subsidiaries, including exercising the Company’s rights with respect to the business and affairs of the Company’s Subsidiaries.
(b) Class A Consent
Matters. Notwithstanding Section 4.1(a), until the earlier of (X) the fifth anniversary of the Effective Date and (Y) the first date on which Class A Units are no
longer held by the Rollover Members (the “Class A Consent Period”) (provided that the Class A Consent period will not expire as to clause (i)
below until the date contemplated by clause (Y) above), without obtaining the Requisite Rollover Consent (which consent shall not be unreasonably withheld, delayed or conditioned), the West Member and Manager shall not permit the Company
Accounting Group to (except as set forth in Section 4.1(e) and except for Ordinary Business Changes):
(i) amend the Certificate of Formation or this Agreement in a manner that that would adversely and disproportionately
(compared to the West Member) impact the Rollover Members;
4
(ii) other than in the ordinary course of business, (x) incur any Indebtedness (other than (1) Indebtedness among the Company Accounting Group and (2) Permitted
Company Debt) or (y) lend money to any Person (other than (1) among the Company Accounting Group, and (2) subject to clause (v) below, loans to Parent and its Subsidiaries (that are not part of the Company Accounting Group) of cash of the Company
Accounting Group in a manner consistent with the manner in which such loans are made by other Subsidiaries of Parent that are not part of the Company Accounting Group (“Permitted Cash Loans”)), provided that, during the Class A Consent Period, so long as there is Permitted Company Debt outstanding, any net cash generated by the Company Accounting Group that is not to be used to fund
or support the operations of the Company Accounting Group or to make Tax Payments shall be (i) applied to reduce Permitted Company Debt owing from the Company Accounting Group to Parent and/or any of its other Subsidiaries that are not part of
the Company Accounting Group (“Intercompany Debt”) or (ii) distributed or paid as a dividend as a Permitted Cash Distribution to Parent, in
which case for purposes of calculating the Company Accounting Group’s interest expense for purposes of deriving Company Net Income for any period thereafter, the amount so paid as a dividend or distributed shall be treated as having reduced a
portion of the Permitted Company Debt (other than Intercompany Debt) equal to that amount;
(iii) provide any payment guaranty of obligations of Parent or any of its Subsidiaries or business units (excluding the Company Accounting Group), except in the
ordinary course of business or as customary for other Subsidiaries and business units of Parent;
(iv) acquire any business, enter into any joint venture or make any investment in any Person (other than (1) acquisitions, joint ventures and investments by and
among units or entities that are part of, or new entities created in connection with and after giving effect to the transaction that would be part of, the Company Accounting Group, (2) capital expenditures in the ordinary course of business, (3)
Permitted Cash Loans permitted under clause (ii) above, and Permitted Cash Distributions permitted under clause (v) below, and (4) Sponsored Insurance Investments);
(v) pay or declare any dividend or make any distribution in respect of the Common Units, other than (1) Tax Payments, and (2) subject to clause (ii) above, cash
distributions of the Company Accounting Group to Parent and/or its other Subsidiaries that are not part of the Company Accounting Group (“Permitted
Cash Distributions”);
(vi) purchase or redeem any Common Units;
(vii) dissolve or liquidate the Company, other than as part of a Parent Planning Transaction;
(viii) adopt any employee compensation plan under which Units or other Equity Interests of the Company would be issued, unless the issuance of such Units or other
Equity Interests would not dilute the Rollover Units then owned by the Rollover Members;
5
(ix) enter into any new line of business that does not involve freight transportation, logistics and related services (with related services being deemed to
include any services provided as of the Effective Date, and any natural extensions and evolutions thereof by Parent or any of its Subsidiaries or business units that are not part of the Company Accounting Group);
(x) sell, or license on an exclusive basis, any intellectual property of the units or companies that are part of, or after giving effect to the transaction
would be part of, the Company Accounting Group, unless all net proceeds thereof are to be reinvested in the businesses or operations of the Company Accounting Group;
(xi) issue any Units or other Equity Interests in the Company (other than in a Qualified IPO) unless the issuance of such Units or other Equity Interests would
not dilute the Rollover Units then owned by the Rollover Members; or
(xii) enter into any material transactions with Parent or any of its business units or Subsidiaries that are not (and after giving effect to the transaction will
not be) part of the Company Accounting Group on terms materially less favorable in the aggregate to the Company Accounting Group than those that would in the good faith judgement of Parent be obtained by the Company Accounting Group on a
stand-alone basis on an arm’s-length basis other than (1) the making of Permitted Cash Loans and the repayment thereof, (2) Permitted Cash Distributions, (3) the contribution by Parent or any of its Subsidiaries of cash or other assets to the
Company Accounting Group, (4) Tax Payments, (5) the incurrence of Permitted Company Debt and the repayment thereof, and (6) Sponsored Insurance Investments.
(c) Class B Consent
Matters. Notwithstanding Section 4.1(a), until the earlier of (X) the fifth anniversary of the Effective Date and (Y) the first date on which any Class B Units
are no longer held by the Rollover Members (the “Class B Consent Period”) (provided that the Class B Consent Period will not expire as to
clause (i) below until the date contemplated by clause (Y) above), without obtaining the Requisite Rollover Consent (which consent shall not be unreasonably withheld, delayed or conditioned), the West Member and Manager shall not permit the
Company Accounting Group to (except as set forth in Section 4.1(e) and except for Ordinary Business Changes):
(i) amend the Certificate of Formation or this Agreement in a manner that that would adversely and disproportionately
(compared to the West Member) impact the Class B Rollover Members;
(ii) acquire any business, enter into any joint venture or make any investment in any Person (other than (1) acquisitions, joint ventures and investments by and
among units or companies that are part of, or new entities created in connection with and after giving effect to the transaction that would be part of, the Company Accounting Group, (2) capital expenditures in the ordinary course of business, (3)
Permitted Cash Loans and Permitted Cash Distributions, and (4) Sponsored Insurance Investments);
(iii) dissolve or liquidate the Company, other than as part of a Parent Planning Transaction;
6
(iv) enter into any new line of business that does not involve freight transportation, logistics and related services (with related services being deemed to
include any services provided as of the Effective Date, and any natural extensions and evolutions thereof by Parent or any of its Subsidiaries or business units that are not part of the Company Accounting Group);
(v) sell, or license on an exclusive basis, any intellectual property of the Company Accounting Group other than (1) in the ordinary course of business or (2)
among the units or companies that are part of, or after giving effect to the transaction would be part of, the Company Accounting Group, unless all net proceeds thereof are to be reinvested in the businesses or operations of the Company
Accounting Group; or
(vi) enter into any material transactions with Parent or any of its business units or Subsidiaries that are not (and after giving effect to the transaction will
not be) part of Company Accounting Group on terms materially less favorable in the aggregate to the Company Accounting Group than those that would in the good faith judgement of Parent be obtained by the Company Accounting Group on a stand-alone
basis other than (1) the making of Permitted Cash Loans and the repayment thereof, (2) Permitted Cash Distributions, (3) the contribution by Parent or any of its Subsidiaries of cash or other assets to the Company Accounting Group, (4) Tax
Payments, (5) the incurrence of Permitted Company Debt and the repayment thereof, and (6) Sponsored Insurance Investments.
(d) Certain Covenants.
(i) Notwithstanding Section 4.1(a) and except as
set forth in Section 4.1(e) and for matters permitted under exceptions set forth in Section 4.1(b)
or for which, during the Class A Consent Period, the Requisite Rollover Consent has been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), the West Member and Manager shall not, and shall not permit any member
of the Company Accounting Group to, during the Class A Consent Period, take any action that is primarily intended to reduce the Class A Required Purchase Consideration that would be required to be paid pursuant to Sections 5.4(b) or 5.4(c) or prevent the achievement by the Company Accounting Group of the Class B LTM Operating Income
Threshold; provided that Ordinary Business Changes shall not be deemed to violate this Section 4.1(d)(i).
(ii) Notwithstanding Section
4.1(a) and except as set forth in Section 4.1(e) and for matters permitted under exceptions set forth in Section 4.1(c) or for which, during the Class B Consent Period, the Requisite Rollover Consent has been obtained (which consent shall not be unreasonably withheld, delayed or conditioned), the West Member and
Manager shall not, and shall not permit any member of the Company Accounting Group to, during the Class B Consent Period, take any action that is primarily intended to prevent the achievement by the Company Accounting Group of the Class B LTM
Operating Income Threshold; provided that Ordinary Business Changes shall not be deemed to violate this Section 4.1(d)(ii).
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(e) Certain Corporate
Matters. Notwithstanding anything in this Agreement to the contrary, the Company Accounting Group and Parent and/or any of its Subsidiaries or business units (other than the Company Accounting Group) may, without obtaining any
Requisite Rollover Consent enter into one or more agreements or arrangements in accordance with Parent’s customary arrangements, policies and practices for provision of and sharing of corporate services, grants of Parent equity awards, the
sharing of freight, including brokered freight, and intellectual property by or among Parent, its Subsidiaries and business units, it being understood that freight sharing or brokered freight between the Company Accounting Group and other
Subsidiaries and business units of Parent would be on a straight pass-through basis without the originating company or unit taking a gross profit margin.
(f) Synergies. Parent
shall use commercially reasonable efforts to provide the Company Accounting Group with access to the corporate purchasing economies (including of fuel and equipment), network and pricing data, and operating principles and personnel, financing terms available to Parent and its
Subsidiaries and to other opportunities for net synergies as reasonably practicable in accordance with contractual arrangements and Parent’s post-closing transition plan and without disrupting the operations of Parent or any of its Subsidiaries,
it being understood that to the extent that any existing Indebtedness or other arrangements of East or any of its Subsidiaries is required by its terms to be refinanced or revised in connection with the Merger and, as a result, the expenses
associated therewith increases, then such increased expenses shall be borne by the Company Accounting Group. With respect to net synergies that may be obtained by consolidation of administrative activities (either by (x) reducing the activities
at the Company Accounting Group and providing them through Parent or a Subsidiary that is not a member of the Company Accounting Group, or (y) vice versa), the synergy amount (including for purposes of calculating Company Net Income and Company
Operating Income) shall reflect that the entity providing the services will be entitled to an intercompany allocation equal to the cost of any personnel actually added to provide the services plus an allocation (consistent with the methodology
under clauses (b) and (c) of the Accounting Rules) for the existing personnel; provided, that in no event will the allocation described immediately prior to this proviso result in a net negative impact on Company Net Income or Company Operating
Income compared with not consolidating the activities at all.
(g) Delegation of
Authority to Officers. The Manager may appoint individuals to act as Officers from time to time and may delegate power and authority to one or more such Officers of the Company. The Manager may remove an Officer at any time and from
time to time (with or without cause) and replace such Officer with a successor. An Officer may resign at any time upon notice to the Manager.
SECTION 4.2 Limitation of Liability.
(a) Any duties (including fiduciary duties) of a Covered Person to the Company or any of its Subsidiaries or to any of the Members that would otherwise apply at law or in equity are
hereby eliminated to the fullest extent permitted under the Act and any other applicable law.
(b) Except as provided by the Rollover Agreement, the Merger Agreement or any other agreement between a Covered Person and Parent or any of its Subsidiaries, (i) each Covered Person
shall have the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly: (A) engage in the same or similar business activities or lines of business of the Company Accounting Group and (B) do business with any
client or customer of Company Accounting Group; (ii) no Covered Person shall be liable to any Member or the Company or its Subsidiaries or any of their Affiliates for breach of any duty (contractual or otherwise) by reason of any of the
activities referred to in clause (i) or of such Person’s participation therein; and (iii) in the event that a Covered Person acquires knowledge of a potential transaction or
matter that may be a “corporate opportunity” for Company Accounting Group (including any acquisition, joint venture or other investment opportunity), the Covered Person shall not have any duty (contractual or otherwise) to communicate, present,
provide or make available such corporate opportunity to the Company Accounting Group and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to any Member or the Company or its Subsidiaries or any of their
Affiliates for breach of any duty (contractual or otherwise) by reason of the fact that the Covered Person directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person or entity (including
another Subsidiary of Parent), or does not communicate, present, provide or make available such corporate opportunity to the Company Accounting Group.
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SECTION 4.3 Indemnification. The provisions regarding the indemnification of Covered Persons are set forth in the Indemnification Schedule attached
hereto as Schedule B.
ARTICLE V
TRANSFER OF INTERESTS; RESTRICTIVE COVENANTS
TRANSFER OF INTERESTS; RESTRICTIVE COVENANTS
SECTION 5.1 In General. Any Transfer by a Member of all or any portion of its Interest will be subject to satisfaction of each of the following
conditions, unless otherwise approved in writing by the Manager:
(a) Securities Law
Compliance. Either (i) the Units proposed to be Transferred are registered under the Securities Act and the rules and regulations thereunder and any applicable state securities laws; or (ii) the Company determines, in its reasonable
discretion, that the Transfer qualifies for an exemption from the registration requirements of the Securities Act, any applicable state securities laws and any securities laws of any applicable jurisdiction and, if reasonably requested by the
Company, counsel to the Member proposing to effect the Transfer provides a written legal opinion to that effect.
(b) Registration. The
Transfer would not cause the Company or any of its Subsidiaries to be required to register under the Securities Act, the Exchange Act, the Investment Partnership Act of 1940, as amended, the Investment Company Act of 1940, as amended, or any
other U.S. federal or state securities or blue sky laws.
SECTION 5.2 Transfer of Common Units and Rollover Units.
(a) During the Class A Consent Period, the West Member shall not Transfer any Common Units other than (i) to its Affiliates or (ii) in compliance with the provisions of Section 5.5 or Section 5.6. Notwithstanding any provision of this Agreement to the contrary, no
Rollover Units may be Transferred other than (w) pursuant to Section 5.4, Section 5.5 or Section 5.6 for so long as such provisions remain in effect; (x) to another Rollover Member; (y) for estate planning purposes of such Rollover Member to (1) any Family Member of
such Rollover Member, (2) any Permitted Entity of such Rollover Member, or (3) any Family Member of another Rollover Member, or the Permitted Entity of another Rollover Member; or (z) otherwise with the prior written consent of the Manager, which
may be granted or withheld by the Manager in its sole discretion. In addition, no Transfer by a Member shall be effective unless the transferee executes a joinder agreement agreeing to be bound by the terms and conditions of this Agreement in
such form as may be reasonably required by the Manager.
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(b) Any attempted Transfer not in compliance with the provisions of Section 5.1 and Section 5.2(a) shall be null and void ab initio, and the Company shall not recognize the
attempted purchaser, assignee or transferee or the attempted Transfer for any purpose whatsoever, and the Member the Units of which are subject to such attempted Transfer shall have breached this Agreement for which the Company shall have all
remedies available for breach of contract.
SECTION 5.3 Admission as a Member. Each Person acquiring any Units in accordance with the terms hereof shall be admitted as a Member. The Manager shall
amend the Schedule of Members promptly to reflect the admission of Members pursuant to this Section
5.3.
SECTION 5.4 Class A Call Option; Class A Put Option; Mandatory Purchase
Obligations.
(a) Class A Call Option. The West Member shall have the option (the “Class A Call Option”) to purchase from the holders of the Class A Units, and if the Class A Call Option is exercised in accordance herewith, each of the Class A Rollover Members
shall be obligated to sell to the West Member, all, and not less than all, of the Class A Units held by such holders at a purchase price per Class A Unit equal to the Class A Call Consideration. The Class A Call Option shall be exercisable by
delivery by the West Member of a written notice of exercise to the Rollover Representative (a “Class A Call Notice”) at any time at or prior
to the Class A Call Expiration Time. If the West Member does not deliver a Class A Call Notice to the Rollover Representative at or prior to the Class A Call Expiration Time, the West Member’s right to exercise the Class A Call Option shall
expire.
(b) Class A Put Option. In the event that the Company Operating Income over any four consecutive Fiscal
Quarters is equal to or exceeds the Class A LTM Operating Income Threshold (a “Class A Operating Income Trigger”) and the Class A Call Option
shall not have been exercised at or prior to the Class A Call Expiration Time, then, at any time after the Class A Call Expiration Time, the Class A Rollover Members shall have the option (the “Class A Put Option”) to sell to the West Member, and if the Class A Put Option is exercised in accordance herewith, the West Member shall be obligated to purchase from the Class
A Rollover Members (and each of the Class A Rollover Members shall be obligated to sell to the West Member), all, and not less than all, of the Class A Units held by each such Class A Rollover Member at a purchase price per Class A Unit equal to
the Class A Required Purchase Consideration determined as of the date of the delivery of the Class A Put Notice, subject to Section 5.4(h). The Class A Put Option shall be
exercisable by delivery by the Rollover Representative of a written notice of exercise (“Class A Put Notice”) to the West Member and to the
other Class A Rollover Members at any time after the Class A Operating Income Trigger shall have occurred but only if the Class A Call Expiration Time shall have occurred without the Class A Call Option having been exercised.
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(c) Class A Mandatory Purchase. In the event that any Class A Units continue to be outstanding as of the
fifth anniversary of the Effective Date, the West Member shall purchase from each of the Class A Rollover Members, and each holder of Class A Units shall sell to the West Member, all of the Class A Units held by such Class A Rollover Member at a
purchase price per Class A Unit equal to the Class A Required Purchase Consideration determined as of the date of the fifth anniversary of the Effective Date, subject to Section 5.4(h).
(d) Class B Mandatory Purchase. In the event that the Company Operating Income over any four consecutive
Fiscal Quarters ending on or prior to the fifth anniversary of the Effective Date is equal to or exceeds the Class B LTM Operating Income Threshold (a “Class B Operating Income Trigger”), the West Member shall purchase from each of the Class B Rollover Members, and each Class B Rollover Member shall sell to the West Member, all of the Class B Units then held by such Class B
Rollover Member at a purchase price per Class B Unit equal to the Class B Required Purchase Consideration, subject to Section 5.4(h). In the event that any Class B Units
continue to be outstanding as of the fifth anniversary of the Effective Date and the Class B Operating Income Trigger shall not have been achieved as of or prior to such date, each outstanding Class B Unit shall be cancelled as of such date for
no consideration.
(e) Closing. The date for the closing of any purchase and sale of
Rollover Units pursuant to this Section 5.4 (a “Rollover
Unit Purchase Closing Date”) shall be the date determined by the West Member, but in any event, no earlier than 10 days and no later than 60 days after, as applicable, (i) the delivery of a Class A Call Notice pursuant to Section 5.4(a), if such purchase is pursuant to the exercise of the Class A Call Option, (ii) the delivery of a Class A Put Notice pursuant to Section 5.4(b), if such purchase is pursuant to the exercise of the Class A Put Option, (iii) the fifth anniversary of the Effective Date, if such purchase is pursuant
to Section 5.4(c), or (iv) the final determination in accordance with Section 8.2
of the occurrence of the Class B Operating Income Trigger, if such purchase is pursuant to the first sentence of Section 5.4(d); provided that, in the case of clause (ii) or (iii), if a timely Purchase Price Objection Notice (As defined below) is delivered, the closing of the purchase and sale of Class
A Units shall be a date determined by the West Member not less than 10 days nor more than 20 days after the final determination of the applicable Class A Required Purchase Consideration in accordance with Section 5.4(f) and Section 5.4(g). On the applicable Rollover Unit Purchase Closing Date in connection with any
purchase of Rollover Units pursuant to this Section 5.4, each Rollover Member shall assign to the West Member (or its designee, as directed by the West Member) all
of the Rollover Units being purchased and sold, free and clear of all liens, encumbrances and other restrictions (other than those liens and restrictions imposed by this Agreement and applicable securities laws), by delivering a duly executed
assignment with respect to such Rollover Units (the form of which shall be reasonably satisfactory to the West Member) and Parent shall pay to the Rollover Members the applicable consideration for such Rollover Units by wire transfer to one or
more bank accounts designated by the Rollover Representative; provided that a Rollover Member shall be entitled to direct Parent to pay all or any
portion of the applicable consideration otherwise payable in respect of such Rollover Member’s Rollover Units to any other Person (including, for the avoidance of doubt, another Rollover Member). Upon the purchase of Class A Units pursuant to
this Section 5.4, each such purchased Class A Units shall automatically be converted into and become a Common Unit. Upon the purchase of Class B Units pursuant to
this Section 5.4, each such purchased Class B Unit shall automatically be cancelled.
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(f) Resolution. Within twenty (20) Business Days after (x) the valid delivery by the Rollover Representative
of a Class A Put Notice to the West Member in accordance with Section 5.4(b) or (y) the fifth anniversary of the Effective Date (if Class A Units continue to be held by
Class A Rollover Members as of such anniversary), Parent shall deliver to the Rollover Representative a written notice setting forth its calculation of the applicable Class A Required Purchase Consideration, together with reasonable back-up
information supporting such calculation, and its proposed Rollover Unit Purchase Closing Date (“Class A Purchase Price Notice”). The Rollover
Representative may deliver to Parent, within twenty (20) Business Days after delivery of the Class A Purchase Price Notice a written notice (a “Purchase
Price Objection Notice”) setting forth in
reasonable detail its objections to Parent management’s calculation of the applicable Class A Required Purchase Consideration. During the twenty (20) Business Day period (the “Negotiation Period”) after delivery of the Purchase Price Objection Notice to Parent, Parent and the Rollover Representative shall negotiate in good faith to agree on the applicable Class A Required Purchase Consideration, and if
they so agree, then the applicable Class A Required Purchase Consideration as so agreed shall be final, conclusive and binding on the Rollover Members and Parent. If the Rollover Representative does not timely deliver a Purchase Price Objection
Notice, the applicable Class A Required Purchase Consideration as set forth in the Class A Purchase Price Notice shall be final, conclusive and binding on the Rollover Members and Parent. Any communications between Parent and the Rollover
Representative or the Rollover Members during the Negotiation Period shall be considered settlement discussion materials pursuant to Federal Rule of Evidence 408 and similar state rules.
(g) Price Referee. If Parent and the Rollover Representative do not agree on the applicable Class A Required
Purchase Consideration during the Negotiation Period, Parent and the Rollover Representative shall, within the ten (10) Business Day period after the Negotiation Period, jointly select and engage an independent national recognized accounting firm
to determine the applicable Class A Required Purchase Consideration (such accounting firm, in such capacity, the “Price Referee”); provided,
that, if they are unable to agree upon a Price Referee prior to the end of such ten (10) Business Day period, than, Parent or the Rollover Representative may request that the American Arbitration Association in New York, New York designate an
independent national recognized accounting firm to serve as Price Referee and the accounting firm so designated shall be jointly engaged by Parent and the Rollover Representative to serve as the Price Referee. Each of the Parent and the Rollover
Representative shall use its commercially reasonable efforts to cooperate with the Price Referee. Promptly after being engaged, the Referee shall conduct a review of Parent’s calculation of the applicable Class A Required Purchase Consideration
and based on that review shall determine the applicable Class A Required Purchase Consideration and the applicable Class A Required Purchase Consideration as determined by the Price Referee shall be final, conclusive and binding on the Rollover
Members and Parent. The Referee shall be instructed to reach such determination within thirty (30) Business Days after being engaged. If the applicable Class A Required Purchase Consideration as finally determined by the Price Referee is
greater than applicable Class A Required Purchase Consideration reflected in the Class A Purchase Price Notice, the fees, expenses and costs of the Price Referee shall be borne by Parent; otherwise, the fees, expenses and costs of the Price
Referee shall be borne by the Rollover Members.
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(h) Cap. Notwithstanding anything herein to the contrary, in the event that aggregate amount of the
aggregate amount of consideration otherwise required to be paid to the Rollover Members on any Rollover Unit Purchase Closing Date for the Rollover Units being purchased on such date exceeds the Value Cap as of such date, the consideration
payable to the Rollover Members hereunder on such date shall be proportionally reduced (without reducing the Rollover Units being purchased) so that the aggregate amount of consideration to be paid to the Rollover Members for such Rollover Units
on such Rollover Unit Purchase Closing Date shall not exceed such Value Cap.
(i) This Section 5.4 shall terminate immediately prior to the consummation of a Qualified IPO and thereafter
shall have no further force or effect.
SECTION 5.5 Tag Along Rights.
(a) For so long as Class A Rollover Units and Class B Rollover Units are held by Rollover Members, in the event the West Member proposes to sell
any Common Units held by it to any Person or Persons other than one of its Affiliates, whether pursuant to a stock sale, merger, consolidation, a tender or exchange offer or any other transaction (“Tag Along Sale”), the West Member will have the obligation, and each of the Rollover Members will have the right, to require the proposed transferee or acquiring Person (“Proposed Transferee”) to purchase from each of the Rollover Members that timely exercises its rights under Section 5.5(c) (“Tagging Member”), up to a number of Class A Units (accompanied by an equal number of
Class B Units) equal to (i) the number of Class A Units owned by such Tagging Member multiplied by (ii) the percentage derived by dividing the total number of
Common Units proposed to be sold by the West Member to the Proposed Transferee in the Tag Along Sale by the total number of Common Units then held by the West Member, at the same price per Unit (provided that for this purpose, a Class A Unit and
Class B Unit shall together constitute one Unit) and upon substantially the same terms and conditions (including form of consideration) as the West Member.
(b) It shall be a condition to a Tagging Member’s right to sell Class A Units to the Proposed Transferee that each Class A Unit being sold shall be
accompanied by an equal number of Class B Units and such Tagging Member shall agree to and make the same covenants, indemnities (with respect to all matters other than the West Member’s or other Tagging Members’ ownership of Class A Units and
Class B Units) and agreements as the West Member agrees to make in connection with the Tag Along Sale; provided, that all such covenants, indemnities and
agreements shall be made by the Tagging Members severally and not jointly and that the liabilities thereunder (other than with respect to the ownership of each Member’s Units being transferred, which shall be several obligations) shall be borne
on a pro rata basis based on the number of Units (provided that for this purpose, a Class A Unit and Class B Unit shall together constitute one Unit) sold by each of the Members participating in a Tag Along Sale.
(c) At least ten (10) Business Days’ prior to consummating a Tag Along Sale, the West Member will notify the Rollover Representative in writing of
the proposed Tag Along Sale, such notice setting forth the number of Common Units proposed to be sold, the name of the Proposed Transferee, the amount and form of consideration and other material terms and conditions of the Tag Along Sale. A
Rollover Member may exercise its right to participate in such Tag Along Sale by delivery of an irrevocable written notice to the West Member within ten (10) Business Days following delivery of written notice of such Tag Along Sale specifying the
number of Class A Units (and the accompanying equal number of Class B Units) such Tagging Member desires to sell.
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(d) The closing of the purchase of Rollover Units from Rollover Members timely exercising their right to participate in a Tag Along Sale will take
place concurrently with the West Member’s closing of the Tag Along Sale. If the closing of the Tag Along Sale does not occur within one hundred twenty (120) days of the written notice of such Tag Along Sale, such Tag Along Sale may not be
consummated unless the West Member again complies with the requirements of this Section 5.5.
(e) If a Rollover Member exercises its rights as a Tagging Member under this Section
5.5, such Rollover Member shall use commercially reasonable efforts to secure any governmental authorization required to be obtained by such Tagging Member or its Affiliates and shall provide all information which may reasonably be
required or requested from such Tagging Member in connection therewith, to comply as soon as reasonably practicable with all applicable laws and to take all such other actions and to execute such additional documents as are reasonably necessary
or appropriate in order to consummate the Tag Along Sale.
(f) Upon the sale of Class A Units pursuant to this Section 5.5, each such
purchased Class A Unit shall automatically be converted into and become a Common Unit. Upon the purchase of Class B Units pursuant to this Section 5.5, each such purchased
Class B Unit shall automatically be cancelled.
(g) This Section 5.5 shall terminate immediately prior to the consummation
of a Qualified IPO and thereafter shall have no further force or effect.
SECTION 5.6 Drag Along Rights.
(a) If the West Member or one of its Affiliates (“Dragging
Member”) receives and accepts a bona fide offer from an unaffiliated third party (“Third Party”) to purchase all of the outstanding
Units (“Third Party Offer”), then each of the other Members hereby agrees that, if requested in writing by the Dragging Member, it will sell
to such Third Party at the same price per Unit (provided that for this purpose, a Class A Unit and Class B Unit shall together constitute one Unit) and upon substantially the same terms and conditions (including form of consideration) as the
Dragging Member all of the Units held by such other Members.
(b) If the Dragging Member elects to exercise the rights set out in Section 5.6(a),
the Dragging Member will give notice (“Drag Along Notice”) to each of the other Members setting forth the name of the Third Party, the amount
and form of consideration, and the other material terms and conditions of the Third Party Offer. The Drag Along Notice will be delivered at least ten (10) Business Days in advance of the closing of the transactions contemplated by a Third Party
Offer. The Members will be required (i) to make or agree to the same covenants, indemnities (with respect to all matters other than the Dragging Members’ or other Members’ ownership of Units) and agreements as the Dragging Member so long as such
covenants, indemnities and agreements are made severally and not jointly and the liabilities thereunder (other than with respect to the ownership of each Members’ Units being sold, which shall be several obligations) are borne on a pro rata basis
based on the number of Units sold by each Member in such transaction (provided that for this purpose, a Class A Unit and Class B Unit shall together constitute one Unit); except that the Members (other than the Dragging Member) shall not be
required to agree (unless such Member is an officer or employee within the Company Accounting Group) to any restrictive covenant in connection with the proposed sale (including, without limitation, any covenant not to compete or covenant not to
solicit customers, employees or suppliers of any party to the proposed sale) or any release of claims other than a release in customary form of claims arising solely in such Member’s capacity as a Member of the Company, and, (ii) to take all
necessary action, including, without limitation, to the extent applicable, expressly waiving any dissenter’s rights or rights of appraisal or similar rights, surrendering certificates, cooperating in obtaining any applicable governmental
authorization(s) and otherwise as reasonably required to assist the Dragging Member in the consummation of such Third Party Offer.
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(c) Notwithstanding anything in this Agreement to the contrary, upon receipt of a Drag Along Notice, to the extent of any right of the Members
under applicable law to vote their Units in respect of a Third Party Offer set out in a Drag Along Notice, each Member shall be obligated to vote such Member’s Units, if applicable, in favor of such Third Party Offer at any meeting of holders of
Units to vote on or approve such Third Party Offer (or any written consent solicited for such purpose).
(d) If a Member is required to sell Units in accordance with this Section 5.6,
such Member shall use commercially reasonable efforts to secure any governmental authorization required to be obtained by such Member or its Affiliates and shall provide all information which may reasonably be required or requested from such
Member in connection therewith, to comply as soon as reasonably practicable with all applicable laws and to take all such other actions and to execute such additional documents as are reasonably necessary or appropriate in order to consummate the
Third Party Offer.
(e) Upon the purchase of Class A Units pursuant to this Section 5.6, each
such purchased Class A Unit shall automatically be converted into and become a Common Unit. Upon the purchase of Class B Units pursuant to this Section 5.6, each such
purchased Class B Unit shall automatically be cancelled.
(f) This Section 5.6 shall terminate immediately prior to the consummation
of a Qualified IPO and thereafter shall have no further force or effect.
ARTICLE VI
CESSATION OF MEMBERSHIP
CESSATION OF MEMBERSHIP
SECTION 6.1 When Membership Ceases. A Person who is a Member shall cease to be a Member upon the Transfer of such Member’s entire Interest as
permitted under this Agreement.
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SECTION 6.2 Deceased, Incompetent or Dissolved Members. The personal representative, executor, administrator, guardian, conservator or other legal
representative of a deceased individual Member or of an individual Member who has been adjudicated incompetent may exercise the rights of the Member for the purpose of administration of such deceased Member’s estate or such incompetent Member’s
property. The beneficiaries of a deceased Member’s estate shall become Members of the Company only upon compliance with the conditions of this Agreement. If a Member who is a Person other than an individual is dissolved, the legal representative
or successor of such Person may exercise the rights of the Member pending liquidation. The distributees of such Person may become assignees of the dissolved Member only upon compliance with the conditions of this Agreement.
SECTION 6.3 Consequences of Cessation of Membership. In the event a Person ceases to be a Member as provided in Section 6.1, the Person (or the Person’s successor in interest) shall continue to be liable for all obligations of the former Member to the Company and, with respect to any Interest owned by such Person,
shall be an assignee with only the rights and subject to the restrictions, conditions and limitations described herein.
ARTICLE VII
DISSOLUTION, WINDING UP AND LIQUIDATING DISTRIBUTIONS
DISSOLUTION, WINDING UP AND LIQUIDATING DISTRIBUTIONS
SECTION 7.1 Dissolution Triggers. The Company shall dissolve upon the first occurrence of the following events:
(a) subject to Sections 4.1(b) and 4.1(c),
the determination by the Manager that the Company should be dissolved; or
(b) upon the occurrence of the events specified in the Act.
SECTION 7.2 Winding Up. Upon the dissolution of the Company, the Manager may wind-up the
Company’s affairs and, in the name of, and for and on behalf of, Company, may prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the Company’s business, dispose of and convey the Company’s
property, discharge or make reasonable provision for the Company’s liabilities, and distribute to the Common Members any remaining assets of the Company, all without affecting the liability of the Members and the Manager.
SECTION 7.3 Liquidating Distributions. Upon the winding-up of the Company, the Company’s assets shall be distributed in the following manner
and order:
(a) to the payment of the expenses of the dissolving, winding up and, liquidation of the Company;
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(b) to pay all creditors of the Company, including Members who are creditors, either by the payment thereof or the making of reasonable provision therefor; and
(c) the remaining assets of the Company shall be applied and distributed to the Common Members pro rata in respect of their Common Units.
SECTION 7.4 Waiver of Dissolution and Liquidator Rights. The Members agree that irreparable damage would occur if any Member should bring an action
for judicial dissolution of the Company. Accordingly, each Member accepts the provisions under this Agreement as such Member’s sole entitlement on dissolution of the Company and waives and renounces such Member’s right to seek a court decree of
dissolution or to seek the appointment by a court of a liquidator for the Company.
ARTICLE VIII
COVENANTS
COVENANTS
SECTION 8.1 Taxable Year. To the extent permitted by law, the Company shall use the Fiscal Year as its taxable year.
SECTION 8.2 Information; Confidentiality.
(a) Information. Until the earlier of (x) consummation of a Qualified IPO and (y) the date on which no Rollover Units are held by the Rollover Members, Parent will deliver, or cause to be delivered, the
following to the Rollover Representative as soon as practicable, but no later than sixty (60) days following the end of each full Fiscal Quarter that has elapsed after the Effective Date (or ninety (90) days following the any such
Fiscal Quarter ending December 31):
(i) a condensed consolidated unaudited balance sheet of the Company Accounting Group as of the end of such Fiscal Quarter
and condensed consolidated unaudited statements of operations of the Company Accounting Group for such Fiscal Quarter and for such Fiscal Quarter and the three immediately prior Fiscal Quarters (or such fewer number of full prior Fiscal Quarters
as shall have elapsed), in each case based on the consolidated financial statements filed by Parent with the Securities and Exchange Commission on Form 10-Q or Form 10-K, as applicable, covering such date and/or periods;
(ii) Parent management’s good faith calculation of the Company Operating Income for such Fiscal Quarter and for such Fiscal Quarter and the three immediately
prior Fiscal Quarters (or such fewer number of full Fiscal Quarters as shall have elapsed after the Effective Date);
(iii) if Class A Units are then held by Class A Rollover Members, Parent management’s good faith
calculation of the Company Net Income for such Fiscal Quarter and for such Fiscal Quarter and the three immediately prior Fiscal Quarters (or such fewer number of full Fiscal Quarters as shall have elapsed after the Effective Date);
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(iv) if Class A Units are then held by Class A Rollover Members and four Full Fiscal Quarters shall
have elapsed since the Effective Date, Parent management’s good faith calculation of the Class A Required Purchase Consideration determined as of a date a reasonable period before the delivery thereof; and
(v) a financial forecast prepared by management of Parent in respect of the Company Accounting Group covering the next four Fiscal Quarters.
(b) Resolution. If (x) at least four Fiscal Quarters shall have elapsed
since the Effective Date and the Class A Operating Income Trigger and/or Class B Operating Income Trigger, as applicable, shall not have previously occurred based on Parent management’s calculation of Company Operating Income for any four Fiscal
Quarter period as provided to the Rollover Representative pursuant to Section 8.2(a), (y) Parent delivers to the Rollover Representative after any Fiscal Quarter Parent
management’s calculation of the Company Operating Income for the prior four Fiscal Quarter period and such calculation does not reflect the occurrence of the Class A Operating Income Trigger or the Class B Operating Income Trigger, as applicable,
and (z) the Rollover Representative believes in good faith that the Class A Operating Income Trigger or the Class B Operating Income Trigger, as applicable, occurred over such four Fiscal Quarter period, then the Rollover Representative may
deliver to Parent, within fifteen (15) Business Days after delivery of Parent management’s calculation of the Company Operating Income for such four Fiscal Quarter period a written notice (an “Objection Notice”) objecting to Parent management’s calculation of the Company Operating Income for such four Fiscal Quarter period. Within twenty (20) Business Days of
delivery of the Objection Notice (the “Information Delivery Period”), Parent shall provide to the Rollover Representative and its
representatives with such back-up to Parent management’s calculation of the Company Operating Income for such four Fiscal Quarter period as the Rollover Representative shall reasonably request, and Parent and the Rollover Representative shall
negotiate in good faith until (15) Business Days have elapsed after the Information Delivery Period (the “Resolution Period”) to agree on the
Company Operating Income for such four Fiscal Quarter period, and if they so agree, then Company Operating Income for such four Fiscal Quarter period, as so agreed, shall be final, conclusive and binding on the Rollover Members and Parent. If
the Rollover Representative does not timely deliver an Objection Notice within the applicable Objection Period, Parent management’s calculation of the Company Operating Income for the applicable four Fiscal Quarter period as provided to the
Rollover Representative pursuant to Section 8.2(a) shall be final, conclusive and binding on the Rollover Members and Parent. Any communications between Parent and the
Rollover Representative during the Information Delivery Period and the Resolution Period shall be considered settlement discussion materials pursuant to Federal Rule of Evidence 408 and similar state rules.
(c) Referee. If Parent and the Rollover Representative do not agree on the
Company Operating Income for the applicable four Fiscal Quarter during the applicable Resolution Period, Parent and the Rollover Representative shall, within the (10) Business Day period after the Resolution Period, jointly select and engage an
independent national recognized accounting firm to determine the Company Operating Income for the applicable four Fiscal Quarter period (such accounting firm, in such capacity, the “Referee”); provided, that, if they are unable to agree upon a Referee prior to the end of such ten (10) Business Day period, then Parent or the Rollover Representative may request that the American
Arbitration Association in New York, New York designate an independent national recognized accounting firm to serve as Referee and the accounting firm so designated shall be jointly engaged by Parent and the Rollover Representative to serve as
the Referee. Each of Parent and the Rollover Representative shall use its commercially reasonable efforts to cooperate with the Referee. Promptly after being engaged, the Referee shall conduct a review of Parent management’s calculation of the
Company Operating Income for the applicable four Fiscal Quarter period and based on that review shall determine the Company Operating Income for such four Fiscal Quarter Period and the Company Operating Income for such four Fiscal Quarter period
as determined by the Referee shall be final, conclusive and binding on the Rollover Members and Parent. The Referee shall be instructed to reach such determination within thirty (30) Business Days after being engaged. If the Company Operating
Income for such four Fiscal Quarter period as finally determined by the Referee reflects the occurrence of the Class A Operating Income Trigger and/or Class B Operating Income Trigger, as applicable, and such trigger shall not have previously
occurred, the fees, expenses and costs of the Referee shall be borne by Parent; otherwise, the fees, expenses and costs of the Referee shall be borne by the Rollover Members.
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(d) Confidentiality.
(i) Except as otherwise consented to by Parent, all information which has been furnished to the Rollover Representative or any a Rollover Member pursuant to
this Agreement or otherwise relating to the Company Accounting Group or any of its or their businesses or operations will be kept confidential, will not be used by the Rollover Representative or any Rollover Member, or by any of its or their
Affiliates, agents, representatives, or advisors, for any purpose other than monitoring the Rollover Members’ investment in the Rollover Units or as may be reasonably necessary to enforce a Rollover Member’s rights under this Agreement, and will
not be disclosed by the Rollover Representative or any Rollover Member, or by any of its or their Affiliates, agents, representatives, or advisors, in any manner whatsoever, in whole or in part except as otherwise permitted by this Agreement; provided, however, that the foregoing shall not apply to any information that (A) becomes generally known to the public through no breach of this Agreement by the
Rollover Representative or any Rollover Member, or by any of its or their Affiliates, agents, representatives, or advisors, or (B) has come into the possession of the Rollover Representative or such Rollover Member from a third party who, to such
Rollover Representative’s or Rollover Member’s knowledge, is under no obligation to Parent or any of its Subsidiaries to maintain the confidentiality of such information.
(ii) The Rollover Representative and each Rollover Member shall be permitted to disclose such information: (A) to other Rollover Members and to those of its or
their agents, representatives and advisors who need to be familiar with such information in connection with such Rollover Member’s monitoring of its investment in the Rollover Units or as may be reasonably necessary to enforce a Rollover Member’s
rights under this Agreement, in each case for use solely for such purpose; provided, however, that each such Person shall have been informed of the covenants
set forth in this Section 8.2(d) and the Rollover Representative or such Rollover Member, as applicable, shall be liable for any breach by any such Person of such covenants;
(B) to the extent legally permissible and required by law, rule or regulation, pursuant to the order of any court of administrative agency or in any pending legal, judicial or administrative proceeding, upon request or demand of any regulatory
authority having jurisdiction over the Rollover Representative or the Rollover Member or as required by applicable law or compulsory legal process based on the advice of counsel so long as the Rollover Representative or such Rollover Member shall
have, to the extent permitted and reasonably practicable, first afforded Parent with written notice thereof so that Parent may contest the necessity of disclosing such information or waive compliance with this Section 8.2(d); or (C) as otherwise consented to by Parent.
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(iii) Without intending to limit the remedies available to Parent, the Rollover Representative and each Rollover Member acknowledges that a breach of this Section 8.2(d) may result in material irreparable injury to Parent and/or its Affiliates for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or threat thereof, Parent and the Company shall be entitled to specifically enforce the covenants contained herein without the posting of a bond and the Rollover
Representative and each Rollover Member agrees not to oppose the granting of such injunctive relief on the basis that monetary damages are an adequate remedy.
(iv) The provisions of this Section 8.2(d) shall survive any termination of this
Agreement and shall continue to bind each Person who was ever subject to this provision even if such Person would otherwise cease to be subject to this provision. Notwithstanding anything herein to the contrary, the provisions of this Section 8.2(d) shall terminate with respect to the Rollover Representative and each Rollover Member on the third anniversary of the last date on which such Rollover Members no
longer own any Rollover Units.
(e) Quarterly Call. Upon the request of the Rollover Representative not more than once in any
Fiscal Quarter and only so long as the Rollover Members own any Rollover Units, Parent will make available one or more executives of Parent (as reasonably determined by Parent in the context of topics expected to be covered) for a conference call
(to be held at a mutually agreeable time and for a reasonable period) to discuss the business and operations of the Company Accounting Group.
(f) Except as expressly set forth in this Section 8.2, no Rollover Member shall be entitled to any
information regarding the Company or any of its Affiliates, including without limitation, the status of its business and financial condition or any other information regarding the affairs of the Company or its Affiliates. Notwithstanding
anything to the contrary contained herein, Section 18-305(a) of the Delaware Act shall not apply to or be incorporated into this Agreement and each Rollover Member hereby expressly waives any and all rights under such Section of the Act to the
fullest extent permitted by the Act.
SECTION 8.3 Initial Public Offering.
(a) In the event that the Manager determines to effect an Initial Public Offering, the Manager, the Company and each Member shall take such actions
as are necessary to structure and consummate the Initial Public Offering at the direction of the Manager and in a manner consistent with the terms of this Section 8.3,
including by effecting any Transfers, mergers, consolidations or restructurings pursuant to Section 8.3(b) and making any such amendments to this Agreement as reasonably
necessary to facilitate such Initial Public Offering.
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(b) In connection with (and conditioned upon) any proposed Initial Public Offering approved by the Manager, the Manager may, in its sole discretion
(and, without the approval or consent of, or any other action by, any Member), (i) amend this Agreement and/or the Certificate of Formation, or take any other action it deems appropriate, to provide for a conversion of the Company to a
corporation or such other entity as the Manager may determine, using such means as the Manager may select, including by requiring (A) a transfer of all or substantially all of the assets of the Company or the Units to a newly organized entity in
a contribution under Section 351 of the Code, (B) a merger of the Company into such a newly organized entity or (C) any other restructuring of the Interests or Units (provided that one Class A Unit (together with one Class B Unit) shall be
converted into or exchange for Equity Interests in the Successor Corporation with the same economic terms in which one Common Unit is converted or exchanged), (ii) relocate the organization of the Company or any successor to another jurisdiction
in the United States to facilitate any of the foregoing, or (iii) take such other steps as it deems necessary to create a suitable vehicle for purposes of conducting an Initial Public Offering and becoming a public company, in each such case in
accordance with the Securities Act and applicable law (the resulting entity of any of the foregoing, the “Successor Corporation” and, such
transactions, an “IPO Conversion”), and each Member shall take such steps to effect such Transfer, merger, consolidation or other
restructuring as may be requested by the Member, including, without limitation, Transferring such Member’s Interests to the Successor Corporation in exchange for Capital Stock of the Successor Corporation.
(c) By acceptance of its Units, each Member hereby agrees and shall be required to cooperate fully with any Initial Public Offering, including for
the avoidance of doubt any IPO Conversion, made in accordance with the terms hereof, including by executing any necessary or appropriate documents or forms reasonably requested by the Board, it being the intent of the Members that the IPO
Conversion and the conversion or reorganization of any of the Company’s operating divisions or Subsidiaries, whether currently existing or existing in the future, into corporate or other form are part of each Member’s investment decision with
respect to the Units of such Member and no further action or consent shall be required of any Member prior to the IPO Conversion, or any such conversion or reorganization, in connection
with an Initial Public Offering.
(d) If the Manager approved a merger by the Company with, or consolidation into, another limited liability company or other business entity
(regardless of whether the Company or such other entity is the survivor) in connection with the completion of an Initial Public Offering in accordance with this Section 8.3
each Member hereby consents to such merger and shall vote for (to the extent it has any voting right) and otherwise consent to and raise no objections against such merger, and each Member shall take all reasonable actions in connection with the
consummation thereof as determined by the Manager, shall not exercise any dissenters’, appraisal or other similar rights that it may have in connection with such transaction, and hereby expressly waive all rights under Section 18-210 of the
Delaware Act.
(e) Prior to the consummation of any Initial Public Offering, the Company and each Member agree to enter into (and, if applicable, agree to cause
the Successor Corporation to enter into) a Registration Rights Agreement.
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ARTICLE IX
MISCELLANEOUS
MISCELLANEOUS
SECTION 9.1 Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement shall be in
writing and shall be delivered personally to the Person or to an officer of the Person to whom the same is directed, or sent by registered or certified United States mail return receipt requested, or by nationally recognized overnight delivery
service, addressed as follows: if to the Company or the Manager, to the Company’s principal office address (with a copy to the Manager), or to such other address as may be specified from time to time by notice to the Members; if to a Member, to
the Member’s address as set forth on the Schedule of Members or to such other address as may be specified from time to time by notice to the Members; if to the Manager, to the address of the Manager as set forth in the records of the Company or
to such other address as the Manager may specify from time to time by notice to the Members. Any such notice shall be deemed to be delivered, given and received for all purposes as of the date and time of actual receipt.
SECTION 9.2 Binding Effect; Third Parties under the Agreement.
(a) Except as otherwise provided in this Agreement, every covenant, term and provision of this Agreement shall be binding upon and inure to the benefit of the Members, and their
respective heirs, legatees, legal representatives and permitted successors, transferees and assigns.
(b) This Agreement is entered into among the Company and the Members for the exclusive benefit of the Company, the Members, and their successors and permitted assignees. This
Agreement is expressly not intended for the benefit of any creditor of the Company or any other Person (other than any Person with a right to indemnification under this Agreement). Except and only to the extent provided by applicable statute, no
such creditor or third party shall have any rights under this Agreement.
SECTION 9.3 Construction. Every covenant, term and provision of this Agreement shall be construed simply according to its fair meaning and not
strictly for or against any Member. No provision of this Agreement is to be interpreted as a penalty upon, or a forfeiture by, any party to this Agreement. The parties acknowledge that each party to this Agreement, together with such party’s
legal counsel, has shared equally in the drafting and construction of this Agreement and, accordingly, no court construing this Agreement shall construe it more strictly against one party hereto than the other.
SECTION 9.4 Entire Agreement; No Oral Agreements; Amendments to this Agreement.
(a) This Agreement constitutes the entire agreement among the Members with respect to the affairs of the Company and the conduct of its business and supersedes all prior agreements
and understandings, whether oral or written.
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(b) The Company shall have no oral operating agreements.
(c) Subject to Section 4.1(b) and Section
4.1(c), as applicable, any provision of this Agreement may be amended, modified, supplemented, restated, terminated or waived by action of the Manager. Notwithstanding any provision of this Agreement to the contrary, the Manager
may amend and modify the provisions of this Agreement and the Schedule of Members to the extent necessary to reflect the issuance of any Interests and the admission or substitution of any Member specifically permitted under this Agreement. Any
such amendment described in the first two sentences of this Section 9.4(c) shall be binding on the Members without necessity of the execution of the amendment or any other
instrument by any Member.
SECTION 9.5 Headings. Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.
SECTION 9.6 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for
any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement.
SECTION 9.7 Additional Documents. Each Member, upon the request of the Manager, agrees to perform all further acts and execute, acknowledge and
deliver any documents that may be reasonably necessary, appropriate or desirable to carry out the provisions of this Agreement.
SECTION 9.8 Variation of Pronouns. All pronouns and any variations thereof shall be deemed to refer to masculine, feminine or neuter, singular or
plural, as the identity of the Person or Persons may require.
SECTION 9.9 Governing Law; Consent to Exclusive Jurisdiction. The laws (excluding conflict of laws rules and principles) of the State of Delaware
shall in all respects govern this Agreement, the construction and interpretation of its terms, the organization and internal affairs of the Company and the limited liability of the Members and Manager (as provided for herein). Each Member
irrevocably consents to the exclusive personal jurisdiction of the federal and state courts sitting in Wilmington, Delaware with respect to matters arising out of or related to this Agreement.
SECTION 9.10 Waiver of Action for Partition. Each of the Members irrevocably waives any right that it may have to maintain any action for partition
with respect to any of the assets of the Company.
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SECTION 9.11 Counterparts; Rollover Representative. This
Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document, and all fully executed counterparts shall be construed together and shall constitute one and the same agreement.
Each Rollover Member hereby designates and appoints Max L. Fuller as agent and attorney-in-fact for such Rollover Member (in such capacity, “Rollover Representative”)
to act as Rollover Representative under this Agreement in accordance with the terms of this Section 9.11, In the event of the resignation of the Rollover Representative, a
successor representative, appointed by the resigning Rollover Representative and reasonably satisfactory to Parent, shall thereafter be appointed by an instrument in writing signed by Parent and such successor representative. The Rollover
Representative is hereby authorized and empowered to act for, and on behalf of, any or all of the Rollover Members (with full power of substitution in the premises) in connection with this Agreement and the transactions contemplated hereby,
including: (i) to receive all payments owing to the Rollover Members under this Agreement and then make such payments, or direct such payments to be made, to the Rollover Members in accordance with the terms hereof, (ii) to amend or waive any
provision of, this Agreement, (iii) to act as the representative of the Rollover Members to review and authorize all claims and disputes or question the accuracy thereof, (iv) to negotiate and compromise on their behalf with Parent any claims
asserted hereunder and to authorize payments to be made with respect thereto, (v) to take such further actions as are authorized in this Agreement, and (vi) in general, do all things and perform all acts, including executing and delivering all
agreements, certificates, receipts, consents, elections, calculations, instructions and other documents or deliverables contemplated by, or deemed by the Rollover Representative to be necessary or desirable on behalf of the Rollover Members in
connection with, this Agreement and the transactions contemplated hereby. All Members, the Manager and Parent and the Company shall be entitled to rely on such appointment and to treat Rollover Representative as the duly appointed
attorney-in-fact of each Rollover Member. For the avoidance of doubt, each of the Members, the Manager and Parent and the Company and their respective Affiliates is entitled to rely on the actions or decisions of Rollover Representative taken on
behalf of the Rollover Members in connection with this Agreement and the transactions contemplated hereby as if such action or decision were taken or made by the Rollover Members themselves. Notices given to the Rollover Representative in
accordance with the provisions of this Agreement shall constitute notice to the Rollover Members for all purposes under and in relation to this Agreement. The appointment of Rollover Representative is an agency coupled with an interest and is
irrevocable and any action taken by Rollover Representative pursuant to the authority granted in this Section 9.11 shall be effective and absolutely binding on each Rollover
Member notwithstanding any contrary action of or direction from such Rollover Member. The death or incapacity, or dissolution or other termination of existence, of any Rollover Member shall not terminate the authority and agency of Rollover
Representative. Each of the Members, the Manager and Parent and the Company and their respective Affiliates and any other party to any document contemplated by this Agreement in dealing with Rollover Representative may conclusively and absolutely
rely, without inquiry, upon any act of the Rollover Representative as the act of the Rollover Members. The Rollover Representative shall not be liable to any Rollover Member with respect to any action taken or omitted to be taken by the Rollover
Representative in its role as Rollover Representative under or in connection with this Agreement, unless such action or omission results from or arises out of willful misconduct or gross negligence on the part of the Rollover Representative.
SECTION 9.12 Tax Matters. For U.S. federal income tax purposes, the Company has elected or shall elect under Treasury Regulations § 301.7701-3 to be
classified as an association taxable as a corporation effective on or prior to the Effective Date.
SECTION 9.13 Exhibits and Schedules. The Exhibits and Schedules to this Agreement, each of which is incorporated by reference into this Agreement,
are:
Exhibit A:
Glossary of Terms
Schedule A:
Schedule of Members
Schedule B:
Indemnification Schedule
Schedule C:
Registration Rights Agreement Term Sheet
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company and Members have executed this Agreement as of this [●] day of [●], 2023.
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Company:
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| Liberty Holdings Topco LLC |
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| By: Knight-Swift Transportation Holdings Inc., its sole Member | |||
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[SIGNATURE PAGE TO A&R LLC AGREEMENT OF LIBERTY HOLDINGS TOPCO LLC]
IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of this [●] day of [●] 2023.
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Parent/West
Member:
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| KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. |
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[SIGNATURE PAGE TO A&R LLC AGREEMENT OF LIBERTY HOLDINGS TOPCO LLC]
IN WITNESS WHEREOF, the Company and the Members have executed this Agreement as of this [●] day of [●], 2023.
Rollover Members:
[SIGNATURE PAGE TO A&R LLC AGREEMENT OF LIBERTY HOLDINGS TOPCO LLC]
Exhibit A
Glossary of Terms
Glossary of Terms
Many of the capitalized words and phrases used in this Agreement are defined below or in the Section or Exhibit in
which they are used.
“Accounting Rules”
has the meaning set forth in the definition on Company Net Income.
“Act” means
the Delaware Limited Liability Company Act, as in effect in Delaware and set forth at 6 Delaware Code, Chapter 18, Sections 18–101 through 18–1109 (or any corresponding provisions of succeeding law).
“Affiliate”
means, with respect to any Person, any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person,
whether through the ownership of voting securities, contract or otherwise; provided, however, that, for purposes hereof, neither the Company nor any Person
controlled by the Company shall be deemed to be an Affiliate of any Rollover Member.
“Agreement”
means this Amended and Restated Limited Liability Company Agreement of the Company (including all exhibits and schedules hereto), as amended, restated or amended and restated from time to time.
“Business Day”
or “business day” means any day that is not a Saturday, Sunday, any other day on which commercial banks in Phoenix, Arizona or Chattanooga, Tennessee are authorized
or required by law to remain closed.
“Capital Stock”
means (i) in the case of a corporation, corporate stock; (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (iii) in the case of
a partnership or limited liability company, partnership or membership interests (whether general or limited); and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
“Certificate of
Formation” means the certificate of formation of the Company filed with the Secretary of State of the State of Delaware on March 16, 2023 pursuant to the Act, together
with any amendments thereto.
“Class A Call
Consideration” means an amount equal to (x) (i) $200,000,000 minus (ii) Rollover Member Merger Proceeds, divided by (y) the total number of Class A Units contemplated to be issued pursuant to the Rollover Agreement.
“Class
A Call Expiration Time” means 5:30 PM Phoenix, Arizona time on the fifteen-month anniversary of the Effective Date.
“Class A Call
Notice” has the meaning set forth in Section 5.4(a).
EXHIBIT A-1
“Class A Call
Option” has the meaning set forth in Section 5.4(a).
“Class A Consent
Period” has the meaning set forth in Section 4.1(b).
“Class A LTM
Operating Income Threshold” means $175,000,000.
“Class A Operating
Income Trigger” has the meaning set forth in Section 5.4(b).
“Class A Put
Notice” has the meaning set forth in Section 5.4(b).
“Class A Purchase
Price Notice” has the meaning set forth in Section 5.4(f).
“Class A Required
Purchase Consideration” means, as of any time of determination, (A) (x) Company Net Income over the last four completed Fiscal Quarters prior to such date, multiplied
by (y) the applicable Parent Multiple, multiplied by (B) the Rollover Percentage, and divided by (C) the total number of Class A Units then outstanding.
“Class A Rollover
Member” means a Member in its capacity as such holding Class A Units.
“Class A Units” means Units identified in this Agreement as “Class A Units.”
“Class B Consent
Period” has the meaning set forth in Section 4.1(c).
“Class B LTM
Operating Income Threshold” means $250,000,000.
“Class B Operating
Income Trigger” has the meaning set forth in Section 5.4(c).
“Class B Rollover
Member” means a Member (other than Parent or any of its Subsidiaries) in its capacity as such holding Class B Units.
“Class B Required
Purchase Consideration” means (x) $40,000,000, divided by (y) the total number of Class B Units contemplated to be issued pursuant to the Rollover
Agreement.
“Class B Units”
represent Units identified in this Agreement as “Class B Units”.
“Closing”
means, together, (i) the closing of the transactions contemplated by the Rollover Agreement, and immediately thereafter, and (ii) the closing of the transactions contemplated by the Merger Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time.
“Common Member”
means a Member holding Common Units.
“Common Units”
means Units identified in this Agreement as “Common Units.”
“Company”
has the meaning set forth in the Recitals.
EXHIBIT A-2
“Company
Accounting Group” means, at any time, the Company and its Subsidiaries, together with any business units or portions thereof, whether or not formally designated as such, operated by East and/or its
Subsidiaries immediately prior to the Merger Effective Time that are then owned by Parent or any of its Subsidiaries after the Merger Effective Time.
“Company Net
Income” means, with respect to any period, the aggregate net income attributable to the Company Accounting Group on a condensed consolidated basis over such period (excluding net income attributable to any minority interest in any
Subsidiary of the Company), determined in accordance with GAAP, consistently applied: it being understood that, for purposes of calculating Company Net Income for any period the following will apply (the “Accounting Rules”):
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(a)
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except as expressly noted below, general overhead allocations will not be made to the Company Accounting Group;
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(b)
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corporate level expenses (including Parent’s audit expense, expenses of Parent for compliance with rules
and regulations of the Securities and Exchange Commission and other Parent public company expenses, trucking association dues, expenses under Parent insurance programs, and expenses associated with Parent plans and similar items) will be
allocated in good faith to the Company Accounting Group in a manner substantially consistent with the manner in which such expenses are allocated to Parent’s Knight and Swift business units, and, for avoidance of doubt, with respect to
expenses associated with insurance programs, the expenses allocated to the Company Accounting Group, shall take into account the experience of such group; provided, however, Parent executive officer compensation will not be allocated to
the Company Accounting Group;
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(c)
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expenses for facilities or personnel for maintenance, fueling, driver services, sales/pricing, or other
services provided to, or shared with the Company Accounting Group by Parent or any of its Subsidiaries or business units (other than the Company Accounting Group) shall be allocated in good faith to the Company Accounting Group in a
manner substantially consistent with the manner in which such expenses are allocated to Parent’s Knight and Swift business units (except as expressly noted in the proviso in clause (b) above); provided that the expenses allocated to the
Company Accounting Group for any such facilities, personnel or service with respect to any four Fiscal Quarter Period shall not exceed the expense incurred by East and its Subsidiaries for similar facilities or services or for personnel
providing similar services during 2022, except to the extent any such increase resulted from an expansion of the facilities or services provided or inflation, as determined in good faith by Parent;
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(d)
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Parent equity grants made to (i) employees of the Company Accounting Group and (ii) other personnel of
Parent and its Subsidiaries to the extent allocated under clause (e) below by Parent or any of its Subsidiaries or business units (other than the Company Accounting Group) shall be allocated in good faith to the Company Accounting Group
in a manner substantially consistent with the manner in which such expenses are allocated to Parent’s Knight and Swift business units (except as expressly noted in the proviso in clause (b) above);
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EXHIBIT A-3
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(e)
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personnel expenses for personnel of Parent and its Subsidiaries whose employment relates primarily to
the Company Accounting Group will be allocated to the Company Accounting Group;
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(f)
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to the extent that Permitted Company Debt is incurred under credit facilities or other arrangements of
Parent or any of its Subsidiaries, such Permitted Company Debt shall be allocated to the Company Accounting Group and expenses related thereto that shall be allocated to the Company Accounting Group with respect to any period shall be no
greater than the expenses incurred by Parent in respect of such Permitted Company Debt during such period under GAAP, and to the extent that Permitted Company Debt is provided by Parent or any of its Subsidiaries to the Company Accounting
Group but not incurred under credit facilities or other arrangements of Parent or any of its Subsidiaries, expenses related thereto that shall be allocated to the Company Accounting Group with respect to any period shall be no greater
than the expenses that would, in the good faith judgment of Parent, be incurred by Parent during such period if it incurred Indebtedness with similar terms under credit facilities or other arrangements of Parent or any of its
Subsidiaries, it being understood that, during the Class A Consent Period, so long as there is Permitted Company Debt outstanding, any net cash generated by the Company Accounting Group that is not to be used to fund or support the
operations of the Company Accounting Group or to make Tax Payments shall be (i) applied to reduce Intercompany Debt or (ii) distributed or paid as a dividend as a Permitted Cash Distribution to Parent, in which case for purposes of
calculating the Company Accounting Group’s interest expense for purposes of deriving Company Net Income for any period thereafter, the amount so paid as a dividend or distributed shall be treated as having reduced a portion of the
Permitted Company Debt equal to that amount;
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(g)
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no expenses shall be allocated to the Company Accounting Group with respect to any period for
Indebtedness incurred by Parent or any of its Subsidiaries to fund the payment of merger consideration payable in the Merger under the Merger Agreement in respect of the East Common Stock;
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(h)
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freight sharing or brokered between the Company Accounting Group and other Subsidiaries and business
units of Parent would be on a straight pass-through basis without the originating company or unit taking a gross profit margin;
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(i)
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Parent shall allocate to the Company Accounting Group income tax expense reflected on the consolidated
financial statements of Parent to the extent that such expense is attributable to the income of the Company Accounting Group; and
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(j)
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to the extent that with respect to any period adjustments are applied by Parent to derive adjusted
consolidated net income attributable to Parent for purposes of its public reporting (for example, add-back of non-cash amortization of intangibles), similar adjustments would be applied for purposes of calculating Company Net Income for
such period.
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EXHIBIT A-4
The Company Net Income for any period shall be as calculated by management of Parent in good faith based on the
consolidated financial statements filed by Parent with the Securities and Exchange Commission on Form 10-Q or Form 10-K, as applicable, covering the applicable periods.
“Company Operating
Income” means, with respect to any period, means the aggregate operating revenue minus the aggregate operating expenses of the Company Accounting Group
on a condensed consolidated basis over such period, determined in accordance with GAAP, consistently applied, it being understood that, for purposes of calculating Company Operating Income for any period, (i) the Accounting Rules shall apply to the
extent applicable to the calculation of Company Operating Income and (ii) with respect to operating revenue and operating expenses attributable to any Subsidiary or unit of the Company Accounting Group in respect of which the Company Accounting
Group holds less than a 100% interest, only such percentage (less than 100%) of such operating revenue and operating expenses shall be taken into account in calculating Company Operating Income. The Company Operating Income for any period shall be
as calculated by management of Parent in good faith based on the consolidated financial statements filed by Parent with the Securities and Exchange Commission on Form 10-Q or Form 10-K, as applicable, covering the applicable periods.
“Covered Person”
means any current or former Manager or current or former Member
“Drag Along Notice”
has the meaning set forth in Section 5.6(b).
“Dragging Member”
has the meaning set forth in Section 5.6(a).
“East” has the meaning set forth in the Recitals.
“East
Common Stock” has the meaning given to the term “Company Common Stock” in the Merger Agreement.
“Effective Date”
has the meaning set forth in the Preamble.
“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock.
“Exchange Act”
means the Securities and Exchange Act of 1934, as amended.
“Family Member”
shall mean a person’s spouse, child, father, mother, brother, or sister, or a lineal descendant of any of the foregoing (natural or adopted).
“Fiscal Quarter”
means each of the period from and after January 1 to and including March 31; the period from and after April 1 to and including June 30; the period from and after July 1 to and including September 30; and the period from and after October 1 to and
including December 31; provided no such period shall constitute a Fiscal Quarter for purpose of this Agreement, unless the first day of such period occurs on or after the Effective Date.
EXHIBIT A-5
“Fiscal Year”
means, with respect to the year of the Company’s formation, the period beginning upon such formation and ending on December 31, 2023, and with respect to subsequent Fiscal Years of the Company, the calendar year and, with respect to the last year
of the Company, the period beginning on the preceding January 1 and ending with the date of the final liquidating distributions. The Manager may change the Fiscal Year of the Company to the extent required by the Code or as selected by the Manager
and permitted by applicable law.
“GAAP”
means United States generally accepted accounting principles, consistently applied.
“Initial LLC
Agreement” has the meaning set forth in the Recitals.
“Intercompany Debt”
has the meaning set forth in Section 4.1(b)(ii).
“Interest”
means a limited liability interest in the Company, which represents the interest of each Member in and to the profits and losses of the Company and such Member’s right to receive distributions of the Company’s assets, as set forth in this
Agreement.
“Indebtedness”
means, with respect to any Person, (i) any indebtedness of such Person for borrowed money or evidenced by bonds, notes, debentures or similar instruments, and (ii) any obligation of such
Person to pay rent or other amounts under any lease of real or personal property, which obligation is required to be classified and accounted for as a finance lease on a balance sheet of such Person under GAAP.
“Initial Public
Offering” means a public offering of Equity Interests in the Company or a Successor Corporation through a registration statement (other than a Form S-8 or successor forms) filed with, and declared effective by, the Securities and Exchange
Commission and pursuant to which such interests are authorized and approved for listing on any U.S. national securities exchange.
“IPO Conversion”
has the meaning set forth in Section 8.3(b).
“IRS” means
the U.S. Internal Revenue Service.
“Manager”
has the meaning set forth in Section 4.1.
“Member”
means any one of the Members.
“Members”
collectively means the Persons listed on the Schedule of Members as Members and any other Persons who are admitted to the Company as Members or who become Members
under the terms of this Agreement until such Persons have ceased to be Members under the terms of this Agreement.
“Merger Agreement”
has the meaning set forth in the Recitals.
EXHIBIT A-6
“Merger Effective
Time” has the meaning set forth in the Recitals.
“Merger Sub”
has the meaning set forth in the Recitals.
“Negotiation
Period” has the meaning set forth in Section 5.4(f).
“New Securities” has the meaning set forth in Section 2.2(a).
“NYSE”
means the New York Stock Exchange.
“Officer”
means any of the officers of the Company as designated by the Manager.
“Ordinary Business
Changes” means changes to the operations of the Company Accounting Group in the ordinary course of business consistent with the policies and practices of Parent and its
Subsidiaries (other than the Company Accounting Group), including without limitation, changes in fleet size, personnel, customer contracts, allocation and pricing of freight, maintenance locations, safety and driver recruiting, driver management
and arrangements with vendors.
“Parent” has the meaning set forth in the Recitals.
“Parent Common
Stock” means the common stock, par value $0.01 per share, of Parent or the common stock of any successor entity that is traded on the NYSE, the Nasdaq Global Select Market or the Nasdaq Global Market (or any successor to any of the foregoing).
“Parent Planning
Transaction” means any transaction between or among Parent and its Subsidiaries primarily for tax planning purposes and that does not adversely impact the calculation of the Class
A Required Purchase Consideration that would be required to be paid pursuant to Sections 5.4(b) or 5.4(c) or impair the achievement by the Company Accounting Group of the Class B LTM Operating Income Threshold prior to the
fifth anniversary of the Effective Date.
“Parent
Multiple” means, with respect to any date of determination, the quotient of the Parent VWAP, divided by the total adjusted
diluted earnings per share of Parent Common Stock over the last four completed Fiscal Quarters prior to such date, as reported in the Parent’s consolidated financial statements included in its periodic reports filed with the Securities and
Exchange Commission with respect to such periods; provided that, if Parent ceases to file periodic reports filed with the Securities and Exchange Commission or the shares of Parent Common Stock cease to be traded on a national securities
exchange, the West Member and the Rollover Representative shall negotiate in good faith to agree on an alternative methodology for determining the Parent Multiple and this definition shall be modified to reflect such agreement.
“Parent VWAP”
means, with respect to any date of determination, the volume weighted average trading price of the shares of Parent Common Stock over the last completed Fiscal Quarter prior to such date on the principal national securities exchange upon which the
shares of Parent Common Stock are then traded.
“Per Share Price”
has the meaning given to such term in the Merger Agreement.
EXHIBIT A-7
“Permitted Cash
Distributions” has the meaning set forth in Section 4.1(b)(v).
“Permitted Cash
Loans” has the meaning set forth in Section 4.1(b)(ii).
“Permitted Company
Debt” means all of the Indebtedness of East and its Subsidiaries outstanding immediately prior to the Merger Effective Time, together with all re-financings and replacements thereof, and all working capital and fixed asset Indebtedness
incurred to fund or support the operations and capital expenditures of the Company Accounting Group, which Indebtedness may be provided by the Parent or any of its Subsidiaries or incurred under credit facilities or other arrangements of Parent or
any of its Subsidiaries and allocated to the Company and/or its Subsidiaries, provided, that, in no event shall Permitted Company Debt include Indebtedness
incurred by Parent or any of its Subsidiaries to fund the payment of merger consideration payable in the Merger under the Merger Agreement in respect of the East Common Stock.
“Permitted Entity”
shall mean, with respect to any Rollover Member: (a) a Permitted Trust solely for the benefit of (i) such Rollover Member, (ii) one or more Family Members of such Rollover Member, and/or (iii) any other Permitted Entity of such Rollover Member; and
(b) any corporation, limited liability company, partnership, or other entity exclusively owned by (i) such Rollover Member, (ii) one or more Family Members of such Rollover Member, and/or (iii) any other Permitted Entity of such Rollover Member.
“Permitted Trust”
shall mean a bona fide trust where each trustee is (i) a Rollover Member, (ii) a Family Member of a Rollover Member, or (iii) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies,
bank trust departments, attorneys, and accountants.
“Person”
means any natural person, partnership, trust, estate, association, limited liability company, corporation, custodian, nominee, governmental instrumentality or agency, body politic or any other entity in its own or any representative capacity.
“Proposed
Transferee” has the meaning set forth in Section 5.5(a).
“Qualified IPO” means an Initial Public Offering pursuant to which the aggregate
equity value for the Company or Successor Corporation implied by the gross offering price (without regard to underwriting discounts or commissions) of such Initial Public Offering multiplied by the Rollover Percentage as then in effect is equal to or greater than: (i) $240,000,000, minus (ii) the Rollover Member Merger Proceeds, minus (iii) Rollover Unit Sale Proceeds.
“Purchase Price
Objection Notice” has the meaning set forth in Section 5.4(f).
“Referee”
has the meaning set forth in Section 8.2(c).
“Registration
Rights Agreement” means a registration rights agreement in customary form and consistent with the terms set forth in Schedule C hereto, which registration
rights agreement shall set forth the respective rights and obligations of the parties with respect to additional registration rights of the Successor Corporation or the Company following an Initial Public Offering.
EXHIBIT A-8
“Requisite
Rollover Consent” means the prior written consent of the Rollover Representative.
“Rollover Member”
means a Class A Rollover Member or a Class B Rollover Member in its capacity as such.
“Rollover Member
Converted Share Number” means total number of shares of East Common Stock held by the Rollover Stockholders (as defined in the Rollover Agreement) as of the date of the Merger Agreement minus the total number of Rollover Shares contributed to the Company pursuant to the Rollover Agreement.
“Rollover Member
Merger Proceeds” means an amount equal to (i) the Per Share Price multiplied by (b) the Rollover Member Converted Share Number.
“Rollover
Percentage” means, at any time of determination, (A)(i) the aggregate number of Class A Units then outstanding divided by (ii) the aggregate number of
Units (other than Class B Units) then outstanding.
“Rollover
Representative” means Max L. Fuller (or any successor thereto selected in accordance with Section 9.11).
“Rollover Units”
means the Class A Units and the Class B Units.
“Rollover Unit
Sale Proceeds” means, as of any time of determination, the aggregate amount of cash and the fair market value of all other consideration paid to Rollover Members in respect of the sale of Rollover Units pursuant to Sections 5.4, 5.5 or 5.6 or
otherwise prior to the time of such determination.
“Rollover Unit
Purchase Closing Date” has the meaning set forth in Section 5.4(d).
“Schedule of
Members” has the meaning in the Preamble, as the same may be amended from time to time in accordance with this Agreement.
“Securities Act”
means the Securities Act of 1933, as amended.
“Sponsored
Insurance Investment” means any investment by the Company or its Subsidiaries in any Person that is a captive insurance company sponsored by Parent
or any Subsidiary up to the minimum required capital of the capital insurance company attributable to the Company and its Subsidiaries.
“Subsidiary” means on any date, any Person of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests or more than 50% of the profits or losses of which are, as of such date,
owned, controlled or held by the applicable Person or one or more direct or indirect Subsidiaries of such Person.
EXHIBIT A-9
“Successor
Corporation” has the meaning set forth in Section 8.3(b).
“Surviving EastCo”
has the meaning set forth in the Recitals.
“Tag Along Sale”
has the meaning set forth in Section 5.5(a).
“Tagging Member”
has the meaning set forth in Section 5.5(a).
“Tax Payments”
has the meaning set forth in Section 3.1.
“Third Party”
has the meaning set forth in Section 5.6(a).
“Third Party Offer”
has the meaning set forth in Section 5.6(a).
“Transfer”
means, directly or indirectly, any sale, assignment, transfer, conveyance, pledge, hypothecation or other disposition, voluntarily or involuntarily, by operation of law, with or without consideration or otherwise (including, without limitation, by
way of intestacy, will, gift, bankruptcy, receivership, levy, execution, charging order or other similar sale or seizure by legal process or transfer of Equity Interests) of all or
any portion of any Interest.
“Units”
represent the basis on which Interests are denominated and the basis on which the Members’ relative rights, privileges, preferences and obligations are determined under this Agreement and the Act. The total number and class of Units attributed to
each Member shall be the number recorded on the Schedule of Members as of the relevant time.
“Value Cap” means, as of any time of determination, (i) $320,000,000 minus (ii) the Rollover
Member Merger Proceeds minus (iii) Rollover Unit Sale Proceeds.
“West Member”
has the meaning set forth in the Recitals.
[The Remainder of This Page Has Intentionally Been Left Blank]
EXHIBIT A-10
Exhibit 99.3
IRREVOCABLE PROXY AND AGREEMENT
This Irrevocable Proxy and Agreement (this “Proxy and Agreement”), granted and entered into as of March 20, 2023, by each of the Persons set forth on Schedule A (each, a “Stockholder” and, collectively, the “Stockholders”) to and with each
of the committee members (each a “Proxy
Holder”), each a director of U.S. Xpress Enterprises, Inc., a Nevada corporation (the “Company”), and a member of the Special Committee of the
Board of Directors (the “Special Committee”) of the Company, and the Company. Capitalized terms used but not defined herein shall have the meanings given to
them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, concurrently with the execution and delivery of this Proxy and Agreement, (i) the Company, (ii)
Knight-Swift Transportation Holdings Inc., a Delaware corporation (“Acquiror”) and (iii) Liberty Merger Sub Inc., a Nevada corporation and indirect wholly
owned subsidiary of Acquiror (“Merger Sub”), are entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”), which provides for the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as an indirect wholly owned subsidiary of Acquiror;
WHEREAS, as of the date hereof, each Stockholder is the record owner of the number of shares of Class A Common Stock, par value $0.01 per share, of the Company (the “Company Class A Common Stock”) and the number of shares of Class B Common Stock, par value $0.01 per share, of
the Company (the “Company Class B Common Stock”) (the Company Class A Common Stock and Company Class B Common Stock, collectively, the “Company Common Stock”) set forth opposite such Stockholder’s name on Schedule A hereto under the heading “Owned Shares” (the “Owned Shares”).
The total set forth opposite each Stockholder’s name being all of the shares of Company Common Stock owned of record by such Stockholder, and the aggregate of the shares set forth in Schedule A being all of the shares of Company Common Stock for which the any Stockholder is a “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act); and
WHEREAS, as a condition to the
willingness of the Company and Acquiror to enter into the Merger Agreement and as an inducement and in consideration therefor, the Special Committee has requested that each Stockholder agree, and each Stockholder has agreed, to grant the
irrevocable proxy set forth herein and to agree to the other matters set forth in this Proxy and Agreement.
NOW, THEREFORE, in consideration of the foregoing and intending to be legally bound hereby, each of the
Stockholders hereby grants the irrevocable proxy set forth below and the Stockholders, the Proxy Holders and the Company otherwise agrees as follows:
1. Irrevocable Proxy. Each Stockholder hereby irrevocably appoints the Proxy Holders, or any of them, with full power of substitution and resubstitution and
power to act alone, as such Stockholder’s proxy and attorney-in-fact, to vote all of the Owned Shares of such Stockholder and any additional shares of Company Common Stock acquired by such Stockholder or its respective controlled Affiliates after
the date hereof and prior to the Termination Date (collectively, and together with such Stockholder’s Owned Shares, such Stockholder’s “Covered Shares”) at
the Company Stockholder Meeting and at every other meeting of Company Stockholders, including any postponement, recess or adjournment thereof, or in any other circumstance, however called, and to execute consents with respect all of such
Stockholder’s Covered Shares as follows: (a) in favor of (i) the approval of the Charter Amendment, (ii) the adoption of the Merger Agreement and the approval of the Merger, (iii) the approval of any advisory proposal with respect to “golden
parachute compensation,” (iv) the approval of any proposal to adjourn or postpone any Company Stockholder Meeting to a later date if the Company proposes or requests such postponement or adjournment, and (v) the approval of any other proposal to
be voted upon or consented to by the Company Stockholders at any Company Stockholder Meeting or other meeting of stockholders or in respect of any proposed action by written consent, the approval of which is necessary for the consummation of the
Merger and the other transactions contemplated by the Merger Agreement, but only to the extent that such Covered Shares are entitled to be voted on or consent to such proposal, and (b) against (i) any proposal, action, or agreement that would
reasonably be expected to result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company contained in the Merger Agreement or that would reasonably be expected to result in any condition set forth
in the Merger Agreement not being satisfied or not being fulfilled prior to the Termination Date, (ii) any proposal to amend the Charter or Bylaws of the Company, other than the Charter Amendment, (iii) any Acquisition Proposal, (iv) any
reorganization, dissolution, liquidation, winding up or similar extraordinary transaction involving the Company (except as contemplated by the Merger Agreement) and (v) any other proposal, action or agreement that would reasonably be expected to
prevent or materially impede or materially delay the approval of the Charter Amendment or the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement, (clauses (a) and (b) collectively, the “Supported Matters”); provided that, such Stockholder shall retain at
all times the right to vote such Stockholder’s Covered Shares (or to direct how such Covered Shares shall be voted) in such Stockholder’s sole discretion on matters other than Supported Matters.
Each Stockholder hereby affirms that the irrevocable proxy set forth in this Section 1 is given in connection with the Company’s execution of the Merger Agreement, and further affirms that the irrevocable proxy is coupled with an interest, is intended to be
irrevocable in accordance with the provisions of Section 78.355 of the NRS, and may under no circumstances be revoked. The irrevocable proxy granted by each Stockholder herein is a durable power of attorney and shall survive the dissolution,
bankruptcy or incapacity of such Stockholder. Notwithstanding the foregoing, the proxy and appointment granted hereby shall be automatically revoked, without any action by any Stockholder, upon any termination of this Proxy and Agreement pursuant
to Section 2.
No Stockholder shall take any action that would reasonably be expected to prevent or materially impair or
materially delay the consummation of the transactions contemplated by this Proxy and Agreement, and from and after the date hereof until the Termination Date, no Stockholder shall, without the prior written consent of the Company and the Acquiror,
take any action that would reasonably be expected to result in the conversion of any Covered Shares of such Stockholder that, as of the date hereof are shares of Company Class B Common Stock, into shares of Company Class A Common Stock.
Each of the Proxy Holders agrees that
he or she shall vote or consent in respect of, or cause to be voted or consents to be in executed in respect of, all of the Covered Shares of each of the Stockholders at the Company Stockholder Meeting and at every other meeting of
Company Stockholders, including any postponement, recess or adjournment thereof, or in any other circumstance, however called, and to execute consents with respect all of such Stockholder’s Covered Shares, in favor of the Supported Matters set
forth in clause (a) of the first paragraph of this Section 1 and against the Supported Matters set forth in clause (b) of the first paragraph of this Section 1. The Company shall ensure that the Proxy Holders comply with the foregoing sentence.
Without limiting the obligations of each Proxy Holder hereunder, the parties acknowledge and agree that obligations of the Proxy Holders hereunder shall be exercised by the consent of a majority of all Proxy Holders.
2. Termination. This Proxy and Agreement shall be revoked and terminated automatically and without further action upon the earliest to occur (such date, the “Termination Date”) of: (i) the valid termination of the Merger Agreement in accordance with its terms or (ii) the Effective Time; provided that the provisions set forth in Sections 9 through 24 shall survive the revocation and termination of this Proxy and Agreement; and provided further that, the revocation and termination of this Proxy and Agreement shall not prevent any party hereto or the Acquiror from seeking any remedies (at law or
in equity) against any party hereto for that party’s Willful Breach of this Proxy and Agreement that may have occurred on or before such termination. For the purpose hereof, “Willful Breach” means a breach of any covenant or agreement in this of
this Proxy and Agreement that is a consequence of an act or failure to act undertaken or omitted to be taken by or on behalf of the breaching party with the actual knowledge that the taking of such act or failure to take such act would cause or
constitute a breach of the relevant covenant or agreement in this Proxy and Agreement.
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3. Certain Covenants of the Stockholders.
3.1 Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly permitted by this
Proxy and Agreement, (a) such Stockholder shall not, directly or indirectly (i) tender any Covered Shares into any tender or exchange offer, (ii) offer, sell, transfer, assign, exchange, pledge, hypothecate, encumber or otherwise dispose of
(collectively, “Transfer”) or enter into any contract, option, agreement, understanding or other arrangement with respect to the Transfer of, any Covered
Shares or beneficial ownership, voting power or any other interest thereof or therein (including by operation of law), except pursuant to the Rollover Agreement (to the extent applicable to such Stockholder) or as a Permitted Transfer, (iii)
grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares that is inconsistent with this Proxy and Agreement, or (iv) commit or agree to take any of
the foregoing actions. Notwithstanding the foregoing, but subject to the terms of the Rollover Agreement (to the extent applicable to such Stockholder), this Proxy and Agreement shall not restrict Transfers by a Stockholder of any or all of its
Covered Shares to any of its Affiliates provided, that prior to and as a condition to the effectiveness of such Transfer, such Affiliate shall have executed
and delivered to the Company a counterpart of this Proxy and Agreement pursuant to which such Affiliate shall be bound by all of the terms and provisions of this Proxy and Agreement. Any Transfer in violation of this Section 3.1 shall be void ab initio. “Permitted Transfer” (A) a pledge, hypothecation, or collateral assignment of, or grant of a security interest in, Covered Shares or any interest or rights therein as security or
collateral for a bona fide loan or other obligation (collectively, a “Pledge”), or (B) after notice to the Acquiror, the transfer or conversion of ownership of Covered Shares or any interests or rights therein to a lender or other beneficiary of
the Pledge pursuant to a foreclosure thereof following a default under the loan or other obligation secured by the Pledge.
3.2 Documentation and Information. Each Stockholder shall permit and hereby consents to and authorizes the Company and Acquiror to publish and disclose in all
documents and schedules filed with the SEC, and any press release or other disclosure document that the Company or Acquiror reasonably determines to be necessary in connection with the Merger Agreement and any of the transactions contemplated by
the Merger Agreement, including a copy of this Proxy and Agreement, the identity of each Stockholder and their respective ownership of Covered Shares and the nature of the Stockholders’ commitments and obligations under this Proxy and Agreement.
3.3 No Solicitation.
(a) Each
Stockholder hereby covenants and agrees that, from and after the date hereof until the Termination Date, except as expressly contemplated by this Proxy and Agreement, such Stockholder shall not, and shall cause its Representatives not to,
directly or indirectly: (i) solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any offer, inquiry, indication of interest or proposal that constitutes, or is reasonably
expected to lead to, an Acquisition Proposal; (ii) furnish to any Person or Group (other than Acquiror, its Subsidiaries or any of their respective Representatives in their capacity as such) any non-public information relating to such
Stockholder, its Covered Shares or the Company or any of its Subsidiaries or afford to any Person or Group (other than Acquiror, its Subsidiaries or any of their respective Representatives in their capacity as such) access to the business,
properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its Subsidiaries, in any such case in connection with any Acquisition Proposal or with the intent to induce the making, submission
or announcement of, or to knowingly encourage, facilitate or assist, an Acquisition Proposal or the making of any offer, inquiry, indication of interest or proposal that constitutes or would reasonably be expected to lead to an Acquisition
Proposal; (iii) participate or engage in discussions or negotiations with any Person or Group with respect to an Acquisition Proposal or with respect to any inquiries from Persons relating to any offer, indication of interest or proposal relating
to an Acquisition Proposal (other than informing such Persons of the provisions contained in this Section 3.3); (iv) approve, endorse or recommend any
offer, inquiry, indication of interest or proposal that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; (v) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or
other Contract (whether written, oral, binding or non-binding) relating to an Acquisition Proposal or Acquisition Transaction; or (vi) authorize or commit to do any of the foregoing; provided, that, notwithstanding anything to the contrary in the foregoing, nothing shall prohibit any Stockholder or its Representatives from taking any action which the Company is permitted to take in
compliance with Section 5.4 of the Merger Agreement, including, from the date of the Merger Agreement until the Company’s receipt of Requisite Stockholder Approval and following the execution and delivery of an Acceptable Confidentiality
Agreement, (x) participating or engaging in discussions or negotiations with; or (y) (1) furnishing any non-public information relating to the Company or any of its Subsidiaries to, or (2) affording access to the business, properties, assets,
books, records or other non-public information, or to any personnel, of the Company or any of its Subsidiaries to, in each case, any Person or Group or their respective Representatives that has made, renewed or delivered to the Company a bona
fide written Acquisition Proposal after the date of the Merger Agreement that did not result from a material breach of Section 5.4(a) of the Merger Agreement, in each case, if the Company and the Company Special Committee has determined in good
faith (after consultation with its financial advisor and outside legal counsel) that an Acquisition Proposal either constitutes a Superior Proposal or is reasonably likely to lead to a Superior Proposal. Each Stockholder hereby represents and
warrants that such Stockholder has read Section 5.4 of the Merger Agreement and agrees not to facilitate or participate in any actions prohibited thereby.
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(b) Each
Stockholder will promptly (and, in any event, within 36 hours from the receipt thereof) notify the Company and Acquiror in writing if an Acquisition Proposal is received by, any non-public information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, such Stockholder or any of its Representatives with respect to an Acquisition Proposal or potential Acquisition Proposal. Such notice must include (A) the identity of the Person or Group
making such Acquisition Proposal, request or seeking of discussions or negotiations; and (B) a summary of the material terms, conditions or other aspects of such Acquisition Proposal, request or seeking of discussions or negotiations and, if in
writing, a copy thereof and all written materials received in connection therewith. Thereafter, each Stockholder must keep the Company and Acquiror reasonably informed, on a prompt basis (and in any event within 24 hours), of the status and terms
of, any developments regarding, any such Acquisition Proposal (including any amendments thereto) and the status of any such discussions or negotiations, including by providing copies of all written materials sent to or from such Stockholder or
any of its Representatives relating to such Acquisition Proposal. The parties acknowledge that notice provided by each Stockholder to the Special Committee satisfies that Stockholder’s obligation to provide notice to the Company under this
subsection.
4. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants as follows:
4.1 Due Authority. Such Stockholder, if not a natural person, is a legal entity duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation. Such Stockholder has all requisite corporate or other similar power and authority and has taken all corporate or other similar action necessary (including approval by the board of directors or applicable corporate
bodies) to grant the irrevocable proxy, and execute, deliver, comply with and perform its obligations, under this Proxy and Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other action
on the part of or vote of holders of any equity securities of such Stockholder is necessary to authorize the grant of the irrevocable proxy, and the execution and delivery of, compliance with and performance, by such Stockholder under and of this
Proxy and Agreement. This Proxy and Agreement has been duly executed and delivered by the Stockholder and, assuming the due execution and delivery of this Proxy and Agreement by all of the other parties hereto, constitutes a legal, valid and
binding agreement of such Stockholder enforceable against such Stockholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting or relating to creditors’ rights generally.
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4.2 No Conflict. The grant of the irrevocable proxy, and the execution and delivery of, compliance with and performance, by such Stockholder under and of this Proxy
and Agreement do not and will not (i) if not a natural person, conflict with or result in any violation or breach of any provision of the certificate of formation or operating agreement or similar organizational documents of such Stockholder,
(ii) conflict with or result in a violation or breach of any applicable law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under,
or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which such Stockholder is entitled, under any Contract binding upon such Stockholder, or to which any of its properties,
rights or other assets are subject or (iv) result in the creation of a lien (other than Permitted Liens) on any of the properties or assets (including intangible assets) of such Stockholder, except in the case of clauses (ii), (iii) and (iv)
above, any such violation, breach, conflict, consent, default, termination, acceleration, cancellation or loss that would not, individually or in the aggregate, reasonably be expected to restrict, prohibit or impair the approval and filing of the
Charter Amendment, the consummation of the Merger and the other transactions contemplated by the Merger Agreement or the grant of the irrevocable proxy by such Stockholder, or performance by such Stockholder of its obligations, under this Proxy
and Agreement.
4.3 Consents. To the Stockholder’s knowledge, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental
Authority or any other Person, is required by or with respect to such Stockholder in connection with the grant of the irrevocable proxy by such Stockholder or the execution and delivery of this Proxy and Agreement or. except as disclosed on Schedule B, the consummation by such Stockholder of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under
the Exchange Act, the Securities Act, or state securities, takeover and “blue sky” laws, (b) compliance with any applicable requirements of the HSR Act and any applicable foreign Antitrust Laws, (c) the applicable rules and regulations of the SEC
or any applicable stock exchange or (d) as would not, individually or in the aggregate, reasonably be expected to restrict, prohibit, impair or delay the approval and filing of the Charter Amendment, the consummation of the Merger and the other
transactions contemplated by the Merger Agreement or the grant of the irrevocable proxy by such Stockholder, or performance by such Stockholder of its obligations, under this Proxy and Agreement.
4.4 Ownership of the Owned Shares. Each Stockholder is the record owner of the shares of Company Common Stock (broken out by class) set forth opposite its name on Schedule A, representing all beneficially owned shares of Company Stock held by the Stockholders, all of which are free and clear of any liens, other than as set
forth on Schedule B or in the Schedule 13D filed by Max L. Fuller and the other filers with the SEC on July 26, 2018 (as amended through the date hereof,
the “Schedule 13D”) and those arising under applicable securities laws or created by (a) this Proxy and Agreement, (b) the Voting Agreement, dated June 13,
2018, by and among the Company Stockholders party thereto (the “Voting Agreement”), (c) the Registration Rights Agreement, dated June 13, 2018, by and among
the Company and the Company Stockholders party thereto (the “Registration Rights Agreement”), and (d) the Stockholders’ Agreement, dated June 13, 2018, by
and among the Company and the Company Stockholders party thereto, as amended by the Amendment to Stockholders’ Agreement, dated May 24, 2019, as further amended by the Second Amendment to Stockholders’ Agreement, dated March 20, 2023
(collectively, the “Stockholders’ Agreement”). Except as set forth in the Schedule 13D, no Stockholder owns, of record or beneficially, any shares of capital
stock of the Company, or other rights to acquire shares of capital stock of the Company, in each case, other than the Owned Shares or as set forth on Schedule A.
Such Stockholder has the sole right to dispose of the Owned Shares, and none of the Owned Shares is subject to any pledge, disposition, transfer or other agreement, arrangement or restriction, except as contemplated by this Proxy and Agreement,
the Voting Agreement, the Registration Rights Agreement, the Stockholders’ Agreement, as set forth on Schedule B and in the Schedule 13D. As of the date
hereof, other than as set forth on Schedule B and in the Schedule 13D,
such Stockholder has not entered into any agreement to transfer any Owned Shares and no person has a right to acquire any of the Owned Shares held by such Stockholder.
5
4.5 Absence of Litigation. There is no legal action pending against, or, to the knowledge of such Stockholder, threatened against such Stockholder that would
reasonably be expected to prevent, or materially impair the grant of the irrevocable proxy by such Stockholder, or the ability of such Stockholder to perform its obligations, under this Proxy and Agreement.
5. Representations and Warranties of the Company. The Company hereby represents and warrants as follows:
5.1 Due Authority. The Company is a legal entity duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation. The
Company has all requisite corporate power and authority and has taken all corporate action necessary (including approval by the board of directors or applicable corporate bodies) to execute, deliver and perform its obligations under this Proxy
and Agreement in accordance with the terms hereof and no other corporate action by the Company or vote of holders of any class of the capital stock of the Company is necessary to approve and adopt this Proxy and Agreement. This Proxy and
Agreement has been duly executed and delivered by the Company and, assuming the due execution and delivery of this Proxy and Agreement by all of the other parties hereto, constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors’ rights generally.
5.2 No Conflict. The execution, delivery and performance by the Company of this Proxy and Agreement do not and will not, other than as provided in the Merger
Agreement with respect to the Merger and the other transactions contemplated thereby, (i) conflict with or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company or the similar
organizational documents of any of its Subsidiaries, (ii) conflict with or result in a violation or breach of any applicable law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or
lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which the Company and any of its Subsidiaries are entitled, under
any Contract binding upon the Company or any of its Subsidiaries, or to which any of their respective properties, rights or other assets are subject or (iv) result in the creation of a lien (other than Permitted Liens) on any of the properties or
assets (including intangible assets) of the Company or any of its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) above, any such violation, breach, conflict, consent, default, termination, acceleration, cancellation or loss that
would not reasonably be expected to restrict, prohibit or impair the performance by the Company of its obligations under this Proxy and Agreement.
6
6. Non-Survival of Representations, Warranties and Covenants. Other than the covenants and agreements in Section 16 and Section 17, which shall survive, the representations, warranties and covenants contained herein shall
not survive the Effective Time.
7. Certain Adjustments. In the event of a stock split, stock dividend or distribution, or any change in the Company Common Stock by reason of any split-up, reverse
stock split, recapitalization, combination, reclassification, exchange of shares or the like, the terms “Company Common Stock”, “Covered Shares”, and “Owned Shares” shall be deemed to refer to and include such shares as well as all such stock
dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.
8. Further Assurances. The Stockholders shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents,
documents and other instruments as the Proxy Holders, the Company or the Acquiror may reasonably request to the extent necessary to effect the grant of the irrevocable proxy and the transactions contemplated by this Proxy and Agreement.
9. Notices. All notices and other communications under this Proxy and Agreement must be in writing and will be deemed to have been duly
delivered and received using one or a combination of the following methods: (i) four (4) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid; (ii) one (1) Business Day after being sent for
next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service; (iii) immediately upon delivery by hand or by fax; or (iv) on the date sent by email. In each case, the intended recipient is set forth below:
| if to the Proxy Holders or the Company to: | |
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U.S. Xpress Enterprises, Inc.
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4080 Jenkins Road
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Chattanooga, TN 37421
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| Attention: |
Nathan Harwell, EVP, Chief Legal Officer and Corporate Secretary
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| Email: |
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| with a copy (which will not constitute notice) to: | |
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King & Spalding LLP
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1180 Peachtree Street, NE
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Suite 1600
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Atlanta, GA 30309
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| Attention: |
Erik Belenky; Keith Townsend
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| Email: |
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| And with a copy to Acquiror: | |
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Knight-Swift Transportation Holdings Inc.
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2002 West Wahalla Lane
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Phoenix, Arizona 85027
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| Attention: |
Todd F. Carlson, General Counsel and Secretary
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| Email: |
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| if to the Stockholders, to the address, email or fax set forth on Schedule A for each Stockholder, with a copy (which will not constitute notice) to: | |
| Holland & Hart LLP | |
| 9555 Hillwood Drive, 2nd Floor | |
| Las Vegas, NV 89134 | |
| Attention: |
Gian Brown |
| Email: |
|
| And with a copy to Acquiror: | |
|
Knight-Swift Transportation Holdings Inc.
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2002 West Wahalla Lane
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Phoenix, Arizona 85027
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|
| Attention: |
Todd F. Carlson, General Counsel and Secretary
|
| Email: |
|
7
10. Interpretation. Where a reference in this Proxy and Agreement is made to a section or exhibit, such reference shall be to a section of or exhibit to this Proxy
and Agreement unless otherwise indicated. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Unless the context of this Proxy and Agreement
clearly requires otherwise, words importing the masculine gender shall include the feminine and neutral genders and vice versa, and the definitions of terms contained in this Proxy and Agreement are applicable to the singular as well as the
plural forms of such terms. The words “includes” or “including” shall mean “including without limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Proxy and Agreement shall refer to this Proxy and Agreement
as a whole and not any particular section or article in which such words appear, the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and such phrase shall not mean simply “if,” any
reference to a “law” shall include any rules and regulations promulgated thereunder, and any reference to “any law” in this Proxy and Agreement shall mean such law as from time to time amended, modified or supplemented. Each reference to a
“wholly owned Subsidiary” or “wholly owned Subsidiaries” of a Person shall be deemed to include any Subsidiary of such Person where all of the equity interests of such Subsidiary are directly or indirectly owned by such Person (other than
directors qualifying shares, nominee shares or other equity interests that are required by law or regulation to be held by a director or nominee).
11. Entire Agreement. This Proxy and Agreement (along with the documents referenced herein) and the Merger Agreement collectively constitute the entire agreement,
and supersede all other prior agreements, understandings, representations and warranties both written and oral, among the parties hereto, with respect to the subject matter hereof.
12. No Third-Party Beneficiaries. This Proxy and Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns, and nothing in this Proxy and Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Proxy and
Agreement; provided, however, that Acquiror is an express third party beneficiary of this Proxy and Agreement and shall be entitled to enforce this Proxy and Agreement against the parties hereto.
13. Governing Law; Waiver of Jury Trial. This Proxy and Agreement is governed by and construed in accordance with the laws of the State of Nevada without giving
effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause or permit the application of laws of any jurisdictions other than those of the State of Nevada. Each of the
parties (i) hereby irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts) in any Legal Proceeding arising out of or relating to this
Proxy and Agreement, for and on behalf of itself or any of its properties or assets, in accordance with Section 9 or in such other manner as may be
permitted by applicable law, but nothing in this Section 13 will affect the right of any party to serve legal process in any other manner permitted by
applicable law; (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any Legal Proceeding to the exclusive general jurisdiction of the Chosen Courts in the event that any dispute or controversy arises
out of or relates to this Proxy and Agreement; (iii) irrevocably and unconditionally agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any Chosen Court; (iv) agrees that any
Legal Proceeding arising out of or relating to this Proxy and Agreement will be brought, tried and determined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such Legal Proceeding in the
Chosen Courts or that such Legal Proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and (vi) agrees that it will not bring any Legal Proceeding arising out of or relating to this Proxy and Agreement in any
court other than the Chosen Courts. Each of the parties agrees that a final judgment in any Legal Proceeding in the Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by applicable law. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO THIS PROXY AND AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS PROXY AND AGREEMENT, AND THE IRREOVABLE PROXY UNDER, AND THE TRANSACTIONS CONTEMPLATED BY, THIS PROXY AND AGREEMENT. EACH PARTY CERTIFIES AND AGREES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (b) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (c) IT MAKES THIS WAIVER VOLUNTARILY;
AND (d) IT HAS BEEN INDUCED TO GRANT OR ENTER INTO THIS PROXY AND AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13.
8
14. Assignment; Successors. Other than as provided herein, neither this Proxy and Agreement nor any of the rights, interests or obligations under this Proxy and
Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party hereto without the prior written consent of the other parties hereto and the Acquiror, and any such assignment without such prior written
consent shall be null and void. Subject to the preceding sentence, this Proxy and Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.
15. Enforcement.
The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties hereto do not perform the provisions of this Proxy and Agreement (including
any party hereto failing to take such actions that are required of it hereunder in order to consummate this Proxy and Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties hereto acknowledge and agree
that (a) the parties hereto and the Acquiror will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened
breaches) of this Proxy and Agreement or to enforce specifically the terms and provisions hereof, (b) the parties hereto will not assert that a remedy of monetary damages would provide an adequate remedy for such breach and (c) the right of
specific enforcement is an integral part of the transactions contemplated hereby and without that right, none of the Company or the Stockholders would have entered into this Proxy and Agreement, and none of the Company, Acquiror or Merger Sub
would not have entered into the Merger Agreement.
16. Waiver of Appraisal and Dissenters’ Rights and Certain Other Actions. Each Stockholder hereby irrevocably and unconditionally waives, and agrees not to assert or perfect, any rights of appraisal or rights to dissent in connection with
the Merger that such Stockholder may have by virtue of ownership of shares of Company Common Stock. In addition, each Stockholder hereby
agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any Legal Proceeding, derivative or otherwise, against Acquiror, the Company, or any of their respective
Subsidiaries or successors: (a) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of this Proxy and Agreement or the Merger Agreement (including any claim seeking to enjoin or delay the Effective Time); or
(b) alleging a breach of any duty of the Company Board (or any committee thereof), Company Stockholder or Acquiror in connection with the Merger Agreement, this Proxy and Agreement, or the irrevocable proxy hereunder or transactions contemplated
thereby or hereby.
9
17. Termination of Related Party Agreements. Each Stockholder (to the extent applicable to such Stockholder) acknowledges and agrees that each of (i) the Voting
Agreement, (ii) the Registration Rights Agreement and (iii) the Stockholders’ Agreement will be automatically terminated, without any further rights, privileges, liabilities or obligations of any kind or nature whatsoever applicable to any of the
parties thereto (or, for those Contracts that cannot be terminated, acknowledges and agrees to waive all rights, privileges, liabilities or obligations of any kind or nature whatsoever applicable to any of the parties thereto that are a party to
this Proxy and Agreement), effective as of, and conditioned upon the occurrence of the Effective Time.
18. Severability. In the event that any provision of this Proxy and Agreement, or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this Proxy and Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to
effect the intent of the parties hereto. The parties hereto further agree to replace such void or unenforceable provision of this Proxy and Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
19. Counterparts. This Proxy and Agreement and any amendments hereto may be executed in one or more counterparts, all of which will be considered one and the same
agreement and will become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart. Any such
counterpart, to the extent delivered by electronic delivery, will be treated in all manners and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version
thereof delivered in person. No party hereto may raise the use of an electronic delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an electronic delivery,
as a defense to the formation of a contract, and each party hereto forever waives any such defense, except to the extent such defense relates to lack of authenticity.
20. Amendment; Waiver. This Proxy and Agreement may be amended by the parties hereto, and the terms and conditions hereof may be waived, only by an instrument in
writing signed on behalf of each of the parties hereto and the Acquiror, or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance and the Acquiror. No failure or delay on the part of a party or Acquiror in
the exercise of any right or remedy hereunder shall impair such right or power or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or of any other right or power.
21. No Presumption Against Drafting Party. The Company and the Stockholders acknowledge that each party to this Proxy and Agreement has been represented by counsel
in connection with this Proxy and Agreement and the transactions contemplated by this Proxy and Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Proxy and Agreement
against the drafting party has no application and is expressly waived.
22. No Agreement Until Executed. Irrespective of negotiations among the parties or the exchanging of drafts of this Proxy and Agreement, this Proxy and Agreement
shall not constitute or be deemed to evidence a contract, agreement, arrangement or understanding between the parties unless and until (a) the Special Committee has approved, for purposes of any applicable anti-takeover laws and regulations, and
any applicable provision of the Charter or the Bylaws, the Merger Agreement, this Proxy and Agreement and the irrevocable proxy and the transactions contemplated by the Merger Agreement and this Proxy and Agreement, including the Merger; (b) the
Merger Agreement is executed by all parties thereto; and (c) this Proxy and Agreement is executed by all parties hereto.
10
23. No Ownership Interest. Nothing contained in this Proxy and Agreement shall be deemed
to vest in the Proxy Holders, the Company or the Acquiror any direct or indirect ownership or incidence of ownership of or with respect to the Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares
shall remain vested in and belong to the Stockholders, and the Proxy Holders, the Company or the Acquiror shall have no authority to direct the voting or disposition of any of the Covered Shares, except as otherwise provided herein.
24. Action in Stockholder Capacity Only. The parties acknowledge that this Proxy and Agreement is granted and entered into by each Stockholder solely in its capacity
as a direct or indirect owner of the Covered Shares, and each provision of this Agreement shall apply to each Stockholder solely in such Stockholder’s capacity as a holder of Covered Shares and not in such Stockholder’s capacity as a director,
officer or employee of the Company or any of its Subsidiaries or as a trustee or fiduciary of any employee benefit plan or employee benefit plan trust. For the avoidance of doubt, this Agreement shall not apply to any partner, officer, employee
or Affiliate of such Stockholder in its capacity as a director, officer or employee of the Company or any of its Subsidiaries or as a trustee or fiduciary of any employee benefit plan or employee benefit plan trust. Nothing in this Proxy and
Agreement shall (or shall require any Stockholder or any partner, officer, employee or Affiliate of Stockholder to attempt to) in any way restrict or limit the ability of such Stockholder or any Affiliate or employee of such Stockholder who is a
director or officer of the Company from taking any action or refraining from taking any action in his or her capacity as a director or officer of the Company or its Subsidiaries or in his or her capacity as trustee or fiduciary of any employee
benefit plan or employee benefit plan trust, including the exercise of fiduciary duties to the Company, the Company Stockholders or the Company’s Subsidiaries or their respective equityholders. Nothing herein shall be construed to create any
obligation on the part of any director and/or officer of the Company or any of its Subsidiaries or any trustee or fiduciary of any employee benefit plan or employee benefit plan trust, to take or refrain from taking any action in his or her
capacity as such director, officer, trustee and/or fiduciary, and any such action taken in such capacity or any such inaction shall not constitute a breach of this Proxy and Agreement.
[Signature pages follow]
11
IN WITNESS
WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
|
COMPANY
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||
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U.S. XPRESS ENTERPRISES, INC.
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By:
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/s/ Eric Fuller |
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Name:
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Eric Fuller |
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Title:
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President and CEO |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN WITNESS
WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| MAX L. FULLER |
||
| By: |
/s/ Max Fuller |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN
WITNESS WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| FSBSPE 1, LLC |
||
| By: |
/s/ Max Fuller |
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| |
Name: |
Max L. Fuller |
| Title: |
Manager |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN
WITNESS WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| FSBSPE 2, LLC |
||
| By: |
/s/ Max Fuller |
|
| |
Name: |
Max L. Fuller |
| Title: |
Manager |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN WITNESS
WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| FSBSPE 3, LLC |
||
| By: |
/s/ Max Fuller |
|
| |
Name: |
Max L. Fuller |
| Title: |
Manager | |
[Signature Page to Irrevocable Proxy and Agreement]
IN WITNESS
WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| FULLER FAMILY ENTERPRISES, LLC |
||
| By: |
/s/ Janice Fuller |
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| Name: |
Janice B. Fuller |
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| Title: |
Managing Member |
|
| By: |
/s/ Max Fuller |
|
| |
Name: |
Max L. Fuller |
| Title: |
Managing Manager | |
[Signature Page to Irrevocable Proxy and Agreement]
IN
WITNESS WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| WILLIAM E. FULLER |
||
| By: |
/s/ William E. Fuller | |
[Signature Page to Irrevocable Proxy and Agreement]
IN
WITNESS WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| MAX L. FULLER FAMILY LIMITED PARTNERSHIP |
||
| By: |
/s/ William E. Fuller |
|
| |
Name: |
William E. Fuller |
| Title: |
Managing General Partner |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN
WITNESS WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| STOCKHOLDERS |
||
| MAX L. FULLER 2008 IRREVOCABLE TRUST FBO WILLIAM E. FULLER |
||
| By: |
/s/ William E. Fuller |
|
| |
Name: |
William E. Fuller |
| Title: |
Trustee |
|
[Signature Page to Irrevocable Proxy and Agreement]
IN WITNESS
WHEREOF, the parties have caused this Proxy and Agreement to be duly executed and delivered on the date and year first above written.
| PROXY HOLDERS |
||
| |
/s/ John C. Rickel | |
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Name:
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John C. Rickel
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| /s/ Edward Braman | ||
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Name: |
Edward Braman |
| /s/ Jon Beizer |
||
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Name: |
Jon Beizer |
| |
/s/ Michael Ducker |
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Name: |
Michael Ducker |
| /s/ Jennifer G. Buckner |
||
|
|
Name:
|
Jennifer G. Buckner |
| /s/ Dennis Nash |
||
|
|
Name:
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Dennis Nash |
[Signature Page to Irrevocable Proxy and Agreement]
Exhibit 99.4
  |
 |
KNIGHT-SWIFT TRANSPORTATION AGREES TO ACQUIRE U.S. XPRESS ENTERPRISES
FOR $6.15 PER SHARE
PHOENIX, ARIZONA and CHATTANOOGA, TENNESSEE – March 21,
2023 – Knight-Swift Transportation Holdings Inc. (NYSE: KNX) ("Knight-Swift") and U.S. Xpress Enterprises, Inc. (NYSE: USX) ("U.S. Xpress") today announced an agreement under which Knight-Swift will acquire U.S. Xpress for a total
enterprise value of approximately $808 million, excluding transaction costs. The transaction has been unanimously approved by the Board of Directors of Knight-Swift and a Special Committee of the independent directors of the U.S. Xpress Board of
Directors (“Special Committee”). It is expected to close late in the second quarter or early third quarter of 2023, subject to customary closing conditions.
Highlights
|
•
|
Knight-Swift revenue base to grow by nearly 30%; Knight-Swift management targets high-80s adjusted operating ratio(1)
and mid-teens return on invested capital(1) for U.S. Xpress by calendar 2026
|
|
•
|
U.S. Xpress stockholders to receive 310% premium over U.S. Xpress’ closing stock price on March 20, 2023; U.S. Xpress
Special Committee determined compelling cash consideration maximizes value for U.S. Xpress stockholders
|
|
•
|
U.S. Xpress brand and separate operations to continue
|
|
•
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Knight-Swift growth and diversification strategy remains intact, with low leverage and strong cash flows to support ongoing
national LTL build-out and full range of capital allocation alternatives
|
Knight-Swift CEO, Dave Jackson, commented, “The opportunity to add one of the largest and most well-known brands in our industry, with significant
opportunity to improve earnings, gain customers and reach more professional drivers, was very compelling to us. We expect to apply the same playbook that proved successful in the Knight-Swift merger as we share best practices, improve operations
and work together to help U.S. Xpress become the best that it can be. Although it will take time, particularly given the current freight environment, we would not have pursued the transaction unless we were confident in achieving our return
thresholds within a few years. Beyond that, we will continue to work with the U.S Xpress team in pursuit of the performance levels of our other truckload businesses over the next several years, so the opportunity for our stockholders is
substantial. Moreover, this transaction will not slow down the geographic expansion of our LTL network or our other growth initiatives, as our financial and other resources remain significant.”
U.S. Xpress CEO, Eric Fuller, said: “We are very pleased to deliver to our stockholders the opportunity for near-term liquidity at a significant premium.
Additionally, joining the Knight-Swift team is an exciting opportunity for our people, our customers, and the Chattanooga and other communities we call home. The increased scale, operating expertise and resources of the combined entity will allow
U.S. Xpress to pursue new levels of service and efficiency. We’re delighted that U.S. Xpress will continue to operate as an independent brand and will do so with the support and partnership of one of North America’s strongest transportation
companies.”
John Rickel, Lead Independent Director and Chair of the U.S. Xpress Special Committee, said: “The Special Committee evaluated the transaction against the
company’s standalone prospects and current macroeconomic environment and unanimously determined that the compelling and certain cash consideration is in the best interest of all U.S. Xpress stakeholders and maximizes value for its stockholders.
Knight-Swift is a proven operator with a strong track record in the industry, and we are confident this transaction is the best path forward for U.S. Xpress.”
Strategic Rationale and Financial Goals
A slide presentation containing additional information about the transaction and goals has been posted to Knight-Swift’s investor relations site at
investor.knight-swift.com.
Based on 2022 results, U.S. Xpress is expected to add approximately $2.2 billion in total operating revenue (including $1.8 billion in truckload
revenue), 7,200 tractors, and 14,400 trailers to Knight-Swift’s consolidated enterprise. After the transaction, Knight-Swift’s consolidated revenue run-rate is expected to approach $10 billion, while the truckload fleet will have approximately
25,000 tractors and 93,000 trailers.
For 2022, U.S. Xpress total revenue comprised approximately 36% dedicated truckload, 34% U.S. Xpress Inc. irregular route truckload, 14% Total
Transportation of Mississippi irregular route truckload, and 16% brokerage. Portions of the U.S. Xpress business are performing reasonably well, such as the Total Transportation subsidiary, while the most underperforming irregular route business
unit matches up well with Knight-Swift’s strengths.
The transaction is expected to be accretive to Knight-Swift’s adjusted earnings per share(1) starting
in 2024. Knight-Swift is targeting a high-80s adjusted operating ratio(1) by calendar 2026, producing a mid-teens return on invested capital(1) for the consolidated U.S. Xpress business unit. Further, management expects the
U.S. Xpress truckload business to perform similarly to Knight-Swift’s other truckload business units over time based on Knight-Swift’s historical execution and success with acquisitions.
Knight-Swift operates one of the largest asset-based truckload fleets in North America while delivering leading profitability. The truckload business
generates most of the capital Knight-Swift deploys for growth, diversification, and returning capital to shareholders, such as the $1.5 billion invested in acquisitions in the less-than-truckload sector and $733 million spent on share buybacks and
dividends over the past three years. For perspective, in 2013, the year before the acquisition of Barr-Nunn, Knight Transportation’s truckload segment generated $822 million in revenue and $106 million in GAAP operating income (12.9% operating
margin). By 2022, through internal growth and several acquisitions, Knight-Swift’s consolidated truckload segment generated $4.5 billion in revenue and $747 million in GAAP operating income (16.5% operating margin).
Transaction Terms
In the transaction, U.S. Xpress stockholders will receive $6.15 per share in cash for each outstanding share of U.S. Xpress Class A and Class B common
stock, except Max Fuller, Executive Chairman of U.S. Xpress, and Eric Fuller and related entities (collectively, the “Fullers”) will rollover a portion of their shares of U.S. Xpress into an approximately 10% interest in a new Knight-Swift
subsidiary formed to hold the U.S. Xpress business post-closing. The rollover interests will be subject to optional and mandatory redemption provisions based on the future performance of the U.S. Xpress business post-closing. As minority owners in
the future U.S. Xpress, the Fullers will have a continuing economic interest and be fully aligned with Knight-Swift in ensuring that U.S. Xpress is best positioned for success, including by fostering ongoing relationships with key customers and
vendors, and maintaining other important business relationships. Additionally, the Fullers have agreed to certain restrictive covenants.
The total enterprise value of $808 million for U.S. Xpress represents Knight-Swift assuming U.S. Xpress’ $484 million of outstanding debt and finance
leases and purchasing its outstanding equity for $324 million, or $6.15 per share, and excludes its $336 million of operating lease liabilities for the purposes of this calculation (debt and lease balances as of December 31, 2022). As of December
31, 2022, U.S. Xpress had approximately $96 million in outstanding borrowings under its secured revolving credit facility and $388 million in other long-term debt and finance leases. Knight-Swift expects to repay and terminate the U.S. Xpress
secured revolving credit facility at closing while seeking to retain in place U.S. Xpress’ existing primarily fixed-rate equipment and real estate financing arrangements. Knight-Swift had approximately $1.3 billion unrestricted cash and available
liquidity on December 31, 2022, a portion of which will fund the transaction.
Transition Plan
After the closing of the transaction, U.S. Xpress will continue as a separate brand and operation to minimize disruptions for the driving associates,
shop and office employees, and customers. At the same time, cross-functional teams made up of leaders from Knight, Swift, and U.S. Xpress will work together to leverage economies of scale, freight network efficiencies, and best practices.
Through closing, U.S. Xpress will continue to be led by its current senior management. At closing, the Fullers along with Eric Peterson, CFO, will
transition out of their executive officer roles while remaining available to ensure a smooth transition. Tim Harrington and Josh Smith, both executives at Swift and members of the teams that helped achieve significant margin improvement following
the Knight-Swift merger, will join U.S. Xpress as President and CFO, respectively. Tim and Josh will be supported by Knight-Swift’s deep bench of subject matter experts, and their prior transition experience is expected to make them excellent
partners for working with the U.S. Xpress team.
Mr. Jackson commented: “The Fuller family, along with their co-founders, the Quinns, built one of the largest and fastest growing truckload carriers in
the country, which is a significant accomplishment in such a fiercely competitive industry. We’re honored to lead the next phase of U.S. Xpress’ development, and we are pleased that the Fullers are willing to link a portion of their economic
outcome to ours to mitigate the transition risk and will be aligned with us in ensuring that U.S. Xpress becomes the best it can be.”
Approvals and Expected Timing
The transaction is not conditioned on financing and is subject to regulatory and other customary conditions, including approval of holders of a majority
of the voting power of the outstanding shares of U.S. Xpress Class A and Class B Common Stock voting together, approval of holders of a majority of the outstanding shares of each class of U.S. Xpress common stock, voting separately, and approval
of holders of a majority of all outstanding U.S. Xpress’ shares not held by the Fullers, the officers and directors of U.S. Xpress, or Knight-Swift (a “majority-of-the-minority approval”).
The Fullers, which together hold approximately 29% of the outstanding shares of U.S. Xpress common stock representing approximately 58% of the U.S.
Xpress voting power, have delivered to the members of the U.S. Xpress Special Committee an irrevocable proxy to vote their shares in favor of the transaction. Upon completion of the transaction, which is expected late in the second quarter or
early third quarter of 2023, U.S. Xpress will de-list from the New York Stock Exchange.
Advisors
Scudder Law Firm, P.C., L.L.O. of Lincoln, Nebraska served as Knight-Swift’s transaction and legal advisor, and Fried, Frank, Harris, Shriver & Jacobson LLP served as its legal advisor in connection with the transaction. J.P. Morgan
Securities LLC served as exclusive financial advisor to the Special Committee of independent directors of the U.S. Xpress board of directors, and King & Spalding LLP served as its legal advisor. Holland & Hart LLP served as legal advisor to
the Fuller family.
About U.S. Xpress
U.S. Xpress is based in Chattanooga, Tennessee and generated approximately $2.2 billion in total operating revenue in 2022 while serving its blue-chip
customer base through a network of approximately 14 facilities, primarily located across the eastern United States. U.S. Xpress’ fleet includes approximately 7,200 tractors and 14,400 trailers, including tractors provided by approximately 1,000
independent contractors. The company’s highly skilled workforce includes approximately 7,900 drivers (including independent contractors), 300 maintenance technicians, and 2,200 non-driver employees.
About Knight-Swift
Knight-Swift Transportation Holdings Inc. is one of North America's largest and most diversified freight transportation companies, providing multiple
truckload transportation, less-than-truckload, logistics, and business services to the shipping and transportation sectors. Knight-Swift uses a nationwide network of business units and terminals in the United States and Mexico to serve customers
throughout North America. In addition to operating the country's largest tractor fleet, Knight-Swift also contracts with third-party equipment providers to provide a broad range of services to its customers while creating quality driving jobs for
driving associates and successful business opportunities for independent contractors.
Contacts
For Knight-Swift:
David Jackson, President and CEO, Adam Miller, CFO, or Brad Stewart, Investor Relations
(602) 606-6349
For U.S. Xpress:
Investor Contact: Matt Garvie, Vice President, Investor Relations,
(423)-633-7153,
mgarvie@usxpress.com
Additional Information about the Transaction and Where to Find It
This communication is being made in respect of the proposed acquisition by Knight-Swift of U.S. Xpress. A meeting of the stockholders of U.S. Xpress
will be held to seek stockholder approval in connection with the proposed acquisition. U.S. Xpress will file with the Securities and Exchange Commission (“SEC”)
a proxy statement and other relevant documents in connection with the proposed transaction. The definitive proxy statement will be sent or given to the stockholders of U.S. Xpress and will contain important information about the proposed
transaction and related matters. INVESTORS AND STOCKHOLDERS OF U.S. XPRESS SHOULD READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT U.S. XPRESS, KNIGHT-SWIFT, AND THE TRANSACTION. Investors may obtain a free copy of these materials (when they are available) and other documents filed by U.S. Xpress with the SEC at the SEC’s website at www.sec.gov, at U.S.
Xpress’s website at www.usxpress.com or by sending a written request to the U.S. Xpress’s Secretary at 4080 Jenkins Road, Chattanooga, Tennessee 37421.
Participants in the Solicitation
U.S. Xpress and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting
proxies from its stockholders in connection with the transaction. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of U.S. Xpress’s stockholders in connection with the
transaction will be set forth in U.S. Xpress’s definitive proxy statement for its stockholder meeting. Additional information regarding these individuals and any direct or indirect interests they may have in the transaction will be set forth in
the definitive proxy statement when it is filed with the SEC in connection with the transaction.
Forward Looking Statements
This communication contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 that provides a safe harbor for forward-looking statements, including statements
relating to the completion of the transaction, all statements that do not relate solely to historical or current facts, and expectations, intentions or strategies
regarding the future. These forward-looking statements are generally denoted by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “aim,” “target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,” “should,”
“could,” “would,” “predict,” “potential,” “ongoing,” “goal,” “can,” “seek,” “designed,” “likely,” “foresee,” “forecast,” “project,” “hope,” “strategy,” “objective,” “mission,” “continue,” “outlook,” “potential,” “feel,” and similar expressions.
However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Statements in this announcement that are forward looking may include, but are not limited to, statements regarding the benefits of the
proposed transaction with U.S. Xpress and the associated integration plans, expected synergies and revenue opportunities, expected branding, anticipated future operating performance and results of Knight-Swift, including statements regarding
anticipated earnings, margins, and cash flows, anticipated future liquidity, anticipated availability of future resources, financial or otherwise, anticipated growth opportunities, anticipated fleet size, the availability of the transaction
consideration, the expected management and governance of U.S. Xpress following the transaction and the expected timing of the closing of the proposed transaction and other transactions contemplated by the proposed transaction. By their nature, all
forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Such risks and uncertainties include, but are not limited to: the occurrence of
any event, change or other circumstance that could give rise to the right of Knight-Swift or U.S. Xpress or both of them to terminate the proposed transaction, including circumstances requiring U.S. Xpress to pay Knight-Swift a termination fee
pursuant to the transaction agreement; the failure to obtain applicable regulatory or U.S. Xpress stockholder approval in a timely manner or otherwise; the risk that the transaction may not close in the anticipated timeframe or at all due to one or
more of the other closing conditions to the transaction not being satisfied or waived; the risk that there may be unexpected costs, charges or expenses resulting from the proposed transaction; risks related to the ability of Knight-Swift and U.S.
Xpress to successfully integrate the businesses and achieve the expected synergies and operating efficiencies within the expected timeframes or at all and the possibility that such integration may be more difficult, time consuming or costly than
expected; risks that the proposed transaction disrupts Knight-Swift’s or U.S. Xpress’ current plans and operations; the risk that certain restrictions during the pendency of the proposed transaction may impact Knight-Swift’s or U.S. Xpress’ ability
to pursue certain business opportunities or strategic transactions; risks related to disruption of each company’s management’s time and attention from ongoing business operations due to the proposed transaction; continued and sufficient
availability of capital and financing; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Knight-Swift’s and/or U.S. Xpress’ common stock or operating results; the risk that the
proposed transaction and its announcement could have an adverse effect on the ability of Knight-Swift and U.S. Xpress to retain and hire key personnel, to retain customers and to maintain relationships with each of their respective business
partners, suppliers and customers and on their respective operating results and businesses generally; the risk of litigation that could be instituted against the parties to the agreement or their respective directors, affiliated persons or officers
and/or regulatory actions related to the proposed transaction, including the effects of any outcomes related thereto; risks related to changes in accounting standards or
tax rates, laws or regulations; risks related to unpredictable and severe or catastrophic events, including but not limited to acts of terrorism, war or hostilities (including effects of the conflict in Ukraine), cyber-attacks, or the
impact of the COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide on Knight-Swift’s or U.S. Xpress’ business, financial condition and results of operations, as well as the
response thereto by each company; and other business effects, including the effects of industry, market, economic (including the effect of inflation), political or regulatory conditions. Also, Knight-Swift’s and U.S. Xpress’ actual results may
differ materially from those contemplated by the forward-looking statements for a number of additional reasons as described in Knight-Swift’s and U.S. Xpress’ respective SEC filings, including those set forth in the Risk Factors section and under
any “Forward-Looking Statements” or similar heading in Knight-Swift’s or U.S. Xpress’ respective most recently filed Annual Report on Form 10-K for the year ended December 31, 2022 and Knight-Swift’s and U.S. Xpress’ Current Reports on Form 8-K.
You are cautioned not to place undue reliance on Knight-Swift’s or U.S. Xpress’ forward-looking statements. Knight-Swift’s or U.S. Xpress’ respective
forward-looking statements are and will be based upon each company’s management’s then-current views and assumptions regarding Knight-Swift’s proposed transaction with U.S. Xpress, future events and operating performance, and are applicable only as
of the dates of such statements. Neither Knight-Swift nor U.S. Xpress assumes any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.
If the proposed transaction is consummated, U.S. Xpress’ stockholders (other than the rollover holders) will cease to have any equity interest in U.S.
Xpress and will have no right to participate in its earnings and future growth.
(1) Non-GAAP Financial Measures
This press release includes statement’s regarding Knight-Swift
management’s general expectations for Knight-Swift’s future adjusted earnings per share, adjusted operating ratio, and return on invested capital, which are non-GAAP
financial measures. Knight-Swift management believes that its general expectations regarding these non-GAAP financial measures are useful to analysts and investors. Knight-Swift is unable to provide without unreasonable effort a reconciliation
to GAAP of its general expectations with respect to these forward-looking non-GAAP measures because it is not possible to predict with a reasonable degree of certainty the information necessary to calculate such measures on a GAAP basis because
such information is dependent on future events that may be outside of Knight-Swift’s control. The unavailable information could have a significant impact on Knight-Swift’s GAAP financial results.
Adjusted earnings per share is defined as earnings per diluted shares net of amortization of intangibles, impairments, legal accruals, and transaction
fees.
Adjusted operating ratio is defined as operating expenses, net of fuel surcharge, amortization of intangibles, impairments, legal accruals, and
transaction fees, expressed as a percentage of revenue, excluding fuel surcharge.
Return on invested capital is defined as NOPAT/Invested
Capital. NOPAT is defined as adjusted operating income multiplied by an assumed effective income tax rate for financial reporting purposes of 25%. Adjusted operating income is defined as total revenue less fuel surcharge revenue, less operating
expenses, net of net of fuel surcharge, amortization of intangibles, impairments, legal accruals, and transaction fees. Invested capital is defined as the cash paid for the equity of U.S. Xpress (including the rollover shares) plus transaction
expenses, plus the long-term debt, finance leases, and operating lease right-of-use liabilities assumed in the transaction, net of cash acquired.
Exhibit 99.5
Knight Swift Agrees to Acquire U.S. Xpress March 21, 2023
Disclosure This communication contains “forward-looking statements,” within the meaning of Section 27A of
the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 that provides a safe harbor for forward-looking statements, including statements relating to the
completion of the transaction, all statements that do not relate solely to historical or current facts, and expectations, intentions or strategies regarding the future. These forward-looking statements are generally denoted by the use of
words such as “anticipate,” “believe,” “expect,” “intend,” “aim,” “target,” “plan,” “continue,” “estimate,” “project,” “may,” “will,” “should,” “could,” “would,” “predict,” “potential,” “ongoing,” “goal,” “can,” “seek,” “designed,” “likely,”
“foresee,” “forecast,” “project,” “hope,” “strategy,” “objective,” “mission,” “continue,” “outlook,” “potential,” “feel,” and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is
not forward-looking. Statements in this announcement that are forward looking may include, but are not limited to, statements regarding the benefits of the proposed transaction with U.S. Xpress (“USX”) and the associated integration plans,
expected synergies and revenue opportunities, expected branding, anticipated future operating performance and results of Knight-Swift (“KNX”), including statements regarding anticipated earnings, margins, and cash flows, anticipated future
liquidity, anticipated availability of future resources, financial or otherwise, anticipated growth opportunities, anticipated fleet size, the availability of the merger consideration, the expected management and governance of U.S. Xpress
following the transaction and the expected timing of the closing of the proposed transaction and other transactions contemplated by the proposed transaction. By their nature, all forward-looking statements are not guarantees of future
performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Such risks and uncertainties include, but are not limited to: the occurrence of any event, change or other circumstance that
could give rise to the right of Knight-Swift or U.S. Xpress or both of them to terminate the proposed transaction, including circumstances requiring U.S. Xpress to pay Knight-Swift a termination fee pursuant to the merger agreement; the
failure to obtain applicable regulatory or U.S. Xpress stockholder approval in a timely manner or otherwise; the risk that the transaction may not close in the anticipated timeframe or at all due to one or more of the other closing conditions
to the transaction not being satisfied or waived; the risk that there may be unexpected costs, charges or expenses resulting from the proposed transaction; risks related to the ability of Knight-Swift and U.S. Xpress to successfully integrate
the businesses and achieve the expected synergies and operating efficiencies within the expected timeframes or at all and the possibility that such integration may be more difficult, time consuming or costly than expected; risks that the
proposed transaction disrupts Knight-Swift’s or U.S. Xpress’ current plans and operations; the risk that certain restrictions during the pendency of the proposed transaction may impact Knight-Swift’s or U.S. Xpress’ ability to pursue certain
business opportunities or strategic transactions; risks related to disruption of each company’s management’s time and attention from ongoing business operations due to the proposed transaction; continued and sufficient availability of capital
and financing; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Knight-Swift’s and/or U.S. Xpress’ common stock or operating results; the risk that the proposed transaction
and its announcement could have an adverse effect on the ability of Knight-Swift and U.S. Xpress to retain and hire key personnel, to retain customers and to maintain relationships with each of their respective business partners, suppliers
and customers and on their respective operating results and businesses generally; the risk of litigation that could be instituted against the parties to the Merger Agreement or their respective directors, affiliated persons or officers and/or
regulatory actions related to the proposed transaction, including the effects of any outcomes related thereto; risks related to changes in accounting standards or tax rates, laws or regulations; risks related to unpredictable and severe or
catastrophic events, including but not limited to acts of terrorism, war or hostilities (including effects of the conflict in Ukraine), cyber-attacks, or the impact of the COVID-19 pandemic or any other pandemic, epidemic or outbreak of an
infectious disease in the United States or worldwide on Knight-Swift’s or U.S. Xpress’ business, financial condition and results of operations, as well as the response thereto by each company; and other business effects, including the effects
of industry, market, economic (including the effect of inflation), political or regulatory conditions. Also, Knight-Swift’s and U.S. Xpress’ actual results may differ materially from those contemplated by the forward-looking statements for a
number of additional reasons as described in Knight-Swift’s and U.S. Xpress’ respective SEC filings, including those set forth in the Risk Factors section and under any “Forward-Looking Statements” or similar heading in Knight-Swift’s or U.S.
Xpress’ respective most recently filed Annual Report on Form 10-K for the year ended December 31, 2022 and Knight-Swift’s and U.S. Xpress’ Current Reports on Form 8-K. You are cautioned not to place undue reliance on Knight-Swift’s or U.S.
Xpress’ forward-looking statements. Knight-Swift’s or U.S. Xpress’ respective forward-looking statements are and will be based upon each company’s management’s then-current views and assumptions regarding Knight-Swift’s proposed transaction
with U.S. Xpress, future events and operating performance, and are applicable only as of the dates of such statements. Neither Knight-Swift nor U.S. Xpress assumes any duty to update or revise forward-looking statements, whether as a result
of new information, future events, uncertainties or otherwise. If the proposed transaction is consummated, U.S. Xpress’ stockholders (other than the rollover holders) will cease to have any equity interest in U.S. Xpress and will have no
right to participate in its earnings and future growth. 2
Non-GAAP Financial Data This presentation includes statements regarding Knight-Swift management’s
general expectations regarding Knight-Swift’s future adjusted earnings per share (“Adjusted EPS”), adjusted operating ratio (“Adjusted OR”), adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”),
Adjusted Leverage Ratio, and adjusted operating margin, which are financial measures not presented in accordance with GAAP. Knight-Swift management believes these non-GAAP financial measures are useful to analysts and investors.
Knight-Swift is unable to provide a reconciliation of its expectations regarding the forward-looking non-GAAP measures without unreasonable effort because it is not possible to predict with a reasonable degree of certainty the information
necessary to calculate such measures on a GAAP basis because such information is dependent on future events that may be outside of Knight-Swift’s control. The unavailable information could have a significant impact on Knight-Swift’s GAAP
financial results. The non-GAAP financial measures are not substitutes for their comparable GAAP financial measures, such as earnings per share, net income, or other measures prescribed by GAAP. There are limitations to using non-GAAP
financial measures. Although we believe that they improve comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry if those companies define these measures differently.
Because of these limitations, our non-GAAP financial measures should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for
these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis. 3
Additional Information This communication is being made in respect of the proposed acquisition by
Knight-Swift of U.S. Xpress. A meeting of the stockholders of U.S. Xpress will be held to seek stockholder approval in connection with the proposed acquisition. U.S. Xpress will file with the Securities and Exchange Commission (“SEC”) a proxy statement and other relevant documents in connection with the proposed transaction. The definitive proxy statement will be sent or given to the
stockholders of U.S. Xpress and will contain important information about the proposed transaction and related matters. INVESTORS AND STOCKHOLDERS OF U.S. XPRESS SHOULD READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT U.S. XPRESS, KNIGHT-SWIFT, AND THE TRANSACTION. Investors may obtain a free copy of these materials (when they are
available) and other documents filed by U.S. Xpress with the SEC at the SEC’s website at www.sec.gov, at U.S. Xpress’s website at www.usxpress.com or by sending a written request to the U.S. Xpress’s Secretary at 4080 Jenkins Road,
Chattanooga, Tennessee 37421. U.S. Xpress and its directors, executive officers and certain other members of management and employees may be deemed to be participants in soliciting proxies from its stockholders in connection with the
transaction. Information regarding the persons who may, under the rules of the SEC, be considered to be participants in the solicitation of U.S. Xpress’s stockholders in connection with the transaction will be set forth in U.S.
Xpress’s definitive proxy statement for its stockholder meeting. Additional information regarding these individuals and any direct or indirect interests they may have in the transaction will be set forth in the definitive proxy
statement when it is filed with the SEC in connection with the transaction. 4
Founded in 1985 Headquartered in Chattanooga, Tennessee #7 on 2022 Transport Topics list
of Top Truckload/Dedicated carriers Operations include OTR, Dedicated, and Brokerage Operates 14 Terminals and 30 drop yards nationally Approximately 7,200 Tractors and 14,400 Trailers at 12/31/2022 About 7,900 drivers and 2,500
non-driving employees at 12/31/2022 U.S. Xpress Full Year 2022 Results Revenue: $2.2 billion EBITDA(1): $43 million Operating Income: ($27) million (1) EBITDA is a non-GAAP measure. EBITDA is defined as net income
(loss) before interest, income taxes, depreciation, and amortization. KNX TL Locations U.S. XPRESS Locations 5
Deal Summary PURCHASE PRICE Enterprise value of $808mm(1) Assume outstanding
balance sheet debt $484mm as of 12/31/2022 Purchase outstanding shares at $6.15 per share, $324mm Cash paid to U.S. Xpress stockholders at closing ~$291mm Rollover Shares valued at ~$33mm ($6.15 per share) at closing with
future redemption price dependent on U.S. Xpress performance ADJUSTED EPS ACCRETION Accretion expected beginning in 2024 Adjusted EPS accretion goal of $1.00+ per share in 2026 ROLLOVER SHARE STRUCTURE The Fullers and related
entities will rollover a portion of their U.S Xpress shares into a passive 10% interest in the Knight-Swift subsidiary formed to hold the U.S. Xpress business The rollover interests will be subject to optional and mandatory
redemption provisions based on the future performance of the U.S. Xpress business post-closingAs minority owners in the future U.S. Xpress, the Fullers will have a continuing economic interest and be fully aligned with
Knight-Swift in ensuring that U.S. Xpress is best positioned for success (1) Excludes operating lease liability, ~$336mm 6
Deal Summary – Continued TIMING Expected to close late second quarter / early third
quarter of 2023 GOVERNANCE U.S. Xpress will continue as a separate brand with separate operations similar to prior KNX acquisitions At closing, the Fullers along with Eric Peterson, CFO, will transition out of their
executive officer roles while remaining available to ensure a smooth transition At closing, Tim Harrington and Josh Smith, both leaders at Swift through the Knight-Swift merger, will assume the roles at U.S. Xpress of
President and CFO, respectively Existing KNX Board of Directors to remain unchanged USX to maintain presence in Chattanooga, TN 7
Compelling Strategic Rationale SCALE Transaction provides economies of scale
Combined company’s truckload fleet will have ~25,000 tractors and 93,000 trailers Rare opportunity to acquire company of this scale, in a sector where we have proven competence GROWTH Limited opportunity for organic
growth in the current truckload environment Opportunity to grow inorganically by acquiring companies, operating them more efficiently, and using KNX’s strong and growing free cash flow to pay down acquisition debt,
retaining acquired revenue and earnings accretion RISK / RETURN The parts of the USX business with most room for improvement align well with KNX strengths Proven Knight-Swift plan gives line of sight to high-80’s
adjusted operating ratio and mid-teens returns by 2026 Over time, TL business is expected to perform similarly to KNX’s other TL business units CAPITAL DEPLOYMENT Deal does not slow our LTL buildout plans Strong &
growing free cash flow allows payoff of acquisition debt and enhances funding of growth outside TL MANAGEMENT New leadership at U.S. Xpress with experience in implementing Knight-Swift best practices Leverage talent
and resources at U.S Xpress with support from other KNX entities Retain brands and improve operating performance 8
Go Forward Plan / Business Evolution Bolster the U.S. Xpress brand through
operational and financial improvements Segment Current State Strategy 3 Year Milestone Dedicated ~$800mm Business operating above KNX OR target for segment Share best practices, customer introduction, and cost
synergies Business performance – high-80’s OR level Over-the-Road TL ~$750mm Historically unprofitable business Apply the KNX irregular route model to drive operational improvements and cost synergies Business
performance high-80’s OR level, pursuing KNX TL business Total Transportation (1)~$300mm Profitable well-run TL carrier approaching KNX OR targets for TL segment Provide support and cost synergies to
the business Business performance aligned to KNX TL business – low to mid-80’s OR level Brokerage ~$340mm Logistics business generating a mid-90’s OR Share KNX best practices, customer introductions, and the
power-only model Business performance in the high-80’s to low-90's OR Revenue (Inc FSC) $2.2B Consolidated business operating with 100%+ OR Share KNX best practices, cost synergies, customer introductions, and the
power-only model Business performance in the high-80’s OR Adjusted Operating Ratio in the high 80’s will result in a mid-teens return on invested capital (1) Total Transportation of Mississippi LLC 9
Debt and Leverage Pro-forma combined leverage ratio estimated at 1.7 on
12/31/2022 Combined balance sheet debt and operating leases expected to be ~ $3.0B after close KNX assuming ~$484mm of debt and finance leases KNX incurring additional debt of $291mm at close, excluding cash
acquired, transaction costs, and future redemption of rollover shares (1) Net Leverage is on-balance sheet debt net of unrestricted cash and cash equivalents at the balance sheet date and is calculated in
accordance with the provisions of Knight-Swift's senior credit facility. (2) The lease adjustment for 2017 is management's estimate of the right-of-use asset and liability as prescribed under ASC Topic 842
prior to its implementation. (3) Adjusted Leverage Ratio is calculated using balance sheet debt and lease liability net of cash divided by Adjusted EBITDA, the proforma includes $336mm of operating lease
liability of U.S. Xpress Leverage History 3,500 3,000 2,500 2,000 1,500 1,000 500 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/22 pro forma Net Leverage (1) Lease Adjustment (2)
Adjusted Leverage Ratio (3) 2.0 1.1 1.0 0.8 1.2 1.1 1.7 10
Prior Merger Success Merger with Swift has been highly successful and
provides a general guideline of what we expect to achieve with U.S. Xpress Swift Truckload Adjusted Operating Margins improved from approximately 7% in 2017 to greater than 20% in 2022 In 2022, the U.S.
Xpress Truckload Adjusted Operating Margin was (2.4%) vs KNX truckload of 19.6% We expect U.S. Xpress Truckload Adjusted Operating margins to be in the mid-teens over time Strong Freight Margin Expectations
Soft Freight Margin Expectations Below Expectations (1) Pre-merger Swift Operating Margin Swift Truckload Adjusted Operating Margins 30% 25% 20% 15% 10% 5% 0% 2017 (1) 2018 2019 2020 2021 2022 11
Key Takeaways Truckload remains a key component of our business Adding of one of the largest and most
well-known brands in the industry, with unique turnaround opportunity KNX has extensive trucking knowledge with proven record of strong operating performance Truckload generates significant free cash
flow Plenty of liquidity for additional acquisitions ~$800mm of unrestricted cash and available liquidity expected to remain post-close Net leverage should remain comfortably below 2.0x post close KNX
long-term strategy remains to: Provide double-digit returns to shareholders Build a nationwide LTL network Grow revenue organically and through acquisitions while driving diversification of our service
offerings (1) Assumes full year U.S. Xpress revenue combined with KNX 2022 FY Revenue Diversity Truckload 58% OTR 43% Dedicated 15% LTL 13% Other 8% Intermodal 7% Logistics 14% 2022 Pro-Forma Revenue
Diversity (1) Truckload 63% OTR 43% Dedicated 20% LTL 10% Logistics 15% Other 6% Intermodal 6% 12
APPENDIX
Non-GAAP Reconciliation Net Leverage and Leverage Ratio 1
(Unaudited) As of December 31, 2022 KNX USX Pro forma Adjustments 2 Proforma (Dollars in thousands) Term loans $1,000,000 $— $ — $
1,000,000 Revolving line of credit 43,000 96,200 291,000 430,200 Accounts receivable securitization 419,000 — — 419,000 Revenue equipment installment notes — 346,352 — 346,352 Mortgage notes
payable — 23,108 — 23,108 Other secured debt and finance leases 442,051 18,238 — 460,289 Total face value of debt 1,904,051 483,898 291,000 2,678,949 Unrestricted cash and cash
equivalents (196,770) (2,275) — (199,045) Non-GAAP: Net Leverage 1,707,281 481,623 291,000 2,479,904 Operating Leases 186,953 335,583 — 522,536 Non-GAAP: Adjusted Net Leverage $1,894,234
$817,206 $291,000 $3,002,440 Non-GAAP: Adjusted EBITDA - Year-to-Date December 31, 2022 $1,757,247 $59,132 $— $1,816,379 Non-GAAP: Leverage Ratio 3 0.97 8.14 1.37 Non-GAAP: Adjusted
Leverage Ratio 4 1.08 13.82 1.65 1.Pursuant to the requirements of Regulation G, these tables reconcile consolidated GAAP net income attributable to Knight-Swift and net income attributable to U.S.
Express to non-GAAP consolidated EBITDA, Adjusted EBITDA, Net Leverage, and Leverage Ratio. 2. "Pro forma adjustments" represents additional debt Knight-Swift expects to incur upon closing of the
transaction. 3."Leverage Ratio" is calculated in accordance with the provisions of Knight-Swift's senior credit facility. 4. "Adjusted Leverage Ratio" is the Leverage Ratio adjusted to add the
operating lease liability to net leverage which is then divided by Adjusted EBITDA to calculate the Adjusted Leverage Ratio. 14
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA 1
(Unaudited) Year-to-Date December 31, 2022 KNX USX Proforma (Dollars in thousands) GAAP: Net income $771,325 $(43,988) $727,337 Adjusted for: Depreciation and amortization of
property and equipment 594,981 82,289 677,270 Amortization of intangibles 64,843 — 64,843 Interest expense 50,803 19,054 69,857 Interest income (5,439) — (5,439) Income tax expense 249,388
(14,348) 235,040 Non-GAAP: EBITDA 1,725,901 43,007 1,768,908 Impairments 2 810 — 810 Stock compensation expense 33,928 5,287 39,215 Other non-cash gains, net 3 (3,392) 10,838 7,446 Non-GAAP:
Adjusted EBITDA 4 $1,757,247 $59,132 $1,816,379 1. Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP EBITDA
and Adjusted EBITDA. 2. "Impairments" reflects the non-cash impairments of building improvements recognized within Knight-Swift's non-reportable segments. 3. "Other non-cash gains, net" includes
unrealized positions on equity securities, and other various items. 4. Adjusted EBITDA is calculated in accordance with the provisions of Knight-Swift's senior credit facility. 15