<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
JEVIC TRANSPORTATION, INC.
(NAME OF SUBJECT COMPANY)
JPF ACQUISITION CORP.
YELLOW CORPORATION
(BIDDERS)
------------------------
COMMON STOCK, NO PAR VALUE
(TITLE OF CLASS OF SECURITIES)
47719P107
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
WILLIAM F. MARTIN, JR., ESQ.
SENIOR VICE PRESIDENT
YELLOW CORPORATION
P.O. BOX 7563
10990 ROE AVENUE
OVERLAND PARK, KANSAS 66211
TELEPHONE: (913) 696-6100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
WITH A COPY TO:
W. LESLIE DUFFY, ESQ.
CAHILL GORDON & REINDEL
80 PINE STREET
NEW YORK, NEW YORK 10005-1702
TELEPHONE: (212) 701-3000
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
---------------------- ----------------------
<S> <C>
$172,170,642.00 $34,434.13
</TABLE>
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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of 5,739,544 outstanding Class A Common Shares at a
purchase price of $14.00 per Class A Common Share and an aggregate of
6,558,359 Common Shares consisting of 4,994,303 outstanding Common Shares and
1,564,056 Common Shares issuable upon exercise of options at a purchase price
of $14.00 per Common Share.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the value of the aggregate Shares purchased.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid: None
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
</TABLE>
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<PAGE> 2
SCHEDULE 14D-1
<TABLE>
<S> <C> <C>
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1 NAMES OF REPORTING PERSONS
Yellow Corporation
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
I.R.S. No. 48-0948788
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions) (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCES OF FUNDS (See Instructions)
BK, WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0*
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8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) [ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
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10 TYPE OF REPORTING PERSON (See Instructions)
HC and CO
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</TABLE>
2
<PAGE> 3
SCHEDULE 14D-1
<TABLE>
<S> <C> <C>
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1 NAMES OF REPORTING PERSONS
JPF Acquisition Corp.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
I.R.S. No. NA
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCES OF FUNDS (See Instructions)
AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0*
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8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
(See Instructions) [ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0%
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10 TYPE OF REPORTING PERSON (See Instructions)
CO
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</TABLE>
* On June 6, 1999, Yellow Corporation ("Parent"), JPF Acquisition Corp. (the
"Purchaser"), and each holder of Class A Common Shares (each, a "Class A
Common Shareholder" and, together, the "Class A
3
<PAGE> 4
Common Shareholders") entered into a Tender and Voting Agreement (the "Tender
and Voting Agreement") pursuant to which, under certain circumstances set
forth therein, the Class A Common Shareholders have agreed to tender 5,701,794
Class A Common Shares in the aggregate in the Offer. The Tender and Voting
Agreement is described in more detail in Section 10 of the Offer to Purchase
dated June 9, 1999, attached hereto as Exhibit (a)(1). The Tender and Voting
Agreement is attached hereto as Exhibit (c)(1).
This Schedule 14D-1 Tender Offer Statement and Schedule 13D (this
"Statement") relates to the offer by JPF Acquisition Corp., a New Jersey
corporation (the "Purchaser"), and a wholly owned subsidiary of Yellow
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of Class A Common Stock, no par value (the "Class A Common Shares"), and
all outstanding shares of Common Stock, no par value (the "Common Shares" and,
together with the Class A Common Shares, the "Shares"), of Jevic Transportation,
Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 9, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Copies of the Offer to Purchase and the Letter of Transmittal are
annexed hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Jevic Transportation, Inc., a New
Jersey corporation (the "Company"). The address of the Company's principal
executive offices is 600 Creek Road, Delanco, New Jersey 08075.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends on Shares") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed on behalf of Parent and the Purchaser for
purposes of the Schedule 14D-1 and Schedule 13D. The information set forth in
the Introduction, Section 8 ("Certain Information Concerning Parent and the
Purchaser") and Schedule I ("Directors and Executive Officers of Parent and the
Purchaser") of the Offer to Purchase is incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best knowledge of Parent and the Purchaser, the persons listed in
Schedule I ("Directors and Executive Officers of Parent and the Purchaser") of
the Offer to Purchase, has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Sections 8 ("Certain
Information Concerning Parent and the Purchaser"), 9 ("Background of the
Offer"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The
Employment Agreements") and Schedule I ("Directors and Executive Officers of
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 12 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
4
<PAGE> 5
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(b) The information set forth in the Introduction, and Sections 9
("Background of the Offer"), 10 ("The Merger Agreement; The Tender and Voting
Agreement; The Employment Agreements"), and 11 ("Purpose of the Offer; Plans for
the Company") of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 10 ("The Merger Agreement; The
Tender and Voting Agreement; The Employment Agreements") of the Offer to
Purchase is incorporated herein by reference.
(d)-(e) The information set forth in Sections 9 ("Background of the
Offer"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The
Employment Agreements"), 11 ("Purpose of the Offer; Plans for the Company"), and
14 ("Dividends and Distributions") of the Offer to Purchase is incorporated
herein by reference.
(f)-(g) The information set forth in Sections 11 ("Purpose of the Offer;
Plans for the Company") and 13 ("Effect of the Offer on the Market for the
Shares; Exchange Act Registration; Margin Regulations") of the Offer to Purchase
is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Sections 8 ("Certain
Information Concerning Parent and the Purchaser") and 9 ("Background of the
Offer") of the Offer to Purchase and the Tender and Voting Agreement, a copy of
which is attached hereto as Exhibit (c)(1), are incorporated herein by
reference.
ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE
SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, and Sections 9 ("Background
of the Offer") and 10 ("The Merger Agreement; The Tender and Voting Agreement;
The Employment Agreements") of the Offer to Purchase and the Tender and Voting
Agreement, a copy of which is attached hereto as Exhibit (c)(1), are
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Sections 9 ("Background
of the Offer") and 17 ("Fees and Expenses") of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning
Parent and the Purchaser") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Sections 7 ("Certain Information
Concerning the Company"), 8 ("Certain Information Concerning Parent and the
Purchaser"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The
Employment Agreements") and 11 ("Purpose of the Offer; Plans for the Company")
of the Offer to Purchase is incorporated herein by reference.
(b)-(c), (e) The information set forth in Sections 10 ("The Merger
Agreement; The Tender and Voting Agreement; The Employment Agreements") and 16
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Sections 10 ("The Merger Agreement; The
Tender and Voting Agreement; The Employment Agreements"), 11 ("Purpose of the
Offer; Plans for the Company"), and 13 ("Effect of the Offer on the Market for
the Shares; Exchange Act Registration; Margin Regulations") of the Offer to
Purchase is incorporated herein by reference.
5
<PAGE> 6
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) -- Offer to Purchase dated June 9, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Text of Press Release issued by Parent on June 7, 1999.
(a)(8) -- Form of Summary Advertisement dated June 9, 1999.
(b)(1) -- Revolving Credit Agreement, dated as of September 24, 1997.
(b)(2) -- Receivables Purchase Agreement, dated as of August 2, 1996.
(c)(1) -- Tender and Voting Agreement among Parent, the Purchaser and
the Class A Common Shareholders dated June 6, 1999.
(c)(2) -- Agreement and Plan of Merger among Parent, the Purchaser and
the Company dated June 6, 1999.
(c)(3) -- Employment Agreement of Raymond M. Conlin.
(c)(4) -- Employment Agreement of Brian J. Fitzpatrick.
(c)(5) -- Employment Agreement of Paul J. Karvois.
(c)(6) -- Employment Agreement of Joseph A. Librizzi.
(c)(7) -- Amended and Restated Severance Agreement of Raymond M.
Conlin.
(c)(8) -- Amended and Restated Severance Agreement of Brian J.
Fitzpatrick.
(c)(9) -- Amended and Restated Severance Agreement of Paul J. Karvois.
(c)(10) -- Amended and Restated Severance Agreement of Joseph A.
Librizzi.
(c)(11) -- Confidentiality Agreement between Parent and the Company
dated December 22, 1998.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
6
<PAGE> 7
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
JPF ACQUISITION CORP.
By: /s/ WILLIAM F. MARTIN, JR.
------------------------------------
Name: William F. Martin, Jr.
Title: Vice President
YELLOW CORPORATION
By: /s/ WILLIAM F. MARTIN, JR.
------------------------------------
Name: William F. Martin, Jr.
Title: Senior Vice President
Dated: June 9, 1999
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NUMBER
- ------- ----------- -----------
<S> <C> <C> <C>
(a)(1) -- Offer to Purchase dated June 9, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Text of Press Release issued by Parent on June 7, 1999.
(a)(8) -- Form of Summary Advertisement dated June 9, 1999.
(b)(1) -- Revolving Credit Agreement, dated as of September 24, 1997.
(b)(2) -- Receivables Purchase Agreement, dated as of August 2, 1996.
(c)(1) -- Tender and Voting Agreement among Parent, the Purchaser and
the Class A Common Shareholders dated June 6, 1999.
(c)(2) -- Agreement and Plan of Merger among Parent, the Purchaser and
the Company dated June 6, 1999.
(c)(3) -- Employment Agreement of Raymond M. Conlin.
(c)(4) -- Employment Agreement of Brian J. Fitzpatrick.
(c)(5) -- Employment Agreement of Paul J. Karvois.
(c)(6) -- Employment Agreement of Joseph A. Librizzi.
(c)(7) -- Amended and Restated Severance Agreement of Raymond M.
Conlin.
(c)(8) -- Amended and Restated Severance Agreement of Brian J.
Fitzpatrick.
(c)(9) -- Amended and Restated Severance Agreement of Paul J. Karvois.
(c)(10) -- Amended and Restated Severance Agreement of Joseph A.
Librizzi.
(c)(11) -- Confidentiality Agreement between Parent and the Company
dated December 22, 1998.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
8
<PAGE> 1
EXHIBIT (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CLASS A COMMON SHARES
AND
ALL OUTSTANDING COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
AT
$14.00 NET PER CLASS A COMMON SHARE
AND
$14.00 NET PER COMMON SHARE
BY
JPF ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF JUNE 6, 1999 (THE "MERGER AGREEMENT"), BY AND AMONG YELLOW CORPORATION
("PARENT"), JPF ACQUISITION CORP. (THE "PURCHASER") AND JEVIC TRANSPORTATION,
INC. (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER AND HAS UNANIMOUSLY DETERMINED THAT THE TERMS
OF THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER,
TENDER THEIR SHARES AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 51% OF THE COMMON
SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE
"MINIMUM CONDITION"), (II) THERE BEING VALIDLY TENDERED ALL OF THE OUTSTANDING
CLASS A COMMON SHARES AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE
WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976,
AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"), AND ALL APPLICABLE
FOREIGN ANTITRUST STATUTES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS NOT SUBJECT TO ANY FINANCING
CONDITION.
------------------------
IMPORTANT
Any Shareholder (as defined) desiring to tender all or any portion of such
Shareholder's Shares (as defined) should either (i) complete and sign the Letter
of Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal, have such Shareholder's signature thereon guaranteed
if required by Instruction 1 to the Letter of Transmittal, mail or deliver the
Letter of Transmittal (or such facsimile) and any other required documents to
the Depositary (as defined) and either deliver the certificates for such Shares
to the Depositary along with the Letter of Transmittal (or facsimile) or deliver
such Shares pursuant to the procedure for book-entry transfer as set forth in
Section 2 hereof, or (ii) request such Shareholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
Shareholder. A Shareholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
Shareholder desires to tender such Shares. As used herein "Class A Common
Shares" means the Class A Common Stock, no par value, of the Company; "Common
Shares" means the Common Stock, no par value, of the Company; "Shares" means the
Class A Common Shares together with the Common Shares; and "Shareholder" means a
holder of Shares.
If a Shareholder desires to tender Shares and such Shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined), such Shareholder's tender may be effected by following the
procedure for guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to J.P. Morgan
Securities Inc., who is acting as the Dealer Manager, or ChaseMellon Shareholder
Services L.L.C., who is acting as the Information Agent, at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent or from brokers, dealers, commercial
banks, trust companies and other nominees.
------------------------
The Dealer Manager for the Offer is:
J.P. MORGAN & CO.
June 9, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
INTRODUCTION............................................................. 1
SECTION 1. TERMS OF THE OFFER.......................................... 2
SECTION 2. PROCEDURES FOR TENDERING SHARES............................. 4
SECTION 3. WITHDRAWAL RIGHTS........................................... 7
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.......................... 7
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 8
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.............. 9
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 9
SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER..... 10
SECTION 9. BACKGROUND OF THE OFFER..................................... 12
SECTION 10. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; THE
EMPLOYMENT AGREEMENTS....................................... 14
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY................. 24
SECTION 12. SOURCE AND AMOUNT OF FUNDS.................................. 24
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS............... 25
SECTION 14. DIVIDENDS AND DISTRIBUTIONS................................. 26
SECTION 15. CERTAIN CONDITIONS OF THE OFFER............................. 26
SECTION 16. CERTAIN LEGAL MATTERS....................................... 28
SECTION 17. FEES AND EXPENSES........................................... 30
SECTION 18. MISCELLANEOUS............................................... 30
SCHEDULE I. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
AND THE PURCHASER........................................... S-1
</TABLE>
i
<PAGE> 3
TO THE HOLDERS OF SHARES OF
JEVIC TRANSPORTATION, INC.:
INTRODUCTION
JPF Acquisition Corp. (the "Purchaser"), a New Jersey corporation and a
wholly owned subsidiary of Yellow Corporation, a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of Class A Common
Stock, no par value (the "Class A Common Shares"), and all outstanding shares of
Common Stock, no par value (the "Common Shares" and, together with the Class A
Common Shares, the "Shares"), of Jevic Transportation, Inc., a New Jersey
corporation (the "Company"), at a price of $14.00 per Share, net to the seller
in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which, as amended from time to time, together constitute
the "Offer"). Unless the context indicates otherwise, as used herein, "Shares"
shall mean the Class A Common Shares together with the Common Shares; and
"Shareholders" shall mean holders of Shares.
Tendering Shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. However, any tendering Shareholder or other payee who fails to complete
and sign the Substitute Form W-9 that is included in the Letter of Transmittal
may be subject to a required backup federal income tax withholding of 31% of the
gross proceeds payable to such Shareholder or other payee pursuant to the Offer.
See Section 2. The Purchaser will pay all charges and expenses of J.P. Morgan
Securities Inc., as Dealer Manager (in such capacity, the "Dealer Manager"),
ChaseMellon Shareholder Services L.L.C., as Depositary (in such capacity, the
"Depositary"), and ChaseMellon Shareholder Services L.L.C., as Information Agent
(in such capacity, the "Information Agent"), incurred in connection with the
Offer.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED
AS OF JUNE 6, 1999 (THE "MERGER AGREEMENT"), BY AND AMONG PARENT, THE PURCHASER
AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER OF THE PURCHASER WITH AND INTO THE COMPANY (THE
"MERGER") AND HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE MERGER AGREEMENT
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES
AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 51% OF THE COMMON
SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE
"MINIMUM CONDITION"), (II) THERE BEING VALIDLY TENDERED ALL OF THE OUTSTANDING
CLASS A COMMON SHARES AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE
WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976,
AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"), AND ALL APPLICABLE
FOREIGN ANTITRUST STATUTES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND
CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS NOT SUBJECT TO ANY FINANCING
CONDITION.
At the effective time of the Merger (the "Effective Time"), each Share then
outstanding will be converted into the right to receive an amount in cash equal
to the Offer Price (the "Merger Price"). The Merger Agreement is more fully
described in Section 10.
The Merger Agreement provides that, except as provided therein, following
satisfaction or waiver of the conditions to the Offer and subject to the terms
and conditions thereof, the Purchaser will accept for payment, in accordance
with the terms of the Offer, all Shares validly tendered pursuant to the Offer
and not withdrawn
<PAGE> 4
as soon as it is permitted to do so pursuant to applicable law. The Offer will
not remain open following the time Shares are accepted for payment.
Under the New Jersey Business Corporation Act (the "New Jersey Act"), if
the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the
outstanding Class A Common Shares and 90% of the outstanding Common Shares, the
Purchaser will be able to approve the Merger Agreement and the transactions
contemplated thereby without a vote of the Shareholders. In such event, Parent,
the Purchaser and the Company have agreed in the Merger Agreement to take, at
the request of the Purchaser and subject to the satisfaction of the conditions
set forth in the Merger Agreement, all necessary and appropriate actions to
cause the Merger to become effective as soon as practicable after such
acquisition without a meeting of Shareholders, in accordance with Section
14A:10-5.1 of the New Jersey Act. If, however, the Purchaser does not acquire at
least 90% of the outstanding Class A Common Shares and 90% of the outstanding
Common Shares pursuant to the Offer or otherwise and a vote of the Shareholders
is required under the New Jersey Act, a significantly longer period of time
would be required to effect the Merger. In the Merger Agreement, Parent, the
Purchaser and the Company have agreed that if immediately prior to the scheduled
Expiration Date all of the conditions to the Offer are then satisfied or waived,
but the Shares tendered pursuant to the Offer are less than 90% of the
outstanding Class A Common Shares and 90% of the outstanding Common Shares, the
Purchaser may extend the Offer for a period or periods aggregating up to ten
business days from the Initial Expiration Date (as hereinafter defined), and
thereafter with the prior written consent of the Company.
Concurrently with the execution of the Merger Agreement, Parent, the
Purchaser and each holder of Class A Common Shares (each, a "Class A Common
Shareholder" and, together, the "Class A Common Shareholders") entered into a
Tender and Voting Agreement (the "Tender and Voting Agreement") dated June 6,
1999 pursuant to which, subject to the terms and conditions of the Tender and
Voting Agreement, the Class A Common Shareholders have agreed to tender
5,701,794 Class A Common Shares in the aggregate in the Offer. The Tender and
Voting Agreement is more fully described in Section 10.
The Company has represented and warranted that, as of June 5, 1999, there
were outstanding 5,739,544 Class A Common Shares and 4,994,303 Common Shares and
options to acquire 1,564,056 Common Shares. The Merger Agreement provides, among
other things, that the Company will not, without the prior written consent of
Parent, issue any additional Shares (except on the exercise of outstanding
options).
Based on the foregoing and allowing no additional Shares (or options,
warrants or rights exercisable for, or securities convertible into, Shares) to
have been issued (other than Common Shares issued pursuant to the exercise of
the stock options referred to above), if the Purchaser were to purchase
6,148,952 Shares pursuant to the Offer, the Minimum Condition would be
satisfied.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SECTION 1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date. The term "Initial Expiration Date" means
12:00 midnight, New York City time, on Wednesday, July 7, 1999, unless and until
the Purchaser, in its sole discretion, shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, will expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the HSR Act and all applicable foreign antitrust statutes. See
Section 15. If such conditions are not satisfied prior to the Expiration Date,
the Purchaser reserves the right (but shall not be obligated) to, subject to the
terms of the Merger Agreement, (i) decline to
2
<PAGE> 5
purchase any of the Shares tendered and terminate the Offer, (ii) waive any of
the conditions to the Offer, to the extent permitted by applicable law, and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Shares validly tendered or
(iii) extend the Offer and, subject to the right of Shareholders to withdraw
Shares until the Expiration Date, retain the Shares tendered during the period
or periods for which the Offer is extended.
Subject to the Merger Agreement and the applicable rules and regulations of
the Commission, the Purchaser reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether any of the events set
forth in Section 15 hereof have occurred or been determined by the Purchaser to
have occurred, to (a) extend the period of time during which the Offer is open,
and thereby delay acceptance for payment of any Shares, by giving oral or
written notice of such extension and delay to the Depositary and (b) waive any
condition or amend the Offer in any other respect by giving oral or written
notice of such waiver or amendment to the Depositary. During any such extension,
all Shares previously tendered and not properly withdrawn will remain subject to
the Offer, subject to the right of a tendering Shareholder to withdraw such
Shareholder's Shares. See Section 3. Under no circumstances will interest be
paid on the purchase price for tendered Shares, whether or not the Purchaser
exercises its right to extend the Offer. The Merger Agreement provides that the
Purchaser may not waive the Minimum Condition or amend the conditions or terms
of the Offer without prior written consent of the Company; provided, however,
that if all of the conditions to the Offer are then satisfied or waived, Parent
shall, in order to permit the Merger to become effective without a meeting of
Shareholders of the Company in accordance with Section 14A:10A-1 of the New
Jersey Act, have the right to extend the Offer for a period or periods
aggregating up to ten business days from the then effective Expiration Date, and
thereafter with the prior written consent of the Company.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 15. There can be no
assurance that the Purchaser will exercise its right to extend the Offer. Any
extension, amendment, delay, waiver or termination will be followed as promptly
as practicable by public announcement. In the case of an extension, Rule
14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires that the announcement be issued no later than the earlier of (i)
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date, or (ii) the first opening of the Nasdaq National
Market on the next business day after the previously scheduled Expiration Date,
in accordance with the public announcement requirements of Rule 14e-1 under the
Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d)
under the Exchange Act, which require that any material change in the
information published, sent or given to Shareholders in connection with the
Offer be promptly disseminated to Shareholders in a manner reasonably designed
to inform Shareholders of such change), and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser will not
have any obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it is unable to pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser,
and such Shares may not be withdrawn except to the extent tendering Shareholders
are entitled to withdrawal rights as described in Section 3. However, the
ability of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
tendered by or on behalf of holders of securities promptly after the termination
or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the
3
<PAGE> 6
percentage of securities sought, will depend upon the facts and circumstances
then existing, including the relative materiality of the changed terms. For
information with respect to a change in price or a change in the percentage of
securities sought, a minimum period of 10 business days is required to allow for
adequate dissemination to Shareholders and investor response. If the Purchaser
should decide to change the price offered or the percentage of Shares sought,
such change will be applicable to all Shareholders who hold any Shares.
The Merger Agreement provides that the Company will supply the Purchaser
with the Company's Shareholder lists and security position listings for the
purpose of disseminating the Offer to holders of Shares. This Offer to Purchase,
the related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will be furnished to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the Shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares, by the Purchaser following receipt
of such lists or listings from the Company.
SECTION 2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a Shareholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, and either (i) certificates for tendered Shares ("Share
Certificates") must be received by the Depositary at one of such addresses or
(ii) such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each case prior to the Expiration Date, or (b)
the tendering Shareholder must comply with the guaranteed delivery procedures
set forth below.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at The Depositary Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering Shareholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation."
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
Participants in the Book-Entry Transfer Facility's system may tender their
Shares in accordance with the Book-Entry Transfer Facility's Automated Tender
Offer Program ("ATOP"), to the extent it is available to such participants for
the Shares they wish to tender. A Shareholder tendering through ATOP must
expressly acknowledge that the Shareholder has received and agreed to be bound
by the Letter of Transmittal and that the Letter of Transmittal may be enforced
against such Shareholder.
4
<PAGE> 7
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARE
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS WILL BE
DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in the
Book-Entry Transfer Facility's system whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (b) if such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (an "Eligible Institution"). In
all other cases, all signatures on the Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instructions 1 and 5 to the Letter of
Transmittal. If Share Certificates are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made or
Share Certificates for Shares not tendered or not accepted for payment are to be
returned to a person other than the registered holder of the Share Certificates
surrendered, the tendered Share Certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders appear on the Share Certificates, with the signatures on
the Share Certificates or stock powers guaranteed as described above. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a Shareholder desires to tender Shares pursuant to
the Offer and such Shareholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shareholder's tender may be
effected if all the following conditions are met:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the Share Certificates, representing all tendered Shares, in
proper form for transfer (or a Book-Entry Confirmation with respect to all
such Shares), together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the New York Stock Exchange
(the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (c) any other documents required by the Letter of Transmittal.
Accordingly, tendering Shareholders may be paid at different times depending
upon when Share Certificates
5
<PAGE> 8
or Book-Entry Confirmations with respect to Shares are actually received by the
Depositary. Under no circumstances will interest be paid on the Offer Price of
the Shares to be paid by the Purchaser, regardless of any extension of the Offer
or any delay in making such payment.
The Purchaser's acceptance for payment of Shares validly tendered pursuant
to the Offer will constitute a binding agreement between the tendering
Shareholder and the Purchaser upon the terms and subject to the conditions of
the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering Shareholder irrevocably appoints designees of the Purchaser
as such Shareholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such Shareholder's rights with respect to the Shares tendered by such
Shareholder and accepted for payment by the Purchaser. All such proxies will be
irrevocable and considered coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts such Shares for payment pursuant to the Offer. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by such
Shareholder with respect to such Shares will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be deemed effective). The designees of the
Purchaser will thereby be empowered to exercise all voting and other rights with
respect to such Shares in respect of any annual, special, adjourned or postponed
meeting of the Company's Shareholders, actions by written consent in lieu of any
such meeting or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares, including voting at any meeting of
Shareholders.
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any defect or irregularity in the tender of any Shares
of any particular Shareholder whether or not similar defects or irregularities
are waived in the case of other Shareholders. No tender of Shares will be deemed
to have been validly made until all defects or irregularities relating thereto
have been cured or waived. None of the Purchaser, Parent, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding on all
parties.
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a Shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such Shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such Shareholder is not subject to backup withholding. If a
Shareholder does not provide such Shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service may impose a
penalty on such Shareholder and the payment of cash to such Shareholder pursuant
to the Offer may be subject to backup withholding of 31% of the amount of such
payment. All Shareholders surrendering Shares pursuant to the Offer should
complete and sign the main signature form and the Substitute Form W-9 included
as part of the Letter of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchaser and the
Depositary).
Non-corporate foreign Shareholders should complete and sign the main
signature form and a Form W-8, Certificate of Foreign Status, a copy of which
may be obtained from the Depositary, in order to avoid backup withholding. See
Instruction 10 to the Letter of Transmittal.
6
<PAGE> 9
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after August 8, 1999.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. If Share Certificates have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedure
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 2 at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all Shares
validly tendered promptly after the Expiration Date. All questions as to the
satisfaction of such terms and conditions will be determined by the Purchaser,
in its sole discretion, whose determination will be final and binding on all
parties. See Sections 1, 10 and 15. The Purchaser expressly reserves the right,
in its sole discretion, to delay acceptance for payment of Shares in order to
comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. See Section 16. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's
obligation to pay for or return tendered securities promptly after the
termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (c) any other documents required by
the Letter of Transmittal. The per Share consideration paid to any Shareholder
pursuant to the Offer will be the highest per Share consideration paid to any
other Shareholder of the same class pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares. Payment for Shares accepted
for payment pursuant to the Offer will be made by deposit of the Offer Price
therefor with the Depositary, which
7
<PAGE> 10
will act as agent for validly tendering Shareholders for the purpose of
receiving payment from the Purchaser and transmitting payment to tendering
Shareholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE OF THE
SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering Shareholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering Shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer. The Purchaser will pay
any stock transfer taxes with respect to the transfer and sale to it or its
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any charges and expenses of the
Depositary, the Dealer Manager and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer, then, without prejudice to the Purchaser's rights under the Offer (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering Shareholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, Share Certificates for any such unpurchased Shares will be returned,
without expense to the tendering Shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
the Book-Entry Transfer Facility pursuant to the procedure set forth in Section
2, such Shares will be credited to an account maintained at the Book-Entry
Transfer Facility), as promptly as practicable after the expiration, termination
or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer, but any such transfer or assignment will not relieve the Purchaser of
its obligations under the Offer and will in no way prejudice the rights of
tendering Shareholders to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code"), and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Generally, for
federal income tax purposes, a tendering Shareholder will recognize gain or loss
equal to the difference between the amount of cash received by the Shareholder
pursuant to the Offer or the Merger and the aggregate tax basis in the Shares
tendered by the Shareholder and purchased pursuant to the Offer or converted in
the Merger, as the case may be. Gain or loss will be calculated separately for
each block of Shares tendered and purchased pursuant to the Offer or converted
in the Merger, as the case may be.
If Shares are held by a Shareholder as capital assets, gain or loss
recognized by the Shareholder will be capital gain or loss, which, in the case
of non-corporate Shareholders, generally will be long-term capital gain or loss
subject to a maximum federal income tax rate of 20% if the Shareholder's holding
period for the Shares exceeds one year. Special rules (and generally lower
maximum rates) apply for non-corporate Shareholders in lower tax brackets.
Long-term capital gains recognized by a corporate Shareholder will be taxed at a
maximum federal income tax rate of 35%.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED AS COMPENSATION OR WITH
RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE
CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-
8
<PAGE> 11
EXEMPT ORGANIZATIONS, PASS-THROUGH ENTITIES AND INVESTORS IN SUCH ENTITIES AND
FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF
INDIVIDUAL CIRCUMSTANCES. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE
APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS)
OF THE OFFER AND THE MERGER.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
The Common Shares are included for trading on the Nasdaq National Market
(the "Nasdaq Stock Market") under the symbol "JEVC". The Common Shares began
trading on the Nasdaq Stock Market on October 7, 1997. The Class A Common Shares
are not listed on a national securities exchange or included for trading on the
Nasdaq Stock Market. The following table sets forth the high and low sales
prices per Common Share, as reported in publicly available sources for the
periods indicated. The Company did not pay any dividends on the Common Shares
during such periods.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1997:
Fourth quarter (commencing October 7, 1997).............. $18.88 $15.38
1998:
First quarter............................................ 17.25 13.88
Second quarter........................................... 16.00 10.50
Third quarter............................................ 12.00 5.50
Fourth quarter........................................... 9.13 5.50
1999:
First quarter............................................ 8.00 5.00
Second quarter (through June 4, 1999).................... 11.50 6.50
</TABLE>
On June 4, 1999, the last full trading day prior to the first public
announcement of the Purchaser's intention to commence a tender offer for the
Shares, the last reported sale price of the Common Shares was $10.75 per Common
Share. On June 8, 1999, the last full day prior to the commencement of the
Offer, the last reported sale price of the Common Shares was $13.75 per Common
Share.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON
SHARES.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a New Jersey corporation with its principal offices at 600
Creek Road, Delanco, New Jersey 08075. According to the Company's Annual Report
on Form 10-K for 1998 (the "Company 10-K"), the Company is a motor carrier that
combines the high revenue yield characteristics of a typical less-than-
truckload ("LTL") carrier, an industry designation for shipments weighing less
than 10,000 pounds, with the operating flexibility and low fixed costs of a
truckload carrier. The Company utilizes a simplified in-route delivery system in
which over 70% of the Company's shipments are delivered to their destinations
directly from line-haul trailers, eliminating the need for an expensive network
of labor-intensive breakbulk terminals, which most LTL carriers use to
distribute shipments. The Company's revenue per terminal for 1998 was
approximately $33.2 million. The Company serves shippers throughout the eastern
half of the United States and in selected markets in the remainder of the
continental United States and Canada.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company and its
consolidated subsidiaries excerpted from the information contained in the
Company 10-K and the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999 (the "Company 10-Q"). More comprehensive financial
information is included in the Company 10-K, the Company 10-Q and other
documents filed by the Company with the Commission, and the following summary
9
<PAGE> 12
is qualified in its entirety by reference to such information. The Company 10-K,
the Company 10-Q and such other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth below under
"-- Available Information".
JEVIC TRANSPORTATION, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
MARCH 31, DECEMBER 31,
-------------------- --------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Revenues.......................... $ 65,832 $ 54,899 $226,123 $190,821 $154,799
Operating Income.................. 4,924 3,809 16,686 15,439 9,390
Net Income........................ 2,532 2,222 9,321 2,418 6,195
Basic Earnings Per Share.......... .24 .21 0.87 0.31 0.90
Diluted Earnings Per Share........ .24 .20 0.86 0.30 0.88
Balance Sheet Data:
Total Assets...................... $164,804 $117,290 $147,839 $113,368 $ 82,355
Long-Term Debt.................... 30,409 15,207 31,008 15,679 28,855
Total Shareholders' Equity........ 77,935 67,859 75,305 65,537 24,071
</TABLE>
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's Shareholders and filed with the Commission. Such
reports, proxy statements and other information are available for inspection at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such
information are obtainable from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a web site at http://www.sec.gov that contains
reports, proxy statements and other information. Such reports, proxy statements
and other information concerning the Company may also be inspected at the
offices of the Nasdaq Stock Market, Reports Section, at 1753 K Street, N.W.,
Washington, D.C. 20006.
Company Information. The information concerning the Company contained in
this Offer to Purchase has been provided by and represented and warranted by the
Company. Although Parent and the Purchaser do not have any knowledge that any
such information is untrue, neither the Purchaser nor Parent takes any
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information.
SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Parent is a Delaware corporation with its principal executive offices
located at 10990 Roe Avenue, P.O. Box 7563, Overland Park, KS 66211.
The Purchaser is a newly incorporated New Jersey corporation and a wholly
owned subsidiary of the Parent which to date has not conducted any business
other than in connection with the Offer and the Merger. The principal executive
offices of the Purchaser are located at 10990 Roe Avenue, P.O. Box 7563,
Overland Park, KS 66211.
10
<PAGE> 13
Except as set forth in this Offer to Purchase, neither Parent, the
Purchaser or any other affiliate of Parent nor, to the best knowledge of Parent
and the Purchaser, any of the persons listed in Schedule I hereto, or any
associate or majority-owned subsidiary of such persons (collectively, the
"Purchaser Entities"), beneficially owns an equity security of the Company, and
no Purchaser Entity, or, to the best knowledge of Parent, the Purchaser, or any
other affiliate of Parent, any of the other persons referred to above, or any of
the respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to
the best knowledge of any Purchaser Entity, any of the persons listed in
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
without limitation, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge
of any Purchaser Entity, any of the persons listed in Schedule I hereto has had
any transactions with the Company or any of its executive officers, directors or
affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between any Purchaser Entity, or their respective
subsidiaries, or, to the best knowledge of any Purchaser Entity, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the Commission.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to Parent and its consolidated
subsidiaries excerpted from the information contained in Parent's Annual Report
on Form 10-K for 1998 (the "Parent 10-K") and Parent's Quarterly Report on Form
10-Q for the quarter ended March 31, 1999 (the "Parent 10-Q"). More
comprehensive financial information is included in the Parent 10-K, the Parent
10-Q and other documents filed by Parent with the Commission, and the following
summary is qualified in its entirety by reference to such information. The
Parent 10-K, the Parent 10-Q and such other documents are obtainable for
inspection and copies thereof are obtainable in the manner set forth below under
"-- Available Information."
YELLOW CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, FISCAL YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------
1999 1998 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Operating Revenue.................. $ 727,498 $ 692,460 $2,900,577 $2,898,414 $2,654,991
Income (Loss) From Operations...... 11,752 8,909 83,396 98,677 (7,749)
Net Income (Loss).................. 4,775 (647) (28,669) 52,435 (27,180)
Basic Earnings (Loss) per share.... .19 (.02) (1.07) 1.86 (.97)
Diluted Earnings (Loss) per
share........................... .19 (.02) (1.06) 1.83 (.97)
Balance Sheet Data:
Total Assets....................... $1,074,980 $1,210,690 $1,105,685 $1,270,812 $1,227,807
Long-Term Debt..................... 156,765 162,272 156,988 163,080 192,492
Total Shareholders' Equity......... 365,163 430,107 371,252 445,851 395,700
</TABLE>
11
<PAGE> 14
Available Information. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, is required to file reports
relating to its business, financial condition and other matters. Information as
of particular dates concerning Parent's directors and officers, their
remuneration, stock options and other matters, the principal holders of Parent's
securities and any material interest of such persons in transactions with Parent
is required to be disclosed in proxy statements distributed to Parent's
shareholders and filed with the Commission. Such reports, proxy statements and
other information are available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, IL 60661. Copies of such information are
obtainable from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
statements and other information. Such reports, proxy statements and other
information concerning Parent may also be inspected at the offices of the Nasdaq
Stock Market, Reports Section, at 1753 K Street, N.W., Washington, D.C. 20006.
SECTION 9. BACKGROUND OF THE OFFER
In late October 1998, Samuel A. Woodward, Senior Vice President of
Operations and Planning of Parent, contacted Harry J. Muhlschlegel, Chief
Executive Officer and Chairman of the Board of the Company, to discuss the
possibility of exploring a strategic relationship between Parent and the
Company.
On November 10, 1998, Mr. Woodward met with Mr. Muhlschlegel and Brian J.
Fitzpatrick, Senior Vice President and Chief Financial Officer of the Company,
and discussed possible strategic relationships between Parent and the Company.
At this meeting, the participants concluded that discussions concerning a
possible strategic alliance or business combination involving Parent and the
Company should continue.
On December 15, 1998, Mr. Woodward met with Messrs. Muhlschlegel, Karvois
and Fitzpatrick. At this meeting, Mr. Woodward indicated that Parent was
primarily interested in pursuing a business combination with the Company. After
the December 15, 1998 meeting, the Company's legal counsel distributed a form of
confidentiality agreement to Parent, which was negotiated over the course of the
following week and was executed by Parent and the Company on December 22, 1998.
On January 8, 1999, Mr. Woodward contacted Mr. Muhlschlegel to schedule a
meeting at which Parent could further explore the potential benefits to both
companies of a business combination. On January 12, 1999, Mr. Woodward, William
F. Martin, Jr., General Counsel of the Company, and the president of Parent's
information services subsidiary met with Messrs. Muhlschlegel, Karvois and
Fitzpatrick and the Company's legal counsel to explore such benefits and to
preliminarily discuss the structure of a potential business combination.
On February 18, 1999, Mr. Muhlschlegel contacted Mr. Woodward to further
discuss the potential operating benefits that could result from a business
combination and to schedule a meeting where representatives of Parent could meet
with a larger group of management of the Company. On March 2, 1999, Mr. Woodward
and certain operations personnel of Parent met with Messrs. Muhlschlegel,
Karvois and Fitzpatrick and certain operations personnel of the Company to
discuss potential operating benefits that could result from a business
combination.
On March 24, 1999, Mr. Woodward contacted Messrs. Muhlschlegel, Karvois and
Fitzpatrick to arrange to have them meet with A. Maurice Myers, Chief Executive
Officer of Parent, and H.A. Trucksess, III, Senior Vice President and Chief
Financial Officer of Parent. On March 29, 1999, Messrs. Myers and Trucksess met
with Mr. Muhlschlegel, Karvois and Fitzpatrick to discuss the status of
discussions between the parties. At this meeting, it was determined that the
parties would proceed with negotiations with respect to the terms of a business
combination.
On April 9, 1999, Mr. Woodward contacted Mr. Muhlschlegel to schedule
meetings at which the parties would begin negotiating the terms of a business
combination. On April 15, 1999, the Company's legal counsel
12
<PAGE> 15
contacted Mr. Martin to discuss the agenda of such meetings, which were
scheduled for April 28-29, 1999. On April 28, 1999, Messrs. Myers, Martin and
Woodward met with Messrs. Muhlschlegel, Karvois and Fitzpatrick and the
Company's legal counsel for a dinner discussion in anticipation of a formal
negotiating session the following day. On April 29, 1999, Mr. Martin, together
with legal counsel to Parent and a representative of J.P. Morgan Securities
Inc., financial advisor to Parent, commenced such negotiations with Messrs.
Muhlschlegel, Karvois and Fitzpatrick and the Company's legal counsel.
During the period from May 1, 1999 through May 17, 1999, representatives of
J.P. Morgan Securities Inc. and Janney Montgomery Scott Inc., financial advisor
to the Company, conferred and discussed the potential financial impact of
combining the two companies.
On May 17, 1999, Mr. Martin of Parent, together with Parent's legal and
financial advisors, met with the Company's legal and financial advisors to
continue to negotiate the terms of a transaction. On May 18, 1999, tentative
agreement on the form of the transaction and the consideration to the Company's
shareholders was reached in discussions between Mr. Myers and Mr. Muhlschlegel,
subject to continuing due diligence and negotiation and the approval of the
Boards of Directors of Parent and the Company.
On May 20, 1999, Parent's legal counsel distributed first drafts of the
Merger Agreement and the Tender and Voting Agreement to the Company and its
counsel.
On May 20, 1999, Mr. Muhlschlegel contacted Mr. Myers and informed him that
the Company's Board of Directors was considering soliciting from third parties
other offers to purchase the Company. Mr. Myers informed Mr. Muhlschlegel that
in the event the Company's Board determined to solicit other offers, he could
not assure Mr. Muhlschlegel that Parent would continue to be willing to proceed
with a transaction. Mr. Myers also informed Mr. Muhlschlegel that in the event
the Company's Board agreed not to solicit any offers from third parties, the
Merger Agreement would not contain provisions of a nature that would be
preclusive with respect to unsolicited third party proposals. On May 21, 1999,
Mr. Muhlschlegel contacted Mr. Myers and informed him that the Company's Board
had determined not to solicit third party offers on the condition that the
Merger Agreement not contain provisions of a nature that would be preclusive
with respect to third party proposals. Mr. Myers informed Mr. Muhlschlegel that
Parent was willing to proceed with the transaction on this basis.
On May 24, 1999, Mr. Martin contacted Mr. Fitzpatrick to schedule Parent's
legal, tax and accounting due diligence review. During May 26-28, 1999,
representatives of Parent conducted their legal, tax and accounting due
diligence. On May 26, 1999, Mr. Myers contacted Mr. Muhlschlegel and indicated
Parent's interest in revising certain severance agreements of certain officers
of the Company and in having certain officers of the Company enter into
employment agreements with Parent to provide appropriate incentives to retain
such officers on a long term basis. On May 27, 1999, Mr. Muhlschlegel contacted
Mr. Myers and scheduled a meeting at which Mr. Myers could discuss these
employment matters with the applicable officers of the Company.
On May 28, 1999, Mr. Martin, together with Parent's legal counsel,
contacted the Company's legal counsel to discuss the Company's comments on the
drafts of the Merger Agreement and the Tender and Voting Agreement. On the basis
of these discussions, revised drafts of the Merger Agreement and the Tender and
Voting Agreement were thereafter distributed to the Company and its legal
counsel.
On June 2, 1999, Mr. Myers met with officers of the Company and negotiated
Parent's proposed amendments to their severance agreements and the proposed
employment agreements. In addition, Mr. Martin, together with Parent's legal
counsel, contacted the Company's legal counsel to discuss the Company's comments
on the revised drafts of Merger Agreement and the Tender and Voting Agreement.
On this basis of these discussions, revised drafts of the Merger Agreement and
the Tender and Voting Agreement were distributed to the Company and its counsel.
During June 3-6, 1999 the parties' respective legal counsel and financial
advisors conferred to finalize the Merger Agreement and the Tender and Voting
Agreement and related documentation.
13
<PAGE> 16
On June 4, 1999, Mr. Myers contacted Mr. Muhlschlegel and informed him that
the Board of Directors of Parent had unanimously approved the Merger Agreement
and the Tender Voting Agreement, subject to the finalization of the Merger
Agreement and the Tender and Voting Agreement and related documentation.
On June 4, 1999, Mr. Muhlschlegel contacted Mr. Myers and informed him
that, subject to the finalization of the Merger Agreement and the Tender and
Voting Agreement and related documentation, the Board of Directors of the
Company had unanimously approved the Merger Agreement, the Offer and the Merger
and would recommend that the Shareholders accept the Offer and adopt and approve
the Merger Agreement.
On June 6, 1999, the Merger Agreement and the Tender and Voting Agreement
were executed by the parties thereto, and the applicable officers of the Company
executed the amendments to their severance agreements and executed their
employment agreements.
On June 7, 1999, the terms of the Merger Agreement and the Tender and
Voting Agreement were publicly announced.
SECTION 10. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; THE
EMPLOYMENT AGREEMENTS
The following is a summary of certain provisions of the Merger Agreement,
the Tender and Voting Agreement, the Employment Agreements and the Amended and
Restated Severance Agreements. This summary is qualified in its entirety by
reference to the Merger Agreement, the Tender and Voting Agreement, the
Employment Agreements and the Amended and Restated Severance Agreements, which
are incorporated by reference and copies of which have been filed with the
Commission as exhibits to the Schedule 14D-1. The Merger Agreement, the Tender
and Voting Agreement, the Employment Agreements and the Amended and Restated
Severance Agreements may be examined and copies may be obtained at the places
set forth in Section 8 of this Offer to Purchase under "Available Information".
(A) THE MERGER AGREEMENT
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to prior satisfaction or waiver
of the conditions of the Offer, as set forth in Section 15, the Purchaser will
purchase all Shares validly tendered pursuant to the Offer at a price of $14.00
per Share, net to the seller in cash, without interest thereon. The Merger
Agreement provides that, without the prior written consent of the Company, the
Purchaser will not decrease the price per Class A Common Share or Common Share
or change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased in the Offer, change the conditions set forth in
the Offer, waive or reduce the Minimum Condition, impose additional conditions
to the Offer or amend any other term of the Offer in any manner adverse to the
holders of any Shares; provided, however, that if all the conditions to the
Offer are then satisfied or waived, the Parent, in order to permit the Merger to
become effective without a meeting of Shareholders in accordance with Section
14A:10-5.1 of the New Jersey Act, shall have the right (i) to extend the Offer
for a period or periods aggregating up to ten business days from the then
effective Expiration Date and (ii) thereafter to extend the Offer with the prior
written consent of the Company; and provided, further, that if Parent elects to
extend the Offer pursuant to clause (i) above, Parent and the Purchaser shall be
deemed to have permanently and irrevocably waived all of the conditions to the
Offer (other than the Minimum Condition and the conditions set forth in clause
(a) of the conditions to the Offer) and provided, further, that the Purchaser
may extend the Offer to the extent any conditions to the Offer have not been
satisfied on the applicable Expiration Date.
Recommendation. The Merger Agreement provides that, subject to the
conditions thereof, the Board of Directors of the Company has (i) determined
that the Offer and the Merger are fair to and in the best interests of the
Company and its Shareholders, (ii) irrevocably approved the Tender and Voting
Agreement, the Offer and the Merger in accordance with Section 14A:10A-1 of the
New Jersey Act (and for purposes of any other applicable state takeover law),
and (iii) resolved to recommend acceptance of the Offer and approval and
adoption of the Merger and the Merger Agreement by the Company's Shareholders
(in accordance with the requirements of the Company's Restated Certificate of
Incorporation and applicable law).
14
<PAGE> 17
The Merger. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, and in accordance
with the New Jersey Act, at the Effective Time, the Purchaser will be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of the Purchaser will cease and the Company will continue as the
surviving corporation (the "Surviving Corporation"). The Merger Agreement
provides that Parent, the Purchaser and the Company shall use their reasonable
best efforts to consummate the Merger as soon as practicable.
Under the New Jersey Act, the approval of the Board of Directors of the
Company and the affirmative vote of holders of a majority of the outstanding
Shares is required to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger. Section 14A:10A-4 of
the New Jersey Act prevents certain "business combinations" with an "interested
stockholder" (generally, any person who owns or has the right to acquire 10% or
more of a corporation's outstanding voting stock) for a period of five years
following the time such person became an interested stockholder, unless, among
other things, prior to the time the interested stockholder became such the board
of directors of the corporation approved the business combination. Section
14A:10A-5 of the New Jersey Act further provides that a business combination is
permissible if approved by two-thirds of the outstanding shares of voting stock
of the Company, excluding voting stock held by any "interested stockholder," or
if certain price criteria and procedural standards are satisfied.
The Board of Directors of the Company has unanimously approved the Offer,
the Merger, the Merger Agreement and the Tender and Voting Agreement and the
transactions contemplated thereby for the purposes of Section 14A:10A-4 of the
New Jersey Act.
Pursuant to the Merger Agreement, the Company will, if required by the
Company's Restated Certificate of Incorporation and/or applicable law in order
to consummate the Merger, duly call, give notice of, convene and hold a special
meeting of its Shareholders (the "Special Meeting") as soon as practicable
following the acceptance for payment and purchase of the Shares by the Purchaser
pursuant to the Offer for the purpose of considering and taking action upon the
Merger and the adoption of the Merger Agreement. The Merger Agreement provides
that the Company will (a) prepare and file with the Commission a preliminary
proxy or information statement and (b) use its reasonable best efforts to (x)
obtain and furnish the information required to be included by the Commission in
a definitive proxy or information statement (the "Statement") and (y) obtain the
necessary approvals of the Merger and the Merger Agreement from its
Shareholders. The Board of Directors of the Company, subject to the fiduciary
obligation of the Board under applicable law, will include in the Statement the
recommendation of the Board that the Shareholders of the Company vote in favor
of the approval of the Merger and the Merger Agreement. Parent agrees that it
will vote, or cause to be voted, all of the Shares then owned by it and the
Purchaser or any of its other subsidiaries in favor of the Merger and adoption
of the Merger Agreement. If the Purchaser acquires at least a majority of the
Shares on a fully diluted basis, pursuant to the Offer or otherwise, the
Purchaser will have sufficient voting power to approve the Merger, even if no
other Shareholder votes in favor of the Merger.
The Merger Agreement provides that in the event that Parent, the Purchaser
or any other subsidiary of Parent acquires at least 90% of the outstanding Class
A Common Shares and at least 90% of the outstanding Common Shares on a fully
diluted basis, pursuant to the Offer or otherwise, Parent, the Purchaser and the
Company will, at the request of the Parent and subject to the terms and
conditions of the Merger Agreement, take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of Shareholders of the Company, in accordance
with Section 14A:10-5.1 of the New Jersey Act.
Conversion of Securities. At the Effective Time, each Share issued and
outstanding prior to the Effective Time shall be converted into the right to
receive in cash the Merger Price. Shares held by Parent, the Purchaser, any
wholly owned subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly owned subsidiary of the Company ("Excluded Shares")
shall be canceled and retired.
Pursuant to the Merger Agreement, the Board of Directors of the Company has
adopted such resolutions, and has agreed to take such other actions as may be
necessary, so that each outstanding option (an "Option") granted under the
Company's 1994 Stock Option Plan and the 1997 Incentive Plan (collectively, the
"Option
15
<PAGE> 18
Plans"), whether or not then exercisable or vested, shall become fully
exercisable and vested and, except to the extent that Parent or the Purchaser
and the holder of any such Option otherwise agree, immediately following
consummation of the Offer, the Company shall pay to such holders of Options an
amount in respect thereof equal to the product of (A) the excess of the Merger
Price over the exercise price thereof and (B) the number of Shares subject
thereto (such payment to be net of taxes required by law to be withheld with
respect thereto); provided that the foregoing shall be subject to the obtaining
of any necessary consents of holders of awards of Options under the Option
Plans, it being agreed that the Company will use its best efforts to obtain any
such consent.
Board of Directors. Upon payment by the Purchaser for Shares pursuant to
the Offer representing at least a majority of the votes entitled to be cast by
all holders of Shares and from time to time thereafter so long as the Purchaser
and/or Parent (and/or their respective wholly-owned subsidiaries) continue to
hold at least such number of Shares, Parent will be entitled to designate such
number of directors, rounded up to the next whole number, on the Company's Board
of Directors as is equal to the product of the total number of directors on the
Company's Board (determined after giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Parent or its affiliates bears to the
total number of Shares outstanding. The Company shall, upon request of Parent,
promptly take all actions necessary to cause Parent's designees to be so
elected, including, if necessary, seeking the resignations of one or more
existing directors. If Parent's designees are so elected, prior to the Effective
Time the Board shall always have at least one member who is neither an officer,
director, stockholder or designee of Parent or any of its affiliates. The
Company's obligation to appoint Parent's designees to the Board of Directors is
subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder.
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and the
Purchaser with respect to, among other things, its organization and
qualifications, capitalization, authority, financial statements, public filings,
litigation, compliance with law, employee benefit plans, intellectual property,
material contracts, insurance, labor matters, real property matters, suppliers
and customers, accounts receivable, "Year 2000" compliance, environmental
matters, granting of certain approvals, opinion of financial advisor,
information in the Statement, tax status and the absence of material adverse
change on the Company or any of its subsidiaries since March 31, 1999. Parent
and the Purchaser have made customary representations and warranties to the
Company with respect to, among other things, its organization and
qualifications, authority, public filings, information in the Statement and
financing for the Offer.
Covenants. The Merger Agreement contains certain restrictive covenants as
to the conduct of the Company, Parent, the Purchaser and the Surviving
Corporation in contemplation of the Merger including, without limitation, access
by Parent and the Purchaser to information concerning the Company, use of
reasonable best efforts to consummate the Merger, use of reasonable best efforts
to ensure that the conditions set forth in Section 15 are satisfied, and
notification of the other parties of certain matters.
Conduct of Business of the Company. Pursuant to the Merger Agreement, the
Company has agreed that, except with the prior written consent of Parent or as
otherwise required by the Merger Agreement, during the period from execution of
the Merger Agreement to the Effective Time, the Company and its subsidiaries
will conduct operations only in the ordinary course of business consistent with
past practice and will use reasonable best efforts to preserve intact the
business organization of the Company and each of its subsidiaries, to keep
available the services of its and their present officers and employees, and to
preserve the good will of those having business relationships with it.
No Solicitation. Pursuant to the Merger Agreement, the Company has
represented and warranted to, and covenanted and agreed with, Parent and the
Purchaser that neither the Company nor any of its subsidiaries has any
agreement, arrangement or understanding with any potential acquiror that,
directly or indirectly, would be violated, or require any payments, by reason of
the execution, delivery and/or consummation of the Merger Agreement. The Merger
Agreement provides that the Company shall, and shall cause its subsidiaries and
its and their officers, directors, employees, investment bankers, attorneys and
other agents and representatives to, immediately cease any existing discussions
or negotiations with any person other
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<PAGE> 19
than Parent or the Purchaser (a "Third Party") heretofore conducted with respect
to any Acquisition Transaction (as hereinafter defined). The Merger Agreement
provides that the Company and the Board of Directors of the Company shall not,
and the Company shall cause its subsidiaries and its and their respective
officers, directors, employees, investment bankers, attorneys and other agents
and representatives not to, directly or indirectly, (w) withdraw or modify (or
resolve to withdraw or modify) in a manner adverse to Parent the approval or
recommendation of the Board of Directors of the Company of the Merger Agreement
or any of the transactions contemplated thereby or recommend (or resolve to
recommend) an Acquisition Transaction with a Third Party to the Shareholders,
(x) solicit, initiate, continue, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries, proposals or
offers from any Third Party with respect to, or that could reasonably be
expected to lead to, any acquisition or purchase of a material portion of the
assets or business of, or a 15% or more voting equity interest in (including by
way of a tender offer), or any amalgamation, merger, consolidation or business
combination with, or any recapitalization or restructuring, or any similar
transaction involving, the Company or any of its subsidiaries (the foregoing
being referred to collectively as an "Acquisition Transaction"), or (y)
negotiate, explore or otherwise communicate in any way with any Third Party with
respect to any Acquisition Transaction or enter into, approve or recommend any
agreement, arrangement or understanding requiring the Company to abandon,
terminate or fail to consummate the Offer and/or the Merger or any other
transaction contemplated by the Merger Agreement. The Merger Agreement provides
that notwithstanding anything to the contrary in the foregoing, the Company may,
prior to the purchase of Shares pursuant to the Offer, in response to an
unsolicited written proposal with respect to an Acquisition Transaction
involving the acquisition of all of the Shares (or all or substantially all of
the assets of the Company and its subsidiaries) from a Third Party or in
response to an unsolicited all cash tender offer for any and all Shares (i)
furnish or disclose non-public information to such Third Party, (ii) negotiate,
discuss or otherwise communicate with such Third Party and (iii) in the case of
an unsolicited all cash tender offer for any and all Shares, withdraw or modify
(or resolve to withdraw or modify) in a manner adverse to Parent the approval or
recommendation of the Merger Agreement and the transactions contemplated thereby
or recommend (or resolve to recommend) an Acquisition Transaction with a Third
Party to Shareholders, in each case only if the Board of Directors of the
Company determines in good faith: (1) (after consultation with Janney Montgomery
Scott Inc.) that such proposal or such unsolicited all cash tender offer, as the
case may be, is more favorable to the Shareholders from a financial point of
view than the transaction contemplated by the Merger Agreement (including any
adjustment to the terms and conditions proposed by Parent and the Purchaser in
response to such proposal or such unsolicited all cash tender offer, as the case
may be), (2) (after consultation with Janney Montgomery Scott Inc.) that
sufficient financing is obtainable with respect to such proposal or such
unsolicited all cash tender offer, as the case may be, such that the proposed
Acquisition Transaction will be consummated without material delay and (3) that
the proposed Acquisition Transaction (including, if applicable, such an
unsolicited all cash tender offer) is not subject to any regulatory approvals
that could reasonably be expected to prevent or materially delay its
consummation (a proposal with respect to an Acquisition Transaction (including,
if applicable, such an unsolicited all cash tender offer) meeting the
requirements of clauses (1) through (3) is referred to herein as a "Superior
Proposal"). The Merger Agreement also provides that prior to furnishing or
disclosing any non-public information to, or entering into negotiations,
discussions or other communications with, such Third Party, the Company shall
receive from such Third Party an executed confidentiality agreement with terms
no less favorable in the aggregate to the Company than those contained in the
Confidentiality Agreement between the Company and Parent (the "Confidentiality
Agreement"), but which confidentiality agreement shall not provide for any
exclusive right to negotiate with the Company or any payments by the Company.
The Merger Agreement also provides that the Company shall provide to Parent
copies of all such non-public information delivered to such Third Party
concurrently with such delivery. The Merger Agreement provides that,
notwithstanding the foregoing, the Company and the Board of Directors of the
Company shall not, and the Company shall cause its affiliates not to, withdraw
or modify (or resolve to withdraw or modify) in a manner adverse to Parent the
approval or recommendation of this Agreement or any of the transactions
contemplated hereby, or recommend (or resolve to recommend) an Acquisition
Transaction with a Third Party to Shareholders or enter into a definitive
agreement with respect to a Superior Proposal unless (w) the Company has given
Parent three business days' notice of the intention of the Board of Directors to
withdraw or modify (or resolve to withdraw or modify) in a manner adverse to
Parent the
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<PAGE> 20
approval or recommendation of the Merger Agreement or any of the transactions
contemplated thereby, or recommend (or resolve to recommend) an Acquisition
Transaction with a Third Party to the Shareholders or the intention of the
Company to enter into such definitive agreement, as the case may be, (x) if
Parent makes a counter-proposal within such three business day period, the Board
of Directors of the Company shall have determined, in light of any such
counter-proposal, that the Third Party Acquisition Transaction proposal is still
a Superior Proposal, (y) the Company concurrently terminates the Merger
Agreement in accordance with the terms thereof and pays any Termination Fee (as
defined) required under the termination provisions of the Merger Agreement and
agrees to pay any other amounts required under such provisions, and (z) with
respect to a definitive agreement, such agreement permits the Company to
terminate it if it receives a Superior Proposal, such termination and related
provisions to be on terms no less favorable to the Company, including as to fees
and reimbursement of expenses, as those contained in the Merger Agreement.
The Merger Agreement provides that the Company shall promptly (but in any
event within one day of the Company becoming aware of same) advise Parent of the
receipt by the Company, any of its subsidiaries or any of its or their bankers,
attorneys or other agents or representatives of any inquiries or proposals
relating to an Acquisition Transaction and of certain actions taken with respect
thereto. The Merger Agreement provides that the Company shall promptly (but in
any event within one day of the Company becoming aware of same) provide Parent
with a copy of any such inquiry or proposal in writing and a written statement
with respect to any such inquiries or proposals not in writing, which statement
shall include the identity of the parties making such inquiries or proposal and
the material terms thereof. The Merger Agreement provides that the Company
shall, from time to time, promptly (but in any event within one day of the
Company becoming aware of same) inform Parent of the status and content of and
developments with respect to any discussions regarding any Acquisition
Transaction with a Third Party, including (i) the calling of meetings of the
Board of Directors of the Company to take action with respect to such
Acquisition Transaction, (ii) the execution of any letters of intent, memoranda
of understanding or similar non-binding agreements with respect to such
Acquisition Transaction, (iii) the waiver of any standstill agreement to which
the Company is or becomes a party, (iv) the determination by the Board of
Directors of the Company to recommend to the Shareholders that they approve or
accept a Superior Proposal or withdraw or modify in a manner adverse to the
Parent its approval or recommendation of the Merger Agreement or the
transactions contemplated thereby, (v) the determination by the Company to
publicly disclose receipt of a Superior Proposal and (vi) the waiver by the
Company of any confidentiality agreement with a person proposing a Superior
Proposal. The Merger Agreement provides that for the avoidance of doubt, the
Company agrees that it will not enter into any definitive agreement with respect
to a Superior Proposal unless and until Parent has been given notice of the
identity of the parties making such Superior Proposal, the terms thereof and
developments referred to in the preceding sentence and the intent to enter into
such a definitive agreement at least three business days prior to the entering
into such agreement.
State Takeover Laws. The Merger Agreement provides that the Company shall,
upon the request of the Purchaser, take all reasonable steps to assist in any
challenge by the Purchaser to the validity or applicability to the transactions
contemplated by the Merger Agreement, including the Offer and the Merger, and
the Tender and Voting Agreement of any state takeover law. The Merger Agreement
provides that the Board of Directors of the Company shall not amend, modify or
rescind the approval of any purchase of Shares in the Offer for purposes of
Section 14A:10A-1 of the New Jersey Act.
Indemnification. Pursuant to the Merger Agreement, all rights to
indemnification now existing in favor of any director or officer of the Company,
as provided in the Company's Restated Certificate of Incorporation or by laws,
in an agreement between any such person and the Company, or otherwise in effect
on the date thereof shall survive the Merger and shall continue in full force
and effect indefinitely after the Effective Time. The Merger Agreement provides
that Parent also agrees to indemnify all current and former directors and
officers of the Company ("Indemnified Parties") to the fullest extent permitted
by applicable law with respect to all acts and omissions arising out of such
individuals' services as officers or directors of the Company or any of its
subsidiaries or as trustees or fiduciaries of any plan for the benefit of
employees occurring prior to the Effective Time. The Merger Agreement provides
that without limitation of the foregoing, in the event any such Indemnified
Party is or becomes involved in any capacity in any action, proceeding or
investigation in
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<PAGE> 21
connection with any matter, including, without limitation, the transactions
contemplated by the Merger Agreement, occurring prior to, and including, the
Effective Time, Parent will pay as incurred such Indemnified Party's reasonable
legal and other expenses of counsel selected by the Indemnified Party and
reasonably acceptable to Parent (including the cost of any investigation,
preparation and settlement) incurred in connection therewith; provided, however,
that Parent shall not, in connection with any one such action or proceeding or
separate but substantially similar actions or proceedings arising out of the
same general allegations be liable for fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all Indemnified Parties. The Merger Agreement provides that Parent shall be
entitled to participate in the defense of any such action or proceeding, and
counsel selected by the Indemnified Party shall, to the extent consistent with
their professional responsibilities, cooperate with Parent and any counsel
designated by Parent. The Merger Agreement provides that Parent shall pay all
reasonable expenses, including attorneys' fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other obligations provided for
in the Merger Agreement.
The Merger Agreement provides that Parent agrees that the Company and, from
and after the Effective Time, the Surviving Corporation shall cause to be
maintained in effect for not less than six years from the Effective Time the
current policies of the directors' and officers' liability insurance maintained
by the Company; provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous and provided that such substitution shall not result in any
gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time; and provided, further, that the Surviving Corporation shall not
be required to pay an annual premium in excess of 200% of the last annual
premium paid by the Company prior to the date of the Merger Agreement and if the
Surviving Corporation is unable to obtain the insurance required by the Merger
Agreement it shall obtain as much comparable insurance as possible for an annual
premium equal to such maximum amount.
Employee Matters. The Merger Agreement provides that on and after the
Effective Time, Parent shall cause the Surviving Corporation and its
subsidiaries to promptly pay or provide when due all compensation and benefits
earned through or prior to the Effective Time as provided pursuant to the terms
of any Company employee benefit plans disclosed to Parent ("Company Plans") for
all employees (and former employees) and directors (and former directors) of the
Company and its subsidiaries. Pursuant to the Merger Agreement, Parent and
Company have agreed that the Surviving Corporation and its subsidiaries shall
pay promptly or provide when due all compensation and benefits required to be
paid pursuant to the terms of any individual agreement with any employee, former
employee, director or former director in effect as of the date of the Merger
Agreement and disclosed to Parent.
The Merger Agreement provides that if employees of the Surviving
Corporation and its subsidiaries become eligible to participate in a medical,
dental or health plan of Parent or its subsidiaries, Parent shall cause such
plan to (i) waive any preexisting condition limitations for conditions under the
applicable medical, health or dental plans of the Company and its subsidiaries
(other than any limitation already in effect with respect to the applicable
employee that has not been satisfied as of the Effective Time under the
applicable Company Plan) and (ii) honor any deductible and out-of-pocket
expenses incurred by the employees and their beneficiaries under such plans
during the portion of the calendar year prior to such participation.
Waiver. The Merger Agreement provides that, prior to the Effective Time,
the parties may (i) extend the time for the performance of any of the
obligations or other acts of any other party, (ii) waive any inaccuracies in the
representations and warranties contained in the Merger Agreement by any other
party or in any document, certificate or writing delivered pursuant thereto by
any other party or (iii) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations. Any agreement on the
part of any party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party.
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<PAGE> 22
Termination. The Merger Agreement provides that it may be terminated and
the Merger contemplated thereby may be abandoned at any time prior to the
Effective Time, whether or not approval thereof by the Shareholders has been
obtained:
(a) by the mutual written consent of Parent and the Company;
(b) by the Company if the Company is not in material breach of any of
its representations, warranties, covenants or agreements contained in the
Merger Agreement and if (i) the Purchaser fails to commence the Offer as
provided in the Merger Agreement, (ii) the Purchaser shall not have
accepted for payment and paid for Shares pursuant to the Offer in
accordance with the terms hereof on or before August 31, 1999 (provided
that if the only unsatisfied condition to the Offer at August 31, 1999 is
the expiration or termination of all applicable waiting periods relating to
the Offer under the HSR Act, termination pursuant to this clause (ii) may
not occur until after October 31, 1999), (iii) the Purchaser fails to
purchase validly tendered Shares in violation of the terms of the Offer or
the Merger Agreement or (iv) the Merger shall not have occurred on or
before December 31, 1999;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any Shares being purchased in the Offer;
provided that Parent may terminate the Merger Agreement pursuant to this
clause only if Parent's or the Purchaser's termination or withdrawal of the
Offer is not in violation of the terms of the Merger Agreement or the
Offer;
(d) by Parent or the Company if any court or other government or
subdivision thereof, or any administrative governmental or regulatory
authority, agency, commission, tribunal or body, domestic, foreign or
supranational (a "Governmental Entity") shall have issued, enacted,
entered, promulgated or enforced any order, judgment, decree, injunction,
or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such order, judgment, decree,
injunction, ruling or other action shall have become final and
nonappealable;
(e) by the Company if prior to the purchase by the Purchaser of any
Shares in the Offer (i) there shall have occurred, on the part of Parent or
the Purchaser, a material breach of any representation or warranty,
covenant or agreement contained in the Merger Agreement which is not
curable or, if curable, is not cured within ten business days after written
notice of such breach is given by the Company to the party committing the
breach or (ii)(A)(x) the Company proposes entering into a definitive
agreement with respect to a Superior Proposal or (y) the Board of Directors
of the Company recommends a Third Party Acquisition Transaction which is an
unsolicited all cash tender offer for any and all Shares and which
constitutes a Superior Proposal, (B) the Company gives Parent the three
business days' notice as required pursuant to the Merger Agreement, (C) if
a counter-proposal was made by Parent within such three business day
period, the Board of Directors of the Company has determined, in light of
the counter-proposal, that the Third Party Acquisition Transaction (or
proposal therefor) is still a Superior Proposal as required by the Merger
Agreement, and (D) the Company pays any Termination Fee and any other
amounts required under the Merger Agreement;
(f) by Parent if prior to the purchase by the Purchaser of any Shares
in the Offer (i) there shall have occurred, on the part of the Company, a
material breach of any representation, warranty, covenant or agreement
contained in the Merger Agreement which is not curable or, if curable, is
not cured within ten business days after written notice of such breach is
given by Parent to the Company or (ii) there shall have occurred, on the
part of any shareholder party to the Tender and Voting Agreement, a
material breach of any representation, warranty, covenant or agreement
contained in the Tender and Voting Agreement which is not curable or, if
curable, is not cured within five business days after written notice of
such breach is given by Parent to the applicable shareholder or (iii) if
the Board of Directors of the Company or committee thereof shall have
withdrawn or modified (or shall have resolved to withdraw or modify) in a
manner adverse to Parent, its approval or recommendation of the Merger
Agreement or any of the transactions contemplated thereby or shall have
recommended (or resolved to recommend) an Acquisition Transaction (other
than the Offer and Merger) to the Shareholders; or
20
<PAGE> 23
(g) by Parent if it is not in material breach of its obligations under
the Merger Agreement or under the Offer and no Shares shall have been
purchased pursuant to the Offer on or before August 31, 1999 (provided that
if the only unsatisfied condition to the Offer at August 31, 1999 is the
expiration or termination of all applicable waiting periods relating to the
Offer under the HSR Act, termination pursuant to this clause (g) may not
occur until October 31, 1999).
Fees and Expenses.
(a) The Merger Agreement provides that whether or not the Merger is
consummated, all costs and expenses incurred in connection with the Offer, the
Merger Agreement and the transactions contemplated thereby shall be paid by the
party incurring such expenses.
(b) The Merger Agreement provides that in the event it is terminated
pursuant to clause (e)(ii) or clause (f)(iii) under "-- Termination" above, then
the Company shall (i) promptly reimburse Parent for the documented fees and
expenses of Parent and the Purchaser related to the Merger Agreement and the
transactions contemplated thereby not to exceed $1.0 million, and (ii) promptly
pay Parent a termination fee (a "Termination Fee") of $4.75 million, in each
case by wire transfer of same day funds to an account designated by Parent as a
condition of such termination. In the event the Merger Agreement is terminated
pursuant to clause (f)(i) or clause (f)(ii) under "-- Termination" above, the
Company shall promptly reimburse Parent for the documented fees and expenses of
Parent and the Purchaser related to the Merger Agreement and the transactions
contemplated hereby not to exceed $1.0 million by wire transfer of same day
funds to an account designated by Parent.
(c) The Merger Agreement provides that in the event that (i) prior to the
termination of the Merger Agreement, a Third Party shall have made a proposal
regarding an Acquisition Transaction and (ii) thereafter (x) such proposal is
publicly disclosed and August 31, 1999 occurs (or, if the only unsatisfied
condition to the Offer at August 31, 1999 is the expiration or termination of
all applicable waiting periods relating to the Offer under the HSR Act, October
31, 1999 occurs) without the Minimum Condition being satisfied (other than as a
result of a material breach of the Merger Agreement by Parent or the Purchaser
that has not been cured within the time period set forth in the Merger
Agreement) or (y) the Merger Agreement is terminated (A) by the Company pursuant
to clause (b)(ii) or clause (c) under "-- Termination" above or (B) by Parent
pursuant to clause (f)(i), clause (f)(ii) or clause (g) under "-- Termination"
above, and, in each case, at the time the event giving rise to the right to so
terminate the Merger Agreement, such Third Party Acquisition Transaction
proposal shall not have been withdrawn, and (iii) prior to twelve months after
any termination of the Merger Agreement the Company shall have entered into an
agreement for a Third Party Acquisition Transaction which constitutes a Superior
Proposal, or a Third Party Acquisition Transaction which constitutes a Superior
Proposal shall have been consummated, then the Company shall promptly, but in no
event later than immediately prior to, and as a condition of, entering into such
definitive agreement, or, if there is no such definitive agreement then
immediately upon consummation of the Acquisition Transaction, reimburse Parent
for the documented fees and expenses of Parent and the Purchaser relating the
Merger Agreement and the transactions contemplated thereby (to the extent not
previously reimbursed and without duplication of any amounts pursuant to clause
(b) above) not to exceed $1.0 million and pay Parent a Termination Fee of $4.75
million (it being understood that only one Termination Fee shall be payable
pursuant to clause (b) above and this clause (c) in the aggregate), which
amounts shall be payable by wire transfer of same day funds to an account
designated by Parent.
(B) THE TENDER AND VOTING AGREEMENT
Concurrently with the execution and delivery of the Merger Agreement, the
Company, Parent, Purchaser and the Class A Common Shareholders entered into the
Tender and Voting Agreement.
Tender of Shares. Pursuant to the Tender and Voting Agreement, Parent and
the Purchaser have jointly and severally agreed: (i) subject to the conditions
of the Offer and the other terms and conditions of the Merger Agreement, that
the Purchaser will purchase all Shares tendered pursuant to the Offer as
promptly as practicable following commencement of the Offer and that the
Purchaser will consummate the Merger in accordance with the terms of the Merger
Agreement; and (ii) not to decrease the price per share to be paid to
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<PAGE> 24
the Company's shareholders in the Offer below $14.00 per share. Pursuant to the
Tender and Voting Agreement, each Class A Common Shareholder has agreed to (i)
tender such Class A Common Shareholder's Class A Common Shares ("Subject
Shares") other than Contributed Shares (as defined below), if applicable, into
the Offer promptly, and in any event no later than the fifth business day
following the commencement of the Offer, or, if such Class A Common Shareholder
has not received the Offer Documents (as defined in the Merger Agreement) by
such time, within two business days following receipt of such documents, and
(ii) not withdraw any Subject Shares so tendered. Each of Harry J. Muhlschlegel
and Karen B. Muhlschlegel shall be permitted not to tender into the Offer 18,875
of their Subject Shares (for a total of 37,750 Subject Shares, collectively
herein referred to as the "Contributed Shares"); provided that, so long as the
Purchaser notifies Mr. and Mrs. Muhlschlegel at least eight hours prior to the
purchase of Shares by the Purchaser pursuant to the Offer, Mr. and Mrs.
Muhlschlegel shall be obligated to contribute their Contributed Shares to the
capital of the Company prior to the purchase of Shares by the Purchaser pursuant
to the Offer. The foregoing obligations of the parties to the Tender and Voting
Agreement shall terminate on the Termination Date. As used in the Tender and
Voting Agreement, "Termination Date" means the date the Merger Agreement is
terminated in accordance with its terms.
Transfer of Subject Shares. The Tender and Voting Agreement provides that,
until the Termination Date, each Class A Common Shareholder will not, except as
required pursuant to the terms of the Tender and Voting Agreement, (i) sell,
offer to sell, pledge or otherwise dispose of any of such Class A Common
Shareholder's Subject Shares; (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all of such
Subject Shares or any interest therein; (iii) grant any proxy, power-
of-attorney or other authorization or consent in or with respect to such Subject
Shares; (iv) deposit such Subject Shares into a voting trust or enter into a
voting agreement or assignment with respect to the Subject Shares; or (v) take
any other action with respect to such Subject Shares that would in any way
restrict, limit or interfere with the performance of such Class A Common
Shareholder's obligations under the Tender and Voting Agreement.
No Solicitation. The Tender and Voting Agreement provides that each Class
A Common Shareholder represents and warrants to, and covenants and agrees with,
Parent and the Purchaser that such Class A Common Shareholder does not have any
agreement, arrangement or understanding with any potential acquiror of the
Company that, directly or indirectly, would be violated, or require any
payments, by reason of the execution, delivery and/or consummation of the Tender
and Voting Agreement.
The Tender and Voting Agreement also provides that each Class A Common
Shareholder shall, and shall cause its agents and representatives to,
immediately cease any existing discussions or negotiations with any Third Party
heretofore conducted with respect to any Acquisition Transaction. The Tender and
Voting Agreement provides that, until the Termination Date, each Class A Common
Shareholder shall not, and shall cause its agents and representatives not to,
directly or indirectly, (x) solicit, initiate, continue, facilitate or encourage
(including by way of furnishing or disclosing non-public information) any
inquiries, proposals or offers from any Third Party with respect to, or that
could reasonably be expected to lead to, any Acquisition Transaction or (y)
negotiate, explore or otherwise communicate in any way with any Third Party with
respect to any Acquisition Transaction. The Tender and Voting Agreement provides
that if the Board of Directors of the Company determines that a Third Party
proposal for an Acquisition Transaction constitutes a Superior Proposal in
accordance with the provisions of the Merger Agreement discussed above under
"-- The Merger Agreement -- No Solicitation," then, notwithstanding the
provisions of this paragraph, the Class A Common Shareholders shall be permitted
to negotiate, discuss or otherwise communicate with such Third Party with
respect to a tender and voting agreement with terms no less favorable in the
aggregate to each Class A Common Shareholder than those contained in the Tender
and Voting Agreement; provided that no Class A Common Shareholder shall enter
into any such tender and voting agreement (i) prior to the Termination Date or
(ii) with any Third Party with whom negotiations for an Acquisition Transaction
had taken place prior to the Termination Date, if such tender and voting
agreement contains provisions less favorable in the aggregate to such Class A
Common Shareholder than those contained in the Tender and Voting Agreement. In
addition, the provisions of this paragraph shall not be deemed to prohibit any
Class A Common Shareholder who is an officer or director of the Company from
taking actions permitted to be taken by an officer or director, as the
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<PAGE> 25
case may be, in such Class A Common Shareholder's capacity as an officer and/or
director, as the case may be, of the Company.
The Tender and Voting Agreement further provides that until the Termination
Date, each Class A Common Shareholder shall promptly (but in any event within
one day of such Class A Common Shareholder becoming aware of same) (i) advise
Parent of the receipt by such Class A Common Shareholder or any of its agents or
representatives of any inquiries or proposals relating to an Acquisition
Transaction, (ii) provide Parent with a copy of any such inquiry or proposal in
writing and a written statement with respect to any such inquiries or proposals
not in writing, which statement shall include the identity of the parties making
such inquiries or proposal and the material terms thereof and (iii) inform
Parent of the status and content of and developments with respect to any
discussions regarding any Acquisition Transaction with a Third Party.
Voting of Subject Shares. The Tender and Voting Agreement provides that,
until the Termination Date, each Class A Common Shareholder shall, at any
meeting of the stockholders of the Company, however called, or in connection
with any written consent of the stockholders of the Company, vote (or cause to
be voted) all Shares beneficially owned by such Class A Common Shareholder (i)
in favor of the Merger, the execution and delivery by the Company of the Merger
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Merger Agreement and the Tender and Voting Agreement and any
actions required in furtherance thereof; (ii) against any other Acquisition
Transaction and against any action or agreement that would impede, frustrate,
prevent or nullify the Merger Agreement or the Tender and Voting Agreement or
the transactions contemplated thereby, or result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or which would result in any of the
conditions to the Merger in the Merger Agreement not being fulfilled; and (iii)
if requested by Parent, in favor of a stockholder resolution proposed by Parent
in accordance with the New Jersey Act, the purpose of which is to cause the
Offer and the Merger to be consummated and which does not relate to election of
directors.
Best Efforts. The Tender and Voting Agreement provides that, subject to
the terms and conditions thereof, until the Termination Date, each Class A
Common Shareholder agrees to use all reasonable best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Tender and Voting Agreement and
the Merger Agreement. The Tender and Voting Agreement provides that, until the
Termination Date, each Class A Common Shareholder shall properly consult with
Parent and the Purchaser and provide any necessary information and material with
respect to all filings with any Governmental Entity in connection with the
Tender and Voting Agreement and the Merger Agreement and the transactions
contemplated thereby.
(C) THE EMPLOYMENT AGREEMENTS; THE AMENDED AND RESTATED SEVERANCE
AGREEMENTS
On June 4, 1999, the Company entered into employment agreements with seven
of its officers (the "Company Executives"), including four executive officers
(Raymond M. Conlin, Brian J. Fitzpatrick, Paul J. Karvois and Joseph A.
Librizzi). Pursuant to such agreements, each Company Executive will continue his
employment in his current position receiving base salary, a minimum target
bonus, and other Company benefits. Parent is also a party to these employment
agreements and has agreed to cause the Surviving Corporation to satisfy the
Company's obligations thereunder effective upon the date on which Shares are
purchased pursuant to the Offer (the "Purchase Date"). In addition, under the
employment agreements, Parent agrees to grant to the Company Executives as of
the Purchase Date stock options to purchase Parent common stock (Mr.
Conlin -- 20,000 shares; Mr. Fitzpatrick -- 20,000 shares; Mr. Karvois -- 30,000
shares; and Mr. Librizzi -- 20,000 shares) and to cause the Surviving
Corporation to provide certain specified perquisites after the Purchase Date.
With respect to calendar years after the Purchase Date, the Company Executives
will be entitled to participate in Parent's stock option plans on terms and
conditions substantially similar to those generally applicable to executives of
Parent and its subsidiaries. The employment agreements recognize the Company's
obligation to pay benefits under certain amended and restated severance
agreements (the "Severance Agreements") entered into between the Company and the
Company Executives (if the conditions set forth in such severance agreements are
met), but vary the terms of prior severance agreements
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so that certain contemplated changes in a Company Executive's responsibilities
and benefits after the Purchase Date will not be considered "Good Reason"
entitling the Company Executive upon termination of employment to benefits under
the applicable severance agreement. The Severance Agreements provide certain
additional benefits to each Company Executive if, within two years of the
Purchase Date, (i) he is terminated by the Company without cause or (ii) he
resigns for good reason. In such circumstances, the Company Executive will be
entitled to receive a lump sum payment equal to two times the sum of (a) the
Company Executive's salary, at the greater of his salary immediately prior to
the Purchase Date or on the date of termination, plus (b) the Company
Executive's bonus, at the greater of his target bonus for the year of his
termination or the best actual bonus he received in the five previous years.
In addition, under the Severance Agreements on the Purchase Date, the
Company will pay to the Company Executives who are executive officers bonuses is
an aggregate amount of approximately $875,000 (Mr. Conlin -- $55,000; Mr.
Fitzpatrick -- $280,000; Mr. Karvois -- $315,000; and Mr. Librizzi -- $225,000).
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Merger is to enable Parent to
acquire control of, and the entire equity interest in, the Company. The Offer,
as the first step in the acquisition of the Company, is intended to facilitate
the acquisition of all the Shares. Parent will consummate, as soon as
practicable following the consummation of the Offer, the Merger. The purpose of
the Merger is to acquire all Shares not purchased pursuant to the Offer or
otherwise. Pursuant to the Merger, each then outstanding Share (other than
Excluded Shares) will be converted into the right to receive an amount in cash
equal to the Merger Price.
Plans for the Company.
It is expected that, initially following the Merger, the Company will
become part of Parent's newly formed regional carrier group and that the
business and operations of the Company will, except as set forth in this Offer
to Purchase, be continued by the Company substantially as they are currently
being conducted. Parent will continue to evaluate the business and operations of
the Company during the pendency, and following the consummation, of the Offer
and the Merger, and will take such actions as it deems appropriate under the
circumstances then existing. Parent intends to seek additional information about
the Company during this period. Thereafter, Parent intends to review such
information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing the
Company's potential in conjunction with Parent's business.
Except as described in this Offer to Purchase, Parent and the Purchaser
have no present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, consolidation, reorganization,
liquidation or sale or transfer of a material amount of assets, involving the
Company or any of its subsidiaries, or any material changes in the Company's
present capitalization, dividend policy, employee benefit plans, corporate
structure or business or any material changes or reductions in the composition
of its management or personnel.
SECTION 12. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
the Shares that are outstanding on a fully diluted basis (such basis assumes all
Shares underlying vested and unvested Options are issued and outstanding)
pursuant to the Offer and to consummate the Merger under the Merger Agreement,
to refinance indebtedness of the Company which may become payable as a result of
the Offer and the Merger and to pay fees and expenses related to the Offer and
the Merger will be approximately $220.0 million. The Purchaser estimates that
exercise of options issued and outstanding prior to the Merger will generate
approximately $10.3 million in additional funds (or will offset uses of funds by
a corresponding amount in the event of a cashless exercise of such options). The
Purchaser plans to obtain all funds needed for the Offer and the Merger from
Parent. Parent intends to obtain these funds by borrowing from an existing $300
million revolving credit facility (the "Revolving Facility") created under a
credit agreement by and among Parent, NationsBank, N.A., individually and as
documentation agent, the First Union National Bank of Chicago,
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individually, as issuer and as agent and the several lenders from time to time
parties thereto (as defined therein) dated as of September 24, 1997 (the "Credit
Agreement"), a copy of which has been filed with the Commission as an Exhibit to
the Schedule 14D-1 and is incorporated herein by reference. Parent may elect to
obtain a portion of such funds from an asset-backed securitization agreement
involving Parent's accounts receivable (the "Receivables Purchase Agreement"), a
copy of which has been filed with the Commission as an Exhibit to the Schedule
14D-1 and is incorporated herein by reference. Parent does not consider that
there are any conditions or restrictions that would limit it from obtaining
these funds under the Credit Agreement or the Receivables Purchase Agreement.
Such borrowings may be repaid by Parent from time to time, in whole or in part,
from internally generated funds or from the proceeds of other borrowings. The
Revolving Facility bears interest at a rate equal to a spread over a reference
rate chosen by Parent from various options and matures on September 24, 2001.
The Revolving Facility is unsecured. The Receivables Purchase Agreement, entered
into among Yellow Receivables Corporation ("YRC"), Falcon Asset Securitization
Corporation ("Falcon"), certain investors party thereto and The First National
Bank of Chicago ("First Chicago"), as agent for Falcon, is subject to a facility
limit of $150 million. The Receivables Purchase Agreement permits the sale of
accounts receivable to YRC, a wholly-owned, special purpose corporation of
Parent. YRC in turn sells an undivided interest to Falcon or the investors party
to such agreement in a revolving pool of eligible receivables as funding is
required. For receivable interests held by Falcon, YRC may select a discount
rate equal to, (i) with the concurrence of First Chicago, the CP Composite Rate
or a rate agreed to by Falcon equivalent to the rate commercial paper with
similar terms may be sold by any placement agent or commercial paper dealer
reasonably selected by Falcon plus any applicable issuing and paying agent fees
and commissions or (ii) the rate per annum equal to the corporate base rate,
prime rate or base rate of interest, as applicable, announced by First Chicago
changing when such rate changes (the "Base Rate"). For receivable interests held
by investors, YRC may select an applicable discount rate for receivables equal
to (i) the Base Rate or (ii) the rate per annum equal to the sum of (x) the rate
at which deposits in U.S dollars are offered by First Chicago to first-class
banks in the London interbank market on a certain date, divided by one minus the
applicable reserve requirement plus (y) .75%. The interests of Falcon and the
investors are secured by an interest in YRC's right, title and interest in the
receivables, payments on those receivables and the proceeds thereof and all
other rights relating to such receivables. The Receivables Purchase Agreement
terminates on August 1, 1999. The Offer is not conditioned upon obtaining
financing.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; EXCHANGE
ACT REGISTRATION;
MARGIN REGULATIONS
The Purchaser intends to seek to cause the Company to terminate the
registration of the Common Shares under the Exchange Act as soon after the
completion of the Offer as the requirements for such termination are met. If
registration of the Common Shares is not terminated prior to the Merger, the
registration of the Common Shares under the Exchange Act will be terminated
following the consummation of the Merger.
Market for the Common Shares. The purchase of Common Shares pursuant to
the Offer will reduce the number of holders of Common Shares and the number of
Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Common Shares held by the public.
Depending upon the aggregate market value and per share price of any Common
Shares not purchased pursuant to the Offer, the Common Shares may no longer meet
the standards of the National Association of Securities Dealers, Inc. (the
"NASD") for continued inclusion in the Nasdaq Stock Market, which require that
an issuer have at least 500,000 publicly held shares with a market value of
$1,000,000 held by at least 300 stockholders holding round lots and have net
tangible assets of at least $2,000,000, total market capitalization of at least
$35,000,000, and net income of at least $500,000 in the most recently completed
fiscal year or two of the three most recently completed fiscal years. If these
standards are not met, the Common Shares might nevertheless continue to be
included in the Nasdaq Stock Market with quotations published in the Nasdaq
"additional list," or in one of the "local lists." However, if the number of
round lot holders of Common Shares falls below 300, or if the number of publicly
held Common Shares falls below 100,000, or if there are not at least two market
makers for such Common Shares, NASD rules provide that the Common Shares would
no longer be "qualified" for Nasdaq Stock Market reporting, and the Nasdaq Stock
Market would cease to
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provide any quotations. Common Shares held directly or indirectly by an officer
or director of the Company, or by any beneficial owner of more than 10% of the
total Common Shares outstanding, ordinarily will not be considered publicly held
for this purpose. If, as a result of the purchase of Common Shares pursuant to
the Offer or otherwise, the Common Shares no longer meet the NASD requirements
for continued inclusion in any tier of the Nasdaq National Market or in any
other tier of the Nasdaq Stock Market, and the Common Shares are no longer
included in any tier of the Nasdaq Stock Market, the market for such Common
Shares could be adversely affected.
In the event the Common Shares no longer meet the requirements of the NASD
for inclusion in any tier of the Nasdaq Stock Market, quotations might still be
available from other sources. The extent of the public market for Common Shares
and availability of such quotations would, however, depend upon the number of
holders of Common Shares remaining at such time, the interest in maintaining a
market in the Common Shares on the part of securities firms, the possible
termination of registration under the Exchange Act, as described below, and
other factors.
Exchange Act Registration. The Common Shares are currently registered
under the Exchange Act. Registration of the Common Shares under the Exchange Act
may be terminated upon application of the Company to the Commission if the
Common Shares are neither listed on a national securities exchange nor held by
300 or more holders of record. Termination of registration of the Common Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to its Shareholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the Company,
such as the short-swing profit recovery provisions of Section 16(b) of the
Exchange Act, the requirement of furnishing a proxy statement pursuant to
Section 14(a) of the Exchange Act in connection with Shareholders' meetings and
the related requirement of furnishing an annual report to Shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, as amended, may be impaired or eliminated. The Purchaser intends to seek
to cause the Company to apply for termination of registration of the Common
Shares under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Common Shares is not terminated prior to the Merger,
then the Common Shares will be delisted from all stock exchanges and the
registration of the Common Shares under the Exchange Act will be terminated
following the consummation of the Merger.
Margin Regulations. The Common Shares are currently "margin securities"
under the regulations of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Shares.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Common Shares
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
SECTION 14. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that, prior to the Effective Time, without
the prior written consent of Parent, the Company will not (i) declare or pay any
dividend on its capital stock, (ii) except as explicitly permitted by the Merger
Agreement, issue, sell or pledge (or authorize or propose the issuance, sale or
pledge of) any additional shares of its capital stock or securities convertible
into or exercisable or exchangeable for shares of its capital stock or (iii)
purchase or otherwise acquire, or propose to purchase or otherwise acquire, any
outstanding Shares.
SECTION 15. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, in addition to (and not
in limitation of) the Purchaser's right to extend and amend the Offer at any
time in its sole discretion (subject to the terms of the
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Merger Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act, pay for, and may delay the acceptance for
payment of or, subject to the regulations referred to above, the payment for,
any tendered Shares, and may terminate or amend the Offer, if (i) there are not
validly tendered and not withdrawn prior to the expiration date for the Offer
(the "Expiration Date") that number of Shares which represent at least 51% of
the outstanding Common Shares on a fully diluted basis (including Common Shares
issuable upon conversion of Class A Common Shares) on the date of purchase (the
"Minimum Condition"), (ii) all of the outstanding Class A Common Shares are not
validly tendered and not withdrawn prior to the Expiration Date, (iii) any
applicable waiting periods under the HSR Act or any applicable foreign antitrust
statute shall not have expired or (iv) at any time on or after June 6, 1999 and
before the expiration of the Offer, any of the following events shall occur:
(a) any law, statute, rule, regulation or ordinance is enacted,
entered, enforced, promulgated or deemed applicable to the Offer or the
Merger, or any other action is taken by any Governmental Entity that would
reasonably be expected to, directly or indirectly, (i) make illegal or
otherwise directly or indirectly restrain or prohibit the acquisition by
Parent or the Purchaser of any Shares under the Offer or the making or
consummation of the Offer or the Merger, the performance by the Company of
any of its material obligations under the Merger Agreement or the
consummation of any purchase of Shares contemplated by the Merger Agreement
or the Tender and Voting Agreement, (ii) prohibit or limit the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
any portion of the business or assets of the Company or any Subsidiary or
of Parent or any of its subsidiaries or compels the Company or Parent to
dispose of or hold separate any portion of the business or assets of the
Company or any Subsidiary or of Parent or any of its subsidiaries as a
result of the Offer or the Merger, (iii) impose limitations on the ability
of Parent or the Purchaser to acquire or hold, or exercise full rights of
ownership of, any Shares accepted for payment pursuant to the Offer,
including, without limitation, the right to vote such Shares on all matters
properly presented to the shareholders of the Company or (iv) prohibit
Parent or any of its subsidiaries from effectively controlling any portion
of the business or operations of the Company or any Subsidiary; or
(b) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(c) any event shall have occurred or condition exist that has or could
reasonably be expected to have, a Material Adverse Effect on the Company
(as defined in the Merger Agreement); or
(d)(i) the Board of Directors of the Company or any committee thereof
withdraws or modifies in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approves or recommends any proposal for an Acquisition
Transaction with a Third Party or (ii) the Company enters into any
agreement to consummate any Acquisition Transaction with a Third Party; or
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are not qualified as to materiality are not
true and correct or the representations and warranties of the Company set
forth in the Merger Agreement that are qualified as to materiality would
not be true and correct, but for such qualification, and the events or
conditions giving rise to such representations and warranties not being
true and correct but for such qualification could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, in each case at the date of the Merger Agreement or at the
scheduled expiration of the Offer (as though made as of such date, except
that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date) which have
not been cured within the time period specified in Article VIII of the
Merger Agreement or the Purchaser shall have failed to receive a
certificate executed by the President or a Vice President of the Company,
dated as of the scheduled expiration date, to the effect that the
conditions set forth in this clause (e) have not occurred; or
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(f) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Merger Agreement, or the Purchaser shall have failed to receive a
certificate executed by the President or a Vice President of the Company,
dated as of the scheduled expiration of the Offer, that the conditions set
forth in this clause (f) have not occurred; or
(g) any shareholder party to any Tender and Voting Agreement shall
have breached or failed to perform in any material respect any of such
shareholder's obligations, covenants or agreements thereunder; or
(h) all Consents of Governmental Entities and other Persons (other
than lenders) listed in Section 4.05 of the Company Disclosure Statement
shall not have been obtained with no material adverse conditions attached
and no material expense imposed on the Company or any of its subsidiaries;
or
(i) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq Stock Market, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States (whether or not mandatory), (iii) a commencement of a
war, armed hostilities or other international or national calamity directly
or indirectly involving the United States, (iv) any limitation (whether or
not mandatory) by any United States governmental authority on the extension
of credit generally by banks or other financial institutions, or (v) a
change in general financial, bank or capital market conditions which
materially and adversely affects the ability of financial institutions in
the United States to extend credit or syndicate loans or (vi) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof.
The Merger Agreement provides that the foregoing conditions are for the
benefit of Parent and the Purchaser and may be asserted by Parent or the
Purchaser regardless of the circumstances giving rise to any such conditions and
may be waived by Parent or the Purchaser in whole or in part at any time and
from time to time in their sole discretion. The Merger Agreement provides that
the failure by Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
SECTION 16. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of
publicly available information filed by the Company with the Commission, neither
the Purchaser nor Parent is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Shares
by the Purchaser pursuant to the Offer or the Merger or (ii) any approval or
other action, by any governmental, administrative or regulatory agency or
authority, domestic, foreign or supranational, that would be required for the
acquisition or ownership of Shares by the Purchaser as contemplated herein.
Should any such approval or other action be required, the Purchaser currently
contemplates that such approval or action would be sought. While the Purchaser
does not currently intend to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or action, if needed, would be obtained or
would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, the Purchaser or Parent or that
certain parts of the businesses of the Company, the Purchaser or Parent might
not have to be disposed of in the event that such approvals were not obtained or
any other actions were not taken. The Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions. See
Sections 10 and 15.
United States Antitrust Approvals. Under the HSR Act, and the rules and
regulations that have been promulgated thereunder by the Federal Trade
Commission (the "FTC"), certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the FTC and certain waiting
period requirements have been satisfied. Parent intends to file a Notification
and Report Form with respect to the Offer and the Merger Agreement promptly.
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Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent. Parent intends to
make such filing on June 9, 1999. Accordingly, the waiting period with respect
to the Offer would expire at 11:59 p.m., New York City time, on June 25, 1999
unless Parent receives a request for additional information or documentary
material, or the Antitrust Division and the FTC terminate the waiting period
prior thereto. If, within such 15-day period, either the Antitrust Division or
the FTC requests additional information or material from Parent concerning the
Offer, the waiting period will be extended and would expire at 11:59 p.m., New
York City time, on the tenth calendar day after the date of substantial
compliance by Parent with such request. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the HSR Act.
Thereafter, such waiting period may be extended only by court order or with the
consent of Parent. The Purchaser will not accept for payment Shares tendered
pursuant to the Offer unless and until the waiting period requirements imposed
by the HSR Act with respect to the Offer have been satisfied. See Sections 10
and 15.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties and state attorneys general may also bring action under the
antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the acquisition
of Shares by the Purchaser will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer or other acquisition of
Shares by the Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result.
Other State Laws. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, Shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in Edgar v. MITE
Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the Indiana Control Share Acquisition Act was
constitutional. Such Act, by its terms, is applicable only to corporations that
have a substantial number of Shareholders in Indiana and are incorporated there.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer and has not complied with any such laws. Should
any person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
and the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be required
to file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer. In such case, the Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 15.
Other Antitrust Approvals. In connection with the acquisition of the
Shares pursuant to the Offer, the laws of certain foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval of, governmental authorities in such countries and jurisdictions.
The governments in such countries and jurisdictions might attempt to impose
additional conditions on the Company's operations conducted in such countries
and jurisdictions as a result of the acquisition of the Shares pursuant to the
Offer
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or the Merger. There can be no assurance that the Purchaser will be able to
cause the Company or its subsidiaries to satisfy or comply with such laws or
that compliance or non-compliance will not have adverse consequences for the
Company or any subsidiary after purchase of the Shares pursuant to the Offer or
the Merger.
SECTION 17. FEES AND EXPENSES
J.P. Morgan Securities Inc. is acting as Dealer Manager in connection with
the Offer and is providing certain financial advisory services to Purchaser and
Parent in connection with the Offer. Parent has paid J.P. Morgan Securities Inc.
an engagement fee of $300,000 and has agreed to pay an additional fee of $1.4
million upon consummation of the Offer. Parent has also agreed to reimburse J.P.
Morgan Securities Inc. for its expenses, including fees and expenses of its
counsel, and to indemnify J.P. Morgan Securities Inc. and certain related
persons against certain liabilities and expenses, including certain liabilities
and expenses under the federal securities laws.
ChaseMellon Shareholder Services L.L.C. has been retained by the Purchaser
as Information Agent in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interview and may request brokers, dealers and other nominee Shareholders to
forward material relating to the Offer to beneficial owners of Shares. The
Purchaser will pay the Information Agent reasonable and customary compensation
for all such services in addition to reimbursing the Information Agent for
reasonable out-of-pocket expenses in connection therewith. The Purchaser has
agreed to indemnify the Information Agent against certain liabilities and
expenses in connection with the Offer, including, without limitation, certain
liabilities under the federal securities laws.
ChaseMellon Shareholder Services L.L.C. has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
SECTION 18. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Neither the Purchaser nor Parent is
aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. To the
extent the Purchaser or Parent becomes aware of any state law that would limit
the class of offerees in the Offer, the Purchaser will amend the Offer and,
depending on the timing of such amendment, if any, will extend the Offer to
provide adequate dissemination of such information to such holders of Shares
prior to the expiration of the Offer. In any jurisdiction the securities, blue
sky or other laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on behalf of the Purchaser by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Parent not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Parent have filed with the Commission a Tender Offer
Statement on Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional
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information with respect to the Offer, and may file amendments thereto. Such
Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected
and copies may be obtained in the manner set forth in Section 7 with respect to
the Company (except that such material will not be available at the regional
Offices of the Commission).
JPF ACQUISITION CORP.
DATED: JUNE 9, 1999
31
<PAGE> 34
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
Parent. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director and executive officer of
Parent. Except as otherwise noted, the business address of each such person is
10990 Roe Avenue, P.O. Box 7563, Overland Park, Kansas 66211. Unless indicated,
each such person is a citizen of the United States and has held his or her
present position as set forth below for the past five years. Directors of Parent
are indicated by an asterisk.
<TABLE>
<CAPTION>
CITIZENSHIP, PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
- ---- ------------------------------------------------
<S> <C>
Klaus E. Agthe*.............................. Citizen of the United States and Germany.
Agthe Consult, Inc. Formerly director and North American Liaison for
P.O. Box 297 the VIAG Group, Munich, Germany (an
Old Greenwich, CT 06870 international holding company).
Cassandra C. Carr*........................... Senior Vice President, Human Resources SBC
SBC Communications, Inc. Communications, Inc., San Antonio, Texas
175 East Houston St. (Telecommunications) (since 1994). Formerly
Suite 1304 President, Texas Division (1993-1994).
San Antonio, Texas 78205
Howard M. Dean*.............................. Chairman and Chief Executive Officer (formerly
Dean Foods Company President and Chief Executive Officer) of Dean
3600 North River Road Foods Company, Franklin Park, IL (processor and
Franklin Park, IL 60131 distributor of food products); Director of Nalco
Chemical Company and Ball Corporation.
Ronald T. LeMay*............................. President, Director and Chief Operating Officer
Sprint Corporation of Sprint Corporation, Kansas City, MO
2330 Shawnee Mission Parkway (Telecommunications) (since October 1997).
Westwood, KS 66205 Formerly Chairman and Chief Executive Officer of
Waste Management, Inc. (July 1997 - October
1997); Director, President and Chief Operating
Officer of Sprint Corporation, Kansas City, MO
(1996-1997), Chief Executive Officer of the
Sprint Telecommunications Venture (1995-1996);
Vice Chairman of Sprint Corporation (March 1995-
February 1996); Director, President, and Chief
Operating Officer, Long Distance Division,
Sprint Corporation (October 1989 - March 1995);
Director of Imation Corporation and Ceridian
Corporation.
John C. McKelvey*............................ President and Chief Executive Officer of Midwest
Midwest Research Institute Research Institute, Kansas City, MO (scientific
425 Volker Boulevard Kansas City, MO and technical research).
64110
</TABLE>
S-1
<PAGE> 35
<TABLE>
<CAPTION>
CITIZENSHIP, PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
- ---- ------------------------------------------------
<S> <C>
A. Maurice Myers*............................ Chairman of Parent (since July, 1996). President
and Chief Executive Officer of Parent (since
March, 1996). Formerly President and Chief
Operating Officer America West Airlines, Inc.,
Phoenix, AZ (January 1994 - December 1995);
President and Chief Executive Officer of Aloha
Air Group, Inc., Honolulu, HI (August 1983 -
December 1993); Director of Hawaiian Electric
Industries, Inc.
William L. Trubeck*.......................... Senior Vice President-Finance and Chief
International Multifoods Corporation Financial Officer, President, Latin American
200 East Lake Street Wayzata, MN 55391 Operations, International MultiFoods, Inc.,
Minneapolis, MN (food distribution and
production) (since February 1997). Formerly
Senior Vice President-Finance and Chief
Financial Officer of SPX Corporation, Muskegon,
MI (November 1994 - October 1996); Senior Vice
President and Chief Financial Officer of
Honeywell, Inc., Minneapolis, MN (April 1993 -
October 1994).
William F. Martin, Jr........................ Senior Vice President -- Legal/Corporate
Secretary of Parent (since December 1993); Vice
President and Secretary of Parent (prior to
December 1993); Vice President and Secretary of
Yellow Freight System, Inc. (prior to May 1992).
H.A. Trucksess, III.......................... Senior Vice President -- Finance and Chief
Financial Officer of Parent (since June 1994)
and Treasurer of Parent (since December 1995);
Vice President and Chief Financial Officer of
Preston Corporation (prior to June 1994).
Carl W. Vogt*................................ Senior Partner, Fulbright & Jaworski, L.L.P.,
Fulbright & Jaworski, L.L.P. Washington, DC (since 1994). Formerly Chairman,
801 Pennsylvania Avenue N.W. Washington, National Transportation Safety Board,
DC 20004-2604 Washington, DC (1992-1994); Managing Partner,
Fulbright & Jaworski, L.L.P., Washington, DC
(prior to 1994).
Samuel A. Woodward........................... Senior Vice President -- Operations and Planning
of Parent (since July 1996); Senior Vice
President and Managing Officer of SH&E, a
management consulting business (prior to July
1996).
William D. Zollars*.......................... President of Yellow Freight System, Inc. the
Parent's principal operation subsidiary (since
September, 1995). Formerly Senior Vice
President, Ryder Integrated Logistics Inc.,
Miami, FL (1994-1996).
</TABLE>
S-2
<PAGE> 36
The Purchaser. The name and position with the Purchaser of each director
and executive officer of the Purchaser are set forth below. Except as otherwise
noted, the business address of each such person is 10990 Roe Avenue, P.O. Box
7563, Overland Park, Kansas 66207. Each such person is a citizen of the United
States. The present principal occupation or employment and five-year employment
history of Mr. Trucksess and Mr. Martin are set forth in this Schedule I above.
Mr. Berkowitz is, and has been for more than five years, the Assistant Treasurer
of Parent.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---- ---------------------------
<S> <C>
H.A. Trucksess, III......................................... Director, President
William F. Martin, Jr....................................... Director, Vice
President and
Secretary
Lawrence D. Berkowitz....................................... Director, Assistant
Secretary and
Treasurer
</TABLE>
S-3
<PAGE> 37
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each Shareholder of the
Company or such Shareholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department
</TABLE>
Facsimile Transmission: (201) 296-4293
Confirmation of Facsimile Transmission: (201) 296-4860
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and all other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
450 West 33rd Street -- 14th Floor
New York, NY 10001
(212) 273-8035 (Call Collect)
or
Call Toll Free: (800) 814-0304
The Dealer Manager for the Offer is:
J.P. MORGAN & CO.
60 Wall Street
New York, NY 10260
(212) 648-3509
or
Call Toll Free (877) 874-2781
<PAGE> 1
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER CLASS A COMMON SHARES
AND
TO TENDER COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED JUNE 9, 1999
BY
JPF ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Department Attn: Reorganization Department Ridgefield Park, NJ 07660
</TABLE>
Facsimile Transmission: (201) 296-4293
Confirmation of Facsimile Transmission: (201) 296-4860
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S). (PLEASE FILL IN, IF BLANK, EXACTLY AS
NAME(S) APPEAR ON SHARE CERTIFICATE(S)) SHARE CERTIFICATE(S) TENDERED (ATTACH ADDITIONAL LIST, IF NECESSARY)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES REPRESENTED
SHARE CERTIFICATE BY SHARE NUMBER OF SHARES
TYPE OF SHARES* NUMBER(S)** CERTIFICATE(S)** TENDERED***
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Total Class A Shares:
- --------------------------------------------------------------------------------------------------------------------------
Total Common Shares:
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Please indicate if Class A Common Shares or Common Shares are being
tendered.
** Need not be completed by shareholders delivering Shares by book-entry
transfer or in accordance with DTC's ATOP procedures for transfers.
*** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
- --------------------------------------------------------------------------------
<PAGE> 2
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at the Depositary Trust Company ("DTC" or the "Book-Entry
Transfer Facility") pursuant to the book-entry transfer procedure described in
Section 2 of the Offer to Purchase (as defined below). Holders who are
participants ("Participants") in DTC may execute their tender through the
Automated Tender Offer Program of DTC as set forth in Section 2 of the Offer to
Purchase.
Shareholders whose certificates evidencing Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other documents required hereby to the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis and who wish to tender their Shares must do so pursuant to the guaranteed
delivery procedure described in Section 2 of the Offer to Purchase. See
Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
Account Number:
------------------------------- Transaction Code Number:
-------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER
OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to JPF Acquisition Corp., a New Jersey
corporation (the "Purchaser") and a wholly owned subsidiary of Yellow
Corporation, a Delaware corporation ("Parent"), the above-described shares of
Class A Common Stock, no par value (the "Class A Common Shares"), and/or the
above-described shares of Common Stock, no par value (the "Common Shares" and,
together with Class A Common Shares, the "Shares"), of Jevic Transportation,
Inc., a New Jersey corporation (the "Company"), pursuant to Purchaser's offer to
purchase all outstanding Shares, at $14.00 per Share, net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of
wholly owned subsidiaries of Parent, the right to purchase all or any portion of
the Shares tendered pursuant to the Offer. Unless the context indicates
otherwise, as used herein, "Shares" shall mean Class A Common Shares together
with the Common Shares; and "Shareholders" shall mean holders of Shares.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby and all dividends, distributions (including,
without limitation, distributions of additional Shares) and rights declared,
paid or distributed in respect of such Shares on or after June 6, 1999
(collectively, "Distributions"), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates evidencing such Shares and all Distributions,
or transfer ownership of such Shares and all Distributions on the account books
maintained by the Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
the Purchaser, (ii) present such Shares and all Distributions for transfer on
the books of the Company and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints H.A. Trucksess, III, William F. Martin, Jr. and Lawrence D. Berkowitz
as proxies of the undersigned, each with full power of substitution, to the full
extent of the undersigned's rights with respect to the Shares tendered by the
undersigned and accepted for payment by the Purchaser (and any and all
Distributions). All such proxies shall be considered coupled with an interest in
the tendered Shares. This appointment will be effective if, when, and only to
the extent that, the Purchaser accepts such Shares for payment pursuant to the
Offer. Upon such acceptance for payment, all prior proxies given by the
undersigned with respect to such Shares (and such other Shares and securities)
will, without further action, be revoked, and no subsequent proxies may be given
nor any subsequent written consent executed by the undersigned (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of the Purchaser named above will, with respect to the Shares and
other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of the undersigned as they in their sole
discretion may deem proper at any annual or special meeting of the shareholders
of the Company or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise, and the Purchaser reserves the right to
require that, in order for Shares or other securities to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting rights with respect
to such Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares
3
<PAGE> 4
are accepted for payment by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and that none of
such Shares and Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of the Purchaser all Distributions in respect of
the Shares tendered hereby, accompanied by appropriate documentation of
transfer, and, pending such remittance and transfer or appropriate assurance
thereof, the Purchaser shall be entitled to all rights and privileges as owner
of each such Distribution and may withhold the entire purchase price of the
Shares tendered hereby or deduct from such purchase price, the amount or value
of such Distribution as determined by the Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as otherwise stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer, including,
without limitation, the undersigned's representation and warranty that the
undersigned owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered holder(s) thereof if the Purchaser does not
purchase any of the Shares tendered hereby.
4
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not purchased
are to be issued in the name of someone other than the undersigned.
Issue: [ ] Check [ ] Share Certificate(s) to:
Name:
------------------------------------------------
(PRINT)
Address:
---------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
(ZIP CODE)
- -----------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9) ON REVERSE SIDE
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not purchased
are to be mailed to someone other than the undersigned, or to the undersigned at
an address other than that shown under "Description of Shares Tendered."
Mail: [ ] Check [ ] Share Certificate(s) to:
Name:
------------------------------------------------
(PRINT)
Address:
---------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
(ZIP CODE)
5
<PAGE> 6
IMPORTANT
SHAREHOLDERS: SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
SIGNATURE(S) OF SHAREHOLDER(S)
Dated:
- ------------------------------, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustee, executor, administrator, guardian, attorney-
in-fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information. See
Instruction 5 hereof.)
Name(s):
------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone No.:
----------------------------------------------------
Tax Identification or Social Security No.:
--------------------------------------
(SUBSTITUTE FORM W-9 INCLUDED HEREIN)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5 HEREOF)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN THE SPACE BELOW
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or by a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
"Eligible Institution"), unless (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered hereby
and such holder has (have) completed neither the box entitled "Special Payment
Instructions" nor the box entitled "Special Delivery Instructions" on the
reverse hereof or (ii) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter
of Transmittal is to be used if Share Certificates are to be forwarded herewith,
if Shares are to be delivered by book-entry transfers pursuant to the procedure
set forth in Section 2 of the Offer to Purchase, or if Shares are to be
delivered through DTC's Automated Tender Offer Program. Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility of
all Shares delivered by book-entry transfer, together in each case with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or an Agent's Message in connection with a book-entry transfer or
tender pursuant to ATOP procedures, and any other documents required by this
Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Share Certificates are not immediately available, who cannot
deliver their Share Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Shares
pursuant to the guaranteed delivery procedure described in Section 2 of the
Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by
or through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by the
Purchaser, must be received by the Depositary prior to the Expiration Date; and
(iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other documents required by this Letter of Transmittal,
must be received by the Depositary within three New York Stock Exchange, Inc.
("NYSE") trading days after the date of execution of such Notice of Guaranteed
Delivery, all as described in Section 2 of the Offer to Purchase.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program ("ATOP"), to the extent it is available to such
participants for the Shares they wish to tender. A shareholder tendering through
the ATOP must expressly acknowledge that the shareholder has received and agreed
to be bound by the Letter of Transmittal and that the Letter of Transmittal may
be enforced against such shareholder.
If the tender is not made through ATOP, Share Certificates, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
its address set forth herein on or prior to the Expiration Date to be effective.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
7
<PAGE> 8
SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD
BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the type of Shares, the Share Certificate
numbers, the number of Shares evidenced by such Share Certificates and the
number of Shares tendered should be listed on a separate schedule and attached
hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the expiration
or termination of the Offer. All Shares evidenced by Share Certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity for the registered holder, such person should so indicate when signing,
and proper evidence satisfactory to the Purchaser of such person's authority so
to act must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the
8
<PAGE> 9
registered holder(s), the amount of any stock transfer taxes (whether imposed on
the registered holder(s), such other person or otherwise) payable on account of
the transfer to such other person will be deducted from the purchase price of
such Shares purchased, unless evidence satisfactory to the Purchaser of the
payment of such taxes, or exemption therefrom, is submitted. Except as provided
in this Instruction 6, it will not be necessary for transfer tax stamps to be
affixed to the Share Certificates evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information Agent
or from brokers, dealers, commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering Shareholder has been notified by the Internal Revenue Service that
such Shareholder is subject to back-up withholding, such Shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
Shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such shareholder. If the tendering Shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such Shareholder should write "Applied For" in the space provided
for the TIN in Part III of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part III and the Depositary
is not provided with a TIN within 60 days, the Depositary will withhold 31% on
all payments of the purchase price to such shareholder until a TIN is provided
to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN THE OFFER TO PURCHASE).
9
<PAGE> 10
IMPORTANT TAX INFORMATION
Under the federal income tax law, a Shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payor)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
Shareholder is an individual, the TIN is such Shareholder's social security
number. If the Depositary is not provided with the correct TIN, the Shareholder
may be subject to penalties imposed by the Internal Revenue Service. In
addition, payments that are made to such Shareholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%.
Certain Shareholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the Shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Shareholder
with respect to Shares purchased pursuant to the Offer, the Shareholder is
required to notify the Depositary of such Shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such Shareholder has not been notified by the Internal Revenue Service that
such Shareholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such Shareholder that such shareholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering Shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the Shareholder should write "Applied For" in the space provided for the
TIN in Part III, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part III and the Depositary is not provided with a TIN within 60
days, the Depositary will withhold 31% of all payments of the purchase price to
such Shareholder until a TIN is provided to the Depositary.
10
<PAGE> 11
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
PAYOR: CHASEMELLON SHAREHOLDER SERVICES L.L.C.
- -------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification PART III -- Social
FORM W-9 Number -- For all accounts, enter Security Number or
taxpayer identification number in Employee ID Number
the box at right. (For most --------------------------------
individuals, this is your social (If awaiting TIN write
security number. If you do not "Applied For")
have a number, see Obtaining a
Number in the enclosed
Guidelines.) Certify by signing
and dating below. Note: If the
account is in more than one name,
see the chart in the enclosed
Guidelines to determine which
number to give the payor.
---------------------------------------------------------------------
DEPARTMENT OF THE TREASURY INTERNAL PART II -- For Payees exempt from backup withholding, see the
REVENUE SERVICE enclosed Guidelines and complete as instructed therein.
PAYOR'S REQUEST FOR TAXPAYER ---------------------------------------------------------------------
IDENTIFICATION NUMBER ("TIN") CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued
to me); and
(2) I am not subject to backup withholding either because I am
exempt from backup withholding, or I have not been notified by
the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of a failure to report all
interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
- -------------------------------------------------------------------------------------------------------------
Certificate Instructions -- You must cross out item (2) above if you have been notified by the IRS that
you are currently subject to backup withholding because of underreporting interest or dividends on your
tax return. However, if after being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to backup withholding, do not
cross out such item (2). (Also see instructions in the enclosed Guidelines.)
- -------------------------------------------------------------------------------------------------------------
Signature
-----------------------------------------------------------------------------------------------------------
Date
-----------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
11
<PAGE> 12
The Information Agent for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
450 West 33rd Street -- 14th Floor
New York, NY 10001
(212) 273-8035 (Call Collect)
or
Call Toll Free: (800) 814-0304
The Dealer Manager for the Offer is:
J.P. MORGAN & CO.
60 Wall Street
New York, NY 10260
(212) 648-3509
or
Call Toll-Free (877) 874-2781
JUNE 9, 1999
<PAGE> 1
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF CLASS A COMMON SHARES
AND
TENDER OF COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
TO
JPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i) certificates
(the "Share Certificates") evidencing Class A Common Stock, no par value (the
"Class A Common Shares"), and Common Stock, no par value (the "Common Shares"
and, together with Class A Common Shares, the "Shares") of Jevic Transportation,
Inc., a New Jersey corporation (the "Company"), are not immediately available,
(ii) time will not permit all required documents to reach ChaseMellon
Shareholder Services L.L.C., as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined
below)) or (iii) the procedure for book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary. See
Section 2 of the Offer to Purchase. Unless the context indicates otherwise, as
used herein, "Shares" shall mean Class A Common Shares together with the Common
Shares; and "Shareholder" shall mean holders of Shares.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department
</TABLE>
Facsimile Transmission: (201) 296-4293
Confirmation of Facsimile Transmission: (201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
LADIES AND GENTLEMEN:
The undersigned hereby tenders to JPF Acquisition Corp., a New Jersey
corporation (the "Purchaser") and a wholly owned subsidiary of Yellow
Corporation, a Delaware corporation ("Parent"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer"), receipt of each of which is
hereby acknowledged, the number of Shares specified below pursuant to the
guaranteed delivery procedures described in Section 2 of the Offer to Purchase.
Number of Shares (specify type (Class A Common
Shares and/or Common Shares) and number):
- ------------------------------------------------------
- ------------------------------------------------------
Certificate Nos. (if available):
- ------------------------------------------------------
[ ] Check box if Shares will be tendered by book-entry transfer through DTC's
ATOP:
Account Number:
----------------------------------
Name(s) of Record Holder(s):
- ------------------------------------------------------
- ------------------------------------------------------
Please Print
Address(es):
---------------------------------------
- ------------------------------------------------------
Zip Code
Area Code and Tel. No.:
--------------------------
Signature(s):
---------------------------------------
- ------------------------------------------------------
Dated:
------------------------, 1999
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
hereby guarantees delivery to the Depositary, at one of its addresses set forth
above, of Share Certificates evidencing the Shares tendered hereby in proper
form for transfer, or confirmation of book-entry transfer of such Shares into
the Depositary's account at The Depository Trust Company (pursuant to the
procedures for book-entry transfer, set forth in Section 2 of the Offer to
Purchase), in each case with delivery of a properly completed and duly executed
Letter of Transmittal (or a facsimile thereto) with any required signature
guarantees, or an Agent's Message (as defined in Section 2 of the Offer to
Purchase), and any other documents required by the Letter of Transmittal, within
three New York Stock Exchange, Inc. trading days after the date of execution of
this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in financial loss to such Eligible Institution.
- ------------------------------------------------------
Name of Firm
- ------------------------------------------------------
Address
- ------------------------------------------------------
Zip Code
Area Code and Tel. No.
---------------------------
- ------------------------------------------------------
Authorized Signature
- ------------------------------------------------------
Title
Name:
----------------------------------------------
Please Print
Date: , 1999
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
EXHIBIT (A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CLASS A COMMON SHARES
AND
ALL OUTSTANDING COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
AT
$14.00 NET PER CLASS A COMMON SHARE
AND
$14.00 NET PER COMMON SHARE
BY
JPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999,
UNLESS THE OFFER IS EXTENDED.
June 9, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by JPF Acquisition Corp., a New Jersey corporation
(the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a
Delaware corporation ("Parent"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding shares of Class A Common Stock, no
par value (the "Class A Common Shares"), and all outstanding shares of Common
Stock, no par value (the "Common Shares"), of Jevic Transportation, Inc., a New
Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer") enclosed herewith. Unless the
context indicates otherwise, as used herein, "Shares" shall mean Class A Common
Shares together with Common Shares; and "Shareholders" shall mean holders of
Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS AND HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT
AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
<PAGE> 2
Also enclosed is the letter to Shareholders of the Company from the
Chairman of the Board and Chief Executive Officer of the Company accompanied by
the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase, dated June 9, 1999;
2. The Company's Solicitation/Recommendation Statement on Schedule
14D-9;
3. The Letter of Transmittal to be used by holders of Shares in
accepting the Offer and tendering Shares;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the certificates evidencing such Shares (the "Share Certificates") are not
immediately available or time will not permit all required documents to
reach the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed by the Expiration Date;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominees, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withheld; and
7. A return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase, by accepting for payment, and will
pay for the Shares validly tendered prior to the Expiration Date promptly after
the Expiration Date. For purposes of the Offer, the Purchaser will be deemed to
have accepted for payment, and thereby purchased, tendered Shares as, if and
when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, payment for Shares purchased pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) the Share Certificates, timely
confirmation of a book-entry transfer of such Shares, if such procedure is
available, into the Depositary's account at The Depository Trust Company ("DTC")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase, or
confirmation of surrender of Shares through DTC's Automated Tender Offer Program
("ATOP"), (ii) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or an
Agent's Message (as defined in Section 2 of the Offer to Purchase), in the case
of a book-entry transfer or tender pursuant to ATOP procedures and (iii) any
other documents required by the Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Information Agent and
the Depositary as described in Section 17 of the Offer to Purchase) in
connection with the solicitation of tenders of Shares pursuant to the Offer. The
Purchaser will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding the enclosed materials to your
clients.
The Purchaser will pay any stock transfer taxes incident to the transfer to
it of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
2
<PAGE> 3
12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999 UNLESS THE OFFER
IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer or in accordance with
DTC's ATOP procedures, all in accordance with the Instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer or ATOP on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified under Section 2 of the
Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
ChaseMellon Shareholder Services L.L.C., the Information Agent, or J.P. Morgan
Securities Inc., the Dealer Manager, at their respective addresses and telephone
numbers set forth on the back cover page of the offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling
ChaseMellon Shareholder Services L.L.C., the Information Agent, collect at (212)
273-8035 or toll-free at (800) 814-0304, or from brokers, dealers, commercial
banks or trust companies.
Very truly yours,
J.P. Morgan Securities Inc.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE DEPOSITARY,
THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
EXHIBIT (A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CLASS A COMMON SHARES
AND
ALL OUTSTANDING COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
AT
$14.00 NET PER CLASS A COMMON SHARE
AND
$14.00 NET PER COMMON SHARE
BY
JPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME ON WEDNESDAY, JULY 7, 1999,
UNLESS THE OFFER IS EXTENDED.
June 9, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated June 9,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection with
the Offer by JPF Acquisition Corp., a New Jersey corporation (the "Purchaser")
and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation
("Parent"), to purchase all outstanding shares of Class A Common Stock, no par
value (the "Class A Common Shares"), and all outstanding shares of Common Stock,
no par value (the "Common Shares", of Jevic Transportation, Inc., a New Jersey
corporation (the "Company"), at a price of $14.00 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase. Unless the context indicates otherwise,
"Shares" shall mean the Class A Common Shares together with Common Shares; and
"Shareholders" shall mean holders of Shares. Also enclosed is the letter to
shareholders of the Company from the Chairman of the Board and Chief Executive
Officer of the Company accompanied by the Company's Solicitation/Recommendation
Statement on Schedule 14D-9.
Shareholders whose certificates evidencing Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other documents required by the Letter of Transmittal to
the Depositary prior to the Expiration Date (as defined in the Offer to
Purchase) or who cannot complete the procedure for delivery by book-entry
transfer to the Depositary's account at the Book-Entry Transfer Facility (as
defined in Section 2 of the Offer to Purchase) on a timely basis and who wish to
tender
<PAGE> 2
their Shares must do so pursuant to the guaranteed delivery procedure described
in Section 2 of the Offer to Purchase. See Instruction 2 of the Letter of
Transmittal. Delivery of documents to the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD
BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
LETTER OF TRANSMITTAL IS BEING FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND
CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account upon the terms and
subject to the conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The tender price is $14.00 per Share, net to you in cash, without
interest thereon.
2. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Wednesday, July 7, 1999, unless the Offer is extended.
3. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of June 6, 1999 (the "Merger Agreement"), by and among
Parent, the Purchaser and the Company. The Merger Agreement provides that,
among other things, following the consummation of the Offer and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement, the Purchaser will be merged with and into the Company (the
"Merger"). At the effective time of the Merger, each outstanding Share
(other than Shares held in the treasury of the Company, owned by Parent,
the Purchaser or any wholly owned subsidiary of Parent or the Company) will
be converted into the right to receive the per Share price paid in the
Offer, without interest.
4. The Board of Directors of the Company has unanimously determined
that the Offer and the Merger are fair to and in the best interests of the
Company and its Shareholders and has unanimously approved the Offer and the
Merger Agreement and unanimously recommends that the Company's Shareholders
accept the Offer and tender their Shares pursuant to the Offer.
5. The Offer is being made for all outstanding Shares.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto and is being made to all
holders of Shares. The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. Neither the Purchaser
nor Parent is aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or Parent becomes aware of any state
law that would limit the class of offerees in the Offer, the Purchaser will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to such
holders of Shares prior to the expiration of the Offer. In any jurisdiction the
securities, blue sky or other laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser by
J.P. Morgan Securities Inc. or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to
2
<PAGE> 3
us is enclosed. If you authorize the tender of your Shares, all such Shares will
be tendered unless otherwise specified on the instruction form contained in this
letter. Your instructions should be forwarded to us in ample time to permit us
to submit a tender on your behalf prior to the expiration of the Offer.
If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
3
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CLASS A COMMON SHARES
AND
ALL OUTSTANDING COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated June 9, 1999, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the Offer by the Purchaser and to purchase all outstanding
Shares at $14.00 per Share, net to the seller in cash without interest thereon.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer and the related Letter of Transmittal.
Number and Type (Class A Common Shares and/or Common Shares) of Shares to
be Tendered*: ----------
------------------------------------------------------------------------------
SIGN HERE
Account Number: -------------------- Signature(s) --------------------
Dated: -------------------- , 1999
------------------------------------------------------------------------------
Please type or print name(s)
------------------------------------------------------------------------------
Please type or print address(es) here
------------------------------------------------------------------------------
Area Code and Telephone Number
------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number(s)
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
4
<PAGE> 1
EXHIBIT (A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer:
------------------------------------------------------------------
<TABLE>
<S> <C> <C>
GIVE THE SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ---------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the ac-
account) count or, if combined funds,
the first individual on the
account(2)
3. Husband and wife (joint account) The actual owner of the ac-
count or, if joint funds,
either person(2)
4. Custodian account of a minor The minor(3)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor
is the only contributor, the
minor(2)
6. Account in the name of guardian The ward, minor, or incompe-
or committee for a designated tent person(4)
ward, minor, or incompetent
person
7. a. The usual revocable savings The grantor-trustee(2)
trust account (grantor is also
trustee)
b. So-called trust account that The actual owner(2)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(5)
- ---------------------------------------------------------------------
GIVE THE EMPLOYER IDEN-
FOR THIS TYPE OF ACCOUNT: TIFICATION NUMBER OF --
- ---------------------------------------------------------------------
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title.)(1)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district, or prison) that
receives agricultural program
payments
</TABLE>
------------------------------------------------------------------
(1) List first and circle the name of the legal trust, estate or pension trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for a Social Security Number Card or Form SS-4,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEE EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - An organization exempt from tax under section 501(a) or an individual
retirement account.
- - The United States or any wholly owned agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States or any
political subdivision of any of the foregoing, or any wholly owned agency or
instrumentality of any one or more of the foregoing.
- - A foreign government, a political subdivision of a foreign government, or any
wholly owned agency or instrumentality of any one or more of the foregoing (as
defined in section 7701(a)(18)).
Other payees that may be exempt from backup withholding on certain payments
include the following:
- - A corporation.
- - A financial institution.
- - A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - A trust exempt from tax under section 664 or described in section 4947.
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A foreign central bank of issue.
- - A middleman known in the investment community as a nominee or who is listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
Payment of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- - Payments or patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
Exempt payees described above should file Substitution Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM AND
RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividends, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT (A)(7)
June 7, 1999
FOR IMMEDIATE RELEASE
YELLOW CORPORATION MAKES TENDER OFFER
TO ACQUIRE JEVIC TRANSPORTATION, INC.
OVERLAND PARK, KAN. -- Yellow Corporation (NASDAQ: YELL) and Jevic
Transportation, Inc. (NASDAQ: JEVC) today announced that the Jevic Board of
Directors has recommended that its shareholders accept a tender offer by Yellow
to acquire all 11.5 million shares of Jevic at $14 per share. If the tender is
successful, Jevic will become part of Yellow Corp.'s newly formed regional
transportation services holding company. The new carrier group would become one
of the nation's largest regional LTL transportation companies.
The value of the tender offer, including debt assumption, is approximately
$200 million and is also subject to regulatory approval. The transaction is to
be financed through existing debt facilities and could be completed early in the
third quarter of 1999.
Jevic is a fully-integrated regional and inter-regional less-than-truckload
and truckload carrier. In 1998, Jevic reported revenue of $226.1 million and
operating income of $16.7 million, for an operating ratio of 92.6. Net income
was $9.3 million, up from $7.8 million in the prior year. In the first quarter
of 1999, Jevic reported revenue of $65.8 million, an increase of 19.9 percent
over revenue in the 1998 first quarter. First quarter 1999 operating income was
$4.9 million, up 29.3 percent from the prior year period. The first quarter 1999
operating ratio was 92.5.
"As one of the premier transportation services companies in our industry
today, Jevic is an excellent fit with Yellow Corporation's regional
transportation strategy," said A. Maurice Myers, chairman, president and CEO of
Yellow Corporation. "Jevic has established itself as one of the best performing
carriers in our rapidly consolidating industry. They have grown quickly and have
maintained excellent profitability."
With the addition of Jevic, Yellow Corporation annual revenue from its
regional carrier group will approach $800 million. "With this critical mass, it
is obvious that our regional carrier group demands its own management and
structure to best serve the fast growing regional market sector. A search is
currently underway internally and externally for a President for this new
holding company."
The acquisition of Jevic would give Yellow's regional carrier group
significant additional regional service coverage in the Northeast and Upper
Midwest. Other regional Yellow Corporation companies include Saia, an LTL
carrier serving the Southeast, WestEx, serving California and the Southwest, and
Action Express, serving the Pacific Northwest and Rocky Mountain States.
It is Yellow Corporation's intent to operate Jevic as a separate,
stand-alone company within the regional carrier holding company. No reductions
in the current Jevic workforce are expected to result from the acquisition.
Jevic employs approximately 2,300 people, including 1,200 drivers.
Jevic founder Harry Muhlschlegel will remain as Chief Executive Officer and
current President and Chief Operating Officer Paul Karvois will continue, after
closing, along with all members of his current management team.
"Yellow Corporation's newly formed regional transportation group is very
exciting," said Muhlschlegel, who with his wife Karen founded Jevic in 1982.
"This is the next logical step for us. We have proven that our business
philosophy and operating model works in today's market. We've kept our focus on
our people first, especially our drivers, because they are the ones who deliver
the service our customers expect. Of most importance to our employees and our
customers, this transaction will have no impact on day-to-day operations and
have a very positive impact long-term on our ability to keep growing and
providing the service our customers demand."
<PAGE> 2
Jevic operates a unique hybrid less-than-truckload and truckload network
that de-emphasizes the need for large breakbulk facilities where freight often
is re-handled. Origin terminals build loads that are sequenced within the
trailers for easy delivery by the driver along a flexible route. The operating
model has significantly reduced cost-per-shipment and claims while increasing
revenue per ton and maintaining high on-time reliability.
Jevic's regional facilities are located in the metropolitan areas of
Atlanta, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Houston and
Philadelphia. Its headquarters are in Delanco, New Jersey, in the Philadelphia
metropolitan area.
Yellow Corporation is a holding company with operating subsidiaries
specializing in national regional and international less-than-truckload
transportation services. Headquartered in Overland Park, Kansas, Yellow employs
approximately 29,700 people.
Statements contained in this release that are not purely historical are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding the company's
expectations, hopes, beliefs and intentions on strategies regarding the future.
It is important to note that the company's actual future results could differ
materially from those projected in such forward-looking statements because of a
number of factors, including but not limited to inflation, labor relations,
inclement weather, competitor pricing activity, expense volatility and a
downturn in general economic activity.
<TABLE>
<S> <C>
Analyst Contact: H.A. (Bert) Trucksess III
913-696-6105
Media Contact: Roger Dick
913-696-6184
</TABLE>
<PAGE> 1
EXHIBIT (A)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer is made solely by the Offer
to Purchase dated June 9, 1999 and the related Letter of Transmittal. The Offer
is not being made to (nor will tenders be accepted from or on behalf of) holders
of Shares in any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the securities, blue sky or other laws
of such jurisdiction. However, the Purchaser may, in its discretion, take such
action as it may deem necessary to make the Offer in any jurisdiction and extend
the Offer to holders of Shares in such jurisdiction. In those jurisdictions
where securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by J.P. Morgan Securities Inc. (the "Dealer Manager") or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CLASS A COMMON SHARES
AND
ALL OUTSTANDING COMMON SHARES
OF
JEVIC TRANSPORTATION, INC.
AT
$14.00 NET PER CLASS A COMMON SHARE
AND
$14.00 NET PER COMMON SHARE
BY
JPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
YELLOW CORPORATION
JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a
wholly owned subsidiary of Yellow Corporation, a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of Class A Common
Stock, no par value (the "Class A Common Shares"), and all outstanding shares of
Common Stock, no par value (the "Common Shares"), of Jevic Transportation, Inc.,
a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context indicates
otherwise, as used herein, "Shares" shall mean the Class A Common Shares
together with Common Shares; and "Shareholders" shall mean holders of Shares.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999,
UNLESS THE OFFER IS EXTENDED.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST 51% OF COMMON SHARES
OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) THERE BEING
VALIDLY TENDERED ALL OF THE OUTSTANDING CLASS A COMMON SHARES ON THE DATE OF
PURCHASE AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING
PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, AND THE REGULATIONS THEREUNDER, AND CERTAIN OTHER APPLICABLE ANTITRUST
STATUTES. THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION. SEE SECTION 15 OF
THE OFFER TO PURCHASE.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of June 6, 1999, among the Company, Parent and the
Purchaser, pursuant to which, after the completion of the Offer, the Purchaser
will be merged with and into the Company (the "Merger") and each issued and
outstanding Share (other than Shares owned by Parent, the Purchaser or any other
subsidiary of Parent) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive, without
interest, an amount in cash equal to the Share price paid pursuant to the Offer.
Concurrently with the execution of the Merger Agreement, Parent, the
Purchaser and each holder of Class A Common Shares entered into a Tender and
Voting Agreement (the "Tender and Voting Agreement") pursuant to which, subject
to the terms and conditions of the Tender and Voting Agreement, the Class A
Common Share holders have agreed to tender (and not withdraw) 5,701,794 Class A
Common Shares in the aggregate in the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS AND HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT
AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
The purpose of the Offer is to enable Parent to acquire control of, and the
entire equity interest in, the Company.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary (as
defined in the Offer to Purchase) of the Purchaser's acceptance for payment of
such Shares. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
validly tendering shareholders for the purpose of receiving payments from the
Purchaser and transmitting such payments to validly tendering shareholders.
Under no circumstances will interest on the purchase price for Shares be paid by
the Purchaser, regardless of any extension of the Offer or delay in making such
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing such Shares (the "Share Certificates") or
timely confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in Section 2 of the
Offer to Purchase) pursuant to the procedures set forth in Section 2 of the
Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined in Section
2 of the Offer to Purchase), and (iii) any other documents required by the
Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend for any reason the period of time during
which the Offer is open, including the occurrence of any condition specified in
Section 15 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. During any such extension, all Shares previously
tendered and not withdrawn will remain
2
<PAGE> 3
subject to the Offer, subject to the rights of a tendering shareholder to
withdraw his Shares. Any such extension will be followed as promptly as
practicable by public announcement thereof, such announcement to be made no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date of the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 12:00 midnight, New York City
time, on Wednesday, July 7, 1999 (or, if the Purchaser shall have extended the
period of time for which the Offer is open, the latest time and date at which
the Offer, as so extended by the Purchaser, shall expire) and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after August 8, 1999. For a withdrawal to be
effective, a written, telegraphic or facsimile transmission notice of withdrawal
must be timely received by the Depositary at its address set forth on the back
cover of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 2 of the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility procedures. All questions
as to the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Purchaser, in its sole discretion, whose determination
will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference. The Offer to Purchase and the related Letter of Transmittal and, if
required, other relevant materials will be mailed to record holders of Shares
whose names appear on the Company's shareholder list and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the shareholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares by
the Purchaser.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
3
<PAGE> 4
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses and telephone numbers as
set forth below. The Purchaser will not pay any fees or commissions to any
broker or dealer or to any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
Additional copies of the Offer to Purchase, the Letter of Transmittal and all
other tender offer materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies, and will be furnished
promptly at the Purchaser's expense.
The Information Agent for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
450 West 33rd Street -- 14th Floor
New York, NY 10001
(212) 273-8035 (Call Collect)
or
Call Toll Free: (800) 814-0304
The Dealer Manager for the Offer is:
J.P. MORGAN & CO.
60 Wall Street
New York, NY 10260
(212) 648-3509
or
Call Toll-Free (877) 874-2781
June 9, 1999
4
<PAGE> 1
EXHIBIT (B)(1)
REVOLVING CREDIT AGREEMENT
DATED AS OF SEPTEMBER 24, 1997
AMONG
YELLOW CORPORATION
NATIONSBANK, N.A.,
INDIVIDUALLY AND AS DOCUMENTATION AGENT
THE FIRST NATIONAL BANK OF CHICAGO,
INDIVIDUALLY, AS ISSUER AND AS AGENT
AND
THE LENDERS LISTED HEREIN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I. DEFINITIONS............................................... 1
ARTICLE II. THE FACILITY............................................. 12
2.1. The Facility................................................ 12
2.1.1. Description of Facility..................................... 12
2.1.2. Facility Amount............................................. 12
2.1.3. Availability of Facility.................................... 12
2.2. Ratable Advances............................................ 12
2.2.1. Ratable Advances............................................ 12
2.2.2. Ratable Advance Rate Options................................ 13
2.2.3. Method of Selecting Rate Options and Interest Periods for
Ratable Advances............................................ 13
2.3. Competitive Bid Advances.................................... 13
2.3.1. Competitive Bid Option...................................... 13
2.3.2. Competitive Bid Quote Request............................... 13
2.3.3. Invitation for Competitive Bid Quotes....................... 14
2.3.4. Submission and Contents of Competitive Bid Quotes........... 14
2.3.5. Notice to Borrower.......................................... 15
2.3.6. Acceptance and Notice by Borrower........................... 15
2.3.7. Allocation by Agent......................................... 15
2.3.8. Competitive Bid Auction Fees................................ 15
2.4. Facility Letters of Credit.................................. 16
2.4.1. Obligation to Issue......................................... 16
2.4.2. Conditions for Issuance..................................... 16
2.4.3. Procedure for Issuance of Facility Letters of Credit........ 16
2.4.4. Reimbursement Obligations................................... 17
2.4.5. Participation............................................... 17
2.4.6. Compensation for Facility Letters of Credit................. 18
2.4.7. Letter of Credit Collateral Account......................... 18
2.4.8. Nature of Obligations....................................... 18
2.5. Fees........................................................ 19
2.5.1. Agent's Fees................................................ 19
2.5.2. Facility Fee................................................ 19
2.5.3. Utilization Fee............................................. 19
2.6. General Facility Terms...................................... 19
2.6.1. Method of Borrowing......................................... 19
2.6.2. Minimum Amount of Each Advance.............................. 20
2.6.3. Payment on Last Day of Interest Period...................... 20
2.6.4. Optional Principal Payments................................. 20
2.6.5. Interest Periods............................................ 20
2.6.6. Default Rate................................................ 20
2.6.7. Interest Payment Dates; Interest Basis...................... 20
2.6.8. Method of Payment........................................... 20
2.6.9. Notes; Telephonic Notices................................... 21
2.6.10. Notification of Advances, Interest Rates and Prepayments.... 21
2.6.11. Non-Receipt of Funds by the Agent........................... 21
2.6.12. Cancellation................................................ 21
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2.6.13. Lending Installations....................................... 21
2.6.14. Withholding Tax Exemption................................... 22
2.6.15. Application of Payments with Respect to Defaulting
Lenders..................................................... 22
ARTICLE III. CHANGE IN CIRCUMSTANCES................................. 23
3.1. Yield Protection............................................ 23
3.2. Changes in Capital Adequacy Regulations..................... 23
3.3. Availability of Rate Options................................ 24
3.4. Funding Indemnification..................................... 24
3.5. Lender Statements; Survival of Indemnity.................... 24
3.6. References to Lender to Include Issuer...................... 24
ARTICLE IV. CONDITIONS PRECEDENT..................................... 24
4.1. Initial Credit Extension.................................... 24
4.2. Refinancing Credit Extension................................ 25
4.3. Each Credit Extension (other than a Refinancing Credit
Extension).................................................. 26
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................ 26
5.1. Corporate Existence and Standing............................ 26
5.2. Authorization and Validity.................................. 26
5.3. No Conflict; Government Consent............................. 26
5.4. Financial Statements........................................ 26
5.5. Material Adverse Change..................................... 27
5.6. Taxes....................................................... 27
5.7. Litigation and Contingent Obligations....................... 27
5.8. Subsidiaries................................................ 27
5.9. ERISA....................................................... 27
5.10. Accuracy of Information..................................... 27
5.11. Regulation U................................................ 27
5.12. Material Agreements......................................... 27
5.13. Compliance With Laws........................................ 27
5.14. Investment Company Act...................................... 28
5.15. Public Utility Holding Company Act.......................... 28
5.16. Ownership of Property....................................... 28
ARTICLE VI. COVENANTS................................................ 28
6.1. Financial Reporting......................................... 28
6.2. Use of Proceeds; Regulation U............................... 29
6.3. Notice of Default........................................... 29
6.4. Conduct of Business......................................... 29
6.5. Taxes....................................................... 29
6.6. Insurance................................................... 29
6.7. Compliance with Laws........................................ 29
6.8. Environmental Covenant...................................... 29
6.9. Maintenance of Property..................................... 30
6.10. Inspection.................................................. 30
6.11. Merger...................................................... 30
6.12. Sale of Assets.............................................. 30
6.13. Liens....................................................... 30
6.14. Guaranties, Loans, Advances and Investments................. 31
6.15. Affiliates.................................................. 32
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6.16. Adjusted Consolidated Tangible Net Worth.................... 32
6.17. Consolidated Indebtedness to Total Indebtedness Ratio....... 32
6.18. Employee Benefit Plans...................................... 32
6.19. Other Agreements............................................ 32
6.20. Subsidiary Dividends and Indebtedness....................... 32
6.21. Ownership of Yellow Freight................................. 33
6.22. Additional Material Subsidiaries............................ 33
ARTICLE VII. DEFAULTS............................................... 33
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES......... 35
8.1. Acceleration; Collateral Shortfall.......................... 35
8.2. Amendments.................................................. 35
8.3. Preservation of Rights...................................... 36
ARTICLE IX. GENERAL PROVISIONS....................................... 36
9.1. Survival of Representations................................. 36
9.2. Governmental Regulation..................................... 36
9.3. Taxes....................................................... 36
9.4. Headings.................................................... 36
9.5. Entire Agreement............................................ 37
9.6. Several Obligations; Benefits of this Agreement............. 37
9.7. Expenses; Indemnification................................... 37
9.8. Numbers of Documents........................................ 37
9.9. Accounting.................................................. 37
9.10. Severability of Provisions.................................. 37
9.11. Nonliability of Lenders..................................... 37
9.12. CHOICE OF LAW............................................... 37
9.13. CONSENT TO JURISDICTION..................................... 38
9.14. WAIVER OF JURY TRIAL........................................ 38
9.15. Confidentiality............................................. 38
ARTICLE X. THE AGENT................................................. 38
10.1. Appointment................................................. 38
10.2. Powers...................................................... 38
10.3. General Immunity............................................ 38
10.4. No Responsibility for Loans, Recitals, etc.; Delivery of
Documents................................................... 38
10.5. Action on Instructions of Lenders........................... 39
10.6. Employment of Agents and Counsel............................ 39
10.7. Reliance on Documents; Counsel.............................. 39
10.8. Agent's Reimbursement and Indemnification................... 39
10.9. Rights as a Lender.......................................... 39
10.10. Lender Credit Decision...................................... 40
10.11. Successor Agent............................................. 40
10.12. Notice of Default........................................... 40
ARTICLE XI. SETOFF; RATABLE PAYMENTS................................. 40
11.1. Setoff...................................................... 40
11.2. Ratable Payments............................................ 40
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ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....... 41
12.1. Successors and Assigns...................................... 41
12.2. Participations.............................................. 41
12.2.1. Permitted Participants; Effect.............................. 41
12.2.2. Voting Rights............................................... 41
12.2.3. Benefit of Setoff........................................... 41
12.3. Assignments................................................. 42
12.3.1. Permitted Assignments....................................... 42
12.3.2. Effect; Effective Date...................................... 42
12.4. Dissemination of Information................................ 42
12.5. Tax Treatment............................................... 42
ARTICLE XIII. NOTICES................................................ 43
13.1. Giving Notice............................................... 43
13.2. Change of Address........................................... 43
ARTICLE XIV. COUNTERPARTS............................................ 43
EXHIBITS
Exhibit "A" -- Note (Ratable Loans).................................. 48
Exhibit "B" -- Note (Competitive Bid Loans).......................... 50
Exhibit "C" -- Competitive Bid Quote Request......................... 52
Exhibit "D" -- Invitation for Competitive Bid Quotes................. 53
Exhibit "E" -- Competitive Bid Quote................................. 54
Exhibit "F" -- Form of Opinion of Counsel to Yellow Corporation...... 55
Exhibit "G" -- Loan/Credit Related Money Transfer Instructions....... 57
Exhibit "H" -- Compliance Certificate................................ 58
Exhibit "I" -- Form of Assignment Agreement.......................... 60
SCHEDULES
Schedule "1" -- Potential Liabilities not Provided For in Financial
Statements........................................... 64
Schedule "2" -- Yellow Corporation Subsidiaries...................... 68
Schedule "3" -- Notices of Legal or Regulatory Violations............ 69
Schedule "4" -- Specified Liens in Existence on the Closing Date..... 70
</TABLE>
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<PAGE> 6
YELLOW CORPORATION
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement, dated as of September 24, 1997, is among
Yellow Corporation, a Delaware corporation, the Lenders (as defined below),
NationsBank, N.A., as Documentation Agent, and The First National Bank of
Chicago, as Issuer and as Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
given Lender for the relevant Absolute Rate Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such Lender
and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.3.
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance, a period of not less than 30 days and not more than six months,
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. If such Absolute Rate Interest Period would end on a day which is not
a Business Day, such Absolute Rate Interest Period shall end on the next
succeeding Business Day, unless such next succeeding Business Day is after the
Termination Date, in which case such Absolute Rate Interest Period shall end on
the next preceding Business Day. No Absolute Rate Interest Period may end after
the Termination Date.
"Absolute Rate Loan" means a Loan which bears interest at the Absolute
Rate.
"Adjusted Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated EBITDA plus (ii) Special Subsidiary Discontinuation/Restructuring
Charges incurred or taken by the Borrower during such period, provided that the
cumulative amount of Special Subsidiary Discontinuation/Restructuring Charges
included in Adjusted Consolidated EBITDA pursuant to this clause (ii) during the
term of this Agreement shall not exceed $115,000,000 (which is a pre-tax
amount).
"Adjusted Consolidated Tangible Net Worth" means the sum of (i)
Consolidated Tangible Net Worth, plus (ii) the cumulative amount of Special
Subsidiary Discontinuation/Restructuring Charges incurred or taken by the
Borrower for fiscal quarters ending on September 30, 1997 or thereafter (such
amount to be adjusted quarterly upon delivery by the Borrower of its financial
statements described in Section 6.1(ii)), provided that the cumulative amount of
Special Subsidiary Discontinuation/Restructuring Charges included in Adjusted
Consolidated Tangible Net Worth pursuant to this clause (ii) during the term of
this Agreement shall not exceed $75,000,000 (which is an after-tax amount).
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by some or all of the Lenders to the Borrower on the same
Borrowing Date, at the same Rate Option (or on the same interest basis in the
case of Competitive Bid Advances) and for the same Interest Period and includes
a Competitive Bid Advance.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
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<PAGE> 7
"Agent" means The First National Bank of Chicago in its capacity as agent
for the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Agent's Fee Letter" is defined in Section 2.3.8.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this revolving credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4,
provided that, to the extent that generally accepted accounting principles as in
effect at any time permit alternative methods of accounting for particular
events or transactions, the Borrower may, with the concurrence of its
independent certified public accountants, vary its selection of such methods
during different accounting periods so long as any inconsistency in the
application of generally accepted accounting principles resulting therefrom is
disclosed and explained to the Lenders.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate or (ii) the Federal Funds
Effective Rate most recently determined by the Agent plus 1/2% per annum.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate.
"Applicable Facility Fee Rate" means (i) during any Level 1 Rating Period,
0.08% per annum, (ii) during any Level 2 Rating Period, 0.10% per annum, (iii)
during any Level 3 Rating Period, 0.125% per annum, (iv) during any Level 4
Rating Period, 0.15% per annum, (v) during any Level 5 Rating Period, 0.175% per
annum and (vi) during any Level 6 Rating Period, 0.20% per annum.
"Applicable Margin" means (i) during any Level 1 Rating Period, 0.17% per
annum, (ii) during any Level 2 Rating Period, 0.20% per annum, (iii) during any
Level 3 Rating Period, 0.225% per annum, (iv) during any Level 4 Rating Period,
0.25% per annum, (v) during any Level 5 Rating Period, 0.325% per annum and (vi)
during any Level 6 Rating Period, 0.40% per annum.
"Applicable Utilization Fee Rate" means (i) during any Level 1, 2 or 3
Rating Period, 0.05% per annum, (ii) during any Level 4 or 5 Rating Period,
0.10% per annum and (iii) during any Level 6 Rating Period, 0.15% per annum.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means either of the Treasurer or Assistant Treasurer
of the Borrower, acting singly.
"Board of Directors" means the board of directors of a Person or any duly
authorized committee of such board of directors to the extent that such
committee is authorized to perform the functions of such board of directors.
Unless otherwise expressly provided or unless the context otherwise requires,
all references herein to the "Board of Directors" shall mean the Board of
Directors of the Borrower.
"Borrower" means Yellow Corporation, a Delaware corporation, and its
permitted successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Ratable Advances or Eurodollar Bid Rate Advances, a day
other than Saturday or Sunday on which banks generally are open in Chicago and
New York for the conduct of substantially all of their commercial lending
activities and on which dealings in United States dollars are carried on in the
London interbank market and (ii) for all other purposes, a day other than
Saturday or Sunday on which banks generally are open in Chicago and New York for
the conduct of substantially all of their commercial lending activities.
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<PAGE> 8
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
Borrower.
"Closing Date" means September 24, 1997, or such other Business Day
thereafter agreed upon by the parties hereto on which the Agent shall have
determined that the conditions set forth in Section 4.1 have been fulfilled or
waived.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Ratable Loans and participate in Facility Letters of Credit in an amount not
exceeding in the aggregate at any one time the amount set forth opposite its
signature below, as such amount may be modified from time to time pursuant to
the terms of this Agreement.
"Competitive Bid Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan, expressed as a
percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from
such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit "B" hereto, with appropriate insertions, duly executed and delivered to
the Agent by the Borrower for the account of a Lender and payable to the order
of such Lender, including any amendment, modification, renewal or replacement of
such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the
form of Exhibit "E" hereto completed and delivered by a Lender to the Agent in
accordance with Section 2.3.4.
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit "C" hereto completed and delivered by the
Borrower to the Agent in accordance with Section 2.3.2.
"Condemnation" is defined in Section 7.8.
"Consolidated Assets" means, at any date, all amounts which, in conformity
with Agreement Accounting Principles, would be included as assets on a
consolidated balance sheet of the Borrower and its Subsidiaries as at such date.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Net Interest
Expense, (ii) income taxes, (iii) depreciation, and (iv) amortization, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles.
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<PAGE> 9
"Consolidated Indebtedness" means, at any date, all Indebtedness of the
Borrower and its Subsidiaries at such date, determined on a consolidated basis
in accordance with Agreement Accounting Principles.
"Consolidated Net Income" means, for any period, the net income or loss of
the Borrower and its Subsidiaries for such period, determined on a consolidated
basis in accordance with Agreement Accounting Principles.
"Consolidated Tangible Net Worth" means, at any date, the consolidated net
worth of the Borrower and its Subsidiaries at such date after subtracting
therefrom the aggregate amount of any intangible assets of the Borrower and its
Subsidiaries, including, without limitation, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights, service marks, brand names and
operating rights, all determined in accordance with Agreement Accounting
Principles.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes.
"Credit Extension" means the making of any Advance or the issuance of any
Facility Letter of Credit pursuant to this Agreement.
"Credit Extension Date" means the date on which any Credit Extension is
made hereunder.
"Current Payment Obligations" means (when used in Sections 5.9 and 7.11
only), as of any date of determination, payment obligations which are past due,
are due on or will become due within 12 months after such date.
"Default" means an event described in Article VII.
"Defaulting Lender" means any Lender that, in breach of this Agreement, (i)
on any Borrowing Date fails to make available to the Agent such Lender's Loans
required to be made to the Borrower on such Borrowing Date or (ii) shall not
have made a payment to the Issuer pursuant to Section 2.4.5(b). Once a Lender
becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender
until such time as such Defaulting Lender makes available to the Agent the
amount of such Defaulting Lender's Loans and/or to the Issuer such payments
requested by the Issuer, together with all other amounts then due and payable to
the Agent and/or the Issuer by such Defaulting Lender pursuant to this
Agreement.
"Dollars" and "$" mean lawful money of the United States of America.
"Environmental Laws" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.
"Equipment" means all equipment, machinery, furniture and goods used or
usable by the Borrower in its business and all other tangible personal property
(other than inventory), and all accessions and additions thereto, excluding such
of the foregoing as have been attached to real property in such a manner that
their removal would cause damage to the realty and which have therefore taken on
the character of real property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or any Subsidiary of the Borrower,
or is under common control (within the meaning of Section 414(c) of the Code)
with the Borrower or any Subsidiary of the Borrower.
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes setting
forth Competitive Bid Margins pursuant to Section 2.3.
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<PAGE> 10
"Eurodollar Base Rate" means, with respect to a Eurodollar Ratable Advance
or a Eurodollar Bid Rate Advance for the relevant Eurodollar Interest Period,
the rate determined by the Agent to be the arithmetic average of the rates
reported to the Agent by each Reference Bank as the rate at which deposits in
U.S. dollars are offered by such Reference Bank to first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Eurodollar Interest Period, in the
approximate amount of such Reference Bank's relevant Eurodollar Ratable Loan or,
in the case of a Eurodollar Bid Rate Advance, the amount of the Eurodollar Bid
Rate Advance requested by the Borrower, and having a maturity approximately
equal to such Eurodollar Interest Period. If any Reference Bank fails to provide
such quotation to the Agent, then the Agent shall determine the Eurodollar Base
Rate on the basis of the quotations of the remaining Reference Bank(s).
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan
made by a given Lender for the relevant Eurodollar Interest Period, the sum of
(i) the Eurodollar Base Rate, rounded, if necessary, to the next higher 1/16 of
1%, and (ii) the Competitive Bid Margin offered by such Lender and accepted by
the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest at the
Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a Eurodollar Ratable
Advance or a Eurodollar Bid Rate Advance, a period of one, two, three or six
months commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Eurodollar Interest Period shall end on (but exclude) the day
which corresponds numerically to such date one, two, three or six months (as
applicable) thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Eurodollar Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If a Eurodollar Interest Period would
otherwise end on a day which is not a Business Day, such Eurodollar Interest
Period shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new month, such Eurodollar Interest
Period shall end on the Business Day immediately preceding the day (which was
not a Business Day) upon which such Eurodollar Interest Period would otherwise
have ended. No Eurodollar Interest Period may end after the Termination Date.
"Eurodollar Ratable Advance" means an Advance which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Ratable Loan" means a Loan which bears interest at a Eurodollar
Rate requested by the Borrower pursuant to Section 2.2.
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for
the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to that Eurodollar Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
that Eurodollar Interest Period, plus (ii) the Applicable Margin. The Eurodollar
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
"Existing Credit Agreement" is defined in Section 4.1.
"Facility Letter of Credit" means a standby Letter of Credit issued by the
Issuer pursuant to Section 2.4. Upon the satisfaction of the conditions to the
initial Credit Extension set forth in Sections 4.1 and 4.3, each Letter of
Credit issued under the Existing Credit Agreement shall be deemed for all
purposes to be a Facility Letter of Credit issued hereunder and each Lender
shall be deemed to hold a participation equal to its Pro Rata Share in such
Facility Letter of Credit.
"Facility Letter of Credit Obligations" means, as at the time of any
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to the Facility Letters of Credit, including the sum of
(a) Reimbursement Obligations and (b) the aggregate undrawn face amount of the
outstanding Facility Letters of Credit.
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<PAGE> 11
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fixed Rate" means the Eurodollar Rate, the Eurodollar Bid Rate or the
Absolute Rate.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.
"Floating Rate" means, for any day, a rate per annum equal to the Alternate
Base Rate, in each case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Floating Rate Interest Period" means, with respect to a Floating Rate
Advance, a period of 30 days commencing on a Business Day selected by the
Borrower pursuant to this Agreement. If such Floating Rate Interest Period would
end on a day which is not a Business Day, such Floating Rate Interest Period
shall end on the next succeeding Business Day. No Floating Rate Interest Period
may end after the Termination Date.
"Guarantors" means, collectively, the Original Guarantors, any other Person
which becomes a party to the Guaranty after the date hereof, and any successor
or assign of any of the foregoing Persons (except to the extent such successor
or assign is relieved from its obligations under the Guaranty pursuant to the
provisions of this Agreement), and
"Guarantor" means any one of such Persons, provided that any Person
released from the Guaranty pursuant to the provisions of Section 6.22 shall no
longer be a "Guarantor" unless and until such Person re-executes the Guaranty
pursuant to the provisions of Section 6.22.
"Guaranty" means that certain Guaranty dated as of September 24, 1997
executed by the Guarantors in favor of the Agent, for the ratable benefit of the
Lenders, as it may be amended or modified and in effect from time to time.
"Hazardous Material" means (i) any Hazardous Substance; (ii) any Hazardous
Waste; (iii) any petroleum product; or (iv) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material or substance within the meaning
of any other federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended.
"Hazardous Substance" means any "hazardous substance," as defined by
CERCLA.
"Hazardous Waste" means any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended.
"Indebtedness" of a Person means, without duplication, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens on or
payable out of the proceeds or production from Property now or hereafter owned
or acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other instruments, (v) Capitalized Lease Obligations, (vi)
outstanding principal balances (representing securitized but unliquidated
assets) under asset securitization agreements (including,
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without limitation, the outstanding principal balance of accounts receivable
under Receivables Transactions), and (vii) all guaranties of or other contingent
obligations with respect to indebtedness of Persons other than the Borrower or
any Subsidiary, including without limitation contingent obligations with respect
to Letters of Credit.
"Interest Period" means a Eurodollar Interest Period, an Absolute Rate
Interest Period or a Floating Rate Interest Period.
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit "D" hereto, completed and
delivered by the Agent to the Lenders in accordance with Section 2.3.3.
"Issuer" means The First National Bank of Chicago, in its capacity as
issuer of Facility Letters of Credit under Section 2.4.
"LC Application" is defined in Section 2.4.3.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement, including, without limitation, First Chicago in its capacity as
a lender, and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender, the Issuer or the
Agent, any office, branch, subsidiary or affiliate of such Lender, the Issuer or
the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 2.4.7.
"Level 1 Rating Period" means any period during which the Borrower's senior
unsecured long-term debt is rated A- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) or A3 or higher by Moody's (or a
comparable rating from any generally recognized successor to Moody's), provided,
however, that notwithstanding the foregoing provisions of this definition, if
the rating by Moody's or its successor and the rating by S&P or its successor
differ by two or more of the rating grades used by such agencies, the Rating
Period which would exist if the Borrower's senior unsecured long-term debt were
rated by both such agencies at one rating grade above the lower of such rating
grades shall be deemed to exist.
"Level 2 Rating Period" means any period which does not qualify as a Level
1 Rating Period during which the Borrower's senior unsecured long-term debt is
rated BBB+ or higher by S&P (or a comparable rating from any generally
recognized successor to S&P) and Baa1 or higher by Moody's (or a comparable
rating from any generally recognized successor to Moody's).
"Level 3 Rating Period" means any period which does not qualify as a Level
1 or Level 2 Rating Period during which the Borrower's senior unsecured
long-term debt is rated BBB+ or higher by S&P (or a comparable rating from any
generally recognized successor to S&P) or Baa1 or higher by Moody's (or a
comparable rating from any generally recognized successor to Moody's), provided,
however, that notwithstanding the foregoing provisions of this definition, if
the rating by Moody's or its successor and the rating by S&P or its successor
differ by two or more of the rating grades used by such agencies, the Rating
Period which would exist if the Borrower's senior unsecured long-term debt were
rated by both such agencies at one rating grade above the lower of such rating
grades shall be deemed to exist.
"Level 4 Rating Period" means any period which does not qualify as a Level
1, Level 2 or Level 3 Rating Period during which the Borrower's senior unsecured
long-term debt is rated BBB or higher by S&P (or a comparable rating from any
generally recognized successor to S&P) or Baa2 or higher by Moody's (or a
comparable rating from any generally recognized successor to Moody's), provided,
however, that notwithstanding the foregoing provisions of this definition, if
the rating by Moody's or its successor and the rating by S&P or its successor
differ by two or more of the rating grades used by such agencies, the Rating
Period which would exist if the Borrower's senior unsecured long-term debt were
rated by both such agencies at one rating grade above the lower of such rating
grades shall be deemed to exist.
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"Level 5 Rating Period" means any period which does not qualify as a Level
1, Level 2, Level 3 or Level 4 Rating Period during which the Borrower's senior
unsecured long-term debt is rated BBB- or higher by S&P (or a comparable rating
from any generally recognized successor to S&P) and Baa3 or higher by Moody's
(or a comparable rating from any generally recognized successor to Moody's).
"Level 6 Rating Period" means any period which does not qualify as a Level
1, Level 2, Level 3, Level 4 or Level 5 Rating Period.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion, if any, of
any Advance.
"Loan Documents" means this Agreement, the Notes, the Guaranty and the LC
Applications.
"Margin Stock" means "margin stock" as defined in Regulation U.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or other), results of operations, or
prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent, the Issuer or the Lenders thereunder.
"Material Subsidiary" means, as of any time of determination, any
Subsidiary of the Borrower (i) the assets of which comprise more than 10% of the
Consolidated Assets of the Borrower and its Subsidiaries as of the end of the
Borrower's most recent fiscal year, or (ii) revenue attributable to which
comprises more than 10% of the consolidated revenue of the Borrower and its
Subsidiaries for the Borrower's most recent fiscal year.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Interest Expense" means, for any period, the difference of (i)
interest expense (including interest, yield, discount, or similar amounts paid
in connection with any receivables securitization, however characterized), minus
(ii) interest income.
"Notes" means, collectively, the Competitive Bid Notes and the Ratable
Notes; and "Note" means any one of the Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees, all Facility Letter of Credit
Obligations and all expenses, reimbursements, indemnities and other obligations
of the Borrower or any Subsidiary Co-Applicant to the Lenders or to any Lender,
the Issuer, the Agent or any indemnified party hereunder arising under the Loan
Documents.
"Officer's Certificate" shall mean a certificate signed in the name of the
Borrower by an Authorized Officer.
"Original Guarantors" means, collectively, Yellow Freight, Preston Trucking
Company, Inc., Saia Motor Freight Line, Inc. and WestEx, Inc.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each calendar quarter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
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"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, for each Lender, the ratio of such Lender's
Commitment to the Aggregate Commitment.
"Purchasers" is defined in Section 12.3.1.
"Ratable Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Ratable Loans made by the Lenders to the Borrower at the
same time, at the same Rate Option and for the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2
hereof.
"Ratable Note" means a promissory note in substantially the form of Exhibit
"A" hereto, duly executed and delivered to the Agent by the Borrower for the
account of a Lender and payable to the order of such Lender in the amount of its
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Rating Period" means a Level 1 Rating Period, a Level 2 Rating Period, a
Level 3 Rating Period, a Level 4 Rating Period, a Level 5 Rating Period or a
Level 6 Rating Period.
"Receivables Corp." means Yellow Receivables Corporation, a special-purpose
Subsidiary of Yellow Freight.
"Receivables Purchaser" means a purchaser of accounts receivable from
Receivables Corp. pursuant to a Receivables Transaction.
"Receivables Transactions" means, collectively, (i) the creation of
Receivables Corp. to purchase accounts receivable generated by and owed to
certain Subsidiaries of the Borrower, (ii) the entry by Receivables Corp. into
one or more receivables purchase agreements with Receivables Purchasers,
pursuant to which each Receivables Purchaser will, from time to time, purchase
from Receivables Corp. undivided interests in the receivables described in
clause (i), and (iii) the entry by Receivables Corp. into such ancillary
agreements, documents and instruments as are necessary or advisable in
connection with such receivables purchase agreements, provided that (x) the
outstanding principal amount of the financing provided by all Receivables
Purchasers pursuant to such receivables purchase agreements shall not exceed
$150,000,000 in the aggregate at any time and (y) the primary structural terms
of each such receivables purchase agreement, including without limitation the
amount of any recourse to the Borrower or any of its Subsidiaries for
uncollectible receivables, shall be reasonably satisfactory to the Agent in each
case.
"Reference Banks" means The First National Bank of Chicago, Morgan Guaranty
Trust Company of New York and NationsBank, N.A.
"Refinancing Credit Extension" (i) when used to refer to an Advance means
an Advance which, after giving effect to the Advance and the application of the
proceeds thereof, does not increase the aggregate amount of outstanding
Advances; provided, however, that any Ratable Advance the proceeds of which are
used, all or in part, to repay any Competitive Bid Loan shall not be deemed to
be a Refinancing Credit Extension and (ii) when used to refer to the issuance of
a Facility Letter of Credit means a Facility Letter of
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Credit which, after giving effect to the issuance thereof, does not increase the
aggregate amount of Facility Letter of Credit Obligations.
"Refinancing Loan" means, with respect to a Lender, such Lender's ratable
share of a Refinancing Credit Extension which is an Advance.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of the
obligations of the Borrower to the Lenders and the Issuer in respect of all
unreimbursed payments or disbursements made by the Issuer and the Lenders under
or in respect of the Facility Letters of Credit (including, without limitation,
the Borrower's obligation to reimburse the Issuer for draws on Facility Letters
of Credit pursuant to Section 2.4.4(b)).
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66 2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid
principal amount of the outstanding Advances and participations in Facility
Letters of Credit.
"Reserve Requirement" means, with respect to a Eurodollar Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities (in the case of Eurodollar Ratable Advances).
"Revenue Equipment" means that Property of the Borrower or any Subsidiary
which is so designated on the Borrower's consolidated balance sheets provided to
the Lenders under Section 6.1(i) and (ii), exclusive of any real property which
may fall under such designation.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Significant Restructuring" means, with respect to a Subsidiary of the
Borrower, a reorganization or discontinuation of all or a significant portion of
the business or operations of such Subsidiary.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Special Subsidiary Discontinuation/Restructuring Charges" means cash or
non-cash adjustments to or charges against income specifically identified in the
Borrower's internal books of account as incurred in connection with the
liquidation and dissolution of or a Significant Restructuring of one of the
Borrower's Subsidiaries, provided that only adjustments or charges with respect
to one particular Subsidiary of the Borrower (which Subsidiary shall be the same
Subsidiary for the term of this Agreement) will be defined as Special Subsidiary
Discontinuation/Restructuring Charges.
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"Stock Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Borrower directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number
of votes) of the securities of a corporation or other Person which have ordinary
voting power for the election of directors or other governing body (other than
securities having such power only by reason of the happening of a contingency),
provided, however, that such term shall not include any such transaction (or
series of transactions) which has been approved as to its terms by the Board of
Directors of the Borrower and (prior to the commencement of such transaction or
series of transactions) by the Board of Directors or other governing body of the
corporation or other Person whose securities are to be acquired.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Co-Applicant" is defined in Section 2.4.1.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which represents more than 10% of the
Consolidated Assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made.
"Termination Date" means September 24, 2001.
"Termination Event" means any of the following:
(i) the filing by the Borrower, any of its Subsidiaries, any of its
ERISA Affiliates or any plan administrator under Title IV of ERISA of a
notice of the termination of, or the intent to terminate, any Single
Employer Plan;
(ii) the institution by the PBGC of proceedings for the termination of
any Single Employer Plan; or the receipt by the Borrower, any of its
Subsidiaries, or any of its ERISA Affiliates of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) the complete or partial withdrawal by the Borrower, any of its
Subsidiaries, or any of its ERISA Affiliates from any Multiemployer Plan, a
default, within the meaning of Section 4219(c)(5) of ERISA, by the Borrower
or any member of the Controlled Group with respect to any Multiemployer
Plan, or the receipt by the Borrower, any of its Subsidiaries, or any of
its ERISA Affiliates of notice from a Multiemployer Plan that it is in
reorganization or insolvency or that it intends to terminate or has been
terminated.
Once a Termination Event occurs with respect to a Plan, such Termination
Event shall be deemed to continue in effect for the purposes of this Agreement
until all payment obligations and other liabilities of any member of the
Controlled Group with respect thereto have been discharged.
"Transferee" is defined in Section 12.4.
"Transferor Lender" is defined in Section 12.3.1.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance, Eurodollar Ratable Advance, Eurodollar Bid Rate Advance or Absolute
Rate Advance.
"Unfunded Liabilities" means the amount (if any) by which the actuarial
present value of all accumulated vested nonforfeitable benefits under all Single
Employer Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined as of the then most recent valuation date for
such Plans and calculated in accordance with Statement of Financial Accounting
Standards No. 35.
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"Unmatured Default" means an event or condition which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means any Subsidiary of such Person
all of the outstanding voting stock of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person.
"Yellow Freight" means Yellow Freight System, Inc., an Indiana corporation.
The foregoing definitions shall be equally applicable to both the singular
and the plural forms of the defined terms.
Except as provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with Agreement Accounting Principles, applied in a manner
consistent with that used in the preparation of the most recent financial
statements submitted by the Borrower pursuant to Section 6.1 (or, before any
financial statements have been submitted pursuant to Section 6.1, in a manner
consistent with that used in the preparation of the financial statements
referred to in Section 5.4).
ARTICLE II
THE FACILITY
2.1. The Facility.
2.1.1. Description of Facility. The Lenders grant to the Borrower a
revolving credit facility pursuant to which, and upon the terms and subject to
the conditions herein set forth:
(i) each Lender severally agrees to make Ratable Loans to the Borrower
in accordance with Section 2.2;
(ii) each Lender severally agrees to participate in Facility Letters
of Credit issued by the Issuer in accordance with Section 2.4; and
(iii) each Lender may, in its sole discretion, make bids to make
Competitive Bid Loans to the Borrower in accordance with Section 2.3.
2.1.2. Facility Amount. In no event may the sum of (i) the aggregate
principal amount of all outstanding Advances (including both the Ratable
Advances and the Competitive Bid Advances) plus (ii) the Facility Letter of
Credit Obligations exceed the Aggregate Commitment. The Borrower agrees that if
at any time any such excess shall arise, it shall immediately pay to the Agent
(or deposit into the Letter of Credit Collateral Account, to the extent that all
Loans have been fully repaid) the amount necessary to eliminate such excess,
without presentment, demand, protest or notice of any kind from the Agent, the
Issuer or any Lender, all of which the Borrower hereby expressly waives.
2.1.3. Availability of Facility. Subject to the terms hereof, the facility
is available from the date hereof to the Termination Date. Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow and the Borrower
may request the issuance of Facility Letters of Credit at any time prior to the
Termination Date. The Commitments to lend and participate in Facility Letters of
Credit hereunder shall expire on the Termination Date.
2.2. Ratable Advances.
2.2.1. Ratable Advances. Each Ratable Advance hereunder shall consist of
borrowings made from the several Lenders ratably in proportion to the amounts of
their respective Commitments. The aggregate outstanding amount of Competitive
Bid Advances shall reduce the amount available for borrowing under each Lender's
Commitment ratably in the proportion such Lender's Commitment bears to the
Aggregate
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Commitment regardless of which Lender or Lenders make such Competitive Bid
Advances. Ratable Advances shall be evidenced by the Ratable Notes. No Ratable
Advance may mature after the Termination Date.
2.2.2. Ratable Advance Rate Options. The Ratable Advances may be Floating
Rate Advances or Eurodollar Ratable Advances, or a combination thereof, selected
by the Borrower in accordance with Section 2.2.3.
2.2.3. Method of Selecting Rate Options and Interest Periods for Ratable
Advances. The Borrower shall select the Rate Option and Interest Period
applicable to each Ratable Advance from time to time. The Borrower shall give
the Agent irrevocable notice (a "Ratable Borrowing Notice") not later than 11:00
a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance and
10:00 a.m. (Chicago time) three Business Days before the Borrowing Date of each
Eurodollar Ratable Advance. Notwithstanding the foregoing, a Ratable Borrowing
Notice for a Floating Rate Advance may be given not later than 30 minutes after
the time at which the Borrower is required to reject one or more bids offered in
connection with an Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable
Borrowing Notice for a Eurodollar Ratable Advance may be given not later than 30
minutes after the time the Borrower is required to reject one or more bids
offered in connection with a Eurodollar Auction pursuant to Section 2.3.6. A
Ratable Borrowing Notice shall specify:
(i) the Borrowing Date, which shall be a Business Day, of such Ratable
Advance;
(ii) the aggregate amount of such Ratable Advance;
(iii) the Rate Option selected for such Ratable Advance; and
(iv) in the case of each Eurodollar Ratable Advance, the Interest
Period applicable thereto (which may not end after the Termination Date).
2.3. Competitive Bid Advances.
2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant to
Section 2.2, but subject to the terms and conditions of this Agreement
(including, without limitation, the limitation set forth in Section 2.1.2 as to
the maximum aggregate principal amount of all outstanding Advances and Facility
Letter of Credit Obligations hereunder), the Borrower may, as set forth in this
Section 2.3, request the Lenders, prior to the Termination Date, to make offers
to make Competitive Bid Advances to the Borrower. Each Lender may, but shall
have no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.3. Competitive Bid Advances shall be evidenced by the Competitive Bid Notes.
2.3.2. Competitive Bid Quote Request. When the Borrower wishes to request
offers to make Competitive Bid Loans under this Section 2.3, it shall transmit
to the Agent by telecopy a Competitive Bid Quote Request substantially in the
form of Exhibit "C" hereto so as to be received no later than (x) 10:00 a.m.
(Chicago time) at least four Business Days prior to the Borrowing Date proposed
therein, in the case of a Eurodollar Auction, or (y) 9:00 a.m. (Chicago time) at
least one Business Day prior to the Borrowing Date proposed therein, in the case
of an Absolute Rate Auction, specifying:
(i) the proposed Borrowing Date, which shall be a Business Day, for
the proposed Competitive Bid Advance;
(ii) the aggregate principal amount of such Competitive Bid Advance;
(iii) whether the Competitive Bid Quotes requested are to set forth a
Competitive Bid Margin or an Absolute Rate, or both; and
(iv) the Interest Period applicable thereto (which may not end after
the Termination Date).
The Borrower may request offers to make Competitive Bid Loans for more than
one Interest Period in a single Competitive Bid Quote Request. No Competitive
Bid Quote Request shall be given within five Business
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Days (or such other number of days as the Borrower and the Agent may agree) of
any other Competitive Bid Quote Request. To the extent that a Competitive Bid
Quote Request does not conform substantially to the format of Exhibit "C"
hereto, it shall be rejected.
2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any event
before the close of business on the same Business Day of receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section 2.3.2,
the Agent shall send to each of the Lenders by telecopy an Invitation for
Competitive Bid Quotes substantially in the form of Exhibit "D" hereto, which
shall constitute an invitation by the Borrower to each Lender to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which such
Competitive Bid Quote Request relates in accordance with this Section 2.3.
2.3.4. Submission and Contents of Competitive Bid Quotes. (a) Each Lender
may, in its sole discretion, submit a Competitive Bid Quote containing an offer
or offers to make Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this Section 2.3.4 and must be submitted to the Agent by
telecopy at its offices specified in or pursuant to Article XIII not later than
(x) 9:00 a.m. (Chicago time) at least three Business Days prior to the proposed
Borrowing Date, in the case of a Eurodollar Auction or (y) 9:00 a.m. (Chicago
time) on the proposed Borrowing Date, in the case of an Absolute Rate Auction;
provided that Competitive Bid Quotes submitted by First Chicago may only be
submitted if the Agent or First Chicago notifies the Borrower of the terms of
the offer or offers contained therein not later than 15 minutes prior to the
latest time at which the relevant Competitive Bid Quotes must be submitted by
the other Lenders. Subject to Articles IV and VIII, any Competitive Bid Quote so
made shall be irrevocable except with the written consent of the Agent given on
the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the form of
Exhibit "E" hereto and shall in any case specify:
(i) the proposed Borrowing Date, which shall be the same as that set
forth in the applicable Invitation for Competitive Bid Quotes;
(ii) the principal amount of the Competitive Bid Loan for which each
such offer is being made, which principal amount (1) may be greater than,
less than or equal to the Commitment of the quoting Lender, (2) must be at
least $2,000,000 and an integral multiple of $500,000, and (3) may not
exceed the principal amount of Competitive Bid Loans for which offers were
requested;
(iii) in the case of a Eurodollar Auction, the Competitive Bid Margin
offered for each such Competitive Bid Loan;
(iv) the minimum amount, if any, of the Competitive Bid Loan which may
be accepted by the Borrower;
(v) in the case of an Absolute Rate Auction, the Absolute Rate offered
for each such Competitive Bid Loan; and
(vi) the identity of the quoting Lender.
(c) The Agent shall reject any Competitive Bid Quote that:
(i) is not substantially in the form of Exhibit "E" hereto or does not
specify all of the information required by Section 2.3.4(b);
(ii) contains qualifying, conditional or similar language, other than
any such language contained in Exhibit "E";
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in Section 2.3.4(a).
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If any Competitive Bid Quote shall be rejected pursuant to this Section
2.3.4(c), then the Agent shall notify the relevant Lender of such rejection as
soon as practical.
2.3.5. Notice to Borrower. The Agent shall promptly notify the Borrower of
the terms (i) of any Competitive Bid Quote submitted by a Lender that is in
accordance with Section 2.3.4 and (ii) of any Competitive Bid Quote that amends,
modifies or is otherwise inconsistent with a previous Competitive Bid Quote
submitted by such Lender with respect to the same Competitive Bid Quote Request.
Any such subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote specifically states that it is
submitted solely to correct a manifest error in such former Competitive Bid
Quote. The Agent's notice to the Borrower shall specify the aggregate principal
amount of Competitive Bid Loans for which offers have been received for each
Interest Period specified in the related Competitive Bid Quote Request and the
respective principal amounts and Competitive Bid Margins (and resulting
Eurodollar Bid Rates) or Absolute Rates, as the case may be, so offered.
2.3.6. Acceptance and Notice by Borrower. Not later than (x) 10:00 a.m.
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (y) 10:00 a.m. (Chicago time) on
the proposed Borrowing Date, in the case of an Absolute Rate Auction, the
Borrower shall notify the Agent of its acceptance or rejection of the offers of
which it received notification pursuant to Section 2.3.5. The failure by the
Borrower to give such notice to the Agent shall be deemed to be a rejection of
all such offers. In the case of acceptance, such notice (a "Competitive Bid
Borrowing Notice") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Competitive
Bid Quote in whole or in part (subject to the terms of Section 2.3.4(b)(iv) and
Section 2.6.2); provided that:
(i) the aggregate principal amount of each Competitive Bid Advance may
not exceed the applicable amount set forth in the related Competitive Bid
Quote Request;
(ii) acceptance of offers may only be made on the basis of ascending
Competitive Bid Margins (and resulting Eurodollar Bid Rates) or Absolute
Rates, as the case may be; and
(iii) the Borrower may not accept any offer that is described in
Section 2.3.4(c) (and is not subsequently corrected by the relevant Lender)
or that otherwise fails to comply with the requirements of this Agreement.
2.3.7. Allocation by Agent. If offers are made by two or more Lenders with
the same Competitive Bid Margins (and resulting Eurodollar Bid Rates) or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are accepted for the related Interest
Period, the principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Agent among such Lenders as nearly
as possible (in such multiples, not greater than $1,000,000, as the Agent may
deem appropriate) in proportion to the aggregate principal amount of such
offers; provided, however, that no Lender shall be allocated a portion of any
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of manifest
error. The Agent shall promptly, but in any event on the same Business Day,
notify each Lender of its receipt of a Competitive Bid Borrowing Notice and the
aggregate principal amount of such Competitive Bid Advance allocated to each
participating Lender. Upon request by any Lender at the completion of the
bidding process in response to any Competitive Bid Quote Request, the Agent will
disclose to such Lender the range of the pricing of all offers accepted by the
Borrower and allocated to Lenders.
2.3.8. Competitive Bid Auction Fees. The Borrower hereby agrees to pay to
the Agent, for its own account, competitive bid auction fees in the amounts set
forth in that certain Agent's Fee Letter dated July 15, 1997 from the Agent to
the Borrower (the "Agent's Fee Letter"), such fees to be due and payable on the
date any offer to make a Competitive Bid Loan is accepted by the Borrower.
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2.4. Facility Letters of Credit.
2.4.1. Obligation to Issue. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, The First National Bank of Chicago, in its capacity
as the Issuer hereunder, hereby agrees to issue upon the request of the Borrower
and for the account of the Borrower or for the account of the Borrower and any
Subsidiary of the Borrower which is a co-applicant with the Borrower for such
Facility Letter of Credit on the form of application described in Section
2.4.3(a) (each such Subsidiary a "Subsidiary Co-Applicant"), through such of the
Issuer's Lending Installations or Affiliates as the Issuer, the Borrower and the
Subsidiary Applicant (if any) may mutually agree, one or more Facility Letters
of Credit in accordance with this Section 2.4, from time to time during the
period, commencing on the Closing Date and ending on the Business Day prior to
the Termination Date. All Facility Letters of Credit shall be denominated and
drawable in U.S. Dollars.
2.4.2. Conditions for Issuance. In addition to being subject to the
satisfaction of the conditions contained in Section 4.2, the obligation of the
Issuer to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the aggregate maximum amount then available for drawing under
Facility Letters of Credit issued by the Issuer, after giving effect to the
Facility Letter of Credit requested hereunder, shall not exceed any limit
imposed by law or regulation upon the Issuer;
(ii) after giving effect to the requested issuance of any Facility
Letter of Credit, the sum of (x) the Facility Letter of Credit Obligations
plus (y) the total aggregate unpaid principal balance of the Advances does
not exceed the Aggregate Commitment;
(iii) the requested Facility Letter of Credit has an expiration date
not later than the earlier of (x) the Business Day prior to the Termination
Date and (y) one year after its date of issuance;
(iv) the Borrower shall have delivered to the Issuer at such times and
in such manner as the Issuer may reasonably prescribe such documents and
materials as may be required pursuant to the terms of the proposed Facility
Letter of Credit and the proposed Facility Letter of Credit shall be
satisfactory to the Issuer as to form and content; and
(v) as of the date of issuance, no order, judgment or decree of any
court, arbitrator or governmental authority shall purport by its terms to
enjoin or restrain the Issuer from issuing the Facility Letter of Credit
and no law, rule or regulation applicable to the Issuer and no request or
directive (whether or not having the force of law) from any governmental
authority with jurisdiction over the Issuer shall prohibit or request that
the Issuer refrain from the issuance of Letters of Credit generally or the
issuance of that Facility Letter of Credit.
2.4.3. Procedure for Issuance of Facility Letters of Credit. (a) The
Borrower shall give the Issuer five Business Days' prior written notice of any
requested issuance of a Facility Letter of Credit under this Agreement. Such
notice (the "LC Application") shall be on such standard application form as may
be prescribed by the Issuer, shall be irrevocable and shall specify the stated
amount of the Facility Letter of Credit requested, the effective date (which day
shall be a Business Day) of issuance of such requested Facility Letter of
Credit, the date on which such requested Facility Letter of Credit is to expire
(which date shall be a Business Day and shall in no event be later than the
Business Day prior to the Termination Date), the purpose for which such Facility
Letter of Credit is to be issued, and the Person for whose benefit the requested
Facility Letter of Credit is to be issued. At the time such LC Application is
delivered, the Borrower shall also provide the Issuer with a copy of the form of
the Facility Letter of Credit it is requesting be issued. The Issuer shall
promptly forward to the Lenders a copy of the LC Application.
(b) IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND
THE TERMS OF THE LC APPLICATION, THE TERMS OF THIS AGREEMENT SHALL CONTROL,
PROVIDED THAT ANY SUBSIDIARY CO-APPLICANT SHALL, AS AND TO THE EXTENT SET FORTH
IN THE RELEVANT LC APPLICATION, BE JOINTLY AND SEVERALLY LIABLE WITH THE
BORROWER FOR THE REIMBURSEMENT OBLIGATIONS WITH RESPECT
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TO THE FACILITY LETTER(S) OF CREDIT ISSUED IN RESPONSE TO SUCH LC APPLICATION,
NOTWITHSTANDING THE FACT THAT SUCH SUBSIDIARY CO-APPLICANT IS NOT A SIGNATORY TO
THIS AGREEMENT.
(c) Subject to the terms and conditions of this Section 2.4.3 and provided
that the applicable conditions set forth in Article IV and Section 2.4.2 hereof
have been satisfied, the Issuer shall, on the requested date, issue a Facility
Letter of Credit in accordance with the Issuer's usual and customary business
practices.
(d) The Issuer shall not extend or amend any Facility Letter of Credit
unless the requirements of this Section 2.4.3 are met as though a new Facility
Letter of Credit was being requested and issued.
2.4.4. Reimbursement Obligations. (a) The Borrower agrees to pay to the
Agent for the account of the Issuer the amount of all Reimbursement Obligations,
interest and other amounts payable to the Issuer under or in connection with any
Facility Letter of Credit immediately when due, irrespective of any claim,
set-off, defense or other right which the Borrower or any Subsidiary or
Affiliate of the Borrower may have at any time against the Issuer or any other
Person, under all circumstances, including without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any Subsidiary or Affiliate of the Borrower may have at any
time against a beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for whom any
such transferee may be acting), the Issuer, any Lender, or any other
Person, whether in connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower or any
Subsidiary or Affiliate of the Borrower and the beneficiary named in any
Facility Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Facility Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents;
(v) the occurrence of any Default or Unmatured Default;
(vi) with respect to any Facility Letter of Credit for which there is
a Subsidiary Co-Applicant, any defense to payment of such Reimbursement
Obligations based on the status of the Borrower as a co-applicant for such
Facility Letter of Credit, including without limitation any defense to
payment which might be available to a guarantor or surety, all of which are
hereby explicitly waived by the Borrower, which hereby agrees and
acknowledges that its undertaking to pay all Reimbursement Obligations,
including without limitation Reimbursement Obligations arising with respect
to Facility Letters of Credit for which there is a Subsidiary Co-Applicant,
is a primary obligation and not one of surety.
(b) The Issuer shall promptly notify the Borrower of any draw under a
Facility Letter of Credit. The Borrower shall reimburse the Issuer for the
amount of each drawing under a Facility Letter of Credit no later than the
Business Day after the payment by the Issuer. Any Reimbursement Obligation with
respect to any Facility Letter of Credit shall bear interest from the date of
the relevant drawing under the pertinent Facility Letter of Credit at the
interest rate for past due Floating Rate Loans calculated in accordance with
Section 2.6.6.
2.4.5. Participation. (a) Immediately upon issuance by the Issuer of any
Facility Letter of Credit in accordance with the procedures set forth in Section
2.4.3 each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Issuer, without recourse or warranty, an
undivided interest and participation equal to its Pro Rata Share in such
Facility Letter of Credit.
(b) In the event that the Issuer makes any payment under any Facility
Letter of Credit and neither the Borrower nor any Subsidiary shall have repaid
such amount to the Issuer pursuant to Section 2.4.4, the Issuer
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shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Agent for the account of the Issuer the
amount of such Lender's Pro Rata Share of the unreimbursed amount of any such
payment. If any Lender fails to make available to the Agent for the account of
the Issuer any amounts due to the Issuer pursuant to this Section 2.4.5(b), the
Issuer shall be entitled to recover such amount, together with interest thereon
at the Federal Funds Effective Rate, for the first three Business Days after
such Lender receives such notice and thereafter, at the Floating Rate, payable
(i) on demand, (ii) by setoff against any payments made to the Issuer for the
account of such Lender or (iii) by payment to the Issuer by the Agent of amounts
otherwise payable to such Lender under this Agreement. The failure of any Lender
to make available to the Agent its Pro Rata Share of the unreimbursed amount of
any such payment shall not relieve any other Lender of its obligation hereunder
to make available to the Agent its Pro Rata Share of the unreimbursed amount of
any payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
its Pro Rata Share of the unreimbursed amount of any payment on the date such
payment is to be made.
(c) Whenever the Issuer receives a payment on account of a Reimbursement
Obligation, including any interest thereon, it shall promptly pay to each Lender
which has funded its participating interest therein, in immediately available
funds, an amount equal to such Lender's Pro Rata Share thereof.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
(e) In the event any payment by the Borrower or any Subsidiary or Affiliate
of the Borrower received by the Issuer or the Agent with respect to a Facility
Letter of Credit and distributed to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from the Issuer or
the Agent in connection with any receivership, liquidation, reorganization or
bankruptcy proceeding, each Lender which received such distribution shall, upon
demand by the Agent, contribute such Lender's Pro Rata Share of the amount set
aside, avoided or recovered together with interest at the rate required to be
paid by the Issuer upon the amount required to be repaid by it.
2.4.6. Compensation for Facility Letters of Credit. (a) The Borrower shall
pay to the Issuer, for the ratable benefit of the Lenders, a Facility Letter of
Credit fee at a per annum rate equal to the Applicable Margin on the average
daily undrawn amount of all Facility Letters of Credit outstanding, such fee to
be paid in arrears on each Payment Date and on the Termination Date.
(b) In addition, the Borrower shall pay to the Issuer, for its own account,
a Letter of Credit fronting fee in the amount set forth in the Agent's Fee
Letter as well as the Issuer's reasonable and customary costs of issuing and
servicing the Facility Letters of Credit.
2.4.7. Letter of Credit Collateral Account. The Borrower agrees that it
will, upon the request of the Agent or the Required Lenders and until the final
expiration date of any Facility Letter of Credit and thereafter as long as any
amount is payable to the Issuer or the Lenders in respect of any Facility Letter
of Credit, maintain a special collateral account (the "Letter of Credit
Collateral Account") at the Agent's office at the address specified pursuant to
Article XIII, in the name of such Borrower but under the sole dominion and
control of the Agent, for the benefit of the Lenders and in which such Borrower
shall have no interest other than as set forth in Section 8.1. The Agent will
invest any funds on deposit from time to time in the Letter of Credit Collateral
Account in certificates of deposit of First Chicago having a maturity not
exceeding 30 days. Nothing in this Section 2.4.7 shall either obligate the Agent
to require the Borrower to deposit any funds in the Letter of Credit Collateral
Account or limit the right of the Agent to release any funds held in the Letter
of Credit Collateral Account in each case other than as required by Section 8.1.
2.4.8. Nature of Obligations. (a) As among the Borrower, the Issuer and
the Lenders, the Borrower assumes all risks of the acts and omissions of, or
misuse of the Facility Letters of Credit by, the respective beneficiaries of the
Facility Letters of Credit. In furtherance and not in limitation of the
foregoing, neither the Issuer nor the Lenders shall be responsible for (i) the
forms, validity, sufficiency, accuracy, genuineness or
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legal effect of any document submitted by any party in connection with the
application for and issuance of any Facility Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Facility Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii)
failure of the beneficiary of a Facility Letter of Credit to comply fully with
conditions required in order to draw upon such Facility Letter of Credit; (iv)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise; (v) errors in
interpretation of technical terms; (vi) misapplication by the beneficiary of a
Facility Letter of Credit of the proceeds of any drawing under such Facility
Letter of Credit; nor (viii) any consequences arising from causes beyond the
control of the Issuer or the Lenders.
(b) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuer or
any Lender under or in connection with the Facility Letters of Credit or any
related certificates, if taken or omitted in good faith, shall not put the
Issuer or such Lender under any resulting liability to the Borrower or any
Subsidiary Co-Applicant or relieve the Borrower or any Subsidiary Co-Applicant
of any of its obligations hereunder or under any LC Application to the Issuer,
the Agent or any Lender.
2.5. Fees.
2.5.1. Agent's Fees. The Borrower hereby agrees to pay to the Agent fees
in such amounts and at such times as are set forth in the Agent's Fee Letter.
2.5.2. Facility Fee. The Borrower hereby agrees to pay to the Agent for
the account of each Lender a facility fee at the Applicable Facility Fee Rate on
the average daily amount of such Lender's Commitment (without regard to usage)
for the period from the Closing Date to and including the Termination Date (or
such earlier date on which the Aggregate Commitment shall terminate or be
cancelled, all of the Loans shall be repaid and all of the Facility Letters of
Credit shall be terminated or fully cash collateralized pursuant to the terms
hereof), payable in arrears on each Payment Date hereafter and on the
Termination Date (or such earlier date on which the Aggregate Commitment shall
terminate or be cancelled and all of the Loans shall be repaid and Facility
Letters of Credit shall have terminated or fully cash collateralized pursuant to
the terms hereof) for any period then ending for which such fee shall not have
been theretofore paid.
2.5.3. Utilization Fee. In addition to the facility fee set forth in the
preceding Section 2.5.2, the Borrower hereby agrees to pay to the Agent for the
account of the Lenders a utilization fee for all periods during which the
aggregate principal amount of Loans (including Competitive Bid Loans) and
Facility Letter of Credit Obligations outstanding exceeds 50% of the
then-current Aggregate Commitment. Such utilization fee shall be at a rate equal
to the Applicable Utilization Fee Rate on the aggregate principal amount of
Loans (including Competitive Bid Loans) and Facility Letter of Credit
Obligations outstanding, shall be distributed to each Lender pro rata according
to such Lender's proportion of such Loans (including Competitive Bid Loans) and
participations in Facility Letters of Credit outstanding, and shall be payable
in arrears on each Payment Date hereafter and on the Termination Date (or such
earlier date on which the Aggregate Commitment shall terminate or be cancelled,
all of the Loans shall be repaid and all of the Facility Letters of Credit shall
be terminated or fully cash collateralized pursuant to the terms hereof) for any
period then ending for which such fee shall not have been theretofore paid.
2.6. General Facility Terms.
2.6.1. Method of Borrowing. Not later than 12:00 noon (Chicago time) on
each Borrowing Date (1:00 p.m., Chicago time, on each Borrowing Date in the case
of Floating Rate Loans), each Lender shall make available its Loan or Loans in
funds immediately available in Chicago, to the Agent at its address specified
pursuant to Article XIII. The Agent shall deposit the funds so received from the
Lenders in the Borrower's account at the Agent's main office in Chicago.
Notwithstanding the foregoing provisions of this Section 2.6.1, to the extent
that a Loan made by a Lender matures on the Borrowing Date of a requested
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Loan, such Lender shall apply the proceeds of the Loan it is then making to the
repayment of principal of the maturing Loan.
2.6.2. Minimum Amount of Each Advance. Each Advance shall be in the
minimum amount of $10,000,000 (and in integral multiples of $5,000,000 if in
excess thereof); provided, however, that any Floating Rate Advance may be in the
aggregate amount of the unused Aggregate Commitment.
2.6.3. Payment on Last Day of Interest Period. Each Advance shall be paid
in full by the Borrower on the last day of the Interest Period applicable
thereto.
2.6.4. Optional Principal Payments. The Borrower may from time to time
pay, without penalty, all outstanding Floating Rate Advances, or, in a minimum
aggregate amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), any portion of the outstanding Floating Rate Advances upon one
Business Day's prior notice to the Agent. The Borrower may not voluntarily repay
a Fixed Rate Advance prior to the last day of the applicable Interest Period.
2.6.5. Interest Periods. Subject to the provisions of Section 2.6.6, each
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined, pursuant to the terms of this Agreement,
as applicable to such Advance. The Borrower shall not request a Fixed Rate
Advance if, after giving effect to the requested Fixed Rate Advance, more than
10 separate Fixed Rate Advances would be outstanding.
2.6.6. Default Rate. Notwithstanding any other provision in this Agreement
to the contrary, after the occurrence and during the continuance of a Default,
each Advance shall bear interest until paid in full at a rate per annum equal to
the greater of (i) the Alternate Base Rate plus 2% per annum, or (ii) the
interest rate otherwise applicable to such Advance pursuant to the provisions of
this Agreement other than this Section 2.6.6.
2.6.7. Interest Payment Dates; Interest Basis. Interest accrued on each
Fixed Rate Advance shall be payable on the last day of its applicable Interest
Period and on any date on which such Fixed Rate Advance is prepaid, whether due
to acceleration or otherwise. Interest accrued on each Fixed Rate Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, on any date
on which such Floating Rate Advance is repaid, whether due to acceleration or
otherwise, and on the Termination Date. Interest on Fixed Rate Advances and all
fees under Sections 2.5.2 and 2.5.3 shall be calculated for the actual number of
days elapsed on the basis of a year consisting of 360 days. Interest on Floating
Rate Advances shall be calculated for the actual number of days elapsed on the
basis of a year consisting of 365, or, when appropriate, 366 days. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (Chicago time)
at the place of payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.6.8. Method of Payment. Except as specifically provided in this
Agreement and in the following sentence, all payments of principal, interest,
Reimbursement Obligations and fees hereunder shall be made in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII or at any other Lending Installation of the Agent within the United
States specified in writing by the Agent to the Borrower (at least one Business
Day prior to the applicable due date) by noon (Chicago time) on the date when
due and shall be applied (i) first, ratably among the relevant Lenders with
respect to any principal and interest due in connection with Advances, (ii)
second, to the Issuer with respect to any Reimbursement Obligations then due and
payable and (iii) third, after all amounts described in clauses (i) and (ii)
have been satisfied, ratably to any other Obligations then due. Each payment
delivered to the Agent for the account of any Lender or the Issuer shall be
delivered promptly by the Agent to such Lender or the Issuer, as the case may
be, in the same type of funds which the Agent received, at such Lender's or the
Issuer's address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such
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Lender or the Issuer. Any payments not delivered by the Agent to any Lender
within one Business Day of receipt thereof by the Agent shall bear interest at
the Federal Funds Effective Rate until paid. The Agent is hereby authorized to
charge the account of the Borrower for each payment of principal, interest,
Reimbursement Obligations and fees as it becomes due hereunder.
2.6.9. Notes; Telephonic Notices. Each Lender is hereby authorized to
record on the schedule attached to each of its Notes, or otherwise record in
accordance with its usual practice, the date and amount of each of its Loans of
the type evidenced by such Note; provided, however, that any failure to so
record or any mistake in so recording shall not affect the Borrower's
obligations under any Note. The Borrower hereby authorizes the Lenders and the
Agent to extend Advances, effect Rate Option selections and submit Competitive
Bid Quotes based on telephonic notices made by any person or persons the Agent
or any Lender in good faith believes to be an Authorized Officer or an officer,
employee or agent of the Borrower designated in writing by an Authorized
Officer. The Borrower agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.6.10. Notification of Advances, Interest Rates and Prepayments. The
Agent will notify each Lender of the contents of each borrowing notice, LC
Application and payment notice received by it hereunder promptly after receipt
thereof. The Agent will notify each Lender of the interest rate applicable to
each Fixed Rate Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Corporate Base Rate.
2.6.11. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or a payment under Section 2.4.5.(b) or (ii) in the case of
the Borrower, a payment of principal, interest, fees or Reimbursement
Obligations to the Agent or the Issuer for the account of the Lenders or the
Issuer, that it does not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in reliance upon
such assumption. If such Lender or the Borrower, as the case may be, has not in
fact made such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on the
date such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (x) in the case of repayment
by a Lender of funds advanced to such Lender by the Agent, the Federal Funds
Effective Rate for such day or (y) in the case of repayment by the Borrower of
funds advanced to the Borrower by the Agent, the interest rate applicable to the
relevant Loan or Reimbursement Obligation.
2.6.12. Cancellation. The Borrower may at any time after the date hereof
cancel the Aggregate Commitment in whole, or in a minimum aggregate amount of
$5,000,000 and in integral multiples of $1,000,000 in excess thereof ratably
among the Lenders upon at least three Business Days' prior written notice to the
Agent, which notice shall specify the amount of such reduction; provided,
however, no such notice of cancellation shall be effective to the extent that it
would reduce the Aggregate Commitment to an amount which would be less than the
aggregate outstanding principal amount of Loans and Facility Letter of Credit
Obligations at the time such cancellation is to take effect. Any notice of
cancellation given pursuant to this Section shall be irrevocable and shall
specify the date upon which such cancellation is to take effect.
2.6.13. Lending Installations. Each Lender may book its Loans and
participations in Facility Letters of Credit at any Lending Installation
selected by such Lender and may change its Lending Installation from time to
time. Each Lender will notify the Agent and the Borrower on or prior to the date
of this Agreement of the initial Lending Installation which it intends to
utilize for each Type of Loan and each participation in Facility Letters of
Credit hereunder. Each Lender may, by written notice to the Agent and the
Borrower, change the Lending Installation through which Loans will be made by it
and participations in Facility Letters of Credit booked by it and for whose
account Loan and Reimbursement Obligation payments are to be made.
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2.6.14. Withholding Tax Exemption. (a) Not later than ten Business Days
after the Closing Date, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver to
each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes. Each
Lender which so delivers a Form 1001 or 4224 further undertakes to deliver to
each of the Borrower and the Agent two additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
in each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the Borrower
and the Agent that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax.
(b) Except as otherwise required by law and subject to Section 2.6.14(a),
each payment by the Borrower under this Agreement or any Loan Document shall be
made without withholding for or on account of any present or future taxes (other
than overall net income taxes on the recipient not required to be deducted or
withheld) imposed by or within the jurisdiction in which the Borrower is
domiciled, any jurisdiction from which the Borrower makes any payment, or (in
each case) any political subdivision or taxing authority thereof or therein. If
any such withholding is so required, the Borrower shall make the withholding,
pay the amount withheld to the appropriate governmental authority before
penalties attach thereto or interest accrues thereon and forthwith pay such
additional amount as may be necessary to ensure that the net amount actually
received by each Lender, the Issuer and the Agent free and clear of such taxes
(including taxes on such additional amount) is equal to the amount which that
Lender, the Issuer or the Agent (as the case may be) would have received had
such withholding not been made. If the Agent, the Issuer or any Lender pays any
amount in respect of such taxes, penalties or interest the Borrower shall
reimburse the Agent, the Issuer or that Lender for that payment on demand in the
currency in which such payment was made. If the Borrower pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender, the Issuer or the Agent on
whose account such withholding was made (with a copy to the Agent if not the
recipient of the original) on or before the thirtieth day after payment. To the
extent that the Agent, the Issuer or any Lender actually receives a credit
against or a reduction in its tax liability as a result of payments made by the
Borrower pursuant to this Section 2.6.14(b), the Agent, the Issuer or such
Lender, as the case may be, shall reimburse the Borrower for such credit or
reduction at the time when such credit or reduction is no longer subject to
challenge by the applicable taxing authority.
2.6.15. Application of Payments with Respect to Defaulting Lenders. No
payments of principal, interest, Reimbursement Obligations or fees delivered to
the Agent for the account of any Defaulting Lender shall be delivered by the
Agent to such Defaulting Lender. Instead, such payments shall, for so long as
such Defaulting Lender shall be a Defaulting Lender, be held by the Agent, and
the Agent is hereby authorized and directed by all parties hereto to hold such
funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due to the Issuer pursuant to
Section 2.4.5(b); and
(ii) Second, to Loans required to be made by such Defaulting Lender on
any Borrowing Date to the extent such Defaulting Lender fails to make such
Loans.
Notwithstanding the foregoing, upon the termination of the Aggregate
Commitment and the payment and performance of all of the Obligations (other than
those owing to a Defaulting Lender), any funds then held in escrow by the Agent
pursuant to the preceding sentence shall be distributed to each Defaulting
Lender, pro rata in proportion to amounts that would be due to each Defaulting
Lender but for the fact that it is a Defaulting Lender.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If, after the date of this Agreement, the adoption
of any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
therein, or any change in the interpretation or administration thereof, or the
compliance of any Lender therewith,
(i) subjects the Agent, any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from the Borrower (excluding, (x) in the case of the Agent and of each
Lender, (1) United States federal taxation of its overall net income, and
(2) taxes imposed on its overall net income, and franchise taxes imposed on
it, by any jurisdiction outside of the United States of America or by the
jurisdiction under the laws of which the Agent or such Lender (as the case
may be) is organized or any political subdivision thereof or the
jurisdiction in which the principal office of the Agent or such Lender (as
the case may be) is located or any political subdivision thereof, and, (y)
in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it, by the jurisdiction in which its applicable
Lending Installation is located or any political subdivision thereof), or
changes the basis of taxation of payments to any Lender in respect of its
Loans or Facility Letters of Credit (or participations therein) or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or
any applicable Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable to Fixed
Rate Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining Loans or Facility Letters of Credit (or
participations therein) or reduces any amount receivable by any Lender or
any applicable Lending Installation in connection with Loans or Facility
Letters of Credit (or participations therein), or requires any Lender or
any applicable Lending Installation to make any payment calculated by
reference to the amount of Loans or Facility Letters of Credit (or
participations therein) held or interest received by it, by an amount
deemed material by such Lender, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender that portion of such increased
expense incurred or reduction in an amount received which such Lender
determines is directly attributable to making, funding and maintaining its
Loans and Facility Letters of Credit (or participations therein) and its
Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines that
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change (as hereinafter defined), then, within 15
days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender determines is attributable to this
Agreement, its Loans and Facility Letters of Credit (or participations therein)
or its obligation to make Loans and issue or participate in Facility Letters of
Credit hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines (as hereinafter defined) or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines
in effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
Entitled "International Convergence of
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Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Rate Options. If any Lender determines that
maintenance of any of its Fixed Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Fixed Rate Advances are not
available or (ii) the interest rate applicable to a Type of Advance does not
accurately reflect the cost of making or maintaining such Advance, then the
Agent shall (x) suspend the availability of the affected Type of Advance and, to
the extent that any Lender has so determined that maintenance of any Type of
Fixed Rate Advance at a suitable Lending Installation would violate any
applicable law, rule, regulation, or directive, whether or not having the force
of law, require the Fixed Rate Loans of the affected Type made by such Lender to
be repaid.
3.4. Funding Indemnification. If any payment of a Fixed Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment (whether mandatory or voluntary) or
otherwise, or a Fixed Rate Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Fixed Rate Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Fixed Rate Loans or Facility Letters of Credit (or participations
therein) to reduce any liability of the Borrower to such Lender under Section
3.1 or 3.2 or to avoid the unavailability of a Type of Advance under Section
3.3, so long as such designation is not disadvantageous to such Lender. Each
Lender shall deliver a written statement of such Lender as to the amount due, if
any, under Section 3.1, 3.2 or 3.4. Such written statement shall set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final, conclusive and binding on the Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a Fixed Rate Loan shall be calculated as though each Lender
funded its Fixed Rate Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
Fixed Rate applicable to such Loan, whether in fact that is the case or not.
Except as otherwise specifically provided herein, the amount specified in the
written statement shall be payable on demand after receipt by the Borrower of
the written statement. The obligations of the Borrower under Sections 3.1, 3.2
and 3.4 shall survive payment of the Obligations and termination of this
Agreement.
3.6 References to Lender to Include Issuer. All references to "Lender" or
"Lenders" in this Article III shall be deemed to include The First National Bank
of Chicago in its capacity as Issuer.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. Neither the Lenders nor the Issuer shall be
required to make the initial Credit Extension hereunder unless (a) the Borrower
has furnished to the Agent with sufficient copies for the Lenders:
(i) Copies of the certificate of incorporation of the Borrower and of
each Guarantor, together with all amendments, and a certificate of good
standing of each such entity, both certified as of a date reasonably close
to the Closing Date by the appropriate governmental officer in its
jurisdiction of incorporation.
(ii) Copies, certified as of the Closing Date by the Secretary or
Assistant Secretary of the Borrower and of each Guarantor, of its by-laws
and of its Board of Directors' resolutions authorizing the execution and
delivery of the Loan Documents to which it is a party and the performance
by each such entity of its obligations thereunder.
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(iii) An incumbency certificate dated as of the Closing Date, executed
by the Secretary or Assistant Secretary of the Borrower and of each
Guarantor, which shall identify by name and title and bear the signature of
the officers of such entity authorized to sign the Loan Documents to which
it is a party and, in the case of the Borrower, to request Credit
Extensions hereunder, upon which certificate the Lenders, the Issuer and
the Agent shall be entitled to rely until informed of any change in writing
by the Borrower.
(iv) Counterparts of this Agreement executed by the Agent, the Issuer
and the Borrower, and telecopy or telephone confirmation pursuant to
Article XIII that this Agreement has been executed by the Lenders.
(v) The Guaranty.
(vi) A certificate, signed by the Treasurer of the Borrower or his
designee, stating that on and as of the Closing Date (x) no Default or
Unmatured Default has occurred and is continuing and (y) the
representations and warranties contained in Article V are true and correct
in all material respects.
(vii) A written opinion of the Borrower's counsel dated the Closing
Date addressed to the Agent, the Lenders and the Issuer and in form and
substance substantially similar to that set forth in Exhibit "F" hereto.
(viii) Ratable Notes and Competitive Bid Notes payable to the order of
each of the Lenders.
(ix) Written money transfer instructions, in substantially the form of
Exhibit "G" hereto, addressed to the Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as
the Agent may have reasonably requested.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
and (b) the following events shall have occurred or conditions shall have been
fulfilled:
(i) The Agent shall have received from the Borrower all fees, if any,
required to be paid to the Agent on or prior to the Closing Date.
(ii) All loans under that certain Credit Agreement dated as of June
23, 1995 (the "Existing Credit Agreement") among the Borrower, the banks
party thereto and First Chicago, as agent, shall have been (or shall,
concurrently with the initial Credit Extension, be) repaid and all
commitments of the banks party to the Existing Credit Agreement to make
loans thereunder shall have been (or shall, concurrently with the initial
Credit Extension, be) cancelled.
4.2. Refinancing Credit Extension. Neither the Lenders nor the Issuer
shall be required to make any Refinancing Credit Extension, unless on the Credit
Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V (except
the representations and warranties contained in Sections 5.5 and 5.7) are
true and correct in all material respects as of such Credit Extension Date,
except for changes in the Schedules hereto reflecting transactions
permitted by this Agreement.
(iii) All legal requirements arising under or in connection with the
Loan Documents or applicable laws, rules or regulations and incident to the
making of such Credit Extension shall be satisfactory to the Agent and its
counsel.
Each Ratable Borrowing Notice, Competitive Bid Quote Request or LC
Application with respect to such Refinancing Credit Extension shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i) and (ii) have been satisfied.
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4.3. Each Credit Extension (other than a Refinancing Credit
Extension). Neither the Lenders nor the Issuer shall be required to make any
Credit Extension (other than a Refinancing Credit Extension), unless on the
applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V (except
the representations and warranties contained in Section 5.5) are true and
correct in all material respects as of such Credit Extension Date, except
for changes in the Schedules hereto reflecting transactions permitted by
this Agreement.
(iii) All legal requirements arising under or in connection with the
Loan Documents or applicable laws, rules or regulations and incident to the
making of such Credit Extension shall be satisfactory to the Agent and its
counsel.
Each Ratable Borrowing Notice, Competitive Bid Quote Request or LC
Application with respect to each such Credit Extension shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.3(i) and (ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders and to the Issuer that:
5.1. Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
5.2. Authorization and Validity. Each of the Borrower and each Subsidiary
Co-Applicant has the corporate power and authority and legal right to execute
and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by each of the Borrower and
each Subsidiary Co-Applicant of the Loan Documents to which it is a party and
its performance of its obligations thereunder have been duly authorized by
proper corporate proceedings, and the Loan Documents constitute (or, in the case
of the LC Applications delivered after the date hereof, will, when executed and
delivered, constitute) legal, valid and binding obligations of the Borrower or
such Subsidiary Co-Applicant, as the case may be, enforceable against the
Borrower or such Subsidiary Co-Applicant in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery
by the Borrower and each Subsidiary Co-Applicant of the Loan Documents to which
it is a party, nor the consummation of the transactions therein contemplated,
nor compliance with the provisions thereof will violate any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries or the Borrower's or any such Subsidiary's
articles or certificate of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of the Borrower or
any of its Subsidiaries pursuant to the terms of any such indenture, instrument
or agreement. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents.
5.4. Financial Statements. The June 30, 1997 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated
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financial condition of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.5. Material Adverse Change. Since June 30, 1997, there has been no
change in the business, Property, condition (financial or other) or results of
operations of the Borrower and its Subsidiaries which could have a Material
Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided. The United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1992. The charges, accruals and reserves on the
books of the Borrower or of such Subsidiary, as the case may be, in respect of
any taxes or other governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries the probable outcome of which would have a
Material Adverse Effect. Other than any potential liability incident to matters
disclosed on Schedule "1" hereto, the Borrower has no material contingent
obligations not provided for or disclosed in its financial statements referred
to in Section 5.4.
5.8. Subsidiaries. Schedule "2" hereto contains an accurate list of all of
the presently existing Subsidiaries of the Borrower, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by the Borrower or other Subsidiaries. All of the issued and
outstanding shares of capital stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $15,000,000. Each Single Employer Plan complies in all
material respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Single Employer Plan, neither
the Borrower nor any other member of the Controlled Group has withdrawn from any
Single Employer Plan or initiated steps to do so, and no steps have been taken
to reorganize or terminate any Single Employer Plan. No Termination Event has
occurred and is continuing with respect to any Plan which would cause the
Borrower and the other members of the Controlled Group to incur aggregate
Current Payment Obligations in excess of $25,000,000.
5.10. Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Agent or any Lender in
connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of those assets of the Borrower and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which might have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary of the Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (i) any agreement to which it is a party, which default might have
a Material Adverse Effect, or (ii) any agreement or instrument evidencing or
governing Indebtedness in an aggregate amount exceeding $1,000,000.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government, or any instrumentality or
agency thereof, having jurisdiction over the conduct of their business or the
ownership of their Property, the non-compliance with which might have a Material
Adverse Effect. Other than as set forth on Schedule
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"3" hereto, neither the Borrower nor any of its Subsidiaries has received any
notice to the effect that its operations are not in material compliance with any
of the requirements of applicable federal, state or local environmental, health
or safety statutes or regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action might have a Material Adverse Effect.
5.14. Investment Company Act. Neither the Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.15. Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.16. Ownership of Property. On the date of this Agreement, each of the
Borrower and its Subsidiaries will have good title, free of all Liens other than
those permitted by Section 6.13, to all of the Property and assets reflected in
the financial statements referred to in Section 5.4 as owned by it.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will cause to be maintained, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with Agreement Accounting Principles, and furnish to
the Lenders:
(i) Within 90 days after the close of each of its fiscal years, annual
audited financial statements for itself and its consolidated Subsidiaries,
including a balance sheet as of the end of such period, related profit and
loss and reconciliation of surplus statements, and a statement of cash
flows, which financial statements shall be included within an unqualified
audit report certified by independent certified public accountants (the
identity of such accountants to be acceptable to the Lenders), which
statements shall be prepared in accordance with Agreement Accounting
Principles on a consolidated basis (consolidating statements, which need
not be certified by such accountants, will be provided upon request by any
Lender), and which statements and audit report shall be accompanied by a
certificate of said accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its consolidated
Subsidiaries, a consolidated unaudited balance sheet as at the close of
each such period and consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all certified by
its Treasurer or his designee.
(iii) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit "H" hereto
signed by its Treasurer, or his designee, showing the calculations
necessary to determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.
(iv) If there are Unfunded Liabilities relating to any Single Employer
Plan of the Borrower at the close of any fiscal year, a statement of the
Unfunded Liabilities of such Single Employer Plan, certified as correct by
an actuary enrolled under ERISA, within 270 days after the close of such
fiscal year.
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(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to any
Single Employer Plan, a statement, signed by the Treasurer of the Borrower,
or his designee, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after receipt
by the Borrower or any of its Subsidiaries, a copy of (a) any notice or
claim to the effect that the Borrower or such Subsidiary is or may be
liable to any Person as a result of the release by the Borrower or such
Subsidiary or any other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any violation of any
federal, state or local environmental, health or safety law or regulation
by the Borrower or any of its Subsidiaries which, in any case, could have a
Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements
so furnished.
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports or
financial statements which the Borrower or any Subsidiary files with the
Securities and Exchange Commission or the Interstate Commerce Commission or
any agency succeeding to substantially all of the functions of either of
such agencies.
(ix) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds; Regulation U. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances only in one or more of the
following ways: as liquidity support for the issuance of commercial paper by the
Borrower, for acquisitions permitted by the following sentence and for general
corporate purposes of the Borrower. The Borrower will not, nor will it permit
any Subsidiary to, use any of the proceeds of the Advances to purchase or carry
any "margin stock" (as defined in Regulation U) or to make any Stock
Acquisition. Facility Letters of Credit will be used for general corporate
purposes of the Borrower.
6.3. Notice of Default. The Borrower will, and will cause each Subsidiary
to, give notice in writing to the Lenders within five Business Days of the
occurrence of any Default or Unmatured Default and of any other development,
financial or other (including, without limitation, the commencement of or
significant developments in litigation, arbitration or other governmental
proceedings), which might have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all of its Property in such amounts and covering such risks as is customarily
maintained by companies similarly situated, and the Borrower will furnish to any
Lender upon request full information as to the insurance carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject.
6.8. Environmental Covenant. (a) The Borrower will, and will cause each of
its Subsidiaries to use and operate all of its facilities and Property in
material compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates and licenses in effect and remain in material compliance
therewith,
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and handle all Hazardous Materials in material compliance with all applicable
Environmental Laws, and provide such information and certifications as the Agent
or any Lender may reasonably request from time to time to insure compliance with
this Section 6.8.
(b) The Borrower will not, and will not permit any Subsidiary to, store,
transport or arrange for the transportation of any (i) Hazardous Wastes, or (ii)
other Hazardous Materials except to the extent allowed under applicable permits
held by the Borrower or such Subsidiary.
(c) The Borrower will not, and will not permit any Subsidiary to, engage in
the storage, transportation or arrangement for transportation of Hazardous
Materials as one of its primary businesses.
6.9. Maintenance of Property. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and the Borrower will,
and will cause each Subsidiary to, make all necessary and proper repairs,
renewals and replacements so that such entity's business carried on in
connection therewith may be properly conducted at all times.
6.10. Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Lenders, by their respective representatives and agents and (except
during the continuance of a Default or Unmatured Default) with reasonable notice
to the Borrower and during normal business hours, to inspect any of the
Property, corporate books and financial records of the Borrower and of each
Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and of each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, the Borrower's or such Subsidiary's officers at
such reasonable times and intervals as the Lenders may designate.
6.11. Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, except that a Subsidiary may
merge with the Borrower or a Wholly-Owned Subsidiary, provided that the Borrower
or a Wholly-Owned Subsidiary is the surviving corporation in any such merger or
consolidation.
6.12. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except for (i) sales of Revenue Equipment for fair value in the ordinary
course of business, (ii) sales by the Borrower or any Subsidiary of accounts
receivable pursuant to the Receivables Transactions (subject to the limitation
on the amount of the financing which may be provided in all such transactions as
set forth in the definition of the term "Receivables Transactions" herein),
(iii) sales or other dispositions of Property for fair value by a Subsidiary to
a Guarantor, (iv) sales or other dispositions of Property as part of a
Significant Restructuring, and (v) other leases, sales or other dispositions of
Property for fair value that, together with all other Property of the Borrower
and its Subsidiaries previously leased, sold or disposed of as permitted by this
clause (v) during the twelve-month period ending with the month in which any
such lease, sale or other disposition occurs, has a value not exceeding
$75,000,000.
6.13. Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur or permit to exist any Lien in, of or on any Property of the
Borrower or any Subsidiary (including, without limitation, the capital stock of
any direct or indirect Subsidiary of the Borrower) except:
(i) Liens for taxes, assessments or governmental charges or levies
thereon if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law (other than ERISA), such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more
than 60 days past due.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation (other than
ERISA).
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(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of the Borrower or of its Subsidiaries.
(v) Purchase money Liens granted to secure the purchase price of
Equipment or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such Equipment, provided that such Liens do
not extend to any other assets of the Borrower or of any Subsidiary.
(vi) Liens existing on assets at the time of their acquisition
(whether such acquisition is by purchase of assets or stock or by merger),
provided that such Liens are limited to the assets so acquired and do not
extend to any other assets of the Borrower or any Subsidiary.
(vii) Liens on real property granted to secure Indebtedness incurred
in connection with the acquisition thereof, provided that such Liens do not
extend to any other assets of the Borrower or of any Subsidiary.
(viii) Liens in existence on the Closing Date on real or personal
property securing Indebtedness or other obligations of the Borrower or any
Subsidiary in an aggregate principal amount for the Borrower and all
Subsidiaries not in excess of $30,000,000 at any one time outstanding
incurred in connection with the issuance of obligations, the interest on
which is exempt from federal income taxation under Section 103 of the Code,
to finance the acquisition by the Borrower or such Subsidiary of real or
personal property, provided that such Liens shall extend only to the assets
being financed with the proceeds of such Indebtedness.
(ix) Liens in existence on the Closing Date as set forth on Schedule
"4".
(x) Liens on accounts receivable (together with related collections
and proceeds thereof, collateral insurance therefor, guaranties thereof,
lockbox or other collection accounts related thereto and all records
related thereto) of any Subsidiary which are transferred to Receivables
Corp. as part of a Receivables Transaction (subject to the limitation on
the amount of the financing which may be provided in all such transactions
as set forth in the definition of the term "Receivables Transactions"
herein).
(xi) In addition to Liens permitted under any of the foregoing
categories, Liens on real or personal property granted to secure
Indebtedness incurred in the ordinary course of business not exceeding
$50,000,000 in the aggregate.
6.14. Guaranties, Loans, Advances and Investments. The Borrower will not,
and will not permit any Subsidiary to, become or be a guarantor or surety of, or
otherwise become or be responsible in any manner (whether by agreement to
purchase any obligations, stock, assets, goods or services, or to supply or
advance any funds, assets, goods or services, or otherwise) with respect to any
undertaking of any other Person, or make or permit to exist any loans or
advances to any other Person or investments in any other Person or instrument,
except for:
(i) the Guaranty;
(ii) the endorsement, in the ordinary course of collection, of
instruments payable to it or to its order;
(iii) guaranties or other contingent obligations, if after giving
effect to the incurrence of such obligations, the aggregate of all such
obligations of the Borrower and its Subsidiaries on a consolidated basis
does not exceed 10% of Consolidated Tangible Net Worth, provided that any
contingent obligation shall be excluded from the restriction imposed by
this Section 6.14(iii) if pursuant to the terms thereof, (a) the Borrower
or such Subsidiary is contingently liable solely with respect to a primary
obligation (other than an obligation for Indebtedness) of the Borrower or
any Subsidiary, and (b) such primary obligation is included among the
liabilities shown on the Borrower's consolidated balance sheets submitted
to the Lenders pursuant to Section 6.1;
(iv) investment grade investments;
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(v) loans, advances or other investments in an amount which, when
computed in an aggregate amount for the Borrower and its Subsidiaries,
shall not exceed 10% of Consolidated Tangible Net Worth at any one time
outstanding;
(vi) guaranties by the Borrower or any Subsidiary in an aggregate
principal amount for the Borrower and all Subsidiaries not in excess of
$30,000,000 at any one time outstanding incurred in connection with the
issuance of obligations which are outstanding on the Closing Date, the
interest on which is exempt from Federal income taxation under Section 103
of the Code to finance the acquisition by the Borrower or such Subsidiary
of Property;
(vii) guaranties, loans, advances or other investments in connection
with a Receivables Transaction (provided that such Receivables Transaction
complies in all respects with the provisions set forth in the definition of
the term "Receivables Transactions" herein); and
(viii) loans or advances by the Borrower to any Subsidiary, by any
Subsidiary to the Borrower and by any Subsidiary to any other Subsidiary,
and equity interests of the Borrower or any Subsidiary in any Subsidiary.
6.15. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) pursuant to or in connection with a
Receivables Transaction and (ii) any other transaction conducted in the ordinary
course of business and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.
6.16. Adjusted Consolidated Tangible Net Worth. The Borrower will maintain
at all times Adjusted Consolidated Tangible Net Worth of not less than the sum
of (i) $310,000,000 plus (ii) 50% of Consolidated Net Income earned in any
fiscal year beginning with the fiscal year ending on December 31, 1997 (without
deduction for losses), provided that the adjustment to minimum Adjusted
Consolidated Tangible Net Worth as a result of this clause (ii) shall occur
annually upon delivery by the Borrower of the financial statements described in
Section 6.1(i) for the relevant fiscal year.
6.17. Consolidated Indebtedness to Adjusted Consolidated EBITDA Ratio. The
Borrower will not permit the ratio (measured at the end of each fiscal quarter
for the then-most recently ended four fiscal quarters) of (i) Consolidated
Indebtedness to (ii) Adjusted Consolidated EBITDA to exceed 3.0 to 1.0.
6.18. Employee Benefit Plans. The Borrower will properly conduct, and
cause each Subsidiary to properly conduct, each Single Employer Plan as to which
it may have any liability in compliance with all applicable requirements of law
and regulations.
6.19. Other Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any agreement containing any provision which would be
violated or breached by the performance of its obligations hereunder or under
any instrument or document delivered or to be delivered by it hereunder or in
connection with the transactions contemplated hereby.
6.20. Subsidiary Dividends and Indebtedness. (a) The Borrower will not,
and will not permit any Subsidiary to, enter into any agreement which prohibits
or in any manner restricts the right or ability of any Subsidiary to declare and
pay any dividends or to make any loans or advances, whether in cash or in
property, to the Borrower.
(b) At any time when the Borrower's senior unsecured long-term debt is
rated below BBB+ by S&P (or a comparable rating from any generally recognized
successor to S&P) or below Baa1 by Moody's (or a comparable rating from any
generally recognized successor to Moody's), the Borrower will not permit its
Subsidiaries to incur or maintain any Indebtedness except for (i) Indebtedness
owed to the Borrower or to a Wholly-Owned Subsidiary of the Borrower, (ii)
Indebtedness secured by Liens permitted by the terms of Section 6.13(viii),
(iii) Indebtedness incurred as part of a Receivables Transaction (subject to the
limitation on the amount of the financing which may be provided in all such
transactions as set forth in the definition of
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the term Receivables Transactions' herein) and (iv) other Indebtedness not to
exceed $75,000,000 in aggregate principal amount at any time.
6.21. Ownership of Yellow Freight. The Borrower will not, without the
prior written consent of the Required Lenders, sell, transfer, assign, grant a
Lien on or otherwise encumber or dispose of any capital stock of Yellow Freight.
6.22. Additional Material Subsidiaries. (a) The Borrower will cause any
Person that becomes a Material Subsidiary after the date hereof (i) to execute
and deliver to the Agent, within ten Business Days of becoming a Material
Subsidiary, a counterpart of the Guaranty or a new guaranty in substantially the
form of the Guaranty, in each case guarantying the obligations of the Borrower
hereunder and (ii) to deliver to the Agent evidence of action of its board of
directors or other governing body authorizing the execution, delivery and
performance thereof.
(b) If (i) as of the end of any fiscal year of the Borrower, the assets of
any Guarantor (other than an Original Guarantor) comprise less than 5% of the
Consolidated Assets of the Borrower and its Subsidiaries, and the revenue
attributable to any such Guarantor (other than an Original Guarantor) comprises
less than 5% of the consolidated revenue of the Borrower and its Subsidiaries
for such fiscal year, or (ii) the Borrower or any Subsidiary sells or otherwise
transfers all of the capital stock of any Guarantor to any Person which is not
the Borrower or a Subsidiary or liquidates or dissolves any Guarantor in a
transaction which, in any case described in this clause (b), is not otherwise
prohibited by the terms of this Agreement, the Agent will, on behalf of the
Lenders, execute and deliver to the Borrower a release of such Guarantor from
its obligations under the Guaranty, provided that to the extent that any
proceeds of any sale, transfer, liquidation or dissolution described in clause
(ii) exceed $1,000,000, such transaction must be structured so that such
proceeds are ultimately retained by the Borrower or by a Guarantor.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
the Borrower or any of its Subsidiaries to the Lenders, the Issuer or the Agent
under or in connection with this Agreement, any Credit Extension, any LC
Application or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the date as of
which made.
7.2. Nonpayment of principal of any Note or of any Reimbursement Obligation
when due, or nonpayment of interest upon any Note or of any facility or
utilization fee or other obligations under any of the Loan Documents within five
days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.3, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.20 or 6.21.
7.4. The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement or the breach by the Borrower or any Subsidiary Co-Applicant of any of
the terms or provisions of any LC Application which is not remedied within
thirty days after written notice from the Agent, the Issuer or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
principal, interest or other amounts under any Indebtedness the aggregate
principal amount of which at the time of such failure exceeds $1,000,000; or the
default by the Borrower or any of its Subsidiaries in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness the aggregate principal amount of which at the time of such default
exceeds $10,000,000 was created or is governed, or any other event shall occur
or condition exist, the effect of which is to cause, or to permit the holder or
holders of such Indebtedness to cause, such Indebtedness to become due prior to
its stated maturity; or any Indebtedness the aggregate principal amount of which
exceeds $10,000,000 of the Borrower or any of its Subsidiaries shall be declared
to
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be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or the Borrower or any
of its Subsidiaries shall not pay, or admit in writing its inability to pay, its
debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its property, (iv) institute any proceeding seeking an order
for relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6 or (vi) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or any of
its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
substantial part of its property, or a proceeding described in Section 7.6(iv)
shall be instituted against the Borrower or any of its Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge any judgment or order for the payment of money
in excess of $10,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. The Borrower or any of its Subsidiaries shall be the subject of any
proceeding or investigation pertaining to the release by the Borrower, any of
its Subsidiaries or any other Person of any Hazardous Material into the
environment, or there shall occur any violation of any Environmental Law which,
in the case of any such proceeding, investigation or violation, would be
reasonably likely to have a Material Adverse Effect.
7.11. (a) The aggregate Unfunded Liabilities under all Single Employer
Plans shall at any time exceed $15,000,000, or any Reportable Event shall occur
with respect to any Single Employer Plan.
(b) Any Termination Event shall occur with respect to one or more Plans
which, when taken together with any other Termination Events then existing with
respect to Plans, will cause the Borrower and the other members of the
Controlled Group to incur aggregate Current Payment Obligations in excess of
$25,000,000.
7.12. Any Change in Control shall occur.
7.13. The Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of the Guaranty, or any Guarantor shall deny that it
has any further liability under the Guaranty, or shall give notice to such
effect, provided that this Section 7.13 shall not affect the Agent's power to
release a Guarantor from its obligations under the Guaranty pursuant to Sections
6.22 and 8.2(v).
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Collateral Shortfall.
(a) If any Default described in Section 7.6 or 7.7 occurs with respect to
the Borrower, (i) the obligations of the Lenders to make Loans hereunder and to
participate in Facility Letters of Credit and the obligations of the Issuer to
issue Facility Letters of Credit shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the Issuer or any Lender and (ii) the Borrower
will be and become thereby unconditionally obligated, without the need for
demand or the necessity of any act or evidence, to deliver to the Agent, at its
address specified pursuant to Article XIII for deposit into the Letter of Credit
Collateral Account, an amount (the "Collateral Shortfall Amount") equal to the
excess, if any, of (A) 100% of the sum of the aggregate maximum amount remaining
available to be drawn under the Facility Letters of Credit (assuming compliance
with all conditions for drawing thereunder) issued by the Issuer and outstanding
as of such time, over (B) the amount on deposit in the Letter of Credit
Collateral Account at such time that is free and clear of all rights and claims
of third parties and that has not been applied by the Agent against the
Obligations.
(b) If any Default occurs and is continuing (other than a Default described
in Section 7.6 or 7.7 with respect to the Borrower), (i) the Required Lenders
(or the Agent, acting with the consent of or upon the direction of the Required
Lenders) may terminate or suspend the obligations of the Lenders to make Loans
and to participate in Facility Letters of Credit hereunder and the obligation of
the Issuer to issue Facility Letters of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives and (ii)
the Required Lenders (or the Agent, acting with the consent of or upon the
direction of the Required Lenders) may, upon notice delivered to the Borrower
and in addition to the continuing right to demand payment of all amounts payable
under this Agreement, make demand on the Borrower to deliver, and the Borrower
will, forthwith upon such demand and without necessity of further act or
evidence, be and become thereby unconditionally and jointly and severally
obligated to deliver, to the Agent, at its address specified pursuant to Article
XIII, for deposit into the Letter of Credit Collateral Account an amount equal
to the Collateral Shortfall Amount.
(c) If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than zero, the
Agent may make demand on the Borrower to deliver, and the Borrower will,
forthwith upon demand by the Agent and without necessity of further act or
evidence, be and become thereby unconditionally obligated to deliver, to the
Agent as additional funds to be deposited and held in the Letter of Credit
Collateral Account an amount equal to such Collateral Shortfall Amount at such
time.
(d) The Agent may at any time or from time to time after funds are
deposited in the Letter of Credit Collateral Account, apply such funds to the
payment of the Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower or any Subsidiary Co-Applicant to the
Lenders or the Issuer under the Loan Documents.
(e) At any time while any Default is continuing, neither the Borrower, any
Subsidiary Co-Applicant, nor any Person claiming on behalf of or through the
Borrower or any Subsidiary Co-Applicant shall have any right to withdraw any of
the funds held in the Letter of Credit Collateral Account. After all of the
Obligations have been indefeasibly paid in full, any funds remaining in the
Letter of Credit Collateral Account shall be returned by the Agent to the
Borrower or paid to whomever may be legally entitled thereto at such time.
(f) The Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Letter of Credit Collateral Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower
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hereunder or waiving any Default hereunder; provided, however, that no such
supplemental agreement shall, without the consent of all of the Lenders:
(i) Extend the maturity of any Loan or Note or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the amount of or extend the maturity of the Reimbursement
Obligations, or reduce the rate or change the time of payment of any fees
related to Facility Letters of Credit.
(iii) Reduce the percentage specified in the definition of Required
Lenders.
(iv) Extend the Termination Date or increase the amount of the
Commitment of any Lender hereunder, or permit the Borrower to assign its
rights under this Agreement.
(v) Release any Guarantor from its obligations under the Guaranty,
except in accordance with the provisions of Section 6.22(b).
(vi) Amend this Section 8.2 or Section 2.4.2(iii).
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 and release any Guarantor in
accordance with the provisions of Section 6.22(b) without obtaining the consent
of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the Issuer
and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, neither any Lender nor the Issuer shall be obligated
to extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding, (x) in the case of the Agent, the Issuer
and each Lender, (1) United States federal taxation of its overall net income,
and (2) taxes imposed on its overall net income, and franchise taxes imposed on
it, by any jurisdiction outside of the United States of America or by the
jurisdiction under the laws of which the Agent, the Issuer or such Lender (as
the case may be) is organized or any political subdivision thereof or the
jurisdiction in which the principal office of the Agent, the Issuer or such
Lender (as the case may be) is located or any political subdivision thereof,
and, (y) in the case of the Issuer and each Lender, taxes imposed on its overall
net income, and franchise taxes imposed on it, by the jurisdiction in which its
applicable Lending Installation is located or any political subdivision thereof)
or other similar assessments or charges payable or ruled payable by any
governmental authority in respect of the Loan Documents shall be paid by the
Borrower, together with interest and penalties, if any.
9.4. Headings. Section headings in the Loan Documents are for convenience
of reference only and shall not govern the interpretation of any of the
provisions of the Loan Documents.
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9.5. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Issuer, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Issuer, the Agent and the Lenders relating to the subject matter thereof.
9.6. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the Agent for
any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, administration, syndication and amendment
of the Loan Documents. The Borrower also agrees to reimburse the Agent, the
Issuer and the Lenders for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent,
the Issuer and the Lenders, which attorneys may be employees of the Agent, the
Issuer or the Lenders) paid or incurred by the Agent, the Issuer or any Lender
in connection with the collection and enforcement of the Loan Documents. The
Borrower further agrees to (x) indemnify the Agent, the Issuer and each Lender,
and their respective directors, officers and employees, agents and directors
("Indemnified Persons") against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all
reasonable expenses of litigation or preparation therefor whether or not the
Agent or any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to the commitment letter dated July 15, 1997 relating
to this transaction, this Agreement, the other Loan Documents, or any other
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder, except
to the extent any of the foregoing arises solely from the gross negligence or
willful misconduct of the party seeking indemnification, and (y) to assert no
claim against the Agent, the Issuer, any Lender or any other Indemnified Person,
on any theory of liability, for special, indirect, consequential or punitive
damages. The obligations of the Borrower under this Section shall survive the
termination of this Agreement and the Aggregate Commitment and the repayment of
the Advances and the termination of the Facility Letters of Credit hereunder.
9.8. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.9. Accounting. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
9.10. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the Issuer and the Agent, on the other hand, shall
be solely that of borrower and lender. Neither the Agent, the Issuer nor any
Lender shall have any fiduciary responsibilities to the Borrower. Neither the
Agent, the Issuer nor any Lender undertakes any responsibility to the Borrower
to review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
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<PAGE> 43
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT, THE ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE AGENT, THE ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE
ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Confidentiality. Each of the Lenders and the Issuer agrees to hold
any information identified to it as confidential which it may receive from the
Borrower pursuant to this Agreement in confidence, except for disclosure (i) to
its Affiliates, to other Lenders or the Issuer and their respective Affiliates,
(ii) to its legal counsel, accountants, and other professional advisors, (iii)
to regulatory officials, (iv) as requested pursuant to or as required by law,
regulation, or legal process, (v) in connection with any legal proceeding to
which it is a party, (vi) permitted by Section 12.4, and (vii) of such portions
of such information which is or becomes generally available to the public other
than as a result of disclosure by it or its representatives.
ARTICLE X
THE AGENT
10.1. Appointment. The First National Bank of Chicago is hereby appointed
Agent hereunder and under each other Loan Document, and each of the Lenders
irrevocably (except to the extent provided in Section 10.11) authorizes the
Agent to act as the agent of such Lender. The Agent agrees to act as such upon
the express conditions contained in this Article X. The Agent shall not have a
fiduciary relationship in respect of the Borrower or any Lender by reason of
this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no duties or obligations to the Lenders (including, without
limitation, duties or obligations to take action under the Loan Documents) other
than those specifically set forth in the Loan Documents.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc.; Delivery of
Documents. Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into,
or
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verify (i) any statement, warranty or representation made in connection with any
Loan Document or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of any obligor under any Loan Document; (iii)
the satisfaction of any condition specified in Article IV, except receipt of
items required to be delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith. The Agent will deliver to the Lenders copies of all
documents received from the Borrower which are specifically required by the
terms of the Loan Documents to be provided to the Lenders, together with any
other documents which the Agent hereafter agrees in writing to deliver to the
Lenders.
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or, when required hereunder, all of the Lenders), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Notes. The Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders against any and all liability, cost and expense that it may incur
by reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper Person or Persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
provided that, to the extent the Agent is subsequently reimbursed for such
amounts by the Borrower, the Agent will refund any such amounts paid by the
Lenders, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
(other than routine administrative duties under the Loan Documents) and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and termination of this
Agreement and all Facility Letters of Credit.
10.9. Rights as a Lender. With respect to its Commitment, Loans made by it
and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as though it were not the Agent, and the term "Lender" or "Lenders" shall,
at any time when the Agent is a Lender, unless the context otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person. The Agent, in its individual capacity, is not obligated to remain
a Lender.
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10.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Issuer or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Issuer or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
10.11. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Lenders, the Issuer and the Borrower, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Required Lenders. Upon any such resignation or removal, the
Required Lenders (with the consent of the Borrower at any time other than during
the continuance of a Default) shall have the right to appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty days after the retiring Agent's giving notice of
resignation, then the retiring Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Agent. Such successor Agent shall be a commercial bank
having capital and retained earnings of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent, and the
retiring or removed Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Article X shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents.
10.12. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of the
Lenders or the Issuer under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default or Unmatured Default occurs, any and all
deposits (including all account balances, whether provisional or final and
whether or not collected or available) and any other Indebtedness at any time
held or owing by any Lender or the Issuer to or for the credit or account of the
Borrower may be offset and applied toward the payment of the Obligations owing
to such Lender or the Issuer, whether or not the Obligations, or any part
hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans or participations in Facility Letters of
Credit (other than payments received pursuant to Sections 3.1, 3.2 or 3.4) in a
greater proportion than that received by any other Lender, such Lender agrees,
promptly upon demand, to purchase a portion of the Loans or participations in
Facility Letters of Credit held by the other Lenders so that after such purchase
each Lender will hold its ratable proportion of Loans and participations in
Facility Letters of Credit. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be subject to
setoff, such Lender agrees, promptly upon demand, to take such action necessary
such that all Lenders share in the benefits of such collateral ratably in
proportion to their Loans and participations in Facility Letters of Credit. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
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ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Agent, the Issuer and the Lenders and their respective successors and assigns,
except that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender must
be made in compliance with Section 12.3. Notwithstanding clause (ii) of this
Section, any Lender may at any time, without the consent of the Borrower, the
Issuer or the Agent and without the payment of any fee to the Agent, assign all
or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 12.3 in the case of an assignment thereof or, in the
case of any other transfer, a written notice of the transfer is filed with the
Agent. Any assignee or transferee of a Note (other than a Federal Reserve Bank
in the case of an assignment for security purposes) agrees by acceptance thereof
to be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Loan owing to such Lender, any participation in Facility Letters of
Credit owned by such Lender, any Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan Documents.
Unless a Default has occurred and is continuing, the consent of the Borrower and
the Agent shall be required prior to such sale becoming effective with respect
to a Participant which is not a Lender or an Affiliate of a Lender or of such
Lender's parent corporation. Such consent shall not be unreasonably withheld. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower, the Issuer
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Facility Letter of Credit or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable with respect to any such Loan,
Facility Letter of Credit or Commitment, postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees on, any such
Loan, Reimbursement Obligations, interest or fees in respect of any such
Facility Letter of Credit or Commitment, releases any guarantor of any such Loan
or Facility Letter of Credit or releases any collateral held in the Letter of
Credit Collateral Account (except in accordance with Section 8.1) or any
substantial portion of any other collateral, if any, securing any such Loan or
Facility Letter of Credit.
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
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12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course of
its business and in accordance with applicable law and the provisions of this
Section 12.3, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the Loan
Documents. Such assignment shall be substantially in the form of Exhibit "I"
hereto or in such other form as may be agreed to by the parties thereto. The
Lender which desires to make such an assignment (the "Transferor Lender") shall
so inform the Borrower and the Agent in writing. The Borrower shall then have an
exclusive period of 30 days after such notice from the Transferor Lender to
locate a Purchaser (which may or may not be an entity recommended by the
Transferor Lender) for that portion of the Transferor Lender's rights and
obligations which are proposed to be sold and, if the Borrower locates a
Purchaser within such period, the Transferor Lender will make the proposed
assignment to such Purchaser as long as the terms of such assignment are no
worse than the Transferor Lender could obtain in a sale to a Purchaser of its
choice. If a sale to a Purchaser selected by the Borrower does not occur within
such 30 day period, the Transferor Lender may, with the consent of the Agent and
the Borrower (which shall not be unreasonably withheld or delayed), make the
proposed assignment to a Purchaser of its choice. Notwithstanding the foregoing
provisions, any Lender may make an assignment of all or any part of its rights
and obligations under the Loan Documents (i) without the consent of the Borrower
or the Agent and without giving the Borrower the 30-day exclusive period to
locate a Purchaser described above if the Purchaser is another Lender or an
Affiliate of a Lender or (ii) without the consent of the Borrower and without
giving the Borrower the 30-day exclusive period to locate a Purchaser described
above if a Default has occurred and is continuing.
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as Exhibit "I" to Exhibit "I"
hereto (a "Notice of Assignment"), together with any consents required by
Section 12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and participations in
Facility Letters of Credit under the applicable assignment agreement are "plan
assets" as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the Issuer, the
Lenders or the Agent shall be required to release the Transferor Lender with
respect to the percentage of the Aggregate Commitment, Loans and participation
in Facility Letters of Credit assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 12.3.2, the Transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such Transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment.
12.4. Dissemination of Information. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.15 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the Transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.6.14.
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ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section 2.6.9 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing and shall be sent by United States mail, telegraph, telex, FAX or
nationally established overnight courier service, and shall be deemed received
(i) when received by the addressee if sent via the United States mail, postage
prepaid, (ii) when delivered to the appropriate office or machine operator for
transmission, charges prepaid, if sent by telegraph or telex (answerback
confirmed in the case of telexes), (iii) when receipt thereof by the addressee
is confirmed by telephone if sent by FAX and (iv) one business day after
delivery to an overnight courier service, if sent by such service, in each case
addressed to such party at its address or facsimile number set forth below its
signature hereto.
13.2. Change of Address. The Borrower, the Agent, the Issuer and any
Lender may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent, the Issuer and
the Lenders and each party has notified the Agent by facsimile or telephone that
it has taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders, the Issuer and the Agent
have executed this Agreement as of the date first above written.
YELLOW CORPORATION
By:
Print Name:
Title:
10990 Roe Avenue
Overland Park, Kansas 66211-1213
Attention: Lawrence D. Berkowitz
Assistant Treasurer
Telephone: (913) 696-6130
FAX: (913) 696-6122
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<PAGE> 49
Commitments
$60,000,000 THE FIRST NATIONAL BANK OF CHICAGO
Individually, as Issuer and as Agent
By:
Print Name:
Title:
One First National Plaza
Suite 0374
Chicago, Illinois 60670
Attention: Timothy J. King
Telephone: (312) 732-6456
FAX: (312) 732-3885
$50,000,000 NATIONSBANK, N.A.
Individually, and as Documentation
Agent
By:
Print Name:
Title:
Grand Cayman (North American No. 1)
c/o New York Branch
Financial Square, 23rd Floor
10th & Baltimore
5th Floor
Kansas City, Missouri 64183
Attention: Bruce A. Easterly
Telephone: (816) 979-7727
FAX: (816) 979-7426
$25.000,000 BANK OF HAWAII
By:
Print Name:
Title:
1850 N. Central Avenue,
Suite 400
Phoenix, Arizona 85004
Attention: Donna Parker
Telephone: (602) 257-2436
FAX: (602) 257-2235
44
<PAGE> 50
$25,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:
Print Name:
Title:
60 Wall Street
New York, New York
10260-0060
Attention: Charles H. King
Vice-President
Telephone: (212) 648-7138
FAX: (212) 648-5336
$25,000,000 ROYAL BANK OF CANADA
By:
Print Name:
Title:
Grand Cayman (North America No. 1)
c/o New York Branch
Financial Square, 23rd Floor
New York, New York 10005-3531
Attention: Manager, Loans
Administration
Telephone: (212) 428-6311
FAX: (212) 428-2372
with a copy to:
Financial Square
24th Floor
New York,
New York 10005-3531
Attention: Michael J. Madnick
Manager
Telephone: (212) 428-6203
FAX: (212) 428-6459
45
<PAGE> 51
$25,000,000 WACHOVIA BANK, N.A.
By:
Print Name:
Title:
191 Peachtree St., N.E.
Mail Code GA-370
Atlanta, Georgia 30303
Attention: Mark L. Thomas
Vice President
Telephone: (404) 332-6450
FAX: (404) 332-6898
$15,000,000 BANQUE PARIBAS
By:
Print Name:
Title:
227 W. Monroe, Suite 3300
Chicago, Illinois 60606
Attention: Nick Mast
Telephone: (312) 853-6038
FAX: (312) 853-6020
$15,000,000 THE CHASE MANHATTAN BANK
By:
Print Name:
Title:
270 Park Avenue, 47th Floor
New York, New York 10017
Attention: Andris G. Kalnins
Telephone: (212) 270-5732
FAX: (212) 270-5127
$15,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By:
Print Name:
Title:
55 E. Monroe, 47th Floor
Chicago, Illinois 60603
Attention: Paul Dytrych
Telephone: (312) 917-7573
FAX: (312) 372-3724
46
<PAGE> 52
$15,000,000 THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, NEW YORK BRANCH
By:
Print Name:
Title:
1251 Avenue of the
Americas, 39th Floor
New York 10020-1104
Attention: Koichi Yokoyama
Telephone: (312) 201-4700
FAX: (312) 201-
$15,000,000 TOKAI BANK, LTD.
By:
Print Name:
Title:
181 W. Madison Street, Suite 3600
Chicago, Illinois 60602
Attention: Thomas Kania
Telephone: (312) 456-3422
FAX: (312) 977-0003
$15,000,000 UNION BANK OF CALIFORNIA, N.A.
By:
Print Name:
Title:
350 California Street, 6th Floor
San Francisco, California 94104
Attention: Alison Mason
Telephone: (415) 705-7452
FAX: (415) 705-7566
$300,000,000 Aggregate Commitment
47
<PAGE> 53
EXHIBIT "A"
NOTE
(RATABLE LOANS)
$ September 24, 1997
Yellow Corporation, a Delaware corporation (the "Borrower"), promises to
pay, on the Termination Date (as defined in the Agreement referred to below), to
the order of (the "Lender") the lesser of the principal sum of Dollars or the
aggregate unpaid principal amount of all Ratable Loans made by the Lender to the
Borrower pursuant to Section 2.2 of that certain Revolving Credit Agreement,
dated as of September 24, 1997, among the Borrower, The First National Bank of
Chicago, individually, as Issuer and as Agent, and the financial institutions
named therein, including the Lender (as the same may be amended or modified, the
"Agreement"), in immediately available funds at the main office of The First
National Bank of Chicago, as Agent, in Chicago, Illinois, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement. The Borrower shall pay each Ratable Loan in full on the last day
of such Ratable Loan's applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Ratable Loan and the date and amount of each
principal payment hereunder, provided that the failure by the Lender to so
record or any mistake in so recording shall not affect the obligations of the
Borrower hereunder.
This Note (Ratable Loans) is one of the Notes issued pursuant to, and is
subject to the terms of and entitled to the benefits of, the Agreement, to which
Agreement reference is hereby made for a statement of the terms and conditions
under which this Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used with the
meanings attributed to them in the Agreement.
THIS NOTE (RATABLE LOANS) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
YELLOW CORPORATION
By:
Print Name:
Title:
48
<PAGE> 54
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (RATABLE LOANS) OF YELLOW CORPORATION
DATED SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
PRINCIPAL MATURITY PRINCIPAL
AMOUNT OF OF INTEREST AMOUNT UNPAID
DATE LOAN PERIOD PAID BALANCE
---- --------- ----------- --------- -------
<S> <C> <C> <C> <C>
</TABLE>
49
<PAGE> 55
EXHIBIT "B"
NOTE
(COMPETITIVE BID LOANS)
$300,000,000 September 24, 1997
Yellow Corporation, a Delaware corporation (the "Borrower"), promises to
pay, on the Termination Date, to the order of (the "Lender") the aggregate
unpaid principal amount of all Competitive Bid Loans made by the Lender to the
Borrower pursuant to Section 2.3 of that certain Revolving Credit Agreement,
dated as of September 24, 1997, among the Borrower, The First National Bank of
Chicago, individually, as Issuer and as Agent, and the financial institutions
named therein, including the Lender (as the same may be amended or modified, the
"Agreement"), in immediately available funds at the main office of The First
National Bank of Chicago, as Agent, in Chicago, Illinois, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement. The Borrower shall pay each Competitive Bid Loan in full on the
last day of such Competitive Bid Loan's applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder, provided that the failure by the Lender to so
record or any mistake in so recording shall not affect the obligations of the
Borrower hereunder.
This Note (Competitive Bid Loans) is one of the Notes issued pursuant to,
and is subject to the terms of and entitled to the benefits of, the Agreement,
to which Agreement reference is hereby made for a statement of the terms and
conditions under which this Note may be prepaid or its maturity date
accelerated. Capitalized terms used herein and not otherwise defined herein are
used with the meanings attributed to them in the Agreement.
Each Note (Competitive Bid Loans) issued pursuant to the Agreement is in
the amount of $300,000,000, provided, however, that the aggregate principal
amount of all Loans outstanding from all Lenders under the Agreement shall not
exceed $300,000,000 at any time.
THIS NOTE (COMPETITIVE BID LOANS) SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
YELLOW CORPORATION
By:
Print Name:
Title:
50
<PAGE> 56
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (COMPETITIVE LOANS)
OF YELLOW CORPORATION
DATED SEPTEMBER 24, 1997
<TABLE>
<CAPTION>
PRINCIPAL MATURITY PRINCIPAL
AMOUNT OF OF INTEREST AMOUNT UNPAID
DATE LOAN PERIOD PAID BALANCE
---- --------- ----------- --------- --------
<S> <C> <C> <C> <C>
</TABLE>
51
<PAGE> 57
EXHIBIT "C"
COMPETITIVE BID QUOTE REQUEST
(SECTION 2.3.2)
, 19
To: The First National Bank of Chicago,
as agent (the "Agent")
From: Yellow Corporation ("Borrower")
Re: Revolving Credit Agreement dated as of September 24, 1997, among the
Borrower, The First National Bank of Chicago, individually, as Issuer and
as Agent, and the Lenders parties thereto
We hereby give notice pursuant to Section 2.3.2 of the Agreement that we
request Competitive Bid Quotes for the following proposed Competitive Bid
Advance(s):
Borrowing Date: , 19
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT (1) INTEREST PERIOD (2)
-------------------- -------------------
<S> <C>
$
</TABLE>
Such Competitive Bid Quotes should offer a Competitive Bid Margin an
Absolute Rate.
Upon acceptance by the undersigned of any or all of the Competitive Bid
Loans offered by Lenders in response to this request, the undersigned shall be
deemed to affirm as of such date that the representations and warranties made in
the Agreement are true and correct in all material respects to the extent
specified in Article IV thereof. Capitalized terms used herein have the meanings
assigned to them in the Agreement.
YELLOW CORPORATION
By:
Print Name:
Title:
- ---------------
(1) Amount must be at least $10,000,000 and an integral multiple of $5,000,000.
(2) One, two, three or six months (Eurodollar Auction) or at least 30 days and
up to six months (Absolute Rate Auction), subject to the provisions of the
definitions of Eurodollar Interest Period and Absolute Rate Interest Period.
52
<PAGE> 58
EXHIBIT "D"
INVITATION FOR COMPETITIVE BID QUOTES
(SECTION 2.3.3)
, 19
To: Name of Lender
Re: Invitation for Competitive Bid Quotes to Yellow Corporation (the
"Borrower")
Pursuant to Section 2.3.3 of the Revolving Credit Agreement dated as of
September 24, 1997 among the Borrower, the Lenders parties thereto, and the
undersigned, as Issuer and as Agent, we are pleased on behalf of the Borrower to
invite you to submit Competitive Bid Quotes to the Borrower for the following
proposed Competitive Bid Advance(s):
Borrowing Date: , 19
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT INTEREST PERIOD
---------------- ---------------
<S> <C>
$
</TABLE>
Such Competitive Bid Quotes should offer a Competitive Bid Margin an
Absolute Rate. Your Competitive Bid Quote must comply with Section 2.3.4 of the
Agreement and the foregoing terms in which the Competitive Bid Quote Request was
made. Capitalized terms used herein have the meanings assigned to them in the
Agreement.
Please respond to this invitation by no later than 9:00 a.m. Chicago time
on , 19 .
THE FIRST NATIONAL BANK OF
CHICAGO,
as Agent
By:
Authorized Officer
53
<PAGE> 59
EXHIBIT "E"
COMPETITIVE BID QUOTE
(SECTION 2.3.4)
, 19
To: The First National Bank of Chicago, as Agent
Attn:
Re: Competitive Bid Quote to Yellow Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
, 19 , we hereby make the following Competitive Bid Quote
pursuant to Section 2.3.4 of the Revolving Credit Agreement hereinafter referred
to and on the following terms:
1. Quoting Lender:
2. Person to contact at Quoting Lender:
3. Borrowing Date: , 19 (1)
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the following
rates:
<TABLE>
<CAPTION>
PRINCIPAL INTEREST COMPETITIVE ABSOLUTE MINIMUM
AMOUNT(2) PERIOD(3) BID(4) RATE(5) AMOUNT(6)
- --------- --------- ----------- -------- ---------
<S> <C> <C> <C> <C>
$
</TABLE>
1. As specified in the related Invitation.
2. Principal amount bid for each Interest Period may not exceed principal
amount requested. Bids must be made for $2,000,000 and an integral multiple of
$500,000.
3. One, two, three or six months or at least 30 days and up to six months,
as specified in the related Invitation.
4. Competitive Bid Margin over or under the Eurodollar Base Rate, rounded,
if necessary, to the next higher 1/16 of 1%, determined for the applicable
Interest Period. Specify percentage (rounded to the nearest 1/100 of 1%) and
specify whether "PLUS" or "MINUS".
5. Specify rate of interest per annum (rounded to the nearest 1/100 of 1%)
6. Specify minimum amount which the Borrower may accept (see Section
2.3.4(b)(iv).
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Revolving Credit
Agreement dated as of September 24, 1997, as amended or modified, among the
Borrower, the Issuer, the Lenders parties thereto and yourselves, as Agent,
irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which any
offer(s) are accepted, in whole or in part.
Dated: , 19
Very truly yours,
NAME OF LENDER
By:
Authorized Officer
54
<PAGE> 60
EXHIBIT "F"
FORM OF OPINION OF COUNSEL TO YELLOW CORPORATION
September 24, 1997
The Agent, the Issuer and the Lenders who are parties to the
Revolving Credit Agreement described below
Ladies and Gentlemen:
I am counsel for Yellow Corporation, a Delaware corporation (the
"Borrower"), and have represented the Borrower in connection with its execution
and delivery of that certain Revolving Credit Agreement dated as of September
24, 1997 among the Borrower, The First National Bank of Chicago, as Agent and as
Issuer, and the financial institutions party thereto (each, including The First
National Bank of Chicago in its individual capacity, a "Lender" and
collectively, the "Lenders"), providing for Advances and issuances of Facility
Letters of Credit in an aggregate principal amount not exceeding $300,000,000 at
any one time outstanding (the "Agreement"). All capitalized terms used in this
opinion and not otherwise defined shall have the meanings attributed to them in
the Agreement.
I have examined the Borrower's, each Original Guarantor's and each
Subsidiary Co-Applicant's (the Borrower, the Original Guarantors and the
Subsidiary Co-Applicants are hereinafter collectively referred to as the "Credit
Parties") certificate or articles of incorporation, by-laws, resolutions of each
Credit Party's Board of Directors, the Loan Documents and such other matters of
fact and law which I deem necessary in order to render this opinion. Based upon
the foregoing, it is my opinion that:
1. Each of the Borrower and its Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority to conduct
its business in each jurisdiction in which its business is conducted.
2. Each Credit Party has the corporate power and authority and legal
right to execute and deliver the Loan Documents to which it is a party and
to perform its obligations thereunder. The execution and delivery by each
Credit Party of the Loan Documents to which it is a party and the payment
and performance by each Credit Party of its respective obligations
thereunder have been duly authorized by all necessary corporate action and
proceedings on the part of each Credit Party and will not:
(a) require any consent of any Credit Party's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's certificate or
articles of incorporation or by-laws or any indenture, instrument or
agreement binding upon the Borrower or any of its Subsidiaries; or
(c) result in, or require, the creation or imposition of any Lien
in, of or on the Property of the Borrower or any of its Subsidiaries
pursuant to the provisions of any indenture, instrument or agreement
binding upon the Borrower or any of its Subsidiaries.
3. Each Loan Document (other than any LC Application which has not
been executed and delivered on or prior to the Closing Date) has been duly
executed and delivered by each Credit Party which is a party thereto and
constitutes a legal, valid, and binding obligation of each such Credit
Party enforceable in accordance with its terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and subject
also to the availability of equitable remedies if equitable remedies are
sought. Without limiting the foregoing, a Kansas court (or a federal court
applying Kansas choice of law principles) would uphold the choice of the
internal law of the State of Illinois as the law governing the
interpretation of the Loan Documents.
55
<PAGE> 61
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of my knowledge, threatened
against or affecting the Borrower or any of its Subsidiaries the probable
outcome of which would have a Material Adverse Effect.
5. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
6. Neither the Borrower nor any Subsidiary is an "investment company"
or a "company"
7. Neither the Borrower nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended. I am licensed to practice in the State of Kansas and the opinions
expressed above are limited to the laws of the State of Kansas, the
corporate laws of the State of Delaware, and the Federal law of the United
States of America. As the Loan Documents explicitly state that they are
governed by the internal law of the State of Illinois, I have assumed (with
your consent) for the purpose of rendering my opinions set forth herein
that the substantive laws of the State of Illinois relating to the matters
discussed herein are substantially similar to those of the State of Kansas.
This opinion may be relied upon by the Agent, the Issuer, the Lenders and
their participants, assignees and other transferees.
Very truly yours,
56
<PAGE> 62
EXHIBIT "G"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement Described Below.
Re: Revolving Credit Agreement, dated as of September 24, 1997 (as the
same may be amended or modified, the "Credit Agreement"), among
Yellow Corporation (the "Borrower"), the Agent, the Issuer and the
Lenders named therein
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Credit Agreement.
The Agent is specifically authorized and directed to act upon the following
standing money transfer instructions with respect to the proceeds of Advances or
other extensions of credit from time to time until receipt by the Agent of a
specific written revocation of such instructions by the Borrower, provided,
however, that the Agent may otherwise transfer funds as hereafter directed in
writing by the Borrower in accordance with Section 13.1 of the Credit Agreement
or based on any telephonic notice made in accordance with Section 2.6.9 of the
Credit Agreement.
- --------------------------------------------------------------------------------
Facility Identification Number(s)
- --------------------------------------------------------------------------------
Customer/Account Name
Transfer Funds To
- --------------------------------------------------------------------------------
For Account No.
- --------------------------------------------------------------------------------
Reference/Attention To
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Authorized Officer (Customer Representative) Date
- --------------------------------------------------------------------------------
(Please Print) Signature
- --------------------------------------------------------------------------------
Bank Officer Name Date
- --------------------------------------------------------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
57
<PAGE> 63
EXHIBIT "H"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Revolving
Credit Agreement dated as of September 24, 1997 (as amended or modified from
time to time, the "Agreement") among the Borrower, the Lenders party thereto and
The First National Bank of Chicago, as Agent for the Lenders and as Issuer.
Unless otherwise defined herein, capitalized terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Treasurer of the Borrower or his designee;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a review of the transactions and
conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements to determine whether
the Borrower has fulfilled all of its obligations under the Agreement and
the Notes;
3. To the best of my knowledge after due inquiry, during such fiscal
period and as at the date hereof, the Borrower has not been and is not in
default in the fulfillment of any of the terms, covenants, provisions or
conditions of the Agreement and no Default or Unmatured Default existed or
exists, except as set forth below;
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with Sections 6.12, 6.13,
6.14, 6.16 and 6.17 and 6.20 of the Agreement, all of which data and
computations are true, complete and correct;
5. If the Borrower or any of its Subsidiaries has formed or acquired
one or more Subsidiaries since the date of the preceding certificate
delivered pursuant to Section 6.1(iii) of the Agreement, the name of each
such Subsidiary, its jurisdiction of incorporation and a brief description
of its business is described in a schedule attached hereto; and
6. Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is
taking, or proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this day of , 19 .
58
<PAGE> 64
SAMPLE
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with Provisions of and
of the Agreement.
59
<PAGE> 65
EXHIBIT "I"
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between (the
"Assignor") and (the "Assignee") is dated as of , 19 The parties
hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Revolving
Credit Agreement (which, as it may be amended or modified from time to time
is herein called the "Credit Agreement") described in Item 1 of Schedule 1
attached hereto ("Schedule 1"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to them in the
Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement such that after giving effect to such assignment the
Assignee shall have the percentage interest specified in Item 3 of Schedule
1 of all outstanding rights and obligations under the Credit Agreement
relating to the facilities listed in Item 3 of Schedule 1 and the other
Loan Documents. The aggregate Commitment (or Loans and participations in
Facility Letters of Credit, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4 of
Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5
of Schedule 1 or two Business Days (or such shorter period agreed to by the
Agent) after a Notice of Assignment substantially in the form of Exhibit
"I" attached hereto has been delivered to the Agent. Such Notice of
Assignment must include any consents required to be delivered to the Agent
by Section 12.3.1 of the Credit Agreement. In no event will the Effective
Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date under Sections 4 and 5 hereof are not made
on the proposed Effective Date. The Assignor will notify the Assignee of
the proposed Effective Date no later than the Business Day prior to the
proposed Effective Date. As of the Effective Date, (i) the Assignee shall
have the rights and obligations of a Lender under the Loan Documents with
respect to the rights and obligations assigned to the Assignee hereunder
and (ii) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal,
Reimbursement Obligations, interest and fees with respect to the interest
assigned hereby. The Assignee shall advance funds directly to the Agent
with respect to all Loans made and participations in Facility Letters of
Credit funded on or after the Effective Date with respect to the interest
assigned hereby. In consideration for the sale and assignment of Loans and
participations in Facility Letters of Credit hereunder, (i) the Assignee
shall pay the Assignor, on the Effective Date, an amount equal to the
principal amount of the portion of all Floating Rate Loans assigned to the
Assignee hereunder and (ii) with respect to each Fixed Rate Loan made by
the Assignor and assigned to the Assignee hereunder which is outstanding on
the Effective Date, (a) on the last day of the Interest Period therefor or
(b) on such earlier date agreed to by the Assignor and the Assignee or (c)
on the date on which any such Fixed Rate Loan either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (a), (b) or (c) being hereinafter referred to as the
"Payment Date"), the Assignee shall pay the Assignor an amount equal to the
principal amount of the portion of such Fixed Rate Loan assigned to the
Assignee which is outstanding on the Payment Date. If the Assignor and the
Assignee agree that the Payment Date for such Fixed Rate Loan shall be the
Effective Date, they shall agree to the interest rate applicable to the
portion of such Loan assigned hereunder for the period from the Effective
Date to the end of the existing Interest Period applicable to such Fixed
Rate Loan (the "Agreed Interest Rate") and any interest received by the
Assignee in excess of the Agreed Interest Rate shall be remitted to the
Assignor. In the event interest for the period from the Effective Date to
but not including the Payment Date is not paid by the Borrower with respect
to any
60
<PAGE> 66
Fixed Rate Loan sold by the Assignor to the Assignee hereunder, the
Assignee shall pay to the Assignor interest for such period on the portion
of such Fixed Rate Loan sold by the Assignor to the Assignee hereunder at
the applicable rate provided by the Credit Agreement. In the event a
prepayment of any Fixed Rate Loan which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment
Date but before the end of the Interest Period applicable to such Fixed
Rate Loan, the Assignee shall remit to the Assignor the excess of the
prepayment penalty paid with respect to the portion of such Fixed Rate Loan
assigned to the Assignee hereunder over the amount which would have been
paid if such prepayment penalty was calculated based on the Agreed Interest
Rate. The Assignee will also promptly remit to the Assignor (i) any
principal payments received from the Agent with respect to Fixed Rate Loans
prior to the Payment Date and (ii) any amounts of interest on Loans and
Reimbursement Obligations and fees received from the Agent which relate to
the portion of the Loans and participations in Facility Letters of Credit
assigned to the Assignee hereunder for periods prior to the Effective Date,
in the case of Floating Rate Loans or participations in Facility Letters of
Credit, or the Payment Date, in the case of Fixed Rate Loans, and not
previously paid by the Assignee to the Assignor.* In the event that either
party hereto receives any payment to which the other party hereto is
entitled under this Assignment Agreement, then the party receiving such
amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or facility or
letter of credit fees is made under the Credit Agreement with respect to
the amounts assigned to the Assignee hereunder (other than a payment of
interest or facility fees for the period prior to the Effective Date or, in
the case of Fixed Rate Loans, the Payment Date, which the Assignee is
obligated to deliver to the Assignor pursuant to Section 4 hereof). The
amount of such fee shall be the difference between (i) the interest or fee,
as applicable, paid with respect to the amounts assigned to the Assignee
hereunder and (ii) the interest or fee, as applicable, which would have
been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was of 1% less than the interest rate paid by the
Borrower or if the facility fee was of 1% less than the
facility fee paid by the Borrower, as applicable. In addition, the Assignee
agrees to pay % of the processing fee required to be paid to the Agent in
connection with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim. It is understood and
agreed that the assignment and assumption hereunder are made without
recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the
Assignor nor any of its officers, directors, employees, agents or attorneys
shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan
Document, including without limitation, documents granting the Agent, the
Issuer, the Assignor and the other Lenders a security interest in assets of
the Borrower, any Subsidiary Co-Applicant or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of
the Loan Documents, (iii) the financial condition or creditworthiness of
the Borrower, any Subsidiary Co-Applicant or any guarantor, (iv) the
performance of or compliance with any of the terms or provisions of any of
the Loan Documents, (v) inspecting any of the Property, books or records of
the Borrower, (vi) the validity, enforceability, perfection, priority,
condition, value or sufficiency of any collateral securing or purporting to
secure the Credit Extensions or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Credit
Extensions or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment Agreement, (ii) agrees that it
will, independently and
- ---------------
* Each Assignor may insert its standard payment provisions in lieu of the
payment terms included in this Exhibit.
61
<PAGE> 67
without reliance upon the Agent, the Issuer, the Assignor or any other
Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably
incidental thereto, (iv) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender, (v) agrees that its payment
instructions and notice instructions are as set forth in the attachment to
Schedule 1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are
"plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under
ERISA, and (vii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to
receive payments under the Loan Documents without deduction or withholding
of any United States federal income taxes.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 12.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any
Person, provided that (i) any such subsequent assignment does not violate
any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any
consent required under the terms of the Loan Documents has been obtained
and (ii) unless the prior written consent of the Assignor is obtained, the
Assignee is not thereby released from its obligations to the Assignor
hereunder, if any remain unsatisfied, including, without limitation, its
obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement
and the Effective Date, the percentage interest specified in Item 3 of
Schedule 1 shall remain the same, but the dollar amount purchased shall be
recalculated based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof,
the addresses of the parties hereto (until notice of a change is delivered)
shall be the addresses set forth in the attachment to Schedule 1.
62
<PAGE> 68
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
NAME OF ASSIGNOR
By:
Print Name:
Title:
NAME OF ASSIGNEE
By:
Print Name:
Title:
63
<PAGE> 69
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement: Revolving Credit Agreement
dated as of September 24, 1997 among Yellow Corporation, the Lenders parties
thereto and The First National Bank of Chicago, as Agent and as Issuer
2. Date of Assignment Agreement: , 19
3. Amounts (As of Date of Item 2 above):
<TABLE>
<S> <C>
a. Total of Commitment (Loans and Facility Letter of
Credit Participations)* under Credit Agreement
$
b. Assignee's Percentage of Facility purchased under
the Assignment Agreement**
%
c. Amount of Assigned Share in Facility purchased
under the Assignment Agreement
$
4. Assignee's Aggregate (Loan Amount and Amount of
Participations in Facility Letters of Credit)** Commitment
Amount Purchased Hereunder:
$
5. Proposed Effective Date:
</TABLE>
Accepted and Agreed:
<TABLE>
<S> <C>
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
Title: Title:
</TABLE>
ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT
Attach Assignee's Administrative Information Sheet, which must include notice
address for the Assignor and the Assignee
- ---------------
* If a Commitment has been terminated, insert outstanding Loans and
participations in Facility
Letters of Credit in place of Commitment
** Percentage taken to 10 decimal places
64
<PAGE> 70
EXHIBIT "I"
TO ASSIGNMENT AGREEMENT
NOTICE
OF ASSIGNMENT
, 19
To: Yellow Corporation
The First National Bank of Chicago, as Agent
From: NAME OF ASSIGNOR (the "Assignor")
NAME OF ASSIGNEE (the "Assignee")
1. We refer to that Revolving Credit Agreement (the "Credit Agreement")
described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to the
Borrower and the Agent pursuant to Section 12.3.2 of the Credit Agreement.
3. The Assignor and the Assignee have entered into an Assignment Agreement,
dated as of , 19 (the "Assignment"), pursuant to which, among other
things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the Assignor
the percentage interest specified in Item 3 of Schedule 1 of all outstandings,
rights and obligations under the Credit Agreement, including, without
limitation, such interest in the Assignor's Commitment (if applicable) and the
Loans owing to the Assignor relating to such facilities. The Effective Date of
the Assignment shall be the later of the date specified in Item 5 of Schedule 1
to the Assignment ("Schedule 1") or two Business Days (or such shorter period as
agreed to by the Agent) after this Notice of Assignment and any fee required by
Section 12.3.2 of the Credit Agreement have been delivered to the Agent,
provided that the Effective Date shall not occur if any condition precedent
agreed to by the Assignor and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the Agent
notice of the assignment and delegation referred to herein. The Assignor will
confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,500 required by Section 12.3.2 of the
Credit Agreement.
6. The Assignor and the Assignee request and direct that the Agent prepare
and cause the Borrower to execute and deliver new Notes or, as appropriate,
replacement notes, to the Assignor and the Assignee. The Assignor and, if
applicable, the Assignee each agree to deliver to the Agent the original Notes
received by it from the Borrower upon its receipt of new Notes in the
appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions are
set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
65
<PAGE> 71
9. Each party consenting to the Assignment in the space indicated below
hereby releases the Assignor from any obligations to it which have been assigned
to the Assignee.
<TABLE>
<S> <C>
NAME OF ASSIGNOR NAME OF ASSIGNEE
By:
By: Print Name:
Title:
Print Name:
Title:
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY NAME OF AGENT BY YELLOW CORPORATION
By:
By:
Print Name:
Print Name:
Title:
Title:
</TABLE>
66
<PAGE> 72
SCHEDULE "1"
POTENTIAL LIABILITIES NOT PROVIDED FOR IN FINANCIAL STATEMENTS
None.
67
<PAGE> 73
SCHEDULE "2"
YELLOW CORPORATION SUBSIDIARIES
Jurisdiction of
<TABLE>
<CAPTION>
NAME INCORPORATION/DATE
- ---- ------------------
<S> <C>
I. Direct Subsidiaries of Yellow Corporation (incorporated 1/28/83 in Delaware)
Yellow Consolidation Services, Inc. ........................ Delaware (7/30/92)
Yellow Logistics Services, Inc. ............................ Delaware (7/29/91)
Yellow Services, Inc. ...................................... Delaware (5/12/92)
OPK Insurance Co., Ltd. .................................... Bermuda (8/11/92)
WestEx, Inc. ............................................... Arizona (9/24/80)
Yellow Freight System, Inc. ................................ Indiana (12/22/50)
Preston Corporation ........................................ Maryland (3/02/83)
II. Direct Subsidiaries of Yellow Freight System, Inc.
Yellow Freight Mexicana S.A. de C.V. ....................... Mexico (12/21/90)
Yellow Freight System of British Columbia, Inc. ............ Brit. Col., Canada (4/18/73)
Yellow Freight System of Ontario, Inc. ..................... Ontario, Canada (5/20/41)
Yellow Redevelopment Corporation ........................... Missouri (12/22/63)
Yellow Relocation Services ................................. Kansas (3/20/89)
Mission Supply Co. ......................................... Kansas (11/03/80)
Yellow Receivables Corporation ............................. Delaware (7/23/96)
III. Direct Subsidiaries of Preston Corporation
Preston Trucking Company, Inc. ............................. Maryland (8/27/32)
Saia Motor Freight Line, Inc. .............................. Louisiana (6/08/59)
151 Tire, Inc. ............................................. Maryland (12/1/95)
</TABLE>
All subsidiaries are 100% owned by the respective owners shown above except
for Yellow Freight Mexicana S.A. de C.V., which is 99.9% owned by Yellow Freight
System, Inc.
68
<PAGE> 74
SCHEDULE "3"
NOTICES OF LEGAL OR REGULATORY VIOLATIONS
None.
69
<PAGE> 75
SCHEDULE "4"
SPECIFIED LIENS IN EXISTENCE ON THE CLOSING DATE
(SECTION 6.13(IX) LIENS)
None.
70
<PAGE> 1
EXHIBIT (b)(2)
$150,000,000
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF AUGUST 2, 1996
AMONG YELLOW RECEIVABLES CORPORATION,
AS SELLER
AND
FALCON ASSET SECURITIZATION CORPORATION
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS INVESTORS
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility........................................... 1
Section 1.2. Making Incremental Purchases................................ 1
Section 1.3. Selection of Tranche Periods and Discount Rates............. 2
Section 1.4. Percentage Evidenced by Receivable Interests................ 2
Section 1.5. Dividing or Combining Receivable Interests.................. 2
Section 1.6. Reinvestment Purchases and Pre-Liquidation Settlements...... 3
Section 1.7. Liquidation Settlement Procedures........................... 3
Deemed Collection of Dilutions and Certain Other Recourse
Section 1.8. Obligations................................................. 4
Section 1.9. Discount; Payments and Computations, Etc.................... 4
Maximum Aggregate of Receivable Interests; Grant of Security
Section 1.10. Interest.................................................... 5
Section 1.11. Seller's Extinguishment..................................... 5
Section 1.12. Servicer Fee................................................ 5
ARTICLE II
LIQUIDITY FACILITY
Section 2.1. Transfer to Investors....................................... 5
Section 2.2. Transfer Price Reduction Discount........................... 5
Section 2.3. Payments to FALCON.......................................... 6
Section 2.4. Limitation on Commitment to Purchase from FALCON............ 6
Section 2.5. Defaulting Investors........................................ 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Seller Representations and Warranties....................... 6
(a) Corporate Existence and Power........................... 6
(b) No Conflict............................................. 6
(c) Governmental Authorization.............................. 7
(d) Binding Effect.......................................... 7
(e) Accuracy of Information................................. 7
(f) Use of Proceeds......................................... 7
(g) Title to Receivables.................................... 7
(h) Good Title; Perfection.................................. 7
(i) Places of Business...................................... 7
(j) Collection Banks; etc................................... 8
(k) Material Adverse Effect................................. 8
(l) Names................................................... 8
(m) Actions, Suits.......................................... 8
(n) Credit and Collection Policies.......................... 8
(o) Payments to Originator.................................. 8
(p) Ownership of the Seller................................. 8
(q) Not an Investment Company............................... 8
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
(r) Purpose................................................. 8
(s) Net Receivables Balance................................. 9
(t) Contracts Governing Excluded Receivables................ 9
Section 3.2. Investor Representations and Warranties..................... 9
(a) Existence and Power..................................... 9
(b) No Conflict............................................. 9
(c) Governmental Authorization.............................. 9
(d) Binding Effect.......................................... 9
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1. Conditions Precedent to Initial Purchase.................... 9
Section 4.2. Conditions Precedent to All Purchases and Reinvestments..... 9
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Seller............................. 10
(a) Financial Reporting..................................... 10
(i) Annual Reporting....................................... 10
(ii) Quarterly Reporting................................... 10
(iii) Compliance Certificate................................ 10
(iv) Copies of Notices, Etc. under Sale Agreement and Other
Transaction Documents....................................... 10
(v) Change in Credit and Collection Policy................. 10
(vi) Replacement of Contracts Applicable to Excluded
Receivables........................................... 10
(vii) Other Information..................................... 10
(b) Notices................................................. 11
(i) Servicer Defaults or Potential Servicer Defaults....... 11
(ii) Judgment.............................................. 11
(iii) Litigation............................................ 11
(iv) Termination Date under Sale Agreement................. 11
(v) Downgrade.............................................. 11
(vi) Labor Strike, Walkout, Lockout or Slowdown............ 11
(c) Compliance with Laws.................................... 11
(d) Audits.................................................. 11
(e) Keeping and Marking of Records and Books................ 11
(f) Compliance with Invoices and Credit and Collection
Policy.................................................. 12
(g) Purchase of Receivables from the Originator............. 12
(h) Ownership Interest...................................... 12
(i) Payment to the Originator............................... 12
(j) Performance and Enforcement of Sale Agreement........... 12
(k) Purchasers' Reliance.................................... 12
(l) Collections............................................. 13
(m) Minimum Net Worth....................................... 14
(n) Accounting for Collections of Excluded Receivables...... 14
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Section 5.2. Negative Covenants of Seller................................ 14
(a) Name Change, Offices, Records and Books of Accounts..... 14
(b) Change in Payment Instructions to Obligors.............. 14
(c) Modifications to Invoices and Credit and Collection
Policy.................................................. 15
(d) Sales, Liens, Etc....................................... 15
(e) Nature of Business; Other Agreements; Other
Indebtedness............................................ 15
(f) Amendments to Sale Agreement............................ 15
(g) Amendments to Corporate Documents....................... 15
(h) Merger.................................................. 15
(i) Restricted Junior Payments.............................. 16
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1. Designation of Servicer..................................... 16
Section 6.2. Duties of Servicer.......................................... 16
Section 6.3. Collection Notices.......................................... 17
Section 6.4. Responsibilities of the Seller.............................. 17
Section 6.5. Reports..................................................... 17
ARTICLE VII
SERVICER DEFAULTS
Section 7.1. Servicer Defaults........................................... 18
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnities by the Seller................................... 18
Section 8.2. Increased Cost and Reduced Return........................... 20
Section 8.3. Costs and Expenses Relating to this Agreement............... 20
ARTICLE IX
THE AGENT
Section 9.1. Authorization and Action.................................... 21
Section 9.2. Delegation of Duties........................................ 21
Section 9.3. Exculpatory Provisions...................................... 21
Section 9.4. Reliance by Agent........................................... 21
Section 9.5. Non-Reliance on Agent and Other Purchasers.................. 22
Section 9.6. Reimbursement and Indemnification........................... 22
Section 9.7. Agent in its Individual Capacity............................ 22
Section 9.8. Successor Agent............................................. 22
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Assignments................................................. 22
Section 10.2. Participations.............................................. 23
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE XI
MISCELLANEOUS
Section 11.1. Waivers and Amendments...................................... 23
Section 11.2. Notices..................................................... 24
Section 11.3. Ratable Payments............................................ 24
Section 11.4. Protection of Ownership Interests of the Purchasers......... 24
Section 11.5. Confidentiality............................................. 25
Section 11.6. Bankruptcy Petition......................................... 25
Section 11.7. Limitation of Liability..................................... 25
Section 11.8. CHOICE OF LAW............................................... 26
Section 11.9. CONSENT TO JURISDICTION..................................... 26
Section 11.10. WAIVER OF JURY TRIAL........................................ 26
Section 11.11. Integration; Survival of Terms.............................. 26
Section 11.12. Counterparts; Severability.................................. 26
Section 11.13. First Chicago Roles......................................... 26
Section 11.14. Characterization............................................ 27
</TABLE>
<TABLE>
<S> <C>
EXHIBITS AND SCHEDULES
EXHIBIT I DEFINITIONS
EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER
EXHIBIT III LOCKBOXES; COLLECTION ACCOUNTS; CONCENTRATION ACCOUNTS; AND
DEPOSITARY ACCOUNTS
EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE
EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT
EXHIBIT VI CREDIT AND COLLECTION POLICY
EXHIBIT VII FORM OF INVOICE(S)
EXHIBIT VIII FORM OF MONTHLY REPORT
EXHIBIT IX FORM OF PURCHASE NOTICE
EXHIBIT X CONTRACTS APPLICABLE TO EXCLUDED CONTRACTS
SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED TO THE AGENT ON
OR PRIOR TO THE INITIAL PURCHASE
</TABLE>
iv
<PAGE> 6
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of August 2, 1996, is by and
among Yellow Receivables Corporation, a Delaware corporation (the "SELLER"), the
Investors (hereinafter defined), Falcon Asset Securitization Corporation
("FALCON") and The First National Bank of Chicago, as Agent. Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in EXHIBIT I hereto.
PRELIMINARY STATEMENTS
The Seller desires to transfer and assign Receivable Interests to the
Purchasers from time to time.
FALCON may, in its absolute and sole discretion, purchase Receivable
Interests from the Seller from time to time.
The Investors shall, at the request of the Seller, purchase Receivable
Interests from time to time. In addition, the Investors have agreed to provide a
liquidity facility to FALCON.
The First National Bank of Chicago has been requested and is willing to act
as Agent on behalf of FALCON and the Investors in accordance with the terms
hereof.
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, the Seller may, at
its option, sell and assign Receivable Interests to the Agent for the benefit of
the Purchasers. FALCON may, at its option, instruct the Agent to purchase on
behalf of FALCON, or if FALCON shall decline to purchase, unless the Seller
cancels such purchase in accordance with SECTION 1.2, the Agent shall purchase
on behalf of the Investors, Receivable Interests from time to time during the
period from the date hereof to but not including the Facility Termination Date.
The Seller hereby assigns, transfers and conveys to the Agent for the benefit of
the relevant Purchaser(s), and the Agent hereby acquires, all of the Seller's
now owned and existing and hereafter arising or acquired right, title and
interest in and to the Receivable Interests.
(b) The Seller may, upon at least 30 Business Days' notice to the Agent,
terminate in whole or reduce in part, ratably among the Investors, the unused
portion of the Purchase Limit; PROVIDED THAT each partial reduction of the
Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple
thereof.
Section 1.2. Making Incremental Purchases. The Seller shall provide the
Agent with a purchase notice, in substantially the form of EXHIBIT IX hereto
(each, a "PURCHASE NOTICE"), at least one (1) Business Day prior to the initial
purchase of Receivable Interests hereunder and at least three (3) Business Days
prior to each subsequent Incremental Purchase. Each Purchase Notice shall,
except as set forth below, be irrevocable and shall specify the requested
Purchase Price (which shall not be less than $3,000,000) and date of such
Incremental Purchase, together with the duration of the initial Tranche Period
and the initial Discount Rate related thereto. Following receipt of a Purchase
Notice, the Agent will determine whether FALCON agrees to make the purchase. If
FALCON declines to make a proposed purchase, the Agent shall promptly advise the
Seller and the Servicer of such fact, and (i) the Seller may thereupon cancel
the Purchase Notice or (ii) in the absence of such a cancellation, the
Incremental Purchase of the Receivable Interests will be made by the Investors.
On the date of each Incremental Purchase, upon satisfaction of the applicable
conditions precedent set forth in ARTICLE IV, FALCON or each Investor, as
applicable, shall deposit to the Facility Account, in immediately available
funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the
case of FALCON, the aggregate Purchase Price of each Receivable Interest FALCON
is then purchasing or (ii) in the case of an Investor, such Investor's Pro Rata
Share of the aggregate Purchase Price of each of the Receivable Interests the
Investors are purchasing.
<PAGE> 7
Section 1.3. Selection of Tranche Periods and Discount Rates.
(a) Each Receivable Interest shall at all times have an associated amount
of Capital, a Discount Rate and Tranche Period applicable to it. Not less than
$3,000,000 of Capital may be allocated to any single Receivable Interest. The
Seller shall request Discount Rates and Tranche Periods for the Receivable
Interests of the Purchasers. For the Receivable Interests of FALCON, the Seller
may select the CP Rate, with the concurrence of the Agent, or the Base Rate; for
the Receivable Interests of the Investors, the Seller may select the LIBOR Rate
or the Base Rate. The Seller shall by 9:00 a.m. (Chicago time):
(i) at least three (3) Business Days prior to the expiration of any
then existing Tranche Period with respect to which the LIBOR Rate is being
requested as a new Discount Rate,
(ii) at least one (1) Business Day prior to the expiration of any then
existing Tranche Period with respect to which the CP Rate is being
requested as a new Discount Rate, and
(iii) at least one (1) Business Day prior to the expiration of any
Tranche Period with respect to which the Base Rate is being requested as a
new Discount Rate, give the Agent irrevocable notice of the new Tranche
Period and Discount Rate for the Receivable Interest associated with such
expiring Tranche Period. The Agent shall, promptly following its knowledge
thereof, advise the Seller in any instance if the Tranche Period selected
by the Seller at any time is not acceptable to FALCON or the Investors, as
applicable. If the Seller fails to request timely a Discount Rate and/or a
Tranche Period for any Receivable Interest pursuant to the terms of this
SECTION 1.3, or the Seller and the Agent fail to agree on an acceptable
duration for any Tranche Period, the Discount Rate shall be the CP Rate (if
FALCON is the applicable Purchaser) or the Base Rate, in the Agent's sole
discretion, and the applicable Tranche Period shall be a period of one
Business Day commencing on the day requested in the Purchase Notice or the
last day of the then expiring Tranche Period for such Receivable Interest,
as applicable. Until the Seller gives notice to the Agent of another
Discount Rate, the initial Discount Rate for any Receivable Interest
transferred to the Investors pursuant to SECTION 2.1 shall be the Base
Rate.
(b) If any Investor notifies the Agent that it has determined that funding
its Pro Rata Share of the Receivable Interests of the Investors at a LIBOR Rate
would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match fund its
Receivable Interests at such LIBOR Rate are not available or (ii) such LIBOR
Rate does not accurately reflect the cost of acquiring or maintaining a
Receivable Interest at such LIBOR Rate, then the Agent shall suspend the
availability of such LIBOR Rate and require the Seller to select a new Discount
Rate for any Receivable Interest accruing Discount at such LIBOR Rate.
Section 1.4. Percentage Evidenced by Receivable Interests. Each Receivable
Interest shall be initially computed on its date of purchase. Thereafter, until
its Liquidation Day, each Receivable Interest shall be automatically recomputed
(or deemed to be recomputed) on each day prior to its Liquidation Day. The
variable percentage represented by any Receivable Interest as computed (or
deemed recomputed) as of the close of business on the day immediately preceding
its Liquidation Day shall remain constant at all times after such Liquidation
Day.
Section 1.5. Dividing or Combining Receivable Interests. The Seller or the
Agent may, upon notice to and consent by the other received not later than the
applicable time required under SECTION 1.3(A) prior to the end of a Tranche
Period for any Receivable Interest, take any of the following actions with
respect to such Receivable Interest: (i) divide the Receivable Interest into two
or more Receivable Interests having aggregate Capital equal to the Capital of
such divided Receivable Interest, (ii) combine the Receivable Interest with
another Receivable Interest with a Tranche Period ending on the same day,
creating a new Receivable Interest having Capital equal to the Capital of the
two Receivable Interests combined or (iii) combine the Receivable Interest with
a Receivable Interest to be purchased on such day by such Purchaser, creating a
new Receivable Interest having Capital equal to the Capital of the two
Receivable Interests combined, PROVIDED THAT a Receivable Interest of FALCON may
not be combined with a Receivable Interest of the Investors.
2
<PAGE> 8
Section 1.6. Reinvestment Purchases and Pre-Liquidation Settlements. At any
time that any Collection is received by the Servicer after the initial purchase,
or any other Incremental Purchase, of a Receivable Interest hereunder and on or
prior to the Liquidation Day of such Receivable Interest:
(a) the Servicer (at any time the Servicer is not the Seller, the
Originator or an Affiliate thereof) may retain a portion of such Collection
in payment of any Servicer Fee then due and owing;
(b) thereafter, the Servicer is hereby directed to pay a portion of
the remainder, if any, of such Collection to the Agent in payment of any
accrued and unpaid (i) Discount and (ii) fees under the Fee Letter, in each
case that are due and owing on such day; and
(c) thereafter, except to the extent the Seller wishes to reduce the
outstanding amount of Capital of a Receivable Interest (in which case the
provisions of SECTION 1.7 shall be applicable to the portion of such
Receivable Interest represented by such reduction in Capital), the Seller
hereby requests and the Purchasers hereby agree to make, simultaneously
with such receipt, a reinvestment (each, a "REINVESTMENT") with that
portion of the remainder of such Collection that is part of such Receivable
Interest such that after giving effect to such Reinvestment, the amount of
the Capital of such Receivable Interest immediately after any such receipt
and corresponding Reinvestment shall be equal to the amount of the Capital
immediately prior to such receipt;
(d) thereafter, the Servicer (if the Servicer is the Seller, the
Originator or an Affiliate thereof) may retain a portion of the remainder,
if any, of such Collection to payment of the Servicer Fee;
(e) thereafter, if requested by the Seller, any remaining portion of
such Collection may be applied to making an additional Incremental Purchase
in accordance with the terms of this Agreement; and
(f) finally, any remaining portion of such Collection shall be paid to
the Seller, as the Seller may direct; PROVIDED, HOWEVER, that in the event
that such remaining portion follows an election by the Seller not to
reinvest Collections pursuant to SECTION 1.6(C), the Servicer shall
continue to hold, in trust in the Facility Account, the Seller's undivided
percentage interest of such Collection which is not reinvested until the
earlier to occur of (i) establishment by the Seller or the Servicer or
subservicer of a software modification which enables the identification of
Collections related to Excluded Receivables separate and apart from the
Receivables and demonstration by the Seller that it is entitled to receive
such remaining portion as a Collection in respect of an Excluded
Receivable, or (ii) a subsequent Incremental Purchase in at least the
amount of such un-reinvested funds.
Section 1.7. Liquidation Settlement Procedures. On the Liquidation Day of a
Receivable Interest and on each day thereafter, the Servicer shall set aside and
hold in trust for (a) the holder of such Receivable Interest, the percentage
evidenced by such Receivable Interest of Collections received on such day, and
(b) for the Seller, all remaining Collections. On the last day of each Tranche
Period of a Receivable Interest after the occurrence of its Liquidation Day:
(i) until the Seller or the Servicer is able to identify which
Collections relate to Excluded Receivables, the Servicer shall continue to
hold, in trust in the Facility Account, the Seller's undivided percentage
interest of all Collections in respect of such Receivable Interest which
are received on and after the Liquidation Day of a Receivable Interest,
(ii) once the Seller or the Servicer is able to identify which Collections
relate to Excluded Receivables, the Servicer shall remit to the Seller the
Seller's undivided percentage interest of all Collections in respect of
such Receivable Interest which are received on and after the Liquidation
Day of a Receivable Interest and all Collections in respect of Excluded
Receivables, and (iii) the Servicer shall remit to the Agent's account the
amounts set aside pursuant to the preceding clause (a), together with any
remaining amounts set aside pursuant to SECTION 1.8 prior to such day, but
not to exceed the sum of (A) the accrued Discount for such Receivable
Interest, (B) the Capital of such Receivable Interest, (C) the aggregate of
all fees and other amounts then owed hereunder or under the Fee Letter by
Seller to the Agent or any of the Purchasers, and (D) the accrued Servicer
Fee for such Receivable Interest. If there shall be insufficient funds on
deposit for the Servicer to
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distribute funds to the Agent in payment in full of the amounts described
in the foregoing clause (iii), the Servicer shall distribute such funds:
first, to reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
second, to the Servicer (if the Servicer is not the Seller, the
Originator or an Affiliate thereof) in payment of all accrued Servicer
Fee in respect of such Receivable Interest,
third, in payment of all accrued Discount for such Receivable
Interest,
fourth, in reduction of the Capital of the Receivable Interests,
fifth, in payment of all fees under the Fee Letter and other
amounts, if any, then due and owing hereunder to the Agent or the
Purchasers,
and sixth, to the Servicer (if the Seller, the Originator or an
Affiliate thereof is the Servicer) in payment of all accrued Servicer
Fee in respect of such Receivable Interest.
Collections allocated to the Receivable Interests of the Investors shall be
shared ratably by the Investors in accordance with their Pro Rata Shares.
Collections applied to the payment of fees, expenses, Discount and all other
amounts payable by the Seller to or for the account of the Agent and the
Purchasers hereunder shall be allocated ratably among the Agent and the
Purchasers in accordance with such amounts owing to each of them. To the extent
Collections are available for such purpose in accordance with the foregoing, the
accrued Servicer Fee in respect of each Receivable Interest shall be remitted to
the Servicer. Following the date on which the Aggregate Unpaids are reduced to
zero, the Servicer shall pay to Seller any remaining Collections set aside and
held by the Servicer pursuant to this SECTION 1.7.
Section 1.8. Deemed Collection of Dilutions and Certain Other Recourse
Obligations. If on any day the Outstanding Balance of, or Finance Charges in
respect of, a Receivable is either (a) reduced as a result of any defective or
rejected services, any cash discount or any adjustment by the Seller or the
Originator or (b) reduced or canceled as a result of a setoff in respect of any
claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), the Seller shall be deemed to have
received on such day a Collection of such Receivable in the amount of such
reduction or cancellation. If on any day any of the representations or
warranties in SECTION 3.1 (other than SECTION 3.1(K)) are no longer true with
respect to a Receivable, the Seller shall be deemed to have received on such day
a Collection of such Receivable in full. If the Seller receives any Collections
or is deemed to receive Collections pursuant to this SECTION 1.8 or otherwise,
the Seller shall immediately pay such Collections or deemed Collections to the
Servicer and, at all times prior to such payment, such Collections shall be held
in trust by the Seller for the exclusive benefit of the Purchasers and the
Agent.
Section 1.9. Discount; Payments and Computations, Etc.
(a) Discount shall accrue for each Receivable Interest for each day
occurring during the Tranche Period for such Receivable Interest. On the last
day of each Tranche Period, the Seller shall pay to the Agent an amount equal to
the accrued and unpaid Discount for such Tranche Period.
(b) Notwithstanding any limitation on recourse contained in this Agreement,
the Seller shall pay to the Agent, for the account of the relevant Purchasers,
the fees set forth in the Fee Letter, all amounts payable as Discount, all
amounts payable pursuant to ARTICLE VIII, if any, all Servicer costs, if any,
payable pursuant to SECTION 6.2 and on demand therefor, any Early Collection
Fee. If any Person fails to pay any amount when due hereunder, such Person
agrees to pay, on demand, the Default Fee.
(c) All amounts to be paid or deposited by any Person hereunder shall be
paid or deposited in accordance with the terms hereof no later than 12:00 noon
(Chicago time) on the day when due in immediately available funds; if such
amounts are payable to a Purchaser they shall be paid to the Agent, for the
account of such Purchaser, at the account specified in SECTION 1.9(D) until
otherwise notified by the Agent. The Agent shall, in accordance with its
customary practice, provide invoices from time to time to the Seller in respect
of Discount and other fees and expenses payable by the Seller hereunder. In the
event the Seller shall at any time fail to pay any amount when due hereunder,
the Agent may, on notice to the Seller,
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debit the Facility Account for such amount. All computations of Discount and per
annum fees hereunder and under the Fee Letter shall be made on the basis of a
year of 360 days for the actual number of days elapsed (including the first but
excluding the last day). All per annum fees shall be payable monthly in arrears.
If any amount hereunder shall be payable on a day which is not a Business Day,
such amount shall be payable on the next succeeding Business Day.
(d) All amounts payable to the Agent or any Purchaser under this Agreement
or the Fee Letter shall be made in immediately available funds to FMSD Clearing
Account no. 7321-7683 at The First National Bank of Chicago, in Chicago,
Illinois, ABA No. 071000013, Reference: Yellow Receivables Corporation, until
otherwise notified by the Agent.
Section 1.10. Maximum Aggregate of Receivable Interests; Grant of Security
Interest. The Seller shall ensure that the aggregate Receivable Interests of the
Purchasers shall at no time exceed 100%. If, on any day, the aggregate
Receivable Interests of the Purchasers exceeds 100%, the Seller shall
immediately pay to the Agent an amount to be applied to reduce the Capital of
the Receivable Interests, such that after giving effect to such payment the
aggregate of the Receivable Interest equals or is less than 100%. Such amount
shall be applied to the reduction of the Capital of the Receivable Interests
ratably in accordance with the percentages of the Receivable Interests. Any
amounts received by the Investors pursuant to the preceding sentence shall be
applied ratably in accordance with their Pro Rata Shares. The Seller hereby
grants to the Agent for the ratable benefit of the Purchasers a security
interest in all of its interest in the Receivables, Related Security,
Collections and proceeds thereof to secure payment of the Aggregate Unpaids,
including its indemnity obligations under ARTICLE VIII and all other obligations
owed hereunder to the Purchasers.
Section 1.11. Seller's Extinguishment. The Seller shall have the right, on
not less than thirty (30) Business Days' written notice to the Agent, at any
time following the reduction of the Capital to a level that is less than 5.0% of
the original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Receivable Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.
Section 1.12. Servicer Fee. To the extent of available Collections in
accordance with the priorities set forth in SECTIONS 1.6 and 1.7, on the first
Business Day of each month while any Aggregate Unpaids are outstanding, the
Servicer shall be paid a servicing and collection fee (the "SERVICER FEE") equal
to 2.0% per annum on the average daily amount of Capital during the calendar
month (or portion thereof) then most recently ended. The Servicer Fee shall be
computed for actual days elapsed on the basis of a year consisting of 365 days.
ARTICLE II
LIQUIDITY FACILITY
Section 2.1. Transfer to Investors. Each Investor hereby agrees, subject to
SECTION 2.4, that immediately upon written notice from FALCON delivered on or
prior to the Liquidity Termination Date, it shall acquire by assignment from
FALCON, without recourse or warranty, its Pro Rata Share of one or more of the
Receivable Interests of FALCON as specified by FALCON. Each Investor shall
promptly pay to the Agent at an account designated by the Agent, for the benefit
of FALCON, its Acquisition Amount. Unless an Investor has notified the Agent
that it does not intend to pay its Acquisition Amount, the Agent may assume that
such payment has been made and may, but shall not be obligated to, make the
amount of such payment available to FALCON in reliance upon such assumption.
FALCON hereby sells and assigns to the Agent for the ratable benefit of the
Investors, and the Agent hereby purchases and assumes from FALCON, effective
upon the receipt by FALCON of the FALCON Transfer Price, the Receivable
Interests of FALCON which are the subject of any transfer pursuant to this
ARTICLE II.
Section 2.2. Transfer Price Reduction Discount. If the Adjusted Liquidity
Price is included in the calculation of the FALCON Transfer Price for any
Receivable Interest, each Investor agrees that the Agent
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shall pay to FALCON the Reduction Percentage of any Discount received by the
Agent with respect to such Receivable Interest.
Section 2.3. Payments to FALCON. In consideration for the reduction of the
FALCON Transfer Prices by the FALCON Transfer Price Reductions, effective only
at such time as the aggregate amount of the Capital of the Receivable Interests
of the Investors equals the FALCON Residual, each Investor hereby agrees that
the Agent shall not distribute to the Investors and shall immediately remit to
FALCON any Discount, Collections or other payments received by it to be applied
pursuant to the terms hereof or otherwise to reduce the Capital of the
Receivable Interests of the Investors.
Section 2.4. Limitation on Commitment to Purchase from
FALCON. Notwithstanding anything to the contrary in this Agreement, no Investor
shall have any obligation to purchase any Receivable Interest from FALCON,
pursuant to SECTION 2.1 or otherwise, if: (i) FALCON shall have voluntarily
commenced any proceeding or filed any petition under any bankruptcy, insolvency
or similar law seeking the dissolution, liquidation or reorganization of FALCON
or taken any corporate action for the purpose of effectuating any of the
foregoing; or (ii) involuntary proceedings or an involuntary petition shall have
been commenced or filed against FALCON by any Person under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation or reorganization
of FALCON and such proceeding or petition shall have not been dismissed.
Section 2.5. Defaulting Investors. If one or more Investors defaults in its
obligation to pay its Acquisition Amount pursuant to SECTION 2.1 (each such
Investor shall be called a "DEFAULTING INVESTOR" and the aggregate amount of
such defaulted obligations being herein called the "FALCON TRANSFER PRICE
DEFICIT"), then upon notice from the Agent, each Investor other than the
Defaulting Investors (a "NON-DEFAULTING INVESTOR") shall promptly pay to the
Agent, in immediately available funds, an amount equal to the lesser of (x) such
Non-Defaulting Investor's proportionate share (based upon the relative
Commitments of the Non-Defaulting Investors) of the FALCON Transfer Price
Deficit and (y) the unused portion of such Non-Defaulting Investor's Commitment.
A Defaulting Investor shall forthwith upon demand pay to the Agent for the
account of the Non-Defaulting Investors all amounts paid by each Non-Defaulting
Investor on behalf of such Defaulting Investor, together with interest thereon,
for each day from the date a payment was made by a Non-Defaulting Investor until
the date such Non-Defaulting Investor has been paid such amounts in full, at a
rate per annum equal to the Federal Funds Effective Rate plus 0.5% for the two
Business Days and 2.0% per annum thereafter. In addition, without prejudice to
any other rights that FALCON may have under applicable law, each Defaulting
Investor shall pay to FALCON forthwith upon demand, the difference between such
Defaulting Investor's unpaid Acquisition Amount and the amount paid with respect
thereto by the non-Defaulting Investors, together with interest thereon, for
each day from the date of the Agent's request for such Defaulting Investor's
Acquisition Amount pursuant to SECTION 2.1 until the date the requisite amount
is paid to FALCON in full, at a rate per annum equal to the Federal Funds
Effective Rate plus 2.0%.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Seller Representations and Warranties. The Seller hereby
represents and warrants to the Purchasers that:
(a) Corporate Existence and Power. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation, and has all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted.
(b) No Conflict. The execution, delivery and performance by the Seller
of this Agreement and each other Transaction Document, and the Seller's use
of the proceeds of purchases made hereunder, are within its corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is
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a party or by which it or any of its property is bound, or (iv) any order,
writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any
Adverse Claim on assets of the Seller or its Subsidiaries (except created
hereunder); and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law. This Agreement and each other
Transaction Document has been duly authorized, executed and delivered by
the Seller.
(c) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action
by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by the Seller of the Transaction Documents.
(d) Binding Effect. The Transaction Documents constitute the legal,
valid and binding obligations of the Seller enforceable against the Seller
in accordance with their respective terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally.
(e) Accuracy of Information. All information heretofore furnished by
the Seller or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is,
and all such information hereafter furnished by the Seller or any of its
Affiliates to the Purchasers will be, true and accurate in every material
respect, on the date such information is stated or certified and does not
and will not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained
therein not misleading.
(f) Use of Proceeds. No proceeds of any purchase hereunder will be
used
(i) for a purpose which violates, or would be inconsistent with,
Regulation G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System from time to time or (ii) to acquire any security
in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended.
(g) Title to Receivables. Each Receivable has been purchased by the
Seller from the Originator in accordance with the terms of the Sale
Agreement, and the Seller has thereby irrevocably obtained all legal and
equitable title to, and has the legal right to sell and encumber, such
Receivable, its Collections and the Related Security. Each such Receivable
has been transferred to the Seller free and clear of any Adverse Claim.
Without limiting the foregoing, there has been duly filed all financing
statements or other similar instruments or documents necessary under the
UCC of all appropriate jurisdictions (or any comparable law) to perfect the
Seller's ownership interest in such Receivable.
(h) Good Title; Perfection. Immediately prior to each purchase
hereunder, the Seller shall be the legal and beneficial owner of the
Receivables and Related Security with respect thereto, free and clear of
any Adverse Claim, except as created by the Transaction Documents. This
Agreement is effective to, and shall, upon each purchase hereunder,
transfer to the relevant Purchaser or Purchasers (and such Purchaser or
Purchasers shall acquire from the Seller) a valid and perfected first
priority undivided percentage ownership interest in each Receivable
existing or hereafter arising and in the Related Security and Collections
with respect thereto, free and clear of any Adverse Claim, except as
created by the Transactions Documents.
(i) Places of Business. The principal places of business and chief
executive office of the Seller and the offices where the Seller keeps all
its Records are located at the address(es) listed on EXHIBIT II or such
other locations notified to the Agent in accordance with SECTION 5.2(A) in
jurisdictions where all action required by SECTION 5.2(A) has been taken
and completed. The Seller's Federal Employer Identification Number is
correctly set forth on EXHIBIT II.
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(j) Collection Banks; etc. Except as otherwise notified to the Agent
in accordance with SECTION 5.2(B):
(i) the Seller has instructed, or has caused the Originator to
instruct, all Obligors to pay all Collections directly to a segregated
lock-box identified on EXHIBIT III hereto,
(ii) in the case of all proceeds remitted to any such lock-box
which is now or hereafter established, such proceeds will be deposited
directly by the applicable Collection Bank into a concentration account
or a depository account listed on EXHIBIT III,
(iii) the names and addresses of all Collection Banks, together
with the account numbers of the Collection Accounts of the Seller at
each Collection Bank, are listed on EXHIBIT III, and
(iv) each lock-box and Collection Account to which Collections are
remitted shall be subject to a Collection Account Agreement that is then
in full force and effect.
In the case of lock-boxes and Collection Accounts identified on
EXHIBIT III which were established by the Originator or by any Person other
than the Seller, exclusive dominion and control thereof has been
transferred to the Seller. The Seller has not granted any Person, other
than the Agent as contemplated by this Agreement, dominion and control of
any lock-box or Collection Account, or the right to take dominion and
control of any lock-box or Collection Account at a future time or upon the
occurrence of a future event.
(k) Material Adverse Effect. Since April 30, 1996, no event has
occurred which would have a Material Adverse Effect.
(l) Names. In the past five years, the Seller has not used any
corporate names, trade names or assumed names other than the name in which
it has executed this Agreement.
(m) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of the Seller's knowledge, threatened, against or
affecting the Seller or the Originator, or any of the respective properties
of the Seller or the Originator, in or before any court, arbitrator or
other body, which are reasonably likely to (i) adversely affect the
collectibility of a material portion of the Receivables, (ii) materially
adversely affect the financial condition of the Seller or the Originator or
(iii) materially adversely affect the ability of the Seller or the
Originator to perform its obligations under the Transaction Documents.
Neither the Seller nor the Originator is in default with respect to any
order of any court, arbitrator or governmental body.
(n) Credit and Collection Policies. With respect to each Receivable,
each of the Originator, the Seller and the Servicer has complied in all
material respects with the Credit and Collection Policy.
(o) Payments to Originator. With respect to each Receivable
transferred to the Seller, the Seller has given reasonably equivalent value
to the Originator in consideration for such transfer of such Receivable and
the Related Security with respect thereto under the Sale Agreement and such
transfer was not made for or on account of an antecedent debt. No transfer
by the Originator of any Receivable is or may be voidable under any Section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Section 101 et seq.), as
amended.
(p) Ownership of the Seller. The Originator owns, directly or
indirectly, 100% of the issued and outstanding capital stock of the Seller.
Such capital stock is validly issued, fully paid and nonassessable and
there are no options, warrants or other rights to acquire securities of the
Seller.
(q) Not an Investment Company. The Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended from time to time, or any successor statute.
(r) Purpose. The Seller has determined that, from a business
viewpoint, the purchase of Receivables and related interests from the
Originator under the Sale Agreement, and the sale of Receivable Interests
to the Purchasers and the other transactions contemplated herein, are in
the best interest of the Seller.
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(s) Net Receivables Balance. Both before and after giving effect to
each Incremental Purchase and Reinvestment, the Net Receivables Balance
equals or exceeds the product of (i) 100% + the Aggregate Reserve
Percentage, multiplied by (ii) the aggregate Capital outstanding.
(t) Contracts Governing Excluded Receivables. Aside from contracts
applicable to Approved Offset Receivables, the only contracts listed on
EXHIBIT X hereto are contracts of the Originator that (i) by virtue of
their confidentiality provisions would preclude the Originator from
disclosing to any Person information that is included on an Invoice, and/or
(ii) by their terms preclude the assignment to any Person of any of the
Originator's rights to payment thereunder (notwithstanding the provisions
of Section 9-318 of the UCC).
Section 3.2. Investor Representations and Warranties. Each Investor hereby
represents and warrants to the Agent and FALCON that:
(a) Existence and Power. Such Investor is a corporation or a banking
association duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution, delivery and performance by such
Investor of this Agreement are within its corporate powers, have been duly
authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or association or by-laws,
(ii) any law, rule or regulation applicable to it, (iii) any restrictions
under any agreement, contract or instrument to which it is a party or any
of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on its assets.
This Agreement has been duly authorized, executed and delivered by such
Investor.
(c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance
by such Investor of this Agreement.
(d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Investor enforceable against such Investor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or limiting creditors' rights generally.
ARTICLE IV
CONDITIONS OF PURCHASES
Section 4.1. Conditions Precedent to Initial Purchase. The initial purchase
of a Receivable Interest under this Agreement is subject to the conditions
precedent that (a) the Agent shall have received on or before the date of such
purchase those documents listed on SCHEDULE A hereto, and (b) the Agent shall
have been paid all fees required to be paid on such date pursuant to the terms
of the Fee Letter.
Section 4.2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase of a Receivable Interest (other than pursuant to SECTION 2.1) and each
Reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each such purchase, the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form
and substance satisfactory to the Agent, all Monthly Reports as and when
due under SECTION 6.5;
(b) on the date of each such purchase or Reinvestment, the following
statements shall be true both before and after giving effect to such
purchase or Reinvestment (and acceptance of the proceeds of such
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purchase or Reinvestment shall be deemed a representation and warranty by
the Seller that such statements are then true):
(i) the representations and warranties set forth in SECTION 3.1 are
correct on and as of the date of such purchase or Reinvestment as though
made on and as of such date; PROVIDED, HOWEVER, that the representation
and warranty set forth in SECTION 3.1(K) need only be true and correct
as of the date of the initial purchase of Receivable Interests
hereunder;
(ii) no event has occurred, or would result from such purchase or
Reinvestment, that will constitute a Servicer Default, and no event has
occurred and is continuing, or would result from such purchase or
Reinvestment, that would constitute a Potential Servicer Default; and
(iii) the Liquidity Termination Date shall not have occurred, the
aggregate Capital of all Receivable Interests shall not exceed the
Purchase Limit and the aggregate Receivable Interests shall not exceed
100%; and
(c) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
ARTICLE V
COVENANTS
Section 5.1. Affirmative Covenants of Seller. Until the date on which the
Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby
covenants, individually and in its capacity as Servicer, that:
(a) Financial Reporting. The Seller will maintain a system of
accounting established and administered in accordance with generally
accepted accounting principles, and furnish to the Agent:
(i) Annual Reporting. Within 90 days after the close of each of its
fiscal years, financial statements for such fiscal year certified in a
manner acceptable to the Agent by the Chief Financial Officer of the
Seller.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three quarterly periods of each of its fiscal years, balance
sheets as at the close of each such period and statements of income and
retained earnings and a statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all certified
by its Chief Financial Officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of EXHIBIT IV signed by the Seller's Chief Financial Officer
and dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Copies of Notices, Etc. under Sale Agreement and Other
Transaction Documents. Forthwith upon its receipt of any notice, request
for consent, financial statements of the Originator, certification,
report or other communication under or in connection with any
Transaction Document from any Person other than the Agent or FALCON,
copies of the same.
(v) Change in Credit and Collection Policy. At least 30 days prior
to the effectiveness of any material change in or amendment to the
Credit and Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice indicating such change or amendment.
(vi) Replacement of Contracts Applicable to Excluded
Receivables. Not less than once every 3 months while any Excluded
Receivables exist (or more frequently if the Seller desires), an updated
version of EXHIBIT X hereto.
(vii) Other Information. Such other information (including
non-financial information) as the Agent or any Purchaser may from time
to time reasonably request.
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(b) Notices. The Seller will notify the Agent in writing of any of the
following immediately upon learning of the occurrence thereof, describing
the same and, if applicable, the steps being taken with respect thereto:
(i) Servicer Defaults or Potential Servicer Defaults. The
occurrence of each Servicer Default or each Potential Servicer Default,
by a statement of the Chief Financial Officer of the Seller;
(ii) Judgment. The entry of any judgment or decree against the
Seller;
(iii) Litigation. The institution of any litigation, arbitration
proceeding or governmental proceeding against the Seller or to which the
Seller becomes party;
(iv) Termination Date under Sale Agreement. The declaration by the
Originator of the "TERMINATION DATE" under the Sale Agreement;
(v) Downgrade. Any downgrade in the rating of any Indebtedness of
the Seller, the Originator or Yellow Corporation by Standard & Poor's
Ratings Group or by Moody's Investors Service, Inc., setting forth the
Indebtedness affected and the nature of such change; and/or
(vi) Labor Strike, Walkout, Lockout or Slowdown. The commencement
or threat of any labor strike, walkout, lockout or concerted labor
slowdown which prevents, or could reasonably be likely to prevent,
pick-ups, shipments and/or deliveries by the Originator (collectively,
"LABOR ACTIONS").
(c) Compliance with Laws. The Seller will comply in all material
respects with all applicable laws, rules, regulations, orders writs,
judgments, injunctions, decrees or awards to which it may be subject.
(d) Audits. The Seller will furnish to the Agent from time to time
such information with respect to it and the Receivables as the Agent may
reasonably request. The Seller shall, from time to time during regular
business hours as requested by the Agent upon reasonable notice, permit the
Agent, or its agents or representatives (and shall cause the Originator to
permit the Agent or its agents or representatives) (i) to examine and make
copies of and abstracts from all Records in the possession or under the
control of the Seller or the Originator relating to Receivables and the
Related Security, including, without limitation, the related Invoices, and
(ii) to visit the offices and properties of the Seller or the Originator
for the purpose of examining such materials described in clause (i) above,
and to discuss matters relating to the Seller's or the Originator's
financial condition or the Receivables and the Related Security or the
Seller's performance hereunder, or the
Originator's performance under any of the other Transaction Documents,
or the Seller's or the Originator's performance under the Invoices with any
of the officers or employees of the Seller or the Originator having
knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Seller will, and will cause the Originator to, maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep and
maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including,
without limitation, records adequate to permit the immediate
identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Seller will, and will
cause the Originator to, give the Agent notice of any material change in
the administrative and operating procedures referred to in the previous
sentence.
(ii) The Seller will, and will cause the Originator to, (a) on or
prior to the date hereof, mark its master data processing records and
other books and records relating to the Receivable Interests with a
legend, acceptable to the Agent, describing the Receivable Interests and
(b) upon the request of the Agent: (A) mark each Invoice with a legend
describing the Receivable Interests and (B) deliver to the Agent all
Invoices (including, without limitation, all multiple originals of any
such Invoice) relating to the Receivables.
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(f) Compliance with Invoices and Credit and Collection Policy. The
Seller will, and will cause the Originator to, timely and fully (i) perform
and comply with all provisions, covenants and other promises required to be
observed by it under the Invoices (other than bills of lading) related to
the Receivables, and (ii) comply in all material respects with any bills of
lading included in the Invoices and with the Credit and Collection Policy.
The Seller will, and will cause the Originator to, pay when due any taxes
payable in connection with the Receivables.
(g) Purchase of Receivables from the Originator. With respect to each
Receivable purchased under the Sale Agreement, the Seller shall (or shall
cause the Originator to) take all actions necessary to vest legal and
equitable title to such Receivable and the Related Security irrevocably in
the Seller, including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the
UCC of all appropriate jurisdictions (or any comparable law) to perfect the
Seller's interest in such Receivable and such other action to perfect,
protect or more fully evidence the interest of the Seller as the Agent may
reasonably request.
(h) Ownership Interest. The Seller shall take all necessary action to
establish and maintain a valid and perfected first priority undivided
percentage ownership interest in the Receivables and the Related Security
and Collections with respect thereto, to the full extent contemplated
herein, in favor of the Agent and the Purchasers, including, without
limitation, taking such action to perfect, protect or more fully evidence
the interest of the Agent and the Purchasers hereunder as the Agent may
reasonably request.
(i) Payment to the Originator. With respect to any Receivable
purchased by the Seller from the Originator, such sale shall be effected
under, and in strict compliance with the terms of, the Sale Agreement,
including, without limitation, the terms relating to the amount and timing
of payments to be made to the Originator in respect of the purchase price
for such Receivable.
(j) Performance and Enforcement of Sale Agreement. The Seller shall
timely perform the obligations required to be performed by the Seller, and
shall vigorously enforce the rights and remedies accorded to the Seller,
under the Sale Agreement. The Seller shall take all actions to perfect and
enforce its rights and interests (and the rights and interests of the
Purchasers and the Agents, as assignees of the Seller) under the Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Sale
Agreement.
(k) Purchasers' Reliance. The Seller acknowledges that the Purchasers
are entering into the transactions contemplated by this Agreement in
reliance upon the Seller's identity as a legal entity that is separate from
the Originator. Therefore, from and after the date of execution and
delivery of this Agreement, the Seller shall take all reasonable steps
including, without limitation, all steps that the Agent or any Purchaser
may from time to time reasonably request to maintain the Seller's identity
as a separate legal entity and to make it manifest to third parties that
the Seller is an entity with assets and liabilities distinct from those of
the Originator and any Affiliates thereof and not just a division of the
Originator. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, the Seller shall:
(i) conduct its own business in its own name and require that all
full-time employees of the Seller, if any, identify themselves as such
and not as employees of the Originator (including, without limitation,
by means of providing appropriate employees with business or
identification cards identifying such employees as the Seller's
employees);
(ii) compensate all employees, consultants and agents directly,
from the Seller's bank accounts, for services provided to the Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of the Seller is also an employee, consultant or
agent of the Originator, allocate the compensation of such employee,
consultant or agent between the Seller and the Originator on a basis
which reflects the services rendered to the Seller and the Originator;
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(iii) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of the Originator,
the Seller shall lease such office at a fair market rent;
(iv) have a separate telephone number, which will be answered only
in its name and separate stationery, invoices and checks in its own
name;
(v) conduct all transactions with the Originator (including,
without limitation, any delegation of its obligations hereunder as
Servicer) strictly on an arm's-length basis, allocate all overhead
expenses (including, without limitation, telephone and other utility
charges) for items shared between the Seller and the Originator on the
basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual
use;
(vi) at all times have at least two members of its Board of
Directors (each, an "INDEPENDENT DIRECTOR") who are not at such time,
and have not have been at any time during the preceding five years (A) a
director, officer, employee or affiliate of Yellow Corporation or any of
its subsidiaries or affiliates, or (B) the beneficial owner at the time
of such individual's appointment as an Independent Director or at any
time thereafter while serving as an Independent Director, of five
percent (5%) of the outstanding common shares of Yellow Corporation
having general voting rights; provided, however, that a director who
otherwise meets the description of Independent Director as set forth
herein shall not be disqualified from serving as an Independent Director
of the Seller if he or she is also a director of another corporation
that is an Affiliate of Yellow Corporation with a certificate of
incorporation substantially similar to the certificate of incorporation
of the Seller;
(vii) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Directors, (B) the
dissolution or liquidation of the Seller or (C) the initiation of
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving the Seller,
are duly authorized by unanimous vote of its Board of Directors
(including the Independent Directors);
(viii) maintain the Seller's books and records separate from those
of the Originator and otherwise readily identifiable as its own assets
rather than assets of the Originator;
(ix) prepare its financial statements separately from those of the
Originator and insure that any consolidated financial statements of the
Originator or any Affiliate thereof that include the Seller and which
are filed with the Securities and Exchange Commission or any other
governmental agency have notes clearly stating that the Seller is a
separate corporate entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of the Seller;
(x) except as herein specifically otherwise provided, not commingle
funds or other assets of the Seller with those of the Originator and not
maintain bank accounts or other depository accounts to which the
Originator is an account party, into which the Originator makes deposits
or from which the Originator has the power to make withdrawals;
(xi) not permit the Originator to pay any of the Seller's operating
expenses (except pursuant to allocation arrangements that comply with
the requirements of this SECTION 5.1(K));
(xii) not permit the Seller to be named as an insured on the
insurance policy covering the property of the Originator or enter into
an agreement with the holder of such policy whereby in the event of a
loss in connection with such property, proceeds are paid to the Seller;
and
(xiii) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion issued by
Skadden, Arps, Slate, Meagher & Flom, as counsel for the Seller, in
connection with the closing or initial purchase under this Agreement and
relating to substantive consolidation issues, and in the certificates
accompanying such opinion, remain true and correct in all material
respects at all times.
(l) Collections. The Seller shall instruct all Obligors, or cause the
Originator to instruct, all Obligors to pay all Collections directly to a
segregated lock-box or other Collection Account listed on
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EXHIBIT III, each of which is subject to a Collection Account Agreement. In
the case of payments remitted to any such lock-box, the Seller shall cause
all proceeds from such lock-box to be deposited directly by a Collection
Bank into a Collection Account listed on EXHIBIT III, which is subject to a
Collection Account Agreement. The Seller shall maintain exclusive dominion
and control (subject to the terms of this Agreement) to each such
Collection Account. In the case of any Collections received by the Seller
or the Originator, the Seller shall remit (or shall cause the Originator to
remit) such Collections to a Collection Account not later than the Business
Day immediately following the date of receipt of such Collections, and, at
all times prior to such remittance, the Seller shall itself hold (or, if
applicable, shall cause the Originator to hold) such Collections in trust,
for the exclusive benefit of the Purchasers and the Agent. In the case of
any remittances received by the Seller in any such Collection Account that
shall have been identified, to the satisfaction of the Servicer, to not
constitute Collections or other proceeds of the Receivables or the Related
Security, the Seller shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after the
date the Agent delivers to any of the Collection Banks a Collection Notice
pursuant to SECTION 6.3, the Agent may request that the Seller, and the
Seller thereupon promptly shall and shall direct the Originator to, direct
all Obligors on Receivables to remit all payments thereon to a new
depositary account (the "NEW CONCENTRATION ACCOUNT") specified by the Agent
and, at all times thereafter the Seller shall not deposit or otherwise
credit, and shall not permit the Originator or any other Person to deposit
or otherwise credit to the New Concentration Account any cash or payment
item other than Collections. Alternatively, the Agent may request that the
Seller, and the Seller thereupon promptly shall, direct all Persons then
making remittances to any Collection Account listed on EXHIBIT III which
remittances are not payments on Receivables to deliver such remittances to
a location other than an account listed on EXHIBIT III.
(m) Minimum Net Worth. The Seller shall at all times maintain total
assets which exceed its total liabilities by not less than 3% of the
Outstanding Balance of the Receivables at such time.
(n) Accounting for Collections of Excluded Receivables. As soon as
practicable and in any event not later than October 31, 1996, the Seller
shall (or shall require the Originator to) implement a modification to its
accounting systems which enables the Seller (and/or the Originator as
subservicer) to identify and track Collections in respect of the Excluded
Receivables separately from the Collections in respect of the Receivables.
Section 5.2. Negative Covenants of Seller. Until the date on which the
Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby
covenants, individually and in its capacity as Servicer, that:
(a) Name Change, Offices, Records and Books of Accounts. The Seller
will not change its name, identity or corporate structure (within the
meaning of Section 9-402(7) of any applicable enactment of the UCC) or
relocate its chief executive office or any office where Records are kept
unless it shall have: (i) given the Agent at least 45 days prior notice
thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with
such change or relocation.
(b) Change in Payment Instructions to Obligors. The Seller will not
add or terminate any bank as a Collection Bank from those listed in EXHIBIT
III, or make any change in its instructions to Obligors regarding payments
to be made to the Seller or payments to be made to any lock-box, Collection
Account or Collection Bank, unless the Agent shall have received, at least
fifteen (15) Business Days before the proposed effective date therefor:
(i) written notice of such addition, termination or change, and
(ii) with respect to the addition of a lock-box, Collection Account or
Collection Bank, an executed account agreement and an executed Collection
Account Agreement from such Collection Bank relating thereto;
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PROVIDED, HOWEVER, that the Seller may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing lock-box or Collection Account that is subject
to a Collection Account Agreement then in effect.
(c) Modifications to Invoices and Credit and Collection Policy. The
Seller will not make any change to the Credit and Collection Policy which
would be reasonably likely to adversely affect the collectibility of any
material portion of the Receivables or decrease the credit quality of any
newly created Receivables. Except as provided in SECTION 6.2(C), the
Seller, acting as Servicer or otherwise, will not extend, amend or
otherwise modify the terms of any Receivable or any Invoice related thereto
other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens, Etc. The Seller shall not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect
to, any Excluded Receivable or any Receivable, Related Security or
Collections, or upon or with respect to any Invoice under which any
Receivable arises, or any lock-box or Collection Account or assign any
right to receive income in respect thereof (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and the Seller shall defend the right, title and
interest of the Agent and the Purchasers in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under the Seller or the Originator.
(e) Nature of Business; Other Agreements; Other Indebtedness. The
Seller shall not engage in any business or activity of any kind or enter
into any transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking other than the transactions
contemplated and authorized by this Agreement and the Sale Agreement.
Without limiting the generality of the foregoing, the Seller shall not
create, incur, guarantee, assume or suffer to exist any indebtedness or
other liabilities, whether direct or contingent, other than:
(i) the incurrence of obligations under this Agreement,
(ii) the incurrence of obligations, as expressly contemplated in
the Sale Agreement, to make payment to the Originator thereunder for the
purchase of Receivables from the Originator under the Sale Agreement,
and
(iii) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated in SECTION 5.1(K) of this
Agreement.
In the event the Seller shall at any time borrow a "REVOLVING LOAN" under
the Sale Agreement, the obligations of the Seller in connection therewith shall
be subordinated to the obligations of the Seller to the Purchasers and the Agent
under this Agreement, on such terms as shall be satisfactory to the Agent.
(f) Amendments to Sale Agreement. The Seller shall not, without the
prior written consent of the Agent:
(i) cancel or terminate the Sale Agreement,
(ii) give any consent, waiver, directive or approval under the Sale
Agreement,
(iii) waive any default, action, omission or breach under the Sale
Agreement, or otherwise grant any indulgence thereunder, or
(iv) amend, supplement or otherwise modify any of the terms of the
Sale Agreement.
(g) Amendments to Corporate Documents. The Seller shall not amend its
Certificate of Incorporation or By-Laws in any respect that would impair
its ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, SECTION 5.1(K) of
this Agreement.
(h) Merger. The Seller shall not merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions, and except as otherwise
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contemplated herein) all or substantially all of its assets (whether now
owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person.
(i) Restricted Junior Payments. The Seller shall not make any
Restricted Junior Payment if a Servicer Default or Potential Servicer
Default exists or would result therefrom.
ARTICLE VI
ADMINISTRATION AND COLLECTION
Section 6.1. Designation of Servicer.
(a) The servicing, administration and collection of the Receivables shall
be conducted by such Person (the "SERVICER") so designated from time to time in
accordance with this SECTION 6.1. The Seller is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms of this Agreement. The Agent may at any time designate as Servicer any
Person to succeed the Seller or any successor Servicer.
(b) The Seller is permitted to delegate, and the Seller hereby advises the
Purchasers and the Agent that it has delegated, to the Originator, as
subservicer of the Servicer, certain of its duties and responsibilities as
Servicer hereunder in respect of the Receivables transferred by the Originator
to the Seller. Notwithstanding the foregoing, (i) the Seller shall be and remain
primarily liable to the Agent and the Purchasers for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Agent and the Purchasers shall be entitled to deal exclusively with the
Seller in matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder, and the Agent and the Purchasers shall not be
required to give notice, demand or other communication to any Person other than
the Seller in order for communication to the Servicer and its subservicer or
other delegate in respect thereof to be accomplished. The Seller, at all times
that it is the Servicer, shall be responsible for providing its subservicer or
other delegate with any notice given under this Agreement.
(c) Without the prior written consent of the Required Investors, (i) the
Seller shall not be permitted to delegate any of its duties or responsibilities
as Servicer to any Person other than the Originator, and then such delegation
shall be limited to the activities of Servicer hereunder as the same may relate
to the Receivables originated by the Originator, and (ii) no Originator shall be
permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by the Seller. If at any time
the Agent shall designate as Servicer any Person other than the Seller, all
duties and responsibilities theretofore delegated by the Seller to the
Originator may, at the discretion of the Agent, be terminated forthwith on
notice given by the Agent to the Seller.
Section 6.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the applicable Invoices and the Credit and
Collection Policy.
(b) The Servicer shall administer the Collections in accordance with the
procedures described herein and in ARTICLE I. The Servicer shall set aside and
hold in trust for the account of the Seller and the Purchasers their respective
shares of the Collections of Receivables in accordance with SECTIONS 1.6 and
1.7. The Servicer shall upon the request of the Agent after the occurrence of a
Liquidation Day, segregate, in a manner acceptable to the Agent, all cash,
checks and other instruments received by it from time to time constituting
Collections from the general funds of the Servicer or the Seller prior to the
remittance thereof in accordance with SECTION 1.7. If the Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for the Purchasers on
the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
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(c) The Servicer, may, in accordance with the Credit and Collection Policy,
extend the maturity of any Receivable or adjust the Outstanding Balance of any
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof;
PROVIDED, HOWEVER, that such extension or adjustment shall not alter the
status of such Receivable as a Delinquent Receivable or Defaulted Receivable or
limit the rights of the Agent or the Purchasers under this Agreement.
Notwithstanding anything to the contrary contained herein, from and after the
occurrence of a Servicer Default, the Agent shall have the absolute and
unlimited right to direct the Servicer to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security.
(d) The Servicer shall hold in trust for the Seller and the Purchasers, in
accordance with their respective interests in the Receivables, all Records that
evidence or relate to the Receivables, the related Invoices and Related Security
or that are otherwise necessary or desirable to collect the Receivables and
shall, as soon as practicable upon demand of the Agent, deliver or make
available to the Agent all such Records, (x) if such demand is made at any time
prior to the replacement of the Seller as Servicer hereunder, at the chief
executive office of the Originator and (y) if such demand is made at any time
after the replacement of the Seller as Servicer hereunder, to such location as
the Agent may designate in writing. The Servicer shall, as soon as practicable
following receipt thereof, turn over to the Seller (i) that portion of
Collections of Receivables representing the Seller's undivided fractional
ownership interest therein, less, in the event the Seller is not the Servicer,
all reasonable out-of-pocket costs and expenses of the Servicer of servicing,
administering and collecting the Receivables, and (ii) any cash collections or
other cash proceeds received with respect to indebtedness not constituting
Receivables. The Servicer shall, from time to time at the request of any
Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to SECTION 1.7.
(e) Any payment by an Obligor in respect of any indebtedness owed by it to
the Seller shall, except as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Agent, be
applied as a Collection of any Receivable of such Obligor (starting with the
oldest such Receivable) to the extent of any amounts then due and payable
thereunder before being applied to any other receivable or other obligation of
such Obligor.
Section 6.3. Collection Notices. The Agent is authorized at any time to
date and to deliver to the Collection Banks a Collection Notice under any
Collection Account Agreement. The Seller hereby transfers to the Agent for the
benefit of the Purchasers, effective when the Agent delivers such notice, the
exclusive ownership and control of the Collection Accounts. In case any
authorized signatory of the Seller whose signature appears on a Collection
Account Agreement shall cease to have such authority before the delivery of such
notice, such Collection Notice shall nevertheless be valid as if such authority
had remained in force. The Seller hereby authorizes the Agent, and agrees that
the Agent shall be entitled to (i) endorse the Seller's name on checks and other
instruments representing Collections, (ii) enforce the Receivables, the related
Invoices and the Related Security and (iii) take such action as shall be
necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than the Seller.
Section 6.4. Responsibilities of the Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer or the Seller from any of their
duties or obligations with respect to any Receivables or under the related
Invoices. The Purchasers shall have no obligation or liability with respect to
any Receivables or related Invoices, nor shall any of them be obligated to
perform the obligations of the Seller.
Section 6.5. Reports. On the 15th day of each month (or, if such date is
not a Business Day, the next following Business Day), and at such other times as
the Agent shall request, the Servicer shall prepare and forward to the Agent a
Monthly Report. Promptly following any request therefor by the Agent, the Seller
shall prepare and provide to the Agent a listing by Obligor of all Receivables
together with an aging of such Receivables. If at any time an Approved Offset
Receivable or a Supplemental Approved Offset Receivable ceases to be an Eligible
Receivable because the Originator commences purchasing, on credit, goods or
services
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from the Obligor thereon, the Servicer shall, not later than 5 Business Days
thereafter, deliver to the Agent a restated Monthly Report for the month
preceding such occurrence deducting the Outstanding Balance of such Approved
Offset Receivable or Supplemental Approved Offset Receivable, as the case may
be, from the aggregate Outstanding Balance of Eligible Receivables previously
reflected thereon.
ARTICLE VII
SERVICER DEFAULTS
Section 7.1. Servicer Defaults. The occurrence of any one or more of the
following events shall constitute a Servicer Default:
(a) The Servicer or the Seller shall fail (i) to make when due any
payment or deposit required hereunder, or (ii) to perform or observe any
term, covenant or agreement hereunder (other than as referred to in clause
(i) of this paragraph (a)) and such failure shall remain unremedied for
five (5) Business Days following written notice thereof to the Servicer or
the Seller, as applicable.
(b) Any representation, warranty, certification or statement made by
the Seller, the Servicer or the Originator in this Agreement, any other
Transaction Document or in any other document delivered pursuant hereto
shall prove to have been incorrect in any material respect when made or
deemed made.
(c) (i) The Seller or the Servicer shall generally not pay its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller
or the Servicer seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its
property, or (ii) the Seller or any Servicer shall take any corporate
action to authorize any of the actions set forth in clause (i) above in
this subsection (c).
(d) As at the end of any calendar month:
(i) the average of the Delinquency Ratios for each of the three
consecutive calendar months then most recently ended shall exceed 4.00%;
(ii) the Dilution Ratio for any calendar month shall exceed 3.25%;
or
(iii) the average of the Default Ratios for each of the three
consecutive calendar months then most recently ended shall exceed 4.00%.
(e) The Originator (i) shall fail to perform or observe any term,
covenant or agreement contained in any other Transaction Document, or (ii)
shall for any reason cease to transfer, or cease to have the legal capacity
or otherwise be incapable of transferring, Receivables to the Seller, as
purchaser under the Sale Agreement, or any "EVENT OF DEFAULT" or "POTENTIAL
EVENT OF DEFAULT" shall occur under the Sale Agreement.
(f) The aggregate Receivable Interests hereunder shall at any time
exceed 100%.
(g) A Change of Control shall occur.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Indemnities by the Seller. Without limiting any other rights
which the Agent or any Purchaser may have hereunder or under applicable law, the
Seller hereby agrees to indemnify the Agent and each Purchaser and their
respective officers, directors, agents and employees (each, an "INDEMNIFIED
PARTY") from and against any and all damages, losses, claims, taxes,
liabilities, costs, expenses and for all
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other amounts payable, including reasonable attorneys' fees (which attorneys may
be employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, EXCLUDING, HOWEVER:
(a) Indemnified Amounts to the extent final judgment of a court of
competent jurisdiction holds such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables which are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the Intended Characterization;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of the Seller or the Servicer or limit the recourse of the Purchasers
to the Seller or Servicer for amounts otherwise specifically provided to be paid
by the Seller or the Servicer under the terms of this Agreement. Without
limiting the generality of the foregoing indemnification, the Seller shall
indemnify the Agent and the Purchasers for Indemnified Amounts (including,
without limitation, losses in respect of uncollectible receivables, regardless
of whether reimbursement therefor would constitute recourse to the Seller or the
Servicer) relating to or resulting from:
(i) any representation or warranty made by the Seller, the Originator
or the Servicer (or any officers of the Seller, the Originator or the
Servicer) under or in connection with this Agreement, any other Transaction
Document, any Monthly Report or any other information or report delivered
by the Seller, the Originator or the Servicer pursuant hereto or thereto,
which shall have been false or incorrect when made or deemed made;
(ii) the failure by the Seller, the Originator or the Servicer to
comply with any applicable law, rule or regulation with respect to any
Receivable or Invoice related thereto, or the nonconformity of any
Receivable or Invoice included therein with any such applicable law, rule
or regulation;
(iii) any failure of the Seller, the Originator or the Servicer to
perform its duties or obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability or similar claim arising out of or in
connection with merchandise, insurance or services which are the subject of
any Invoice;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of any Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Invoice not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such merchandise or
services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby or thereby, the use of the proceeds of a
purchase, the ownership of the Receivable Interests or any other
investigation, litigation or proceeding relating to the Seller or the
Originator in which any Indemnified Party becomes involved as a result of
any of the transactions contemplated hereby or thereby;
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(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) a Servicer Default described in SECTION 7.1(C);
(x) the failure to vest and maintain vested in the Agent and the
Purchasers, or to transfer to the Agent and the Purchasers, legal and
equitable title to, and ownership of, a first priority perfected undivided
percentage ownership (to the extent of the Receivable Interests
contemplated hereunder) in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim; or
(xi) any failure of the Seller to give reasonably equivalent value to
the Originator under the Sale Agreement in consideration of the transfer by
the Originator of any Receivable, or any attempt by any Person to void any
such transfer under statutory provisions or common law or equitable action,
including, without limitation, any provision of the Bankruptcy Code.
Section 8.2. Increased Cost and Reduced Return.
(a) If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency (a "REGULATORY CHANGE"): (i)
which subjects any Funding Source to any charge or withholding on or with
respect to any Funding Agreement or a Funding Source's obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source) or (ii) which imposes, modifies or deems applicable
any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) which imposes any other condition the result of which is to increase
the cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, the Seller shall pay to the Agent, for the benefit of the relevant
Funding Source, such amounts charged to such Funding Source or compensate such
Funding Source for such reduction.
(b) Payment of any sum pursuant to SECTION 8.2(A) shall be made by the
Seller to the Agent, for the benefit of the relevant Funding Source, not later
than ten (10) days after any such demand is made. A certificate of any Funding
Source, signed by an authorized officer claiming compensation under this SECTION
8.2 and setting forth the additional amount to be paid for its benefit and
explaining the manner in which such amount was determined shall be conclusive
evidence of the amount to be paid, absent manifest error.
Section 8.3. Costs and Expenses Relating to this Agreement. The Seller
shall pay to the Agent and FALCON on demand all costs and out-of-pocket expenses
in connection with the preparation, execution, delivery and administration of
this Agreement, the transactions contemplated hereby and the other documents to
be delivered hereunder, including without limitation, the cost of FALCON's
auditors auditing the books, records and procedures of the Seller, reasonable
fees and out-of-pocket expenses of legal counsel for FALCON and the Agent (which
such counsel may be employees of FALCON or the Agent) with respect thereto and
with respect to advising FALCON and the Agent as to their respective rights and
remedies under this Agreement. The Seller shall pay to the Agent on demand any
and all costs and expenses of the Agent and the Purchasers, if any, including
reasonable counsel fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following a Servicer Default.
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ARTICLE IX
THE AGENT
Section 9.1. Authorization and Action. Each Purchaser hereby designates and
appoints First Chicago to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Seller or any of its successors or assigns. The Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Transaction Document or
applicable law. The appointment and authority of the Agent hereunder shall
terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each
Purchaser hereby authorizes the Agent to execute on behalf of such Purchaser
(the terms of which shall be binding on such Purchaser) each of the Uniform
Commercial Code financing statements, together with such other instruments or
documents determined by the Agent to be necessary or desirable in order to
perfect, evidence or more fully protect the interest of the Purchasers
contemplated hereunder.
Section 9.2. Delegation of Duties. The Agent may execute any of its duties
under this Agreement and each other Transaction Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3. Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by the Seller contained in this Agreement, any other Transaction
Document or any certificate, report, statement or other document referred to or
provided for in, or received under or in connection with, this Agreement, or any
other Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, or any other
Transaction Document or any other document furnished in connection herewith or
therewith, or for any failure of the Seller to perform its obligations hereunder
or thereunder, or for the satisfaction of any condition specified in ARTICLE IV,
or for the perfection, priority, condition, value or sufficiency or any
collateral pledged in connection herewith. The Agent shall not be under any
obligation to any Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of the Seller. The Agent shall not be deemed to
have knowledge of a Servicer Default or Potential Servicer Default unless the
Agent has received notice from the Seller or a Purchaser.
Section 9.4. Reliance by Agent. The Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Seller), independent accountants
and other experts selected by the Agent. The Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other Transaction Document unless it shall first receive such advice or
concurrence of FALCON or the Required Investors or all of the Purchasers, as
applicable, as it deems appropriate and it shall first be indemnified to its
satisfaction by the Purchasers, PROVIDED THAT unless and until the Agent shall
have received such advice, the Agent may take or refrain from taking any action,
as the Agent shall deem advisable and in the best interests of the Purchasers.
The Agent shall in all cases be fully protected in acting,
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or in refraining from acting, in accordance with a request of FALCON or the
Required Investors or all of the Purchasers, as applicable, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Purchasers.
Section 9.5. Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of the Seller,
shall be deemed to constitute any representation or warranty by the Agent. Each
Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 9.6. Reimbursement and Indemnification. The Investors agree to
reimburse and indemnify the Agent and its officers, directors, employees,
representatives and agents ratably according to their Pro Rata Shares, to the
extent not paid or reimbursed by the Seller (i) for any amounts for which the
Agent, acting in its capacity as Agent, is entitled to reimbursement by the
Seller hereunder and (ii) for any other expenses incurred by the Agent, in its
capacity as Agent and acting on behalf of the Purchasers, in connection with the
administration and enforcement of this Agreement and the other Transaction
Documents.
Section 9.7. Agent in its Individual Capacity. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Seller or any Affiliate of the Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Receivable Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement as any Purchaser and may exercise the same as though it
were not the Agent, and the terms "Investor," "Purchaser," "Investors" and
"Purchasers" shall include the Agent in its individual capacity.
Section 9.8. Successor Agent. The Agent may, upon five days' notice to the
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Investors during such five-day
period shall appoint from among the Purchasers a successor agent. If for any
reason no successor Agent is appointed by the Required Investors during such
five-day period, then effective upon the termination of such five day period,
the Purchasers shall perform all of the duties of the Agent hereunder and under
the other Transaction Documents and the Seller shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other
Transaction Documents and the provisions of this ARTICLE IX and ARTICLE VIII
shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while it was Agent under this Agreement and under the
other Transaction Documents.
ARTICLE X
ASSIGNMENTS; PARTICIPATIONS
Section 10.1. Assignments.
(a) The Seller and each Investor hereby agree and consent to the complete
or partial assignment by FALCON of all of its rights under, interest in, title
to and obligations under this Agreement to the Investors pursuant to SECTION 2.1
or to any other Person, and upon such assignment, FALCON shall be released from
its obligations so assigned. Further, the Seller and each Investor hereby agree
that any assignee of FALCON of this Agreement or all or any of the Receivable
Interests of FALCON shall have all of the rights and benefits under this
Agreement as if the term "FALCON" explicitly referred to such party, and no such
assignment shall in any way impair the rights and benefits of FALCON hereunder.
The Seller shall not have the right to assign its rights or obligations under
this Agreement.
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(b) Any Investor may at any time and from time to time assign to one or
more Persons ("PURCHASING INVESTORS") all or any part of its rights and
obligations under this Agreement pursuant to an assignment agreement, in a form
and substance satisfactory to the Agent (the "ASSIGNMENT AGREEMENT"), executed
by such Purchasing Investor and such selling Investor. The consent of FALCON
shall be required prior to the effectiveness of any such assignment. Each
assignee of an Investor must have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Moody's Investors Service, Inc. and
must agree to deliver to the Agent, promptly following any request therefor by
the Agent or FALCON, an enforceability opinion in form and substance
satisfactory to the Agent and FALCON. Upon delivery of the executed Assignment
Agreement to the Agent, such selling Investor shall be released from its
obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Investor shall for all purposes be an Investor party to this
Agreement and shall have all the rights and obligations of an Investor under
this Agreement to the same extent as if it were an original party hereto and no
further consent or action by the Seller, the Purchasers or the Agent shall be
required.
(c) Each of the Investors agrees that in the event that it shall cease to
have a short-term debt rating of A-1 or better by Standard & Poor's Corporation
and P-1 by Moody's Investors Service, Inc. (an "AFFECTED INVESTOR"), such
Affected Investor shall be obliged, at the request of FALCON or the Agent, to
assign all of its rights and obligations hereunder to (x) another Investor or
(y) another financial institution nominated by the Agent and acceptable to
FALCON, and willing to participate in this Agreement through the Liquidity
Termination Date in the place of such Affected Investor; provided that the
Affected Investor receives payment in full, pursuant to an Assignment Agreement,
of an amount equal to such Investor's Pro Rata Share of the Capital and Discount
owing to the Investors and all accruing but unpaid fees and other costs and
expenses payable in respect of its Pro Rata Share of the Receivable Interests.
Section 10.2. Participations. Any Investor may, in the ordinary course of
its business at any time sell to one or more Persons (each, a "PARTICIPANT")
participating interests in its Pro Rata Share of the Receivable Interests of the
Investors, its obligation to pay FALCON its Acquisition Amounts or any other
interest of such Investor hereunder. Notwithstanding any such sale by an
Investor of a participating interest to a Participant, such Investor's rights
and obligations under this Agreement shall remain unchanged, such Investor shall
remain solely responsible for the performance of its obligations hereunder, and
the Seller, FALCON and the Agent shall continue to deal solely and directly with
such Investor in connection with such Investor's rights and obligations under
this Agreement. Each Investor agrees that any agreement between such Investor
and any such Participant in respect of such participating interest shall not
restrict such Investor's right to agree to any amendment, supplement, waiver or
modification to this Agreement, except for any amendment, supplement, waiver or
modification described in clause (i) of SECTION 11.1(B).
ARTICLE XI
MISCELLANEOUS
Section 11.1. Waivers and Amendments. (a) No failure or delay on the part
of any party hereto in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any waiver of this Agreement shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this SECTION
11.1(B). FALCON, the Seller and the Agent, at the direction of the Required
Investors, may enter into written modifications or waivers of any provisions of
this Agreement, PROVIDED, HOWEVER, that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by the Seller or the Servicer, (B) reduce the rate or extend
the time of payment of Discount (or any component thereof), (C) reduce any
fee payable to the
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Agent for the benefit of the Purchasers, (D) except pursuant to ARTICLE X
hereof, change the amount of the Capital of any Purchaser, an Investor's
Pro Rata Share or an Investor's Commitment, (E) amend, modify or waive any
provision of the definition of Required Investors or this SECTION 11.1(B),
(F) consent to or permit the assignment or transfer by the Seller of any of
its rights and obligations under this Agreement, (G) change the definition
of "ELIGIBLE RECEIVABLE," "DILUTION RESERVE", "DISCOUNT RESERVE," "LOSS
RESERVE PERCENTAGE," "AGGREGATE RESERVE PERCENTAGE" or "DEFAULT RATIO," or
(H) amend or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above in a
manner which would circumvent the intention of the restrictions set forth
in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect
the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Investors,
the Agent may, with the consent of the Seller, amend this Agreement solely to
add additional Persons as Investors hereunder and (ii) without the consent of
the Seller, the Agent, the Required Investors and FALCON may enter into
amendments to modify any of the terms or provisions of ARTICLE II, ARTICLE IX,
ARTICLE X or SECTION 11.13 provided that such amendment has no negative impact
upon the Seller. Any modification or waiver made in accordance with this SECTION
11.1 shall apply to each of the Purchasers equally and shall be binding upon the
Seller, the Purchasers and the Agent.
Section 11.2. Notices.
(a) Except as provided in subsection (b) below, all communications and
notices provided for hereunder shall be in writing (including bank wire,
telecopy or electronic facsimile transmission or similar writing) and shall be
given to the other parties hereto at their respective addresses or telecopy
numbers set forth on the signature pages hereof. All such communications and
notices shall, when mailed, telecopied, telegraphed, telexed or cabled, be
effective when received through the mails, transmitted by telecopy, delivered to
the telegraph company, confirmed by telex answerback or delivered to the cable
company, respectively, except that communications and notices to the Agent or
any Purchaser pursuant to ARTICLE I or II shall not be effective until received
by the intended recipient.
(b) The Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of the
Seller. The Seller agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an authorized officer of the
Seller. However, the absence of such confirmation shall not affect the validity
of such notice. If the written confirmation differs from the action taken by the
Agent, the records of the Agent shall govern absent manifest error.
Section 11.3. Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
SECTION 8.2 or 8.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of the Aggregate Unpaids held by the other Purchasers so that
after such purchase each Purchaser will hold its ratable proportion of the
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 11.4. Protection of Ownership Interests of the Purchasers.
(a) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Receivable Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. The Agent may, or the Agent may direct the Seller to, notify the
Obligors of Receivables, at any time following the replacement of the Seller as
Servicer and at the Seller's expense, of the ownership interests of the
Purchasers under this Agreement and
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may also direct that payments of all amounts due or that become due under any or
all Receivables be made directly to the Agent or its designee. The Seller shall,
at any Purchaser's written request, withhold the identity of such Purchaser in
any such notification.
(b) If the Seller or the Servicer fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligation; and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by the Seller (if the Servicer that fails to so perform is the Seller or an
Affiliate thereof) as provided in SECTION 8.3, as applicable. The Seller and the
Servicer each irrevocably authorizes the Agent at any time and from time to time
in the sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact, to act on behalf of the Seller and the Servicer (i) to execute
on behalf of the Seller as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Purchasers in the Receivables and
(ii) to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing statement
in such offices as the Agent in its sole discretion deems necessary or desirable
to perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable.
Section 11.5. Confidentiality.
(a) The Seller shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of this Agreement and the other
confidential proprietary information with respect to the Agent and FALCON and
their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein,
except that the Seller and its officers and employees may disclose such
information to the Seller's external accountants and attorneys and as required
by any applicable law or order of any judicial or administrative proceeding. In
addition, the Seller may disclose any such nonpublic information pursuant to any
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
(b) Anything herein to the contrary notwithstanding, the Seller hereby
consents to the disclosure of any nonpublic information with respect to it (i)
to the Agent, the Investors or FALCON by each other, (ii) by the Agent or the
Purchasers to any prospective or actual assignee or participant of any of them
or (iii) by the Agent to any rating agency, Commercial Paper dealer or provider
of a surety, guaranty or credit or liquidity enhancement to FALCON or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which First Chicago acts as the administrative agent and to any
officers, directors, employees, outside account-ants and attorneys of any of the
foregoing, provided each such Person is informed of the confidential nature of
such information in a manner consistent with the practice of the Agent for the
making of such disclosures generally to Persons of such type. In addition, the
Purchasers and the Agent may disclose any such nonpublic information pursuant to
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 11.6. Bankruptcy Petition. The Seller, the Agent and each Investor
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of all outstanding senior indebtedness of FALCON,
it will not institute against, or join any other Person in instituting against,
FALCON any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
Section 11.7. Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of FALCON, the Agent
or any Investor, no claim may be made by the Seller, the Servicer or any other
Person against FALCON, the Agent or any Investor or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith;
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and the Seller hereby waives, releases, and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
Section 11.8. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS.
Section 11.9. CONSENT TO JURISDICTION. THE SELLER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT
TO THIS AGREEMENT AND THE SELLER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST THE SELLER IN THE COURTS OF
ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE SELLER OR THE ORIGINATOR MAY BE
LOCATED. ANY JUDICIAL PROCEEDING BY THE SELLER AGAINST THE AGENT OR ANY
PURCHASER OR ANY AFFILIATE OF THE AGENT OR A PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT
SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 11.10. WAIVER OF JURY TRIAL. THE AGENT, THE SELLER AND EACH
PURCHASER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT, ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT OR THE
RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 11.11. Integration; Survival of Terms. This Agreement, the
Collection Account Agreements, and the Fee Letter contain the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings. The provisions of ARTICLE VIII and SECTION 11.6
shall survive any termination of this Agreement.
Section 11.12. Counterparts; Severability. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 11.13. First Chicago Roles. Each of the Investors acknowledges that
First Chicago and certain of its Affiliates including (First Chicago Capital
Markets, Inc.) act, or may in the future act, (i) as administrative agent for
FALCON, (ii) as issuing and paying agent for the Commercial Paper, (iii) to
provide credit or liquidity enhancement for the timely payment for the
Commercial Paper and (iv) to provide other services from time to time for FALCON
(collectively, the "FIRST CHICAGO ROLES"). Without limiting the generality of
this SECTION 11.13, each Investor hereby acknowledges and consents to any and
all First Chicago Roles and agrees that in connection with any First Chicago
Role, First Chicago may take, or refrain from taking, any action which it, in
its discretion, deems appropriate, including, without limitation, in
26
<PAGE> 32
its role as administrative agent for FALCON, the giving of notice to the Agent
of a mandatory purchase pursuant to SECTION 2.1.
Section 11.14. Characterization.
(a) It is the intention of the parties hereto that each purchase hereunder
shall constitute an absolute and irrevocable sale, which purchase shall provide
the applicable Purchaser with the full benefits of ownership of the applicable
Receivable Interest. Except as specifically provided in this Agreement, each
sale of a Receivable Interest hereunder is made without recourse to the Seller;
PROVIDED, HOWEVER, that (i) the Seller shall be liable to each Purchaser and the
Agent for all representations, warranties and covenants made by the Seller
pursuant to the terms of this Agreement, and (ii) such sale does not constitute
and is not intended to result in an assumption by any Purchaser or the Agent or
any assignee thereof of any obligation of the Seller or the Originator or any
other person arising in connection with the Receivables, the Related Security,
or the related Invoices, or any other obligations of the Seller or the
Originator.
(b) If the conveyance by the Seller to the Purchasers of interests in
Receivables hereunder shall be characterized as a secured loan and not a sale,
it is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Seller shall be deemed to
have granted to the Agent for the ratable benefit of the Purchasers a duly
perfected security interest in all of the Seller's right, title and interest in,
to and under the Receivables, the Collections, each Collection Account, all
Related Security, all payments on or with respect to such Receivables, all other
rights relating to and payments made in respect of the Receivables, and all
proceeds of any thereof prior to all other liens on and security interests
therein. After a Servicer Default, the Agent and the Purchasers shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor after default under
the UCC and other applicable law, which rights and remedies shall be cumulative.
27
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
YELLOW RECEIVABLES CORPORATION
By:
--------------------------------------
Name:
Title:
Address for Notices:
Yellow Receivables Corporation
10990 Roe Avenue
P.O. Box 7489
Overland Park, KS 66211
Attention: Chet Lamkey
Phone: (913) 344-3325
Fax: (913) 344-4849
FALCON ASSET SECURITIZATION
CORPORATION
By:
--------------------------------------
Authorized Signatory
c/o The First National Bank of Chicago
Asset-Backed Finance
One First National Plaza
Chicago, Illinois 60670-0079
Attention: Alison Dolin
Fax: (312) 732-4487
INVESTORS:
Commitment
$150,000,000
THE FIRST NATIONAL BANK OF CHICAGO,
as an Investor and as Agent
By:
--------------------------------------
Authorized Agent
The First National Bank of Chicago
Suite 0079, 1-21
One First National Plaza
Chicago, Illinois 60670
Attention: Alison Dolin
Fax: (312) 732-4487
$150,000,000 PURCHASE LIMIT
28
<PAGE> 34
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"ACQUISITION AMOUNT" means, on the date of any purchase from FALCON of
Receivable Interests pursuant to SECTION 2.1, (i) with respect to each Investor
other than First Chicago, the lesser of (a) such Investor's Pro Rata Share of
the FALCON Transfer Price and (b) such Investor's unused Commitment and (ii)
with respect to First Chicago, the difference between (a) the FALCON Transfer
Price and (b) the aggregate amount payable by all other Investors on such date
pursuant to clause (i) above.
"ADJUSTED LIQUIDITY PRICE" means, in determining the FALCON Transfer Price
for any Receivable Interest, an amount equal to:
(i) DC + (ii) RI X NDR
1 + .50 X (LRP + DRP)
where:
RI = the undivided percentage interest evidenced by such Receivable
Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all non-Defaulted Receivables.
LRP = the Loss Reserve Percentage.
DRP = the Dilution Reserve Percentage.
Each of the foregoing shall be determined from the most recent Monthly
Report received from the Servicer.
"ADVERSE CLAIM" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the other Person, whether through ownership of
voting securities, by contract or otherwise. In addition, for purposes of the
definitions of "CONCENTRATION LIMIT," "ELIGIBLE RECEIVABLE" and "NET RECEIVABLES
BALANCE," a Person shall be deemed to control another Person if such Person owns
more than 50% of any class of voting securities (or corresponding interest in
the case of non-corporate entities) of the other Person.
"AGENT" means First Chicago in its capacity as agent for the Purchasers
pursuant to ARTICLE IX, and not in its individual capacity as an Investor, and
any successor Agent appointed pursuant to ARTICLE IX.
"AGGREGATE RESERVE PERCENTAGE" means, on any date of determination, the
greater of (a) the sum of the Loss Reserve Percentage, the Dilution Reserve
Percentage, the Discount Reserve Percentage and the Servicer Fee Percentage,
each as then in effect, and (b) 20%.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all
accrued and unpaid Discount, Capital and all other amounts owed (whether due or
accrued) hereunder or under the Fee Letter to the Agent and the Purchasers at
such time, plus all accrued and unpaid Servicer Fees owed hereunder to the
Servicer.
"AGREEMENT" means this Receivables Purchase Agreement, as it may be amended
or modified and in effect from time to time.
<PAGE> 35
"APPROVED OFFSET RECEIVABLE" means any Receivable arising under contract
numbers 39, 45, 56, 111, 146 and 152 on EXHIBIT X hereto for so long as the
Originator does not purchase goods or services on credit from the Obligor
thereon.
"BASE RATE" means a rate per annum equal to the corporate base rate, prime
rate or base rate of interest, as applicable, announced by the Reference Bank
from time to time, changing when and as such rate changes; PROVIDED, HOWEVER,
that from and after the occurrence of a Servicer Default, and during the
continuation thereof, the "BASE RATE" shall mean a rate per annum equal to the
sum of 2% per annum PLUS the corporate base rate, prime rate or base rate of
interest, as applicable, announced by the Reference Bank from time to time,
changing when and as such rate changes.
"BUSINESS DAY" means any day on which banks are not authorized or required
to close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBOR Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
"CAPITAL" of any Receivable Interest means, at any time, the Purchase Price
of such Receivable Interest (and after giving effect to any adjustments
contemplated in SECTION 1.5), minus the sum of the aggregate amount of
Collections and other payments received by the Agent which in each case are
applied to reduce such Capital; PROVIDED THAT such Capital shall be restored in
the amount of any Collections or payments so received and applied if at any time
the distribution of such Collections or payments are rescinded or must otherwise
be returned for any reason.
"CHANGE OF CONTROL" means (i) any Person or Persons acting in concert shall
acquire beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding shares of voting stock of Yellow Corporation; or (ii)
during any period of twelve (12) consecutive months, commencing before or after
the date hereof, individuals who at the beginning of such twelve-month period
were directors of the Originator shall cease for any reason to constitute a
majority of the board of directors of the Originator; or (iii) the Originator
shall cease to own, free and clear of all Adverse Claims, all of the outstanding
shares of voting stock of the Seller on a fully diluted basis; or (iv) Yellow
Corporation shall cease to own, free and clear of all Adverse Claims, all of the
outstanding shares of voting stock of the Originator on a fully diluted basis.
"COLLECTION ACCOUNT" means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited.
"COLLECTION ACCOUNT AGREEMENT" means, in the case of any actual or proposed
Collection Account, an agreement in substantially the form of EXHIBIT V hereto.
"COLLECTION BANK" means, at any time, any of the banks or other financial
institutions holding one or more Collection Accounts.
"COLLECTION NOTICE" means a notice, in substantially the form of the
Collection Notice contained in EXHIBIT V hereto, from the Agent to a Collection
Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash collections
and other cash proceeds in respect of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable and all amounts payable to the Purchasers by the Seller pursuant to
SECTION 1.8.
"COMMERCIAL PAPER" means promissory notes of FALCON issued by FALCON in the
commercial paper market.
"COMMITMENT" means, for each Investor, the commitment of such Investor to
purchase its Pro Rata Share of Receivable Interests from (i) the Seller and (ii)
FALCON, such Pro Rata Share not to exceed, in the aggregate, the amount set
forth opposite such Investor's name on the signature pages of this Agreement, as
such amount may be modified in accordance with the terms hereof.
<PAGE> 36
"CONCENTRATION LIMIT" means:
(a) for any Obligor and its Affiliates considered as if they were one
and the same Obligor, an amount equal to (i) 3.00%, multiplied by (ii) the
aggregate Outstanding Balance of all Eligible Receivables at such time;
(b) at any time, for all Government Receivables, 5% of the aggregate
Outstanding Balance of all Eligible Receivables at such time; and
(c) at any time, for that portion of the Receivables representing
Deferred Revenue, 10% of the aggregate Outstanding Balance of all Eligible
Receivables at such time;
PROVIDED, HOWEVER, that:
(i) the Concentration Limit set forth in the preceding clause (c)
will automatically become zero (A) at all times while any Labor Action
remains is pending, and (B) immediately following the threat of any
Labor Action and for so long as the Agent, FALCON or the Required
Investors reasonably believe(s) such threat is likely to be carried out,
and
(ii) the Agent may from time to time designate other amounts (each,
a "SPECIAL CONCENTRATION LIMIT") for any Obligor or class of
Receivables, it being understood and agreed that the Agent, FALCON or
the Required Investors may, upon not less than three Business Days'
notice to the Seller, cancel any Special Concentration Limit.
"CP RATE" means (a) if applicable, unless and until the Agent advises the
Seller to the contrary, the CP Composite Rate or (b) the rate, requested by the
Seller and agreed to by FALCON, equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which Commercial Paper having a term
equal to the relevant Tranche Period may be sold by any placement agent or
commercial paper dealer reasonably selected by FALCON, as agreed between each
such dealer or agent and FALCON plus any and all applicable issuing and paying
agent fees and commissions of placement agents and commercial paper dealers in
respect of such Commercial Paper; PROVIDED, HOWEVER, that if the rate (or rates)
as agreed between any such agent or dealer and FALCON is a discount rate (or
rates), the "CP Rate" for such Tranche Period shall be the rate (or if more than
one rate, the weighted average of the rates) resulting from FALCON's converting
such discount rate (or rates) to an interest-bearing equivalent rate per annum.
"CREDIT AND COLLECTION POLICY" means the Seller's credit and collection
policies and practices relating to Invoices and Receivables existing on the date
hereof and summarized in EXHIBIT VI hereto, as modified from time to time in
accordance with this Agreement. It is understood that the Credit and Collection
Policy of the Seller in respect of any Receivable shall be the credit and
collection policies of the Originator thereof. To the extent the Originator
shall not have comprehensively reduced to writing its credit and collection
policies, the Credit and Collection Policy in respect of Receivables originated
by the Originator shall be those credit and collection policies of the
Originator in effect on the date hereof and disclosed to the Agent on or prior
to the date hereof.
"DAYS OUTSTANDING" means, at any time: (a) one-half of the sum of the
beginning and ending Outstanding Balances of all Receivables during the month
most recently ended, multiplied by (b) the number of days in the month most
recently ended divided by the aggregate amount payable pursuant to Invoices
generated during that month.
"DEEMED COLLECTIONS" means the aggregate of all amounts owing to FALCON
pursuant to SECTIONS 1.8 and 8.1.
"DEFAULT FEE" means with respect to any amount due and payable by the
Seller hereunder or under the Fee Letter, an amount equal to interest on any
such amount at a rate per annum equal to 2% above the Base Rate; PROVIDED,
HOWEVER, that such interest rate will not at any time exceed the maximum rate
permitted by applicable law.
"DEFAULT RATIO" means, at any time, a fraction (expressed as a percentage)
having (a) a numerator equal to the sum of (i) the Outstanding Balance of all
Receivables that remained outstanding 151
<PAGE> 37
to 180 days after their respective initial invoice dates, plus (ii) the
aggregate Outstanding Balance of Receivables that were written off as
uncollectible during the month most recently ended that, if not so written off,
would have been outstanding not more than 150 days after their respective
invoice dates, and (b) a denominator equal to the aggregate amount payable
pursuant to Invoices generated five (5) months prior to the month most recently
ended.
"DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any payment, or
part thereof, remains unpaid for 150 days or more from the original invoice date
for such payment; (ii) as to which the Obligor thereof has taken any action, or
suffered any event to occur, of the type described in SECTION 7.1(C) (as if
references to the Seller therein refer to such Obligor); (iii) as to which the
Obligor thereof, if a natural person, is deceased; or (iv) which has been
identified by the Seller as uncollectible.
"DEFERRED REVENUE" means any Receivable which has been booked as an asset
on the Originator's balance sheet (prior to giving effect to any sale or
contribution of such Receivable by the Originator to the Seller) but as to which
delivery of the underlying goods has not yet been completed in accordance with
the Invoice or underlying purchase order.
"DELINQUENCY RATIO" means, as of the last day of any calendar month, a
percentage equal to (i) the aggregate Outstanding Balance of all Receivables
that are then Delinquent Receivables, divided by (ii) the aggregate Outstanding
Balance of all Receivables as of such date.
"DELINQUENT RECEIVABLE" means a Receivable (other than a Defaulted
Receivable) as to which any payment, or part thereof, remains unpaid for 120
days but less than 150 days from the original invoice date for such payment.
"DILUTION HORIZON RATIO" means, on any date of determination: (i) the
aggregate amount of Receivables generated during the 4-month period then most
recently ended, divided by (ii) the Net Receivables Balance on such date.
"DILUTION RESERVE PERCENTAGE" means, on any date of determination, the
percentage determined pursuant to the following formula:
(2.25 x ED) + (DS - ED) X (DS/ED) X DHR
where:
ED = the Expected Dilution on such date;
DS = the Dilution Spike as of such date; and
DHR = the Dilution Horizon Ratio on such date.
"DILUTION RATIO" means, as of the last day of any calendar month, a
percentage equal to (i) the aggregate amount of Dilutions which occurred during
such month, divided by (ii) the aggregate amount of Receivables generated by the
Originator 4 months prior to such month.
"DILUTION RESERVE" means, on any date, an amount equal to (i) the Dilution
Reserve Percentage, multiplied by (ii) the Net Receivables Balance as of the
opening of business of the Servicer on such date.
"DILUTION SPIKE" means, on any date of determination, the highest Dilution
Ratio for any month during the 12 months then most recently ended.
"DILUTIONS" means, at any time, the aggregate amount of reductions in the
Outstanding Balances of the Receivables as a result of any setoff, discount,
adjustment or otherwise, other than cash Collections on account of the
Receivables.
"DISCOUNT" means, for each Receivable Interest for any Tranche Period:
AD
DR X C X --360
<PAGE> 38
where:
DR = the Discount Rate for such Receivable Interest for such Tranche
Period;
C = the Capital of such Receivable Interest during such Tranche Period;
and
AD = the actual number of days elapsed during such Tranche Period;
PROVIDED, THAT no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and PROVIDED FURTHER, that Discount for any Tranche Period shall
not be considered paid by any distribution to the extent that at any time all or
a portion of such distribution is rescinded or must otherwise be returned for
any reason.
"DISCOUNT RATE" means the LIBOR Rate, the CP Rate or the Base Rate, as
applicable; PROVIDED THAT from and after the occurrence of a Servicer Default,
the Discount Rate in respect of each Receivable Interest and Tranche Period
shall be the Base Rate.
"DISCOUNT RESERVE" means, on any date of determination, the amount
determined pursuant to the following formula:
(D + F) + (C X 1.5 X DR) X 2 X DSO
360
where:
D = the accrued and unpaid Discount for all Receivable Interests as of
the date of determination; the aggregate amount of accrued and unpaid
Servicer Fees and other fees owing pursuant to the Fee Letter as of the
date of determination;
C = the aggregate Capital outstanding as of the date of determination;
DR = the highest Discount Rate applicable on the date of determination;
and
DSO = the Days Outstanding.
"DISCOUNT RESERVE PERCENTAGE" means, on any date of determination, a
percentage equal to (i) the Discount Reserve divided by (ii) the Net Receivables
Balance.
"EARLY COLLECTION FEE" means, for any Receivable Interest which has its
Capital reduced, or its Tranche Period terminated prior to the date on which it
was originally scheduled to end, the excess, if any, of (i) the Discount that
would have accrued during the remainder of the Tranche Period subsequent to the
date of such reduction or termination on the Capital of such Receivable Interest
if such reduction or termination had not occurred, over (ii) the sum of (a) to
the extent all or a portion of such Capital is allocated to another Receivable
Interest, the Discount actually accrued during such period on such Capital for
the new Receivable Interest, and (b) to the extent such Capital is not allocated
to another Receivable Interest, the income, if any, actually received during
such period by the holder of such Receivable Interest from investing the portion
of such Capital not so allocated. In the event that the amount referred to in
clause (ii) exceeds the amount referred to in clause (i), the relevant Purchaser
or Purchasers agree to pay to the Seller the amount of such excess.
"ELIGIBLE RECEIVABLE" means, at any time:
(i) a Receivable the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in the
United States, and (b) is not an Affiliate of any of the parties hereto,
(ii) a Receivable as to which no payment, or part thereof, remains
unpaid for 120 days or more from the original invoice date, and such
Receivable is not a Defaulted Receivable,
<PAGE> 39
(iii) a Receivable which arises under an Invoice that requires payment
within 60 days after the original invoice date therefor and has not had its
payment terms extended,
(iv) a Receivable which is an account receivable representing all or
part of the sales price of merchandise, insurance and services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended,
(v) a Receivable which is an "account" within the meaning of Section
9-106 of the UCC of all applicable jurisdictions,
(vi) a Receivable which is denominated and payable only in United
States dollars in the United States,
(vii) a Receivable which arises under an Invoice in substantially the
form of one of the form invoices set forth on EXHIBIT VII hereto or
otherwise approved by the Agent in writing, which, together with such
Receivable, is in full force and effect and constitutes the legal, valid
and binding obligation of the related Obligor enforceable by the Seller and
its assignees against such Obligor in accordance with its terms,
(viii) a Receivable which arises under an Invoice which (a) does not
require the Obligor under such Invoice to consent to the transfer, sale or
assignment of the rights and duties of the Originator or any of its
assignees under such Invoice and (b) is not subject to a confidentiality
provision that would have the effect of restricting the ability of the
Agent or any Purchaser to exercise its rights under this Agreement,
including, without limitation, its right to review the Invoice,
(ix) a Receivable which arises under an Invoice that contains an
obligation to pay a specified sum of money,
(x) a Receivable (A) which is not subject to any right of rescission,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor or the Originator or
any other Adverse Claim, and (B) which, unless such Receivable is an
Approved Offset Receivable or a Supplemental Approved Offset Receivable, is
not subject to any right of set-off in respect of all or any portion of the
Outstanding Balance thereof then being proposed for inclusion in Net
Receivables Balance as of any date,
(xi) a Receivable as to which (A) at any time while any Labor Action
is pending or threatened, the Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any
Person with respect thereto other than payment thereon by the applicable
Obligor, and (B) at any time while no such Labor Action is pending or
threatened, a Receivable as to which the Originator has commenced shipment
of the underlying goods in accordance with the applicable Invoice or
purchase order and no further action is required to be performed by any
Person with respect thereto other than the completion of shipment by the
Originator and payment thereon by the applicable Obligor,
(xii) a Receivable all right, title and interest to and in which has
been validly transferred by the Originator directly to the Seller under and
in accordance with the Sale Agreement, and the Seller has good and
marketable title thereto free and clear of any Adverse Claim,
(xiii) a Receivable which, together with the Invoice related thereto,
was created in compliance with each, and does not contravene any, law, rule
or regulation applicable thereto (including, without limitation, any law,
rule and regulation relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no part of the Invoice related
thereto is in violation of any such law, rule or regulation,
(xiv) a Receivable which satisfies all applicable requirements of the
Credit and Collection Policy,
(xv) a Receivable which was generated in the ordinary course of the
Originator's business in connection with the provision of shipping services
for the applicable Obligor by the Originator,
<PAGE> 40
(xvi) that portion of a Receivable which arises solely from the sale
of freight shipping and ancillary services to the related Obligor by the
Originator (and not that portion which arises from the provision of
services by an interline carrier), and the Originator shall have
transferred such Receivable to the Seller,
(xvii) a Receivable as to which the Agent has not notified the Seller
that the Agent has determined that such Receivable or class of Receivables
is not acceptable as an Eligible Receivable, including, without limitation,
because such Receivable arises under an Invoice that is not acceptable to
the Agent, and
(xviii) a Receivable the Obligor of which is not the Obligor (or the
Affiliate of an Obligor) in respect of Receivables of which more than 50%
of the aggregate Outstanding Balance is more than 120 days past their
respective invoice dates.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EXCLUDED RECEIVABLE" means any Receivable (other than an Approved Offset
Receivable) which arises under a contract listed on EXHIBIT X hereto unless and
until such contract is replaced, restated, amended or otherwise modified to
eliminate (i) any confidentiality provision, if applicable, that purport to
preclude the Originator from disclosing information that would be included on an
Invoice, and (ii) any provision that purports to preclude the assignment of any
of the Originator's rights to payment thereunder.
"EXPECTED DILUTION" means, on any date of determination, the average of the
Dilution Ratios for the 12 months then most recently ended.
"FACILITY ACCOUNT" means the Seller's Account No. 55-66681 at First
Chicago.
"FACILITY TERMINATION DATE" means the earliest of (i) the Liquidity
Termination Date, (ii) the date the Seller shall exercise its right to
repurchase the outstanding Receivable Interests pursuant to SECTION 1.11, (iii)
any date selected by the Seller on not less than fifteen (15) Business Days'
prior written notice to the Agent; PROVIDED THAT if any Person then acting as
Agent hereunder shall have elected or been required to resign as Agent pursuant
to SECTION 9.8, the Seller may elect, by written notice to the Agent given
promptly following notice to the Seller of such resignation, to have the
Facility Termination Date occur on the effective date of such resignation; (iv)
the date of the occurrence of a Servicer Default involving the Seller and of the
type described in SECTION 7.1(C), (v) any date following the occurrence, and
during the continuance, of a Servicer Default which the Required Investors
declare to be the Facility Termination Date, and (vi) the date on which the
Originator ceases selling and/or contributing Receivables to the Seller pursuant
to the Sale Agreement and/or the Subscription Agreement referred to therein.
"FALCON RESIDUAL" means the sum of the FALCON Transfer Price Reductions.
"FALCON TRANSFER PRICE" means, with respect to the assignment by FALCON of
one or more Receivable Interests to the Agent for the benefit of the Investors
pursuant to SECTION 2.1, the sum of (i) the lesser of (a) the Capital of each
Receivable Interest and (b) the Adjusted Liquidity Price of each Receivable
Interest and (ii) all accrued and unpaid Discount for such Receivable Interests.
"FALCON TRANSFER PRICE REDUCTION" means in connection with the assignment
of a Receivable Interest by FALCON to the Agent for the benefit of the
Investors, the positive difference between (i) the Capital of such Receivable
Interest and (ii) the Adjusted Liquidity Price for such Receivable Interest.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period equal to (i) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Governments Securities; or (ii) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Reference Bank from three federal funds brokers of recognized
standing selected by it.
<PAGE> 41
"FEE LETTER" means that certain letter agreement dated as of the date
hereof between the Seller and the Agent, as it may be amended or modified and in
effect from time to time.
"FINANCE CHARGES" means, with respect to an Invoice, any finance, interest,
late payment charges or similar charges owing by an Obligor pursuant to such
Invoice.
"FIRST CHICAGO" means The First National Bank of Chicago in its individual
capacity and its successors.
"FUNDING AGREEMENT" means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of FALCON.
"FUNDING SOURCE" means (i) any Investor or (ii) any insurance company, bank
or other financial institution providing liquidity, credit enhancement or
back-up purchase support or facilities to FALCON.
"GOVERNMENT RECEIVABLE" means a Receivable as to which the Obligor is the
United States federal government, any political subdivision thereof, or any
agency of the foregoing.
"INCREMENTAL PURCHASE" means a purchase of one or more Receivable Interests
which increases the total outstanding Capital hereunder.
"INTENDED CHARACTERIZATION" means, for income tax purposes, the
characterization of the acquisition by the Purchasers of Receivable Interests as
a loan or loans by the Purchasers to the Seller secured by the Receivables, the
Related Security, the Collection Accounts and the Collections.
"INVESTORS" means the financial institutions listed on the signature pages
of this Agreement under the heading "INVESTORS" and their respective successors
and assigns.
"INVOICE" means, collectively, with respect to any Receivable, any and all
instruments, bills of lading, invoices or other writings which evidence such
Receivable or the goods underlying such Receivable.
"LABOR ACTIONS" has the meaning set forth in SECTION 5.1(B)(VI).
"LIBOR RATE" means the rate per annum equal to the sum of (i) (a) the rate
at which deposits in U.S. Dollars are offered by the Reference Bank to
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period, such deposits being in the approximate amount of the Capital of the
Receivable Interest to be funded or maintained, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Tranche Period
plus (ii) 0.75%. The LIBOR Rate shall be rounded, if necessary, to the next
higher 1/16 of 1%.
"LIQUIDATION DAY" means, for any Receivable Interest, the earliest to occur
of (i) any Business Day so designated by the Agent on or at any time following
any day on which the conditions precedent set forth in SECTION 4.2 are not
satisfied, (ii) any Business Day so designated by the Seller or FALCON after the
occurrence of the Termination Date, (iii) the Business Day immediately prior to
the occurrence of a Servicer Default set forth in SECTION 7.1(C), and (iv) the
Business Day, if any, on which the aggregate outstanding amount of Capital of
all Receivable Interests is decreased after giving effect to any Reinvestments
on such day.
"LIQUIDITY TERMINATION DATE" means August 1, 1999 (or if such date is not a
Business Day, the next preceding Business Day.
"LOSS RESERVE PERCENTAGE" means, on any date of determination, (a) 2.25,
multiplied by (b) the highest of the past 12 rolling 3-month average Default
Ratio, multiplied by (c) a fraction having a numerator equal to the aggregate
amount of Receivables generated during the preceding 4 months and denominator
equal to the Net Receivables Balance on the date of determination.
"LOSS-TO-LIQUIDATION RATIO" means, for any month, a percentage equal to:
(i) the amount of Receivables which were written-off as uncollectible any time
during such month in accordance with the Credit and Collection Policy, divided
by (ii) the aggregate amount of Collections during each such month.
<PAGE> 42
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition, business or operations of the Seller or the Originator,
(ii) the ability of the Seller or the Originator to perform its obligations
under any Transaction Document, (iii) the legality, validity or enforceability
of this Agreement, any Transaction Document or any Collection Account Agreement
or Collection Notice relating to a Collection Account into which a material
portion of Collections are deposited, (iv) the Seller's or any Purchaser's
interest in the Receivables generally or in any significant portion of the
Receivables, the Related Security or the Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"MONTHLY REPORT" means a report, in substantially the form of EXHIBIT VIII
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to SECTION 6.5.
"NET RECEIVABLES BALANCE" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time, reduced by the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Concentration Limit for such Obligor.
"NEW CONCENTRATION ACCOUNT" has the meaning set forth in SECTION 5.1(I).
"OBLIGOR" means a Person obligated to make payments pursuant to an Invoice.
"ORIGINATOR" means Yellow Freight System, Inc., an Indiana corporation.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof, and shall exclude any interest or finance
charges thereon, without regard to whether any of the same shall have been
capitalized.
"PERSON" means an individual, partnership, corporation, association, trust,
or any other entity, or organization, including a government or political
subdivision or agent or instrumentality thereof.
"POTENTIAL SERVICER DEFAULT" means an event which, with the passage of time
or the giving of notice, or both, would constitute a Servicer Default.
"PRO RATA SHARE" means, for each Investor, the Commitment of such Investor
divided by the Purchase Limit, adjusted as necessary to give affect to the
application of the terms of SECTION 2.5.
"PURCHASE LIMIT" means the aggregate of the Commitments of the Investors
hereunder (which aggregate amount is $150,000,000 as of the date of this
Agreement).
"PURCHASE PRICE" means, with respect to any Incremental Purchase, the least
of:
(a) the amount of Capital requested by the Seller,
(b) the remaining unused portion of the Purchase Limit, and
(c) the maximum amount by which the aggregate outstanding Capital
could be increased such that after giving effect to such increase in
Capital, the Net Receivables Balance will equal or exceed the product of
(i) the sum of 100% plus the Aggregate Reserve Percentage, times (ii) the
aggregate outstanding Capital after giving effect to such Incremental
Purchase.
"PURCHASER" means FALCON or an Investor, as applicable.
"RECEIVABLE" means the indebtedness and other obligations owed (at the time
it arises, and before giving effect to any transfer or conveyance contemplated
under the Sale Agreement or hereunder) to the Originator, whether constituting
an account, chattel paper, instrument or general intangible, arising in
connection with the provision of freight shipping and ancillary services by the
Originator and includes, without limitation, the obligation to pay any Finance
Charges with respect thereto; PROVIDED, HOWEVER, that the term "RECEIVABLE"
shall not include any Excluded Receivable. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
Invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction.
<PAGE> 43
"RECEIVABLE INTEREST" means, at any time, an undivided percentage ownership
interest associated with a designated amount of Capital, Discount Rate and
Tranche Period selected pursuant to SECTION 1.3 in (i) all Receivables
transferred to or otherwise acquired or held by the Seller and arising prior to
the time of the most recent computation or recomputation of such undivided
interest pursuant to SECTION 1.4, (ii) all Related Security with respect to such
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Receivables. Such undivided percentage interest shall equal:
C
NRB - (ARP X NRB)
where:
C = the Capital of such Receivable Interest.
ARP = the Aggregate Reserve Percentage.
NRB = the Net Receivables Balance.
"RECORDS" means, with respect to any Receivable, all Invoices and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
"REDUCTION PERCENTAGE" means, for any Receivable Interest acquired by the
Investors from FALCON for less than the Capital of such Receivable Interest, a
percentage equal to a fraction the numerator of which is the FALCON Transfer
Price Reduction for such Receivable Interest and the denominator of which is the
Capital of such Receivable Interest.
"REFERENCE BANK" means First Chicago or such other bank as the Agent shall
designate with the consent of the Seller.
"REQUIRED INVESTORS" means, at any time, Investors with Commitments in
excess of 66 2/3% of the Purchase Limit.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the Seller's interest in the goods, the shipment of which
gave rise to such Receivable, and any and all insurance contracts with
respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Invoice related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of
such Receivable whether pursuant to the Invoice related to such Receivable
or otherwise,
(iv) all Records related to such Receivables,
(v) all of the Seller's right, title and interest in, to and under the
Sale Agreement and each bill of lading, instrument, document or agreement
executed in connection therewith in favor of or otherwise for the benefit
of the Seller; and
(vi) all proceeds of any of the foregoing.
"RESERVE REQUIREMENT" means the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed against the Reference Bank in respect of Eurocurrency liabilities, as
defined in Regulation D of the Board of Governors of the Federal Reserve System
as in effect from time to time.
<PAGE> 44
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of capital stock of
the Seller now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock or in any junior class of stock to the Originator,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
capital stock of the Seller now or hereafter outstanding, (iii) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to the
Indebtedness evidenced by the Subordinated Note (as defined in the Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of the Seller now or hereafter
outstanding, and (v) any payment of management fees by the Seller.
"SALE AGREEMENT" means that certain Receivables Sale Agreement of even date
herewith between the Seller, as purchaser, and the Originator, as seller, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SERVICER" means at any time the Person (which may be the Agent) then
authorized pursuant to ARTICLE VI to service, administer and collect
Receivables.
"SERVICER DEFAULT" has the meaning specified in ARTICLE VII.
"SERVICER FEE" has the meaning specified in SECTION 1.12.
"SERVICER FEE RESERVE" means, on any date, an amount determined pursuant to
the following formula:
SFP X NRB X 2 X DSO 360
where:
SFP = the Servicer Fee Percentage as of the date of determination;
NRB = the Net Receivables Balance as of the opening of business of the
Servicer on such date; and
DSO = the Days Outstanding on such date of determination.
"SERVICER FEE PERCENTAGE" means 2% or such other percentage as may be
agreed upon between the Agent and the Servicer as an arms-length rate for the
Servicer Fee.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "SUBSIDIARY" shall mean a
Subsidiary of the Seller.
"SUPPLEMENTAL APPROVED OFFSET RECEIVABLE" means any Receivable arising
under contract numbers 1, 9, 22, 67, 107, 110, 116 or 187 on EXHIBIT X hereto
from and after the time such Receivable is no longer an Excluded Receivable but
only for so long as the Originator does not purchase goods or services on credit
from the applicable Obligor.
"TERMINATION DATE" means, for any Receivable Interest, the Facility
Termination Date, and, solely with respect to a Receivable Interest of FALCON,
that Business Day so designated by the Seller or FALCON by notice to the other.
"TRANCHE PERIOD" means, with respect to any Receivable Interest: 59
<PAGE> 45
(i) if Discount for such Receivable Interest is calculated with
respect to the CP Rate, a period of days not to exceed 270 days commencing
on a Business Day requested by the Seller and agreed to by FALCON;
(ii) if Discount for such Receivable Interest is calculated on the
basis of the LIBOR Rate, a period of one, two or three months, or such
other period as may be mutually agreeable to the Agent and the Seller,
commencing on a Business Day selected by the Seller or the Agent pursuant
to this Agreement. Such Tranche Period shall end on the day in the
applicable succeeding calendar month which corresponds numerically to the
beginning day of such Tranche Period, provided, however, that if there is
no such numerically corresponding day in such succeeding month, such
Tranche Period shall end on the last Business Day of such succeeding month;
and
(iii) if Discount for such Receivable Interest is calculated on the
basis of the Base Rate, a period of one Business Day.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, PROVIDED, HOWEVER,
that in the case of Tranche Periods corresponding to the LIBOR Rate, if such
next succeeding Business Day falls in a new month, such Tranche Period shall end
on the immediately preceding Business Day. In the case of any Tranche Period for
any Receivable Interest of which commences before the Termination Date and would
otherwise end on a date occurring after the Termination Date, such Tranche
Period shall end on the Termination Date. The duration of each Tranche Period
which commences after the Termination Date shall be of such duration as selected
by the Agent.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the Sale
Agreement, the Fee Letter, each Collections Notice and all other instruments,
documents and agreements executed and delivered by the Seller or the Originator
in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL TERMS USED IN
ARTICLE 9 OF THE UCC IN THE STATE OF ILLINOIS, AND NOT SPECIFICALLY DEFINED
HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.60
<PAGE> 46
EXHIBIT II
CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER
Chief Executive Office:
10990 Roe Avenue
Overland Park, KS 66211
Location of Records:
10990 Roe Avenue
Overland Park, KS 66211
Federal Employer Identification Number: Yellow Receivables Corporation
52-1985649
Trade Names and Assumed Names:
None (other than its corporate name, Yellow Receivables Corporation)
<PAGE> 47
EXHIBIT III
LOCKBOXES; COLLECTION ACCOUNTS; CONCENTRATION ACCOUNTS;
AND DEPOSITARY ACCOUNTS
YELLOW FREIGHT SYSTEM, INC.
TYPE OF ACCT. ACCOUNT# BANK NAME CITY, STATE
Concentration 010100006289 Boatmen's First National Bank, Kansas City,
Missouri
YELLOW RECEIVABLES CORPORATION
Collection 010161073442 Boatmen's First National Bank, Kansas City,
Missouri
Collection 010161035591* Boatmen's First National Bank, Kansas City,
Missouri
Depository 55-66681 The First National Bank of Chicago, Chicago,
Illinois
Concentration 55-03450* The First National Bank of Chicago, Chicago,
Illinois
Collection 03268-43* National Bank of Detroit, Detroit, Michigan
- ---------------
* Assigned to Yellow Receivables Corporation by Yellow Freight System, Inc.
<PAGE> 48
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
TO: THE FIRST NATIONAL BANK OF CHICAGO, AS AGENT
This Compliance Certificate is furnished pursuant to that certain
Receivables Purchase Agreement dated as of August 2, 1996, among Yellow
Receivables Corporation (the "SELLER"), the Purchasers party thereto, and The
First National Bank of Chicago, as agent for such Purchasers (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Seller;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the
transactions and conditions of the Seller and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Servicer Default or Potential Servicer Default, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of
this Certificate , except as set forth below.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Seller has taken, is taking, or proposes to
take with respect to each such condition or event: The foregoing certifications,
together with the computations set forth in Schedule I hereto and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this day of , 19 .
<PAGE> 49
SCHEDULE I TO COMPLIANCE REPORT
A. Schedule of Compliance with SECTION 7.1(d) of the Agreement. Unless
otherwise defined herein, the terms used in this Compliance Certificate have the
meanings ascribed thereto in the Purchase Agreement.
This schedule relates to the month ended:
<PAGE> 50
EXHIBIT V
FORM OF COLLECTION ACCOUNT AGREEMENT
ON LETTERHEAD OF SELLER
19
LOCK-BOX BANK/CONCENTRATION BANK/DEPOSITARY BANK
RE: YELLOW RECEIVABLES CORPORATION
YELLOW FREIGHT SYSTEM, INC.
LADIES AND GENTLEMEN:
You have exclusive control of P.O. Box # in ** city, state, zip
code ** (the "LOCK-BOX") for the purpose of receiving mail and processing
payments therefrom pursuant to that certain ** name of lock-box agreement **
between you and Yellow Freight System, Inc. dated (the "AGREEMENT"). You
hereby confirm your agreement to perform the services described therein. Among
the services you have agreed to perform therein, is to endorse all checks and
other evidences of payment, and credit such payments to checking account no.
maintained with you in the name of Yellow Freight System, Inc. (the "LOCK-
BOX ACCOUNT").
Yellow Freight System, Inc. ("YFSI") hereby transfers and assigns all of
its right, title and interest in and to, and exclusive ownership and control
over, the Lock-Box and the Lock-Box Account to Yellow Receivables Corporation
("YELLOW-SPC"). YFSI and Yellow-SPC hereby request that the name of the Lock-Box
Account be changed to the Yellow Receivables Corporation, as "COLLECTION AGENT"
for the benefit of The First National Bank of Chicago ("FNBC"), as agent under
that certain Receivables Purchase Agreement (the "RECEIVABLES PURCHASE
AGREEMENT") dated as of August 2, 1996 among Yellow-SPC, Falcon Asset
Securitization Corporation, certain financial institutions parties thereto and
FNBC.
Yellow-SPC hereby irrevocably instructs you, and you hereby agree, that
upon receiving notice from FNBC in the form attached hereto as Annex A: (i) the
name of the Lock-Box Account will be changed to FNBC for itself and as agent (or
any designee of FNBC) and FNBC will have exclusive ownership of and access to
such Lock-Box Account, and neither YFSI, Yellow-SPC nor any of their respective
affiliates will have any control of such Lock-Box Account or any access thereto,
(ii) you will either continue to send the funds from the Lock-Box to the
Lock-Box Account, or will redirect the funds as FNBC may otherwise request,
(iii) you will transfer monies on deposit in the Lock-Box Account, at any time,
as directed by FNBC, (iv) all services to be performed by you under the
Agreement will be performed on behalf of FNBC, and (v) all correspondence or
other mail which you have agreed to send to either YFSI or Yellow-SPC will be
sent to FNBC at the following address:
The First National Bank of Chicago
Suite 0079, 21st Floor
One First National Plaza
Chicago, Illinois 60670
Attention: Credit Manager, Asset-Backed Finance
Moreover, upon such notice, FNBC for itself and as agent will have all
rights and remedies given to YFSI or Yellow-SPC under the Agreement. Each of
YFSI and Yellow-SPC agrees, however, to continue to pay all fees and other
assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Account or any
other account established with you by FNBC for the purpose of receiving funds
from the Lock-Box are subject to the liens of FNBC for itself and as agent under
the Receivables Purchase Agreement, and will not be subject to deduction,
set-off, banker's lien or any other right you or any other party may have
against YFSI or Yellow-SPC, except that you may debit the Lock-Box Account for
any items deposited therein that are returned or
<PAGE> 51
otherwise not collected and for all charges, fees, commissions and expenses
incurred by you in providing services hereunder, all in accordance with your
customary practices for the charge back of returned items and expenses.
This letter agreement and the rights and obligations of the parties
hereunder will be governed by and construed and interpreted in accordance with
the laws of the State of Illinois. This letter agreement may be executed in any
number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the parties,
and may not be altered, modified, terminated or amended in any respect, nor may
any right, power or privilege of any party hereunder be waived or released or
discharged, except upon execution by all parties hereto of a written instrument
so providing. In the event that any provision in this letter agreement is in
conflict with, or inconsistent with, any provision of the Agreement, this letter
agreement will exclusively govern and control. Each party agrees to take all
actions reasonably requested by any other party to carry out the purposes of
this letter agreement or to preserve and protect the rights of each party
hereunder.
Please indicate your agreement to the terms of this letter agreement by
signing in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
YELLOW FREIGHT SYSTEM, INC.
By:
--------------------------------------
Title:
--------------------------------------
YELLOW RECEIVABLES CORPORATION
By:
--------------------------------------
Title:
--------------------------------------
Acknowledged and agreed to
this day of , 1996:
COLLECTION BANK
By:
--------------------------------------
Acknowledged and agreed to
this day of , 1996:
THE FIRST NATIONAL BANK OF CHICAGO
(for itself and as Agent)
By:
--------------------------------------
Authorized Agent
<PAGE> 52
ANNEX A
FORM OF COLLECTION NOTICE
On letterhead of FNBC
, 19
COLLECTION BANK/DEPOSITARY BANK/CONCENTRATION BANK
RE: YELLOW RECEIVABLES CORPORATION
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to that
certain letter agreement among Yellow Freight System, Inc., Yellow Receivables
Corporation, you and us, to have the name of, and to have exclusive ownership
and control of, account number (the "LOCK-BOX ACCOUNT") maintained with
you, transferred to us. Lock-Box Account will henceforth be a zero-balance
account, and funds deposited in the Lock-Box Account should be sent at the end
of each day to . You have further agreed to perform all other services
you are performing under that certain agreement dated between you
and Yellow Freight System, Inc. on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
(for itself and as agent)
By:
--------------------------------------
Authorized Agent
<PAGE> 53
EXHIBIT VI
CREDIT AND COLLECTION POLICY
TO BE PROVIDED BY THE SELLER
<PAGE> 54
EXHIBIT VII
FORM OF INVOICE(S)
TO BE PROVIDED BY THE SELLER
<PAGE> 55
EXHIBIT VIII
FORM OF MONTHLY REPORT
TO BE PROVIDED BY FIRST CHICAGO
<PAGE> 56
EXHIBIT IX
FORM OF PURCHASE NOTICE
Date
The First National Bank of Chicago, as Agent for the Purchasers parties to the
Receivables Purchase Agreement referred to below
Suite 0079, 1-21
One First National Plaza
Chicago, Illinois 60670
Attention: Asset-Backed Finance
Gentlemen:
The undersigned, Yellow Receivables Corporation, refers to the Receivables
Purchase Agreement, dated as of August 2, 1996 (the "RECEIVABLES PURCHASE
AGREEMENT", the terms defined therein being used herein as therein defined),
among the undersigned, Falcon Asset Securitization Corporation ("FALCON"),
certain Investors parties thereto and The First National Bank of Chicago, as
Agent for FALCON and such Investors, and hereby gives you notice, irrevocably,
pursuant to SECTION 1.2 of the Receivables Purchase Agreement that the
undersigned hereby requests a Purchase under the Receivables Purchase Agreement,
and in that connection sets forth below the information relating to such
Purchase (the "PROPOSED PURCHASE") as required by SECTION 1.2 of the Receivables
Purchase Agreement:
(i) The Business Day of the Proposed Purchase is , 19 .
(ii) The requested Purchase Price in respect of the Proposed Purchase
is $ .
(iii) The requested Purchaser in respect of the Proposed Purchase is
FALCON are the Investors.
(iv) The duration of the initial Tranche Period for the Proposed
Purchase is days months.
(v) The Discount Rate related to such initial Tranche Period is
requested to be the CP LIBOR Base Rate.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Purchase (before
and after giving effect to the Proposed Purchase):
(A) the representations and warranties set forth in SECTION 3.1 (other
than SECTION 3.1(K)(1) of the Receivables Purchase Agreement are correct on
and as of such date, as though made on and as of such date;
(B) no event has occurred, or would result from the Proposed Purchase
that will constitute a Servicer Default, and no event has occurred and is
continuing, or would result from such Proposed Purchase, that would
constitute a Potential Servicer Default; and (C) the Liquidity Termination
Date shall not have occurred, the aggregate Capital of all Receivable
Interests shall not exceed the Purchase Limit and the aggregate Receivable
Interests shall not exceed 100%.
Very truly yours,
YELLOW RECEIVABLES CORPORATION
By:
--------------------------------------
Title:
(1) Bracketed language should only be included after the initial purchase
of Receivable Interests hereunder.
<PAGE> 57
EXHIBIT X
CONTRACTS APPLICABLE TO EXCLUDED CONTRACTS
TO BE PROVIDED BY SELLER
<PAGE> 58
SCHEDULE A
DOCUMENTS AND RELATED ITEMS TO BE DELIVERED TO THE AGENT ON OR
PRIOR TO THE INITIAL PURCHASE
I. RECEIVABLES SALE AGREEMENT
A. Receivables Sale Agreement dated as of August 2, 1996 (the "SALE
AGREEMENT") by and between Yellow Freight System, Inc., an Indiana corporation
(the "ORIGINATOR"), and Yellow Receivables Corporation, a Delaware corporation
("YELLOW-SPC"), with the following exhibits:
Exhibit I -- Definitions
Exhibit II -- Places of Business of Originator; Locations of Records;
Trade Names; Prior Names; Federal Employer I.D. Number
Exhibit III -- Lockboxes; Collection Accounts; Concentration Accounts; and
Depositary Accounts
Exhibit IV -- Compliance Certificate
Exhibit V -- Collection Account Agreement
Exhibit VI -- Credit and Collection Policy
Exhibit VII -- Form(s) of Invoice(s)
Exhibit VIII -- Monthly Report
Exhibit IX -- Stockholder and Subscription Agreement
Exhibit X -- Subordinated Revolving Note
Exhibit XI -- Contracts Applicable to Excluded Receivables
B. Subordinated Revolving Note dated August 2, 1996 executed by Yellow-SPC
in favor of the Originator.
C. Stockholder and Subscription Agreement dated as of August 2, 1996 by
and between the Originator and Yellow-SPC.
D. Certificate of the Originator's Assistant Secretary certifying:
1. An attached copy of the Originator's Articles of Incorporation
(certified within 60 days prior to closing by the Indiana Secretary of
State)
2. An attached copy of the Originator's By-Laws
3. An attached copy of resolutions of the Originator's Board of
Directors authorizing the Originator's execution, delivery and performance
of the Sale Agreement and related documents
4. The names, titles and specimen signatures of the Originator's
officers authorized to execute and deliver the Sale Agreement and related
documents
E. Good standing certificates for the Originator from the following states
certified within 60 days prior to closing:
1. Indiana
2. Kansas
F. Pre-filing state and federal tax lien, judgment lien and UCC lien
searches against the Originator from the following jurisdictions:
1. Kansas
2. As applicable for tax and judgment liens, Johnson County, Kansas.
<PAGE> 59
G. UCC Financing Statements naming the Originator, as debtor, Yellow-SPC,
as secured party, and The First National Bank of Chicago, as Agent, as assignee
of secured party, for filing in the following jurisdictions:
1. Secretary of State of Kansas
H. Post-filing UCC lien searches against the Originator from the following
jurisdictions:
1. Secretary of State of Kansas
I. Collection Account Agreements
1. Boatmen's
2. First Chicago
3. National Bank of Detroit
J. Opinions:
1. Corporate/UCC opinions
2. True Sale/Non-consolidation opinion
K. CFO's Certificate re no Event of Default or Potential Event of Default
and absence of Material Adverse Effect since April 30, 1996.
M. UCC-3 Termination Statements from the following:
II. Receivables Purchase Agreement
A. Receivables Purchase Agreement dated as of August 2, 1996 (the
"INVESTOR AGREEMENT") by and among Yellow-SPC, Falcon Asset Securitization
Corporation ("FALCON"), various Investors, and The First National Bank of
Chicago, as Agent (in such capacity, the "AGENT") with the following exhibits:
Exhibit I -- Definitions
Exhibit II -- Places of Business of Yellow-SPC; Locations of Records;
Trade Names; Federal Employer I.D. Number
Exhibit III -- Lockboxes; Collection Accounts; Concentration Accounts; and
Depositary Accounts
Exhibit IV -- Compliance Certificate
Exhibit V -- Collection Account Agreement
Exhibit VI -- Credit and Collection Policy
Exhibit VII -- Form(s) of Invoice(s)
Exhibit VIII -- Monthly Report
Exhibit IX -- Form of Purchase Notice
Exhibit X -- Contracts Applicable to Excluded Receivables
B. Fee Letter dated of August 2, 1996 by and between Yellow-SPC and the
Agent.
C. Certificate of Yellow-SPC's Assistant Secretary certifying:
1. An attached copy of Yellow-SPC's Certificate of
Incorporation(certified within 30 days prior to closing by the Delaware
Secretary of State)
2. An attached copy of Yellow-SPC's By-Laws
3. An attached copy of resolutions of Yellow-SPC's Board of Directors
authorizing Yellow-SPC's execution, delivery and performance of the
investors agreement and related documents
4. The names, titles and specimen signatures of Yellow-SPC's officers
authorized to execute and deliver the Investor Agreement and related
documents
<PAGE> 60
D. Good standing certificates for Yellow-SPC from the following states
certified within 30 days prior to closing:
1. Delaware
2. Kansas
E. UCC Financing Statements naming Yellow-SPC, as debtor, and the Agent,
as secured party, for filing in the following jurisdictions:
1. Secretary of State of Kansas
F. Post-filing UCC lien searches against Yellow-SPC from the following
jurisdictions:
1. Secretary of State of Kansas
G. Collection Account Agreements
1. Boatmen's
2. First Chicago
3. National Bank of Detroit
H. Purchase Notice executed by Yellow-SPC
I. Opinion of Yellow-SPC's re corporate/UCC issues
J. CFO's Certificate re no Servicer Default or Potential Servicer Default
and absence of Material Adverse Effect since April 30, 1996.
<PAGE> 1
EXHIBIT (C)(1)
TENDER AND VOTING AGREEMENT
TENDER AND VOTING AGREEMENT, dated as of June 6, 1999, among Yellow
Corporation, a Delaware corporation ("Parent"), JPF Acquisition Corp., a New
Jersey corporation and a wholly owned subsidiary of Parent (the "Purchaser"),
and Harry J. Muhlschlegel, Karen B. Muhlschlegel, the Harry J. Muhlschlegel
Grantor Retained Annuity Trust dated 3/27/99, the Karen B. Muhlschlegel Grantor
Retained Annuity Trust dated 3/7/99, the Vicki L. Whithall 1996 Trust, the
Jeffrey Muhlschlegel 1996 Trust and the Jennifer B. Muhlschlegel 1996 Trust
(each, a "Stockholder" and, together, the "Stockholders").
WITNESSETH
WHEREAS, each Stockholder is the owner of that number of shares of Class A
Common Stock, no par value ("Class A Common Shares"), of Jevic Transportation,
Inc. (the "Company") set forth opposite the name of such Stockholder on Annex A
attached hereto (such Stockholder's "Subject Shares");
WHEREAS, Parent, the Purchaser and the Company have entered into an
Agreement and Plan of Merger (as such agreement may hereafter be amended from
time to time, the "Merger Agreement"), which provides, among other things, that
upon the terms and subject to the conditions therein, the Purchaser will (i)
make a cash tender offer (the "Offer") for all of the outstanding Class A Common
Shares and all of the outstanding shares of Common Stock, no par value ("Common
Shares" and, together with the Class A Common Shares, the "Shares"), of the
Company and (ii) after expiration of the Offer, merge with and into the Company
(the "Merger");
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent and the Purchaser have required that the Stockholders and the
Company agree, and the Stockholders and the Company have agreed, to enter into
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. Representations and Warranties of the Stockholders. Each
Stockholder represents and warrants to Parent and the Purchaser as follows:
(a) Such Stockholder is the sole record and beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of such Stockholder's Subject Shares and,
there exist no liens, claims, security interests, options, proxies,
voting agreements, charges, obligations, understandings, arrangements or
other encumbrances of any nature whatsoever, except for restrictions
applicable thereto under federal and state securities laws ("Liens"),
affecting such Subject Shares.
(b) Such Stockholder's Subject Shares and the certificates
representing such Subject Shares are now and at all times until the
Termination Date (as defined herein) will be held by such Stockholder
free and clear of all Liens, except for the Liens arising hereunder.
(c) This Agreement has been duly and validly executed and delivered
by such Stockholder and, assuming due authorization, execution and
delivery by Parent and the Purchaser, constitutes a valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms, except to the extent that enforceability may
be limited by applicable bankruptcy or other laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(d) The execution and delivery of this Agreement by such
Stockholder does not, and the performance by such Stockholder of its
obligations hereunder will not, constitute a violation of, conflict
with, result in a default (or an event which, with notice or lapse of
time or both, would result in a default) under, or result in the
creation of any Lien on any of such Stockholder's Subject Shares
<PAGE> 2
under, (i) any contract, commitment, agreement, partnership agreement,
understanding, arrangement or restriction of any kind to which such
Stockholder is a party or by which such Stockholder is bound, (ii) any
judgment, writ, decree, order or ruling applicable to such Stockholder
or (iii) any law applicable to such Stockholder.
(e) To such Stockholder's knowledge, neither the execution and
delivery of this Agreement nor the performance of Stockholder's
obligations hereunder will require any consent, authorization or
approval of, filing with or notice to, any court, administrative agency
or other governmental body or authority other than any required notices
or filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated
thereunder (the "HSR Act"), state antitrust laws or the federal
securities laws.
(f) Except for such Stockholder's Subject Shares, such Stockholder
does not, directly or indirectly, own beneficially or of record any
Shares or any option, warrant or other right to acquire Shares nor is
such Stockholder subject to any contract, commitment, arrangement,
understanding or relationship that allows or obligates it to vote or
acquire any security of the Company.
2. Representation and Warranties of Parent and the Purchaser. Parent
and the Purchaser jointly and severally represent and warrant to each
Stockholder as follows:
(a) Each of Parent and the Purchaser is duly organized and validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement.
This Agreement has been duly and validly executed and delivered by each
of Parent and the Purchaser and constitutes the legal, valid and binding
obligation of each of Parent and the Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(b) The execution and delivery of this Agreement by each of Parent
and the Purchaser does not, and the performance by each of Parent and
the Purchaser of its obligations hereunder will not, constitute a
violation of, conflict with, or result in a default (or an event which,
with notice or lapse of time or both, would result in a default) under,
its charter or bylaws or any contract, commitment, agreement,
understanding, arrangement or restriction of any kind to which Parent or
the Purchaser is a party or by which Parent or the Purchaser is bound or
any judgment, writ, decree, order or ruling applicable to Parent or the
Purchaser.
(c) Neither the execution and delivery of this Agreement nor the
performance by each of Parent and the Purchaser of its obligations
hereunder will violate any order, writ, injunction, judgment, law,
decree, statute, rule or regulation applicable to Parent or the
Purchaser or require any consent, authorization or approval of, filing
with, or notice to, any court, administrative agency or other
governmental body or authority other than any required notices or
filings pursuant to the HSR Act, state antitrust laws or the federal
securities laws.
3. Tender of Shares.
(a) Parent and the Purchaser jointly and severally agree:
(i) subject to the conditions of the Offer set forth in Annex A
to the Merger Agreement and the other terms and conditions of the
Merger Agreement, that the Purchaser will purchase all Shares
tendered pursuant to the Offer as promptly as practicable following
commencement of the Offer and that the Purchaser will consummate the
Merger in accordance with the terms of the Merger Agreement;
<PAGE> 3
(ii) not to decrease the price per share to be paid to the
Company's shareholders in the Offer below $14.00 per share; and
(iii) the provisions of Sections 3(a)(i) and 3(a)(ii) shall
survive the termination of this Agreement.
(b) Each Stockholder will (i) tender such Stockholder's Subject
Shares (other than such Stockholder's Excluded Shares (as defined
below), if applicable) into the Offer promptly, and in any event no
later than the fifth business day following the commencement of the
Offer, or, if such Stockholder has not received the Offer Documents (as
defined in the Merger Agreement) by such time, within two business days
following receipt of such documents, and (ii) not withdraw any Subject
Shares so tendered. Each of Harry J. Muhlschlegel and Karen B.
Muhlschlegel shall be permitted to not tender into the Offer 18,875 of
their Subject Shares (for a total of 37,750 Subject Shares, collectively
herein referred to as the "Excluded Shares"); provided that, so long as
the Purchaser notifies Mr. and Mrs. Muhlschlegel at least eight hours
prior to the purchase of Shares by the Purchaser pursuant to the Offer,
Mr. and Mrs. Muhlschlegel shall be obligated to contribute their
respective Excluded Shares to the capital of the Company prior to the
purchase of Shares by the Purchaser pursuant to the Offer. Upon the
purchase of all such Stockholder's Subject Shares pursuant to the Offer
in accordance with this Section 3, this Agreement will terminate. Each
Stockholder will receive the same price per Share received by other
stockholders of the Company in the Offer with respect to Subject Shares
tendered by it in the Offer. In the event that, notwithstanding the
provisions of the first sentence of this Section 3(b), any Subject
Shares are for any reason withdrawn from the Offer or are not purchased
pursuant to the Offer, such Subject Shares will remain subject to the
terms of this Agreement. Each Stockholder acknowledges that the
Purchaser's obligation to accept for payment and pay for the Subject
Shares in the Offer is subject to all the terms and conditions of the
Offer. On the date the Subject Shares are accepted for payment and
purchased by the Purchaser pursuant to the Offer, the Purchaser shall
make payment by wire transfer or other method (as agreed by the
Purchaser and such Stockholder) of the purchase price for such Subject
Shares to an account designated by such Stockholder.
(c) Each Stockholder hereby agrees to permit Parent and the
Purchaser to publish and disclose in the Offer Documents and, if
approval of the shareholders of the Company is required under applicable
law, the Statement (as defined in the Merger Agreement), its identity
and ownership of Shares and the nature of its commitments, arrangements
and understandings under this Agreement.
(d) The obligations of the parties under this Section 3 shall
terminate on the Termination Date.
4. Termination Date. As used in this Agreement, "Termination Date"
means the date the Merger Agreement is terminated in accordance with its
terms.
5. Transfer of Subject Shares. Until the Termination Date, each
Stockholder will not, except as required pursuant to the terms of this
Agreement, (i) sell, offer to sell, pledge or otherwise dispose of any of
such Stockholder's Subject Shares; (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all
of such Subject Shares or any interest therein; (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to
such Subject Shares; (iv) deposit such Subject Shares into a voting trust
or enter into a voting agreement or assignment with respect to the Subject
Shares; or (v) take any other action with respect to such Subject Shares
that would in any way restrict, limit or interfere with the performance of
such Stockholder's obligations hereunder.
6. No Solicitation.
(a) Each Stockholder represents and warrants to, and covenants and
agrees with, Parent and the Purchaser that such Stockholder does not have
any agreement, arrangement or understanding with any potential acquiror of
the Company that, directly or indirectly, would be violated, or require any
payments, by reason of the execution, delivery and/or consummation of this
Agreement.
<PAGE> 4
(b) Each Stockholder shall, and shall cause its agents and
representatives to, immediately cease any existing discussions or
negotiations with any Third Party (as defined in the Merger Agreement)
heretofore conducted with respect to any Acquisition Transaction (as
defined in the Merger Agreement). Until the Termination Date, each
Stockholder shall not, and shall cause its agents and representatives not
to, directly or indirectly, (x) solicit, initiate, continue, facilitate or
encourage (including by way of furnishing or disclosing non-public
information) any inquiries, proposals or offers from any Third Party with
respect to, or that could reasonably be expected to lead to, any
Acquisition Transaction or (y) negotiate, explore or otherwise communicate
in any way with any Third Party with respect to any Acquisition
Transaction. If the Board of Directors of the Company determines that a
Third Party proposal for an Acquisition Transaction constitutes a Superior
Proposal (as defined in the Merger Agreement) in accordance with the
provisions of Section 6.06 of the Merger Agreement, then, notwithstanding
the provisions of this Section 6(b), the Stockholders shall be permitted to
negotiate, discuss or otherwise communicate with such Third Party with
respect to a tender and voting agreement with terms no less favorable in
the aggregate to each Stockholder than those contained in this Agreement;
provided that no Stockholder shall enter into any such tender and voting
agreement (i) prior to the Termination Date or (ii) with any Third Party
with whom negotiations for an Acquisition Transaction had taken place prior
to the Termination Date if such tender and voting agreement contains
provisions less favorable in the aggregate to such Stockholder than those
contained in this Agreement. In addition, the provisions of this Section
6(b) shall not be deemed to prohibit any Stockholder who is an officer or
director of the Company from taking actions permitted to be taken by an
officer or director, as the case may be, in such Stockholder's capacity as
an officer and/or director, as the case may be, of the Company.
(c) Until the Termination Date, each Stockholder shall promptly (but
in any event within one day of such Stockholder becoming aware of same) (i)
advise Parent of the receipt by such Stockholder or any of its agents or
representatives of any inquiries or proposals relating to an Acquisition
Transaction, (ii) provide Parent with a copy of any such inquiry or
proposal in writing and a written statement with respect to any such
inquiries or proposals not in writing, which statement shall include the
identity of the parties making such inquiries or proposal and the material
terms thereof and (iii) inform Parent of the status and content of and
developments with respect to any discussions regarding any Acquisition
Transaction with a Third Party.
7. Voting of Subject Shares.
(a) Voting of Subject Shares. Until the Termination Date, each
Stockholder shall, at any meeting of the stockholders of the Company,
however called, or in connection with any written consent of the
stockholders of the Company, vote (or cause to be voted) all Shares
beneficially owned by such Stockholder (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the
approval of the terms thereof and each of the other actions contemplated by
the Merger Agreement and this Agreement and any actions required in
furtherance thereof and hereof; (ii) against any other Acquisition
Transaction and against any action or agreement that would impede,
frustrate, prevent or nullify the Merger Agreement or this Agreement or the
transactions contemplated hereby and thereby, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Merger Agreement or which would
result in any of the conditions to the Merger in the Merger Agreement not
being fulfilled; and (iii) if requested by Parent, in favor of a
stockholder resolution proposed by Parent in accordance with the New Jersey
Act, the purpose of which is to cause the Offer and the Merger to be
consummated and which does not relate to election of directors.
(b) Best Efforts. Subject to the terms and conditions of this
Agreement, until the Termination Date, each Stockholder agrees to use all
reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Merger Agreement. Until
the Termination Date, each Stockholder shall properly consult with Parent
and the Purchaser and provide any necessary information and material with
respect to all filings with any
<PAGE> 5
Governmental Entity in connection with this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby.
8. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(b) Binding Agreement. This Agreement and the obligations hereunder
shall attach to the Subject Shares and shall be binding upon any person or
entity to which record or beneficial ownership of the Subject Shares shall
pass, whether by operation of law or otherwise, including, without
limitation, any Stockholder's administrators or successors. Notwithstanding
any transfer of Subject Shares, the transferor shall remain liable for the
performance of all obligations of the transferor under this Agreement.
(c) Assignment. This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of the other parties
hereto, provided that Parent or the Purchaser may assign, in its sole
discretion, its rights and obligations hereunder to any direct or indirect
wholly owned subsidiary of Parent, but no such assignment shall relieve
Parent or the Purchaser of its obligations hereunder if such assignee does
not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except
upon the execution and delivery of a written agreement executed by the
parties hereto.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given by hand
delivery or telecopy (with a confirmation copy sent for next day delivery
via courier service, such as Federal Express), or by any courier service,
such as Federal Express, providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
If to a Stockholder:
At the address of such Stockholder set forth on Annex A, with copies as
set forth on such Annex A.
If to Parent
or the Purchaser:
Yellow Corporation
10990 Roe Avenue
Overland Park, KS 66207
Attention: William F. Martin, General Counsel
Telephone No.: (913) 696-6106
Telecopy No.: (913) 696-6116
Copy to: Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: W. Leslie Duffy
Telephone No.: (212) 701-3000
Telecopy No.: (212) 269-5420
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
(f) Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
<PAGE> 6
affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
or portion of any provision had never been contained herein.
(g) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained
in this Agreement will cause each of the other parties to sustain damages
for which it would not have an adequate remedy at law for money damages,
and therefore in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any
other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not intended to
be for the benefit of, and shall not be enforceable by, any person or
entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New Jersey, without giving effect
to the principles of conflicts of law thereof.
(l) Waiver of Jury Trial. Each party hereto hereby waives any right
to a trial by jury in connection with any action, suit or proceeding
brought in connection with this Agreement.
(m) Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent, the Purchaser, the Stockholders and the Company
have caused this Agreement to be duly executed as of the day and year first
above written.
YELLOW CORPORATION
By: /s/ A. MAURICE MYERS
------------------------------------
Name: A. Maurice Myers
Title: President and Chief Executive
Officer
JPF ACQUISITION CORP.
By: /s/ WILLIAM F. MARTIN, JR.
------------------------------------
Name: William F. Martin, Jr.
Title: Vice President
/s/ HARRY J. MUHLSCHLEGEL
--------------------------------------
Harry J. Muhlschlegel
<PAGE> 7
/s/ KAREN B. MUHLSCHLEGEL
--------------------------------------
Karen B. Muhlschlegel
HARRY J. MUHLSCHLEGEL GRANTOR RETAINED
ANNUITY TRUST DATED 3/27/99
By: /s/ HARRY J. MUHLSCHLEGEL
------------------------------------
Name: Harry J. Muhlschlegel
Title: Trustee
KAREN B. MUHLSCHLEGEL GRANTOR RETAINED
ANNUITY TRUST DATED 3/27/99
By: /s/ KAREN B. MUHLSCHLEGEL
------------------------------------
Name: Karen B. Muhlschlegel
Title: Trustee
VICKI L. WHITTALL 1996 TRUST
By: /s/ BRUCE D. BURDICK
------------------------------------
Name: Bruce D. Burdick
Title: Trustee
By: /s/ GEORGE K. REYNOLDS, III
------------------------------------
Name: George K. Reynolds, III
Title: Trustee
JEFFREY MUHLSCHLEGEL 1996 TRUST
By: /s/ BRUCE D. BURDICK
------------------------------------
Name: Bruce D. Burdick
Title: Trustee
By: /s/ GEORGE K. REYNOLDS, III
------------------------------------
Name: George K. Reynolds, III
Title: Trustee
JENNIFER B. MUHLSCHLEGEL 1996 TRUST
By: /s/ BRUCE D. BURDICK
------------------------------------
Name: Bruce D. Burdick
Title: Trustee
By: /s/ GEORGE K. REYNOLDS, III
------------------------------------
Name: George K. Reynolds, III
Title: Trustee
<PAGE> 8
ANNEX A
<TABLE>
<CAPTION>
NUMBER OF
CLASS A
STOCKHOLDER ADDRESS* COMMON SHARES
- ----------- -------- -------------
<S> <C> <C>
Harry J. Muhlschlegel Jevic Transportation, Inc. 894,717
600 Creek Road
Delanco, NJ 08075
Karen B. Muhlschlegel Jevic Transportation, Inc. 894,852
600 Creek Road
Delanco, NJ 08075
Harry J. Muhlschlegel Harry J. Muhlschlegel 1,600,000
Grantor Retained Jevic Transportation, Inc.
Annuity Trust 600 Creek Road
Dated 3/27/99 Delanco, NJ 08075
Karen B. Muhlschlegel Karen B. Muhlschlegel 1,600,000
Guarantor Retained Jevic Transportation, Inc.
Annuity Trust 600 Creek Road
Dated 3/27/99 Delanco, NJ 08075
Vicki L. Whittall c/o George K. Reynolds, 249,992
1996 Trust III,
Esquire, Co-Trustee
George, Feinblatt, Rothman,
Hoffberger & Hollander, LLC
The Garrett Building
233 E. Redwood Street
Baltimore, MD 21202
Jeffrey Muhlschlegel George K. Reynolds, Inc., 249,991
1996 Trust Esquire, Co-Trustee
George, Feinblatt, Rothman,
Hoffberger & Hollander, LLC
The Garrett Building
233 E. Redwood Street
Baltimore, MD 21202
Jennifer B. Muhlschlegel George K. Reynolds, III, 249,992
1996 Trust Esquire, Co-Trustee
George, Feinblatt, Rothman,
Hoffberger & Hollander, LLC
The Garrett Building
233 E. Redwood Street
Baltimore, MD 21202
</TABLE>
- ---------------
* All notices shall be sent with a copy to:
Pepper Hamilton LLP
300 Two Logan Square
Philadelphia, PA 19103
Attention: Barry M. Abelson
Fax: 215-981-4750
A-1
<PAGE> 1
EXHIBIT (C)(2)
AGREEMENT
AND
PLAN OF MERGER
DATED AS OF JUNE 6, 1999
BY AND AMONG
YELLOW CORPORATION,
JPF ACQUISITION CORP.
AND
JEVIC TRANSPORTATION, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
THE OFFER
SECTION 1.01. The Offer................................................... 1
SECTION 1.02. Company Actions............................................. 2
SECTION 1.03. Directors................................................... 3
ARTICLE II
THE MERGER
SECTION 2.01. The Merger.................................................. 4
SECTION 2.02. Effective Time; Closing..................................... 4
SECTION 2.03. Effects of the Merger....................................... 4
SECTION 2.04. Certificate of Incorporation and ByLaws of the Surviving 4
Corporation.................................................
SECTION 2.05. Directors................................................... 4
SECTION 2.06. Officers.................................................... 4
SECTION 2.07. Conversion of Shares........................................ 4
SECTION 2.08. Conversion of Purchaser Common Stock........................ 4
SECTION 2.09. Company Option Plans........................................ 5
SECTION 2.10. Shareholders' Meeting....................................... 5
SECTION 2.11. Merger Without Meeting of Shareholders...................... 5
SECTION 2.12. Earliest Consummation....................................... 6
ARTICLE III
PAYMENT FOR SHARES
SECTION 3.01. Payment for Shares.......................................... 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Organization and Qualification; Subsidiaries................ 7
SECTION 4.02. Authority Relative to This Agreement........................ 7
SECTION 4.03. No Conflict; Required Filings and Consents.................. 7
SECTION 4.04. Certain Approvals........................................... 8
SECTION 4.05. Opinion of Financial Advisor................................ 8
SECTION 4.06. Brokers..................................................... 8
SECTION 4.07. Capitalization.............................................. 8
SECTION 4.08. SEC Reports and Financial Statements........................ 9
SECTION 4.09. Information................................................. 10
SECTION 4.10. Litigation.................................................. 10
SECTION 4.11. Compliance with Applicable Laws............................. 10
SECTION 4.12. Employee Benefit Plans...................................... 10
SECTION 4.13. Intellectual Property....................................... 12
SECTION 4.14. Environmental Matters....................................... 12
SECTION 4.15. Material Adverse Change..................................... 14
SECTION 4.16. Taxes....................................................... 14
SECTION 4.17. Labor Matters............................................... 15
SECTION 4.18. Material Contracts.......................................... 16
SECTION 4.19. Insurance................................................... 16
SECTION 4.20. Real Property............................................... 16
SECTION 4.21. Suppliers and Customers..................................... 17
SECTION 4.22. Accounts Receivable......................................... 17
SECTION 4.23. Owner/Operators, Agents and Contractors..................... 17
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 4.24. Year 2000................................................... 17
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
SECTION 5.01. Organization and Qualification.............................. 18
SECTION 5.02. Authority Relative to this Agreement........................ 18
SECTION 5.03. No Conflict; Required Filings and Consents.................. 18
SECTION 5.04. Information................................................. 19
SECTION 5.05. Financing................................................... 19
ARTICLE VI
COVENANTS
SECTION 6.01. Conduct of Business of the Company.......................... 19
SECTION 6.02. Access to Information....................................... 21
SECTION 6.03. Reasonable Best Efforts..................................... 21
SECTION 6.04. Public Announcements........................................ 21
SECTION 6.05. Indemnification............................................. 21
SECTION 6.06. No Solicitation............................................. 22
SECTION 6.07. Notification of Certain Matters............................. 24
SECTION 6.08. State Takeover Laws......................................... 24
SECTION 6.09. Employee Matters............................................ 24
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01. Conditions to Each Party's Obligation to Effect the 25
Merger......................................................
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01. Termination................................................. 25
SECTION 8.02. Effect of Termination....................................... 26
SECTION 8.03. Fees and Expenses........................................... 26
SECTION 8.04. Amendment................................................... 27
SECTION 8.05. Extension; Waiver........................................... 27
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Non-Survival of Representations and Warranties.............. 27
SECTION 9.02. Entire Agreement; Assignment................................ 27
SECTION 9.03. Validity.................................................... 28
SECTION 9.04. Notices..................................................... 28
SECTION 9.05. Governing Law; Jurisdiction................................. 28
SECTION 9.06. Descriptive Headings........................................ 28
SECTION 9.07. Counterparts................................................ 28
SECTION 9.08. Parties in Interest......................................... 29
SECTION 9.09. Certain Definitions......................................... 29
SECTION 9.10. Remedies.................................................... 29
ANNEX I -- CONDITIONS TO THE OFFER
</TABLE>
ii
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 6, 1999, by and among Yellow
Corporation, a Delaware corporation ("Parent"), JPF Acquisition Corp., a New
Jersey corporation and an indirect wholly-owned subsidiary of Parent (the
"Purchaser"), and Jevic Transportation, Inc., a New Jersey corporation (the
"Company").
WHEREAS, as a condition and inducement to Parent's willingness to enter
into this Agreement, Parent, the Purchaser and the holders of shares of Class A
Common Stock, no par value (the "Class A Common Shares"), of the Company have
entered into a Tender, Voting and Option Agreement, dated the date hereof (the
"Tender and Voting Agreement");
WHEREAS, the Board of Directors of the Company has approved the Tender and
Voting Agreement and the transactions contemplated thereby;
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and
the Company have approved the acquisition of the Company by Parent on the terms
and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause the
Purchaser to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all of the shares of
Class A Common Shares and all of the shares of Common Stock, no par value, of
the Company (the "Common Shares" and, together with Class A Common Shares, the
"Shares") at a price per Share of $14.00 net to the seller in cash (such price,
as it may hereafter be increased in accordance with the terms of this Agreement,
the "Offer Price") upon the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, the Board of Directors of the Company has unanimously approved
this Agreement, the Offer and the Merger (as hereinafter defined), has
determined that the Offer and the Merger are fair and in the best interests of
the Company's shareholders (the "Shareholders") and is recommending that the
Shareholders accept the Offer and tender all their Shares and adopt and approve
this Agreement;
WHEREAS, the respective Boards of Directors of Parent, the Purchaser and
the Company have approved the merger of the Purchaser with and into the Company,
as set forth below (the "Merger"), in accordance with the New Jersey Business
Corporation Act (the "New Jersey Act") and upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and outstanding
Class A Common Share and Common Share not owned directly or indirectly by Parent
or the Company will be converted into the right to receive the Offer Price in
cash;
WHEREAS, Parent, the Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, Parent,
the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer.
(a) So long as none of the events set forth in clauses (a) through (i) of
Annex I hereto ("conditions to the Offer") shall have occurred or exist, the
Purchaser shall, and Parent shall cause the Purchaser to, commence (within the
meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) as promptly as practicable after the date hereof, but in any
event not later than June 14, 1999, the Offer for all outstanding Shares at the
Offer Price, net to the seller in cash. The initial expiration date for the
Offer shall be the twentieth business day from and after the date the Offer is
commenced,
<PAGE> 5
including the date of commencement as the first business day in accordance with
Rule 14d-2 under the Exchange Act. As promptly as practicable, the Purchaser
shall file with the Securities and Exchange Commission (the "SEC" or the
"Commission") the Purchaser's Tender Offer Statement on Schedule 14D-1 (together
with any supplements or amendments thereto, the "Offer Documents"), which shall
contain (as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to
Purchase") which shall be mailed to the holders of Shares with respect to the
Offer. The obligation of the Purchaser to accept for payment or pay for any
Shares tendered pursuant to the Offer will be subject only to the satisfaction
or waiver of the conditions to the Offer. Without the prior written consent of
the Company, the Purchaser shall not decrease the price per Share or change the
form of consideration payable in the Offer, decrease the number of Shares sought
to be purchased in the Offer, change the conditions to the Offer, waive or
reduce the Minimum Condition (as defined in Annex I), impose additional
conditions to the Offer or amend any other term of the Offer in any manner
adverse to the holders of Shares; provided, however, that if all of the
conditions to the Offer are then satisfied or waived, the Parent, in order to
permit the Merger to become effective without a meeting of Shareholders in
accordance with Section 14A:10-5.1 of the New Jersey Act, shall have the right
(i) to extend the Offer for a period or periods aggregating up to ten business
days from the then effective expiration date and (ii) thereafter to extend the
Offer with the prior written consent of the Company; provided, further, that if
Parent elects to extend the Offer pursuant to clause (i) above, Parent and the
Purchaser shall be deemed to have permanently and irrevocably waived all of the
conditions to the Offer (other than the Minimum Condition and the conditions set
forth in clause (a) of the conditions to the Offer) and provided, further, that
Parent may extend the Offer to the extent any conditions to the Offer have not
been satisfied on the applicable expiration date. Subject to the terms of the
Offer and this Agreement and the satisfaction or waiver of all the conditions of
the Offer as of any expiration date, Parent will accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after such expiration date of the Offer.
(b) Parent and Purchaser hereby represent and warrant to the Company that
the Offer Documents will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Shareholders, shall 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 made
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or the Purchaser
with respect to information supplied by or on behalf of the Company in writing
for inclusion in the Offer Documents. Each of Parent and the Purchaser, on the
one hand, and the Company, on the other hand, agrees promptly to correct any
information provided by or on behalf of it for use in the Offer Documents if and
to the extent that it shall have become false or misleading in any material
respect, and the Purchaser further agrees to take (and Parent shall cause the
Purchaser to take) all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to Shareholders, in
each case as and to the extent required by applicable federal securities laws.
SECTION 1.02. Company Actions.
(a) Contemporaneously with the filing of the Offer Documents, the Company
shall file with the SEC and mail to the Shareholders a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (together with any amendments or supplements thereto, the "Schedule
14D-9"). The Schedule 14D-9 will set forth, and the Company hereby represents,
that the Board of Directors of the Company, at a meeting duly called and held on
June 3, 1999 (the "Company Board Meeting"), has (i) determined that the Offer
and the Merger are fair to and in the best interests of the Company and its
Shareholders, (ii) irrevocably approved the Tender and Voting Agreement, the
Offer and the Merger in accordance with Section 14A:10A-1 of the New Jersey Act
(and for purposes of any other applicable state takeover law) and (iii) resolved
to recommend acceptance of the Offer and approval and adoption of the Merger and
this Agreement by the Company's Shareholders (in accordance with the
requirements of the Company's Restated Certificate of Incorporation and of
applicable law); provided, however, that, subject to Section 8.03, such
recommendation may be withdrawn, modified or amended to the extent that the
Board of Directors of the Company determines reasonably and in good faith that
it is necessary under applicable law to do so in the exercise of its fiduciary
2
<PAGE> 6
obligations after being advised with respect thereto by outside counsel;
provided, further, however, that notwithstanding any withdrawal, modification or
amendment of such recommendation, the Company agrees that if the Purchaser
purchases Shares pursuant to the Offer, this Agreement shall be submitted to the
Shareholders for approval and adoption at the Special Meeting (if a vote of
Shareholders is required to effect the Merger) whether or not the Board of
Directors determines at any time subsequent to the Company Board Meeting that
this Agreement is no longer advisable and recommends that Shareholders reject
it.
(b) The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Shareholders, shall
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 made therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company with
respect to information supplied by or on behalf of the Parent or Purchaser in
writing for inclusion in the Schedule 14D-9. Each of the Company, on the one
hand, and Parent and the Purchaser, on the other hand, agrees promptly to
correct any information provided by either of them for use in the Schedule 14D-9
if and to the extent that it shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the Shareholders, in each case as and to the extent required by
applicable federal securities law.
(c) In connection with the Offer, the Company will promptly furnish the
Purchaser with such information and assistance as the Purchaser or its agents or
representatives may reasonably request in connection with communicating the
Offer to the record and beneficial holders of the Securities, including, without
limitation, its stockholders list, mailing labels, security position listings
and non-objecting beneficial owners list.
(d) To the knowledge of the Company, all of its directors and executive
officers intend to tender their Shares pursuant to the Offer.
SECTION 1.03. Directors.
(a) Subject to compliance with applicable law, promptly upon the payment by
the Purchaser for Shares pursuant to the Offer representing at least a majority
of the votes entitled to be cast by all holders of Shares, and from time to time
thereafter so long as the Purchaser and/or Parent (and/or their respective
wholly-owned subsidiaries) continue to hold at least such number of Shares,
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as is equal to
the product of the total number of directors on the Board of Directors of the
Company (determined after giving effect to the directors elected pursuant to
this sentence) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Parent or its affiliates bears to the total number of
Shares then outstanding, and the Company shall, upon request of Parent, promptly
take all actions necessary to cause Parent's designees to be so elected,
including, if necessary, seeking the resignations of one or more existing
directors; provided, however, that prior to the Effective Time (as defined in
Section 2.02), the Board shall always have at least one member who is neither an
officer, director or designee of the Parent ("Purchaser Insiders").
(b) The Company's obligations to appoint Parent's designees to the Board
shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
The Company shall promptly take all actions required pursuant to such Section
and Rule in order to fulfill its obligations under this Section 1.03 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under such Section and Rule in order
to fulfill its obligations under this Section 1.03. Parent will supply any
information with respect to itself and its officers, directors and affiliates
required by such Section and Rule to the Company.
(c) From and after the election or appointment of Parent's designees
pursuant to this Section 1.03 and prior to the Effective Time, any amendment or
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or the
3
<PAGE> 7
Purchaser or waiver of any of the Company's rights hereunder, or any other
action taken by the Board of Directors of the Company in connection with this
Agreement, will require the concurrence of a majority of the directors of the
Company then in office who are not Purchaser Insiders.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the satisfaction
or waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement and the New Jersey Act, at the Effective Time (as
defined in Section 2.02) the Purchaser shall be merged with and into the
Company. Following the Merger, the separate corporate existence of the Purchaser
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation").
SECTION 2.02. Effective Time; Closing. As soon as practicable but in no
event later than the fifth business day after the satisfaction or waiver of the
conditions described in Article VII hereof, (a) if a vote of Shareholders is
required to effect the Merger, the Company and the Purchaser shall execute in
the manner required by the New Jersey Act and deliver to the Secretary of State
of the State of New Jersey a duly executed and verified certificate of merger or
(b) if the Merger may be consummated without a vote of Shareholders, Purchaser
shall execute in the manner required by the New Jersey Act and deliver to the
Secretary of State of New Jersey a duly executed and verified certificate of
merger. The parties shall take such other and further actions as may be required
by law to make the Merger effective. The Merger shall become effective upon
filing of the certificate of merger, unless a later time is specified in such
certificate. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time."
SECTION 2.03. Effects of the Merger. The Merger shall have the effects
set forth in Section 14A:10-6 of the New Jersey Act.
SECTION 2.04. Certificate of Incorporation and ByLaws of the Surviving
Corporation.
(a) The certificate of incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
(b) Subject to the provisions of Section 6.05 of this Agreement, the
by-laws of the Purchaser in effect at the Effective Time shall be the by-laws of
the Surviving Corporation, until thereafter amended in accordance with the
provisions thereof and hereof and applicable law.
SECTION 2.05. Directors. Subject to applicable law, the directors of the
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
SECTION 2.06. Officers. The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.07. Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holders thereof, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares held by Parent, the Purchaser, any direct or indirect wholly-owned
subsidiary of Parent, in the treasury of the Company or by any direct or
indirect wholly-owned subsidiary of the Company, which Shares, by virtue of the
Merger and without any action on the part of the holder thereof, shall be
canceled and retired and shall cease to exist with no payment being made with
respect thereto ("Excluded Shares")) shall be converted into the right to
receive in cash the Offer Price (the "Merger Price").
SECTION 2.08. Conversion of Purchaser Common Stock. At the Effective
Time, each share of common stock, no par value, of the Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and
4
<PAGE> 8
become one validly issued, fully paid and nonassessable shares of common stock,
no par value, of the Surviving Corporation.
SECTION 2.09. Company Option Plans. The Board of Directors of the Company
has adopted such resolutions, and shall take such other actions as may be
necessary, so that each outstanding option (an "Option") granted under the
Company's 1994 Stock Option Plan and 1997 Incentive Plan (collectively, the
"Option Plans"), whether or not then exercisable or vested, shall become fully
exercisable and vested and, except to the extent that Parent or the Purchaser
and holder of any such Option otherwise agree, immediately following
consummation of the Offer, the Company shall pay to such holders of Options an
amount in respect thereof equal to the product of (i) the excess of the Merger
Price over the exercise price thereof and (ii) the number of Shares subject
thereto (such payment to be net of taxes required by law to be withheld with
respect thereto); provided that the foregoing shall be subject to the obtaining
of any necessary consents of holders of awards of Options under the Option
Plans, it being agreed that the Company will use its best efforts to obtain any
such consent.
SECTION 2.10. Shareholders' Meeting.
(a) If required by the Company's Restated Certificate of Incorporation
and/or applicable law in order to consummate the Merger, the Company, acting
through its Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its Shareholders (the "Special Meeting") as soon as practicable following
the acceptance for payment of and payment for Shares by the Purchaser
pursuant to the Offer for the purpose of considering and taking action upon
this Agreement, whether or not the Board of Directors determines at any
time subsequent to the Company Board Meeting that this Agreement is no
longer advisable and recommends that Shareholders reject it;
(ii) prepare and file with the SEC a preliminary proxy statement or,
if the Purchaser shall have accepted for payment and purchased Shares
permitting the Purchaser to cast at least a majority of the votes entitled
to be cast by all holders of Shares on a fully diluted basis, information
statement relating to the Merger and this Agreement and use its reasonable
best efforts (x) to obtain and furnish the information required to be
included by the SEC in the Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the
SEC with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement (the "Statement") to be
mailed to its Shareholders and (y) to obtain the necessary approvals of the
Merger and this Agreement by its Shareholders; and
(iii) subject to the fiduciary obligations of the Board of Directors
of the Company under applicable law as advised by outside counsel, include
in the Statement the recommendation of the Board of Directors of the
Company that Shareholders vote in favor of the approval of the Merger and
the adoption of this Agreement; provided, however, that notwithstanding any
withdrawal, modification or amendment of the recommendation of the Board of
Directors of the Company made at the Company Board Meeting, the Company
agrees that if the Purchaser purchases Shares pursuant to the Offer, this
Agreement shall be submitted to the Shareholders for approval and adoption
at the Special Meeting whether or not the Board of Directors determines at
any time subsequent to the Company Board Meeting that this Agreement is no
longer advisable and recommends that Shareholders reject it.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, the Purchaser or any of its other subsidiaries in favor
of the approval of the Merger and the adoption of this Agreement.
SECTION 2.11. Merger Without Meeting of Shareholders. Notwithstanding
Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the outstanding Class A Common Shares and
90% of the outstanding Common Shares pursuant to the Offer, the parties hereto
agree to take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of and payment
for Shares by the Purchaser pursuant to the Offer without a meeting of
Shareholders, in accordance with Section 14A:10-5.1 of the New Jersey Act.
5
<PAGE> 9
SECTION 2.12. Earliest Consummation. Each party hereto shall use its
reasonable best efforts to consummate the Merger as soon as practicable.
ARTICLE III
PAYMENT FOR SHARES
SECTION 3.01. Payment for Shares.
(a) From and after the Effective Time, a bank or trust company or stock
transfer agent mutually acceptable to Parent and the Company (pursuant to an
agreement satisfactory to Parent and the Company) shall act as paying agent (the
"Paying Agent") in effecting the payment of the Merger Price in respect of
certificates (the "Certificates") that, prior to the Effective Time, represented
Shares entitled to payment of the Merger Price pursuant to Section 2.07.
(b) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of Certificates (other than Certificates representing Excluded
Shares) a form of letter of transmittal which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Paying Agent and instructions
for use in surrendering such Certificates and receiving the aggregate Merger
Price in respect thereof. Upon the surrender of each such Certificate, Parent
shall make funds available to the Paying Agent to enable it to, and the Paying
Agent shall, pay the holder of such Certificate the Merger Price multiplied by
the number of Shares formerly represented by such Certificate in consideration
therefor, and such Certificate shall forthwith be canceled. Until so
surrendered, each such Certificate (other than Certificates representing
Excluded Shares) shall represent solely the right to receive the aggregate
Merger Price relating thereto. No interest or dividends shall be paid or accrued
on the Merger Price. If the Merger Price (or any portion thereof) is to be
delivered to any person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition to such right to receive such
Merger Price that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person surrendering such
Certificates shall pay to the Paying Agent any transfer or other taxes required
by reason of the payment of the Merger Price to a person other than the
registered holder of the Certificate surrendered, or shall establish to the
satisfaction of the Paying Agent that such tax has been paid or is not
applicable.
(c) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the holder of such Certificate,
the Paying Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Price deliverable in respect thereof, provided that the
holder of such Certificate shall, as a condition precedent to the payment
thereof, give the Surviving Corporation a bond in such sum as it may direct or
otherwise indemnify the Surviving Corporation in a manner satisfactory to it
against any claim that may be made against it with respect to the Certificate
claimed to have been lost, stolen or destroyed.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Paying Agent,
they shall be surrendered and canceled in return for the payment of the
aggregate Merger Price relating thereto, as provided in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the Purchaser that except
as set forth in the section or subsection of the Company Disclosure Statement
corresponding to the section or subsection of this
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Article IV delivered to Parent and the Purchaser prior to the execution hereof
(the "Company Disclosure Statement"):
SECTION 4.01. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey. Each subsidiary (as
defined in Section 9.09) of the Company (the "Subsidiaries") is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. The Company and each of the
Subsidiaries has the requisite corporate power and authority to own,
operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is
in good standing, in each jurisdiction in which the nature of its business
or the properties owned, operated or leased by it makes such qualification,
licensing or good standing necessary, except where the failures to have
such power or authority, or the failures to be so qualified, licensed or in
good standing, individually, and in the aggregate, would not have a
Material Adverse Effect on the Company (as defined below). The Company does
not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation (other than a Subsidiary),
partnership, joint venture or other business association or entity. The
term "Material Adverse Effect on the Company" means any change in, or
effect on, the business, results of operations, assets, condition
(financial or otherwise) or prospects of the Company or any of the
Subsidiaries that is or could reasonably be expected to be materially
adverse to the Company and the Subsidiaries taken as a whole.
SECTION 4.02. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement and the Tender and Voting Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Tender and Voting Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and
thereby have been duly and validly authorized and approved by the Board of
Directors of the Company and no other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or the
Tender and Voting Agreement or to consummate the transactions contemplated
hereby or thereby (other than, with respect to the Merger, the approval and
adoption of the Merger and this Agreement by holders of a majority of the
outstanding Shares to the extent required by the Company's Restated
Certificate of Incorporation and by applicable law). This Agreement has
been duly and validly executed and delivered by the Company and, assuming
the due and valid authorization, execution and delivery of this Agreement
by Parent and the Purchaser, constitutes valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally (the "Bankruptcy Exceptions")
and (ii) is subject to general principles of equity and any implied
covenant of good faith and fair dealing. The Board of Directors of the
Company has, at the Company Board Meeting, approved and adopted this
Agreement, the Offer, the Merger, the Tender and Voting Agreement and the
other transactions contemplated hereby and thereby, determined that the
Offer Price to be received by the holders of Shares pursuant to the Offer
and the Merger is fair to the Shareholders, recommended that the
Shareholders approve and adopt this Agreement, the Merger and the other
transactions contemplated hereby and tender their Shares pursuant to the
Offer and approved the submission of this Agreement to the Shareholders at
the Special Meeting (if required to consummate the Merger) if the Purchaser
purchases Shares pursuant to the Offer whether or not the Board of
Directors of the Company determines at any time subsequent to the Company
Board Meeting that this Agreement no longer advisable and recommends that
Shareholders reject it.
SECTION 4.03. No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement by the
Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being
a "Consent"), any government or subdivision thereof, or any administrative,
governmental or regulatory authority, agency, commission, tribunal or
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<PAGE> 11
body, domestic, foreign or supranational (a "Governmental Entity") or
person who is not a Governmental Entity, except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a
certificate of merger pursuant to the New Jersey Act, (iii) applicable
state takeover and environmental statutes and (iv) compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act").
(b) Except as set forth in clause (a) of this Section 4.03, none of
the execution and delivery of this Agreement by the Company, the
consummation by the Company of the transactions contemplated hereby or
compliance by the Company with any of the provisions hereof will (i)
conflict with or violate the Restated Certificate of Incorporation or
bylaws of the Company or the comparable organizational documents of any of
the Subsidiaries, (ii) conflict with or violate any statute, ordinance,
rule, regulation, order, judgment or decree applicable to the Company or
the Subsidiaries, or by which any of them or any of their respective
properties or assets may be bound or affected, or (iii) result in a
violation or breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in any loss of any material benefit or the creation of any
Lien (as defined) on any of the property or assets of the Company or any of
the Subsidiaries (any of the foregoing referred to in clause (ii) or this
clause (iii) being a "Violation") pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of the Subsidiaries is
a party or by which the Company or any of the Subsidiaries or any of their
respective properties may be bound or affected, except for Violations
which, individually or in the aggregate, would not have a Material Adverse
Effect on the Company.
SECTION 4.04. Certain Approvals. The Board of Directors of the
Company has taken appropriate irrevocable action (a) such that the
provisions of Section 14A:10A-1 of the New Jersey Act will not apply to the
Offer, the Merger or any of the other transactions contemplated by this
Agreement or the Tender and Voting Agreement and (b) such that the
provisions of any other state takeover law will not be applicable to the
Offer, the Merger or any of the other transactions contemplated by this
Agreement or the Tender and Voting Agreement.
SECTION 4.05. Opinion of Financial Advisor. The Company has received
the written opinion of Janney Montgomery Scott Inc. to the effect that, as
of the date hereof, the Offer Price is fair to the Shareholders from a
financial point of view.
SECTION 4.06. Brokers. Except for the engagement of Janney
Montgomery Scott Inc. (a copy of whose engagement letter previously has
been delivered by the Company to Parent), none of the Company, any of the
Subsidiaries or any of their respective officers, directors or employees
has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finder's fees in connection with the
transactions contemplated by this Agreement.
SECTION 4.07. Capitalization. The Company has heretofore made
available to Parent and the Purchaser a complete and correct copy of the
Restated Certificate of Incorporation and the by-laws, each as amended to
the date hereof, of the Company. The authorized capital stock of the
Company consists of 10,000,000 Class A Common Shares, 40,000,000 Common
Shares and 10,000,000 shares of Preferred Stock, no par value (the
"Preferred Stock"). As of the close of business on the day prior to
execution of this Agreement, there were no shares of Preferred Stock issued
or outstanding. As of the close of business on the day prior to execution
of this Agreement, (i) there were 5,739,544 Class A Common Shares issued,
none of which were owned by the Company or a wholly-owned Subsidiary and
(ii) there were 4,994,303 Common Shares issued, none of which were owned by
the Company or a wholly-owned Subsidiary. The Company has no shares of
capital stock reserved for issuance, except that, as of the day prior to
execution of this Agreement, there were 1,564,056 Common Shares reserved
for issuance pursuant to Options outstanding on the date hereof pursuant to
the Option Plans as listed in Section 4.07 of the Company Disclosure
Statement. Since the day prior to execution of this Agreement, the Company
has not issued any Options or shares of capital stock except pursuant to
the exercise of Options outstanding as of such date and in accordance with
their terms or pursuant to the conversion of Class A
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Shares into Common Shares. All the outstanding Shares are, and all Common
Shares which may be issued pursuant to the exercise of outstanding Options
will be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and nonassessable. There are no
bonds, debentures, notes or other indebtedness having general voting rights
(or convertible into securities having such rights) ("Voting Debt") of the
Company or any of the Subsidiaries issued and outstanding. Except for the
Options, there are no existing options, warrants, calls, subscriptions or
other rights, agreements, arrangements or commitments of any character,
relating to the issued or unissued capital stock of the Company or any of
the Subsidiaries, obligating the Company or any of the Subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any
shares of capital stock or Voting Debt of, or other equity interest in, the
Company or any of the Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests or obligations of the
Company or any of the Subsidiaries to grant, extend or enter into any such
option, warrant, call, subscription or other right, agreement, arrangement
or commitment. There are no outstanding contractual obligations of the
Company or any of the Subsidiaries to repurchase, redeem or otherwise
acquire any capital stock of the Company or any of its Subsidiaries. Each
of the outstanding shares of capital stock of each of the Company's
Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and such shares of the Subsidiaries as are owned by the
Company or by a wholly owned Subsidiary are free and clear of any lien,
claim, option, charge, security interest, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien"). Section 4.07
of the Company Disclosure Statement contains a complete list as of the date
hereof of each Subsidiary and sets forth with respect to each of the
Subsidiaries its name and jurisdiction of organization and the number of
shares of capital stock or share capital owned by the Company and each
other person.
SECTION 4.08. SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements required to be
filed by the Company with the SEC until the date hereof (the "SEC
Reports"). As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended, and the rules and regulations of the
SEC promulgated thereunder applicable, as the case may be, to such SEC
Reports, and, as of their respective dates, none of the SEC Reports
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading.
(b) The consolidated balance sheets as of December 31, 1998 and 1997
and the related consolidated statements of income, shareholders' equity and
cash flows (including the notes thereto) for each of the three years in the
period ended December 31, 1998 (including the related notes and schedules
thereto) of the Company contained in the Company's Form 10-K for the year
ended December 31, 1998 included in the SEC Reports present fairly the
consolidated financial position and the consolidated results of operations
and cash flows of the Company and its consolidated subsidiaries as of the
dates or for the periods presented therein in conformity with United States
generally accepted accounting principles applied on a consistent basis as
of and during the periods involved ("GAAP").
(c) The consolidated balance sheets and the related statements of
income and cash flows (including in each case the related notes thereto) of
the Company contained in the Forms 10-Q for the periods ended March 31,
1999 included in the SEC Reports (collectively, the "Quarterly Financial
Statements") have been prepared in accordance with the requirements for
interim financial statements contained in Regulation S-X under the Exchange
Act. The Quarterly Financial Statements reflect all adjustments, which
include only normal recurring adjustments, necessary to present fairly and
do present fairly the consolidated financial position, results of
operations and cash flows of the Company and its consolidated Subsidiaries
for the period presented therein in conformity with GAAP applied on a
consistent basis during the periods involved.
(d) The Company and the Subsidiaries have no liabilities or
obligations of any nature (whether absolute, accrued, contingent,
unmatured, unaccrued, unliquidated, unasserted, conditional or otherwise)
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except for liabilities or obligations (i) reflected or reserved against on
the balance sheet as at March 31, 1999 included in the Quarterly Financial
Statements (the "Company Balance Sheet"), (ii) incurred in the ordinary
course of business consistent with past practice since such date or (iii)
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
SECTION 4.09. Information. None of the information supplied by the
Company in writing specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9 (including the
information included therein in order to comply with Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder), (iii) the Statement or (iv) any
other document to be filed with the SEC or any other Governmental Entity in
connection with the transactions contemplated by this Agreement (the "Other
Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Statement, at the
date it or any amendment or supplement is mailed to Shareholders, at the
time of the Special Meeting and at the Effective Time, 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 made
therein, in light of the circumstances under which they were made, not
misleading. The Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by the Company with
respect to statements made therein based on information supplied by or on
behalf of Parent or the Purchaser in writing specifically for inclusion in
the Statement.
SECTION 4.10. Litigation. There is no suit, action or proceeding
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of the Subsidiaries, except for suits, actions
and proceedings that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company, nor is there any judgment, decree,
injunction or order of any Governmental Entity or arbitrator outstanding
against the Company or any of the Subsidiaries, except for judgments,
decrees, injunctions and orders that would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
SECTION 4.11. Compliance with Applicable Laws. The Company and the
Subsidiaries have been in compliance with all laws, regulations and orders
of any Governmental Entity applicable to it or the Subsidiaries, except for
such failures so to comply which, individually and in the aggregate, would
not have a Material Adverse Effect on the Company. The business operations
of the Company and the Subsidiaries have not been conducted in violation of
any law, ordinance or regulation of any Governmental Entity, except for
possible violations which, individually or in the aggregate, would not have
a Material Adverse Effect on the Company. Neither the Company, any
Subsidiary nor any director, officer, agent, employee or other person
associated with or acting on behalf of any of them has (i) used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment or made any unlawful expenditures relating to political
activity, or made any direct or indirect unlawful payments to governmental
officials or others or established or maintained any unlawful or unrecorded
funds in violation of Section 30A of the Exchange Act or (ii) accepted or
received any unlawful contributions, payments, gifts or expenditures.
SECTION 4.12. Employee Benefit Plans.
(a) Section 4.12 of the Company Disclosure Statement includes a
complete list of all bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance, incentive, or other
employee benefit plans, programs and agreements providing benefits to any
employee, former employee, director or former director of the Company or
any of the Subsidiaries sponsored or maintained by or on behalf of the
Company or any of the Subsidiaries or to which the Company or any of the
Subsidiaries contributes or is obligated to contribute (collectively, the
"Plans"). Without limiting the generality of the foregoing, the term
"Plans" includes all employee welfare benefit plans within the meaning of
Section 3(l) of the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder ("ERISA") and all employee pension
benefit plans within the meaning of Section 3(2) of ERISA.
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(b) With respect to each Plan, the Company has made available to
Parent a true, correct and complete copy of: (i) all plan documents,
benefit schedules, trust agreements, and insurance contracts and other
funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and
accompanying schedule, if any; (iii) the current summary plan description,
if any; (iv) the most recent annual financial report, if any; (v) the most
recent actuarial report, if any; and (vi) the most recent determination
letter from the Internal Revenue Service (the "IRS"), if any.
(c) The Company and each of the Subsidiaries has complied, and is now
in compliance, in all material respects with all provisions of ERISA, the
Code and all laws and regulations applicable to the Plans. With respect to
each Plan that is intended to be a "qualified plan" within the meaning of
Section 401(a) of the Code, the IRS has issued a favorable determination
letter, and to the knowledge of the Company nothing has occurred at the
date hereof that would reasonably be expected to cause the loss of such
qualification.
(d) All contributions required to be made to any Plan by applicable
law or regulation or by any plan document or other contractual undertaking,
and all premiums due or payable with respect to insurance policies funding
any Plan, for any period through the date hereof have been timely made or
paid in full or, to the extent not required to be made or paid on or before
the date hereof, have been fully reflected in the financial statements of
the Company included in the SEC Reports to the extent required under
generally accepted accounting principles.
(e) With respect to each plan which is subject to Title IV or Section
302 of ERISA or Section 412 of the Code maintained or contributed to (or
required to be contributed to) by the Company, any Subsidiary or any ERISA
Affiliate (as hereinafter defined), (i) there does not now exist, nor do
any circumstances exist that could result in, any liability of the Company
or any of the Subsidiaries under Title IV of ERISA (other than for the
payment of premiums, all of which have been paid when due), (ii) neither
the Company nor any of the Subsidiaries has incurred any accumulated
funding deficiency within the meaning of Section 302 of ERISA or Section
412 of the Code (whether or not waived) and there has been no waiver or
application for a waiver of any minimum funding standard or extension of
any amortization period under Section 412 of the Code or Part 3 of Subtitle
B of Title I of ERISA, (iii) no "reportable event" (as such term is defined
in Section 4043 of ERISA and the regulations thereunder) has occurred or is
expected to occur, (iv) no notice of intent to terminate has been filed
with the Pension Benefit Guaranty Corporation, (v) the Pension Benefit
Guaranty Corporation has not instituted any proceedings to terminate the
plan or to appoint a trustee to administer the plan, and (vi) there has
been no event requiring disclosure under Section 4063(a) of ERISA. For
purposes of this Section 4.12, the term "ERISA Affiliate" shall mean any
business or entity (whether or not incorporated) which is a member of the
same "controlled group of corporations", under "common control" or an
"affiliated service group" with the Company or any Subsidiary within the
meaning of Section 414(b), (c) or (m) of the Code, or is under "common
control" with the Company or any Subsidiary within the meaning of Section
4001(a)(14) of ERISA.
(f) Neither the Company nor any Subsidiary nor any ERISA Affiliate has
been required to contribute to, or incurred any withdrawal liability
(within the meaning of Section 4201 of ERISA) with respect to any plan
which is a multiemployer plan as defined in ERISA Section 3(37) (a
"Multiemployer Plan"). Neither the Company nor any Subsidiary nor any ERISA
Affiliate has completely or partially withdrawn from any Multiemployer
Plan. No Multiemployer Plan as to which the Company, any Subsidiary or any
ERISA Affiliate is required to contribute is in reorganization within the
meaning of Part 3 of Subtitle E of Title IV of ERISA. The Company has
delivered to Parent a schedule showing the contributions of the Company,
any of the Subsidiaries, and any ERISA Affiliates to each of the
Multiemployer Plans for the most recent five plan years.
(g) The execution of, and performance of the transactions contemplated
in, this Agreement will not, either alone or upon the occurrence of
subsequent events, result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any employee or former employee of the Company or any of the
Subsidiaries. The only severance agreements or severance policies
applicable to the
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Company or any of the Subsidiaries in the event of a change of control of
the Company are the agreements referred to in Section 4.12 of the Company
Disclosure Statement.
(h) There are no pending actions, claims or lawsuits which have been
asserted, instituted or, to the knowledge of the Company, threatened in
connection with any of the Plans (other than routine claims for benefits).
(i) Neither the Company nor any of the Subsidiaries maintains or
contributes to any plan or arrangement which provides or has any liability
to provide life insurance or medical or other welfare benefits to any
employee, former employee, director or former director upon his retirement
or termination of service, and neither the Company nor any of the
Subsidiaries has ever represented, promised or contracted (whether in oral
or written form) to any employee, former employee, director or former
director that such benefits would be provided.
(j) The Company and the Subsidiaries are in compliance with the
continuation coverage provisions of Section 601 et seq. of ERISA and
Section 4980B of the Code.
SECTION 4.13. Intellectual Property.
(a) Except as would not, individually and in the aggregate, have a
Material Adverse Effect on the Company, (i) the Company and each of the
Subsidiaries owns, has the right to acquire or is licensed or otherwise has
the right to use (in each case, clear of any Liens of any kind), all
Intellectual Property (as defined below) used in or necessary for the
conduct of its business as currently conducted, (ii) except for
Intellectual Property which is the subject of a patent application of which
the Company has no knowledge, no claims are pending or, to the knowledge of
the Company, threatened that the Company or any of the Subsidiaries is
infringing on or otherwise violating the rights of any person with regard
to any Intellectual Property and (iii) to the knowledge of the Company, no
person is infringing on or otherwise violating any right of the Company or
any of the Subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company or the Subsidiaries.
(b) For purposes of this Agreement, "Intellectual Property" shall mean
patents, copyrights, trademarks (registered or unregistered), service
marks, brand names, trade dress, trade names, computer software programs
and applications (including imbedded software), the goodwill associated
with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing; and trade
secrets and rights in any jurisdiction to limit the use or disclosure
thereof by any person.
SECTION 4.14 Environmental Matters. Except as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect on the Company, (i) no Hazardous Substances (as defined below) are
present at, on or under any real property currently or, to the Company's
knowledge, formerly owned, leased or operated by the Company or any
Subsidiary to an extent or in a manner or condition now requiring
investigation, response, corrective action or other action, or, to the
Company's knowledge, that could result in liability of, or costs to, the
Company or any of the Subsidiaries, under any Environmental Law (as defined
below), (ii) there is currently no civil, criminal or administrative
action, suit, demand, hearing, proceeding notice of violation,
investigation, notice or demand letter, or request for information pending
or to the knowledge of the Company, threatened, under any Environmental Law
against the Company or any of the Subsidiaries, (iii) the Company and the
Subsidiaries have not received any claims or notices alleging liability
under any Environmental Law, and the Company has no knowledge of any
circumstances that would reasonably be expected to result in such claims or
notices, (iv) the Company and each of the Subsidiaries are currently in
compliance, and within the period of applicable statutes of limitation have
complied, with all, and, to the Company's knowledge, have no liability
under any, applicable Environmental Laws, (v) the Company has not been
notified about any property or facility currently or, to the Company's
knowledge as of the date hereof, formerly owned, leased or operated by the
Company or any of the Subsidiaries or any of their respective
predecessors-in-interest, or at which Hazardous Substances of the Company
or any of the Subsidiaries have been stored, treated or disposed of is
listed or proposed for listing on the National Priorities List or
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the Comprehensive Environmental Response, Compensation and Liability
Information System, both promulgated under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or on any
comparable state or foreign list established under any Environmental Law,
(vi) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not affect the
validity or require the transfer of any Environmental Permits held by the
Company or any of the Subsidiaries, and will not require any notification,
disclosure, registration, reporting, filing, investigation, remediation or
other action under any Environmental Law, (vii) no friable asbestos is
present in, on, or at any property, facility or equipment of the Company or
any of the Subsidiaries, (viii) there are no past or present events,
conditions, activities, or practices which could reasonably be expected to
prevent the Company and the Subsidiaries' compliance with any Environmental
Law, or which would reasonably be expected to give rise to any liability of
the Company or any of the Subsidiaries under any Environmental Law, (ix) no
Lien has been asserted or recorded, or to the knowledge of the Company and
each of the Subsidiaries threatened, under any Environmental Law with
respect to any assets, facility, inventory, or property currently owned,
leased or operated by the Company or any of the Subsidiaries, (x) neither
the Company nor any of the Subsidiaries has assumed by contract or
agreement any liabilities or obligations arising under any Environmental
Law including, without limitation, any such liabilities or obligations with
respect to formerly owned, leased or operated real property or facilities,
or former divisions or subsidiaries, (xi) neither the Company nor any of
the Subsidiaries has entered into or agreed to any judgment, decree or
order by any judicial or administrative tribunal or agency and neither the
Company nor any of the Subsidiaries is subject to any judgment, decree
order or agreement, in each case relating to compliance with any
Environmental Law or requiring the Company or any of the Subsidiaries to
conduct any investigation, response, corrective or other action with
respect to any Hazardous Materials under any Environmental Law, and (xii)
there are no underground storage tanks or above storage tanks or related
piping at any real property owned, operated or leased by the Company or any
of the Subsidiaries, and any former such tanks and piping on any such
property which have been removed or closed, have been removed or closed in
accordance with applicable Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws" means
the common law and all applicable federal, state, local and foreign laws,
rules, regulations, codes, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder relating to pollution
or protection of human health and safety or the environment (including,
without limitation, ambient air, indoor air, surface water, ground water,
land surface, subsurface strata, and natural resources such as wetlands,
flora, fauna), including without limitation, laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into the
environment, or otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials. For purposes of this Agreement, the term
"Hazardous Materials" means any pollutant, contaminant, toxic, hazardous or
extremely hazardous substance, constituent or waste, or any other
constituent, waste, chemical, compound, material or substance, including
without limitation, petroleum or any petroleum product, including crude oil
or any fraction thereof, subject to regulation by or that can give rise to
liability under any Environmental Law. For purposes of this Agreement, the
term "Environmental Permit" means any permit, license, approval, consent or
other authorization provided or issued by any government or regulatory
authority pursuant to an Environmental Law.
The Company has made available to the Purchaser and Parent all records
and files, including, but not limited to, all assessments, reports,
studies, audits, analyses, tests and data in the possession or control of
the Company or any Subsidiary relating to the existence of Hazardous
Materials at facilities or properties currently or formerly owned,
operated, leased or used by the Company or any of the Subsidiaries or in
any way concerning compliance by the Company and any Subsidiaries with, or
liability of any of them, under, any Environmental Law.
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SECTION 4.15. Material Adverse Change.
(a) Since March 31, 1999, there has not been any change, or any
development that is reasonably likely to result in a change, in the
business, results of operations, assets, condition (financial or otherwise)
or prospects of the Company or any of the Subsidiaries that is materially
adverse, or is reasonably expected to be materially adverse, to the Company
and the Subsidiaries taken as a whole. Since March 31, 1999, the Company
and the Subsidiaries have conducted their businesses only in the ordinary
course of business consistent with past practices and there has not been,
directly or indirectly:
(i) any declaration, setting aside or payment of any dividend or
other distribution with respect to any capital stock of the Company;
(ii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for
shares of the Company's capital stock;
(iii) any payment or granting by the Company or any of the
Subsidiaries of any increase in compensation to any director, officer
or, other than in the ordinary course of business consistent with past
practice, employee of the Company or any of the Subsidiaries;
(iv) any granting by the Company or any of the Subsidiaries to any
such director, officer or, other than in the ordinary course of business
consistent with past practice, employee of any increase in severance or
termination pay;
(v) any entry by the Company or any of the Subsidiaries into any
employment, severance or termination agreement with any such director,
officer or, other than in the ordinary course of business consistent
with past practice;
(vi) any adoption or increase in payments to or benefits under any
profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan for or with any
employees of the Company or any of the Subsidiaries;
(vii) any change in accounting methods, principles or practices by
the Company or any of the Subsidiaries, except insofar as may have been
required by changes in GAAP; or
(viii) any agreement to do any of the things described in the
preceding clauses (i) through (vii).
SECTION 4.16. Taxes. (i) The Company and each Subsidiary have
prepared and timely filed with the appropriate governmental agencies all
Tax Returns required to be filed for any period (or portion thereof)
through the date hereof, taking into account any extension of time to file
granted to or obtained on behalf of the Company and/or such Subsidiary, and
each such Tax Return is accurate and complete; (ii) the Company and each
Subsidiary have timely paid all Taxes due and payable by them through the
date hereof and have made adequate provision (in accordance with GAAP) for
any Taxes attributable to any taxable period (or portion thereof) of the
Company and/or such Subsidiary ending on or prior to the date hereof that
are not yet due and payable; (iii) the Company and each Subsidiary have
withheld and paid in a timely manner all Taxes required to have been
withheld and paid by them; (iv) any deficiencies or assessments asserted in
writing against the Company and/or any Subsidiary by any taxing authority
through the date hereof have been paid or fully and finally settled; (v)
neither the Company nor any Subsidiary is presently under examination or
audit by any taxing authority and, to the best knowledge of the Company, no
examination or audit of the Company or any Subsidiary is pending or
threatened by any taxing authority; (vi) no extension of the period for
assessment or collection of any Tax of the Company or any Subsidiary is
currently in effect and no extension of time within which to file any Tax
Return of the Company or any Subsidiary has been requested, which Tax
Return has not since been filed; (vii) neither the Company nor any
Subsidiary has made or agreed to make or was or is required to make any
adjustment under Section 481 of the Code (or any similar provision of
state, local or foreign law); (viii) there are no Tax sharing agreements or
arrangements to which the Company or any Subsidiary is a party other than
the Tax Indemnity Agreement dated October 3, 1997; (ix) neither the Company
nor any
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Subsidiary has made an election under Section 341(f) of the Code (or any
similar provision of state, local or foreign law); (x) neither the Company
nor any Subsidiary is a party to any agreement or arrangement that provides
for the payment of any amount, or the provision of any other benefit, that
could constitute a "parachute payment" within the meaning of Section 280G
of the Code (or any similar provision of state, local or foreign law); (xi)
no stock of the Company is a "United States real property interest," within
the meaning of Section 897(c) of the Code; and (xii) the Company has
delivered to Purchaser true and complete copies of (a) all Federal, state,
local and foreign income or franchise Tax Returns filed by the Company
and/or any Subsidiary for all open years (except for those Tax Returns that
have not yet been filed) and (b) any audit reports issued by the IRS or any
other taxing authority with respect to any period that is still open.
SECTION 4.17. Labor Matters.
(a) Neither the Company nor any of the Subsidiaries is party to any
collective bargaining or other labor union contract. There are no petitions
for union representation election, labor disputes, strikes, work stoppages,
work slowdowns, "work-to-rule" actions or similar actions against the
Company or any of the Subsidiaries pending or, to the Company's knowledge,
threatened which may interfere with the respective business activities of
the Company or any of the Subsidiaries. There is no unfair labor practice
charge or complaint against the Company or any Subsidiary pending or, to
the knowledge of the Company, threatened before the national Labor
Relations Board or any similar state or foreign agency. To the knowledge of
the Company, no charges with respect to or relating to the Company or any
Subsidiary are pending before the Equal Employment Opportunity Commission
or any other Governmental Entity responsible for the prevention of unlawful
employment practices or any Governmental Entity responsible for the
enforcement of employee health and safety (including under the Occupational
Safety and Health Act and the regulations thereunder). The Company has not
received notice of the intent of any federal, state, local or foreign
agency responsible for the enforcement of labor or employment laws or
employee health and safety laws to conduct an investigation with respect to
or relating to the Company or any Subsidiary and no such investigation is
in progress. There are no complaints, lawsuits or other proceedings pending
or, to the knowledge of the Company, threatened in any forum by or on
behalf of any present or former employee of the Company or any Subsidiary,
any applicant for employment or classes of the foregoing alleging any
breach by the Company or any Subsidiary of any express or implied contract
of employment, any laws governing employment or the termination thereof or
other discriminatory, wrongful or tortious conduct in connection with the
employment relationship or any employee health and safety laws.
(b) The Company and each of the Subsidiaries has paid in full, or
fully accrued for in the financial statements of the Company, all wages,
salaries, commissions, bonuses, severance payments, vacation payments,
holiday pay, sick pay, pay in lieu of compensatory time and other
compensation due or to become due to all current and former employees of
the Company and each Subsidiary for all services performed by any of them
on or prior to the date hereof. The Company and each of its Subsidiaries
has withheld and paid in a timely manner all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee
or independent contractor. The Company and the Subsidiaries are in
compliance with all applicable federal, state, local and foreign laws,
rules and regulations relating to the employment of labor including,
without limitation, laws, rules and regulations relating to payment of
wages, employment and employment practices, terms and conditions of
employment, hours, immigration, discrimination, child labor, occupational
health and safety, collective bargaining and the payment and withholding of
taxes and other sums required by governmental authorities.
(c) Since the enactment of the Worker Adjustment and Retraining
Notification Act (the "WARN Act"), (i) neither the Company nor any
Subsidiary has effectuated a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating
units within any site of employment or facility of the Company or any
Subsidiary, (ii) there has not occurred a "mass Layoff" (as defined in the
WARN Act) affecting any site of employment or facility of the Company or
any Subsidiary; nor has the Company or any Subsidiary been affected by any
transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state, local or
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foreign law or regulation, and (iii) none of the employees of the Company
or any Subsidiary has suffered an "employment loss" (as defined in the WARN
Act) during the six-month period prior to the date of this Agreement.
SECTION 4.18. Material Contracts. There are no (i) agreements of the
Company or any of the Subsidiaries containing an unexpired covenant not to
compete or similar restriction applying to the Company or any of the
Subsidiaries, (ii) interest rate, currency or commodity hedging, swap or
similar derivative transactions to which the Company or any of the
Subsidiaries is a party, (iii) providing for payment based on revenues,
sales or profits, (iv) agreements between the Company or any of the
Subsidiaries, on the one hand, and any affiliate of the Company, on the
other hand or (iv) other contracts or amendments thereto that would be
required to be filed and have not been filed as an exhibit to a Form 10-K
filed by the Company with the SEC as of the date of this Agreement
(collectively, the "Material Contracts"). Assuming each Material Contract
constitutes a valid and binding obligation of each other party thereto,
each Material Contract is a valid and binding obligation of the Company or
the applicable Subsidiary, as the case may be. To the Company's knowledge,
each Material Contract is a valid and binding obligation of each other
party thereto, and each such Material Contract is in full force and effect
and is enforceable by the Company or the applicable Subsidiary in
accordance with its terms, except as such enforcement may be limited by the
Bankruptcy Exceptions and subject to general principles of equity (whether
considered in a proceeding at law or in equity) and any implied covenant of
good faith and fair dealing. To the best knowledge of the Company, there
are no existing defaults (or circumstances or events that, with the giving
of notice or lapse of time or both would become defaults) of the Company,
any Subsidiary or any third party under any of the Material Contracts.
SECTION 4.19. Insurance. The Company and the Subsidiaries have
obtained and maintained in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such
terms and covering such risks, as is consistent with industry practice for
companies (i) engaged in similar businesses and (ii) of at least similar
size to that of the Company and the Subsidiaries, and have maintained in
full force and effect public liability insurance, insurance against claims
for personal injury or death or property damage occurring in connection
with any of the activities of the Company or the Subsidiaries or any of the
properties owned, occupied or controlled by the Company or any of the
Subsidiaries, in such amount as reasonably deemed necessary by the Company.
Section 4.19 of the Company Disclosure Statement sets forth a complete and
correct list of all insurance policies (including a brief summary of the
nature and terms thereof and any amounts paid or payable to the Company or
any of the Subsidiaries thereunder, or, lieu thereof, a copy of the cover
page for each such policy) providing coverage in favor of the Company or
any of the Subsidiaries or any of their respective properties. Each such
policy is in full force and effect, no notice of termination, cancellation
or reservation of rights has been received with respect to any such policy,
there is no material default with respect to any provision contained in any
such policy, and there has not been any failure to give any notice or
present any claim under any such policy in a timely fashion or in the
manner or detail required by any such policy, except for any such failures
to be in full force and effect, any such terminations, cancellations,
reservations or defaults, or any such failures to give notice or present
claims which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. The Company Balance Sheet reflects adequate
reserves for any insurance programs which require (or have required) the
Company or any of the Subsidiaries to retain a portion of each loss,
including, but not limited to, deductible and self-insurance programs.
SECTION 4.20. Real Property. Section 4.20 of the Company Disclosure
Statement identifies all real property owned, leased or used by the Company
or any of the Subsidiaries in the conduct of its business. The Company and
each of the Subsidiaries has good and marketable title to all of its owned
properties and assets, free and clear of all liens (statutory or
otherwise), mortgages, chattels, pledges, privileges, security interests,
hypothecations or encumbrances, except for those disclosed in the financial
statements included in the SEC Report and except for liens for taxes not
yet due and payable and such liens or other imperfections of title, if any,
as do not materially detract from the value of or interfere with the
present use of the property affected thereby; and all leases pursuant to
which the Company or any of
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the Subsidiaries lease from others real property are valid and effective in
accordance with their respective terms except where the lack of such
validity and effectiveness would not have a Material Adverse Effect on the
Company.
SECTION 4.21. Suppliers and Customers. Except as would not,
individually and in the aggregate, have a Material Adverse Effect on the
Company, since March 31, 1999, no licensor, vendor, supplier, licensee or
customer of the Company or any of the Subsidiaries has canceled or
otherwise modified its relationship with the Company or any of the
Subsidiaries other than consistent with past practice and, to the Company's
knowledge, (i) no such person has notified the Company or any Subsidiary of
its intention to do so, and (ii) the consummation of the transactions
contemplated hereby will not adversely affect any of such relationships.
SECTION 4.22. Accounts Receivable. Subject to any reserves set forth
in the Company Balance Sheet, the accounts receivable shown in the Company
Balance Sheet arose in the ordinary course of business, were not, as of the
date of the Company Balance Sheet, subject to any material discount,
contingency, claim of offset or recoupment or counterclaim, and
represented, as of the date of the Company Balance Sheet, bona fide claims
against debtors for sales, leases, licenses and other charges. All accounts
receivable of the Company and the Subsidiaries arising after the date of
the Company Balance Sheet through the date of this Agreement arose in the
ordinary course of business and, as of the date of this Agreement, are not
subject to any material discount, contingency, claim of offset or
recoupment or counterclaim, except for normal reserves consistent with past
practice. The amount carried for doubtful accounts and allowances disclosed
in the Company Balance Sheet is believed by the Company as of the date of
this Agreement to be sufficient to provide for any losses which may be
sustained or realization of the accounts receivable shown in the Company
Balance Sheet.
SECTION 4.23. Owner/Operators, Agents and Contractors. The Company
and/or the Subsidiaries utilize, and have previously utilized,
owner/operators, contractors, agents, or other individuals in their
operations for whom the Company and/or the Subsidiaries have adopted the
position that said owner/operators, contractors, agents or other
individuals are not employees for tax reporting and withholding or any
other purpose. The procedures adopted and implemented by the Company and/or
the Subsidiaries for the utilization of said owner/operators, contractors,
agents and other individuals have been designed to comply in all material
respects with the criteria set forth in all applicable federal or state
statutes, rules, regulations, orders, opinions and other authority for the
treatment by the Company and/or the Subsidiaries of said owner/operators,
contractors, agents and other individuals as non-employees.
SECTION 4.24. Year 2000. Either (i) all Information Systems and
Equipment (as defined below) are in all material respects either Year 2000
Compliant (as defined below) or (ii) any reprogramming, remediation, or any
other corrective action, including the internal testing of all such
Information Systems and Equipment, will be completed in all material
respects by August 31, 1999. Further, to the extent that such
reprogramming/remediation and testing action is required, the cost thereof,
as well as the cost of the reasonably foreseeable consequence of failure to
become Year 2000 Compliant, to the Company and the Subsidiaries (including,
without limitation, reprogramming errors and the failure of other systems
or equipment) will not result in a Material Adverse Effect on the Company.
"Year 2000 Compliant" means that all Information Systems and Equipment
accurately process date data (including, but not limited to, calculating,
comparing and sequencing), before, during and after the year 2000, as well
as same and multi-century dates, or between the years 1999 and 2000, taking
into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing
with, other Information Systems and Equipment, shall accurately accept,
release and exchange date data, and shall in all material respects continue
to function in the same manner as it performs today and shall not otherwise
materially impair the accuracy or functionality of Information Systems and
Equipment.
"Information Systems and Equipment" means all computer hardware,
firmware and software, as well as other information processing systems, or
any equipment containing embedded microchips,
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whether directly owned, licensed, leased, operated or otherwise controlled
by the Company or any of the Subsidiaries, including through third-party
service providers, and which, in whole or in part, are used, operated,
relied upon, or integral to, the Company's or any of the Subsidiaries'
conduct of their business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser, jointly and severally, represent and warrant to
the Company as follows:
SECTION 5.01. Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of New Jersey. Each of Parent and the Purchaser has the requisite
corporate power and authority to own, operate or lease its properties and
to carry on its business as it is now being conducted, and is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good
standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not have a Material Adverse Effect on Parent (as defined below). The
term "Material Adverse Effect on Parent" means any change or prospective
change in, or effect or prospective effect on, the business, results of
operations, condition (financial or otherwise) of prospects of Parent or
any of its subsidiaries that is or could reasonably be expected to be
materially adverse to Parent and its subsidiaries taken as a whole.
SECTION 5.02. Authority Relative to this Agreement. Each of Parent
and the Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement and the Tender and Voting Agreement and
to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Tender and Voting
Agreement by Parent and the Purchaser and the consummation by Parent and
the Purchaser of the transactions contemplated hereby and thereby have been
duly and validly authorized and approved by the respective Boards of
Directors of Parent and the Purchaser and no other corporate proceedings on
the part of Parent or the Purchaser are necessary to authorize or approve
this Agreement and the Tender and Voting Agreement or to consummate the
transactions contemplated hereby and thereby. This Agreement and the Tender
and Voting Agreement have been duly executed and delivered by each of
Parent and the Purchaser and, assuming the due and valid authorization,
execution and delivery by the Company (and, with respect to the Tender and
Voting Agreement, the other parties thereto), constitute valid and binding
obligations of each of Parent and the Purchaser enforceable against each of
them in accordance with its terms, except that such enforceability (i) may
be limited by the Bankruptcy Exceptions and (ii) is subject to general
principles of equity.
SECTION 5.03. No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this Agreement or the Tender
and Voting Agreement by Parent and the Purchaser, the consummation by
Parent and the Purchaser of the transactions contemplated hereby or thereby
or compliance by Parent and the Purchaser with any of the provisions hereof
or thereof will require any Consent of any Governmental Entity or person
who is not a Governmental Entity, except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a
certificate of merger pursuant to the New Jersey Act, (iii) applicable
state takeover and environmental statutes and (iv) compliance with the HSR
Act.
(b) Except as set forth in clause (a) of this Section 5.03, none of
the execution and delivery of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the transactions
contemplated hereby or compliance by Parent or the Purchaser with any of
the provisions hereof will (i) conflict with or violate the organizational
documents of Parent or the Purchaser, (ii) conflict with or violate any
statute, ordinance, rule, regulation, order, judgment or decree applicable
to Parent or the Purchaser, or any of their subsidiaries, or by which any
of them or any of their respective properties or
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assets may be bound or affected, or (iii) result in a Violation pursuant to
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or the
Purchaser, or any of their respective subsidiaries, is a party or by which
any of their respective properties or assets may be bound or affected.
SECTION 5.04. Information. None of the information supplied or to be
supplied by Parent and the Purchaser in writing specifically for inclusion
in (i) the Offer Documents, (ii) the Schedule 14D-9 (including the
information included therein in order to comply with Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder), (iii) the Statement or (iv) the
Other Filings will, at the respective times filed with the SEC or such
other Governmental Entity and, in addition, in the case of the Statement,
at the date it or any amendment or supplement is mailed to Shareholders, at
the time of the Special Meeting and at the Effective Time, 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
made therein, in light of the circumstances under which they were made, not
misleading.
SECTION 5.05. Financing. Parent has available sufficient cash in
immediately available funds, together with available credit lines, to pay
or to cause the Purchaser to pay the Offer Price with respect to all Shares
permitted to be outstanding pursuant to this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01. Conduct of Business of the Company. Except as required by
this Agreement or with the prior written consent of Parent, during the period
from the date of this Agreement to the Effective Time, the Company will, and
will cause each of the Subsidiaries to, conduct its operations only in the
ordinary course of business consistent with past practice and will use its
reasonable best efforts, and will cause each of the Subsidiaries to use its
reasonable best efforts, to preserve intact the business organization of the
Company and each of the Subsidiaries, to keep available the services of its and
their present officers and employees, and to preserve the good will of those
having business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise required or permitted by this Agreement or as
set forth in Section 6.01 of the Company Disclosure Statement, the Company will
not, and will not permit any of the Subsidiaries to, prior to the Effective
Time, without the prior written consent of Parent:
(a) adopt any amendment to its certificate of incorporation or by laws
or comparable organizational documents;
(b) except for issuances of capital stock of the Subsidiaries to the
Company or a wholly-owned Subsidiary, issue, reissue or sell, or authorize
the issuance, reissuance or sale of (i) additional shares of capital stock
of any class, or securities convertible into capital stock of any class, or
any rights, warrants or options to acquire any convertible securities or
capital stock, other than the issuance of Common Shares pursuant to: (A)
the exercise of Options outstanding on the date hereof pursuant to the
terms thereof as in effect on the date hereof or as modified as
contemplated by Section 2.10, or (B) the conversion of Class A Common
Shares, or (ii) any other securities in respect of, in lieu of, or in
substitution for, Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividend or other distribution
(whether in cash, capital stock, rights thereto or other assets, securities
or property or any combination thereof) in respect of any class or series
of its capital stock other than between any of the Company and any of the
wholly-owned Subsidiaries;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire,
any shares of its capital stock, or any of its other securities;
(e) except for (A) increases in salary, wages and benefits of
non-executive officers or employees of the Company or the Subsidiaries in
the ordinary course of business consistent with past practice, (B)
increases in salary, wages and benefits granted to officers and employees
of the Company or the Subsidiaries in conjunction with new hires,
promotions or other changes in job status in the ordinary
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course of business consistent with past practice, or (C) increases in
salary, wages and benefits to employees of the Company pursuant to
collective bargaining agreements entered into in the ordinary course of
business consistent with past practice, (i) increase the compensation or
fringe benefits payable or to become payable to its directors, officers or
employees (whether from the Company or any of the Subsidiaries), or (ii)
pay any benefit not required by any existing plan or arrangement, or (iii)
grant any severance or termination pay (except pursuant to existing
agreements, plans or policies and as required by such agreements, plans or
polices), or (iv) enter into any employment or severance agreement with,
any director, officer or other employee of the Company or any of the
Subsidiaries, or (v) establish, adopt, enter into, or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance or other employee benefit
plan, agreement, trust, fund, policy or arrangement for the benefit or
welfare of any directors, officers or current or former employees, except
in each case to the extent required by applicable law or regulation;
(f) acquire, sell, lease, mortgage, encumber or dispose of any assets
(other than inventory) or securities with a value, individually or in the
aggregate, in excess of $20.0 million, in the case of rolling stock, or
$3.0 million in the case of other assets or securities, or enter into any
commitment to do any of the foregoing or enter into any material commitment
or transaction outside the ordinary course of business consistent with past
practice other than transactions between a wholly-owned Subsidiary and the
Company or another wholly-owned Subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term debt or incur or assume
any short-term debt, except that the Company and the Subsidiaries may
incur, assume or pre-pay debt in the ordinary course of business consistent
with past practice under existing lines of credit, (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except
in the ordinary course of business consistent with past practice, or (iii)
make any loans, advances or capital contributions to, or investments in,
any other person except in the ordinary course of business consistent with
past practice and except for loans, advances, capital contributions or
investments between any wholly-owned Subsidiary and the Company or another
wholly-owned Subsidiary;
(h) modify, amend or terminate any of the Material Contracts or waive,
release or assign any rights or claims thereunder, except in the ordinary
course of business and consistent with past practice;
(i) change any of the accounting methods used by it unless required by
GAAP, make any material Tax election or change or revoke any material Tax
election already made, adopt, request or consent to any new material Tax
accounting method, change any material Tax accounting method unless
required by applicable law, enter into any material closing agreement,
settle any material Tax claim or assessment or consent to any material Tax
claim or assessment or any waiver of the statute of limitations for any
such claim or assessment;
(j) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of the Subsidiaries (other than the
Merger);
(k) pay, discharge or satisfy, or fail to pay, discharge or satisfy,
any claim, liability or obligation (contingent or otherwise), other than in
the ordinary course of business and consistent with past practice;
(l) take, or agree to commit to take, any action that would or is
reasonably likely to result in any of the conditions to the Merger set
forth in Article VII or any of the conditions to the Offer not being
satisfied, or would make any representation or warranty of the Company
contained herein inaccurate in any material respect at, or as of any time
prior to, the Effective Time, or that would materially impair the ability
of the Company to consummate the Merger in accordance with the terms
thereof or materially delay such consummation; or
(m) enter into an agreement, contract, commitment or arrangement to do
any of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
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SECTION 6.02. Access to Information. From the date hereof until the
Effective Time, the Company will, and will cause the Subsidiaries, and each of
its and their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to, provide
Parent, the Purchaser and any person providing financing for the Offer or the
Merger ("Financing Sources") and their respective officers, employees, counsel,
advisors, representatives (collectively, the "Parent Representatives")
reasonable access, during normal business hours and upon reasonable notice, to
the officers and employees, offices and other facilities and to the books and
records of the Company and the Subsidiaries, as will permit Parent and the
Purchaser to make inspections of such as either of them may reasonably require
during normal business hours and will cause the Company Representatives and the
Company's Subsidiaries to furnish Parent, the Purchaser and the Parent
Representatives to the extent available with such other information with respect
to the business, operations and prospects of the Company and the Subsidiaries
during normal business hours as Parent and the Purchaser may from time to time
reasonably request. Unless otherwise required by law, Parent and the Purchaser
will, and will cause the Parent Representatives to, hold any such information in
confidence until such time as such information otherwise becomes publicly
available through no wrongful act of Parent, the Purchaser or the Parent
Representatives. The Company agrees to make reasonably available its executive
officers for presentations to any Financing Sources. In the event of termination
of this Agreement for any reason, Parent and the Purchaser will, and will cause
the Parent Representatives to, return to the Company all copies of written
information furnished by the Company or any of the Company Representatives to
Parent or the Purchaser or the Parent Representatives and destroy all memoranda,
notes and other writings prepared by Parent, the Purchaser or the Parent
Representatives based upon or including the information furnished by the Company
or any of the Company Representatives to Parent or the Purchaser or the Parent
Representatives (and Parent will certify to the Company that such destruction
has occurred).
SECTION 6.03. Reasonable Best Efforts. Subject to the terms and
conditions herein provided and to applicable legal requirements, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, and to assist and cooperate
with the other parties hereto in doing, as promptly as practicable, all things
necessary, proper or advisable under applicable laws and regulations to ensure
that the conditions set forth in Annex I and Article VII are satisfied and to
consummate and make effective the transactions contemplated by the Offer and
this Agreement.
In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Parent or the Purchaser or any of
their respective subsidiaries, should be discovered by the Company or Parent, as
the case may be, and which should be set forth in an amendment to the Offer
Documents or Schedule 14D-9, the discovering party will promptly inform the
other party of such event or circumstance. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, including the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
necessary action.
SECTION 6.04. Public Announcements. So long as this Agreement is in
effect, Parent, the Purchaser and the Company agree to use reasonable efforts to
consult with each other before issuing any press release or otherwise making any
public statement with respect to the transactions contemplated by this
Agreement.
SECTION 6.05. Indemnification.
(a) Parent agrees that all rights to indemnification now existing in favor
of any director or officer of the Company as provided in the Company's Restated
Certificate of Incorporation or by laws, in an agreement between any such person
and the Company, or otherwise in effect on the date hereof shall survive the
Merger and shall continue in full force and effect indefinitely after the
Effective Time. Parent also agrees to indemnify all current and former directors
and officers of the Company ("Indemnified Parties") to the fullest extent
permitted by applicable law with respect to all acts and omissions arising out
of such individuals' services as officers or directors of the Company or any of
the Subsidiaries or as trustees or fiduciaries of any plan for the benefit of
employees occurring prior to the Effective Time. Without limitation of the
foregoing, in the event any such Indemnified Party is or becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter, including, without limitation, the transactions contemplated by this
Agreement,
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occurring prior to, and including, the Effective Time, Parent will pay as
incurred such Indemnified Party's reasonable legal and other expenses of counsel
selected by the Indemnified Party and reasonably acceptable to Parent (including
the cost of any investigation, preparation and settlement) incurred in
connection therewith; provided, however, that Parent shall not, in connection
with any one such action or proceeding or separate but substantially similar
actions or proceedings arising out of the same general allegations be liable for
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all Indemnified Parties. Parent shall be
entitled to participate in the defense of any such action or proceeding, and
counsel selected by the Indemnified Party shall, to the extent consistent with
their professional responsibilities, cooperate with Parent and any counsel
designated by Parent. Parent shall pay all reasonable expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.05.
(b) Parent agrees that the Company and, from and after the Effective Time,
the Surviving Corporation shall cause to be maintained in effect for not less
than six years from the Effective Time the current policies of the directors'
and officers' liability insurance maintained by the Company; provided that the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous; and
provided that such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
provided, further, that the Surviving Corporation shall not be required to pay
an annual premium in excess of 200% of the last annual premium paid by the
Company prior to the date hereof and if the Surviving Corporation is unable to
obtain the insurance required by this Section 6.05(b) it shall obtain as much
comparable insurance as possible for an annual premium equal to such maximum
amount.
SECTION 6.06. No Solicitation.
(a) The Company represents and warrants to, and covenants and agrees with,
Parent and the Purchaser that neither the Company nor any of the Subsidiaries
has any agreement, arrangement or understanding with any potential acquiror
that, directly or indirectly, would be violated, or require any payments, by
reason of the execution, delivery and/or consummation of this Agreement. The
Company shall, and shall cause the Subsidiaries and its and their officers,
directors, employees, investment bankers, attorneys and other agents and
representatives to, immediately cease any existing discussions or negotiations
with any person other than Parent or the Purchaser (a "Third Party") heretofore
conducted with respect to any Acquisition Transaction (as hereinafter defined).
The Company and the Board of Directors of the Company shall not, and the Company
shall cause the Subsidiaries and its and their respective officers, directors,
employees, investment bankers, attorneys and other agents and representatives
not to, directly or indirectly, (w) withdraw or modify (or resolve to withdraw
or modify) in a manner adverse to Parent the approval or recommendation of the
Board of Directors of the Company of this Agreement or any of the transactions
contemplated hereby or recommend (or resolve to recommend) an Acquisition
Transaction with a Third Party to the Shareholders, (x) solicit, initiate,
continue, facilitate or encourage (including by way of furnishing or disclosing
non-public information) any inquiries, proposals or offers from any Third Party
with respect to, or that could reasonably be expected to lead to, any
acquisition or purchase of a material portion of the assets or business of, or a
15% or more voting equity interest in (including by way of a tender offer), or
any amalgamation, merger, consolidation or business combination with, or any
recapitalization or restructuring, or any similar transaction involving, the
Company or any of the Subsidiaries (the foregoing being referred to collectively
as an "Acquisition Transaction"), or (y) negotiate, explore or otherwise
communicate in any way with any Third Party with respect to any Acquisition
Transaction or enter into, approve or recommend any agreement, arrangement or
understanding requiring the Company to abandon, terminate or fail to consummate
the Offer and/or the Merger or any other transaction contemplated hereby.
Notwithstanding anything to the contrary in the foregoing, the Company may,
prior to the purchase of Shares pursuant to the Offer, in response to an
unsolicited written proposal with respect to an Acquisition Transaction
involving the acquisition of all of the Shares (or all or substantially all of
the assets of the Company and the Subsidiaries) from a Third Party or in
response to an unsolicited all cash tender offer for any and all Shares (i)
furnish or disclose non-public information to such Third Party, (ii) negotiate,
discuss or otherwise communicate with such Third Party and (iii) in the case of
an unsolicited all cash tender offer for any and all Shares, withdraw or modify
(or resolve to
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withdraw or modify) in a manner adverse to Parent the approval or recommendation
of this Agreement and the transactions contemplated hereby or recommend (or
resolve to recommend) an Acquisition Transaction with a Third Party to
Shareholders, in each case only if the Board of Directors of the Company
determines in good faith: (1) (after consultation with Janney Montgomery Scott
Inc.) that such proposal or such unsolicited all cash tender offer, as the case
may be, is more favorable to the Shareholders from a financial point of view
than the transaction contemplated hereby (including any adjustment to the terms
and conditions proposed by Parent and the Purchaser in response to such proposal
or such unsolicited all cash tender offer, as the case may be), (2) (after
consultation with Janney Montgomery Scott Inc.) that sufficient financing is
obtainable with respect to such proposal or such unsolicited all cash tender
offer, as the case may be, such that the proposed Acquisition Transaction will
be consummated without material delay and (3) that the proposed Acquisition
Transaction (including, if applicable, such an unsolicited all cash tender
offer) is not subject to any regulatory approvals that could reasonably be
expected to prevent or materially delay its consummation (a proposal with
respect to an Acquisition Transaction (including, if applicable, such an
unsolicited all cash tender offer) meeting the requirements of clauses (1)
through (3) is referred to herein as a "Superior Proposal"). Prior to furnishing
or disclosing any non-public information to, or entering into negotiations,
discussions or other communications with, such Third Party, the Company shall
receive from such Third Party an executed confidentiality agreement with terms
no less favorable in the aggregate to the Company than those contained in the
Confidentiality Agreement between the Company and Parent (the "Confidentiality
Agreement"), but which confidentiality agreement shall not provide for any
exclusive right to negotiate with the Company or any payments by the Company.
The Company shall provide to Parent copies of all such non-public information
delivered to such Third Party concurrently with such delivery. Notwithstanding
the foregoing, the Company and the Board of Directors of the Company shall not,
and the Company shall cause its affiliates not to, withdraw or modify (or
resolve to withdraw or modify) in a manner adverse to Parent the approval or
recommendation of this Agreement or any of the transactions contemplated hereby,
or recommend (or resolve to recommend) an Acquisition Transaction with a Third
Party to the Shareholders or enter into a definitive agreement with respect to a
Superior Proposal unless (w) the Company has given Parent three business days'
notice of the intention of the Board of Directors to withdraw or modify (or
resolve to withdraw or modify) in a manner adverse to Parent the approval or
recommendation of this Agreement or any of the transactions contemplated hereby,
or recommend (or resolve to recommend) an Acquisition Transaction with a Third
Party to the Shareholders or the intention of the Company to enter into such
definitive agreement, as the case may be, (x) if Parent makes a counter-proposal
within such three business day period, the Board of Directors of the Company
shall have determined, in light of any such counter-proposal, that the Third
Party Acquisition Transaction proposal is still a Superior Proposal, (y) the
Company concurrently terminates this Agreement in accordance with the terms
hereof and pays any Termination Fee (as defined) required under Section 8.03(b)
and agrees to pay any other amounts required under such Section 8.03(b), and (z)
with respect to a definitive agreement, such agreement permits the Company to
terminate it if it receives a Superior Proposal, such termination and related
provisions to be on terms no less favorable to the Company, including as to fees
and reimbursement of expenses, as those contained herein.
(b) The Company shall promptly (but in any event within one day of the
Company becoming aware of same) advise Parent of the receipt by the Company, any
of the Subsidiaries or any of its or their bankers, attorneys or other agents or
representatives of any inquiries or proposals relating to an Acquisition
Transaction and any actions taken pursuant to Section 6.08(a). The Company shall
promptly (but in any event within one day of the Company becoming aware of same)
provide Parent with a copy of any such inquiry or proposal in writing and a
written statement with respect to any such inquiries or proposals not in
writing, which statement shall include the identity of the parties making such
inquiries or proposal and the material terms thereof. The Company shall, from
time to time, promptly (but in any event within one day of the Company becoming
aware of same) inform Parent of the status and content of and developments with
respect to any discussions regarding any Acquisition Transaction with a Third
Party, including (i) the calling of meetings of the Board of Directors of the
Company to take action with respect to such Acquisition Transaction, (ii) the
execution of any letters of intent, memoranda of understanding or similar
non-binding agreements with respect to such Acquisition Transaction, (iii) the
waiver of any standstill agreement to which the Company is or becomes a party,
(iv) the determination by the Board of Directors of the Company to recommend to
the Shareholders
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that they approve or accept a Superior Proposal or withdraw or modify in a
manner adverse to the Parent its approval or recommendation of this Agreement or
the transactions contemplated hereby, (v) the determination by the Company to
publicly disclose receipt of a Superior Proposal and (vi) the waiver by the
Company of any confidentiality agreement with a person proposing a Superior
Proposal. For the avoidance of doubt, the Company agrees that it will not enter
into any definitive agreement with respect to a Superior Proposal unless and
until Parent has been given notice of the identity of the parties making such
Superior Proposal, the terms thereof and developments referred to in the
preceding sentence and the intent to enter into such a definitive agreement at
least three business days prior to the entering into such agreement.
SECTION 6.07. Notification of Certain Matters. Parent and the Company
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time or (ii)
to cause any covenant, condition or agreement hereunder not to be complied with
or satisfied in all material respects and (b) any failure of the Company or
Parent, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder in any material
respect; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder.
SECTION 6.08. State Takeover Laws. The Company shall, upon the request of
the Purchaser, take all reasonable steps to assist in any challenge by the
Purchaser to the validity or applicability to the transactions contemplated by
this Agreement, including the Offer and the Merger, and the Tender and Voting
Agreement of any state takeover law. The Board of Directors of the Company shall
not amend, modify or rescind the approval of any purchase of Shares in the Offer
for purposes of Section 14A:10A-1 of the New Jersey Act.
SECTION 6.09. Employee Matters.
(a) On and after the Effective Time, Parent shall cause the Surviving
Corporation and its subsidiaries to promptly pay or provide when due all
compensation and benefits earned through or prior to the Effective Time as
provided pursuant to the terms of any Company Plans disclosed in the Company
Disclosure Statement for all employees (and former employees) and directors (and
former directors) of the Company and its subsidiaries. Parent and the Company
agree that the Surviving Corporation and its subsidiaries shall pay promptly or
provide when due all compensation and benefits required to be paid pursuant to
the terms of any individual agreement with any employee, former employee,
director or former director in effect as of the date hereof and disclosed in the
Company Disclosure Schedule.
(b) If employees of the Surviving Corporation and its subsidiaries become
eligible to participate in a medical, dental or health plan of Parent or its
subsidiaries, Parent shall cause such plan to (i) waive any preexisting
condition limitations for conditions under the applicable medical, health or
dental plans of the Company and its subsidiaries (other than any limitation
already in effect with respect to the applicable employee that has not been
satisfied as of the Effective Time under the applicable Company Plan) and (ii)
honor any deductible and out-of-pocket expenses incurred by the employees and
their beneficiaries under such plans during the portion of the calendar year
prior to such participation.
(c) Nothing in this Section 6.09 shall require the continued employment of
any person or prevent the Company and/or the Surviving Corporation and their
subsidiaries from taking any action or refraining from taking any action that
the Company and its subsidiaries prior to the Effective Time, could have taken
or refrained from taking.
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ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of Parent, the Purchaser and the Company to
consummate the Merger are subject to the satisfaction or waiver in writing by
each party hereto, at or before the Effective Time, of each of the following
conditions:
(a) Purchase of Shares. The Purchaser shall have accepted for payment
and paid for Shares pursuant to the Offer in accordance with the terms
hereof.
(b) Shareholder Approval. The Shareholders shall have duly approved
and adopted this Agreement and the transactions contemplated by this
Agreement, to the extent required under applicable law.
(c) Injunctions; Illegality. The consummation of the Merger shall not
be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any
Governmental Entity and there shall not have been any statute, rule or
regulation enacted, promulgated or deemed applicable to the Merger by any
Governmental Entity which prevents the consummation of the Merger.
(d) Antitrust. The expiration or termination of all applicable
waiting periods relating to the Merger under the HSR Act and any applicable
foreign antitrust laws, if applicable, shall have occurred.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, whether or not approval thereof by the Shareholders has been obtained:
(a) by the mutual written consent of Parent and the Company;
(b) by the Company if the Company is not in material breach of any of
its representations, warranties, covenants or agreements contained in this
Agreement and if (i) the Purchaser fails to commence the Offer as provided
in Section 1.01 hereof, (ii) the Purchaser shall not have accepted for
payment and paid for Shares pursuant to the Offer in accordance with the
terms thereof on or before August 31, 1999 (provided that if the only
unsatisfied condition to the Offer at August 31, 1999 is the expiration or
termination of all applicable waiting periods relating to the Offer under
the HSR Act, termination pursuant to this clause (ii) may not occur until
after October 31, 1999), (iii) the Purchaser fails to purchase validly
tendered Shares in violation of the terms of the Offer or this Agreement or
(iv) the Merger shall not have occurred on or before December 31, 1999;
(c) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms without any Shares being purchased thereunder;
provided that Parent may terminate this Agreement pursuant to this Section
8.01(c) only if Parent's or the Purchaser's termination or withdrawal of
the Offer is not in violation of the terms of this Agreement or the Offer;
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued, enacted, entered, promulgated or enforced any order,
judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Offer or the Merger and
such order, judgment, decree, injunction, ruling or other action shall have
become final and nonappealable;
(e) by the Company if prior to the purchase by the Purchaser of any
Shares in the Offer (i) there shall have occurred, on the part of Parent or
the Purchaser, a material breach of any representation or warranty,
covenant or agreement contained in this Agreement which is not curable or,
if curable, is not cured within ten business days after written notice of
such breach is given by the Company to the party committing the breach or
(ii) (A) (x) the Company proposes entering into a definitive agreement with
respect to a Superior Proposal or (y) the Board of Directors of the Company
recommends a Third Party
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Acquisition Transaction which is an unsolicited all cash tender offer for
any and all Shares and which constitutes a Superior Proposal, (B) the
Company gives Parent the three business days' notice as required pursuant
to the last sentence of Section 6.06(a), (C) if a counter-proposal was made
by Parent within such three business day period, the Board of Directors of
the Company has determined, in light of the counter-proposal, that the
Third Party Acquisition Transaction (or proposal therefor) is still a
Superior Proposal as required by the last sentence of Section 6.06(a) and
(D) the Company pays any Termination Fee and any other amounts required
under Section 8.03(b);
(f) by Parent if prior to the purchase by the Purchaser of any Shares
in the Offer (i) there shall have occurred, on the part of the Company, a
material breach of any representation, warranty, covenant or agreement
contained in this Agreement which is not curable or, if curable, is not
cured within ten business days after written notice of such breach is given
by Parent to the Company, (ii) there shall have occurred, on the part of
any shareholder party to the Tender and Voting Agreement, a material breach
of any representation, warranty, covenant or agreement contained in the
Tender and Voting Agreement which is not curable or, if curable, is not
cured within five business days after written notice of such breach is
given by Parent to the applicable shareholder or (iii) if the Board of
Directors of the Company or committee thereof shall have withdrawn or
modified (or shall have resolved to withdraw or modify) in a manner adverse
to Parent, its approval or recommendation of this Agreement or any of the
transactions contemplated hereby or shall have recommended (or resolved to
recommend) an Acquisition Transaction (other than the Offer and Merger) to
the Shareholders; or
(g) by Parent if it is not in material breach of its obligations
hereunder or under the Offer and no Shares shall have been purchased
pursuant to the Offer on or before August 31, 1999 (provided that if the
only unsatisfied condition to the Offer at August 31, 1999 is the
expiration or termination of all applicable waiting periods relating to the
Offer under the HSR Act, termination pursuant to this clause (g) may not
occur until October 31, 1999).
SECTION 8.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the provisions of this Section
8.02, Section 8.03 and the last sentence of Section 6.08, which shall survive
any such termination. Nothing contained in this Section 8.02 shall relieve any
party from liability for any breach of this Agreement or the Confidentiality
Agreement.
SECTION 8.03. Fees and Expenses.
(a) Whether or not the Merger is consummated, all costs and expenses
incurred in connection with the Offer, this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
(b) In the event this Agreement is terminated pursuant to Section
8.01(e)(ii) or 8.01(f)(iii), then the Company shall (i) promptly reimburse
Parent for the documented fees and expenses of Parent and the Purchaser related
to this Agreement and the transactions contemplated hereby not to exceed $1.0
million and (ii) promptly pay Parent a Termination Fee of $4.75 million, in each
case by wire transfer of same day funds to an account designated by Parent as a
condition of such termination. In the event this Agreement is terminated
pursuant to Section 8.01(f)(i) or 8.01(f)(ii), the Company shall promptly
reimburse Parent for the documented fees and expenses of Parent and the
Purchaser related to this Agreement and the transactions contemplated hereby not
to exceed $1.0 million by wire transfer of same day funds to an account
designated by Parent.
(c) In the event that (i) prior to the termination of this Agreement, a
Third Party shall have made a proposal regarding an Acquisition Transaction and
(ii) thereafter (x) such proposal is publicly disclosed and August 31, 1999
occurs (or, if the only unsatisfied condition to the Offer at August 31, 1999 is
the expiration or termination of all applicable waiting periods relating to the
Offer under the HSR Act, October 31, 1999 occurs) without the Minimum Condition
being satisfied (other than as a result of a material breach hereof by Parent or
the Purchaser that has not been cured within the time period set forth in
Article VIII of this
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Agreement) or (y) the Agreement is terminated (A) by the Company pursuant to
Section 8.01(b)(ii) or 8.01(c) or (B) by Parent pursuant to 8.01(f)(i),
8.01(f)(ii) or 8.01(g) and, in each case, at the time the event giving rise to
the right to so terminate this Agreement, such Third Party Acquisition
Transaction proposal shall not have been withdrawn, and (iii) prior to twelve
months after any termination of this Agreement the Company shall have entered
into a definitive agreement for a Third Party Acquisition Transaction which
constitutes a Superior Proposal, or a Third Party Acquisition Transaction which
constitutes a Superior Proposal shall have been consummated, then the Company
shall promptly, but in no event later than immediately prior to, and as a
condition of, entering into such definitive agreement, or, if there is no such
definitive agreement then immediately upon consummation of the Acquisition
Transaction, reimburse Parent for the documented fees and expenses of Parent and
the Purchaser relating to this Agreement and the transactions contemplated
hereby (to the extent not previously reimbursed and without duplication of any
amounts reimbursed pursuant to Section 8.03(b))not to exceed $1.0 million and
pay Parent a Termination Fee of $4.75 million (it being understood that only one
Termination Fee shall be payable pursuant to Section 8.03(b) and 8.03(c) in the
aggregate), which amounts shall be payable by wire transfer of same day funds to
an account designated by Parent.
(d) The Company acknowledges that the agreements contained in Section
8.03(b) and (c) are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Parent and Purchaser would not
enter into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to Section 8.03(b) and (c), and, in order to obtain such
payment, Parent or the Purchaser commences a suit that results in a judgment
against the Company for the fee and expenses set forth in Sections 8.03(b) and
(c), the Company shall pay to Parent its costs and expenses (including
reasonable attorneys' fees) in connection with such suit.
SECTION 8.04. Amendment. Subject to Section 1.03(c), this Agreement may
be amended by the Company, Parent and the Purchaser at any time before or after
any approval of this Agreement by the Shareholders but, after any such approval,
no amendment shall be made which decreases the Merger Price or which adversely
affects the rights of the Shareholders hereunder without the approval of such
Shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
SECTION 8.05. Extension; Waiver. Subject to Section 1.03(c), at any time
prior to the Effective Time, the parties hereto may (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein by any other party or in any document, certificate or writing delivered
pursuant hereto by any other party or (iii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time.
SECTION 9.02. Entire Agreement; Assignment.
(a) This Agreement (including the documents and the instruments referred to
herein), the Tender and Voting Agreement and the Confidentiality Agreement
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or obligations
hereunder will be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of the other party. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
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SECTION 9.03. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.04. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile (with
receipt confirmed) to the respective parties as follows:
If to Parent or the Purchaser:
Yellow Corporation
10990 Roe Avenue
Overland Park, KS 66207
Attention: William F. Martin, Jr.,
General Counsel
Fax: (913) 696-6116
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: W. Leslie Duffy, Esq.
Fax: 212-269-5420
If to the Company:
Jevic Transportation, Inc.
600 Creek Road
Delanco, NJ 08075
Attention: Harry J. Muhlschlegel
Chief Executive Officer and
Chairman of the Board
Fax: (609) 764-7237
with a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103
Attention: Barry M. Abelson
Fax: 215-981-4750
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.05. Governing Law; Jurisdiction. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New
Jersey, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(b) In addition, each of the parties hereto agrees that it will not bring
any action relating to this Agreement or any of the transactions contemplated
hereby in any court other than a federal or state court sitting in the State of
New Jersey.
SECTION 9.06. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.07. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
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SECTION 9.08. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and, except with respect
to Sections 2.09, 3.02 and 6.05, nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.09. Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any person, shall mean any
other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied 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, by contract or otherwise;
(b) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act);
(c) the term "subsidiary" or "subsidiaries", means, with respect to
Parent, the Company, or any other person, any corporation, partnership,
joint venture or other legal entity of which Parent, the Company or such
other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of
the vote for the election of the board of directors or other governing body
of such corporation or other legal entity;
(d) The term "Tax" or "Taxes" means (i) all federal, state, local or
foreign taxes, charges, fees, imposts, levies or other assessments,
including, without limitation, all net income, alternative minimum, gross
receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance,
stamp, occupation, property and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to tax or other additional amounts imposed by
any taxing authority in connection with any item described in clause (i)
and (iii) all transferee, successor, joint and several or contractual
liability (including, without limitation, liability pursuant to Treas. Reg.
sec. 1.1502-6 (or any similar state, local or foreign provision)) in
respect of any items described in clause (i) or (ii);
(e) The term "Tax Return" means all returns, declarations, reports,
estimates, information returns and statements required to be filed in
respect of any Taxes; and
(f) the term "Termination Fee" means a fee payable by the Company to
Parent pursuant to Section 8.03(b) or Section 8.03(c) of this Agreement.
SECTION 9.10. Remedies. Except as set forth below, the parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, and, accordingly, it is agreed that
the parties shall be entitled to an injunction or injunctions to prevent such
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity. In the event of a termination of this Agreement pursuant to which a
Termination Fee is paid pursuant to Section 8.03 hereof, the receipt of such
Termination Fee shall serve as payment of liquidated damages with respect to any
breach of this Agreement by the party paying such Termination Fee giving rise to
such termination, and receipt of such Termination Fee shall be the sole and
exclusive remedy (at law or in equity) with respect to any such breach.
29
<PAGE> 33
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
YELLOW CORPORATION
By: /s/ A. MAURICE MYERS
------------------------------------
Name: A. Maurice Myers
Title: President and Chief Executive
Officer
JPF ACQUISITION CORP.
By: /s/ WILLIAM F. MARTIN, JR.
------------------------------------
Name: William F. Martin, Jr.
Title: Vice President
JEVIC TRANSPORTATION, INC.
By: /s/ HARRY J. MUHLSCHLEGEL
------------------------------------
Name: Harry J. Muhlschlegel
Title: Chairman and Chief Executive
Officer
30
<PAGE> 34
ANNEX I
Conditions to the Offer. Notwithstanding any other provisions of the
Offer, in addition to (and not in limitation of) the Purchaser's right to extend
and amend the Offer at any time in its sole discretion (subject to the terms of
the Merger Agreement), the Purchaser shall not be required to accept for payment
or, subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act, pay for, and may delay the acceptance for
payment of or, subject to the regulations referred to above, the payment for,
any tendered Shares, and may terminate or amend the Offer, if (i) there are not
validly tendered and not withdrawn prior to the expiration date for the Offer
(the "Expiration Date") that number of Shares which represent at least 51% of
the outstanding Common Shares on a fully diluted basis (including Common Shares
issuable upon conversion of Class A Common Shares) on the date of purchase (the
"Minimum Condition"), (ii) all of the outstanding Class A Shares are not validly
tendered and not withdrawn prior to the Expiration Date, (iii) any applicable
waiting periods under the HSR Act or any applicable foreign antitrust statute
shall not have expired or (iv) at any time on or after June 6, 1999 and before
the expiration of the Offer, any of the following events shall occur:
(a) any law, statute, rule, regulation, ordinance or injunction is
enacted, entered, enforced, promulgated or deemed applicable to the Offer
or the Merger, or any other action is taken by any Governmental Entity that
would reasonably be expected to, directly or indirectly, (i) make illegal
or otherwise directly or indirectly restrain or prohibit the acquisition by
Parent or Purchaser of any Shares under the Offer or the making or
consummation of the Offer or the Merger, the performance by the Company of
any of its material obligations under the Merger Agreement or the
consummation of any purchase of Shares contemplated by the Merger
Agreement, (ii) prohibit or limit the ownership or operation by the
Company, Parent or any of their respective subsidiaries of any portion of
the business or assets of the Company or any Subsidiary or of Parent or any
of its subsidiaries or compel the Company or Parent to dispose of or hold
separate any portion of the business or assets of the Company or any
Subsidiary or of Parent or any of its subsidiaries as a result of the Offer
or the Merger, (iii) impose limitations on the ability of Parent or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
Shares accepted for payment pursuant to the Offer, including, without
limitation, the right to vote such Shares on all matters properly presented
to the shareholders of the Company or (iv) prohibit Parent or any of its
subsidiaries from effectively controlling any portion of the business or
operations of the Company or any Subsidiary; or
(b) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(c) any event shall have occurred or condition exist that has or could
reasonably be expected to have, a Material Adverse Effect on the Company
(as defined in the Merger Agreement); or
(d) (i) the Board of Directors of the Company or any committee thereof
withdraws or modifies in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approves or recommends any proposal for an Acquisition
Transaction with a Third Party or (ii) the Company enters into any
agreement to consummate any Acquisition Transaction with a Third Party; or
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are not qualified as to materiality are not
true and correct or the representations and warranties of the Company set
forth in the Merger Agreement that are qualified as to materiality would
not be true and correct, but for such qualification, and the events or
conditions giving rise to such representations and warranties not being
true and correct but for such qualification could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, in each case at the date of the Merger Agreement or at the
scheduled expiration of the Offer (as though made as of such date, except
that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date) which have
not been cured within the time period specified in Article VIII of the
Merger Agreement or the Purchaser shall have failed to receive a
certificate executed
1
<PAGE> 35
by the President or a Vice President of the Company, dated as of the
scheduled expiration date, to the effect that the conditions set forth in
this clause (e) have not occurred; or
(f) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Merger Agreement or the Purchaser shall have failed to receive a
certificate executed by the President or a Vice President of the Company,
dated as of the scheduled expiration of the Offer, that the conditions set
forth in this clause (f) have not occurred; or
(g) any shareholder party to any Tender and Voting Agreement shall
have breached or failed to perform in any material respect any of such
shareholder's obligations, covenants or agreements thereunder; or
(h) all Consents of Governmental Entities and other Persons (other
than lenders) listed in Section 4.05 of the Company Disclosure Statement
shall not have been obtained with no material adverse conditions attached
and no material expense imposed on the Company or any of the Subsidiaries;
or
(i) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ Stock Market, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States (whether or not mandatory), (iii) a commencement of a
war, armed hostilities or other international or national calamity directly
or indirectly involving the United States, (iv) any limitation (whether or
not mandatory) by any United States governmental authority on the extension
of credit generally by banks or other financial institutions, or (v) a
change in general financial, bank or capital market conditions which
materially and adversely affects the ability of financial institutions in
the United States to extend credit or syndicate loans or (vi) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof.
The foregoing conditions are for the benefit of Parent and the Purchaser
and may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived by Parent or the Purchaser
in whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
appended.
2
<PAGE> 1
EXHIBIT (c)(3)
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and
among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"),
YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Raymond M. Conlin,
(the "Executive").
WHEREAS, Yellow and the Company are currently engaged in the
negotiation of an Agreement and Plan of Merger (the "Purchase Agreement")
pursuant to which Yellow would, through an indirect wholly owned subsidiary,
acquire all the shares of common stock of the Company; and
WHEREAS, the Boards of Directors of the Company and Yellow have
approved the employment of the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing, for the considerations provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby accepts such
continued employment, upon the terms and conditions set forth
in this Agreement. On and after the effective date of the
merger of the "Purchaser" (as defined in the Purchase
Agreement) into the Company contemplated by the Purchase
Agreement (the "Merger Date"), Yellow shall cause the
"Surviving Corporation" as defined in the Purchase Agreement
to satisfy the Company's obligations under this Agreement;
provided, however, that Yellow shall have no obligations or
liabilities under this Agreement unless and until the
Effective Date, (as defined below) occurs. On and after the
Merger Date, said Surviving Corporation shall be the "Company"
for purposes of this Agreement.
2. Term. This Agreement shall become effective on, and the
term (the "Term") of the Executive's employment under this
Agreement shall commence on, the date on which the Purchaser
purchases shares of the Company's stock pursuant to a tender
offer (the "Effective Date") and shall continue until the date
of termination of the Executive's employment with the Company.
3. Position and Duties. During the Term, the Executive
shall serve as Senior Vice President Administration of the
Company, and shall have such responsibilities and authority as
is commensurate with such office. The Executive shall devote
substantially all of his working time and efforts to the
business and affairs of the Company.
<PAGE> 2
4. Compensation. During the Term, the Company shall
provide the Executive with the following compensation and
other benefits:
(a) Base Salary. The Company shall pay the Executive
base salary at the initial rate of $135,000 per
annum, which shall be payable in accordance with the
standard payroll practices of the Company. At no time
during the Term shall the Executive's base salary be
decreased from the rate then in effect except with
the written consent of the Executive.
(b) Bonus. During the Term, the Executive shall
participate in the annual bonus program maintained
for the executive officers of the Company. The
Executive's target bonus for each fiscal year during
the Term shall be no less than 30% of his annual base
salary for that year.
(c) Other Company, Benefits. During the Term, the
Executive shall be entitled to participate in, and to
receive benefits under, the benefit plans and
programs that are at the applicable time available to
executives of the Company generally and on terms and
conditions that are no less favorable than those
applicable to executives of the Company generally.
(d) Stock Options. As of the Effective Date, Yellow
shall grant to the Executive an option to purchase
20,000 shares of common stock of Yellow with the
following principal terms: (i) an exercise price
equal to the closing price of Yellow common stock as
reported by NASDAQ on June 4, 1999, (ii) vesting and
becoming exercisable at the rate of 25% on the first
anniversary of the Effective Date, 25% on the second
anniversary, 25% on the third anniversary, and the
remaining 25% on the fourth anniversary, and (iii)
other terms and conditions substantially similar to
stock options granted to executives generally under
Yellow's 1996 Stock Option Plan. With respect to
calendar years beginning after the Effective Date,
the Executive during the Term shall participate in
Yellow's stock option plans on terms and conditions
substantially similar to those generally applicable
to executives of Yellow and its subsidiaries.
(e) Perquisites. On and after the Effective Date,
Yellow shall cause the Company during the Term to
provide to the Executive the perquisites listed in
Appendix A hereto.
<PAGE> 3
5. Right to Terminate Employment. The Company reserves the
right to terminate the Executive's employment hereunder at any
time, subject, however, to the termination procedures set
forth in Section 7 of the Amended and Restated Severance
Agreement dated as of June 4, 1999 between the Company and the
Executive (the "Severance Agreement") to the extent such
procedures are then applicable pursuant to the terms of the
Severance Agreement. The Executive reserves the right to
resign from employment with the Company at any time, subject,
however, to any limitations on such right that may then be
applicable pursuant to the terms of the Severance Agreement.
6. Relationship of this Agreement to Severance Agreement.
Nothing in this Agreement shall affect in any way the rights
and obligations of the Company and the Executive under the
Severance Agreement, except that the Executive hereby agrees
to the following modifications of the Severance Agreement,
effective as of the Effective Date:
(i) an act or failure to act constituting "Good Reason" as
described in subsection (i) of Section 15 (M) of the Severance
Agreement shall not be deemed to occur on or after the
Effective Date so long as the Executive has the title,
responsibilities and authority set forth in Section 3 of this
Agreement (notwithstanding changes in the Executive's status,
responsibilities and authority resulting from the Company's
ceasing to be a separate public company), and
(ii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the cessation of the Executive's participation in the
Company's stock option and other stock-based plans so long as
Yellow complies with Section 4 (d) of this Agreement on and
after the Effective Date, and
(iii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15(M) of the
Severance Agreement shall not be deemed to occur by reason of
the limitation of the Executive's target bonus to the level
provided for in Section 4 (b) of this Agreement, and
(iv) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the elimination or modification of any perquisites or fringe
benefits enjoyed by the Executive before the Effective Date
(other than benefits under any Company "employee benefit plan"
as defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended) so long as the Company
provides the perquisites set forth in Appendix A hereto, and
<PAGE> 4
(v) Yellow's execution of this Agreement shall be deemed to
fully satisfy the Company's obligations pursuant to Section
9.1 of the Severance Agreement.
7. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the party against whom such waiver, modification or
discharge is sought to be enforced (with such signature, in
the case of the Company or Yellow, to be made by a duly
authorized officer thereof). No waiver by any party hereto at
any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any
party which are not expressly set forth in this Agreement. The
validity, interpretation, and construction of this Agreement
shall be governed by the laws of the State of New Jersey.
Payments provided for hereunder shall be paid net of
withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
IN WITNESS WHEREOF, this Agreement has been executed, as of
the date first written, on behalf of the Company by its duly
authorized officer, on behalf of Yellow by its duly authorized
officer, and by the Executive.
JEVIC TRANSPORTATION, INC
/s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel
- ------------------------------------- --------------------------------
Secretary
YELLOW CORPORATION
/s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III
- ------------------------------------- --------------------------------
Secretary
EXECUTIVE
By: /s/ Raymond M. Conlin
--------------------------------
<PAGE> 5
APPENDIX A
Under Section 4 (e) of the Employment Agreement between the Executive,
Jevic Transportation, Inc. and Yellow Corporation the following perquisites
shall be provided:
(A) Car Allowance. Executive shall be provided a car or car
allowance at least equal to that provided under Jevic
Transportation, Inc.'s policy dated March 5, 1996.
(B) Vacation. Executive will be entitled to annual vacation
at least equal to that currently provided as an employee of
Jevic Transportation under their current policy and practice.
(C) Supplemental Retirement Plan. Continued eligibility to
participate in Jevic Transportation's non-qualified
supplemental retirement arrangements through Fidelity
Investments.
(D) Split Dollar Life Insurance. Continued participation in
the Split Dollar Life Insurance Program currently provided as
an Executive of Jevic.
(E) Financial Planning/Tax Preparation. Executive will be
entitled to an annual reimbursement of expenses in conjunction
with personal financial planning and/or income tax return
preparation not to exceed $1,500.
(F) Executive Physical. Executive will be reimbursed up to
$350 annually for expenses in conjunction with a physical
examination. This benefit shall be in addition to any amounts
otherwise payable under Jevic's Medical Benefit Plan.
<PAGE> 1
EXHIBIT (c)(4)
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and
among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"),
YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Brian J. Fitzpatrick,
(the "Executive").
WHEREAS, Yellow and the Company are currently engaged in the
negotiation of an Agreement and Plan of Merger (the "Purchase Agreement")
pursuant to which Yellow would, through an indirect wholly owned subsidiary,
acquire all the shares of common stock of the Company; and
WHEREAS, the Boards of Directors of the Company and Yellow have
approved the employment of the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing, for the considerations provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby accepts such
continued employment, upon the terms and conditions set forth
in this Agreement. On and after the effective date of the
merger of the "Purchaser" (as defined in the Purchase
Agreement) into the Company contemplated by the Purchase
Agreement (the "Merger Date"), Yellow shall cause the
"Surviving Corporation" as defined in the Purchase Agreement
to satisfy the Company's obligations under this Agreement;
provided, however, that Yellow shall have no obligations or
liabilities under this Agreement unless and until the
Effective Date (as defined below) occurs. On and after the
Merger Date, said Surviving Corporation shall be the "Company"
for purposes of this Agreement.
2. Term. This Agreement shall become effective on, and the
term (the "Term") of the Executive's employment under this
Agreement shall commence on, the date on which the Purchaser
purchases shares of the Company's stock pursuant to a tender
offer (the "Effective Date") and shall continue until the date
of termination of the Executive's employment with the Company.
3. Position and Duties. During the Term, the Executive shall
serve as Senior Vice President - CFO of the Company, and shall
have such responsibilities and authority as is commensurate
with such office. The Executive shall devote substantially all
of his working time and efforts to the business and affairs of
the Company.
<PAGE> 2
4. Compensation. During the Term, the Company shall provide
the Executive with the following compensation and other
benefits:
(a) Base Salary. The Company shall pay the Executive
base salary at the initial rate of $191,200 per
annum, which shall be payable in accordance with the
standard payroll practices of the Company. At no time
during the Term shall the Executive's base salary be
decreased from the rate then in effect except with
the written consent of the Executive.
(b) Bonus. During the Term, the Executive shall
participate in the annual bonus program maintained
for the executive officers of the Company. The
Executive's target bonus for each fiscal year during
the Term shall be no less than 30% of his annual base
salary for that year.
(c) Other Company, Benefits. During the Term, the
Executive shall be entitled to participate in, and to
receive benefits under, the benefit plans and
programs that are at the applicable time available to
executives of the Company generally and on terms and
conditions that are no less favorable than those
applicable to executives of the Company generally.
(d) Stock Options. As of the Effective Date, Yellow
shall grant to the Executive an option to purchase
20,000 shares of common stock of Yellow with the
following principal terms: (i) an exercise price
equal to the closing price of Yellow common stock as
reported by NASDAQ on June 4, 1999, (ii) vesting and
becoming exercisable at the rate of 25% on the first
anniversary of the Effective Date, 25% on the second
anniversary, 25% on the third anniversary, and the
remaining 25% on the fourth anniversary, and (iii)
other terms and conditions substantially similar to
stock options granted to executives generally under
Yellow's 1996 Stock Option Plan. With respect to
calendar years beginning after the Effective Date,
the Executive during the Term shall participate in
Yellow's stock option plans on terms and conditions
substantially similar to those generally applicable
to executives of Yellow and its subsidiaries.
(e) Perquisites. On and after the Effective Date,
Yellow shall cause the Company during the Term to
provide to the Executive the perquisites listed in
Appendix A hereto.
<PAGE> 3
5. Right to Terminate Employment. The Company reserves the
right to terminate the Executive's employment hereunder at any
time, subject, however, to the termination procedures set
forth in Section 7 of the Amended and Restated Severance
Agreement dated as of June 4, 1999 between the Company and
the Executive (the "Severance Agreement") to the extent such
procedures are then applicable pursuant to the terms of the
Severance Agreement. The Executive reserves the right to
resign from employment with the Company at any time, subject,
however, to any limitations on such right that may then be
applicable pursuant to the terms of the Severance Agreement.
6. Relationship of this Agreement to Severance Agreement.
Nothing in this Agreement shall affect in any way the rights
and obligations of the Company and the Executive under the
Severance Agreement, except that the Executive hereby agrees
to the following modifications of the Severance Agreement,
effective as of the Effective Date:
(i) an act or failure to act constituting "Good Reason" as
described in subsection (i) of Section 15 (M) of the Severance
Agreement shall not be deemed to occur on or after the
Effective Date so long as the Executive has the title,
responsibilities and authority set forth in Section 3 of this
Agreement (notwithstanding changes in the Executive's status,
responsibilities and authority resulting from the Company's
ceasing to be a separate public company), and
(ii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the cessation of the Executive's participation in the
Company's stock option and other stock-based plans so long as
Yellow complies with Section 4 (d) of this Agreement on and
after the Effective Date, and
(iii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15(M) of the
Severance Agreement shall not be deemed to occur by reason of
the limitation of the Executive's target bonus to the level
provided for in Section 4 (b) of this Agreement, and
(iv) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the elimination or modification of any perquisites or fringe
benefits enjoyed by the Executive before the Effective Date
(other than benefits under any Company "employee benefit plan"
as defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended) so long as the Company
provides the perquisites set forth in Appendix A hereto, and
<PAGE> 4
(v) Yellow's execution of this Agreement shall be deemed to
fully satisfy the Company's obligations pursuant to Section
9.1 of the Severance Agreement.
7. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the party against whom such waiver, modification or
discharge is sought to be enforced (with such signature, in
the case of the Company or Yellow, to be made by a duly
authorized officer thereof). No waiver by any party hereto at
any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any
party which are not expressly set forth in this Agreement. The
validity, interpretation, and construction of this Agreement
shall be governed by the laws of the State of New Jersey.
Payments provided for hereunder shall be paid net of
withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
IN WITNESS WHEREOF, this Agreement has been executed, as of
the date first written, on behalf of the Company by its duly
authorized officer, on behalf of Yellow by its duly authorized
officer, and by the Executive.
JEVIC TRANSPORTATION, INC
/s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel
- ------------------------------------- -------------------------------
Secretary
YELLOW CORPORATION
/s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III
- ------------------------------------- -------------------------------
Secretary
EXECUTIVE
By: /s/ Brian J. Fitzpatrick
-------------------------------
<PAGE> 5
APPENDIX A
Under Section 4 (e) of the Employment Agreement between the Executive,
Jevic Transportation, Inc. and Yellow Corporation the following perquisites
shall be provided:
(A) Car Allowance. Executive shall be provided a car or car
allowance at least equal to that provided under Jevic
Transportation, Inc.'s policy dated March 5, 1996.
(B) Vacation. Executive will be entitled to annual vacation
at least equal to that currently provided as an employee of
Jevic Transportation under their current policy and practice.
(C) Supplemental Retirement Plan. Continued eligibility to
participate in Jevic Transportation's non-qualified
supplemental retirement arrangements through Fidelity
Investments.
(D) Split Dollar Life Insurance. Continued participation in
the Split Dollar Life Insurance Program currently provided as
an Executive of Jevic.
(E) Financial Planning / Tax Preparation. Executive will be
entitled to an annual reimbursement of expenses in conjunction
with personal financial planning and/or income tax return
preparation not to exceed $1,500.
(F) Executive Physical. Executive will be reimbursed up to
$350 annually for expenses in conjunction with a physical
examination. This benefit shall be in addition to any amounts
otherwise payable under Jevic's Medical Benefit Plan.
<PAGE> 1
EXHIBIT (c)(5)
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and
among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"),
YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Paul J. Karvois, (the
"Executive").
WHEREAS, Yellow and the Company are currently engaged in the
negotiation of an Agreement and Plan of Merger (the "Purchase Agreement")
pursuant to which Yellow would, through an indirect wholly owned subsidiary,
acquire all the shares of common stock of the Company; and
WHEREAS, the Boards of Directors of the Company and Yellow have
approved the employment of the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing, for the considerations provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby accepts such
continued employment, upon the terms and conditions set forth
in this Agreement. On and after the effective date of the
merger of the "Purchaser" (as defined in the Purchase
Agreement) into the Company contemplated by the Purchase
Agreement (the "Merger Date"), Yellow shall cause the
"Surviving Corporation" as defined in the Purchase Agreement
to satisfy the Company's obligations under this Agreement;
provided, however, that Yellow shall have no obligations or
liabilities under this Agreement unless and until the
Effective Date (as defined below) occurs. On and after the
Merger Date, said Surviving Corporation shall be the "Company"
for purposes of this Agreement.
2. Term. This Agreement shall become effective on, and the
term (the "Term") of the Executive's employment under this
Agreement shall commence on, the date on which the Purchaser
purchases shares of the Company's stock pursuant to a tender
offer (the "Effective Date") and shall continue until the date
of termination of the Executive's employment with the Company.
3. Position and Duties. During the Term, the Executive shall
serve as President of the Company, and shall have such
responsibilities and authority as is commensurate with such
office. The Executive shall devote substantially all of his
working time and efforts to the business and affairs of the
Company.
<PAGE> 2
4. Compensation. During the Term, the Company shall provide
the Executive with the following compensation and other
benefits:
(a) Base Salary. The Company shall pay the Executive
base salary at the initial rate of $275,120 per
annum, which shall be payable in accordance with the
standard payroll practices of the Company. At no time
during the Term shall the Executive's base salary be
decreased from the rate then in effect except with
the written consent of the Executive.
(b) Bonus. During the Term, the Executive shall
participate in the annual bonus program maintained
for the executive officers of the Company. The
Executive's target bonus for each fiscal year during
the Term shall be no less than 40% of his annual base
salary for that year.
(c) Other Company, Benefits. During the Term, the
Executive shall be entitled to participate in, and to
receive benefits under, the benefit plans and
programs that are at the applicable time available to
executives of the Company generally and on terms and
conditions that are no less favorable than those
applicable to executives of the Company generally.
(d) Stock Options. As of the Effective Date, Yellow
shall grant to the Executive an option to purchase
30,000 shares of common stock of Yellow with the
following principal terms: (i) an exercise price
equal to the closing price of Yellow common stock as
reported by NASDAQ on June 4, 1999, (ii) vesting and
becoming exercisable at the rate of 25% on the first
anniversary of the Effective Date, 25% on the second
anniversary, 25% on the third anniversary, and the
remaining 25% on the fourth anniversary, and (iii)
other terms and conditions substantially similar to
stock options granted to executives generally under
Yellow's 1996 Stock Option Plan. With respect to
calendar years beginning after the Effective Date,
the Executive during the Term shall participate in
Yellow's stock option plans on terms and conditions
substantially similar to those generally applicable
to executives of Yellow and its subsidiaries.
(e) Perquisites. On and after the Effective Date,
Yellow shall cause the Company during the Term to
provide to the Executive the perquisites listed in
Appendix A hereto.
<PAGE> 3
5. Right to Terminate Employment. The Company reserves the
right to terminate the Executive's employment hereunder at any
time, subject, however, to the termination procedures set
forth in Section 7 of the Amended and Restated Severance
Agreement dated as of June 4, 1999 between the Company and the
Executive (the "Severance Agreement") to the extent such
procedures are then applicable pursuant to the terms of the
Severance Agreement. The Executive reserves the right to
resign from employment with the Company at any time, subject,
however, to any limitations on such right that may then be
applicable pursuant to the terms of the Severance Agreement.
6. Relationship of this Agreement to Severance Agreement.
Nothing in this Agreement shall affect in any way the rights
and obligations of the Company and the Executive under the
Severance Agreement, except that the Executive hereby agrees
to the following modifications of the Severance Agreement,
effective as of the Effective Date:
(i) an act or failure to act constituting "Good Reason" as
described in subsection (i) of Section 15 (M) of the Severance
Agreement shall not be deemed to occur on or after the
Effective Date so long as the Executive has the title,
responsibilities and authority set forth in Section 3 of this
Agreement (notwithstanding changes in the Executive's status,
responsibilities and authority resulting from the Company's
ceasing to be a separate public company), and
(ii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the cessation of the Executive's participation in the
Company's stock option and other stock-based plans so long as
Yellow complies with Section 4 (d) of this Agreement on and
after the Effective Date, and
(iii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15(M) of the
Severance Agreement shall not be deemed to occur by reason of
the limitation of the Executive's target bonus to the level
provided for in Section 4 (b) of this Agreement, and
(iv) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of
the elimination or modification of any perquisites or fringe
benefits enjoyed by the Executive before the Effective Date
(other than benefits under any Company "employee benefit plan"
as defined in Section 3 (3) of the Employee Retirement Income
Security Act of 1974, as amended) so long as the Company
provides the perquisites set forth in Appendix A hereto, and
<PAGE> 4
(v) Yellow's execution of this Agreement shall be deemed to
fully satisfy the Company's obligations pursuant to Section
9.1 of the Severance Agreement.
7. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed
by the party against whom such waiver, modification or
discharge is sought to be enforced (with such signature, in
the case of the Company or Yellow, to be made by a duly
authorized officer thereof). No waiver by any party hereto at
any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any
party which are not expressly set forth in this Agreement. The
validity, interpretation, and construction of this Agreement
shall be governed by the laws of the State of New Jersey.
Payments provided for hereunder shall be paid net of
withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed.
IN WITNESS WHEREOF, this Agreement has been executed, as of
the date first written, on behalf of the Company by its duly
authorized officer, on behalf of Yellow by its duly authorized
officer, and by the Executive.
JEVIC TRANSPORTATION, INC
/s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel
- ------------------------------------- -----------------------------
Secretary
YELLOW CORPORATION
/s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III
- ------------------------------------- -----------------------------
Secretary
EXECUTIVE
By: /s/ Paul J. Karvois
-----------------------------
<PAGE> 5
APPENDIX A
Under Section 4 (e) of the Employment Agreement between the Executive,
Jevic Transportation, Inc. and Yellow Corporation the following perquisites
shall be provided:
(A) Car Allowance. Executive will be entitled to continuance
of car allowance under Jevic Transportation, Inc. policy dated
March 5, 1996.
(B) Vacation. Executive will be entitled to annual vacation
at least equal to that currently provided as an employee of
Jevic Transportation, Inc. under their current policy and
practice.
(C) Supplemental Retirement Plan. Continued eligibility to
participate in Jevic Transportation's Non-Qualified
Supplemental Retirement Arrangements through Fidelity
Investments.
(D) Split Dollar Life Insurance. Continued participation in
the Split Dollar Life Insurance Program currently provided as
an Executive of Jevic Transportation, Inc.
(E) Financial Planning / Tax Preparation. Executive will be
entitled to an annual reimbursement of expenses in conjunction
with personal financial planning and/or income tax return
preparation not to exceed $3,500.
(F) Executive Physical. Executive is entitled to an annual
physical examination plus travel expenses at the Mayo Clinic
Executive Health Program located in Scottsdale, Arizona.
(G) Country Club Membership. Executive is entitled to
reimbursement of up to $27,500 toward the initiation fee to
join a Country Club, plus up to $250 monthly toward such
club's dues.
<PAGE> 1
EXHIBIT (c)(6)
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of this fourth day of June, 1999 is made by
and among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"),
YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Joseph A. Librizzi,
(the "Executive").
WHEREAS, Yellow and the Company are currently engaged in the
negotiation of an Agreement and Plan of Merger (the "Purchase Agreement")
pursuant to which Yellow would, through an indirect wholly owned subsidiary,
acquire all the shares of common stock of the Company; and
WHEREAS, the Boards of Directors of the Company and Yellow have
approved the employment of the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing, for the considerations provided, to
continue in the employment of the Company on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Employment. The Company hereby agrees to continue to employ
the Executive, and the Executive hereby accepts such continued
employment, upon the terms and conditions set forth in this
Agreement. On and after the effective date of the merger of the
"Purchaser" (as defined in the Purchase Agreement) into the Company
contemplated by the Purchase Agreement (the "Merger Date"), Yellow
shall cause the "Surviving Corporation" as defined in the Purchase
Agreement to satisfy the Company's obligations under this Agreement;
provided, however, that Yellow shall have no obligations or
liabilities under this Agreement unless and until the Effective Date
(as defined below) occurs. On and after the Merger Date, said
Surviving Corporation shall be the "Company" for purposes of this
Agreement.
2. Term. This Agreement shall become effective on, and the term
(the "Term") of the Executive's employment under this Agreement
shall commence on, the date on which the Purchaser purchases shares
of the Company's stock pursuant to a tender offer (the "Effective
Date") and shall continue until the date of termination of the
Executive's employment with the Company.
3. Position and Duties. During the Term, the Executive shall
serve as Senior Vice President - Marketing and Sales of the
Company, and shall have such responsibilities and authority as is
commensurate with such office. The Executive shall devote
substantially all of his working time and efforts to the business
and affairs of the Company.
<PAGE> 2
4. Compensation. During the Term, the Company shall provide the
Executive with the following compensation and other benefits:
(a) Base Salary. The Company shall pay the Executive base
salary at the initial rate of $154,200 per annum, which shall
be payable in accordance with the standard payroll practices
of the Company. At no time during the Term shall the
Executive's base salary be decreased from the rate then in
effect except with the written consent of the Executive.
(b) Bonus. During the Term, the Executive shall participate
in the annual bonus program maintained for the executive
officers of the Company. The Executive's target bonus for each
fiscal year during the Term shall be no less than 30% of his
annual base salary for that year.
(c) Other Company, Benefits. During the Term, the Executive
shall be entitled to participate in, and to receive benefits
under, the benefit plans and programs that are at the
applicable time available to executives of the Company
generally and on terms and conditions that are no less
favorable than those applicable to executives of the Company
generally.
(d) Stock Options. As of the Effective Date, Yellow shall
grant to the Executive an option to purchase 20,000 shares of
common stock of Yellow with the following principal terms: (i)
an exercise price equal to the closing price of Yellow common
stock as reported by NASDAQ on June 4, 1999, (ii) vesting and
becoming exercisable at the rate of 25% on the first
anniversary of the Effective Date, 25% on the second
anniversary, 25% on the third anniversary, and the remaining
25% on the fourth anniversary, and (iii) other terms and
conditions substantially similar to stock options granted to
executives generally under Yellow's 1996 Stock Option Plan.
With respect to calendar years beginning after the Effective
Date, the Executive during the Term shall participate in
Yellow's stock option plans on terms and conditions
substantially similar to those generally applicable to
executives of Yellow and its subsidiaries.
(e) Perquisites. On and after the Effective Date, Yellow
shall cause the Company during the Term to provide to the
Executive the perquisites listed in Appendix A hereto.
<PAGE> 3
5. Right to Terminate Employment. The Company reserves the right
to terminate the Executive's employment hereunder at any time,
subject, however, to the termination procedures set forth in
Section 7 of the Amended and Restated Severance Agreement dated as
of June 4, 1999 between the Company and the Executive (the
"Severance Agreement")to the extent such procedures are then
applicable pursuant to the terms of the Severance Agreement. The
Executive reserves the right to resign from employment with the
Company at any time, subject, however, to any limitations on such
right that may then be applicable pursuant to the terms of the
Severance Agreement.
6. Relationship of this Agreement to Severance Agreement. Nothing
in this Agreement shall affect in any way the rights and
obligations of the Company and the Executive under the Severance
Agreement, except that the Executive hereby agrees to the following
modifications of the Severance Agreement, effective as of the
Effective Date:
(i) an act or failure to act constituting "Good Reason" as
described in subsection (i) of Section 15 (M) of the Severance
Agreement shall not be deemed to occur on or after the Effective
Date so long as the Executive has the title, responsibilities and
authority set forth in Section 3 of this Agreement (notwithstanding
changes in the Executive's status, responsibilities and authority
resulting from the Company's ceasing to be a separate public
company), and
(ii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of the
cessation of the Executive's participation in the Company's stock
option and other stock-based plans so long as Yellow complies with
Section 4 (d) of this Agreement on and after the Effective Date,
and
(iii) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15(M) of the
Severance Agreement shall not be deemed to occur by reason of the
limitation of the Executive's target bonus to the level provided
for in Section 4 (b) of this Agreement, and
(iv) an act or failure to act constituting "Good Reason" as
described in subsection (v) or (vi) of Section 15 (M) of the
Severance Agreement shall not be deemed to occur by reason of the
elimination or modification of any perquisites or fringe benefits
enjoyed by the Executive before the Effective Date (other than
benefits under any Company "employee benefit plan" as defined in
Section 3 (3) of the Employee Retirement Income Security Act of
1974, as amended) so long as the Company provides the perquisites
set forth in Appendix A hereto, and
<PAGE> 4
(v) Yellow's execution of this Agreement shall be deemed to fully
satisfy the Company's obligations pursuant to Section 9.1 of the
Severance Agreement.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the party against whom such
waiver, modification or discharge is sought to be enforced (with
such signature, in the case of the Company or Yellow, to be made by
a duly authorized officer thereof). No waiver by any party hereto
at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by any party which are not expressly set
forth in this Agreement. The validity, interpretation, and
construction of this Agreement shall be governed by the laws of the
State of New Jersey. Payments provided for hereunder shall be paid
net of withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed.
IN WITNESS WHEREOF, this Agreement has been executed, as of the
date first written, on behalf of the Company by its duly authorized
officer, on behalf of Yellow by its duly authorized officer, and by
the Executive.
JEVIC TRANSPORTATION, INC
/s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel
- ----------------------------------- -------------------------------------
Secretary
YELLOW CORPORATION
/s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III
- ----------------------------------- -------------------------------------
Secretary
EXECUTIVE
By: /s/ Joseph A. Librizzi
-------------------------------------
<PAGE> 5
APPENDIX A
Under Section 4 (e) of the Employment Agreement between the Executive,
Jevic Transportation, Inc. and Yellow Corporation the following perquisites
shall be provided:
(A) Car Allowance. Executive shall be provided a car or car
allowance at least equal to that provided under Jevic
Transportation, Inc.'s policy dated March 5, 1996.
(B) Vacation. Executive will be entitled to annual vacation at
least equal to that currently provided as an employee of Jevic
Transportation under their current policy and practice.
(C) Supplemental Retirement Plan. Continued eligibility to
participate in Jevic Transportation's non-qualified supplemental
retirement arrangements through Fidelity Investments.
(D) Split Dollar Life Insurance. Continued participation in the
Split Dollar Life Insurance Program currently provided as an
Executive of Jevic.
(E) Financial Planning / Tax Preparation. Executive will be
entitled to an annual reimbursement of expenses in conjunction with
personal financial planning and/or income tax return preparation
not to exceed $1,500.
(F) Executive Physical. Executive will be reimbursed up to $350
annually for expenses in conjunction with a physical examination.
This benefit shall be in addition to any amounts otherwise payable
under Jevic's Medical Benefit Plan.
<PAGE> 1
EXHIBIT (c)(7)
AMENDED AND RESTATED
SEVERANCE AGREEMENT
THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a
New Jersey corporation (the "Company"), and RAYMOND M. CONLIN (the
"Executive").
WHEREAS, the Company considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that, as is the case with many publicly held corporations, the
possibility of a Change in Control (as defined in the last Section hereof)
exists and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and
WHEREAS, the Company and Executive entered into a severance agreement
relating to the same matters, dated as of April 5, 1999 ("Prior
Agreement"); and
WHEREAS, the Company and Executive wish to and do hereby amend and
restate the Prior Agreement, which is specifically superseded by the terms
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, this Company and the Executive hereby agree as
follows:
1. Defined Terms. The definition of capitalized terms used in, this
Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date on
which shares of common stock of the Company are purchased pursuant to the
tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation
("Effective Date"), and shall continue in effect through December 31, 2001;
provided, however, that commencing on January 1, 2002 and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend this Agreement
or a Change in Control shall have occurred prior to such January 1; and further
provided, however, if a Change in Control shall have occurred during the term
of this Agreement, this Agreement shall continue in effect for a period ending
on the last day of the twenty-fourth calendar month beginning after the month
in which such Change in Control occurred.
<PAGE> 2
3. Company's Covenants Summarized. To induce the Executive to remain
in the employ of the Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under the conditions
described herein, to pay the Executive the Severance Payments described in
Section 6.1 hereof and the other payments and benefits described herein in the
event the Executive's employment with the Company is terminated following a
Change in Control and during the term of this Agreement. Except as provided in
Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be
payable under this Agreement unless there shall have been (or, pursuant to
Section 6.1 hereof, there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants.
4.1. The Executive agrees that, subject to the terms and conditions
of this Agreement, in the event of a Potential Change in Control during the
term of this Agreement, the Executive will remain in the employ of the Company
until the earliest of (i) a date which is three (3) months after the date of
such Potential Change in Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason (determined by treating the Potential Change in Control as a Change in
Control in applying the definition of Good Reason under Section 15(M)(i)
through (vii) hereof) or by reason of death, Disability or retirement, or (iv)
the termination by the Company of the Executive's employment for any reason.
4.2. While the Executive is employed by the Company and for a
period of one year after the effective date of Executive's termination of
employment if Executive's employment is terminated following a Change in
Control (or before a Change in Control but following a Potential Change in
Control under the circumstances set forth in Section 6.1) and Executive
receives any payment under Section 6.1 of this Agreement, the Executive
covenants and agrees that he will not, whether for himself or for any other
person, business, partnership, association, firm, company or corporation,
directly or indirectly, call upon, solicit, divert or take away or attempt to
solicit, divert or take away, any of the customers or employees of the Company
that are or were customers or employees at any time during his employment with
the Company. The Executive acknowledges that the Company would be irreparably
injured by a violation of this Section 4.2, and agrees that the Company, in
addition to other remedies available to it for such breach or threatened
breach, shall be entitled to a preliminary injunction, temporary restraining
order or other equitable relief restraining the Executive from any actual or
threatened breach of this Section 4.2 without any bond or other security being
required.
-2-
<PAGE> 3
5. Compensation Other Than Severance Payments.
5.1. Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive's full salary
to the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Executive's employment is terminated
by the Company for Disability. Nothing in this Section 5.1 shall entitle
Executive to any Company-provided insured or uninsured disability, sick pay or
other similar wage replacement benefits in addition to the Company's payment of
salary during the period of illness.
5.2. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive and such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, this Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
5.4. Whether or not the Executive's employment has been terminated,
following a Change in Control, the Company (or any successor to the Company in
connection with such Change in Control) shall upon the Executive's demand
purchase from the Executive any shares of Company or successor company stock
then held by the Executive (the "Shares"). The Company and any successor shall
not be under any such obligation at any time that there exists an established
market for the Shares. The Company also shall not be under any such obligation
at any time that the Executive's right to demand the purchase of the Shares, or
the exercise of that right, would prohibit pooling of interests accounting in
any acquisition of or by the Company. The price of such Shares shall be the
greater of their fair market value or the per share consideration paid in
connection with such Change in Control, if any. The purchase price for such
Shares shall be paid by the Company or any successor in a single sum of cash
within seven days following such demand, except as the Executive and Company
may agree otherwise.
5.5. Whether or not the Executive's employment is later terminated,
upon purchase of shares of common stock of the Company pursuant to the tender
offer by Yellow
-3-
<PAGE> 4
Corporation and/or a subsidiary of Yellow Corporation, the Company shall pay to
the Executive a single sum of $55,000, less any required withholding as
further set forth in Section 11.
6. Severance Payments.
6.1. The Company shall pay the Executive the payments described in
this Section 6.1 (the "Severance Payments") upon the termination of the
Executive's employment following a Change in Control and during the term of
this Agreement, in addition to the payments and benefits described in Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death or Disability more than six months following the Change in Control, or
(iii) by the Executive without Good Reason. The Company shall pay the Executive
the Severance Payments upon termination of the Executive's employment following
a Potential Change in Control but before a Change in Control and during the
term of this Agreement, in addition to the payments and benefits described in
Section 5 hereof, if:
(i) the termination is initiated, caused or directed by any
Person who has initiated a transaction the consummation of which would result
in a Change in Control; and
(ii) the termination would have been by the Executive for Good
Reason or by the Company without Cause if a Change in Control had occurred on
the date of the Potential Change in Control.
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to the Applicable
Multiplier times the sum of (i) the highest of the Executive's annual base
salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based, or such salary in
effect immediately prior to the Change in Control, or such salary in effect
immediately prior to a Potential Change in Control, and (ii) the higher of (x)
the target bonus for the year in which the Notice of Termination is provided or
(y) the highest of the actual bonuses paid or payable to the Executive for any
of the five years completed immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based.
(B) Notwithstanding any provision of any bonus plan, the
Company shall pay to the Executive a lump sum amount, in cash, equal to the sum
of (i) any bonus amount which has been allocated or awarded to the Executive
for a completed fiscal year or other measuring period preceding the Date of
Termination but has not yet been paid (pursuant to Section 5.2 hereof or
otherwise) and (ii) a pro rata portion to the Date of Termination of the
aggregate value of all contingent bonus awards to the Executive for all
uncompleted periods calculated as to each such award by assuming the
achievement of the target performance level
-4-
<PAGE> 5
within the performance range established with respect to such award and basing
such pro-rata portion upon the portion of the award period that has elapsed as
of the Date of Termination;
(C) For (i) a twelve (12) month period after the Date of
Termination if Executive has one year or less of continuous service as an
employee of the Company, (ii) a twenty-four (24) month period after the Date of
Termination if Executive has more than one year but not more than two years of
continuous service as an employee of the Company, and (iii) a thirty-six (36)
month period after the Date of Termination if Executive has more than two years
of continuous service as an employee of the Company, the Company shall arrange
to provide the Executive with life, disability, accident and health insurance
benefits (and specifically including Executive's split-dollar life insurance
arrangement now in effect), and all other material benefits or perquisites
substantially similar to those which the Executive is receiving immediately
prior to the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control if such reduction constitutes
Good Reason); Notwithstanding any other provision of this Agreement, the
Company shall continue to fund Executive's split-dollar life insurance
arrangement until dividends payable under the policy are sufficient to pay
premiums under the policy. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1(C) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive without
cost during the above-referenced period. In addition, any such benefits
actually received by the Executive shall be reported to the Company by the
Executive.
6.2. (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the Total Payments will be subject to the Excise
Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Total Payments and any federal, state and local income
tax and Excise Tax upon the payment provided for by this Section 6.2, shall be
equal to the excess of the Total Payments over the payment provided for by this
Section 6.2.
(B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) any payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person (the
"Total Payments"), shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably, acceptable to
the Executive, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, and all "excess parachute payments" (within the meaning of section
280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless,
in the opinion of such tax counsel, such excess parachute payments (in whole or
in part) represent reasonable compensation for
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<PAGE> 6
services actually rendered (within the meaning of section 280G(b)(4)(B) of the
Code), or are otherwise not subject to the Excise Tax, and (ii) the value of
any noncash benefits or any deferred payment or benefit shall be determined by
the Company's independent auditors in accordance with the principles of actions
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, FICA taxes at the highest rate
applicable with respect to wages in excess of the Social Security taxable wage
base in effect for the year of payment, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or such other time as is hereinafter
described), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment (or such other time as is
hereinafter described), the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise
Tax or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2)(3) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the Executive's
employment (or such other time as is hereinafter described) (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
addition payable by the Executive with respect to such excess) at the time that
the amount of such excess is finally determined. The Executive and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments. If an Executive
who remains in the employ of the Company becomes entitled to the payment
provided for by this paragraph, such payment shall be made no later than the
later of (i) the fifth day following the date on which the Executive notifies
the Company that he is subject to the Excise Tax and (ii) twenty days prior to
the date on which the Excise Tax is initially due.
6.3. The payments provided for in Section 6.1 hereof (other than
Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made
not later than the fifth day following the Date of Termination, unless
Executive elects a later date of payment for all or any part thereof; provided,
however, that, if the amounts of such payments cannot be finally determined on
or before such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Company of the minimum amount of
such payments to which the Executive is clearly entitled and shall pay the
remainder of such payments (together
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with interest at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(9) of the
Code). At the time that payments are made under this section, the Company shall
provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from outside counsel, auditors or consultants (and any such opinions
or advice which are in writing shall be attached to the statement).
6.4. The Company also shall pay to the Executive all legal fees and
expenses incurred in good faith by the Executive as a result of a termination
of the Executive's employment following a Change in Control and during the term
of this Agreement (including all such fees and expenses, if any, incurred in
disputing in good faith any such termination or in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder). For purposes of this Section 6.4, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was excessive. Such payments shall be
made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.1. After a Change in Control and during the term of this
Agreement, any purported termination of the Executive's employment (other than
by reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause issued by the Company is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board which was called
and held for the purpose of considering such termination (after reasonable
notice to the Executive and an opportunity for the Executive, together with the
Executive's Counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive engaged in conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and specifying the
particulars thereof in detail.
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<PAGE> 8
7.2. "Date of Termination," with respect to any purported
termination of the Executive's employment after a Change in Control and during
the term of this Agreement,
shall mean (i) If the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated by for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination by
the Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive,
shall not be less than fifteen (15) days nor more than sixty (60) days from the
date such Notice of Termination is given).
7.3. If within fifteen (15) days after any Notice of Termination is
given or, if later, prior to the Date of Termination (as determined without
regard to this Section 7.3), either party notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice
of dispute provided by the Executive only if such notice in given in good faith
and the Executive pursues the resolution of such dispute with reasonable
diligence.
7.4. If a purported termination occurs following a Change in
Control and during the term of this Agreement, and such termination is disputed
in accordance with Section 7.3 hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the
dispute was given until the Date of Termination, determined in accordance with
Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all
other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided
for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company, or otherwise.
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<PAGE> 9
9. Successors; Binding Agreement.
9.1. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any such successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for
Good Reason after a Change in Control, except that, for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
states registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Jevic Transportation, Inc.
700 Creek Road
P.O. Box 5157
Delanco, NJ 08075
To the Executive:
Name
Address
City, State ZIP
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<PAGE> 10
11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall he deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, and construction of this Agreement shall be
governed by the laws of the State of New Jersey. Payments provided for
hereunder shall be paid net withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 5, 6, and 7 which
arise during the term of this Agreement shall survive the expiration of the
term of this Agreement.
12. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts; Coordination with Employment Agreement.
13.1. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instruments.
13.2. The terms of this Agreement shall be coordinated with and
applied in conjunction with the terms of the Executive's employment agreement,
if any, with the Company. In general, it is the intent of the parties that,
subsequent to a Change in Control and during the term of this Agreement, the
provisions of this Agreement shall supersede and substitute for those
provisions of the employment agreement relating to the Executive's entitlement
to benefits in connection with any termination of the Executive's employment,
but shall not supersede for any period the provisions of such employment
agreement pertaining to the terms of the Executive's employment. Except for
circumstances relating to a termination of employment following a Change in
Control during the term of this Agreement, as provided for herein, all terms
and conditions of the Executive's employment with the Company shall be governed
by the terms of the Executive's employment agreement (including but not limited
to any such term granting additional years of service to the Executive for
purposes of any of the Company's employee benefit plans).
14. Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific
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<PAGE> 11
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the
Board within sixty (60) days after notification by the Board that the
Executive's claim has been denied. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Burlington County, New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however,
that the Executive shall be entitled to seek specific performance of the
Executive's right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
15. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Applicable Multiplier" means two, except as otherwise
specifically provided herein with the consent of the Executive.
(B) "Base Amount" shall have the meaning defined in section
280G(b)(3) of the Code.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment, after any Potential Change in Control or Change in Control, shall
mean the willful and continued failure by the Executive to substantially
perform the Executive's duties with the Company (other than any such failure
resulting from the Executive's incapacity due to physical or mental illness or
any such actual or anticipated failure after the issuance of a Notice of
Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the
Executive by the Board, which demand specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive's duties. For purposes of this definition, no act, or failure to act,
on the Executive's part shall be "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(E) A "Change in Control" shall be deemed to have occurred if
the events set forth in any one of the following paragraphs shall have
occurred:
(i) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
"Beneficial Ownership" (as the term beneficial ownership is used for purposes
of Rule 13d-3 promulgated under the 1934 Act) of fifty
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<PAGE> 12
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"); or
(ii) Approval by shareholders of the Company of (A) a
merger, reorganization or consolidation involving the Company if the
shareholders of the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) (1) a complete liquidation or dissolution of the Company
or (2) an agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) Acceptance by shareholders of the Company of shares
in a share exchange if the shareholders of the Company immediately before such
share exchange do not or will not own directly or indirectly immediately
following such share exchange more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the corporation resulting
from or surviving such share exchange in substantially the same proportion as
the ownership of the Voting Securities outstanding immediately before such
share exchange.
Notwithstanding the foregoing, a Change in Control shall not
include any event, circumstance or transaction occurring during the six-month
period following a Potential Change in Control which Potential Change in
Control results from the action of any entity or group which includes the
Executive (a "Management Group").
(F) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. References to specific sections of the code shall
include any successors thereto.
(G) "Company" shall mean Jevic Transportation, Inc., a New
Jersey corporation, and any successor to its business or assets which assumes
and agrees to perform this Agreement by operation of law, or otherwise (except
in determining, under Section 15(E) hereof, whether or not any Change in
Control of the Company has occurred in connection with such succession).
(H) "Date of Termination" shall have the meaning stated in
Section 7.2 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if the Executive is
absent from full-time employment and qualifies for disability benefits under
the Company's long-term disability plan
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<PAGE> 13
(or would so qualify but for any waiting period under that plan). In the
absence of any such plan, the determination of Disability shall be made by the
Board.
(J) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
(L) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to
act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure
to act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment by the Company to the Executive of any
duties inconsistent with the Executive's status as an executive of the Company
or a material adverse alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the Change in
Control or Potential Change in Control or any change in Executive's title or
status;
(ii) any reduction by the Company in the Executive's
annual base salary as in affect on the date hereof or as the same may be
increased from time to time;
(iii) the relocation by the Company of its principal
executive offices to a location more than 30 miles from the location of such
office immediately prior to the Change in Control or the Company's requiring
the Executive to be based anywhere other than the Company's principal executive
offices except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation, or to pay to the Executive
any portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date such
compensation is due;
(v) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to the
Change in
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Control which is material to the Executive's total compensation, including but
not limited to any bonus plan and any similar or substitute plan adopted prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of the Executive's participation relative to other participants, as existed at
the time of the Change in Control;
(vi) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical, health
and accident, disability or other material benefit or perquisite plan in which
the Executive was participating at the time of the Change in Control, and
specifically including those benefits set forth in Section 6.1(c) hereof, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in Control,
or the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance, with the Company's normal vacation
policy in effect at the time of the Change in Control; or
(vii) any purported termination by the Company of the
Executive's employment which is not effected for Cause and pursuant to a Notice
of Termination satisfying the requirements of Section 7.1; for purposes of this
Agreement, no such purported termination shall be effective.
The Executive's right to terminate the Executive's employment for
Good Reason shall not be affected by the Executive's incapacity due to physical
or mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(N) "Gross-Up Payment" shall have the meaning given in Section
6.2 hereof.
(O) "Notice of Termination" shall have the meaning stated in
Section 7.1 hereof.
(P) "Person" shall have the meaning given in section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
provided, however, that a Person shall not include (i) the Company or any of
its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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<PAGE> 15
(Q) "Potential Change in Control" shall be deemed to have
occurred if the events set forth in any one of the following paragraphs shall
have occurred:
(i) the Company enters into an agreement, the consummation
of which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) any Person who both (x) is on the date hereof or
subsequently becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing at least 10% or more of the combined
voting power of the Company's then outstanding securities and (y) increases his
or her beneficial ownership of such securities by 5% or more over the
percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
(R) "Severance Payments" shall mean those payments described
in Section 6.1 hereof.
(S) "Total Payments" shall mean those payments described in
Section 6.2 hereof.
16. Prior Agreements Superseded. Effective on the Effective Date, this
Agreement supersedes and replaces any previous Agreement between the Company
and Executive on the same subject.
IN WITNESS WHEREOF, this Agreement has been executed as of the 6th day
of June, 1999, on behalf of this Company by its duly authorized officer and by
the Executive.
ATTEST: JEVIC TRANSPORTATION, INC.
/s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL
- ---------------------------------- -------------------------------------
Secretary Harry J. Muhlschlegel
Chief Executive Officer
EXECUTIVE
By: /s/ RAYMOND M. CONLIN
-------------------------------------
Raymond M. Conlin
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<PAGE> 1
EXHIBIT (c)(8)
AMENDED AND RESTATED
SEVERANCE AGREEMENT
THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a New
Jersey corporation (the "Company"), and BRIAN J. FITZPATRICK (the "Executive").
WHEREAS, the Company considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel; and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and
WHEREAS, the Company and Executive entered into a severance agreement
relating to the same matters, dated as of April 5, 1999 ("Prior
Agreement"); and
WHEREAS, the Company and Executive wish to and do hereby amend and
restate the Prior Agreement, which is specifically superseded by the terms
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, this Company and the Executive hereby agree as
follows:
1. Defined Terms. The definition of capitalized terms used in,
this Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date
on which shares of common stock of the Company are purchased pursuant to the
tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation
("Effective Date"), and shall continue in effect through December 31, 2001;
provided, however, that commencing on January 1, 2002 and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend this Agreement or
a Change in Control shall have occurred prior to such January 1; and further
provided, however, if a Change in Control shall have occurred during the term of
this Agreement, this Agreement shall continue in effect for a period ending on
the last day of the twenty-fourth calendar month beginning after the month in
which such Change in Control occurred.
<PAGE> 2
3. Company's Covenants Summarized. To induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments
described in Section 6.1 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. Except as
provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit
shall be payable under this Agreement unless there shall have been (or, pursuant
to Section 6.1 hereof, there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.
4. The Executive's Covenants.
4.1. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control
during the term of this Agreement, the Executive will remain in the employ of
the Company until the earliest of (i) a date which is three (3) months after the
date of such Potential Change in Control, (ii) the date of a Change in Control,
(iii) the date of termination by the Executive of the Executive's employment for
Good Reason (determined by treating the Potential Change in Control as a Change
in Control in applying the definition of Good Reason under Section 15(M)(i)
through (vii) hereof) or by reason of death, Disability or retirement, or (iv)
the termination by the Company of the Executive's employment for any reason.
4.2. While the Executive is employed by the Company and
for a period of one year after the effective date of Executive's termination of
employment if Executive's employment is terminated following a Change in Control
(or before a Change in Control but following a Potential Change in Control under
the circumstances set forth in Section 6.1) and Executive receives any payment
under Section 6.1 of this Agreement, the Executive covenants and agrees that he
will not, whether for himself or for any other person, business, partnership,
association, firm, company or corporation, directly or indirectly, call upon,
solicit, divert or take away or attempt to solicit, divert or take away, any of
the customers or employees of the Company that are or were customers or
employees at any time during his employment with the Company. The Executive
acknowledges that the Company would be irreparably injured by a violation of
this Section 4.2, and agrees that the Company, in addition to other remedies
available to it for such breach or threatened breach, shall be entitled to a
preliminary injunction, temporary restraining order or other equitable relief
restraining the Executive from any actual or threatened breach of this Section
4.2 without any bond or other security being required.
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<PAGE> 3
5. Compensation Other Than Severance Payments.
5.1. Following a Change in Control and during the term of
this Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive's full salary to
the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Executive's employment is terminated
by the Company for Disability. Nothing in this Section 5.1 shall entitle
Executive to any Company-provided insured or uninsured disability, sick pay or
other similar wage replacement benefits in addition to the Company's payment of
salary during the period of illness.
5.2. If the Executive's employment shall be terminated for
any reason following a Change in Control and during the term of this Agreement,
the Company shall pay the Executive's full salary to the Executive through the
Date of Termination at the rate in effect at the time the Notice of Termination
is given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3. If the Executive's employment shall be terminated for
any reason following a Change in Control and during the term of this Agreement,
the Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive and such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, this Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
5.4. Whether or not the Executive's employment has been
terminated, following a Change in Control, the Company (or any successor to the
Company in connection with such Change in Control) shall upon the Executive's
demand purchase from the Executive any shares of Company or successor company
stock then held by the Executive (the "Shares"). The Company and any successor
shall not be under any such obligation at any time that there exists an
established market for the Shares. The Company also shall not be under any such
obligation at any time that the Executive's right to demand the purchase of the
Shares, or the exercise of that right, would prohibit pooling of interests
accounting in any acquisition of or by the Company. The price of such Shares
shall be the greater of their fair market value or the per share consideration
paid in connection with such Change in Control, if any. The purchase price for
such Shares shall be paid by the Company or any successor in a single sum of
cash within seven days following such demand, except as the Executive and
Company may agree otherwise.
5.5. Whether or not the Executive's employment is later
terminated, upon purchase of shares of common stock of the Company pursuant to
the tender offer by Yellow Corporation and/or a subsidiary of Yellow
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<PAGE> 4
Corporation, the Company shall pay to the Executive a single sum of $280,000
less any required withholding as further set forth in Section 11.
6. Severance Payments.
6.1. The Company shall pay the Executive the payments
described in this Section 6.1 (the "Severance Payments") upon the termination of
the Executive's employment following a Change in Control and during the term of
this Agreement, in addition to the payments and benefits described in Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death or Disability more than six months following the Change in Control, or
(iii) by the Executive without Good Reason. The Company shall pay the Executive
the Severance Payments upon termination of the Executive's employment following
a Potential Change in Control but before a Change in Control and during the term
of this Agreement, in addition to the payments and benefits described in Section
5 hereof, if:
(i) the termination is initiated, caused or
directed by any Person who has initiated a transaction the consummation of which
would result in a Change in Control; and
(ii) the termination would have been by the
Executive for Good Reason or by the Company without Cause if a Change in Control
had occurred on the date of the Potential Change in Control.
(A) In lieu of any further salary payments to
the Executive for periods subsequent to the Date of Termination and in lieu of
any severance benefit otherwise payable to the Executive, the Company shall pay
to the Executive a lump sum severance payment, in cash, equal to the Applicable
Multiplier times the sum of (i) the highest of the Executive's annual base
salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based, or such salary in
effect immediately prior to the Change in Control, or such salary in effect
immediately prior to a Potential Change in Control, and (ii) the higher of (x)
the target bonus for the year in which the Notice of Termination is provided or
(y) the highest of the actual bonuses paid or payable to the Executive for any
of the five years completed immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based.
(B) Notwithstanding any provision of any bonus
plan, the Company shall pay to the Executive a lump sum amount, in cash, equal
to the sum of (i) any bonus amount which has been allocated or awarded to the
Executive for a completed fiscal year or other measuring period preceding the
Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof or
otherwise) and (ii) a pro rata portion to the Date of Termination of the
aggregate value of all contingent bonus awards to the Executive for all
uncompleted periods calculated as to each such award by assuming the achievement
of the target performance level
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<PAGE> 5
within the performance range established with respect to such award and basing
such pro-rata portion upon the portion of the award period that has elapsed as
of the Date of Termination;
(C) For (i) a twelve (12) month period after the
Date of Termination if Executive has one year or less of continuous service as
an employee of the Company, (ii) a twenty-four (24) month period after the Date
of Termination if Executive has more than one year but not more than two years
of continuous service as an employee of the Company, and (iii) a thirty-six (36)
month period after the Date of Termination if Executive has more than two years
of continuous service as an employee of the Company, the Company shall arrange
to provide the Executive with life, disability, accident and health insurance
benefits (and specifically including Executive's split-dollar life insurance
arrangement now in effect), and all other material benefits or perquisites
substantially similar to those which the Executive is receiving immediately
prior to the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control if such reduction constitutes
Good Reason); Notwithstanding any other provision of this Agreement, the Company
shall continue to fund Executive's split-dollar life insurance arrangement until
dividends payable under the policy are sufficient to pay premiums under the
policy. Benefits otherwise receivable by the Executive pursuant to this Section
6.1(C) shall be reduced to the extent comparable benefits are actually received
by or made available to the Executive without cost during the above-referenced
period. In addition, any such benefits actually received by the Executive shall
be reported to the Company by the Executive.
6.2. (A) Whether or not the Executive becomes entitled to
the Severance Payments, if any of the Total Payments will be subject to the
Excise Tax, the Company shall pay to the Executive an additional amount (the
"Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and
local income tax and Excise Tax upon the payment provided for by this Section
6.2, shall be equal to the excess of the Total Payments over the payment
provided for by this Section 6.2.
(B) For purposes of determining whether any of
the Total Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) any payments or benefits received or to be received by the
Executive in connection with a Change in Control or the Executive's termination
of employment, whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any Person whose actions result
in a Change in Control or any Person affiliated with the Company or such Person
(the "Total Payments"), shall be treated as "parachute payments" (within the
meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably, acceptable to the
Executive, such payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of section 280G(b)(4)(A) of the Code,
and all "excess parachute payments" (within the meaning of section 280G(b)(1) of
the Code) shall be treated as subject to the Excise Tax unless, in the opinion
of such tax counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for
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<PAGE> 6
services actually rendered (within the meaning of section 280G(b)(4)(B) of the
Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any
noncash benefits or any deferred payment or benefit shall be determined by the
Company's independent auditors in accordance with the principles of actions
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, FICA taxes at the highest rate
applicable with respect to wages in excess of the Social Security taxable wage
base in effect for the year of payment, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or such other time as is hereinafter
described), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of the Executive's employment (or such other time as
is hereinafter described), the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise Tax
or a federal, state or local income tax deduction) plus interest on the amount
of such repayment at the rate provided in section 1274(b)(2)(3) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time of the termination of the Executive's employment
(or such other time as is hereinafter described) (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or addition payable by the
Executive with respect to such excess) at the time that the amount of such
excess is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the Total Payments. If an Executive who remains in the
employ of the Company becomes entitled to the payment provided for by this
paragraph, such payment shall be made no later than the later of (i) the fifth
day following the date on which the Executive notifies the Company that he is
subject to the Excise Tax and (ii) twenty days prior to the date on which the
Excise Tax is initially due.
6.3. The payments provided for in Section 6.1 hereof
(other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof
shall be made not later than the fifth day following the Date of Termination,
unless Executive elects a later date of payment for all or any part thereof;
provided, however, that, if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Company of the minimum
amount of such payments to which the Executive is clearly entitled and shall pay
the remainder of such payments (together
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<PAGE> 7
with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon
as the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with interest
at the rate provided in section 1274(b)(2)(9) of the Code). At the time that
payments are made under this section, the Company shall provide the Executive
with a written statement setting forth the manner in which such payments were
calculated and the basis for such calculations including, without limitation,
any opinions or other advice the Company has received from outside counsel,
auditors or consultants (and any such opinions or advice which are in writing
shall be attached to the statement).
6.4. The Company also shall pay to the Executive all legal
fees and expenses incurred in good faith by the Executive as a result of a
termination of the Executive's employment following a Change in Control and
during the term of this Agreement (including all such fees and expenses, if any,
incurred in disputing in good faith any such termination or in seeking in good
faith to obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder). For purposes of this Section 6.4, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was excessive. Such payments shall be
made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses incurred
as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.1. After a Change in Control and during the term of this
Agreement, any purported termination of the Executive's employment (other than
by reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10 hereof.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. Further, a Notice of Termination for Cause issued by
the Company is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the purpose
of considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's Counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive engaged in conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.
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<PAGE> 8
7.2. "Date of Termination," with respect to any purported
termination of the Executive's employment after a Change in Control and during
the term of this Agreement, shall mean (i) If the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated by for any other reason, the
date specified in the Notice of Termination (which, in the case of a termination
by the Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days from the date
such Notice of Termination is given).
7.3. If within fifteen (15) days after any Notice of
Termination is given or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), either party notifies the other
party that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or decree of a
court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Date of Termination shall be extended by
a notice of dispute provided by the Executive only if such notice in given in
good faith and the Executive pursues the resolution of such dispute with
reasonable diligence.
7.4. If a purported termination occurs following a Change
in Control and during the term of this Agreement, and such termination is
disputed in accordance with Section 7.3 hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise to
the dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given until the Date of Termination, determined in accordance with Section
7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other
amounts due under this Agreement (other than those due under Section 5.2 hereof)
and shall not be offset against or reduce any other amounts due under this
Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 6
or Section 7.4 hereof. Further, the amount of any payment or benefit provided
for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company, or otherwise.
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<PAGE> 9
9. Successors; Binding Agreement.
9.1. In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any such successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
9.2. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death of
the Executive) if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive's estate.
10. Notices. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when personally delivered or mailed by United
states registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Jevic Transportation, Inc.
700 Creek Road
P.O. Box 5157
Delanco, NJ 08075
To the Executive:
Name
Address
City, State ZIP
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<PAGE> 10
11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall he deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, and construction of this Agreement shall be governed by the laws
of the State of New Jersey. Payments provided for hereunder shall be paid net
withholding required under federal, state or local law and any additional
withholding to which the Executive has agreed. The obligations of the Company
and the Executive under Sections 5, 6, and 7 which arise during the term of this
Agreement shall survive the expiration of the term of this Agreement.
12. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts; Coordination with Employment Agreement.
13.1. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
13.2. The terms of this Agreement shall be coordinated with
and applied in conjunction with the terms of the Executive's employment
agreement, if any, with the Company. In general, it is the intent of the parties
that, subsequent to a Change in Control and during the term of this Agreement,
the provisions of this Agreement shall supersede and substitute for those
provisions of the employment agreement relating to the Executive's entitlement
to benefits in connection with any termination of the Executive's employment,
but shall not supersede for any period the provisions of such employment
agreement pertaining to the terms of the Executive's employment. Except for
circumstances relating to a termination of employment following a Change in
Control during the term of this Agreement, as provided for herein, all terms and
conditions of the Executive's employment with the Company shall be governed by
the terms of the Executive's employment agreement (including but not limited to
any such term granting additional years of service to the Executive for purposes
of any of the Company's employee benefit plans).
14. Settlement of Disputes; Arbitration. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing and
shall set forth the specific reasons for the denial and the specific
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<PAGE> 11
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the Board
within sixty (60) days after notification by the Board that the Executive's
claim has been denied. Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Burlington County, New Jersey in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of the Executive's
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the following
terms shall have the meanings indicated below:
(A) "Applicable Multiplier" means two, except as
otherwise specifically provided herein with the consent of the Executive.
(B) "Base Amount" shall have the meaning defined
in section 280G(b)(3) of the Code.
(C) "Board" shall mean the Board of Directors of
the Company.
(D) "Cause" for termination by the Company of
the Executive's employment, after any Potential Change in Control or Change in
Control, shall mean the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive's
duties. For purposes of this definition, no act, or failure to act, on the
Executive's part shall be "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the Company.
(E) A "Change in Control" shall be deemed to
have occurred if the events set forth in any one of the following paragraphs
shall have occurred:
(i) The acquisition in one or more
transactions by any "Person" (as the term person is used for purposes of
Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used
for purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty
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percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"); or
(ii) Approval by shareholders of the
Company of (A) a merger, reorganization or consolidation involving the Company
if the shareholders of the Company immediately before such merger,
reorganization or consolidation do not or will not own directly or indirectly
immediately following such merger, reorganization or consolidation, more than
fifty percent (50%) of the combined voting power of the outstanding voting
securities of the corporation resulting from or surviving such merger,
reorganization or consolidation in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
reorganization or consolidation, or (B) (1) a complete liquidation or
dissolution of the Company or (2) an agreement for the sale or other disposition
of all or substantially all of the assets of the Company; or
(iii) Acceptance by shareholders of the
Company of shares in a share exchange if the shareholders of the Company
immediately before such share exchange do not or will not own directly or
indirectly immediately following such share exchange more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such share exchange in substantially the
same proportion as the ownership of the Voting Securities outstanding
immediately before such share exchange.
Notwithstanding the foregoing, a Change in Control shall not
include any event, circumstance or transaction occurring during the six-month
period following a Potential Change in Control which Potential Change in Control
results from the action of any entity or group which includes the Executive (a
"Management Group").
(F) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time. References to specific sections of the
code shall include any successors thereto.
(G) "Company" shall mean Jevic Transportation,
Inc., a New Jersey corporation, and any successor to its business or assets
which assumes and agrees to perform this Agreement by operation of law, or
otherwise (except in determining, under Section 15(E) hereof, whether or not any
Change in Control of the Company has occurred in connection with such
succession).
(H) "Date of Termination" shall have the meaning
stated in Section 7.2 hereof.
(I) "Disability" shall be deemed the reason for
the termination by the Company of the Executive's employment if the Executive is
absent from full-time employment and qualifies for disability benefits under the
Company's long-term disability plan
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(or would so qualify but for any waiting period under that plan). In the absence
of any such plan, the determination of Disability shall be made by the Board.
(J) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax
imposed under section 4999 of the Code.
(L) "Executive" shall mean the individual named
in the first paragraph of this Agreement.
(M) "Good Reason" for termination by the
Executive of the Executive's employment shall mean the occurrence (without the
Executive's express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of any act or
failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act
or failure to act is corrected prior to the Date of Termination specified in the
Notice of Termination given in respect thereof:
(i) the assignment by the Company to
the Executive of any duties inconsistent with the Executive's status as an
executive of the Company or a material adverse alteration in the nature or
status of the Executive's responsibilities from those in effect immediately
prior to the Change in Control or Potential Change in Control or any change in
Executive's title or status;
(ii) any reduction by the Company in the
Executive's annual base salary as in affect on the date hereof or as the same
may be increased from time to time;
(iii) the relocation by the Company of
its principal executive offices to a location more than 30 miles from the
location of such office immediately prior to the Change in Control or the
Company's requiring the Executive to be based anywhere other than the Company's
principal executive offices except for required travel on the Company's business
to an extent substantially consistent with the Executive's present business
travel obligations;
(iv) the failure by the Company to pay
to the Executive any portion of the Executive's current compensation, or to pay
to the Executive any portion of an installment of deferred compensation under
any deferred compensation program of the Company, within seven (7) days of the
date such compensation is due;
(v) the failure by the Company to
continue in effect any compensation plan in which the Executive participates
immediately prior to the Change in
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<PAGE> 14
Control which is material to the Executive's total compensation, including but
not limited to any bonus plan and any similar or substitute plan adopted prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan,
or the failure by the Company to continue the Executive's participation therein
(or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed at the time
of the Change in Control;
(vi) the failure by the Company to
continue to provide the Executive with benefits substantially similar to those
enjoyed by the Executive under any of the Company's pension, life insurance,
medical, health and accident, disability or other material benefit or perquisite
plan in which the Executive was participating at the time of the Change in
Control, and specifically including those benefits set forth in Section 6.1(c)
hereof, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of the Change
in Control, or the failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance, with the Company's normal
vacation policy in effect at the time of the Change in Control; or
(vii) any purported termination by the
Company of the Executive's employment which is not effected for Cause and
pursuant to a Notice of Termination satisfying the requirements of Section 7.1;
for purposes of this Agreement, no such purported termination shall be
effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or failure
to act constituting Good Reason hereunder.
(N) "Gross-Up Payment" shall have the meaning
given in Section 6.2 hereof.
(O) "Notice of Termination" shall have the
meaning stated in Section 7.1 hereof.
(P) "Person" shall have the meaning given in
section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; provided, however, that a Person shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
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<PAGE> 15
(Q) "Potential Change in Control" shall be
deemed to have occurred if the events set forth in any one of the following
paragraphs shall have occurred:
(i) the Company enters into an
agreement, the consummation of which would result in the occurrence of a Change
in Control;
(ii) the Company or any Person publicly
announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;
(iii) any Person who both (x) is on the
date hereof or subsequently becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing at least 10% or more of
the combined voting power of the Company's then outstanding securities and (y)
increases his or her beneficial ownership of such securities by 5% or more over
the percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change in Control
has occurred.
(R) "Severance Payments" shall mean those
payments described in Section 6.1 hereof.
(S) "Total Payments" shall mean those payments
described in Section 6.2 hereof.
16. Prior Agreements Superseded. Effective on the Effective Date,
this Agreement supersedes and replaces any previous Agreement between the
Company and Executive on the same subject.
IN WITNESS WHEREOF, this Agreement has been executed as of the 4th day
of June, 1999, on behalf of this Company by its duly authorized officer and by
the Executive.
ATTEST: JEVIC TRANSPORTATION, INC.
/s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL
- ------------------------------- ---------------------------------
Secretary Harry J. Muhlschlegel
Chief Executive Officer
EXECUTIVE
By: /s/ BRIAN J. FITZPATRICK
---------------------------------
Brian J. Fitzpatrick
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<PAGE> 1
EXHIBIT (c)(9)
AMENDED AND RESTATED
SEVERANCE AGREEMENT
THIS AGREEMENT is made by and between JEVIC TRANSPORTATION,
INC., a New Jersey corporation (the "Company"), and PAUL J. KARVOIS (the
"Executive").
WHEREAS, the Company considers it essential to the best
interests of its stockholders to foster the continuous employment of key
management personnel; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that, as is the case with many publicly held corporations, the
possibility of a Change in Control (as defined in the last Section hereof)
exists and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control; and
WHEREAS, the Company and Executive entered into a severance
agreement relating to the same matters, dated as of April 5, 1999 ("Prior
Agreement"); and
WHEREAS, the Company and Executive wish to and do hereby
amend and restate the Prior Agreement, which is specifically superseded by the
terms hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, this Company and the Executive hereby agree
as follows:
1. Defined Terms. The definition of capitalized terms used
in, this Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the
date on which shares of common stock of the Company are purchased pursuant to
the tender offer by Yellow Corporation and/or a subsidiary of Yellow
Corporation ("Effective Date"), and shall continue in effect through December
31, 2001; provided, however, that commencing on January 1, 2002 and each
January 1 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than September 30 of the
preceding year, the Company or the Executive shall have given notice not to
extend this Agreement or a Change in Control shall have occurred prior to such
January 1; and further provided, however, if a Change in Control shall have
occurred during the term of this Agreement, this Agreement shall continue in
effect for a period ending on the last day of the twenty-fourth calendar month
beginning after the month in which such Change in Control occurred.
<PAGE> 2
3. Company's Covenants Summarized. To induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments
described in Section 6.1 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. Except as
provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit
shall be payable under this Agreement unless there shall have been (or,
pursuant to Section 6.1 hereof, there shall be deemed to have been) a
termination of the Executive's employment with the Company following a Change
in Control. This Agreement shall not be construed as creating an express or
implied contract of employment and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not have any right
to be retained in the employ of the Company.
4. The Executive's Covenants.
4.1. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control
during the term of this Agreement, the Executive will remain in the employ of
the Company until the earliest of (i) a date which is three (3) months after
the date of such Potential Change in Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason (determined by treating the Potential Change in
Control as a Change in Control in applying the definition of Good Reason under
Section 15(M)(i) through (vii) hereof) or by reason of death, Disability or
retirement, or (iv) the termination by the Company of the Executive's
employment for any reason.
4.2. While the Executive is employed by the Company and
for a period of one year after the effective date of Executive's termination of
employment if Executive's employment is terminated following a Change in
Control (or before a Change in Control but following a Potential Change in
Control under the circumstances set forth in Section 6.1) and Executive
receives any payment under Section 6.1 of this Agreement, the Executive
covenants and agrees that he will not, whether for himself or for any other
person, business, partnership, association, firm, company or corporation,
directly or indirectly, call upon, solicit, divert or take away or attempt to
solicit, divert or take away, any of the customers or employees of the Company
that are or were customers or employees at any time during his employment with
the Company. The Executive acknowledges that the Company would be irreparably
injured by a violation of this Section 4.2, and agrees that the Company, in
addition to other remedies available to it for such breach or threatened
breach, shall be entitled to a preliminary injunction, temporary restraining
order or other equitable relief restraining the Executive from any actual or
threatened breach of this Section 4.2 without any bond or other security being
required.
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<PAGE> 3
5. Compensation Other Than Severance Payments.
5.1. Following a Change in Control and during the term of
this Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive's full salary
to the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Executive's employment is terminated
by the Company for Disability. Nothing in this Section 5.1 shall entitle
Executive to any Company-provided insured or uninsured disability, sick pay or
other similar wage replacement benefits in addition to the Company's payment of
salary during the period of illness.
5.2. If the Executive's employment shall be terminated
for any reason following a Change in Control and during the term of this
Agreement, the Company shall pay the Executive's full salary to the Executive
through the Date of Termination at the rate in effect at the time the Notice of
Termination is given, together with all compensation and benefits payable to
the Executive through the Date of Termination under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period.
5.3. If the Executive's employment shall be terminated
for any reason following a Change in Control and during the term of this
Agreement, the Company shall pay the Executive's normal post-termination
compensation and benefits to the Executive and such payments become due. Such
post-termination compensation and benefits shall be determined under, and paid
in accordance with, this Company's retirement, insurance and other compensation
or benefit plans, programs and arrangements.
5.4. Whether or not the Executive's employment has been
terminated, following a Change in Control, the Company (or any successor to the
Company in connection with such Change in Control) shall upon the Executive's
demand purchase from the Executive any shares of Company or successor company
stock then held by the Executive (the "Shares"). The Company and any successor
shall not be under any such obligation at any time that there exists an
established market for the Shares. The Company also shall not be under any such
obligation at any time that the Executive's right to demand the purchase of the
Shares, or the exercise of that right, would prohibit pooling of interests
accounting in any acquisition of or by the Company. The price of such Shares
shall be the greater of their fair market value or the per share consideration
paid in connection with such Change in Control, if any. The purchase price for
such Shares shall be paid by the Company or any successor in a single sum of
cash within seven days following such demand, except as the Executive and
Company may agree otherwise.
5.5. Whether or not the Executive's employment is later
terminated, upon purchase of shares of common stock of the Company pursuant to
the tender offer by Yellow Corporation and/or a subsidiary of the Yellow
Corporation, the Company shall pay to the
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<PAGE> 4
Executive a single sum of $315,000 less any required withholding as further
set forth in Section 11.
6. Severance Payments.
6.1. The Company shall pay the Executive the payments
described in this Section 6.1 (the "Severance Payments") upon the termination
of the Executive's employment following a Change in Control and during the term
of this Agreement, in addition to the payments and benefits described in
Section 5 hereof, unless such termination is (i) by the Company for Cause, (ii)
by reason of death or Disability more than six months following the Change in
Control, or (iii) by the Executive without Good Reason. The Company shall pay
the Executive the Severance Payments upon termination of the Executive's
employment following a Potential Change in Control but before a Change in
Control and during the term of this Agreement, in addition to the payments and
benefits described in Section 5 hereof, if:
(i) the termination is initiated, caused or directed
by any Person who has initiated a transaction the consummation of which would
result in a Change in Control; and
(ii) the termination would have been by the
Executive for Good Reason or by the Company without Cause if a Change in
Control had occurred on the date of the Potential Change in Control.
(A) In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall pay to
the Executive a lump sum severance payment, in cash, equal to the Applicable
Multiplier times the sum of (i) the highest of the Executive's annual base
salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based, or such salary in
effect immediately prior to the Change in Control, or such salary in effect
immediately prior to a Potential Change in Control, and (ii) the higher of (x)
the target bonus for the year in which the Notice of Termination is provided or
(y) the highest of the actual bonuses paid or payable to the Executive for any
of the five years completed immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based.
(B) Notwithstanding any provision of any bonus plan,
the Company shall pay to the Executive a lump sum amount, in cash, equal to the
sum of (i) any bonus amount which has been allocated or awarded to the
Executive for a completed fiscal year or other measuring period preceding the
Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof
or otherwise) and (ii) a pro rata portion to the Date of Termination of the
aggregate value of all contingent bonus awards to the Executive for all
uncompleted periods calculated as to each such award by assuming the
achievement of the target performance level
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<PAGE> 5
within the performance range established with respect to such award and basing
such pro-rata portion upon the portion of the award period that has elapsed as
of the Date of Termination;
(C) For (i) a twelve (12) month period after the
Date of Termination if Executive has one year or less of continuous service as
an employee of the Company, (ii) a twenty-four (24) month period after the Date
of Termination if Executive has more than one year but not more than two years
of continuous service as an employee of the Company, and (iii) a thirty-six
(36) month period after the Date of Termination if Executive has more than two
years of continuous service as an employee of the Company, the Company shall
arrange to provide the Executive with life, disability, accident and health
insurance benefits (and specifically including Executive's split-dollar life
insurance arrangement now in effect), and all other material benefits or
perquisites substantially similar to those which the Executive is receiving
immediately prior to the Notice of Termination (without giving effect to any
reduction in such benefits subsequent to a Change in Control if such reduction
constitutes Good Reason); Notwithstanding any other provision of this
Agreement, the Company shall continue to fund Executive's split-dollar life
insurance arrangement until dividends payable under the policy are sufficient
to pay premiums under the policy. Benefits otherwise receivable by the
Executive pursuant to this Section 6.1(C) shall be reduced to the extent
comparable benefits are actually received by or made available to the Executive
without cost during the above-referenced period. In addition, any such benefits
actually received by the Executive shall be reported to the Company by the
Executive.
6.2. (A) Whether or not the Executive becomes
entitled to the Severance Payments, if any of the Total Payments will be
subject to the Excise Tax, the Company shall pay to the Executive an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income tax and Excise Tax upon the payment provided
for by this Section 6.2, shall be equal to the excess of the Total Payments
over the payment provided for by this Section 6.2.
(B) For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) any payments or benefits received or to be received by the Executive
in connection with a Change in Control or the Executive's termination of
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person (the
"Total Payments"), shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably, acceptable to
the Executive, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, and all "excess parachute payments" (within the meaning of section
280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless,
in the opinion of such tax counsel, such excess parachute payments (in whole or
in part) represent reasonable compensation for
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<PAGE> 6
services actually rendered (within the meaning of section 280G(b)(4)(B) of the
Code), or are otherwise not subject to the Excise Tax, and (ii) the value of
any noncash benefits or any deferred payment or benefit shall be determined by
the Company's independent auditors in accordance with the principles of actions
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, FICA taxes at the highest rate
applicable with respect to wages in excess of the Social Security taxable wage
base in effect for the year of payment, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or such other time as is hereinafter
described), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment (or such other time as is
hereinafter described), the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise
Tax or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2)(3) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the Executive's
employment (or such other time as is hereinafter described) (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
addition payable by the Executive with respect to such excess) at the time that
the amount of such excess is finally determined. The Executive and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments. If an Executive
who remains in the employ of the Company becomes entitled to the payment
provided for by this paragraph, such payment shall be made no later than the
later of (i) the fifth day following the date on which the Executive notifies
the Company that he is subject to the Excise Tax and (ii) twenty days prior to
the date on which the Excise Tax is initially due.
6.3. The payments provided for in Section 6.1 hereof
(other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof
shall be made not later than the fifth day following the Date of Termination,
unless Executive elects a later date of payment for all or any part thereof;
provided, however, that, if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to the Executive on
such day an estimate, as determined in good faith by the Company of the minimum
amount of such payments to which the Executive is clearly entitled and shall
pay the remainder of such payments (together
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<PAGE> 7
with interest at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(9) of the
Code). At the time that payments are made under this section, the Company shall
provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from outside counsel, auditors or consultants (and any such opinions
or advice which are in writing shall be attached to the statement).
6.4. The Company also shall pay to the Executive all
legal fees and expenses incurred in good faith by the Executive as a result of
a termination of the Executive's employment following a Change in Control and
during the term of this Agreement (including all such fees and expenses, if
any, incurred in disputing in good faith any such termination or in seeking in
good faith to obtain or enforce any benefit or right provided by this Agreement
or in connection with any tax audit or proceeding to the extent attributable to
the application of section 4999 of the Code to any payment or benefit provided
hereunder). For purposes of this Section 6.4, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was excessive. Such payments shall be
made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.1. After a Change in Control and during the term of
this Agreement, any purported termination of the Executive's employment (other
than by reason of death) shall be communicated by written Notice of Termination
from one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause issued by the Company is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board which was called
and held for the purpose of considering such termination (after reasonable
notice to the Executive and an opportunity for the Executive, together with the
Executive's Counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive engaged in conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and specifying the
particulars thereof in detail.
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<PAGE> 8
7.2. "Date of Termination," with respect to any purported
termination of the Executive's employment after a Change in Control and during
the term of this Agreement, shall mean (i) If the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated by for any other reason, the
date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days from the date such Notice of Termination is given).
7.3. If within fifteen (15) days after any Notice of
Termination is given or, if later, prior to the Date of Termination (as
determined without regard to this Section 7.3), either party notifies the other
party that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally resolved, either by mutual
written agreement of the parties or by a final judgment, order or decree of a
court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been
perfected); provided, however, that the Date of Termination shall be extended
by a notice of dispute provided by the Executive only if such notice in given
in good faith and the Executive pursues the resolution of such dispute with
reasonable diligence.
7.4. If a purported termination occurs following a Change
in Control and during the term of this Agreement, and such termination is
disputed in accordance with Section 7.3 hereof, the Company shall continue to
pay the Executive the full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, salary) and continue
the Executive as a participant in all compensation, benefit and insurance plans
in which the Executive was participating when the notice giving rise to the
dispute was given until the Date of Termination, determined in accordance with
Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all
other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided
for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company, or otherwise.
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<PAGE> 9
9. Successors; Binding Agreement.
9.1. In addition to any obligations imposed by law upon
any successor to the Company, the Company will require any such successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to compensation from
the Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or mailed by
United states registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Jevic Transportation, Inc.
700 Creek Road
P.O. Box 5157
Delanco, NJ 08075
To the Executive:
Name
Address
City, State ZIP
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<PAGE> 10
11. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall he deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, and construction of this Agreement
shall be governed by the laws of the State of New Jersey. Payments provided for
hereunder shall be paid net withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 5, 6, and 7 which
arise during the term of this Agreement shall survive the expiration of the
term of this Agreement.
12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts; Coordination with Employment Agreement.
13.1. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
13.2. The terms of this Agreement shall be coordinated
with and applied in conjunction with the terms of the Executive's employment
agreement, if any, with the Company. In general, it is the intent of the
parties that, subsequent to a Change in Control and during the term of this
Agreement, the provisions of this Agreement shall supersede and substitute for
those provisions of the employment agreement relating to the Executive's
entitlement to benefits in connection with any termination of the Executive's
employment, but shall not supersede for any period the provisions of such
employment agreement pertaining to the terms of the Executive's employment.
Except for circumstances relating to a termination of employment following a
Change in Control during the term of this Agreement, as provided for herein,
all terms and conditions of the Executive's employment with the Company shall
be governed by the terms of the Executive's employment agreement (including but
not limited to any such term granting additional years of service to the
Executive for purposes of any of the Company's employee benefit plans).
14. Settlement of Disputes; Arbitration. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing
and shall set forth the specific reasons for the denial and the specific
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<PAGE> 11
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the
Board within sixty (60) days after notification by the Board that the
Executive's claim has been denied. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Burlington County, New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however,
that the Executive shall be entitled to seek specific performance of the
Executive's right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
15. Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated below:
(A) "Applicable Multiplier" means two, except as
otherwise specifically provided herein with the consent of the Executive.
(B) "Base Amount" shall have the meaning defined in
section 280G(b)(3) of the Code.
(C) "Board" shall mean the Board of Directors of the
Company.
(D) "Cause" for termination by the Company of the
Executive's employment, after any Potential Change in Control or Change in
Control, shall mean the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or
mental illness or any such actual or anticipated failure after the issuance of
a Notice of Termination for Good Reason by the Executive pursuant to Section
7.1 hereof) after a written demand for substantial performance is delivered to
the Executive by the Board, which demand specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive's duties. For purposes of this definition, no act, or failure to act,
on the Executive's part shall be "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(E) A "Change in Control" shall be deemed to have
occurred if the events set forth in any one of the following paragraphs shall
have occurred:
(i) The acquisition in one or more transactions
by any "Person" (as the term person is used for purposes of Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
"Beneficial Ownership" (as the term beneficial ownership is used for purposes
of Rule 13d-3 promulgated under the 1934 Act) of fifty
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<PAGE> 12
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"); or
(ii) Approval by shareholders of the Company of
(A) a merger, reorganization or consolidation involving the Company if the
shareholders of the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) (1) a complete liquidation or dissolution of the Company
or (2) an agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) Acceptance by shareholders of the Company
of shares in a share exchange if the shareholders of the Company immediately
before such share exchange do not or will not own directly or indirectly
immediately following such share exchange more than fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from or surviving such share exchange in substantially the same
proportion as the ownership of the Voting Securities outstanding immediately
before such share exchange.
Notwithstanding the foregoing, a Change in Control shall not
include any event, circumstance or transaction occurring during the six-month
period following a Potential Change in Control which Potential Change in
Control results from the action of any entity or group which includes the
Executive (a "Management Group").
(F) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time. References to specific sections of the code
shall include any successors thereto.
(G) "Company" shall mean Jevic Transportation, Inc.,
a New Jersey corporation, and any successor to its business or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise
(except in determining, under Section 15(E) hereof, whether or not any Change
in Control of the Company has occurred in connection with such succession).
(H) "Date of Termination" shall have the meaning
stated in Section 7.2 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if the Executive is
absent from full-time employment and qualifies for disability benefits under
the Company's long-term disability plan
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<PAGE> 13
(or would so qualify but for any waiting period under that plan). In the
absence of any such plan, the determination of Disability shall be made by the
Board.
(J) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed
under section 4999 of the Code.
(L) "Executive" shall mean the individual named in
the first paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive
of the Executive's employment shall mean the occurrence (without the
Executive's express written consent) of any one of the following acts by the
Company, or failures by the Company to act, unless, in the case of any act or
failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act
or failure to act is corrected prior to the Date of Termination specified in
the Notice of Termination given in respect thereof:
(i) the assignment by the Company to the
Executive of any duties inconsistent with the Executive's status as an
executive of the Company or a material adverse alteration in the nature or
status of the Executive's responsibilities from those in effect immediately
prior to the Change in Control or Potential Change in Control or any change in
Executive's title or status;
(ii) any reduction by the Company in the
Executive's annual base salary as in affect on the date hereof or as the same
may be increased from time to time;
(iii) the relocation by the Company of its
principal executive offices to a location more than 30 miles from the location
of such office immediately prior to the Change in Control or the Company's
requiring the Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's business to an
extent substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company to pay to the
Executive any portion of the Executive's current compensation, or to pay to the
Executive any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven (7) days of the date
such compensation is due;
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<PAGE> 14
(v) the failure by the Company to continue in
effect any compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's total
compensation, including but not limited to any bonus plan and any similar or
substitute plan adopted prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue the
Executive's participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of the Executive's participation relative to
other participants, as existed at the time of the Change in Control;
(vi) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those enjoyed by
the Executive under any of the Company's pension, life insurance, medical,
health and accident, disability or other material benefit or perquisite plan in
which the Executive was participating at the time of the Change in Control, and
specifically including those benefits set forth in Section 6.1(c) hereof, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in Control,
or the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance, with the Company's normal vacation
policy in effect at the time of the Change in Control; or
(vii) any purported termination by the Company of
the Executive's employment which is not effected for Cause and pursuant to a
Notice of Termination satisfying the requirements of Section 7.1; for purposes
of this Agreement, no such purported termination shall be effective.
The Executive's right to terminate the Executive's employment
for Good Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(N) "Gross-Up Payment" shall have the meaning given
in Section 6.2 hereof.
(O) "Notice of Termination" shall have the meaning
stated in Section 7.1 hereof.
(P) "Person" shall have the meaning given in section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; provided, however, that a Person shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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<PAGE> 15
(Q) "Potential Change in Control" shall be deemed to
have occurred if the events set forth in any one of the following paragraphs
shall have occurred:
(i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces
an intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) any Person who both (x) is on the date
hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing at least 10% or more of the combined
voting power of the Company's then outstanding securities and (y) increases his
or her beneficial ownership of such securities by 5% or more over the
percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(R) "Severance Payments" shall mean those payments
described in Section 6.1 hereof.
(S) "Total Payments" shall mean those payments
described in Section 6.2 hereof.
16. Prior Agreements Superseded. Effective on the Effective
Date, this Agreement supersedes and replaces any previous Agreement between the
Company and Executive on the same subject.
IN WITNESS WHEREOF, this Agreement has been executed as of
the 4th day of June, 1999, on behalf of this Company by its duly authorized
officer and by the Executive.
ATTEST: JEVIC TRANSPORTATION, INC.
/s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL
- ----------------------------- --------------------------------
Secretary Harry J. Muhlschlegel
Chief Executive Officer
EXECUTIVE
By: /s/ PAUL J. KARVOIS
--------------------------------
Paul J. Karvois
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<PAGE> 1
EXHIBIT (c)(10)
AMENDED AND RESTATED
SEVERANCE AGREEMENT
THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a
New Jersey corporation (the "Company"), and JOSEPH A. LIBRIZZI (the
"Executive").
WHEREAS, the Company considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel; and
WHEREAS, the Board of Directors of the Company (the "Board")
recognizes that, as is the case with many publicly held corporations, the
possibility of a Change in Control (as defined in the last Section hereof)
exists and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control; and
WHEREAS, the Company and Executive entered into a severance agreement
relating to the same matters, dated as of April 5, 1999 ("Prior Agreement"); and
WHEREAS, the Company and Executive wish to and do hereby amend and
restate the Prior Agreement, which is specifically superseded by the terms
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, this Company and the Executive hereby agree as
follows:
1. Defined Terms. The definition of capitalized terms used in, this
Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date on
which shares of common stock of the Company are purchased pursuant to the
tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation
("Effective Date"), and shall continue in effect through December 31, 2001;
provided, however, that commencing on January 1, 2002 and each January 1
thereafter, the term of this Agreement shall automatically be extended for one
additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend this Agreement
or a Change in Control shall have occurred prior to such January 1; and further
provided, however, if a Change in Control shall have occurred during the term
of this Agreement, this Agreement shall continue in effect for a period ending
on the last day of the twenty-fourth calendar month beginning after the month
in which such Change in Control occurred.
<PAGE> 2
3. Company's Covenants Summarized. To induce the Executive to remain
in the employ of the Company and in consideration of the Executive's covenants
set forth in Section 4 hereof, the Company agrees, under the conditions
described herein, to pay the Executive the Severance Payments described in
Section 6.1 hereof and the other payments and benefits described herein in the
event the Executive's employment with the Company is terminated following a
Change in Control and during the term of this Agreement. Except as provided in
Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be
payable under this Agreement unless there shall have been (or, pursuant to
Section 6.1 hereof, there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the
employ of the Company.
4. The Executive's Covenants.
4.1. The Executive agrees that, subject to the terms and conditions
of this Agreement, in the event of a Potential Change in Control during the
term of this Agreement, the Executive will remain in the employ of the Company
until the earliest of (i) a date which is three (3) months after the date of
such Potential Change in Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason (determined by treating the Potential Change in Control as a Change in
Control in applying the definition of Good Reason under Section 15(M)(i)
through (vii) hereof) or by reason of death, Disability or retirement, or (iv)
the termination by the Company of the Executive's employment for any reason.
4.2. While the Executive is employed by the Company and for a
period of one year after the effective date of Executive's termination of
employment if Executive's employment is terminated following a Change in
Control (or before a Change in Control but following a Potential Change in
Control under the circumstances set forth in Section 6.1) and Executive
receives any payment under Section 6.1 of this Agreement, the Executive
covenants and agrees that he will not, whether for himself or for any other
person, business, partnership, association, firm, company or corporation,
directly or indirectly, call upon, solicit, divert or take away or attempt to
solicit, divert or take away, any of the customers or employees of the Company
that are or were customers or employees at any time during his employment with
the Company. The Executive acknowledges that the Company would be irreparably
injured by a violation of this Section 4.2, and agrees that the Company, in
addition to other remedies available to it for such breach or threatened
breach, shall be entitled to a preliminary injunction, temporary restraining
order or other equitable relief restraining the Executive from any actual or
threatened breach of this Section 4.2 without any bond or other security being
required.
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<PAGE> 3
5. Compensation Other Than Severance Payments.
5.1. Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the
Executive's full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive's full salary
to the Executive at the rate in effect at the commencement of any such period,
together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement maintained by
the Company during such period, until the Executive's employment is terminated
by the Company for Disability. Nothing in this Section 5.1 shall entitle
Executive to any Company-provided insured or uninsured disability, sick pay or
other similar wage replacement benefits in addition to the Company's payment of
salary during the period of illness.
5.2. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3. If the Executive's employment shall be terminated for any
reason following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's normal post-termination compensation and
benefits to the Executive and such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, this Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
5.4. Whether or not the Executive's employment has been terminated,
following a Change in Control, the Company (or any successor to the Company in
connection with such Change in Control) shall upon the Executive's demand
purchase from the Executive any shares of Company or successor company stock
then held by the Executive (the "Shares"). The Company and any successor shall
not be under any such obligation at any time that there exists an established
market for the Shares. The Company also shall not be under any such obligation
at any time that the Executive's right to demand the purchase of the Shares, or
the exercise of that right, would prohibit pooling of interests accounting in
any acquisition of or by the Company. The price of such Shares shall be the
greater of their fair market value or the per share consideration paid in
connection with such Change in Control, if any. The purchase price for such
Shares shall be paid by the Company or any successor in a single sum of cash
within seven days following such demand, except as the Executive and Company
may agree otherwise.
5.5. Whether or not the Executive's employment is later terminated,
upon purchase of shares of common stock of the Company pursuant to the tender
offer by Yellow
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<PAGE> 4
Corporation and/or a subsidiary of Yellow Corporation, the Company shall pay to
the Executive a single sum of $225,000 less any required withholding as
further set forth in Section 11.
6. Severance Payments.
6.1. The Company shall pay the Executive the payments described in
this Section 6.1 (the "Severance Payments") upon the termination of the
Executive's employment following a Change in Control and during the term of
this Agreement, in addition to the payments and benefits described in Section 5
hereof, unless such termination is (i) by the Company for Cause, (ii) by reason
of death or Disability more than six months following the Change in Control, or
(iii) by the Executive without Good Reason. The Company shall pay the Executive
the Severance Payments upon termination of the Executive's employment following
a Potential Change in Control but before a Change in Control and during the
term of this Agreement, in addition to the payments and benefits described in
Section 5 hereof, if:
(i) the termination is initiated, caused or directed by any
Person who has initiated a transaction the consummation of which would result
in a Change in Control; and
(ii) the termination would have been by the Executive for Good
Reason or by the Company without Cause if a Change in Control had occurred on
the date of the Potential Change in Control.
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to the Applicable
Multiplier times the sum of (i) the highest of the Executive's annual base
salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based, or such salary in
effect immediately prior to the Change in Control, or such salary in effect
immediately prior to a Potential Change in Control, and (ii) the higher of (x)
the target bonus for the year in which the Notice of Termination is provided or
(y) the highest of the actual bonuses paid or payable to the Executive for any
of the five years completed immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based.
(B) Notwithstanding any provision of any bonus plan, the
Company shall pay to the Executive a lump sum amount, in cash, equal to the sum
of (i) any bonus amount which has been allocated or awarded to the Executive
for a completed fiscal year or other measuring period preceding the Date of
Termination but has not yet been paid (pursuant to Section 5.2 hereof or
otherwise) and (ii) a pro rata portion to the Date of Termination of the
aggregate value of all contingent bonus awards to the Executive for all
uncompleted periods calculated as to each such award by assuming the
achievement of the target performance level
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<PAGE> 5
within the performance range established with respect to such award and basing
such pro-rata portion upon the portion of the award period that has elapsed as
of the Date of Termination;
(C) For (i) a twelve (12) month period after the Date of
Termination if Executive has one year or less of continuous service as an
employee of the Company, (ii) a twenty-four (24) month period after the Date of
Termination if Executive has more than one year but not more than two years of
continuous service as an employee of the Company, and (iii) a thirty-six (36)
month period after the Date of Termination if Executive has more than two years
of continuous service as an employee of the Company, the Company shall arrange
to provide the Executive with life, disability, accident and health insurance
benefits (and specifically including Executive's split-dollar life insurance
arrangement now in effect), and all other material benefits or perquisites
substantially similar to those which the Executive is receiving immediately
prior to the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control if such reduction constitutes
Good Reason); Notwithstanding any other provision of this Agreement, the
Company shall continue to fund Executive's split-dollar life insurance
arrangement until dividends payable under the policy are sufficient to pay
premiums under the policy. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1(C) shall be reduced to the extent comparable
benefits are actually received by or made available to the Executive without
cost during the above-referenced period. In addition, any such benefits
actually received by the Executive shall be reported to the Company by the
Executive.
6.2. (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the Total Payments will be subject to the Excise
Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Total Payments and any federal, state and local income
tax and Excise Tax upon the payment provided for by this Section 6.2, shall be
equal to the excess of the Total Payments over the payment provided for by this
Section 6.2.
(B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) any payments or benefits received or to be received by the Executive in
connection with a Change in Control or the Executive's termination of
employment, whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person (the
"Total Payments"), shall be treated as "parachute payments" (within the meaning
of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably, acceptable to
the Executive, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section 280G(b)(4)(A) of
the Code, and all "excess parachute payments" (within the meaning of section
280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless,
in the opinion of such tax counsel, such excess parachute payments (in whole or
in part) represent reasonable compensation for
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<PAGE> 6
services actually rendered (within the meaning of section 280G(b)(4)(B) of the
Code), or are otherwise not subject to the Excise Tax, and (ii) the value of
any noncash benefits or any deferred payment or benefit shall be determined by
the Company's independent auditors in accordance with the principles of actions
280G(d)(3) and (4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, FICA taxes at the highest rate
applicable with respect to wages in excess of the Social Security taxable wage
base in effect for the year of payment, and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Executive's
residence on the Date of Termination (or such other time as is hereinafter
described), net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(C) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of the Executive's employment (or such other time as is
hereinafter described), the Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus that
portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by the
Executive to the extent that such repayment results in a reduction in Excise
Tax or a federal, state or local income tax deduction) plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2)(3) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the Executive's
employment (or such other time as is hereinafter described) (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess (plus any interest, penalties or
addition payable by the Executive with respect to such excess) at the time that
the amount of such excess is finally determined. The Executive and the Company
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments. If an Executive
who remains in the employ of the Company becomes entitled to the payment
provided for by this paragraph, such payment shall be made no later than the
later of (i) the fifth day following the date on which the Executive notifies
the Company that he is subject to the Excise Tax and (ii) twenty days prior to
the date on which the Excise Tax is initially due.
6.3. The payments provided for in Section 6.1 hereof (other than
Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made
not later than the fifth day following the Date of Termination, unless
Executive elects a later date of payment for all or any part thereof; provided,
however, that, if the amounts of such payments cannot be finally determined on
or before such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Company of the minimum amount of
such payments to which the Executive is clearly entitled and shall pay the
remainder of such payments (together
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with interest at the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(9) of the
Code). At the time that payments are made under this section, the Company shall
provide the Executive with a written statement setting forth the manner in
which such payments were calculated and the basis for such calculations
including, without limitation, any opinions or other advice the Company has
received from outside counsel, auditors or consultants (and any such opinions
or advice which are in writing shall be attached to the statement).
6.4. The Company also shall pay to the Executive all legal fees and
expenses incurred in good faith by the Executive as a result of a termination
of the Executive's employment following a Change in Control and during the term
of this Agreement (including all such fees and expenses, if any, incurred in
disputing in good faith any such termination or in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of section 4999 of the Code to any payment or benefit provided
hereunder). For purposes of this Section 6.4, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was excessive. Such payments shall be
made within five (5) business days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.1. After a Change in Control and during the term of this
Agreement, any purported termination of the Executive's employment (other than
by reason of death) shall be communicated by written Notice of Termination from
one party hereto to the other party hereto in accordance with Section 10
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause issued by the Company is required to include a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board which was called
and held for the purpose of considering such termination (after reasonable
notice to the Executive and an opportunity for the Executive, together with the
Executive's Counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive engaged in conduct set forth in
clause (i) or (ii) of the definition of Cause herein, and specifying the
particulars thereof in detail.
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<PAGE> 8
7.2. "Date of Termination," with respect to any purported
termination of the Executive's employment after a Change in Control and during
the term of this Agreement, shall mean (i) If the Executive's employment is
terminated for Disability, thirty (30) days after Notice of Termination is
given (provided that the Executive shall not have returned to the full-time
performance of the Executive's duties during such thirty (30) day period), and
(ii) if the Executive's employment is terminated by for any other reason, the
date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days from the date such Notice of Termination is given).
7.3. If within fifteen (15) days after any Notice of Termination is
given or, if later, prior to the Date of Termination (as determined without
regard to this Section 7.3), either party notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice
of dispute provided by the Executive only if such notice in given in good faith
and the Executive pursues the resolution of such dispute with reasonable
diligence.
7.4. If a purported termination occurs following a Change in
Control and during the term of this Agreement, and such termination is disputed
in accordance with Section 7.3 hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the
dispute was given until the Date of Termination, determined in accordance with
Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all
other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section
6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided
for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not
be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company, or otherwise.
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<PAGE> 9
9. Successors; Binding Agreement.
9.1. In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any such successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for
Good Reason after a Change in Control, except that, for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
9.2. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amount would still be payable to the Executive
hereunder (other than amounts which, by their terms, terminate upon the death
of the Executive) if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Executive's estate.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
states registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Jevic Transportation, Inc.
700 Creek Road
P.O. Box 5157
Delanco, NJ 08075
To the Executive:
Name
Address
City, State ZIP
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<PAGE> 10
11. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall he deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, and construction of this Agreement shall be
governed by the laws of the State of New Jersey. Payments provided for
hereunder shall be paid net withholding required under federal, state or local
law and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 5, 6, and 7 which
arise during the term of this Agreement shall survive the expiration of the
term of this Agreement.
12. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts; Coordination with Employment Agreement.
13.1. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instruments.
13.2. The terms of this Agreement shall be coordinated with and
applied in conjunction with the terms of the Executive's employment agreement,
if any, with the Company. In general, it is the intent of the parties that,
subsequent to a Change in Control and during the term of this Agreement, the
provisions of this Agreement shall supersede and substitute for those
provisions of the employment agreement relating to the Executive's entitlement
to benefits in connection with any termination of the Executive's employment,
but shall not supersede for any period the provisions of such employment
agreement pertaining to the terms of the Executive's employment. Except for
circumstances relating to a termination of employment following a Change in
Control during the term of this Agreement, as provided for herein, all terms
and conditions of the Executive's employment with the Company shall be governed
by the terms of the Executive's employment agreement (including but not limited
to any such term granting additional years of service to the Executive for
purposes of any of the Company's employee benefit plans).
14. Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific
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<PAGE> 11
provisions of this Agreement relied upon. The Board shall afford a reasonable
opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the
Board within sixty (60) days after notification by the Board that the
Executive's claim has been denied. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Burlington County, New Jersey in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however,
that the Executive shall be entitled to seek specific performance of the
Executive's right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
15. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Applicable Multiplier" means two, except as otherwise
specifically provided herein with the consent of the Executive.
(B) "Base Amount" shall have the meaning defined in section
280G(b)(3) of the Code.
(C) "Board" shall mean the Board of Directors of the
Company.
(D) "Cause" for termination by the Company of the
Executive's employment, after any Potential Change in Control or Change in
Control, shall mean the willful and continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or
mental illness or any such actual or anticipated failure after the issuance of
a Notice of Termination for Good Reason by the Executive pursuant to Section
7.1 hereof) after a written demand for substantial performance is delivered to
the Executive by the Board, which demand specifically identifies the manner in
which the Board believes that the Executive has not substantially performed the
Executive's duties. For purposes of this definition, no act, or failure to act,
on the Executive's part shall be "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
(E) A "Change in Control" shall be deemed to have occurred
if the events set forth in any one of the following paragraphs shall have
occurred:
(i) The acquisition in one or more transactions by any
"Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of
"Beneficial Ownership" (as the term beneficial ownership is used for purposes
of Rule 13d-3 promulgated under the 1934 Act) of fifty
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<PAGE> 12
percent (50%) or more of the combined voting power of the Company's then
outstanding voting securities (the "Voting Securities"); or
(ii) Approval by shareholders of the Company of (A) a
merger, reorganization or consolidation involving the Company if the
shareholders of the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding voting securities of the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) (1) a complete liquidation or dissolution of the Company
or (2) an agreement for the sale or other disposition of all or substantially
all of the assets of the Company; or
(iii) Acceptance by shareholders of the Company of
shares in a share exchange if the shareholders of the Company immediately
before such share exchange do not or will not own directly or indirectly
immediately following such share exchange more than fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from or surviving such share exchange in substantially the same
proportion as the ownership of the Voting Securities outstanding immediately
before such share exchange.
Notwithstanding the foregoing, a Change in Control shall not include
any event, circumstance or transaction occurring during the six-month period
following a Potential Change in Control which Potential Change in Control
results from the action of any entity or group which includes the Executive (a
"Management Group").
(F) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. References to specific sections of the code shall
include any successors thereto.
(G) "Company" shall mean Jevic Transportation, Inc., a New
Jersey corporation, and any successor to its business or assets which assumes
and agrees to perform this Agreement by operation of law, or otherwise (except
in determining, under Section 15(E) hereof, whether or not any Change in
Control of the Company has occurred in connection with such succession).
(H) "Date of Termination" shall have the meaning stated in
Section 7.2 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if the Executive is
absent from full-time employment and qualifies for disability benefits under
the Company's long-term disability plan
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<PAGE> 13
(or would so qualify but for any waiting period under that plan). In the
absence of any such plan, the determination of Disability shall be made by the
Board.
(J) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
(K) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
(L) "Executive" shall mean the individual named in the
first paragraph of this Agreement.
(M) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to
act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure
to act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment by the Company to the Executive of
any duties inconsistent with the Executive's status as an executive of the
Company or a material adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to the
Change in Control or Potential Change in Control or any change in Executive's
title or status;
(ii) any reduction by the Company in the Executive's
annual base salary as in affect on the date hereof or as the same may be
increased from time to time;
(iii) the relocation by the Company of its principal
executive offices to a location more than 30 miles from the location of such
office immediately prior to the Change in Control or the Company's requiring
the Executive to be based anywhere other than the Company's principal executive
offices except for required travel on the Company's business to an extent
substantially consistent with the Executive's present business travel
obligations;
(iv) the failure by the Company to pay to the Executive
any portion of the Executive's current compensation, or to pay to the Executive
any portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date such
compensation is due;
(v) the failure by the Company to continue in effect
any compensation plan in which the Executive participates immediately prior to
the Change in
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<PAGE> 14
Control which is material to the Executive's total compensation, including but
not limited to any bonus plan and any similar or substitute plan adopted prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of the Executive's participation relative to other participants, as existed at
the time of the Change in Control;
(vi) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical, health
and accident, disability or other material benefit or perquisite plan in which
the Executive was participating at the time of the Change in Control, and
specifically including those benefits set forth in Section 6.1(c) hereof, the
taking of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in Control,
or the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance, with the Company's normal vacation
policy in effect at the time of the Change in Control; or
(vii) any purported termination by the Company of the
Executive's employment which is not effected for Cause and pursuant to a Notice
of Termination satisfying the requirements of Section 7.1; for purposes of this
Agreement, no such purported termination shall be effective.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(N) "Gross-Up Payment" shall have the meaning given in
Section 6.2 hereof.
(O) "Notice of Termination" shall have the meaning stated
in Section 7.1 hereof.
(P) "Person" shall have the meaning given in section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; provided, however, that a Person shall not include (i) the Company or
any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
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<PAGE> 15
(Q) "Potential Change in Control" shall be deemed to have
occurred if the events set forth in any one of the following paragraphs shall
have occurred:
(i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated, would
constitute a Change in Control;
(iii) any Person who both (x) is on the date hereof or
subsequently becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing at least 10% or more of the combined
voting power of the Company's then outstanding securities and (y) increases his
or her beneficial ownership of such securities by 5% or more over the
percentage so owned by such Person on the date hereof; or
(iv) the Board adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control has occurred.
(R) "Severance Payments" shall mean those payments
described in Section 6.1 hereof.
(S) "Total Payments" shall mean those payments described in
Section 6.2 hereof.
16. Prior Agreements Superseded. Effective on the Effective Date, this
Agreement supersedes and replaces any previous Agreement between the Company
and Executive on the same subject.
IN WITNESS WHEREOF, this Agreement has been executed as of the 4th day
of June, 1999, on behalf of this Company by its duly authorized officer and by
the Executive.
ATTEST: JEVIC TRANSPORTATION, INC.
/s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL
- ----------------------------------- --------------------------------
Secretary Harry J. Muhlschlegel
Chief Executive Officer
EXECUTIVE
By: /s/ JOSEPH A. LIBRIZZI
--------------------------------
Joseph A. Librizzi
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<PAGE> 1
EXHIBIT (c)(11)
JEVIC TRANSPORTATION, INC.
600 Creek Road
P.O. Box 5157
Delanco, NJ 08075
December 22, 1998
Yellow Corporation
10990 Roe Avenue
Overland Park, KS 66211-1213
Attn: William F. Martin, Jr.
Senior Vice President
Dear Sirs:
In order to enable you to evaluate a possible transaction
between Jevic Transportation, Inc. (together with its subsidiary and affiliated
companies, the "Company") and you (the "Possible Transaction"), there will be
provided to you certain proprietary, nonpublic, confidential information
concerning the Company, its subsidiaries and their properties, operations and
finances.
1. All information about the Company furnished by the Company and by
its affiliates, directors, officers, employees, agents and financing sources
(all such persons are collectively referred to herein as "representatives"),
whether furnished to you or to your representatives before or after the date
hereof, is referred to in this letter agreement as "Proprietary Information".
For purposes of this agreement, Proprietary Information (a) shall include all
documents which are prepared by you and your representatives, including all
correspondence, memoranda, notes, summaries, analyses, studies, models, extracts
of and documents and records reflecting, based on or derived from Proprietary
Information as well as all copies and other reproductions thereof, whether in
writing or stored or maintained in or by electronic, magnetic or other means,
media or devices (all such documents and writings which are prepared by you or
your representatives are sometimes referred to herein as "Evaluation
Documents"), and (b) shall not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by you
or your representatives in violation of this agreement, (ii) was available to
you on a nonconfidential basis prior to its disclosure by the Company or its
representatives, or (iii) becomes available to you on a nonconfidential basis
from a person other than the Company or its representatives who is not known to
you to be otherwise bound by a confidentiality agreement with the Company or its
representatives or prohibited from transmitting the information to you. As used
in this letter, the term "person" shall be broadly interpreted to include,
without limitation, any corporation, company, partnership and individual.
<PAGE> 2
2. Unless otherwise agreed to in writing by the Company or as permitted
by paragraph 3 hereof, you agree that (a) you and your representatives will keep
all Proprietary Information confidential and not disclose or reveal any
Proprietary Information to any person other than those of your representatives
who are actively and directly participating in the evaluation of the Possible
Transaction or who otherwise need to know the Proprietary Information for the
purpose of evaluating the Possible Transaction, and cause your representatives
to observe the terms of this letter agreement, (b) you and your representatives
will not use Proprietary Information for any purpose other than in connection
with the evaluation of the Possible Transaction and (c) you and your
representatives will not disclose to any person (other than to your
representatives actively and directly participating in or evaluating the
Possible Transaction) any information about the Possible Transaction, or the
terms, conditions or other facts relating thereto, including the fact that
discussions are taking place with respect thereto or the status thereof, or the
fact that the Proprietary Information has been made available to you. You will
be responsible for any breach of the terms hereunder by you or your
representatives.
3. In the event that you or any of your representatives is requested
pursuant to , or required by, applicable law or regulation or by legal process
to disclose any Proprietary Information concerning the Company or the Possible
Transaction (including any facts or information referred to in paragraph 2(c)
above), you agree that you will provide the Company with prompt notice of such
request(s) or the receipt(s) of legal process so as to enable the Company to
seek an appropriate protective order, to consult with you with respect to the
Company or you taking steps to resist or narrow the scope of such request or
process, and/or to waive compliance in whole or in part with your agreement to
maintain the confidentiality of the Proprietary Information. If and to the
extent that after the foregoing notice, in the absence of a protective order or
receipt of a waiver under this letter agreement, you or your representatives
are, in the opinion of your counsel, compelled to disclose Proprietary
Information or other information concerning the Company or the Possible
Transaction or risk being liable for contempt or suffer censure or penalty or
violate applicable laws or regulations, you and your representatives may
disclose such Proprietary Information or other information without liability to
the Company under this letter agreement.
4. If you determine that you do not wish to proceed with the Possible
Transaction, you will promptly advise us of that decision. In that case, or in
any case, you agree that you will, upon the Company's request, promptly deliver
to the Company all of the Proprietary Information in your possession or control
or in the possession or control of any of your representatives. You may,
however, destroy such of the Proprietary Information as constitutes Evaluation
Documents in your and your representatives' possession or control, whether
prepared by you or your representatives, in which case you will do so promptly
and, if requested by the Company, you will provide a written statement by an
officer of your organization familiar with your consideration of the Possible
Transaction certifying that all such Evaluation Documents, including all copies
thereof, have been destroyed.
5. In consideration of your receipt of the Proprietary Information, you
hereby agree that for a period of three (3) years from the date hereof neither
you, nor your affiliates, as defined in rule 12b-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange
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<PAGE> 3
Act"), will (and you and they will not assist or encourage others to), directly
or indirectly, unless specifically requested in writing to do so in advance or
consented prior thereto in writing by the Company:
(a) acquire or agree, offer, seek or propose to acquire, or cause
to be acquired, ownership (including, but not limited to,
beneficial ownership as defined in Rule 13d-3 under the
Exchange Act) of any of the assets or business of the Company
or of any of its subsidiaries or any voting securities issued
by the Company or any of its subsidiaries, or any rights or
options to acquire such ownership (including from a third
party); or
(b) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are defined under Regulation 14A of
the Exchange Act) to vote or seek to advise or influence in
any manner whatsoever any person or entity with respect to the
voting of any securities of the Company or any of its
subsidiaries; or
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect
to any voting securities of the Company or any of its
subsidiaries; or
(d) arrange, or in any way participate in, any financing for the
purchase of any voting securities or securities convertible or
exchangeable into or exercisable for any voting securities or
assets of the Company of any of its subsidiaries; or
(e) otherwise act, whether alone or in concert with others, to
seek to propose to the Company, any subsidiary of the Company
or any of their stockholders any merger, business combination,
restructuring, recapitalization or similar transaction to or
with the Company or any of its subsidiaries or otherwise seek
or propose to influence or control the Company's management or
policies; or
(f) solicit for employment, or seek to negotiate or influence the
terms and conditions of employment of, any employees of the
Company or any of its subsidiaries with whom you have direct
contact in connection with your evaluation of or our
discussions concerning the Possible Transaction; or
(g) enter into any discussions, negotiations, arrangements or
understandings with or advise, assist or encourage any third
party with respect to any of the foregoing.
In addition, you also agree during such three (3)-year period not to
(a) request the Company directly or indirectly to amend or waive any provision
of this paragraph 5 (including this sentence) or (b) take any action designed to
or which can reasonably be expected to require
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<PAGE> 4
the Company to make a public announcement regarding any of the matters referred
to in this paragraph 5.
6. Although the Proprietary Information contains information which the
Company believes to be relevant for the purpose of your evaluation of the
Possible Transaction, neither the Company nor any of its representatives makes
hereunder any representation or warranty, express or implied, as to the accuracy
or completeness of the Proprietary Information delivered or made available to
you. Neither the Company nor its representatives shall have any liability to you
or your representatives relating to or arising from the use of the Proprietary
Information. Only those representations and warranties that are made in a
definitive agreement effecting the Possible Transaction when, as and if one is
executed, and subject to such limitations and restrictions as may be specified
in such agreement, shall have any legal effect.
7. Without prejudice to the rights and remedies otherwise available to
the parties, you agree that the Company shall be entitled to equitable relief by
way of injunction if you or any of your representatives breach or threaten to
breach any of the provisions of this letter agreement. It is understood that any
failure or delay by a party in exercising any right, power or privilege
hereunder shall not operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof.
8. This letter agreement constitutes the entire and exclusive agreement
between the parties respecting the subject matter hereof, superseding all prior
discussions, agreements or arrangements, whether oral or written, with respect
to the subject matter hereof. It may not be amended unless in writing and signed
by both parties. You acknowledge that the Company and its representatives have
no obligations to you of any kind respecting the Possible Transaction, that
there is no assurance that the Possible Transaction will be considered,
negotiated, agreed to or completed, and that an alternative transaction with a
person other than you may be considered, negotiated, agreed to or completed by
the Company without notice to you.
9. The Company agrees that it will not disclose to any person (other
than to its representatives actively and directly participating in or evaluating
the Possible Transaction) any information about the Possible Transaction, or the
terms, conditions or other facts relating thereto, including the fact that
discussions are taking place with respect thereto or the status thereof, or the
fact that the Proprietary Information has been made available to you, unless
otherwise agreed in writing by you or required by applicable law or regulation
or by legal process.
10. This letter agreement may be executed and delivered by facsimile
signature in one or more counterparts, each of which shall constitute an
original instrument and all of which, together, shall constitute the same letter
agreement.
11. This letter agreement, its interpretation and enforcement, shall be
governed by the laws of the State of New Jersey applicable to agreements made
and to be performed wholly therein.
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<PAGE> 5
Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this letter enclosed
herewith.
Yours truly,
JEVIC TRANSPORTATION, INC.
By: /s/ Harry J. Muhlschlegel
------------------------------------
Harry J. Muhlschlegel, Chairman
and Chief Executive Officer
Accepted and Agreed
YELLOW CORPORATION
By: /s/ William F. Martin, Jr.
-------------------------------
William F. Martin, Jr.,
Senior Vice President
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