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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 2, 1996
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CALIBER SYSTEM, INC.
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(Exact Name of Registrant as Specified in Charter)
Ohio 0-10716 34-1365496
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1077 Gorge Boulevard, P.O. Box 88, Akron, Ohio 44309-0088
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(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (216) 384-8184
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Roadway Services, Inc.
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
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On December 29, 1995, the Board of Directors of the Registrant declared a
spin-off distribution to the Registrant's shareholders of record at the close of
business on December 29, 1995 of approximately 95% of the Common Stock of its
wholly-owned subsidiary, Roadway Express, Inc. ("REX") on the basis of one
share of Common Stock of REX for every two outstanding shares of Common Stock
of the Registrant. The REX shares were distributed to the Distribution Agent
for the spin-off distribution effective January 2, 1996 and certificates for REX
shares were mailed on or about January 12, 1996. The distribution was effected
to separate the Registrant and REX into two independent public companies and
was approved by the Registrant's shareholders at a Special Meeting of
Shareholders held on December 14, 1995.
In connection with the spin-off, the Registrant has changed its corporate name
to Caliber System, Inc. effective January 2, 1996.
A copy of the Registrant's press release dated December 29, 1995 is attached
hereto and incorporated herein.
Item 7. Financial Statements, Pro Forma Financial Information
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and Exhibits
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(c) Exhibits.
See Exhibit Index.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALIBER SYSTEM,INC.
By: D.A. Wilson
Date: January 18, 1996 Its: Senior Vice President-Finance
and Planning, Secretary and
Chief Financial Officer
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
3.1(a) Restated Amended Articles of Incorporation of Roadway Services,
Inc. (filed as Exhibit 4(a) to Post-Effective Amendment No. 1
to RSI's Registration Statement No. 33-44502 on Form S-8 and
incorporated herein by reference).
3.1(b) Certificate of Amendment to the Articles of Incorporation.
10.1 Distribution Agreement between Roadway Services, Inc. and
Roadway Express, Inc. dated December 29, 1995.
10.2 Form of First Amendment and Waiver to Credit Agreement among
Roadway Services, Inc., the several banks and other
financial institutions parties thereto and Chemical Bank, as
agent for the lenders, dated as of September 28, 1995.
99 Roadway Services, Inc. Press Release dated December 29, 1995.
</TABLE>
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EXHIBIT 3.1(b)
ROADWAY SERVICES, INC.
Certificate of Amendment by Shareholders
to the Amended Articles of Incorporation
The undersigned, Daniel J. Sullivan, Chairman, Chief Executive
Officer and President; and Douglas A. Wilson, Senior Vice President-Finance and
Planning, Secretary and Chief Financial Officer, respectively, of ROADWAY
SERVICES, INC., an Ohio corporation (the "Corporation"), do hereby certify,
pursuant to Section 1701.73 of the Ohio Revised Code, that the following
resolution to amend the Corporation's Amended Articles of Incorporation was
duly adopted and approved, pursuant to Section 1701.71 of the Ohio Revised
Code, by the affirmative vote of holders of a majority of the common stock,
without par value, of the Corporation at a special meeting of the shareholders
of the Corporation on December 14, 1995:
RESOLVED, that, promptly following the distribution of at
least ninety-five percent (95%) of the outstanding shares of common stock of
Roadway Express, Inc., ARTICLE I of the Company's Amended Articles of
Incorporation be amended to read as follows:
ARTICLE I
The name of the Corporation shall be Caliber System, Inc.
IN WITNESS WHEREOF, the above-named officers, acting for and
on behalf of the Corporation, have subscribed their names this 31 day of
December, 1995.
/s/ Daniel J. Sullivan
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Daniel J. Sullivan,
Chairman, Chief Executive
Officer and President
/s/ Douglas A. Wilson
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Douglas A. Wilson,
Senior Vice President -
Finance and Planning,
Secretary and Chief Financial
Officer
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EXHIBIT 10.1
DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT (the "Agreement"), is made as of
this 29th of December, 1995, by and between ROADWAY SERVICES, INC., an Ohio
corporation ("RSI"), and ROADWAY EXPRESS, INC., a Delaware corporation ("REX").
RECITALS
WHEREAS, RSI is the holder of all of the issued and
outstanding shares of common stock, $.01 par value per share, of REX (the "REX
Common Stock");
WHEREAS, the Board of Directors of RSI has determined that it
is advisable to distribute not less than 95% of the shares of REX Common Stock
to the holders of the capital stock, without par value, of RSI (the "RSI Common
Stock"), on substantially the terms and subject to the conditions set forth in
RSI's Proxy Statement dated November 24, 1995 (the "Proxy Statement");
WHEREAS, RSI and REX have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
such distribution and certain other agreements that will govern certain matters
relating to such distribution and the relationships thereafter between RSI and
REX;
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration, the parties
hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
1.1 General. 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):
Action: any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
ADR Agreement: the Alternative Dispute Resolution Agreement
to be entered into by RSI and REX as of the Distribution Date, the form of
which is attached hereto as Annex 1.
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Affiliate: as defined in Rule 12b-2 under the Exchange Act,
including with respect to RSI any RSI Subsidiary and with respect to REX any
REX Subsidiary.
Chubb Amount: an amount equal to the product of the insurance
proceeds payable by Chubb Insurance Company to RSI under its employee fidelity
insurance claims in respect of certain employee malfeasance claims existing on
the date hereof multiplied by a fraction, the numerator of which shall be the
aggregate loss suffered by RSI (including REX) as a result of such malfeasance
in respect of REX properties or facilities and the denominator of which shall
be the aggregate loss suffered by RSI (including REX) as a result of such
malfeasance.
Code: the Internal Revenue Code of 1986, as amended.
Commission: the Securities and Exchange Commission.
Data Processing Agreement: the Data Processing and
Information Technology Services Agreement to be entered into by RSI and REX as
of the Distribution Date, the form of which is attached hereto as Annex 2.
Distribution: the distribution by RSI effective on the
Distribution Date to holders of RSI Common Stock on the Distribution Record
Date of not less than 95% of the shares of REX Common Stock.
Distribution Agent: KeyCorp Shareholder Services, Inc.
Distribution Agent Agreement: the Agreement between RSI and
the Distribution Agent, the form of which is attached hereto as Annex 3.
Distribution Date: the date fixed by the RSI Board or a
committee thereof as the effective date of the Distribution.
Distribution Ratio: the ratio of RSI Common Stock to REX
Common Stock to be distributed in the Distribution.
Distribution Record Date: the close of business on the date
to be determined by the RSI Board or a committee thereof as the record date for
the determination of shareholders of record of RSI entitled to receive the
Distribution.
Employee Matters Agreement: the Agreement on Employee Matters
to be entered into by RSI and REX as of the Distribution Date, the form of
which is attached hereto as Annex 4.
Environmental Liabilities: means any Losses arising from,
under or relating to any environmental, health or safety law, rule, regulation,
Action, threatened Action, order or consent decree.
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Exchange Act: the Securities Exchange Act of 1934, as
amended.
Form 10: the registration statement on Form 10 filed by REX
with the Commission to effect the registration of the REX Common Stock under
the Exchange Act.
Insurance Proceeds: those monies (i) received by an insured
from an insurance carrier on an insurance claim or (ii) paid by an insurance
carrier on behalf of an insured on an insurance claim, in either case net of
any applicable deductibles, retentions, or costs paid by such insured, but such
term does not refer to proceeds received from an insurer on an employee
benefits group insurance policy.
Intellectual Property Agreement: the Trademark, Trade Name
and Trade Dress License Agreement to be entered into by RSI and REX as of the
Distribution Date, the form of which is attached hereto as Annex 5.
IRS: the Internal Revenue Service.
Like-Kind Exchange Agreement: the Like-Kind Exchange
Agreement to be entered into by REX and Services Development Corporation
("SDC"), the form of which is attached hereto as Annex 6.
Long-Term Leases: the long-term leases between the parties
and for the terminals listed on Schedule C, the form of which is attached
hereto as Annex 7.
Losses: any and all debts, losses, liabilities, claims,
damages, judgments, obligations or payments, absolute or contingent, matured or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
direct or indirect, whenever arising, including all costs and expenses relating
thereto (including, without limitation, fines, penalties, punitive damages and
reasonable attorneys' fees), and including, without limitation, those debts,
losses, liabilities, claims, damages, judgments, obligations or payments
arising under any law, rule, regulation, Action, threatened Action, order or
consent decree of any governmental entity, court or agency or any award of any
arbitrator of any kind, and those arising under any contract, commitment or
undertaking, including those arising under this Agreement.
Nasdaq-NMS: the Nasdaq Stock Market, Inc. National Market
System.
ORC: the Ohio Revised Code, as amended.
Other Agreements: the ADR Agreement, the Data Processing
Agreement, the Distribution Agent Agreement, the Employee Matters Agreement,
the Intellectual Property Agreement,
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the Real Estate Agreements, the Services and Support Agreement and the Tax
Matters Agreement.
Proxy Statement: as defined in the recitals to this
Agreement.
Real Estate Agreements: the Like-Kind Exchange Agreement, the
Long-Term Leases and the Short-Term Leases.
REX Common Stock: as defined in the recitals to this
Agreement.
RPS: Roadway Package System, Inc., a wholly-owned subsidiary
of RSI.
RSI Board: the Board of Directors of RSI.
RSI Common Stock: as defined in the recitals to this
Agreement.
Securities Act: the Securities Act of 1933, as amended.
Services and Support Agreement: the Services and Support
Agreement to be entered into by RSI and REX as of the Distribution Date, the
form of which is attached hereto as Annex 8.
Short-Term Leases: the short-term leases between the parties
and for the terminals listed on Schedule D, the form of which is attached
hereto as Annex 9.
Subsidiaries: the term "Subsidiaries" as used herein with
respect to any entity shall, unless otherwise indicated, be deemed to refer to
both direct and indirect subsidiaries of such entity; provided that, with
respect to RSI, such term shall not include REX and its subsidiaries.
Tax Matters Agreement: the Tax Matters Agreement to be
entered into by RSI and REX as of the Distribution Date, the form of which is
attached hereto as Annex 10.
ARTICLE TWO
THE DISTRIBUTION
Section 2.1 Cooperation Prior to the Distribution. Prior
to the Distribution: (a) RSI and REX shall prepare, and RSI shall mail, prior
to the date of the RSI shareholders' meeting held to approve the Distribution,
to the holders of RSI Common Stock, the Proxy Statement, which shall set forth
appropriate disclosure concerning REX, the Distribution and other matters. RSI
and REX shall prepare, and REX shall file with the
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Commission, the Form 10, which shall include or incorporate by reference the
Proxy Statement. REX shall use reasonable efforts to cause the Form 10 to
become effective under the Exchange Act.
(b) RSI and REX shall cooperate in preparing, filing with
the Commission and causing to become effective any registration statements or
amendments thereto that are appropriate to reflect the establishment of or
amendments to any employee benefit and other plans contemplated by the Employee
Matters Agreement.
(c) RSI and REX shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States, in connection with the
transactions contemplated by this Agreement.
(d) REX shall prepare, file and pursue an application to
permit listing of the REX Common Stock on the Nasdaq-NMS under the symbol
"ROAD" or such other symbol as REX deems appropriate.
(e) RSI shall prepare, file and pursue an application to
permit listing of the RSI Common Stock on the New York Stock Exchange under the
symbol "CBB" and shall delist the shares of RSI Common Stock from the
Nasdaq-NMS.
Section 2.2 Conditions to Distribution. The RSI Board
shall in its discretion establish the Distribution Record Date and the
Distribution Date and all appropriate procedures in connection with the
Distribution. The Distribution shall be subject to satisfaction of each of the
following conditions: (i) approval of the Distribution by holders of at least
a majority of the outstanding shares of RSI Common Stock; (ii) receipt by RSI
of a ruling from the IRS to the effect that the Distribution will constitute a
tax-free distribution for Federal income tax purposes for both RSI and holders
of RSI Common Stock or, at the option of the RSI Board, an opinion by Jones,
Day, Reavis & Pogue, RSI's counsel, in form and substance satisfactory to the
RSI Board, to the effect that the Distribution should constitute such a
tax-free distribution; (iii) effectiveness of the Form 10 under the Exchange
Act; (iv) there not being in effect any statute, rule, regulation or order of
any court, governmental or regulatory body which prohibits or makes illegal the
Distribution or the transactions contemplated by the Distribution; (v) receipt
of a favorable response from the staff of the Commission with respect to RSI's
no-action request concerning, among other things, whether the Distribution may
be effected without registration of the REX Common Stock under the Securities
Act; (vi) receipt by RSI of all necessary third party consents to the
Distribution and the transactions contemplated by this Agreement; (vii)
approval for listing of the REX Common Stock on the Nasdaq-NMS subject to
official notice of issuance; (viii) receipt of an updated opinion from Goldman,
Sachs & Co. to the RSI Board, dated as of the Distribution Date, in form and
substance satisfactory to the RSI Board; (ix) if dissenters' rights to the
Distribution
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are available under Ohio law, the exercise of such dissenters' rights by
holders of no more than one percent of RSI Common Stock; provided, that the RSI
Board may waive any condition to the Distribution other than those set forth in
clauses (i), (ii), (iii) and (iv) of this Section 2.2; provided further, that
satisfaction of such conditions shall not create any obligation on the part of
RSI or any other party hereto to effect the Distribution prior to the
Distribution Date or in any way limit RSI's power of termination set forth in
Section 6.8 or alter the consequences of any such termination from those
specified in such section.
Section 2.3 The Distribution. On or prior to the
Distribution Record Date, RSI shall enter into the Distribution Agent Agreement
with the Distribution Agent. On the Distribution Date or as soon thereafter as
practicable, subject to the declaration of the Distribution by the RSI Board or
a committee thereof, RSI shall deliver to the Distribution Agent a certificate
or certificates representing the number of then outstanding shares of REX to be
distributed in the Distribution, together with such documents or certificates
as the Distribution Agent may reasonably request. REX agrees to provide all
certificates for shares of REX Common Stock that the Distribution Agent shall
require in order to effect the Distribution.
ARTICLE THREE
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.1 The Reorganization. (a) Prior to the
Distribution Date, RSI shall (i) make a capital contribution to RPS of all of
the outstanding capital stock of Circle Investment Co., (ii) make a capital
contribution to RPS of all the outstanding capital stock of SDC and (iii) take
all steps necessary to merge Roadway Regional Group, Inc. into Viking Freight
System, Inc. ("Viking") with Viking as the surviving corporation in the merger.
(b) Prior to the Distribution Date, RSI and REX shall
take all steps necessary to increase the outstanding shares of REX Common Stock
so that, immediately prior to the Distribution, RSI will hold a number of
shares of REX Common Stock sufficient to enable it to complete the Distribution
based on the Distribution Ratio.
Section 3.2 Repayment of Intercompany Indebtedness.
Prior to the Distribution, REX shall repay to Affiliates of RSI any
indebtedness owing to any such Affiliates by REX immediately prior to the
Distribution. To the extent any balance of such intercompany indebtedness
exists immediately prior to the Distribution Date, RSI shall contribute to the
capital of REX an amount equal to such balance and REX shall use the proceeds
of
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such capital contribution to repay the remainder of any such indebtedness.
Section 3.3 REX Board. RSI and REX shall take all
actions that may be required to elect as directors of REX, on or prior to the
Distribution Date, the persons named in the Form 10 to constitute the board of
directors of REX on the Distribution Date.
Section 3.4 REX Charter and By-Laws. On or prior to the
Distribution Date, (a) RSI shall approve and cause the Amended and Restated
Certificate of Incorporation of REX substantially in the form of Annex 11
hereto to be filed with the Secretary of State of Delaware and to be in effect
on the Distribution Record Date, and (b) RSI shall adopt the Amended and
Restated By-Laws of REX substantially in the form of Annex 12 hereto to be in
effect on the Distribution Record Date.
Section 3.5 Other Agreements. On or prior to the
Distribution Date, RSI and REX shall enter into, and/or (where applicable)
shall cause their respective subsidiaries to enter into, the ADR Agreement, the
Data Processing Agreement, the Distribution Agent Agreement, the Employee
Matters Agreement, the Intellectual Property Agreement, the Services and
Support Agreement and the Tax Matters Agreement in substantially the forms
attached hereto and any other agreements necessary or appropriate in connection
with the transactions contemplated hereby and thereby. In the event of a
conflict between the terms of this agreement and the terms of any of the Other
Agreements, the terms of such Other Agreement shall govern.
Section 3.6 Real Estate Matters. (a) Prior to or on the
Distribution Date, REX, RSI and certain Affiliates of RSI shall enter into
agreements to terminate leases relating to properties in Kent, Washington,
Grandview, Missouri and Downers Grove, Illinois.
(b) Prior to or on the Distribution Date, REX and certain
Affiliates of RSI will enter into the Long-Term Leases and the Short-Term
Leases in substantially the forms attached hereto.
(c) Prior to or on the Distribution Date, REX and an
Affiliate of RSI will enter into the Like-Kind Exchange Agreement in
substantially the form attached hereto.
ARTICLE FOUR
INDEMNIFICATION
Section 4.1 Indemnification by RSI. Except as otherwise
provided by any of the Other Agreements or as contemplated by Section 4.5
hereof, effective as of the
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Distribution Date, RSI agrees to indemnify, defend and hold harmless REX, each
Subsidiary and Affiliate of REX and each of their respective directors,
officers, employees and agents (in their capacities as directors, officers,
employees and agents of REX, its Subsidiaries and its Affiliates) (the "REX
Indemnitees") from and against any and all Losses of the REX Indemnitees
arising out of or related in any manner to any item set forth on Schedule A.
Section 4.2 Indemnification by REX. Except as otherwise
provided by any of the Other Agreements or as contemplated by Section 4.5
hereof, effective as of the Distribution Date, REX agrees to indemnify, defend
and hold harmless RSI, each Subsidiary and Affiliate of RSI and each of their
respective directors, officers, employees and agents (in their capacities as
directors, officers, employees and agents of RSI, its Subsidiaries and its
Affiliates) (the "RSI Indemnitees") from and against any and all Losses of the
RSI Indemnitees arising out of or related in any manner to any item set forth
on Schedule B.
Section 4.3 Limitations on Indemnification Obligations.
The amount that either RSI or REX (an "Indemnifying Party") is or may be
required to pay to an Indemnitee pursuant to Section 4.1 or 4.2 shall be
reduced by any Insurance Proceeds or other amounts actually recovered by or on
behalf of such Indemnitee, in reduction of the related Loss. If an Indemnitee
shall have received the payment required by this Agreement from an Indemnifying
Party in respect of any Loss and shall subsequently actually receive Insurance
Proceeds or other amounts in respect of such Loss, then such Indemnitee shall
pay to such Indemnifying Party a sum equal to the amount of such Insurance
Proceeds or other amounts actually received (up to but not in excess of the
amount of any indemnity payment made hereunder). No insurer or other third
party shall: (a) be relieved of the responsibility to pay any claims which it
would otherwise be obligated to pay in the absence of the foregoing
indemnification provisions; (b) solely by virtue of the indemnification
provisions hereof, have any subrogation rights with respect to any claims which
it would otherwise be obligated to pay or (c) be entitled to a benefit it would
not be entitled to receive in the absence of the foregoing indemnification
provisions.
Section 4.4 Procedures for Indemnification. (a)(i) If an
Indemnitee shall receive notice or otherwise learn of the assertion of any
claim or commencement of any proceeding (including any governmental
investigation) by a person who is not a party to this Agreement (or any
Affiliate of either party) (a "Third-Party Claim") with respect to which an
Indemnifying Party may be obligated to provide indemnification pursuant to this
Agreement, such Indemnitee shall give such Indemnifying Party written notice
thereof promptly after becoming aware of such Third-Party Claim setting forth
the particulars as to such claim or proceeding in reasonable detail; provided
that the failure of
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any Indemnitee to give notice as provided in this Section 4.4(a) shall not
relieve the related Indemnifying Party of its obligations under this Article
Four, unless such Indemnifying Party is actually prejudiced by such failure to
give notice and then only to the extent of such actual prejudice.
(ii) An Indemnifying Party may, to the extent it wishes
within thirty days of receipt of notice of a Third Party Claim and at its cost
and expense, elect to defend or to seek to settle or compromise any Third-Party
Claim; provided that the Indemnitee may participate in such settlement or
defense through its chosen counsel at its sole cost and expense. After notice
from an Indemnifying Party to an Indemnitee of its election to assume the
defense of a Third-Party Claim, such Indemnifying Party shall not be liable to
such Indemnitee under this Article Four for any legal or other expenses (except
expenses approved in advance by the Indemnifying Party) subsequently incurred
by such Indemnitee in connection with the defense thereof; provided that if the
defendants in any such Third-Party Claim include both the Indemnifying Party
and one or more Indemnitees and in any Indemnitee's reasonable judgment a
conflict of interest between one or more of such Indemnitees and such
Indemnifying Party exists in respect of such claim, such Indemnitees shall have
the right to employ separate counsel to represent such Indemnitees and in that
event the reasonable fees and expenses of such separate counsel (but not more
than one separate counsel reasonably satisfactory to the Indemnifying Party)
shall be paid by such Indemnifying Party; provided further if and to the extent
that there is a conflict of defenses or positions among the Indemnitees, the
Indemnitees shall have the right to retain such number of additional separate
counsel, reasonably satisfactory to the Indemnifying Party, as is reasonably
necessary to avoid such conflicts, and the Indemnifying Party shall be
responsible for the reasonable fees and expenses of such additional separate
counsel; provided further that the Indemnitee may participate in the settlement
or defense of a Third-Party Claim through counsel chosen by such Indemnitee if
the fees and expenses of such counsel shall be borne by such Indemnitee. If an
Indemnifying Party elects not to assume responsibility for defending a
Third-Party Claim, such Indemnitee may defend or seek to compromise or settle
such Third-Party Claim but shall not thereby waive any right to indemnity
therefor pursuant to this Agreement. Notwithstanding the foregoing, the
Indemnifying Party shall not be liable for any settlement of any Third-Party
Claim effected without its written consent. The Indemnifying Party shall not,
except with the consent of the Indemnitee, (i) enter into any such settlement
that does not include as an unconditional term thereof the giving by the person
or persons asserting such Third-Party Claim to all Indemnitees an unconditional
release from all liability with respect to such Third-Party Claim, or (ii)
consent to entry of any judgment.
(b) Any claim on account of a Loss that does not result
from a Third-Party Claim shall be asserted by written
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notice given by the Indemnitee to the Indemnifying Party. Such Indemnifying
Party shall have a period of thirty (30) days after the receipt of such notice
within which to respond thereto. If such Indemnifying Party does not respond
within such thirty-day period, such Indemnifying Party shall be deemed to have
refused to accept responsibility to make payment. If such Indemnifying Party
does not respond within such thirty-day period or rejects such claim in whole
or in part, such Indemnitee shall be free to pursue such remedies as may be
available to such party under this Agreement or under applicable law (except as
provided in the ADR Agreement).
(c) In addition to any adjustments required pursuant to
Section 4.3, if the amount of any Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction that has been received by the
Indemnitee, less any expenses properly incurred in connection therewith, shall
promptly be repaid by the Indemnitee to the Indemnifying Party.
(d) In the event of payment by an Indemnifying Party to
any Indemnitee in connection with any Third-Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as
to any events or circumstances in respect of which such Indemnitee may have any
right or claim relating to such Third-Party Claim or against any other person.
Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable
manner, and at the cost and expense of such Indemnifying Party, in prosecuting
any subrogated right or claim.
Section 4.5 Chubb Payment. Notwithstanding the other
provisions of this Article Four, RSI shall pay to REX the Chubb Amount promptly
following receipt of insurance proceeds relating thereto, and such payment
shall operate as satisfaction in full of any claim on account of any Loss that
any REX Indemnitee may have against RSI or any of its Affiliates in respect of
the matters giving rise to such insurance payment.
Section 4.6 Releases. (a) Effective on the Distribution
Date, REX and its Subsidiaries hereby release and forever discharge RSI, its
Subsidiaries and their present or former officers, directors, shareholders,
agents, employees, representatives, successors-in-interest, parents,
Affiliates, attorneys and assigns of and from any and all Losses and Actions
(other than Losses and Actions for which indemnification is available under
this Article Four or under any Other Agreement (subject to the provisions of
Section 4.3) and other than for the obligations set forth in Section 4.5).
(b) Effective on the Distribution Date, RSI and its
Subsidiaries hereby release and forever discharge REX, its Subsidiaries and
their present or former officers, directors, shareholders, agents, employees,
representatives, successors-in-interest, parents, Affiliates, attorneys and
assigns of and from
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any and all Losses and Actions (other than Losses and Actions for which
indemnification is available under this Article Four or under any Other
Agreement (subject to the provisions of Section 4.3)).
ARTICLE FIVE
ACCESS TO INFORMATION; SERVICES
Section 5.1 Access to Information. From and after the
Distribution Date, RSI and its Subsidiaries shall afford to REX and its
authorized accountants, counsel and other designated representatives
(collectively, "Representatives") reasonable access (including using reasonable
efforts to give access to person or firms possessing information) and
duplicating rights during normal business hours to all records, books,
contracts, instruments, computer data and other data and information
(collectively, "Information") within RSI's or any such Subsidiary's possession
relating to REX or any REX Subsidiary and to any property owned by RSI that was
leased or operated by REX or any REX Subsidiary, insofar as such access is
reasonably required by REX or any REX Subsidiary. Similarly, REX and its
Subsidiaries shall afford to RSI and its Representatives reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
Information within REX's or any such Subsidiary's possession relating to RSI or
any RSI Subsidiary or relating to REX prior to the Distribution Date and to any
property owned by REX that was leased or operated by RSI or any RSI Subsidiary
(other than REX and its Subsidiaries), insofar as such access is reasonably
required by RSI or any RSI Subsidiary. Information may be requested under this
Article Five for, without limitation, audit, accounting, claims, litigation and
tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the transactions contemplated
hereby.
Section 5.2 Production of Witnesses. After the
Distribution Date, each of RSI and REX and its respective subsidiaries shall
use reasonable efforts to make available to the other party and its
subsidiaries, upon written request, its directors, officers, employees and
agents as witnesses to the extent that any such person may reasonably be
required in connection with any legal, administrative or other proceedings in
which the requesting party may from time-to-time be involved.
Section 5.3 Provision of Services. In addition to any
services contemplated to be provided following the Distribution Date by any
Other Agreement, each party, upon written request, shall make available to the
other party, during normal business hours and in a manner that will not
interfere unreasonably with such party's business, its financial, tax,
11
<PAGE> 12
accounting, legal, employee benefits and similar staff services (collectively,
"Services") whenever and to the extent that they may be reasonably required in
connection with the preparation of tax returns, audits, claims, litigation or
administration of employee benefit plans, and otherwise to assist in effecting
an orderly transition following the Distribution.
Section 5.4 Reimbursement. Except to the extent
otherwise provided in any Other Agreement, each party providing Information,
witnesses or Services under Sections 5.1, 5.2 or 5.3 to the other party shall
be entitled to receive from the recipient, upon the presentation of invoices
therefor, payment for all out-of-pocket costs and expenses as may be reasonably
incurred in providing such Information, witnesses or Services.
Section 5.5 Retention of Records. Except as otherwise
required by law or agreed to in writing, each of RSI and REX shall retain, and
shall cause its respective Subsidiaries to retain following the Distribution
Date, all significant Information relating to the business of the other and the
other's subsidiaries, for a period consistent with the document retention
policies in effect at RSI and REX, respectively, but in any event not less than
the six-year period following the Distribution Date. In addition, such
Information shall not be destroyed or otherwise disposed of if during such
period a party shall request in writing that any of the Information be retained
for additional specific and reasonable periods of time at the expense of the
party so requesting. After such six-year period, any party may destroy or
otherwise dispose of any Information at any time, provided that, prior to such
destruction or disposal, (a) such party shall provide no less than ninety (90)
days' prior written notice to the other party, identifying the Information
proposed to be destroyed or disposed of, and (b) if the recipient of such
notice shall request in writing prior to the scheduled date for such
destruction or disposal that any of the Information proposed to be destroyed or
disposed of be delivered to such requesting party, the party proposing the
destruction or disposal shall promptly arrange for the delivery of such of the
Information as was requested at the expense of the requesting party.
Section 5.6 Confidentiality. Each of RSI and the RSI
Subsidiaries on the one hand, and REX and the REX Subsidiaries on the other
hand shall hold, and shall cause its Representatives to hold, in strict
confidence, all Information concerning the other in its possession or furnished
by the other or the other's Representatives pursuant to this Agreement or any
of the Other Agreements (except to the extent that such Information is (a) in
the public domain through no fault of such party or (b) later lawfully acquired
on a non-confidential basis from other sources which are not subject to any
confidentiality litigation with the subject party by such party or subsequently
developed by such party), and neither party shall release or disclose such
Information to any other person, except to its auditors, attorneys, financial
advisors, bankers and other
12
<PAGE> 13
consultants and advisors, and on terms and conditions substantially the same as
the terms and conditions on which such party releases its own Information,
unless compelled to disclose by judicial or administrative process or, as
advised by its counsel, by other requirements of law.
ARTICLE SIX
MISCELLANEOUS
Section 6.1 Complete Agreement; Construction. This
Agreement, the ADR Agreement, the Employee Benefits Agreement, the Tax Matters
Agreement, the Real Estate Agreements, the Data Processing Agreement, the
Intellectual Property Agreement and the Services and Support Agreement,
including any schedules and exhibits hereto or thereto, shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter.
Section 6.2 Expenses. Except as otherwise set forth in
this Agreement, the ADR Agreement, the Employee Benefits Agreement, the Tax
Matters Agreement, the Real Estate Agreements, the Data Processing Agreement,
the Intellectual Property Agreement, or the Services and Support Agreement, (i)
all costs and expenses arising on or prior to the Distribution Date (whether or
not then payable) in connection with the Distribution shall be paid by the
party incurring such cost or expense, and (ii) each party shall bear its costs
and expenses arising after the Distribution Date in connection with the
Distribution.
Section 6.3 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio,
without regard to the principles of conflicts of laws thereof.
Section 6.4 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
delivered by hand, mailed by registered or certified mail (return receipt
requested), or sent by cable, telegram, telecopy (confirmed by regular,
first-class mail), to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and shall be deemed
given on the date on which such notice is received:
if to RSI:
Roadway Services, Inc.
1077 Gorge Boulevard
P.O. Box 88
Akron, Ohio 44309-0088
Attn: General Counsel
13
<PAGE> 14
if to REX:
Roadway Express, Inc.
1077 Gorge Boulevard
P.O. Box 471
Akron, Ohio 44309-0471
Attn: General Counsel
Section 6.5 Amendments and Waivers. This Agreement may
not be altered or amended, nor may rights hereunder be waived, except by an
instrument in writing executed by the party or parties to be charged with such
amendment or waiver. No waiver of any term, provision or condition of or
failure to exercise or delay in exercising any rights or remedies under this
Agreement, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such term, provision, condition,
right or remedy or as a waiver of any other term, provision or condition of
this Agreement.
Section 6.6 Counterparts. This Agreement may be executed
in one or more counterparts each of which shall be deemed an original
instrument, but all of which together shall constitute but one and the same
Agreement.
Section 6.7 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
Section 6.8 Termination. This Agreement may be
terminated and the Distribution abandoned at any time prior to the Distribution
Date by and in the sole discretion of the RSI Board without the approval of REX
or the shareholders of RSI. In the event of such termination, no party shall
have any liability of any kind to any other party on account of such
termination except that expenses incurred in connection with the transactions
contemplated hereby shall be paid as provided in Section 6.2.
Section 6.9 No Third-Party Beneficiaries. Except for the
provisions of Article Four relating to Indemnitees, this agreement is solely
for the benefit of the parties hereto and their respective Affiliates and
should not be deemed to confer upon third parties (including any employee of
RSI or REX or any RSI or REX Subsidiary) any remedy, claim, reimbursement,
cause of action or other right other than those existing without reference to
this Agreement.
Section 6.10 Titles and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
Section 6.11 Legal Enforceability. Any provision of this
Agreement which is prohibited or unenforceable in any
14
<PAGE> 15
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Without prejudice to any rights or remedies otherwise
available to any party hereto, each party hereto acknowledges that damages
would be an inadequate remedy for any breach of the provisions of this
Agreement and agrees that the obligations of the parties hereunder shall be
specifically enforceable.
Section 6.12 Further Assurances. In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
parties hereto will use its reasonable efforts to (i) execute and deliver such
further documents and take such other actions as any other party may reasonably
request in order to effectuate the purposes of this Agreement and to carry out
the terms hereof, and (ii) take, or cause to be taken, all actions, and to do,
or cause to be done, all things, reasonably necessary, proper or advisable
under applicable laws, regulations and agreements or otherwise to consummate
and make effective the transactions contemplated by this Agreement, including,
without limitation, using its reasonable efforts to obtain any consents and
approvals and make any filings and applications necessary or desirable in order
to consummate the transactions contemplated by this Agreement.
Section 6.13 Dispute Resolution. Any dispute between the
parties concerning the performance of this Agreement shall be resolved in
accordance with the provisions of the ADR Agreement.
15
<PAGE> 16
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
ROADWAY SERVICES, INC.
By: /s/ Douglas A. Wilson
----------------------------
ROADWAY EXPRESS, INC.
By: /s/ J. D. Cunningham
----------------------------
<PAGE> 17
SCHEDULE A
Items with respect to which RSI shall indemnify the REX
Indemnitees pursuant to Section 4.1 in accordance with the provisions of
Article Four of this Agreement:
(1) All Losses arising out of the businesses conducted or
to be conducted by RSI or any RSI Subsidiary, whether such Losses relate to
events occurring, or whether such Losses are asserted, before or after the
Distribution Date, excluding the businesses conducted or to be conducted by REX
(either directly or through a Subsidiary or Affiliate of REX);
(2) All Losses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, with respect to all information set
forth in the Proxy Statement; and
(3) All Losses arising out of Environmental Liabilities
with respect to the presence, use, storage, treatment, disposal (whether on
site or off site), escape, release or threatened release of any substance at,
near or from any property owned or leased by any REX Indemnitee to the extent
such presence, use, storage, treatment, disposal, escape, release or threatened
release is related to the operation of the businesses conducted or to be
conducted by RSI or any RSI Subsidiary other than REX or its Subsidiaries.
With respect to such substances, the REX Indemnitees' rights of indemnity
hereunder shall be in addition to any rights of indemnity owed to REX or any
REX Indemnitee by reason of the Real Estate Agreements, but shall exclude any
right of indemnity, right of contribution or other recovery under any statutory
law.
<PAGE> 18
SCHEDULE B
Items with respect to which REX will indemnify the RSI
Indemnitees in accordance with Section 4.2 of this Agreement:
(1) All Losses arising out of the businesses conducted or
to be conducted by REX or any REX Subsidiary, whether such Losses relate to
events occurring, or whether such Losses are asserted, before or after the
Distribution Date, excluding the businesses conducted or to be conducted by RSI
(either directly or through a Subsidiary or Affiliate of RSI (other than REX
and its subsidiaries));
(2) All Losses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, with respect to the information set
forth in the Form 10 or any amendment thereto;
(3) All Losses arising out of Environmental Liabilities
with respect to the presence, use, storage, treatment, disposal (whether on
site or off site), escape, release or threatened release of any substance at,
near or from any property owned or leased by any RSI Indemnitee to the extent
such presence, use, storage, treatment, disposal, escape, release or threatened
release is related to the operation of the businesses conducted or to be
conducted by REX or any REX Subsidiary. With respect to such substances, the
RSI Indemnitees' rights of indemnity hereunder shall be in addition to any
rights of indemnity owed to RSI or any RSI Indemnitee by reason of the Real
Estate Documents but shall exclude any right of indemnity, right of
contribution or right of recovery under any statutory law; and
(4) All Losses incurred solely by reason of RSI's use of
the Licensed Marks, as defined in the Intellectual Property Agreement, to the
extent that any such Loss arises through REX's negligence which has caused
infringements of a third party's trademarks, trade name or trade dress.
<PAGE> 19
SCHEDULE C
The Long-Term Lease Agreements to be entered into between the
following parties with respect to the following terminals:
<TABLE>
<CAPTION>
Landlord Tenant Location
- -------- ------ --------
<S> <C> <C>
REX SDC Atlanta, GA
REX SDC Charlotte (CSX Way), NC
REX SDC Denver, CO
REX SDC Lawrenceville, GA
REX SDC Nashville, TN
REX SDC Vernon, CA
SDC REX Pomona, CA
</TABLE>
<PAGE> 20
SCHEDULE D
The Short-Term Lease Agreements to be entered into between the
following parties with respect to the following facilities:
<TABLE>
<CAPTION>
Landlord Tenant Facility
- -------- ------ --------
<S> <C> <C>
REX Roadway Package System, Inc. Hartford, CT terminal
REX Coles Express, Inc. Newburgh, NY terminal
SDC REX Portion of Columbus, OH terminal
REX RSI Portion of Akron, OH HQ
REX Roadway Information Technology, Inc. Portion of Akron, OH HQ
REX Roadway Information Technology, Inc. Akron, OH AGO East Building
</TABLE>
<PAGE> 21
TABLE OF ANNEXES
<TABLE>
<S> <C>
ANNEX 1 Form of Alternative Dispute Resolution Agreement
ANNEX 2 Form of Data Processing and Information Technology Services Agreement
ANNEX 3 Form of Distribution Agent Agreement
ANNEX 4 Form of Agreement on Employee Matters
ANNEX 5 Form of Intellectual Property Agreement
ANNEX 6 Form of Like-Kind Exchange Agreement
ANNEX 7 Form of Long-Term Lease
ANNEX 8 Form of Services and Support Agreement
ANNEX 9 Form of Short-Term Lease
ANNEX 10 Form of Tax Matters Agreement
ANNEX 11 Form of Restated Certificate of Incorporation
ANNEX 12 Form of Restated By-Laws
</TABLE>
<PAGE> 22
ANNEX 1
ALTERNATIVE DISPUTE RESOLUTION AGREEMENT
ALTERNATIVE DISPUTE RESOLUTION AGREEMENT (the "Agreement")
dated as of January 2, 1996, by and between Roadway Services, Inc., an Ohio
corporation ("RSI") and Roadway Express, Inc., a Delaware corporation ("REX").
Recitals
This Agreement is made pursuant to the Distribution Agreement
dated as of December 29, 1995 between RSI and REX ("Distribution Agreement").
Each term used herein which is defined in the Distribution Agreement shall have
the same meaning when used herein as it is given in the Distribution Agreement.
RSI and REX have determined that it is necessary and desirable
to agree on the procedures described in the Agreement as the sole and exclusive
method for them to resolve any and all disputes which have arisen prior to the
distribution to the shareholders of RSI of the shares of REX (the "Spin-off")
or which may from time-to-time arise under the Transaction Documents (as herein
defined), and claims which either party may have from time-to-time against the
other as a result of the Transaction Documents or in any way related to the
Spin-off whether such disputes or claims are based on a breach of one party or
its obligations under the Transaction Documents or disagreement between the
parties as to the meaning or application of the Transaction Documents or in any
manner related to or arising out of the Spin-off (any such dispute or claim, a
"Dispute").
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
As used in this Agreement, the following terms shall have the
following meaning (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
Amount in Controversy: the monetary value of any Dispute plus the
monetary value of any future Dispute which could reasonably arise under
the provision at issue.
CPR: the Center for Public Resources, Inc.
Demand: a written demand for arbitration under Article IV of this
Agreement which shall contain a statement setting forth the nature of
the Dispute, the Amount in Controversy and such other information as
may be required under the CPR Rules for Non-Administered Arbitration
of Business Disputes as in effect from time-to-time (the "Arbitration
Rules").
Dispute: as defined in the recitals to this Agreement.
<PAGE> 23
2
Request: a written request for mediation under Article III of this
Agreement which shall contain a brief statement of the nature of the
Dispute and such other information as may be required under the then
current CPR Model Procedure for Mediation of Business Disputes (the
"Mediation Rules").
Transaction Documents: the Distribution Agreement and the Other
Agreements.
ARTICLE II
RESOLUTION OF DISPUTES
All Disputes which cannot be resolved by the parties through
good faith negotiation and consultation within thirty (30) days after either
party shall have notified the other of such Dispute shall first be submitted to
mediation pursuant to Article III here of and the Mediation Rules and such
other rules of procedure as the parties may agree; provided that, in the event
of a conflict between Article III and the Mediation Rules, Article III shall
govern. If a Dispute cannot be resolved through mediation, then such Dispute
shall be submitted to binding arbitration pursuant to Article IV hereof and the
Arbitration Rules and such other rules of procedure as the parties may agree;
provided that, in the event of a conflict between Article IV and the
Arbitration Rules, Article IV shall govern.
ARTICLE III
MEDIATION
Section 3.01 Request for Mediation. Either party to a
Dispute may initiate mediation by filing a Request (along with any copies
thereof that may be required under the Mediation Rules) and a copy of this
Agreement with the CPR and by delivering a copy of the Request to the other
party.
Section 3.02 Appointment of Mediator. Unless the parties
otherwise agree in writing, the CPR shall appoint a single mediator from the
CPR Panel of Neutrals.
Section 3.03 Date, Time and Place. Unless the parties
otherwise agree in writing, all mediation proceedings shall take place in
Akron, Ohio. The date, time and place of each mediation session shall be
determined by agreement of the parties or, if the parties cannot agree within a
reasonable period of time, by the mediator; provided that the first such
session shall be held within fifteen (15) days of the date on which the
mediator is appointed.
<PAGE> 24
3
Section 3.04 Termination. The mediation proceedings shall
be terminated upon the happening of any of the following: (i) by execution of a
settlement agreement by the parties; (ii) by written declaration of the
mediator that further efforts at mediation are no longer worthwhile; or (iii)
by written declaration of one or both parties that the mediation proceedings
are terminated. A written declaration hereunder shall not terminate the
mediation proceedings until notice thereof has been given to the parties, or to
the other party, as appropriate, in accordance with Section 5.04 hereof.
ARTICLE IV
ARBITRATION
Section 4.01 Initiating Arbitration. Either party to a
Dispute that has not been settled or resolved through mediation may initiate
arbitration by filing a Demand and a copy of this Agreement (along with any
copies thereof that may be required under the Arbitration Rules) with the CPR
within sixty (60) business days following the termination of the mediation
proceedings and by delivering a copy of the Demand to the other party. Failure
to file a Demand within such period shall constitute an absolute bar to the
institution of any proceedings with respect to such Dispute and a waiver of all
claims related thereto.
Section 4.02 Appointment of Arbitrators. Unless the
parties otherwise agree in writing, a Dispute subject to this Article IV shall
be heard by a panel of three (3) arbitrators who shall be appointed according
to the procedure contemplated by Rule 6 of the Arbitration Rules.
Section 4.03 Absence of Conflicts. No person shall serve
as an arbitrator in any Dispute in which the person has any financial or
personal interest, except by the written consent of both parties.
Section 4.04 Date, Time and Place. Unless the parties
otherwise agree in writing, all arbitration proceedings shall take place in
Akron, Ohio. The date, time and place of each hearing shall be determined by
agreement of the parties or, if the parties cannot agree within a reasonable
period of time, by the arbitration panel or sole arbitrator (each an
"Arbitrator"), as appropriate. The first such hearing shall be held as soon as
practicable following appointment of the Arbitrator(s), but in no event more
than one (1) year after such appointment. Each arbitration shall be governed
by the United States Arbitration Act, 9 U.S.C. Section 1-16, and judgment upon
the award rendered by the Arbitrator(s) may be entered by any court having
jurisdiction thereof.
<PAGE> 25
4
Section 4.05 Award. The Arbitrator(s) may grant any
remedy or relief that the Arbitrator(s) deem just and equitable including, but
not limited to, injunctive relief, judgment interest, attorneys' fees and
specific performance; provided, however, that the Arbitrator(s) shall not be
authorized to award punitive damages.
ARTICLE V
MISCELLANEOUS
Section 5.01 Complete Agreement; Construction. this
Agreement and the Transaction Documents and other agreements and documents
referred to therein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Section 5.02 Survival of Agreements. All covenants and
agreements of the parties contained in this Agreement shall survive the
Distribution Date.
Section 5.03 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio
without regard to the principles of conflicts of law thereof.
Section 5.04 Notice. All notices and other communications
required or permitted to be given or made under this Agreement shall, unless
otherwise provided herein or in the applicable CPR rules, be in writing and
shall be deemed to have been given (i) on the date of personal delivery, or
(ii) provided such notice or communication is actually received by the party to
which it is addressed in the ordinary course of delivery, on the date of (A)
deposit in the United States mail, postage prepaid, by registered or certified
mail, return receipt requested, (B) transmission by telegram, cable, telex or
facsimile transmission, or (C) delivery to a nationally-recognized overnight
courier service, in each case addressed as set forth below, or to such other
person, entity or address as either party shall designate by notice to the
other in accordance herewith:
To RSI: Roadway Services, Inc.
1077 Gorge Boulevard
P.O. Box 88
Akron, Ohio 44309-0088
Attention: General Counsel
To REX: Roadway Express, Inc.
1077 Gorge Boulevard
P.O. Box 471
Akron, Ohio 44309-0471
Attention: General Counsel
<PAGE> 26
5
Section 5.05 Waiver. No waiver by any party of any of the
provisions of this Agreement will be deemed, or will constitute, a waiver of
any other provision, whether similar, nor will any waiver constitute a
continuing waiver. No waiver will be binding unless executed in writing by the
party making the waiver.
Section 5.06 Assignment. Neither party may assign, by
operation of law, merger or otherwise, license, sublicense or otherwise
transfer any or all of its rights or obligations under this Agreement to any
other person or entity without obtaining the prior written consent of the other
party.
Section 5.07 Amendments. This Agreement may not be
modified or amended except by an agreement in writing signed by the parties.
Section 5.08 Successors and Assigns. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
Section 5.09 Subsidiaries. Each of the parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements, and obligations set forth herein or arising hereunder to
be performed by any Subsidiary of such party on and after the Distribution
Date.
Section 5.10 No Third Party Beneficiaries. This Agreement
is solely for the benefit of the parties hereto and their respective
Subsidiaries and Affiliates and should not be deemed to confer upon third
parties any remedy, claim, right or reimbursement or other right.
Section 5.11 Titles and Headings. Titles and headings to
articles and sections herein are inserted for the convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
Section 5.12 Severability. Any provision of this
Agreement that is 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. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. Without
prejudice to any rights or remedies otherwise available to any party hereto,
each party acknowledges that damages would be an inadequate remedy for any
breach of the provisions of this Agreement and agrees that the obligations of
the parties hereunder shall be specifically enforceable.
<PAGE> 27
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
ROADWAY SERVICES, INC.
By: _______________________________
Title:
ROADWAY EXPRESS, INC.
By: _______________________________
Title:
<PAGE> 28
ANNEX 2
-------------------------------------
DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
BETWEEN
ROADWAY INFORMATION TECHNOLOGY, INC.
AND
ROADWAY EXPRESS, INC.
-------------------------------------
December 14, 1995
<PAGE> 29
Roadway Information Technology, Inc.
Roadway Express, Inc.
DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS............................................................. 1
GENERAL TERMS AND CONDITIONS......................................... 1
SECTION 1. DEFINITIONS..................................... 1
1.1 Certain Defined Terms..................... 1
1.2 Other Definitions......................... 4
SECTION 2. SERVICES........................................ 4
2.1 Base Services............................. 4
2.2 Baseline Service Levels................... 4
2.3 Additional and Optional Services.......... 4
2.4 Service Levels and Performance Standards.. 4
2.5 Limitation................................ 5
2.6 Subcontractors............................ 5
2.7 Software.................................. 5
2.8 Equipment................................. 5
SECTION 3. TERM OF AGREEMENT............................... 6
SECTION 4. SECURITY OF INFORMATION; CONFIDENTIALITY........ 6
4.1 Ownership of Data......................... 6
4.2 Confidential Information.................. 7
4.3 Non-Disclosure and Non-Use; Exceptions and
Exclusions................................ 7
4.4 Burden of Proof........................... 8
4.5 Security.................................. 8
SECTION 5. CERTAIN ADDITIONAL RESPONSIBILITIES............. 8
5.1 General................................... 8
5.2 Customer-Provided Software................ 8
SECTION 6. CHARGES......................................... 9
6.1 Prices.................................... 9
6.2 Other Prices.............................. 9
</TABLE>
i
<PAGE> 30
<TABLE>
<CAPTION>
Page
----
<S> <C>
6.3 Price Adjustments......................... 9
6.4 Termination Charges....................... 9
6.5 Pass-Through Costs........................ 9
6.6 Payment................................... 9
6.7 Continued Performance..................... 9
SECTION 7. TAXES........................................... 9
7.1 Customer Responsibility................... 9
7.2 Payment................................... 10
SECTION 8. TERMINATION..................................... 10
8.1 At Customer's Election.................... 10
8.2 Upon Material Breach...................... 10
8.3 Termination Assistance and Services....... 10
8.4 Return of Materials....................... 11
8.5 Personnel Matters on Termination.......... 11
8.6 Software Matters on Termination........... 11
8.7 Equipment Matters on Termination.......... 12
SECTION 9. WARRANTIES, REMEDIES AND INDEMNITIES............ 12
9.1 Service Warranty.......................... 12
9.2 Remedies.................................. 12
9.3 Cross-Indemnity for Personal Injury and
Property Damage........................... 12
9.4 Notice and Defense........................ 13
SECTION 10. LIMITATION OF LIABILITIES AND REMEDIES......... 13
10.1 Direct Damages............................... 13
10.2 Disclaimer of Warranties..................... 13
10.3 Limitations of Liability..................... 13
10.4 Force Majeure................................ 13
SECTION 11. ERRORS AND OMISSIONS........................... 14
11.1 Processing Errors............................ 14
11.2 Data Errors.................................. 14
SECTION 12. TITLE TO PROPERTY.............................. 14
SECTION 13. RISK OF LOSS, INSURANCE ON EQUIPMENT........... 15
SECTION 14. DISPOSITION OF DATA............................ 15
SECTION 15. GOVERNANCE, DISPUTE RESOLUTION AND
ARBITRATION.................................... 15
</TABLE>
ii
<PAGE> 31
<TABLE>
<CAPTION>
Page
----
<S> <C>
15.1 Key Management Employees..................... 15
15.2 Operational Committee........................ 16
15.3 Executive Committee; Disputes................ 16
15.4 Formal Dispute Resolution Procedures......... 16
SECTION 16. CERTAIN OBLIGATIONS REGARDING THIRD-
PARTY SOFTWARE................................. 17
16.1 Customer Obligations......................... 17
16.2 RIT Obligations.............................. 17
SECTION 17. GENERAL........................................ 18
17.1 Amendment; Waiver; Remedies.................. 18
17.2 Assignment; Binding Effect................... 18
17.3 Jurisdiction................................. 18
17.4 Conflicts.................................... 18
17.5 Integration; Complete Document............... 18
17.6 Notices...................................... 19
17.7 Audit Rights................................. 19
17.8 Employees.................................... 19
17.9 Severability................................. 20
17.10 Further Assurances.......................... 20
17.11 Survival.................................... 20
17.12 Consent..................................... 20
17.13 Counterparts................................ 21
SCHEDULES
</TABLE>
iii
<PAGE> 32
Roadway Information Technology, Inc.
Roadway Express, Inc.
DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
This Data Processing Services Agreement (this "Agreement") is made and
entered into as of December 14,1995 by and between Roadway Express, Inc., a
Delaware corporation with its corporate offices in Akron, Ohio (hereinafter
called "Customer"), and Roadway Information Technology, an Ohio corporation with
its corporate offices in Akron, Ohio ("RIT").
RECITALS
A. Customer provides nationwide, long-haul, less than truckload freight
services. Customer and RIT are, and expect through approximately December 31,
1995 to be, subsidiaries of a common parent, after which time Customer will be
spun off to become an independent company. RIT performs data processing and
information technology services for Customer. After the spin-off, Customer
desires to continue to have RIT perform such services by "outsourcing" them to
RIT.
B. RIT is experienced in data processing and information technology
services and desires to continue to provide data processing and other
information systems services to Customer as an outsourcer.
C. Both parties wish to enter this Agreement to establish the
contractual basis for their continuing relationship.
NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
GENERAL TERMS AND CONDITIONS
SECTION 1. DEFINITIONS.
1.1 Certain Defined Terms. As used in the Agreement, the following
terms shall have the meanings set forth below.
(a) "Additional Charges" means the incremental charges payable to RIT
in any month for performance of Additional Services.
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(b) "Additional Services" means Base Services performed in any month
above the Baseline Service Levels, and any other Services expressly designated
as Additional Services on Schedule 2.3 for which pricing or pricing formulas are
provided in this Agreement.
(c) "Affiliate" means, for any person or entity, any other person or
entity that, directly or indirectly controls, is controlled by, or is under
common control with, such person or entity.
(d) "Base Price" means the price payable for each Period (pro-rated for
partial Periods) for Base Services performed at the Baseline Service Levels, as
described on Schedule 6.1.
(e) "Base Services" means all services described in Schedule 2.1 and in
the applicable Customer-Supplier Agreements included in Schedule 9.1.
(f) "Baseline Service Levels" means, with respect to each category of
Base Services described in Schedule 2.1, the level of such Base Service
designated as the Baseline Service Level in Schedule 9.1 and the
Customer-Supplier Agreements included in Schedule 9.1, including permitted
variances, if any.
(g) "Customer Applications Software" means the custom- developed
applications programs and related documentation owned and utilized by Customer,
or the ownership of which Customer may acquire and utilize in the future,
including any modifications thereto. All applications software utilized by RIT
to provide services for Customer is and will be deemed to be Customer
Applications Software except for that which is noted on Schedule 2.7, as amended
from time to time, as being either Third-Party Software or RIT-Owned Software
included in the RIT-Provided Software.
(h) "Customer-Provided Software" means any and all software which
Customer agrees to provide and make available to RIT for operation at the RIT
data center or another RIT facility for use by RIT to provide the Services.
Customer-Provided Software includes owned Customer Applications Software and
Third- Party Software licensed by Customer. Current Third-Party Software
included in the Customer-Provided Software is listed and identified in Schedule
2.7. Customer-Provided Software may include, without limitation, both systems
software and applications software packages which may be Customer Applications
Software or Third-Party Software.
(i) "Customer-Supplier Agreements" means the agreements so designated
in Schedule 9.1 which amplify the descriptions of Services and of Performance
Standards. These shall be amended from time to time to modify or refine the
description of a particular Service, or to add a Service. In each case the
amended or new Customer-Supplier Agreement must specify whether the Services
covered thereby are Base Services,
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Additional Services or Optional Services. If they are Additional Services or
Optional Services, then Schedule 6.1 must also be amended to provide for the
pricing of the covered Service.
(j) "Joint Software" means applications software which is jointly owned
by RIT and Customer. Each party has all rights of an owner in this software,
without any obligation to account to the other; provided, that, each party shall
treat this software as Confidential Information of the other. The copy of any
Joint Software used to provide Services to Customer hereunder shall be treated
for all purposes as Customer Applications Software.
(k) "Optional Services" means those Services described on Schedule 2.3
which are not included in the Base Services or Additional Services, and which
are not priced herein, but which will be furnished by RIT at the request of
Customer upon acceptance of a proposal from RIT.
(l) "Pass-Through Costs" means, collectively, costs and expenses which
will be paid by RIT and passed through without increase, unless an increase is
expressly specified in Schedule 6.1, for reimbursement by Customer, which
include all costs so passed through by RIT as of the Actual Commencement Date
and any costs expressly approved in this Agreement or subsequently approved by
Customer to be treated as Pass-Through Costs. If a cost is incurred by RIT for
the benefit of Customer and others, then the Pass-Through Cost shall be
Customer's pro-rata share of such cost, computed on a reasonable and equitable
basis.
(m) "Performance Standards" means the service level specifications or
descriptions, the performance standards and the measurement procedures set forth
in Schedule 2.1, Schedule 2.3, or Schedule 9.1, as the case may be.
(n) "Period" means one of Customer's thirteen (13) four (4)-week
accounting periods occurring in each calendar year.
(o) "RIT-Owned Software" is software which RIT owns and uses to provide
services to Customer. All RIT-Owned Software which is applications software, if
any, is identified in Schedule 2.7. Systems software owned by RIT, if any, is
not separately identified on Schedule 2.7. The parties agree to amend Schedule
2.7 from time to time to add and delete items from the listing of RIT-Owned
Software as RIT changes the software used subject to the applicable provisions
of this Agreement.
(p) "RIT-Provided Software" means the software which RIT owns or
licenses or agrees to acquire and utilize during the Term for the purpose of
providing the Services. Current RIT-Provided Software is described or
identified on Schedule 2.7. The parties agree to add and delete items from the
listing of RIT-Provided Software as RIT changes the software used subject to the
applicable provisions of this Agreement.
(q) "Services" means, collectively, all of the data processing and
related information technology services and resources to be provided by RIT to
Customer pursuant to this Agreement, including Base Services, Additional
Services and Optional Services.
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(r) "Third-Party Software" means any software owned by a third-party
and licensed to Customer or RIT, as the case may be.
1.2 Other Definitions. Other capitalized defined terms used in this
Agreement are defined in the text in the context in which they are used.
SECTION 2. SERVICES
2.1 Base Services. In accordance with the charges, terms and conditions
contained in these General Terms and Conditions (the "General Terms and
Conditions") and in the Schedules attached hereto ("Schedules") (collectively,
the General Terms and Conditions and the Schedules are referred to as this
"Agreement"), as in effect from time to time, RIT agrees to furnish data
processing services and other information technology services and resources to
Customer. The Base Services and Additional Services to be performed by RIT are
described in this Agreement and on Schedules 2.1, 2.3 and 9.1.
2.2 Baseline Service Levels. RIT will perform the Base Services at or
within the Baseline Service Levels for the Base Price provided in Section 6.1.
RIT agrees to provide Additional Services consisting of Base Services above the
Baseline Service Levels for the Additional Charges described in Schedule 6.1.
2.3 Additional and Optional Services. RIT agrees to provide other
Additional Services and Optional Services from time to time upon the written
request of Customer. Upon receiving Customer's request, RIT will promptly
provide Customer with a plan or proposal as to the manner in which a requested
Additional or Optional Service will be provided. The other Additional Services
and Optional Services will be provided for the prices, or upon the pricing
formulas, described in Schedule 6.1 for Additional Services, or in accordance
with proposals made by RIT and accepted by Customer for Optional Services.
2.4 Service Levels and Performance Standards. RIT agrees that it will
be responsible for and will perform all of the Services hereunder beginning on
the Effective Date and continuing throughout the Term. The "Actual Commencement
Date" shall be the date on which the spin-off of Customer takes place. RIT
agrees that its performance of all Services hereunder will meet and be in
accordance with the applicable Performance Standards contained in Schedule 9.1,
which Schedule includes the Customer-Supplier Agreements.
2.5 Limitation. Anything herein to the contrary notwithstanding, RIT's
obligation to provide Additional Services and Optional Services is subject to
the limitations, if any, in Schedules 2.1 and 2.3.
2.6 Subcontractors. RIT may not delegate to subcontractors the
performance of any major Service hereunder without the prior written approval of
Customer. Otherwise, RIT may engage subcontractors as it deems appropriate to
assist RIT in furnishing the Services; provided, that, RIT shall in all
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cases remain liable hereunder for the performance of its obligations in this
Agreement.
2.7 Software.
(a) At the Effective Date, RIT shall continue to utilize the software
then in use, including, without limitation, that which is described on Schedule
2.7, to provide the Services.
(b) Schedule 2.7 describes the software that is Customer-Provided
Software and RIT-Provided Software, but may not include an exhaustive listing.
(c) Schedule 2.7 identifies all Third-Party Software that is
RIT-Provided Software and all Joint Software.
(d) In each case, Schedule 2.7 contains a listing of all Third-Party
Software.
(e) The parties agree to amend Schedule 2.7 from time to time to add or
delete items included in RIT-Provided Software, and to reflect other changes in
the software utilized by RIT to provide Services hereunder.
2.8 Equipment.
(a) Unless expressly provided otherwise in this Agreement, each party
will continue to own or lease the equipment owned or leased by it and used on
the Effective Date by RIT to provide the Services to Customer. Although RIT may
manage and operate it, the party owning or leasing an item of equipment will
continue to bear the financial responsibility for that equipment and will be
responsible for obtaining maintenance for it.
(b) RIT will be responsible for acquiring and obtaining maintenance for
(i) equipment which it needs to provide the Base Services and Additional
Services which consist of Base Services above the Baseline Service Levels, and
(ii) equipment which is used to provide other Additional Services or Optional
Services but which RIT also uses to provide services to others.
(c) Customer agrees to be responsible for acquiring additional central
processing unit capacity where overall mainframe Operations Services are within
the Baseline Service Levels, but which additional capacity is necessitated by
reason of Customer demand resulting from the distribution of Customer's
processing needs, peak period demands which can not be reduced by rescheduling
or other balancing techniques or a change in Customer's mix of applications, or
like reasons resulting directly from Customer processing capacity demands.
(d) Customer agrees that it will be responsible for acquiring and
obtaining maintenance for equipment which is used solely to provide other
Additional Services or Optional Services to Customer.
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(e) Customer agrees that within twelve (12) days after the Actual
Commencement Date it will purchase or assume the leases for router and hub
equipment in the field in Customer's networks which is owned or leased by RIT at
the Effective Date. The price for such purchase shall be the fair market value
of the equipment.
SECTION 3. TERM OF AGREEMENT
This Agreement shall become effective from and as of the date set out
above (the "Effective Date") and shall remain in effect for a term extending
thirty-six months after the first day of the month immediately following the
Actual Commencement Date, unless earlier terminated as provided herein. This
Agreement may be terminated by the parties before the end of the Term only as
provided in Section 8.
SECTION 4. SECURITY OF INFORMATION; CONFIDENTIALITY
4.1 Ownership of Data. All of the data provided to RIT or held by RIT
in performance of its obligations hereunder is and shall remain the property of
Customer or Customer's customers or other trading partners and will be
safeguarded by RIT against loss, disclosure, unauthorized access or alteration
under reasonable security procedures, consistent with those employed by other
professional data processing service providers. RIT is authorized to have access
to and make use of only that portion of Customer's data as is necessary and
appropriate for the performance of RIT's obligations under this Agreement. It is
further agreed that no data provided by Customer to RIT or held by RIT shall be
duplicated and/or disclosed to others, in whole or in part, by RIT, without the
express written consent of the Customer, except only to the extent that such
duplication or disclosure is necessary to carry out the day-to-day performance
of its duties hereunder.
4.2 Confidential Information.
(a) All information, including, without limitation, information
relating to software and to development projects, provided by either party (or
any of its subsidiaries) to the other party, or developed or acquired by RIT for
the benefit of Customer, either before or after the Effective Date
("Confidential Information") shall be treated as confidential information of the
party disclosing it or the party for whose benefit it was developed or acquired
(the "Disclosing Party") to the other party (the "Receiving Party"), subject to
the exceptions and exclusions set forth below.
(b) Each party shall exercise diligence to notify the other as to which
information it considers Confidential Information and to mark such information
with legends and notices. However, the failure to so notify or mark shall not,
standing alone, constitute a defense.
4.3 Non-Disclosure and Non-Use; Exceptions and Exclusions. Each of
Customer and RIT, to the extent it is a Receiving Party, agrees that it shall
not disclose nor use the Confidential Information of the Disclosing Party
without the prior written consent of the Disclosing Party, except:
(a) Disclosure may be made to, and use may be made by, employees,
agents, consultants and contractors of a party for the
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purpose of performing or effectuating the rights, obligations and
responsibilities of the parties under this Agreement, provided that each of the
parties shall take reasonable steps to prevent unauthorized use, copying or
disclosure of the Confidential Information by such persons, including, without
limitation, the use of appropriate written confidentiality agreements; and
(b) Confidential Information other than data covered by Section 4.1 (as
to which the immediately following exceptions shall not apply) shall no longer
be deemed to be "Confidential Information," where such information (i) is or
becomes generally known through no fault of the Receiving Party; (ii) is, prior
to submission by the Disclosing Party, in the Receiving Party's possession free
of any obligation of confidentiality to the Disclosing Party; provided, that,
information in the possession of the Receiving Party prior to the Actual
Commencement Date which was received or developed, and then held, as
confidential information for the benefit of the other party, shall not be
excluded from Confidential Information under this subparagraph; (iii) is
rightfully obtained by the Receiving Party from a third party who is free of any
duty of confidentiality to the Disclosing Party; or (iv) is independently
developed by the Receiving Party.
(c) Disclosure of Confidential Information, including data covered by
Section 4.1, shall be allowed where information is required to be disclosed
pursuant to any law, rule or regulation or pursuant to an order or judgment of
any court or government body; provided, that, the Receiving Party shall have
notified the Disclosing Party promptly prior to making such disclosure and shall
have taken all reasonable measures to obtain confidential treatment.
4.4 Burden of Proof. The burden of proving the availability of any
exception to these confidentiality and use restrictions shall be on the party
claiming the exception.
4.5 Security. RIT will establish security procedures for its physical
facilities and data centers, and electronic security measures for all systems
and databases. RIT will comply with the reasonable security procedures that are
in effect at the Customer's premises upon notice from Customer on the Actual
Commencement Date or as they may be changed from time to time during the Term.
Customer agrees to comply with all security procedures established by RIT.
SECTION 5. CERTAIN ADDITIONAL RESPONSIBILITIES
5.1 General. In connection with the performance by RIT of the Services,
Customer agrees to perform the responsibilities, if any, specified and described
in Schedules 2.1 and 2.3 and in the Customer-Supplier Agreements.
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5.2 Customer-Provided Software.
(a) Unless the obligation is expressly assumed in writing by RIT,
Customer agrees that it will have the responsibility to support, maintain and
enhance the Customer Application Software in the Customer-Provided Software.
(b)(i) Unless and until assigned or transferred to, and assumed by, the
other party in writing, and noted on Schedule 2.7, each party will keep current
and in force and effect third-party license and maintenance agreements with
regard to the Third-Party Software contained within the Customer-Provided
Software and the RIT-Provided software, respectively.
(ii) Schedule 2.7 identifies the software, if any, as to which a
party's license and maintenance agreements will be assigned or transferred, if
feasible, to the other party.
(iii) Unless otherwise noted on Schedule 2.7, RIT will administer and
support the Third-Party Software contained in the Customer-Provided Software.
(iv) Otherwise, each party will retain its license agreements and
maintenance agreements, but will obtain consent from the licensor, to the extent
required, for such software to be operated on RIT's computers to provide the
Services to Customer in accordance with this Agreement.
(c) RIT will be responsible for the licensing, management, support,
maintenance and/or enhancement of all systems software used in the Services
except where such responsibility is expressly retained or assumed, in writing,
by Customer.
SECTION 6. CHARGES
6.1 Prices. For the Base Services, and for the Additional Services
which consist of Base Services above the Baseline Service Levels, furnished by
RIT under this Agreement, Customer shall pay the Base Price and the Additional
Charges, respectively, set forth in Schedule 6.1.
6.2 Other Prices. Schedule 6.2 sets out the prices or pricing formulas
for other Additional Services, and the manner of setting prices for Optional
Services.
6.3 Price Adjustments. Schedules 6.1 and 6.2, as the case may be, also
set out the price adjustment procedures to be used in connection with this
Agreement.
6.4 Termination Charges. Schedule 6.4 contains the charges for
termination services provided in accordance with Section 8.3.
6.5 Pass-Through Costs. Prices payable hereunder in any Period shall
also include any Pass-Through Costs incurred by RIT in that Period.
6.6 Payment. RIT will invoice Customer for each Period in arrears for
all charges hereunder, which invoices will be payable on or before the tenth
(10th) day after receipt.
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6.7 Continued Performance. If (i) all undisputed amounts have been paid
by Customer, (ii) the Customer continues to make payments to RIT which are not
in dispute in accordance with this Agreement, and (iii) dispute resolution
procedures have been commenced and are being pursued in good faith, then
Customer shall not be deemed to be in default of its obligations to make said
payments.
SECTION 7. TAXES
7.1 Customer Responsibility. In addition to the payments due to RIT for
the prices and charges for the Services, the Customer shall be responsible for
payment of all taxes, however designated, which are exacted in connection with
the performance hereof, except net corporate income or franchise taxes of RIT,
which are levied or based on the Services provided or the charges made under
this Agreement. These taxes shall include, but shall not be limited to, state
and local privilege taxes based on gross revenue and any taxes or amounts in
lieu thereof, including sales, use and/or excise taxes.
7.2 Payment. All charges and prices stated herein are exclusive of such
taxes, and RIT may add such taxes to its invoices hereunder. Upon payment by
Customer to RIT, RIT shall be responsible for filing applicable tax returns and
paying and remitting the taxes when due.
SECTION 8. TERMINATION
8.1 At Customer's Election. (a) As to any or all of the Services
expressly designated in footnotes to Schedule 2.1 as being terminable under this
subsection, Customer may terminate this Agreement on the date which is the last
day of the twelfth (12th) full calendar month of the Term, provided it has given
RIT at least three (3) months prior written notice.
(b) Customer may terminate this Agreement as to the Central LAN Support
Services described in Schedule 2.1, Section IX, at its election, at the end of
the twenty-fourth (24th) full calendar month of the Term upon at least six (6)
months prior written notice to RIT.
(c) This Agreement may be terminated as to all Services by Customer, at
its election, at the end of the twenty-fourth (24th) full calendar month of the
Term upon at least six months prior written notice to RIT.
8.2 Upon Material Breach. This Agreement may be terminated by either
party upon a material breach by the other party if such breach is not cured
within thirty (30) days after written notice by the non-breaching party or if
the breaching party has not commenced corrective action within such thirty (30)
day period which is reasonably likely to cure such breach in a reasonable
further period of time; provided, that, this Agreement may not be terminated by
RIT for any breach by Customer other than a failure to pay or a breach of
Section 17.8.
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8.3 Termination Assistance and Services.
Upon expiration or termination of this Agreement for any reason other
than wrongful non-payment by Customer, and upon Customer's request, RIT will
provide the termination assistance and transition services described in Schedule
8.3 hereto to enable Customer to transfer its processing to its own facilities
or to a third party. Such termination services shall commence as promptly as
practicable after the date of the notice and shall continue as long as
reasonably necessary but no more than the date of termination or expiration. If
necessary and not due to the fault of customer, RIT will extend the period for
the termination services on a month-to-month basis, but only for the minimum
amount of time that is reasonably necessary. All applicable provisions of this
Agreement shall be extended for the period during which such services are
provided. Customer shall pay for Base, Additional and Optional Services rendered
during such transition period in accordance with the applicable provisions of
this Agreement, and shall also pay the charges for other termination services,
if any, described in Schedule 6.4.
8.4 Return of Materials. Upon completion of the termination services,
RIT shall have returned to Customer or its designee all Customer data and
Customer Confidential Information in its possession or control, including,
without limitation, all copies of all Customer Applications Software and all
Customer- Provided Software transferred or made available by Customer to RIT.
8.5 Personnel Matters on Termination. Schedule 8.5 contains certain
rights and obligations of the parties arising with regard to personnel in
connection with the termination or expiration of this Agreement.
8.6 Software Matters on Termination.
(a) In connection with providing the termination services described
herein, RIT will transfer or assign to Customer, effective as of the date of
expiration or termination of the Agreement:
(i) all Customer-Provided Software, and licenses and maintenance
agreements thereto, if any, which have been transferred or
made available to RIT; and
(ii) licenses and maintenance agreements for any other Third-Party
Software used by RIT solely to furnish Services to Customer
or acquired by RIT solely on Customer's behalf;
provided, however, that RIT shall have no obligation to assign or transfer any
license or maintenance agreement to Customer if assignment or transfer is
prohibited under the terms of the applicable license or agreement or if such
assignment or transfer
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would require RIT to pay any amount and Customer declines to make such payment.
(b) Customer shall indemnify and hold RIT harmless from and against any
liability, costs or expenses arising out of the foregoing assignment or transfer
of licenses and maintenance agreements.
8.7 Equipment Matters on Termination. Schedule 8.7 contains certain
rights and obligations of the parties arising in connection with termination or
expiration with regard to equipment.
SECTION 9. WARRANTIES, REMEDIES AND INDEMNITIES
9.1 Service Warranty. RIT warrants that all Services provided by RIT to
Customer will be performed in a professional, competent and timely manner, and
will meet the Performance Standards.
9.2 Remedies. (a) If RIT is in breach of the warranty of Section 9.1 or
any of the Performance Standards, RIT shall, at RIT's sole cost and expense,
take any and all actions necessary to remedy such breach, including, without
limitation: (i) initiating problem reports to identify causes of problems; (ii)
developing reasonable, feasible written recommendations to the Customer for
changes in Customer procedures to avoid future breaches of the same or similar
nature; (iii) implementing modifications to RIT systems and procedures to remedy
such breach; and (iv) changing the wide area network, the data center equipment,
RIT equipment on Customer's premises, the operating software environment, or
other components of the systems being used by RIT.
(b) Further, for continuing failures to perform in accordance with the
key Performance Standards specified in Schedule 9.2, the Customer shall receive
liquidated damages in the form of credits against future payments of the Base
Price computed in accordance with Schedule 9.2.
(c) If material breaches of the warranties of this Section persist for
an extended period of time, or if any maximums for liquidated damages under
Section 9.2(b) have been paid and such breaches continue, Customer shall be
entitled to terminate this Agreement under Section 8.2.
(d) The remedies in this Section 9.2 shall be Customer's sole and
exclusive remedies for breaches of the warranty of Section 9.1. These remedies
shall in no way limit other remedies available to Customer for other breaches of
this Agreement.
9.3 Cross-Indemnity for Personal Injury and Property Damage. RIT and
Customer each agree to indemnify and hold harmless the other from any and all
liabilities, costs, losses,
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and expenses, including reasonable attorneys' fees and expenses, arising out of
or in connection with any personal injury or death, damage to or destruction of
the property or premises leased, licensed, or owned by the indemnitee caused by
the negligence or willful acts of the indemnitor's officers, employees, agents
or other representatives.
9.4 Notice and Defense. The indemnified party shall give the indemnitor
prompt notice of any claim as to which it seeks indemnification. The indemnitor
shall have the right to control the defense and settlement of any indemnified
claim. The indemnitee agrees to provide reasonable assistance in the defense of
indemnified claims. Unless it prejudices the indemnitor, a failure to give
prompt notice shall not terminate the indemnitor's obligation to indemnify
hereunder.
SECTION 10. LIMITATION OF LIABILITIES AND REMEDIES
10.1 Direct Damages. For any claim concerning the performance or
nonperformance by RIT pursuant to, or the breach by RIT of, or in any other way
related to the subject matter of, this Agreement, the Customer shall be entitled
to recover actual direct damages to the limit set forth herein. Direct damages
shall include, without limitation, Customer's costs of cover resulting from a
breach or failure of performance hereunder, defined to be Customer's reasonable
out-of-pocket expenses for obtaining alternative processing and charges of
outside contractors.
10.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, RIT MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, WHICH ARE HEREBY DISCLAIMED.
10.3 Limitations of Liability. (a) RIT's liability for damages
(regardless of the form of action, whether in contract or in tort) shall in no
event exceed the greater of $7,000,000 or the amount paid by the Customer to RIT
during the preceding three (3) Periods (or such shorter period if this Agreement
has not been in effect for three (3) Periods following the Actual Commencement
Date).
(b) IN NO EVENT WILL RIT BE LIABLE FOR ANY LOSS OF PROFITS OR OTHER
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES EVEN IF RIT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR FOR ANY CLAIM AGAINST CUSTOMER BY
ANY OTHER PARTY UNLESS SUCH CLAIM IS EXPRESSLY INDEMNIFIED HEREUNDER.
10.4 Force Majeure. Without limiting RIT's obligations to provide
disaster recovery services as described in Schedule 2.1, neither party shall be
liable for any failure to perform its obligations under this Agreement if
prevented from doing so by a cause or causes beyond its control. Such causes
include strikes, Acts of God or the public enemy, fires, floods, storms,
earthquakes, riots, war or war operations, restraints of
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government or other cause or causes which could not, with reasonable diligence,
be controlled or prevented by the party. A party's excuse of performance under
this paragraph shall continue only so long as the cause preventing the
performance continues or the party could with reasonable diligence have resumed
performance through alternative means or otherwise.
SECTION 11. ERRORS AND OMISSIONS
11.1 Processing Errors. Customer agrees to inspect reports and
materials containing processing results and to give RIT notice of any errors
made by RIT in connection with its data processing services within ten (10) days
after receipt of the materials. Customer shall provide documentary evidence (if
requested) within an additional ten (10) days. If Customer complies with the
above provisions and if the errors were made in the course of processing by RIT,
then RIT shall reprocess the Customer's data on RIT's equipment at no charge.
Otherwise, RIT shall reprocess such data and such reprocessing shall be
considered part of the Base Services.
11.2 Data Errors. Customer is responsible for the correctness and
accuracy of the programs for which it is responsible for support under
subsection 5.2 (a) and the data it submits to RIT. RIT shall not be responsible
for errors in processing or output due to errors in such programs or data. RIT
shall regularly perform backups and off-site file storage in accordance with the
policies and practices set out in Schedule 2.1 or 2.3 or in Schedule 9.1 and the
Customer-Supplier Agreements. Customer shall implement as Customer Applications
Software within the Base Services any other backup procedures which it deems
necessary to protect and recover its own data files.
SECTION 12. TITLE TO PROPERTY
Customer does not transfer hereby to RIT any title or ownership right
or interest in or to any data or programs provided by Customer to RIT or any
intellectual property rights therein. Except to the extent expressly set out in
separate written transfer, assignment, consent or other conveyance documents,
neither party transfers or will transfer hereunder rights under any licenses to
Third-Party Software. RIT is hereby granted a fully-paid, non-exclusive,
non-transferable license, without the right to sublicense, in programs owned by
Customer solely for the purpose of performing the Services hereunder. All
ownership rights in any modifications to such Customer programs whether made by
Customer or RIT, and all intellectual property rights therein, shall belong to
Customer. RIT hereby assigns any such intellectual property rights which it may
obtain to Customer.
SECTION 13. RISK OF LOSS, INSURANCE ON EQUIPMENT
All risk of loss from whatever cause, including theft, destruction and
damage, to equipment which is furnished by RIT
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for use at Customer locations (other than those locations leased by RIT from
Customer) is assumed by Customer. Customer will procure and maintain, at its
expense, casualty insurance with extended coverage, on all such equipment.
Equipment will be insured for its replacement value, for the full Term of this
Agreement. Public liability insurance for death, bodily injury and property
damage resulting from ownership, maintenance, use or operation of equipment
shall also be obtained by Customer. All such insurance shall name RIT as an
additional insured, shall be in reasonable amounts and with reputable insurers
rated at least A by A.M. Best and Company and shall provide that the same may
not be materially modified, altered or cancelled except with notice to RIT.
Customer shall deliver to RIT, at least fifteen (15) days prior to the Actual
Commencement Date a copy of its insurance policies then in effect. In the event
of failure on the part of Customer to provide such insurance, RIT may, at its
option, provide such insurance and add the amount of the premiums to the monthly
rental charged to Customer for such equipment.
SECTION 14. DISPOSITION OF DATA
All data, programs, storage media, and other materials furnished by
Customer to RIT in connection with this Agreement shall be returned by RIT to
Customer or delivered to Customer's designee upon the termination or expiration
of this Agreement, unless Customer requests that RIT otherwise dispose of any of
such items. Upon request, Customer shall be entitled to receive copies of any
such data, programs or other materials at any time during the Term. Customer
shall remain liable for all charges imposed under Schedules 6.1, 6.2 or 6.4 as a
result of data and/or physical media stored with RIT. RIT shall dispose of the
data and media not returned to Customer in the manner requested by Customer.
Customer agrees to pay RIT for its out-of-pocket expenses incurred as a result
of the disposition of the data and/or media. After termination or expiration,
RIT reserves the right to dispose of data and/or media stored by Customer with
RIT if Customer has not utilized RIT facilities and equipment at any time during
a continuous period of at least ninety (90) days.
SECTION 15. GOVERNANCE, DISPUTE RESOLUTION AND ARBITRATION
15.1 Key Management Employees.
(a) Each of Customer and RIT shall appoint a relationship manager who
shall be the employee responsible for the performance of this Agreement and
shall be the other party's principal contact.
(b) Each party shall exert reasonable efforts to correct performance
problems of employees which are brought to its attention by the other party, or
to reassign the employees involved.
15.2 Operational Committee. Each party will appoint up to five
executives to a Operational Committee, whose purpose will
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<PAGE> 46
be to provide a forum for discussing performance, problems and service needs.
The Operational Committee will meet periodically and no less frequently than
monthly at Customer's headquarters facility or other location mutually agreed by
the parties. The initial members of the Operational Committee are set out on
Schedule 15.2. Each party may change its members of the Operational Committee
upon written notice to the other party.
15.3 Executive Committee; Disputes.
(a) Each of the parties will appoint up to three high-level executives
to serve on an Executive Committee. The purpose of the Executive Committee will
be to review and resolve any dispute which may arise pertaining to the
interpretation and the performance of obligations under this Agreement. If a
dispute can not be resolved by the relationship managers or the Operational
Committee, then either party may request that the Executive Committee meet to
seek to resolve the dispute.
(b) The Executive Committee will meet as promptly as practicable after
a request to discuss the dispute or controversy, cause information to be
presented and negotiate in good faith in an effort to resolve the dispute or
controversy without the necessity of any formal proceeding relating thereto. No
formal proceedings for the resolution of such dispute or controversy may be
commenced until either or both of the groups of designated executives on the
Executive Committee conclude in good faith that resolution through continued
negotiation of the matter in issue is not likely to occur.
(c) Each party may change its members of the Executive Committee upon
written notice to the other party.
15.4 Formal Dispute Resolution Procedures. In the event that the
parties are not able to resolve any dispute or controversy in accordance with
the provisions of Sections 15.1 through 15.3, the parties agree that the matter
will be submitted to the dispute resolution procedures contained in that certain
Alternative Dispute Resolution Agreement by and between Roadway Services, Inc.
and Customer, and that they will be bound thereby.
SECTION 16. CERTAIN OBLIGATIONS REGARDING THIRD-PARTY SOFTWARE
16.1 Customer Obligations.
(a) Customer shall obtain consent for RIT to install the
Customer-Provided Software at RIT's location for use hereunder or to assign to
RIT its licenses and maintenance agreements for such Customer-Provided Software,
as the case may be.
(b) Customer may add or delete applications from the Services being
provided hereunder. Any Third-Party Software which Customer adds during the Term
shall be treated as Customer-
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<PAGE> 47
Provided Software and Schedule 2.7 shall be amended accordingly. Unless
otherwise agreed in writing by the parties, such Software shall be used solely
to provide Services to Customer and Customer shall be responsible for all
license, usage, maintenance and other fees and charges payable with respect to
such software, without change in the Base Price.
16.2 RIT Obligations
(a)(i) Except as provided in (ii) immediately below, RIT shall
obtain all consents, licenses or other rights needed to use
all RIT-Provided Software which may be required from time to
time to provide the Services. RIT shall acquire upgrades and
obtain maintenance, support and problem resolution with
respect to all such Software, including, without limitation,
any data center and systems software utilized by it except to
the extent, if any, that Customer expressly retains or
assumes that responsibility in writing.
(ii) If a licensor of Third-Party Software being used on the
Effective Date refuses to permit RIT to use its software to
provide Services to Customer hereunder without an additional
charge, RIT will not be obligated to pay such charge.
Customer shall negotiate with the licensor directly for its
own license, or shall authorize RIT to pay the charge and
recover it from Customer as a Pass-Through Cost.
(b) RIT may charge Customer as Pass-Through Costs (i) fees and charges
paid, with the consent of Customer, to acquire licenses to any Third-Party
Software acquired by RIT solely for use for Customer which RIT agrees to pay,
(ii) fees and charges paid, with the consent of Customer, for transfer of
Customer-Provided Software, and (iii) the annual license (or usage) and
maintenance charges for such Software.
(c) RIT shall endeavor to obtain Third-Party Software in the most
economical manner feasible, and if any such Third- Party Software licenses are
also used for purposes other than providing Services to Customer, such as RIT's
internal use or for services to other customers of RIT, the related Pass-Through
Costs shall be abated proportionately. RIT agrees that maintenance agreements on
all such Third-Party Software will be kept current and in full force and effect.
The versions and releases of such Software will be maintained at a level
sufficient to meet Customer's requirements.
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SECTION 17. GENERAL
17.1 Amendment; Waiver; Remedies.
(a) No amendment, waiver, alteration or modification of any of the
provisions hereof shall be binding upon either party unless signed in writing by
the duly authorized representatives of each party.
(b) The services provided under this Agreement are for the sole benefit
and use of Customer and its Affiliates, and shall not be made available to any
other persons. Unless expressly provided otherwise herein, all remedies provided
for in this Agreement will be cumulative and in addition to and not in lieu of
any other remedies available to either party at law, in equity or otherwise.
17.2 Assignment; Binding Effect. This Agreement may not be assigned by
either party without the other's prior written consent; provided, that, either
party may assign this Agreement to an Affiliate, and Customer may assign this
Agreement to a successor in connection with a sale of all or substantially all
of its assets and business. This Agreement shall be binding upon, and inure to
the benefit of, any successors or assigns of the parties.
17.3 Jurisdiction. This Agreement will be governed by the laws of the
State of Ohio. Subject to Section 15.4 RIT and Customer agree to jurisdiction
and venue in the State and Federal Courts in Ohio.
17.4 Conflicts. In the event of conflict between these General Terms
and Conditions and the Schedules, the Schedules shall prevail.
17.5 Integration; Complete Document. The Customer and RIT each
acknowledges that it has read these General Terms and Conditions together with
the Schedules, which together constitute this Agreement, and understands and
agrees to be bound by their terms and conditions. Further, the parties agree
that this Agreement is the complete and exclusive statement of the agreement
between the parties which supersedes all proposals or prior agreements, oral or
written, and all other communications between the parties relating to the
subject matter of this Agreement.
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17.6 Notices. Any notices permitted or required hereunder may be given
by certified mail, return receipt requested; by telecopy if the receiving
machine confirms receipt; or by electronic mail, followed by confirmation either
by telecopy or certified mail, to the addresses set out below or any other
addresses as to which notice is given.
To Customer:
Roadway Express, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309
Attention: Robert W. Obee
Vice Pres. of Operations,
Engineering and Planning
Pamela J. Kelley, Dir. of
Information Systems
Copy To: General Counsel
To RIT: Roadway Information Technology, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309
Attention: G.A. Long, President
Copy To: General Counsel
17.7 Audit Rights. RIT agrees that internal and external auditors
designated by Customer in writing may, at reasonable times, have such access to
RIT's data facilities and its programs, records and procedures relating to the
processing of Customer's data as they may reasonably request for purposes of
conducting audits of Customer's financial condition, results of operations or
financial statements. RIT will also provide such auditors with access to its
personnel who are responsible for maintaining such programs, practices and
procedures. Additionally, RIT will provide reasonable assistance to such
auditors and inspectors. RIT will not be required to provide such auditors and
inspectors access to data of other RIT customers or the proprietary data of RIT.
17.8 Employees. With the exception of employees who may be employed by
Customer in accordance with Section 8.5 and Schedule 8.5, each party agrees that
during the Term and for a period of twelve (12) months thereafter, it will not,
without the consent of the other party, offer employment or employ any person
who was an employee of the other party at any time during the Term of this
Agreement, without the written consent of the other party.
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<PAGE> 50
17.9 Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance is, to any extent, declared or
found to be illegal, unenforceable or void, then both parties will be relieved
of all obligations arising under such term or provision, but only to the extent
that such term or provision is illegal, unenforceable or void. The validity of
the other provisions hereof shall not be affected, and the remainder of this
Agreement shall continue in full force and effect.
17.10 Further Assurances. Each party agrees that it will execute,
deliver or file such further documents, and take such actions, as the other
party may reasonably request to carry out the purposes and agreements herein.
17.11 Survival. The covenants and obligations of the parties under
Sections 4, 7, 10, 12, 14, 15 and 17 of this Agreement shall survive the
termination or expiration hereof.
17.12 Consent. Whenever consent of a party is required hereunder, it
shall not be unreasonably withheld nor unduly delayed.
17.13 Counterparts. This Agreement may be signed in any number of
identical counterparts each of which shall be deemed to be an original, and all
of which, when taken together, shall constitute a single Agreement.
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ROADWAY INFORMATION ROADWAY EXPRESS, INC.
TECHNOLOGY, INC.
- -------------------------------- ---------------------------------
Authorized Signature Authorized Signature
- -------------------------------- ---------------------------------
Name (Print or Type) Name (Print or Type)
- -------------------------------- ---------------------------------
Title Title
- -------------------------------- ---------------------------------
Date Date
<PAGE> 52
LIST OF ATTACHMENTS
SCHEDULES
Schedule 2.1 DESCRIPTION OF BASE SERVICES AND CERTAIN CUSTOMER
RESPONSIBILITIES
Schedule 2.3 ADDITIONAL AND OPTIONAL SERVICES
Schedule 2.7 SOFTWARE
Schedule 6.1 BASE PRICE AND ADDITIONAL CHARGES; ADJUSTMENTS TO CHARGES
Schedule 6.2 CHARGES FOR CERTAIN ADDITIONAL AND OPTIONAL SERVICES
Schedule 6.4 CHARGES FOR TERMINATION SERVICES
Schedule 8.3 TERMINATION ASSISTANCE AND SERVICES
Schedule 8.5 PERSONNEL MATTERS ON TERMINATION
Schedule 8.7 EQUIPMENT MATTERS ON TERMINATION
Schedule 9.1 BASELINE SERVICE LEVELS, PERFORMANCE STANDARDS AND SERVICE LEVEL
SPECIFICATIONS; CUSTOMER-SUPPLIER AGREEMENTS AND REPORT CARDS
Schedule 9.2 LIQUIDATED DAMAGE CREDITS FOR PERFORMANCE STANDARD FAILURES
Schedule 15.2 OPERATIONAL COMMITTEE
Schedule 15.3 EXECUTIVE COMMITTEE
<PAGE> 53
ANNEX 3
DISTRIBUTION AGENT AGREEMENT
This DISTRIBUTION AGENT AGREEMENT (the "Agreement") is made as of the
29th day of December 1995, by and between ROADWAY SERVICES, INC., an Ohio
corporation ("RSI") and KEYCORP SHAREHOLDER SERVICES, INC., a Delaware
corporation (the "Distribution Agent").
RECITALS
WHEREAS, RSI is the holder of all of the issued and outstanding shares
of common stock, $.01 par value per share, of Roadway Express, Inc. (the "REX
Common Stock");
WHEREAS, the Board of Directors of RSI has determined that it is
advisable to distribute to the holders of RSI's common stock, without par value
(the "RSI Common Stock"), not less than ninety-five percent (95%) of the
outstanding REX Common Stock, on substantially the terms and subject to the
conditions set forth in RSI's Proxy Statement dated November 24, 1995;
WHEREAS, RSI desires to engage the services of the Distribution Agent
to assume certain responsibilities and to perform certain duties as the
Distribution Agent with respect to the Distribution upon the terms and
conditions of this Agreement; and
WHEREAS, the Distribution Agent is qualified and willing to assume such
responsibilities and to perform such duties on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises set forth and
other good and value consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General. 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):
Dissenting Shareholders: those holders of RSI Common Stock on the
Distribution Record Date who purport to have rights of dissent under Ohio
Revised Code Section 1701.85 and have complied with the terms of such Section.
<PAGE> 54
Distribution: the distribution by RSI to holders of RSI Common Stock of
not less than 95% of the shares of REX Common Stock on the Distribution Date.
Distribution Agent: as defined in the recitals to this Agreement.
Distribution Date: January 2, 1996 or such other date as may be set by
the RSI Board for the effective date of the Distribution.
Distribution Record Date: the close of business on December 29, 1995 or
such other date as may be set by the RSI Board as the record date for
shareholders of RSI entitled to the Distribution.
Distribution Services: those services to be performed by the
Distribution Agent under this Agreement.
REX Common Stock: as defined in the recitals to this Agreement.
RSI: as defined in the recitals to this Agreement.
RSI Board: the Board of Directors of RSI or a committee thereof.
RSI Common Stock: as defined in the recitals to this Agreement.
ARTICLE II
DISTRIBUTION AGENT
Section 2.1 Appointment of Distribution Agent and Acceptance. RSI
hereby engages Distribution Agent to perform the Distribution Services as
described herein. Distribution Agent accepts such engagement and agrees to act
in accordance with its standard procedures and the provisions set forth in this
Article 2 with respect to the Distribution.
Section 2.2 Authorization of the Distribution. On the Distribution
Date, RSI intends to deliver to Distribution Agent written instructions (the
"Written Instructions") which shall direct the Distribution Agent to perform the
Distribution Services in accordance with the provisions of this Agreement and
such other documents and certificates which the Distribution Agent may
reasonably request in order to effect the Distribution.
Section 2.3 Rights, Duties and Obligations of Distribution Agent.
(a) The Distribution Agent:
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(i) shall have no duties or obligations other than those
specifically set forth herein, or as may subsequently be agreed to by the
Distribution Agent and RSI in writing;
(ii) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of
any stock certificates or the REX Common Stock represented thereby
deposited with the Distribution Agent in connection with the Distribution
and will not be required to make and will make no representations as to the
validity, value or genuineness of the Distribution;
(iii) will not be obligated to take any legal action hereunder which
might in the Distribution Agent's judgment involve any expense or
liability, unless the Distribution Agent has been furnished with reasonable
indemnity;
(iv) may rely on, and shall be protected in acting upon, any
certificate, instrument, opinion, notice, letter, telegram or other
document, or any security delivered to it and in good faith believed by the
Distribution Agent to be genuine and to have been signed by the proper
party or parties;
(v) may rely on and shall be protected in acting upon the written
or verbal instructions of any officer of RSI with respect to any matter
relating to its actions specifically covered by this Agreement;
(vi) may consult with counsel satisfactory to it (including counsel
of RSI) and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by the Distribution Agent hereunder in good faith and
in accordance with such advice or opinion of such counsel, and the
Distribution Agent shall be entitled to payment or reimbursement for
reasonable fees in connection with such consultation;
(vii) shall not be liable for any recital or statement contained in
any documents which are prepared by persons other than the Distribution
Agent or its counsel; and
(viii) shall not be responsible for any failure on the part of RSI to
comply with any of its covenants and obligations contained herein.
(b) RSI covenants and agrees to indemnify and hold the
Distribution Agent harmless against any costs, expenses (including reasonable
expenses of its legal counsel), losses or damages, which, without gross
negligence, willful misconduct or bad faith on the part of the Distribution
Agent, may be paid, incurred or suffered by, or to which it may become subject
by
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reason of or as a result of the administration of its duties hereunder or by
reason of or as a result of the Distribution Agent's compliance with the
instructions set forth herein or with any written or oral instructions delivered
to it pursuant hereto, or as a result of defending its actions as Distribution
Agent hereunder, including any claim against the Distribution Agent by any
holder of RSI Common Stock.
(c) The Distribution Agent shall not be liable for any action taken
or suffered by it in good faith in accordance with the instructions of RSI or
its counsel other than any liability arising out of the Distribution Agent's
gross negligence or willful misconduct.
(d) If any question or dispute arises with respect to the proper
interpretation of this Agreement or the Distribution Agent's duties hereunder or
the rights of any stockholder receiving REX Common Stock pursuant to the
Distribution, the Distribution Agent shall not be required to act and shall not
be held liable for refusal to act until the question or dispute has been
judicially settled (and, if appropriate, the Distribution Agent may file a suit
in interpleader for such purpose) by final judgment rendered by a court of
competent jurisdiction, binding on all parties interested in the matter or
settled by a written document in form and substance reasonably satisfactory to
the Distribution Agent and the parties to the dispute or question.
(e) RSI represents to the Distribution Agent that it has and shall
continue to solicit the advice of its counsel regarding the compliance with all
applicable state and federal securities laws in connection with the transactions
contemplated by the Distribution and that it will comply with such laws.
(f) The Distribution Agent shall have the right to resign as
Distribution Agent at any time upon thirty (30) days' written notice to RSI.
ARTICLE III
DISTRIBUTION SERVICES
Section 3.1 Preparation and Mailing of the Certificates.
(a) The Distribution. As soon as practicable after receipt of the
Written Instructions, the Distribution Agent shall distribute to the holders of
record of the RSI Common Stock on the Distribution Record Date, subject to
Section 3.1(d) and (e), (i) the REX Common Stock, on the basis of one share of
REX Common Stock for every two shares of RSI Common Stock held on the
Distribution Record Date and (ii) a check in lieu of any fractional share
interests. The manner and method of such
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<PAGE> 57
distribution shall be in accordance with the Distribution Agent's usual practice
for similar transactions.
(b) Whole Shares. The Distribution Agent shall determine the number
of whole shares of REX Common Stock allocable to each holder of record of RSI
Common Stock and shall prepare certificates representing such shares.
(c) Fractional Shares. The Distribution Agent shall not distribute
any fractional shares of REX Common Stock to any holder of RSI Common Stock. The
Distribution Agent shall determine the number of fractional shares of REX Common
Stock allocable to each holder of record of RSI Common Stock, shall aggregate
such fractional shares, shall sell the whole shares obtained thereby in an
orderly manner after the Distribution Date in the open market and shall cause to
be distributed to each such holder a check in lieu of any fractional share
interest that such holder would otherwise be entitled to receive (minus any pro
rata share of any brokerage commissions payable in connection with the sale of
the fractional shares) along with a corresponding 1099-B form.
(d) Dissenters' Certificates. Notwithstanding the foregoing
provisions of this Section 3.1, the Distribution Agent shall take only such
action with respect to the shares of REX Common Stock otherwise distributable to
Dissenting Shareholders as RSI may instruct the Distribution Agent in writing,
including, but not limited to, the return of such shares to RSI. The
Distribution Agent shall distribute shares of REX Common Stock to Dissenting
Shareholders only if, when, and in the manner that the Distribution Agent is
instructed in writing by RSI.
(e) Shares Not Distributed. At the instruction of RSI, the
Distribution Agent shall return to RSI any shares of REX Common Stock not
distributed pursuant to instructions of RSI in accordance with Section 3.1(d) or
otherwise.
Section 3.2 Other Services. The Distribution Agent shall perform such
other services that are usual and customary for a Distribution Agent to perform,
including, but not limited to, responding to shareholder and broker inquiries,
coordinating new stock certificates, and replacing lost checks (in lieu of
fractional shares).
ARTICLE IV
FEES
Section 4.1 Distribution Agent Fees. RSI shall pay to the Distribution
Agent such fees and shall reimburse the Distribution Agent for such reasonable
out-of-pocket expenses each as specified in Schedule A to this Agreement.
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ARTICLE V
MISCELLANEOUS
Section 5.1 Complete Agreement; Construction. This Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.
Section 5.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
the principles of conflicts of laws thereof.
Section 5.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand,
mailed by registered or certified mail (return receipt requested), or sent by
cable, telegram, telecopy (confirmed by regular, first-class mail), to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and shall be deemed given on the date on
which such notice is received:
if to RSI:
Roadway Services, Inc.
1077 Gorge Boulevard
P.O. Box 471
Akron, Ohio 44309-0471
Attn: Secretary
if to Distribution Agent:
KeyCorp Shareholder Services, Inc.
127 Public Square, 15th Floor
Cleveland, Ohio 44114
Attn: Ms. Laura Thoms
Section 5.4 Amendments and Waivers. This Agreement may not be altered
or amended, nor may rights hereunder by waived, except by an instrument in
writing executed by the party or parties to be charged with such amendment or
waiver. No waiver of any term, provision or condition of or failure to exercise
or delay in exercising any rights or remedies under this Agreement, in any one
or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.
Section 5.5 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original instrument, but all of
which together shall constitute but one and the same Agreement.
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<PAGE> 59
Section 5.6 Successors and Assigns. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
Section 5.7 Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date, by, and in
the sole discretion of, the RSI Board without the approval of the Distribution
Agent or the shareholders of RSI. In the event of such termination, no party
shall have any liability of any kind to any other party on account of such
termination.
Section 5.8 Titles and Headings. Titles and headings to sections herein
are inserted for the convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
Section 5.9 Legal Enforceability. Any provision of this Agreement which
is 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. Any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7
<PAGE> 60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
ROADWAY SERVICES, INC.
By:
-------------------------------------
Name:
Title:
KEYCORP SHAREHOLDER SERVICES, INC.
By:
-------------------------------------
Name:
Title:
8
<PAGE> 61
SCHEDULE A
(See Attached)
<PAGE> 62
ANNEX 4
AGREEMENT ON EMPLOYEE MATTERS
This Agreement on Employee Matters, dated as of December ___, 1995, by
and between Roadway Services, Inc., an Ohio corporation ("RSI"), and Roadway
Express, Inc., a Delaware corporation ("REX") which, as of the date hereof, is a
direct, wholly owned subsidiary of RSI.
WITNESSETH:
WHEREAS, the Board of Directors of RSI has determined that it is
advisable to distribute substantially all of the stock of REX to its
shareholders in a transaction intended to qualify under Section 355 of the Code
(the "Distribution");
WHEREAS, RSI and REX are entering into a Distribution Agreement which,
among other things, together with the exhibits thereto, sets forth the principal
corporate transactions required to effect the Distribution and sets forth other
agreements that will govern certain other matters following the Distribution;
and
WHEREAS, in connection with the Distribution, RSI and REX desire to
provide for the allocation of assets and liabilities and other matters relating
to employment, employee benefit plans and compensation arrangements.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto hereby agree as follows:
<PAGE> 63
1
ARTICLE I
Definitions
1.1 Terms used but not defined herein shall have the meanings set
forth in the Distribution Agreement. 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):
(a) Controlled Group: RSI or REX and any and all other
corporations, trades and/or businesses, the employees of which, together with
employees of RSI or REX, as appropriate, are required by Section 414 of the Code
to be treated as if they were employed by a single employer.
(b) Effective Date: January 1, 1996.
(c) ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
(d) REX Defined Contribution Plan: a plan established pursuant to
Section 2.2(c).
(e) REX Employees: any person who, on or after the Distribution
Date, is subject to the dominion and control of REX or a member of REX's
Controlled Group with respect to the type, kind, nature and scope of services
furnished, including (1) Transferred Employees as of the Distribution Date, (2)
any employee of REX on an approved leave of absence (including disability) as of
the Distribution Date and who is not included in a collective bargaining unit,
(3) employees or former employees of REX (and their dependents) participating in
the RSI Medical Plan through COBRA continuation coverage and (4) for purposes of
Section 2.4 only, former employees of REX on early retirement.
(f) REX Medical Plan: the Roadway Express, Inc. Medical, Dental
and Vision Care Plan, effective January 1, 1996.
(g) REX Pension Plan: the Roadway Express, Inc. Pension Plan,
effective January 1, 1996.
(h) REX Pension Plan Trustee: the trustee or trustees appointed
pursuant to the trust agreement under the REX Pension Plan.
<PAGE> 64
2
(i) REX Savings Plan: the Roadway Express, Inc. 401(k) Stock
Savings Plan, effective January 1, 1996.
(j) REX Savings Plan Trustee: the trustee or trustees appointed
pursuant to the REX Savings Plan.
(k) REX Stock Fund: the REX Stock Fund under the REX Savings Plan
or a REX Defined Contribution Plan, as appropriate.
(l) RSI Excess Plan: the Roadway Services, Inc. Excess Plan.
(m) RSI Medical Plan: the Roadway Services, Inc. Medical, Dental
and Vision Care Plan.
(n) RSI Pension Plan: the Roadway Services, Inc. Pension Plan and
Trust (Amended and Restated Effective January 1, 1993).
(o) RSI Pension Plan Trustee: the trustee or trustees appointed
pursuant to the RSI Pension Plan.
(p) RSI Stock Award Plan: the Roadway Services, Inc. Long-Term
Stock Award Incentive Plan (Amended and Restated as of May 1993).
(q) RSI Stock Fund: the RSI Stock Fund under the REX Savings Plan
or a REX Defined Contribution Plan, as appropriate.
(r) RSI VEBA: the Roadway Services, Inc. Welfare Benefits Plan and
Trust (Amended and Restated Effective January 1, 1993).
(s) RSI 401(a)(17) Plan: the Roadway Services, Inc. 401(a)(17)
Plan.
(t) SSRIP: the Roadway Services, Inc. Stock Savings and Retirement
Income Plan and Trust (Amended and Restated Effective January 1, 1993).
(u) SSRIP Trustee: the trustee or trustees appointed pursuant to
SSRIP.
(v) Stock Bonus Plan: the Roadway Services, Inc. Stock Bonus Plan
and Trust (Amended and Restated Effective January 1, 1993).
(w) Stock Bonus Plan Trustee: the trustee or trustees appointed
pursuant to the Stock Bonus Plan.
(x) Transferred Employees: any employee of RSI or a member of
RSI's Controlled Group other than REX on the day before
<PAGE> 65
3
the Distribution Date who becomes, as of the Distribution Date, an employee of
REX. Each Transferred Employee is identified on Exhibit A hereto.
(y) Union Employees: any person who, on or after the Distribution
Date, is subject to the dominion and control of REX or a member of REX's
Controlled Group with respect to the type, kind, nature and scope of services
furnished, including any employee of REX on an approved leave of absence
(including disability) who retains seniority under the applicable collective
bargaining agreement as of January 1, 1996 and who is included in a collective
bargaining unit.
<PAGE> 66
4
ARTICLE II
Employment and Benefit Plans
2.1 Employment of REX Employees and Union Employees.
(a) REX shall employ or continue to employ, effective as of the
Distribution Date, all REX Employees. Subject to the terms and conditions of,
and except as otherwise provided in, this Agreement, effective as of the
Distribution Date, REX shall provide the REX Employees with terms and conditions
of employment, including, without limitation, employee benefits and other
perquisites, that are substantially similar to those provided to the REX
Employees immediately prior to the Distribution Date. However, nothing
contained in this Agreement shall impair REX's ability to make such reasonable
changes in such terms and conditions of employment following the Distribution as
REX may deem to be necessary or appropriate for the operation of REX.
(b) REX shall honor and continue to employ all Union Employees
pursuant to the terms and conditions of the collective bargaining agreement in
effect as of the Distribution Date.
2.2 REX Savings Plan. (a) REX shall establish, as of the
Effective Date, the REX Savings Plan, a qualified profit sharing plan with a
salary deferral feature under Section 401(k) of the Code for the benefit of REX
Employees. REX Employees who participate in SSRIP as of December 31, 1995 shall
be eligible for immediate participation in the REX Savings Plan as of the
Effective Date. REX Employees shall be credited under the REX Savings Plan, for
purposes of determining eligibility to participate, with the service credited to
them under SSRIP. On and after the Effective Date, SSRIP shall continue to
provide benefits to former employees of REX who terminated employment with REX
on or prior to the Effective Date.
(b) As soon as practicable after the Effective Date, RSI shall
direct the SSRIP Trustee to transfer to the REX Savings Plan Trustee in cash,
securities or other property or a combination thereof, as reasonably determined
by RSI and acceptable by the REX Savings Plan Trustee, an amount equal to the
account balances attributable to REX Employees and alternate payees (as defined
in Section 414(p) of the Code) with respect to REX Employees ("Alternate
Payees") under SSRIP as of the date of transfer plus the portion of any
unallocated contributions and trust earnings attributable to such REX Employees
under SSRIP.
<PAGE> 67
5
(c) REX may, in its discretion, establish a qualified plan and
related trust to receive a transfer of assets from the Stock Bonus Plan. As
soon as practicable after the Distribution Date, RSI shall direct the Stock
Bonus Plan Trustee to transfer either to the trustee of such trust or to the REX
Savings Plan Trustee, as determined by REX, in cash, securities or other
property or a combination thereof, as reasonably determined by RSI and
acceptable by the trustee of the recipient trust, an amount equal to the account
balances attributable to REX Employees and Alternate Payees under the Stock
Bonus Plan as of the date of transfer plus the portion of any unallocated
contributions and trust earnings attributable to such REX Employees and
Alternate Payees under the Stock Bonus Plan.
(d) From and after the Effective Date, RSI Common Stock credited to
the accounts of participants under the REX Savings Plan or a REX Defined
Contribution Plan who are REX Employees or Alternate Payees shall be subject to
the investment directions of such participants in accordance with the provisions
of such plans and applicable rules thereunder. On and after the Distribution
Date, dividends paid on such RSI Common Stock shall be invested in the REX Stock
Fund.
(e) RSI shall have no obligation to direct the transfers described
in Subsection (b) or (c) of this Section unless and until RSI receives either a
favorable determination letter issued by the IRS as to the qualified status of
the REX Savings Plan or any REX Defined Contribution Plan under Section 401(a)
of the Code or an opinion of counsel to REX that the REX Savings Plan or any REX
Defined Contribution Plan meets the requirements of Section 401(a) of the Code
as to form. The REX Savings Plan Trustee or the trustee of any REX Defined
Contribution Plan shall have no obligation to accept any transfer from SSRIP or
the Stock Bonus Plan unless and until REX and the REX Savings Plan Trustee
and/or the trustee of any REX Defined Contribution Plan receives copies of
favorable determination letters issued by the IRS as to the qualified status of
SSRIP and the Stock Bonus Plan or an opinion of counsel to RSI that SSRIP and
the Stock Bonus Plan each meet the requirements of Section 401(a) of the Code as
to form.
(f) As of the Effective Date, SSRIP and the Stock Bonus Plan shall
provide that an individual who is an employee of REX on January 1, 1996 shall
not be eligible to commence receiving benefits from SSRIP and/or the Stock Bonus
Plan, as applicable, until he or she terminates employment with REX after
December 31, 1995.
<PAGE> 68
6
(g) RSI and members of its Controlled Group shall jointly and
severally indemnify REX and members of its Controlled Group and hold each of
them harmless from and against any liability, tax, loss, damage, claim,
judgement, fine, penalty, amount paid in settlement, cost or expense, including
the fees and expenses of counsel suffered by any of them in respect of or
arising out of any such transfer.
2.3 REX Pension Plan. (a) REX shall implement, as of the
Effective Date, the REX Pension Plan, a qualified defined benefit plan
substantially similar to the RSI Pension Plan for the benefit of REX Employees.
REX Employees who participate in the RSI Pension Plan as of December 31, 1995
shall be eligible for immediate participation in the REX Pension Plan as of the
Effective Date. REX Employees shall be credited under the REX Pension Plan, for
eligibility and vesting purposes, with the service credited to them under the
RSI Pension Plan. A REX Employee shall be credited under the REX Pension Plan,
for benefit accrual purposes, with the service credited to him or her under the
RSI Pension Plan only if a transfer described in Subsection (b) of this Section
is made with respect to such REX Employee. On and after the Effective Date, the
RSI Pension Plan shall retain all liabilities and obligations for benefits
attributable to employees of REX who terminated employment with REX prior to the
Effective Date.
(b) As soon as practicable after the Effective Date, RSI shall cause
the RSI Pension Plan Trustee to segregate within the RSI Pension Plan Trust the
Segregated Pension Assets (as defined in the following sentence) determined to
be allocable as of December 31, 1995 with respect to accrued benefits of REX
Employees and Alternate Payees as of such date. For purposes of the preceding
sentence, the Segregated Pension Assets allocable as of December 31, 1995 with
respect to accrued benefits of REX Employees and Alternate Payees shall mean
assets with a value equal to the present value as of December 31, 1995 of the
benefits of the REX Employees and Alternate Payees under the RSI Pension Plan,
on a projected benefit obligation basis for purposes of Financial Accounting
Standards Board, Statement No. 87, "Employers' Accounting for Pensions", using a
7 3/4% discount rate and the 1983 Group Annuity Mortality Table (separately for
males and females), but not less than the minimum required under Section 414(l)
of the Code.
(c) As soon as practicable after the Effective Date, RSI and REX
shall make or cause to be made all required filings and submissions to
appropriate governmental and regulatory authorities and all necessary or
appropriate amendments to the RSI Pension Plan and the REX Pension Plan, and
shall take all other steps necessary and appropriate, to permit the transfer of
the Segregated Pension Assets from the RSI Pension Plan Trustee to the REX
Pension Plan Trustee. As soon as practicable after
<PAGE> 69
7
the filings, submissions, amendments and other steps described in this
Subsection are completed, and after the expiration of any waiting periods
imposed under applicable law, RSI shall direct the RSI Pension Plan Trustee to
transfer to the REX Pension Plan Trustee, and REX shall direct the REX Pension
Plan Trustee to accept assets of the RSI Pension Plan equal to (1) the
Segregated Pension Assets, as adjusted for contributions, benefit payments,
expenses and investment experience through the date of such transfer. Such
transfer shall be in cash, securities or other property or a combination
thereof, as reasonably determined by RSI and acceptable to the REX Pension Plan
Trustee. After such transfer, each REX Employee and Alternate Payee for whom
such transfer was made shall be credited with benefits under the REX Pension
Plan attributable to service prior to the Effective Date at least equal to his
or her accrued benefit under the RSI Pension Plan, and the RSI Pension Plan
shall have no further obligations with respect to such accrued benefit. RSI and
REX shall prepare a list, certified by a duly authorized officer of each, of all
REX Employees and Alternate Payees with respect to which a transfer pursuant to
this Subsection has been made.
(d) RSI shall have no obligation to direct the transfer described
in Subsection (c) of this Section unless and until RSI receives either a
favorable determination letter issued by the IRS as to the qualified status of
the REX Pension Plan under Section 401(a) of the Code or an opinion of counsel
to REX that the REX Pension Plan meets the requirements of Section 401(a) of the
Code as to form. The REX Pension Plan Trustee shall have no obligation to
accept any transfer from the RSI Pension Plan unless and until REX and the REX
Pension Plan Trustee receives either a favorable determination letter issued by
the IRS as to the qualified status of the RSI Pension Plan under Section 401(a)
of the Code or an opinion of counsel to RSI that the RSI Pension Plan meets the
requirements of Section 401(a) of the Code as to form.
(e) The REX Pension Plan shall be a continuation of the RSI Pension
Plan as to the REX Employees for whom the transfer described in Subsection (c)
of this Section was made and the transfer of assets and liabilities from the RSI
Pension Plan to the REX Pension Plan and the REX Pension Plan Trustee pursuant
to this Agreement shall not be deemed a termination or partial termination of
the RSI Pension Plan.
(f) In the event a former employee of RSI who participated in the
RSI Pension Plan prior to the Effective Date becomes a REX Employee eligible to
participate in the REX Pension Plan after the Effective Date, RSI and REX may
agree that the liabilities of such individual and the assets attributable to
such liabilities, in an amount which (based on the certification of the actuary
for the Plans) meets the requirements of Section 414(l) of the Code and the
regulations thereunder, will be
<PAGE> 70
8
transferred by the RSI Pension Plan Trustee from the RSI Pension Plan to the REX
Pension Plan and the REX Pension Plan Trustee in the manner described in, and in
compliance with, Section 414(l) of the Code and the regulations thereunder.
(g) As of the Effective Date, the RSI Pension Plan shall provide
that an individual who is an employee of REX on January 1, 1996 shall not be
eligible to commence receiving benefits from the Plan until he terminates
employment with REX after December 31, 1995. Until the completion of the
transfer of assets and liabilities from the RSI Pension Plan to the REX Pension
Plan and the REX Pension Plan Trustee described in Subsection (c) of this
Section, benefits under the REX Pension Plan payable to a REX Employee
thereunder shall be computed on the basis of his or her service with REX. On
and after such transfer of assets and liabilities, benefits under the REX
Pension Plan payable to a REX Employee thereunder shall be computed on the basis
of his or her total service with RSI and REX, but shall be reduced by any
benefits previously paid to such REX Employee under the RSI Pension Plan.
2.4 REX Welfare Benefit Plans. (a) REX Medical Plan: As of the
Effective Date, REX Employees (and their eligible dependent(s)) shall be covered
by the REX Medical Plan, coverage under which shall be a continuation of the
medical plan coverage provided to REX Employees and Transferred Employees
immediately prior to the Effective Date. The REX Medical Plan made available to
REX Employees and their dependent(s) as of the Effective Date shall waive any
applicable waiting periods for coverage of REX Employees and their dependent(s)
which did not exist with respect to such REX Employee or dependent(s)
immediately prior to the Effective Date. The REX Medical Plan shall not
contain, as of the Effective Date, any exclusion or limitation with respect to
any pre-existing condition of any REX Employee or dependent(s) which did not
apply with respect to such REX Employee or dependent immediately prior to the
Effective Date. For purposes of the two preceding sentences, service with RSI
prior to the Effective Date shall be taken into account for purposes of meeting
any such waiting period or pre-existing condition exclusion or limitation.
(b) REX Employee Medical Claims: (i) As of the Effective Date,
the REX Medical Plan shall have sole responsibility for all obligations,
financial and otherwise, with respect to medical claims for expenses incurred by
REX Employees and their dependent(s) from and after the Effective Date; (ii)
medical claims for expenses incurred by REX Employees and their dependent(s)
prior to the Effective Date which remain unpaid as of the Effective Date shall
be processed and paid by: (A) the RSI VEBA, through January 27, 1996; (B)
Aetna Insurance Company from and after the Effective Date; and (C) REX's third
party administrator from and after January 28, 1996. The total of the
<PAGE> 71
9
1995 claims expense paid in 1996 will be charged against the portion of assets
of the RSI VEBA allocated to REX as of December 31, 1995, said allocation to be
calculated in accordance with the formula and procedure described in Subsection
(d) of this Section; and (iii) prior to December 31, 1996, the RSI VEBA, Aetna
Insurance Company and REX's third party administrator will report to RSI the
amount, in dollars, of REX 1995 medical claims paid in 1996. If the total of
these claims paid is less than the REX allocation referred to in (ii) above, the
difference shall be paid by REX to RSI.
(c) Administrative Fees: REX shall pay to RSI administrative fees
for the services specified in Subparagraph (A) of Paragraph (b)(ii) of this
Section. Such fees will be determined by applying RSI's administrative costs for
claims administration per employee, per accounting period of: medical - $9.47;
dental - $2.06; vision - $0.55; prescription drugs - $1.10; flexible spending
accounts - $5.46, to the number of REX employees in each of those accounts as of
December 31, 1995.
(d) Allocation of RSI VEBA Assets: The RSI VEBA assets will be
allocated between RSI and REX by applying a ratio percentage to the total assets
in the RSI VEBA on December 31, 1995. The ratio percentage will be a number
equal to a fraction, the numerator of which shall be the total of claims paid,
in dollars, on behalf of REX Employees under the RSI Medical Plan by the RSI
VEBA through the first 12 periods of 1995, and the denominator of which shall be
the total of claims paid, in dollars, under the RSI Medical Plan by the RSI VEBA
through the first 12 periods of 1995. An estimated dollar amount for the claims
paid on behalf of REX Employees under the RSI VEBA through January 27, 1996,
shall be subtracted from the REX allocation as determined in the preceding
sentence. The remaining balance of the REX allocation shall be paid to REX by
the RSI VEBA in equal payments in the first, second and third periods of 1996.
(e) Claim Appeals: As of the Effective Date, the REX Medical Plan
shall have sole responsibility for the determination of claim appeals filed by
REX Employees under the REX Medical Plan. Claim appeals filed by employees of
REX under the RSI Medical Plan will be determined by the RSI Medical Plan.
(f) Reimbursement Plans: (i) REX shall implement, as of the
Effective Date, a flexible spending account plan, a dependent care reimbursement
plan, a health care reimbursement plan and a pre-tax premium plan (collectively
referred to as the "REX Reimbursement Plans") with provisions substantially
similar to similar plans provided to REX Employees prior to the Effective Date;
and (ii) Plan Year 1995 forfeitures under the Roadway Services, Inc. Flex Plan,
Health Care Reimbursement Plan and Dependent Care Reimbursement Plan,
attributable to REX Employees
<PAGE> 72
10
shall be used to offset administrative expenses attributable to the
participation of employees of REX in such Plans.
2.5 Nonqualified Plans. (a) From and after the Effective Date,
REX shall and hereby does assume all liabilities with respect to REX Employees
who are, as of the Effective Date, participants under the RSI Stock Award Plan,
the RSI Excess Plan and the RSI 401(a)(17) Plan. With respect to the RSI Stock
Award Plan, to the extent REX Employees convert basic stock credits awarded
under the RSI Stock Award Plan to cash and restricted book value shares of RSI,
REX agrees to provide payment to RSI in connection with such conversion as soon
as practicable but in any event within 30 days of notification by RSI of such
conversion, in an amount equal to the value of such cash and restricted book
value shares. RSI shall provide to REX a list, certified by a duly authorized
officer of RSI, of all REX Employees who are participants in such Plans. As of
the Effective Date, REX shall establish similar plans under which each REX
Employee eligible to participate therein shall be credited with his or her term
of service with RSI for all purposes and such service shall be deemed for all
purposes to be service with REX. On and after the Distribution Date REX may
establish such other nonqualified plans for REX Employees as REX may determine
are appropriate.
(b) From and after the Effective Date, RSI shall and hereby does assume
all liabilities with respect to individuals employed by RSI as of the Effective
Date who hold stock credits previously granted by REX.
2.6 Liabilities to REX Employees. REX shall assume sole
responsibility for (a) payments of any and all wages, vacation pay, bereavement
pay, jury duty pay, disability income, supplemental unemployment benefits,
fringe benefits or other perquisites of employment, or similar benefits, payroll
taxes and other payroll related expenses, (b) workers' compensation claims or
related litigation claims, (c) claims filed with the equal Employment
Opportunity Commission or related litigation claims and (d) other similar
employment-related claims, in any such case arising out of or relating to (i)
the employment of the REX Employees prior to the Distribution Date or (ii) the
employment of former employees whose employment with REX or RSI or the
<PAGE> 73
11
Controlled Group of either terminated on or before the Distribution Date.
2.7 At Will Employment. Nothing in this Agreement shall limit the
at will nature of the employment of any of the REX Employees who do not have any
other contractual rights with respect to employment by REX or the right of RSI
or REX to alter or terminate any employee benefit plan.
2.8 Severance. RSI and REX agree that with respect to individuals
who, in connection with the Distribution, cease to be employees of RSI and
become employees REX on the day after the Distribution, such cessation shall not
be deemed a severance of employment from RSI for purposes of the RSI Severance
Pay Plan. RSI shall assume and be solely responsible for, and shall indemnify
REX against, all liabilities and obligations whatsoever in connection with
claims made by or on behalf of REX Employees who are former employees of RSI in
respect of severance pay and similar obligations relating to the termination or
alleged termination of any such person's employment from RSI before the
Distribution Date.
<PAGE> 74
ARTICLE III
Access and Sharing of Information
3.1 Sharing of Information. RSI agrees to provide REX, as soon as
practicable after the Effective Date (with the cooperation of REX to the extent
that relevant information is in the possession of REX), with a list of the REX
Employees who were, to the best knowledge of RSI, participants in or otherwise
entitled to benefits under SSRIP or the RSI Pension Plan immediately prior to
the Effective Date, together with a listing of each such REX Employee's term of
service for eligibility, vesting and benefit accrual purposes under such Plans
and a listing of each such REX Employee's accrued benefit under the RSI Pension
Plan. RSI shall, as soon as practicable after the Effective Date, provide REX
with such additional information (in the possession of RSI and not already in
the possession of REX) as may be reasonably requested by REX and necessary in
order for REX to establish and administer effectively the REX Pension Plan and
the REX Savings Plan.
3.2 Access to Information. (a) From and after the Effective Date
each party hereto shall afford the other party and its accountants, counsel and
other designated representative reasonable access (including using reasonable
efforts to give duplicating rights during normal business hours) to all records,
books, contracts, instruments, computer data and other data and information in
such party's possession relating to the business and affairs of such other party
(other than data and information subject to an attorney/client or other
privilege), insofar as such access is reasonably required by such other party
including, without limitation, for audit, accounting and litigation purposes and
administration of employee benefit plans, as well as for purposes of fulfilling
disclosure and reporting obligations.
<PAGE> 75
(b) For a period of up to 24 months from and after the Distribution
Date, each party shall make available to the other during normal business hours
and in a manner which will not unreasonably interfere with such party's
business, its financial, tax, accounting, legal, employee benefits and such
other staff and services to the extent that the same may be reasonably required
in connection with the preparation of tax returns, audits, claims,
administration of employee benefit plans and otherwise to assist in effecting an
orderly transition following the Distribution.
<PAGE> 76
ARTICLE IV
Miscellaneous
4.1 Complete Agreement. This Agreement, together with the
Distribution Agreement, and the exhibits thereto, shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede all previous negotiations, commitments and writings with
respect to such subject matter.
4.2 Governing Law. This Agreement and (unless otherwise provided)
all amendments hereof shall be governed by the internal laws of the State of
Ohio, without regard to the conflicts of law principles thereof.
4.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, mailed by
registered or certified mail (return receipt requested) or sent by telecopy or
by a recognized overnight courier service, addressed as follows:
If to RSI:
Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44310
Attention: General Counsel
If to REX:
Roadway Express, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309
Attention: General Counsel
<PAGE> 77
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section.
4.4 Amendment. This Agreement may be amended, modified or
supplemented only by a written agreement signed by all the parties hereto.
4.5 Waiver. No waiver by any party of any of the provisions of
this Agreement will be deemed, or will constitute, a waiver of any other
provision, whether similar, nor will any waiver constitute a continuing waiver.
No waiver will be binding unless executed in writing by the party making the
waiver.
4.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument and all of
which together shall constitute one and the same instrument.
4.7 Interpretation. The Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
4.8 Termination. Notwithstanding any provision hereof, this
Agreement may be terminated at any time prior to the Distribution. Any
termination of the Distribution Agreement shall result in the termination of
this Agreement. In the event of such termination, no party hereto shall have
any liability to any person by reason of this Agreement.
<PAGE> 78
4.9 No Third Party Beneficiary. Nothing in this Agreement, express
or implied, shall confer on any person other than the parties any rights or
remedies under or by virtue of this Agreement.
4.10 Dispute Resolution. Any dispute between the parties concerning
the performance of this Agreement which cannot be resolved by good faith
negotiation of the parties shall be determined in accordance with the provisions
of the ADR Agreement.
<PAGE> 79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ROADWAY SERVICES, INC.
By:
-------------------
ROADWAY EXPRESS, INC.
By:
-------------------
<PAGE> 80
ANNEX 5
TRADEMARK, TRADE NAME AND TRADE DRESS LICENSE AGREEMENT
THIS TRADEMARK, TRADE NAME AND TRADE DRESS LICENSE AGREEMENT (the
"Agreement") is made as of the 2nd day of January, 1995 (the "Effective Date"),
by and between Roadway Express, Inc., a Delaware corporation with a place of
business at 1077 Gorge Blvd., Akron, Ohio 43309 (the "Licensor") on the one
hand, and Roadway Services, Inc., an Ohio corporation with a place of business
at 1077 Gorge Blvd., Akron, Ohio 43309, and its subsidiaries (collectively, the
"Licensee"), on the other hand.
W I T N E S S E T H:
WHEREAS, the shareholders of Licensee approved the distribution by
Licensee to holders of common stock of Licensee of at least 95% of the
outstanding shares of common stock of Licensor, a wholly-owned subsidiary of
Licensee, effectively separating Licensor and Licensee into two independent
companies; and
WHEREAS, Licensor owns the trademarks "ROADWAY" and the "R" Logo and
registrations therefor in the United States and throughout the world, as
identified in Exhibit A (such
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<PAGE> 81
trademarks, and the registrations therefor, being hereinafter collectively
referred to as the "Licensed Trademarks"); and
WHEREAS, Licensor owns the trade dress currently used and associated
with the Licensed Trademarks in the United States and throughout the world, such
trade dress consisting essentially of the colors blue and orange or blue and
yellow, and a depiction of a two lane highway forming a stylized letter "R" in
the colors blue and orange or blue and yellow (such trade dress being
hereinafter referred to as the "Licensed Trade Dress"); and
WHEREAS, Licensor owns the trade name "Roadway" in the United States
and throughout the world (such trade name being hereinafter referred to as the
"Licensed Trade Name"; the Licensed Trademarks, Licensed Trade Dress and
Licensed Trade Name are hereinafter sometimes collectively referred to as the
"Licensed Marks"); and
WHEREAS, as between Licensor and Licensee, Licensor is and has been the
primary user of the Licensed Marks; and
WHEREAS, Licensee has used and is continuing to use the Licensed Marks
in its own composite trademarks and trade names, and owns applications and
registrations for its composite trademarks in the United States, as identified
in Exhibit B; and
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<PAGE> 82
WHEREAS, Licensee has agreed that it shall begin to phase out its use
of the Licensed Marks or any names, designs, logos, marks or trade dress
confusingly similar thereto, or any variation or derivation thereof, except as
may be permitted by the terms of this Agreement, and that it shall adopt a new
name, trademark and trade dress which is not confusingly similar to or a
variation or derivation of the Licensed Marks;
THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained and other good and valuable consideration had and
received, Licensor and Licensee hereby agree as follows:
1. Definitions
1.1. As used herein, the term "Services" means nationwide and regional
trucking, domestic and international air cargo services, express package
delivery services, contract logistics services and related transportation
services and activities identical or substantially identical to those which are
being provided by Licensee in its business as of the Effective Date.
3
<PAGE> 83
2. License Grants
2.1. Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee for the term of this Agreement a non-exclusive,
non-assignable, royalty-free, fully paid-up license to use the Licensed Trade
Name throughout the world in connection with the business of Licensee and the
Services, provided that Licensee shall not use the Licensed Trade Name, or any
name confusingly similar thereto, or any variation or derivation thereof, in any
new corporate or entity name of Licensee or any affiliate of Licensee.
2.2. Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee for the term specified in Section 6.1 hereof a
non-exclusive, non-assignable, royalty-free, fully paid-up license to use the
Licensed Trademarks and Licensed Trade Dress throughout the world on or in
connection with the Services, provided that such Services are rendered
substantially in accordance with the specifications and standards of Licensee
that are in existence on the Effective Date.
3. Quality Control
3.1. During the term of this Agreement, Licensee shall (a) use the
Licensed Marks only in a manner consistent with the
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<PAGE> 84
past practice of Licensee, (b) maintain high quality standards for the Services
consistent with Licensee's current quality standards and (c) maintain a business
reputation and conduct its business in accordance with standards generally
acceptable to the business community, as reasonably determined by Licensor.
3.2. In addition to the restrictions of Section 3.1 hereof, Licensee
agrees to use the Licensed Trademarks and Licensed Trade Dress only on or in
connection with Services rendered in strict accordance with the proviso of
Section 2.2 hereof. Licensee shall not provide under the Licensed Trademarks or
Licensed Trade Dress any Services which are not rendered in accordance with said
proviso.
3.3. If, at any time, any Services provided by or for Licensee shall,
in the sole opinion of Licensor, fail to conform to the applicable standards of
quality referred to in Sections 3.1 or 3.2 hereof, Licensee agrees, at its own
expense, to take such action as Licensor directs in writing, including but not
limited to cessation of further sale, distribution, advertising and promotion of
such Services under the Licensed Marks, and/or removal of the Licensed
Trademarks (if any) from all advertising and promotional materials in connection
with such non-conforming Services. Licensee shall fully indemnify and hold
harmless Licensor against any and all claims, losses, damages or liability
asserted or sustained by third parties on account of the
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<PAGE> 85
providing of any such non-conforming Services, in accordance with the procedures
set forth in Section 7.4 hereof.
4. Additional Rules of Use
4.1 Licensee is authorized to use the Licensed Marks only as provided
in this Agreement. On or about the Effective Date of this Agreement, Licensee
shall begin a gradual phase-out of its use of the Licensed Marks, with such use
to cease upon expiration or termination of this Agreement. Licensee shall not
adopt, use or attempt to register any name, mark, logo or trade dress which is
confusingly similar to or a variation or derivation of the Licensed Marks.
4.2. Licensee agrees to use the Licensed Marks in a manner which is
consistent with the current use of said marks by Licensee. Any form of use of
the Licensed Marks not consistent with current practice may be adopted by
Licensee only upon prior written approval by Licensor. From time to time upon
reasonable request by Licensor, Licensee shall send to Licensor representative
specimens showing the use of the Licensed Marks by Licensee.
4.3. Licensee shall comply with all laws and regulations pertaining to
the proper use and designation of the Licensed Marks, including without
limitation, where applicable, use of the notice "(R)" for the Licensed
Trademarks. Licensor's
6
<PAGE> 86
ownership of the Licensed Trademarks shall be clearly shown as appropriate on
all labels, signs, cartons, advertising and printed materials used in connection
with the Services and containing the Licensed Trademarks by the following
legend:
"ROADWAY(R) [or the R(R) Logo] is a trademark owned and licensed by
Roadway Express, Inc."
5. Ownership; Infringement
5.1. Licensee acknowledges the validity of the Licensed Marks and
Licensor's ownership and title thereto, and agrees that any and all rights that
might be acquired by use of the Licensed Marks by Licensee shall inure to the
sole benefit of Licensor. Licensee further agrees not to adopt or use, claim
adversely to Licensor or register in any country any trademarks, service marks,
trade dress or trade names resembling or confusingly similar to any of the
Licensed Marks, or any variation or derivation thereof, or any rights or
interests thereto. If Licensor notifies Licensee of any such confusion or risk
of confusion, Licensee agrees to immediately take appropriate steps to avoid
such confusion. Licensee shall not represent in any manner that it has any
ownership rights in the Licensed Marks.
5.2 At or about the time that Licensee completes its phase-out of its
use of the Licensed Marks, but in no event
7
<PAGE> 87
subsequent to the expiration or termination of this Agreement, Licensee shall
file with the United States Patent and Trademark Office such documents as
required to (a) abandon Licensee's pending trademark applications identified in
Exhibit B, and (b) surrender Licensee's rights in and to Licensee's trademark
registrations identified in Exhibit B. Nothing in this Agreement shall be
construed to prohibit Licensee from filing new trademark applications to
register Licensee's own marks, provided such applications do not incorporate any
of the Licensed Marks.
5.3. Licensee shall give Licensor notice of any known or presumed
infringements any of the Licensed Marks, and Licensee shall cooperate in all
reasonable respects with Licensor for the protection of the Licensed Marks. If
Licensor decides to enforce the Licensed Marks against an infringer, all costs
incurred and recoveries made shall be for the account of Licensor.
5.4. Licensee shall not institute any legal proceeding involving any
of the Licensed Marks. Licensor shall have the sole discretion to determine
when, and if, any legal action shall be taken involving the Licensed Marks. If
the resolution of any such action, whether voluntary or involuntary, precludes
the use of the Licensed Marks in connection with one or more of the Services,
this Agreement shall terminate as to such Service(s) without any liability from
Licensor to Licensee.
8
<PAGE> 88
5.5. Nothing in this Agreement shall be construed as prohibiting or
limiting Licensee from adopting or using any designations or trademarks in
relation to the Services which are not confusingly similar to, or a variation or
derivation of, the Licensed Marks.
6. Term
6.1. Unless this Agreement is previously terminated in accordance with
Section 6.3 or 6.4 hereof, the license to use the Licensed Trademarks and
Licensed Trade Dress granted to Licensee under Section 2.2 hereof shall
terminate as promptly as practicable but in no event later that thirty-six (36)
months from the Effective Date. Upon termination of such license, (a) Licensee
shall cease all use of the Licensed Trademarks and Licensed Trade Dress or any
trademark or trade dress confusingly similar thereto, and any variation or
derivation thereof, and (b) Licensee shall cease to use, directly or indirectly,
or completely and permanently obliterate or remove all markings on assets and
properties of Licensee such as, without limitation, vehicles, products,
packaging materials, labels and literature, that use the Licensed Trademarks or
Licensed Trade Dress, or any trademark or trade dress confusingly similar
thereto, and any variation or derivation thereof.
6.2. Unless previously terminated in accordance with Sections 6.3 or
6.4 hereof, and subject to the earlier
9
<PAGE> 89
termination provisions of Section 6.1 hereof, this Agreement shall terminate as
promptly as practicable but in no event later than thirty-six (36) months from
the Effective Date. Upon termination, the license to use the Licensed Trade Name
granted to Licensee under Section 2.1 hereof shall cease forthwith, and Licensee
shall thereupon (a) cease all use of the Licensed Trade Name or any trade name
confusingly similar thereto, and any variation or derivation thereof, (b) cease
to use, directly or indirectly, or completely and permanently obliterate or
remove all markings on assets and properties of Licensee such as, without
limitation, vehicles, signs, packaging materials, stationery, business cards and
literature, that use the Licensed Trade Name, or any trade name confusingly
similar thereto, and any variation or derivation thereof, except for existing
books, records and documents of Licensee which are retained solely for
record-keeping purposes, and (c) give notice of changes in all registrations or
other listings using the Licensed Trade Name, any trade name confusingly similar
thereto, and any variation or derivation thereof, deleting the Licensed Trade
Name therefrom.
6.3. In the event Licensee does not comply with any provision of this
Agreement and Licensor elects to give Licensee written notice of such
non-compliance, Licensee shall have thirty (30) days from the receipt of such
notice to remedy the breach. If the breach is not remedied within such thirty
(30) day period, Licensor shall have the right to terminate this Agreement at
any time thereafter by giving Licensee written notice of such
10
<PAGE> 90
termination, whereupon Licensee shall cease all use of the Licensed Marks.
6.4. This Agreement may also be terminated by written notice from
Licensor to Licensee in the event Licensee becomes insolvent, is unable to pay
its debts as they mature or is the subject of a petition in bankruptcy, whether
voluntary or involuntary, or of any other proceeding under bankruptcy,
insolvency or similar laws; or makes an assignment for the benefit of creditors;
or is named in, or its property is subject to, a suit for appointment of a
receiver; or is dissolved or liquidated.
7. Indemnification
7.1 The indemnification provisions in the Distribution Agreement
entered into by the parties shall govern this Agreement.
8. Injunctive Relief
Any disputes which may arise between the parties under this Agreement
shall be resolved in accordance with the terms of the Alternative Dispute
Resolution Agreement between the parties, provided, however, that Licensee
acknowledges that Licensor shall be entitled, without the necessity of proving
actual damages or
11
<PAGE> 91
posting any bond, to injunctive relief against Licensee for any breach of this
Agreement.
9. Assignment or Sublicense
9.1. This Agreement or any rights hereunder may not be assigned,
sublicensed or otherwise transferred by Licensee, whether by operation of law or
otherwise, without the prior written consent of Licensor, and any attempted
assignment or transfer without such consent shall be null and void; provided,
however, that Licensor shall not unreasonably withhold its consent to any
proposed sublicense to any majority-owned or wholly-owned direct or indirect
subsidiary of Licensee that agrees in writing to be bound by the terms and
conditions of this Agreement.
9.2. Licensor reserves the right to assign this Agreement in whole or
in part with any transfer of any of the Licensed Marks.
10. Amendment
This Agreement may be amended only by a writing executed by each of the
parties hereto.
12
<PAGE> 92
11. Entire Agreement
This Agreement sets forth the entire understanding of the parties
hereto and supersedes all prior contracts, agreements, arrangements,
communications, discussions, representations and warranties, whether oral or
written, between the parties.
12. Governing Law
This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of Ohio.
13. Notices
Any notice, request or other communication required or permitted
hereunder shall be in writing, (including telefax or similar writing) and shall
be given to the parties at their respective addresses set forth below:
If to Licensor, to: General Counsel
Roadway Express, Inc.
1077 Gorge Blvd.
Akron, Ohio 43309
13
<PAGE> 93
If to Licensee, to: General Counsel
Roadway Services, Inc.
1077 Gorge Blvd.
Akron, Ohio 43309
or such other address or telefax number as such party may hereafter specify by
notice to the other party. Each such notice, request or other communication
shall be effective (i) if given by telefax, when such telefax is transmitted to
the telefax number specified above and the appropriate confirmation is received,
and a written confirmation is sent by U.S. Mail, postage prepaid, or (ii) if
given by any other written means, when delivered at the address specified in
this Section 14.
14. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
15. Waiver
Any waiver by any party of any violation of, breach of or default under
any provision of this Agreement or any other agreements provided for herein by
the other party shall not be
14
<PAGE> 94
construed as, or constitute, a continuing waiver of such provision, or waiver of
any other violation of, breach of or default under any other provision of this
Agreement.
16. Third Parties
Nothing expressed or implied in this Agreement is intended, or shall be
construed, to confer upon or give any person or entity other than Licensor and
Licensee any rights or remedies under or by reason of this Agreement.
17. Headings
The headings in this Agreement are solely for convenience of reference
and shall not be given any effect in the construction or interpretation of this
Agreement.
15
<PAGE> 95
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
ROADWAY EXPRESS, INC.
By
----------------------------
Its
------------------------
ROADWAY SERVICES, INC.
By
----------------------------
Its
------------------------
<PAGE> 96
EXHIBIT A
<TABLE>
<CAPTION>
Mark Reg. No. Jurisdiction
---- -------- ------------
<S> <C> <C>
ROADWAY R 1,068,287 U.S.
ROADWAY 1,050,952 U.S.
QUIKTRAK ROADWAY 1,288,109 U.S.
R ROADWAY 33,412 Texas
ROADWAY-R ROADWAY Tennessee
ROADWAY 14,525 Oklahoma
R ROADWAY 5,593 Missouri
ROADWAY Mississippi
ROADWAY 341,077 Louisiana
ROADWAY Kansas
R-ROADWAY 3,582 Arkansas
</TABLE>
17
<PAGE> 97
EXHIBIT B
<TABLE>
<CAPTION>
Mark Reg./App. No. Jur. Owner
---- ------------- ---- -----
<S> <C> <C> <C>
ROADWAY TELEMARKETING 74/635,885 U.S. Roadway Package
System, Inc.
RGA ROADWAY GLOBAL AIR 74/390,123 U.S. Roadway Global
Air, Inc.
RPS ROADWAY PACKAGE 1,572,445 U.S. Roadway Package
SYSTEM System, Inc.
RS ROADWAY SERVICES 1,398,775 U.S. Roadway
Services, Inc.
</TABLE>
18
<PAGE> 98
ANNEX 6
LIKE-KIND EXCHANGE AGREEMENT
THIS LIKE-KIND EXCHANGE AGREEMENT (this "Agreement") is made and
entered into as of the 2nd day of January, 1996 by and between ROADWAY EXPRESS,
INC., a Delaware corporation ("REX"), and SERVICES DEVELOPMENT CORPORATION, a
Delaware corporation ("SDC").
W I T N E S S E T H:
WHEREAS, REX is the owner in fee simple of an approximately 20.68 acre
parcel of land improved with a 151 door truck terminal (the "REX Terminal")
situated in Mecklenburg County, North Carolina and commonly known as 5201 & 5221
Sunset Road, Charlotte, North Carolina, as more particularly described on
Exhibit "A" attached hereto and made a part hereof;
WHEREAS, SDC is the owner in fee simple of an approximately 16.939
acre parcel of land improved with a 66 door truck terminal (which currently is
being expanded to contain 96 doors) (the "SDC Terminal") situated in Mecklenburg
County, North Carolina and commonly known as 1200 Amble Drive, Charlotte, North
Carolina, as more particularly described on Exhibit "B" attached hereto and made
a part hereof;
WHEREAS, the REX Terminal is too large for the operations of REX and
the SDC Terminal is too small for the operations of SDC's intra-company tenant,
Spartan Express, Inc. ("Spartan");
WHEREAS, REX desires to exchange the REX Terminal for the SDC Terminal
and to receive in cash from SDC the amount by which the fair market value of the
REX Terminal exceeds the fair market value of the SDC Terminal (as expanded);
and
WHEREAS, SDC desires to exchange the SDC Terminal for the REX Terminal
and to pay in cash to REX the amount by which the fair market value of the REX
Terminal exceeds the fair market value of the SDC Terminal;
NOW, THEREFORE, in consideration of their mutual covenants hereinafter
set forth, the parties agree as follows:
1. Exchange. REX agrees to convey the REX Terminal to SDC and SDC
agrees to convey the SDC Terminal to REX. REX and SDC agree that, based upon
appraisals prepared by The Valuation Group in October 1995, the fair market
values of the REX Terminal and of the SDC Terminal (as expanded) are as follow:
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 99
2
REX Terminal $3,125,000.00
SDC Terminal $2,010,000.00
Therefore, at closing SDC shall pay to REX cash in the amount of $1,115,000.00
(the "Cash Payment") to cover the difference between the fair market value of
the REX Terminal being conveyed by REX to SDC and the fair market value of the
SDC terminal (as expanded) being conveyed by SDC to REX. REX acknowledges that
the transaction contemplated by this Agreement may result in a recognized gain
to REX in the amount of the Cash Payment and agrees to pay the tax liability
resulting therefrom.
2. Improvement Work. (a) The parties acknowledge that SDC currently
is causing the SDC Terminal to be expanded from 66 doors to 96 doors and is
causing certain other improvements to be made thereto, all as more particularly
described on Exhibit "C" attached hereto and made a part hereof (the "SDC
Terminal Work"). The parties do not desire to close the exchange transaction
contemplated by this Agreement until such time as the SDC Terminal Work shall
have been completed. SDC shall work diligently to cause the SDC Terminal Work to
be completed at its expense as soon as is reasonably practicable, in a good and
workmanlike manner and in compliance with all applicable laws. REX shall have
the right to consult with SDC regarding change orders to the SDC Terminal Work
to expand the size of the driver's restroom and the office space (the "Change
Order Work") and SDC shall cooperate with REX in any reasonable manner in
connection therewith, provided that promptly upon completion of the Change Order
Work REX shall reimburse SDC in cash for any increased construction or other
costs incurred by SDC in connection therewith. Subject to delays caused by
matters beyond its reasonable control, SDC expects that the SDC Terminal Work
(exclusive of the Change Order Work) shall be completed no later than February
29, 1996 (the date of actual completion, which may be earlier or later than such
target date, being the "Completion Date"), and SDC promptly shall notify REX in
writing when the Completion Date occurs. SDC shall cause any Change Order Work
which shall not have been completed by the Completion Date to be completed
promptly following the Completiom Date, the parties acknowledging that
completion of the Change Order Work shall not be a condition precedent to the
closing of the exchange transaction and that such completion may occur after the
Closing Date.
(b) At any time prior to the Closing Date, SDC or Spartan and their
respective employees and agents may enter upon the REX Terminal and construct or
cause to be constructed, at their expense, perimeter fencing around the REX
Terminal. Such work shall be performed in compliance with all applicable laws
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 100
3
and in a manner so as not to unreasonably interfere with REX's operations at the
REX Terminal.
3. Escrow Agent. A title insurance agent located in Charlotte,
North Carolina and mutually acceptable to SDC and REX shall be the escrow agent
(the "Escrow Agent") hereunder. This Agreement shall serve as escrow
instructions to the Escrow Agent subject to its Standard Conditions of
Acceptance of Escrow, provided that this Agreement shall govern in the event of
any conflict between such Standard Conditions and any of the terms hereof.
4. Title Commitment. (a) The parties shall, within ten (10) days
of the Effective Date (as defined in Section 23 hereof), cause the Escrow Agent
to obtain and deliver to each of the parties separate commitments by a title
insurance company for which Escrow Agent is an agent to issue policies of title
insurance (ALTA Form B, October 17, 1970 if available) covering the REX Terminal
(the "REX Terminal Title Commitment"), on the one hand, and the SDC Terminal
(the "SDC Terminal Title Commitment"), on the other hand (collectively, the
"Title Commitments"), in the amount of the respective fair market values thereof
as set forth in Section 1 above, together with legible copies of all documents
referenced therein.
(b) Each of the parties shall execute such affidavits, certificates,
and assurances as shall be required by the Escrow Agent for the Escrow Agent to
issue the REX Terminal Title Policy and the SDC Terminal Title Policy (each as
hereinafter defined) without certain of the standard preprinted exceptions. SDC
shall be obligated to procure a survey of the REX Terminal, and REX shall be
obligated to procure a survey of the SDC Terminal, if such party desires to have
the remainder of the standard preprinted exceptions deleted from the REX
Terminal Title Policy or the SDC Terminal Title Policy, respectively.
5. Title Defects. (a) If any exception to title shall appear in
the REX Terminal Title Commitment which would materially adversely affect SDC's
use and enjoyment of the REX Terminal for its operations or the operations of
Spartan, and if SDC notifies REX of its objection thereto within seven (7) days
following its receipt of the REX Terminal Title Commitment, REX shall have a
period not exceeding fifteen (15) days from the date of such notice to cure or
remove such exception at REX's expense (except for any lien for the payment of
money, including without limitation mechanics' and materialmen's liens, which
REX shall cause to be removed on the Closing Date). If REX shall be unable or
unwilling to cure or remove any such exception, REX shall forthwith give written
notice to SDC of REX's inability or unwillingness and SDC shall have the option,
exercisable within
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 101
4
seven (7) days after receipt of such notice, either (a) to accept title to the
REX Terminal subject to such exception(s) without modification or impairment of
this Agreement, or (b) to terminate this Agreement.
(b) If any exception to title shall appear in the SDC Terminal Title
Commitment which would materially adversely affect REX's use and enjoyment of
the SDC Terminal for its operations, and if REX notifies SDC of its objection
thereto within seven (7) days following its receipt of the SDC Terminal Title
Commitment, SDC shall have a period not exceeding fifteen (15) days from the
date of such notice to cure or remove such exception at SDC's expense (except
for any lien for the payment of money, including without limitation mechanics'
and materialmen's liens, which SDC shall cause to be removed on the Closing
Date). If SDC shall be unable or unwilling to cure or remove any such exception,
SDC shall forthwith give written notice to REX of SDC's inability or
unwillingness and REX shall have the option, exercisable within seven (7) days
after receipt of such notice, either (a) to accept title to the SDC Terminal
subject to such exception(s) without modification or impairment of this
Agreement, or (b) to terminate this Agreement.
6. Closing Date. The closing date (the "Closing Date") for this
transaction (i.e., the date of transfer of title hereunder) shall be ten (10)
days following the Completion Date, subject to postponement in order for either
or both of the parties to exercise its options pursuant to Section 5.
7. Prorations. General real estate taxes and special assessments,
if any, and all utility charges shall be prorated between REX and SDC as of the
Closing Date.
8. Title Policy. (a) On the Closing Date, the Escrow Agent shall
be in a position to issue to SDC a policy of title insurance for the REX
Terminal (the "REX Terminal Title Policy") in accordance with the REX Terminal
Title Commitment insuring that SDC has good and marketable fee simple title to
the REX Terminal at the time of transfer of title, subject to the exceptions
accepted by SDC or the exceptions to which SDC has no right to object or has
failed to object pursuant to Section 5 hereof. In the event that SDC elects to
obtain the REX Terminal Title Policy, the cost of the premium for the REX
Terminal Title Policy shall be paid by SDC.
(b) On the Closing Date, the Escrow Agent shall be in a position to
issue to REX a policy of title insurance for the SDC Terminal (the "SDC Terminal
Title Policy") in accordance with the SDC Terminal Title Commitment insuring
that REX has good and marketable fee simple title to the SDC Terminal at the
time of
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 102
5
transfer of title, subject to the exceptions accepted by REX or the exceptions
to which REX has no right to object or has failed to object pursuant to Section
5 hereof. In the event that REX elects to obtain the SDC Terminal Title Policy,
the cost of the premium for the SDC Terminal Title Policy shall be paid by REX.
9. Deposits into Escrow. On or before the Closing Date, REX shall
deposit or cause to be deposited with the Escrow Agent:
(a) a good and sufficient limited or special warranty deed (the "REX
Terminal Deed") conveying to SDC fee simple marketable title to
the REX Terminal free and clear of all restrictions, conditions,
liens, encumbrances or encroachments except those which SDC has
agreed to accept or those to which SDC has no right to object or
has failed to object pursuant to Section 5 hereof;
(b) such funds and other instruments, in recordable form or
otherwise, as are required by this Agreement or which reasonably
may be required by the Escrow Agent as a condition of the closing
of the escrow; and
(c) a "non-foreign seller" affidavit as required by Section 1445 of
the Internal Revenue Code of 1986, as amended.
On or before the Closing Date, SDC shall deposit with the Escrow Agent:
(a) a good and sufficient limited or special warranty deed (the "SDC
Terminal Deed") conveying to REX fee simple marketable title to
the SDC Terminal free and clear of all restrictions, conditions,
liens, encumbrances or encroachments except those which REX has
agreed to accept or those to which REX has no right to object or
has failed to object pursuant to Section 5 hereof;
(b) the Cash Payment (by wire transfer or certified or cashier's
check) and such other funds and other instruments, in recordable
form or otherwise, as are required by this Agreement or which
reasonably may be required by the Escrow Agent as a condition of
the closing of the escrow; and
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 103
6
(c) a "non-foreign seller" affidavit as required by Section 1445 of
the Internal Revenue Code of 1986, as amended.
10. Actions by Escrow Agent. On the Closing Date, if all the funds
and documents set forth in Section 9 hereof have been delivered to the Escrow
Agent and if the Escrow Agent is in a position to issue (and will issue if SDC
and REX, as applicable, shall elect) the REX Terminal Title Policy and the SDC
Terminal Title Policy as described in Section 8 hereof, the Escrow Agent shall:
(a) cause the REX Terminal Deed and SDC Terminal Deed to be filed for
record;
(b) (i) in the event that SDC so elects, cause the issuance and
delivery to SDC of the REX Terminal Title Policy, as described in
Section 8 hereof, and charge to the account of SDC the cost of
the title insurance premium therefor, and (ii) charge to the
account of SDC the cost of the title examination for the REX
Terminal;
(c) (i) in the event that REX so elects, cause the issuance and
delivery to REX of the SDC Terminal Title Policy, as described in
Section 8 hereof, and charge to the account of REX the cost of
the title insurance premium therefor, and (ii) charge to the
account of REX the cost of the title examination for the SDC
Terminal;
(d) charge to the account of SDC one-half (1/2) of its escrow fee,
the cost of recording the REX Terminal Deed and any instruments
required in order to clear title to the SDC Terminal, any
applicable transfer fees and transfer taxes applicable to the
conveyance of the SDC Terminal, and all other sums properly
chargeable against SDC hereunder; and
(e) charge to the account of REX one-half (1/2) of its escrow fee,
the cost of recording the SDC Terminal Deed and any instruments
required in order to clear title to the REX Terminal, any
applicable transfer fees and transfer taxes applicable to the
conveyance of REX Terminal, and all other sums properly
chargeable against REX hereunder.
The Escrow Agent shall deliver to SDC the recorded REX Terminal Deed, the REX
Terminal Title Policy (if SDC elects to obtain the same), and its escrow
statement in duplicate showing all the
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 104
7
charges and credits affecting the account of SDC. The Escrow Agent shall deliver
to REX the recorded SDC Terminal Deed, the SDC Terminal Title Policy (if REX
elects to obtain the same), and its escrow statement in duplicate showing all
charges and credits affecting the account of REX.
11. Representations, Warranties and Covenants.
(a) REX represents, warrants and covenants that, as of the Effective
Date:
(i) REX has complete and unrestricted power and authority to execute
and perform this Agreement and to convey the REX Terminal to SDC;
(ii) there are no lawsuits pending or threatened with respect to the
REX Terminal; and
(iii) REX has not received any notice that the REX Terminal or any
part thereof is in violation of any statute, ordinance, code or
regulation of any governmental authority.
(b) SDC represents, warrants and covenants that, as of the Effective
Date:
(i) SDC has complete and unrestricted power and authority to execute
and perform this Agreement and to convey the SDC Terminal to REX;
(ii) there are no lawsuits pending or threatened with respect to the
SDC Terminal; and
(iii) SDC has not received any notice that the SDC Terminal or any
part thereof is in violation of any statute, ordinance, code or
regulation of any governmental authority.
(c) The parties covenant that the representations and warranties set
forth in this Section 11 shall be true and correct on the Closing
Date, as if then made, and shall survive the closing of the
transaction contemplated hereby.
12. Environmental. (a) REX shall indemnify and hold SDC harmless
from and against any and all losses, damages, claims, suits, actions, judgments,
liabilities and expenses, including without limitation remediation costs and
reasonable attorneys' and consultants' fees, arising out of or with respect to
the presence in, on or under the REX Terminal of any materials classified as
toxic or hazardous under applicable federal, state
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 105
8
or local laws, ordinances or requirements of governmental authorities with
competent jurisdiction, but only to the extent that the presence of such
materials is as the result of any actions of REX or its officers, employees,
agents, contractors or invitees.
(b) SDC shall indemnify and hold REX harmless from and against any
and all losses, damages, claims, suits, actions, judgments, liabilities and
expenses, including without limitation remediation costs and reasonable
attorneys' and consultants' fees, arising out of or with respect to the presence
in, on or under the SDC Terminal of any materials classified as toxic or
hazardous under applicable federal, state or local laws, ordinances or
requirements of governmental authorities with competent jurisdiction, but only
to the extent that the presence of such materials is the result of any actions
of SDC or Spartan or their officers, employees, agents, contractors or invitees.
(c) The parties covenant that the indemnities set forth in this
Section 12 shall survive the closing of the transaction contemplated hereby.
13. Remedies. If either party (the "Defaulting Party") should breach
any of its covenants, agreements, representations or warranties contained in
this Agreement, or if said representations and warranties shall not be true and
correct on the date hereof and on the Closing Date, then, provided that the
other party (the "Non-Defaulting Party") is not in default hereunder and
provided further that the Non-Defaulting Party has given the Defaulting Party
ten (10) days written notice specifying the exact nature of such breach or
failure and such breach or failure has not been cured within such period, the
Non-Defaulting Party may (i) declare this Agreement terminated, and thereafter
all rights and obligations of the parties hereunder shall be terminated, or (ii)
enforce specific performance of the Defaulting Party's obligations under this
Agreement. [Notwithstanding the foregoing, any and all disputes between the
parties which may arise under this Agreement shall be resolved in accordance
with the Alternative Dispute Resolution Agreement of even date herewith by and
between Roadway Services, Inc. (SDC's parent corporation) and REX.]
14. Possession. On the Closing Date, REX shall deliver to SDC
possession of the REX Terminal free from any parties in possession or parties
claiming any right of possession, and SDC shall deliver to REX possession of the
SDC Terminal free from any parties in possession or parties claiming any right
of possession.
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 106
9
15. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
16. Notices. Any notice permitted or required to be given pursuant
to the terms of this Agreement shall be deemed properly when hand-delivered, or
three (3) days after deposit in the U.S. Mail (certified with return receipt
requested), to the following addresses:
If to SDC: Services Development Corporation
c/o Caliber System, Inc.
1815 W. Market Street
Akron, Ohio 44313
Attn: Real Estate Department
If to REX: Roadway Express, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309
Attn: Real Estate Department
17. Real Estate Agent. REX and SDC each warrants and represents to
the other that no broker, finder, real estate agent or other person has acted
for either of them in connection with this Agreement or the transactions
contemplated hereby or hereunder, and that no broker, finder, real estate agent
or other person is entitled to any broker's, finder's or agent's fee, commission
or other compensation in respect thereof based in any manner on any agreements,
arrangements or understandings made by them. REX and SDC each agrees to
indemnify, defend and hold the other harmless for any claims in connection with
the foregoing, which agreement shall survive the closing of the transaction
contemplated hereby.
18. No Merger. All representations, warranties, covenants, terms and
conditions herein contained shall survive the delivery and recording of the REX
Terminal Deed and the SDC Terminal Deed and shall not be merged therein.
19. Benefit. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
20. Entire Understanding. The parties mutually agree that no
representations, promises or agreements except those contained herein have been
made or relied upon.
21. Governing Law. This Agreement shall be governed by the internal
substantive laws of the State of North Carolina.
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 107
10
22. Headnotes. The headnotes preceding each Section of this
Agreement are for convenience and are not intended to interpret, expand or
contract any of the terms hereof.
23. Effective Date. This Agreement shall constitute an offer to
exchange real property until such time as this Agreement has been fully signed
and a copy hereof delivered to the Escrow Agent (the "Effective Date"),
whereupon this Agreement shall be considered a binding agreement for the
exchange of the REX Terminal for the SDC Terminal.
24. Authority To Sign This Agreement. Each person signing this
Agreement represents that he or she is authorized to execute this Agreement
without the necessity of obtaining any other signature or approval, that, in the
case of a party which is a corporation, the execution of this Agreement has been
authorized by the Board of Directors of the corporation, and that this Agreement
shall be fully binding on the party represented by such person.
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 108
IN WITNESS WHEREOF, the parties hereto have set their hands the date
and year first above written.
"SDC"
SERVICES DEVELOPMENT CORPORATION
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
"REX"
ROADWAY EXPRESS, INC.
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
THE UNDERSIGNED HEREBY ACCEPTS THIS AGREEMENT AND AGREES TO SERVE AS THE ESCROW
AGENT HEREUNDER IN ACCORDANCE WITH ALL OF THE TERMS HEREOF:
"ESCROW AGENT"
- ----------------------------------
By:
-------------------------------
Name:
-----------------------------
Its:
------------------------------
SDC/REX
CHARLOTTE EXCHANGE
<PAGE> 109
ANNEX 7
GROUND LEASE
BY AND BETWEEN
, LANDLORD
---------------------
AND
, TENANT
----------------------
Dated as of January 2, 1996
Premises Situated in
----------------
NOTE: APPROPRIATE CHANGES WILL BE MADE TO ADAPT THIS GROUND LEASE FORM FOR USE
AS THE FORM FOR THE LONG-TERM LEASES OF IMPROVED REAL PROPERTY.
<PAGE> 110
TABLE OF CONTENTS
<TABLE>
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I. GRANT AND PREMISES . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Grant . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. The Premises . . . . . . . . . . . . . . . . 1
II. TERM: OPTIONS TO EXTEND . . . . . . . . . . . . . . . . . . . . 1
Section 2.01. Basic Term . . . . . . . . . . . . . . . . . 1
Section 2.02. Options to Extend . . . . . . . . . . . . . . 1
Section 2.03. Term of this Lease . . . . . . . . . . . . . 2
III. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3.01. Ground Rent . . . . . . . . . . . . . . . . . 2
Section 3.02. Payment of Ground Rent . . . . . . . . . . . 2
IV. USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
V. NET LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VI. IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 6.01. Definitional . . . . . . . . . . . . . . . . 3
Section 6.02. Construction of Improvements . . . . . . . . 3
Section 6.03. Title to Improvements . . . . . . . . . . . . 4
VII. IMPOSITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 7.01. Payment by Tenant . . . . . . . . . . . . . . 4
Section 7.02. Apportionment at Conclusion of Term . . . . . 5
Section 7.03. Proof of Payment . . . . . . . . . . . . . . 6
VIII. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 8.01. Fire and Extended Coverage
Insurance . . . . . . . . . . . . . . . . . . 6
Section 8.02. Tenant's Liability Insurance . . . . . . . . 6
Section 8.03. General Provisions Regarding
Insurance . . . . . . . . . . . . . . . . . . 6
Section 8.04. Evidence of Insurance Coverage . . . . . . . 6
Section 8.05. Waiver of Subrogation . . . . . . . . . . . . 6
Section 8.06. Proceeds . . . . . . . . . . . . . . . . . . 6
Section 8.07. Blanket Policies . . . . . . . . . . . . . . 7
IX. REPAIR AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . 7
Section 9.01. Tenant's Obligations . . . . . . . . . . . . 7
Section 9.02. Landlord Not Obligated . . . . . . . . . . . 7
X. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 10.01. Definitional . . . . . . . . . . . . . . . . 7
Section 10.02. Alterations Permitted . . . . . . . . . . . . 7
XI. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 11.01. Total Taking; Termination of Lease . . . . . . 7
Section 11.02. Partial Taking . . . . . . . . . . . . . . . 8
Section 11.03. Remedies . . . . . . . . . . . . . . . . . . 8
XII. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . 8
XIII. PERMITTED CONTESTS . . . . . . . . . . . . . . . . . . . . . . 9
XIV. LIENS ON PREMISES . . . . . . . . . . . . . . . . . . . . . . . 9
XV. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
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<TABLE>
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Section 15.01. Events of Default by Tenant . . . . . . . . . . 9
Section 15.02. Events of Default by Landlord . . . . . . . . . 10
XVI. REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . 10
Section 16.01. Remedies of Landlord for Event
of Default by Tenant . . . . . . . . . . . . . 10
Section 16.02. Remedies of Tenant for Event of
Default by Landlord . . . . . . . . . . . . . . 11
XVII. PARTIES' RIGHT TO PERFORM OTHER PARTY'S COVENANTS . . . . . . . . 11
XVIII. NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XIX. ACCESS BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . 12
XX. ASSIGNMENTS AND SUBLETTING . . . . . . . . . . . . . . . . . . . 12
Section 20.01. No Assignment or Subletting Without
Consent . . . . . . . . . . . . . . . . . . . . 12
Section 20.02. Specific Assignments and Sublettings
Permitted . . . . . . . . . . . . . . . . . . . 12
Section 20.03. Leasehold Mortgages . . . . . . . . . . . . . . 13
XXI. REPRESENTATIONS, WARRANTIES, COVENANTS,
AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 21.01. By Tenant . . . . . . . . . . . . . . . . . . . 13
Section 21.02. By Landlord . . . . . . . . . . . . . . . . . . 13
XXII. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . 14
Section 22.01. Tenant's Estoppel . . . . . . . . . . . . . . . 14
Section 22.02. Landlord's Estoppel . . . . . . . . . . . . . . 14
XXIII. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
XXIV. COVENANT OF QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . 15
XXV. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . 15
XXVI. MEMORANDUM OF LEASE . . . . . . . . . . . . . . . . . . . . . . . 15
XXVII. HOLDOVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
XXVIII. SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . . 16
XXIX. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 29.01. By Tenant . . . . . . . . . . . . . . . . . . . 16
Section 29.02. By Landlord . . . . . . . . . . . . . . . . . . 16
Section 29.03. General . . . . . . . . . . . . . . . . . . . . 16
XXX. NO MERGER OF ESTATES . . . . . . . . . . . . . . . . . . . . . . 17
XXXI. HAZARDOUS AND TOXIC CONDITIONS . . . . . . . . . . . . . . . . . 17
Section 31.01. Indemnification by Tenant . . . . . . . . . . . . 17
Section 31.02. Indemnification by Landlord . . . . . . . . . . . 17
XXXII. OPTION TO PURCHASE PREMISES . . . . . . . . . . . . . . . . . . . 17
XXXIII. RIGHT OF FIRST REFUSAL TO PURCHASE PREMISES . . . . . . . . . . . 18
XXXIV. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . 20
XXXV. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 35.01. Survival . . . . . . . . . . . . . . . . . . . 21
Section 35.02. Amendment . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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Section 35.03. Brokers . . . . . . . . . . . . . . . . . . . . 21
Section 35.04. Rights and Remedies Cumulative . . . . . . . . 21
Section 35.05. Third Party Rights . . . . . . . . . . . . . . 21
Section 35.06. Severability . . . . . . . . . . . . . . . . . 21
Section 35.07. Captions . . . . . . . . . . . . . . . . . . . 21
Section 35.08. Interpretation . . . . . . . . . . . . . . . . 21
Section 35.09. Negation of Partnership . . . . . . . . . . . . 22
Section 35.10. Applicable Law . . . . . . . . . . . . . . . . 22
Section 35.11. Entire Agreement . . . . . . . . . . . . . . . 22
Section 35.12. Execution in Counterparts . . . . . . . . . . . 22
Section 35.13. Binding Effect . . . . . . . . . . . . . . . . 22
Section 35.14. Further Assurances . . . . . . . . . . . . . . 22
XXXVI. EXISTING LEASE . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
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<PAGE> 113
GROUND LEASE
THIS GROUND LEASE (this "Lease") is made and entered into as
of the 2nd day of January, 1996, by and between _____________________, a
________ corporation ("Landlord"), and _____________________, a ________
corporation ("Tenant").
ARTICLE I
GRANT AND PREMISES
Section 1.01. Grant. For the rent, on the terms, and subject
to the conditions set forth in this Lease, Landlord leases to Tenant and Tenant
takes and hires from Landlord, all of the Premises (as defined in Section 1.02)
for the Term of this Lease.
Section 1.02. The Premises. The "Premises" are hereby
defined to mean all of the following:
(a) The real property (the "Land") more particularly
defined on Exhibit "A", attached hereto and made a part hereof by this
reference; and
(b) All right, title and interest, if any, of Landlord in
and to each and all of the following:
(i) Real property lying within any street, highway, road,
roadway, avenue or other thoroughfare, whether open
or proposed, adjoining, abutting or contiguous to all
or any portion of the Land, to the centerline
thereof; and
(ii) Rights-of-way, easements, licenses, and other rights
and privileges, hereditaments, and appurtenances now
or hereafter belonging to the Land or any portion
thereof; and
(iii) all alleys, gores and strips of land, pertaining to
or located on real property adjoining, abutting,
contiguous to or appurtenant to all or any portion of
the Land whether presently in existence or created or
arising after the date of this Lease, or which are or
may hereafter be used or available for use or which
otherwise pertain to the Land or any portion thereof.
ARTICLE II
TERM; OPTIONS TO EXTEND
Section 2.01. Basic Term. The basic term of this Lease (the
"Basic Term") shall be for the period commencing on the date of this Lease (the
"Commencement Date") and expiring on December 31, 2025.
Section 2.02. Options to Extend.
(a) Tenant shall have the option to extend the Basic Term
for the extension periods set forth below (the "Extension Terms"),
upon the terms of this Lease, except as otherwise provided in Section
3.01:
<PAGE> 114
(A) Extension Terms: Four (4) five (5) year renewal options,
from:
1st option: January 1, 2026 through December 31, 2030.
2nd option: January 1, 2031 through December 31, 2035.
3rd option: January 1, 2036 through December 31, 2040.
4th option: January 1, 2041 through December 31, 2045.
(B) Exercise Date(s): Tenant shall deliver to Landlord notice of
its election so to extend the Primary Term or an Extension
Term on or before ninety (90) days prior to the expiration of
the Primary Term and each Extension Term, as follows:
1st option: On or before October 2, 2025.
2nd option: On or before October 2, 2030.
3rd option: On or before October 2, 2035.
4th option: On or before October 2, 2040.
Section 2.03 Term of this Lease:
The Primary Term and all Extension Terms elected by Tenant
sometimes shall be referred to collectively as the "Term of this Lease".
ARTICLE III
RENT
Section 3.01. Ground Rent. From and after the Commencement
Date, Tenant shall pay to Landlord, as monthly ground rent for each period
during the Term of this Lease (the "Ground Rent"), the sums described in this
Section 3.01.
(a) For the period of the Basic Term from the Commencement
Date through December 31, 2000, Tenant shall pay to Landlord Ground Rent at the
rate of $_________ per month.
(b) For each five (5) year period of the Basic Term following
December 31, 2000, and for each Extension Term, Tenant shall pay to Landlord
monthly Ground Rent at the rate calculated by multiplying (i) the monthly
Ground Rent payable with respect to the immediately preceding five (5) year
period (the "Prior Period") by (ii) a factor equal to one (1) plus or minus the
decimal equivalent of fifty percent (50%) of the total percentage change, if
any, in the U.S. Department of Labor Price Index for Urban Consumers, All
Items, 1982-84 = 100 (the "CPI"), over the course of the Prior Period.
Landlord shall deliver to Tenant notice of each such adjustment in monthly
Ground Rent, setting forth the calculation of such adjustment. In the event
that the CPI for the final month of the Prior Period is not available on the
date on which such adjustment of the monthly Ground Rent is to be made,
Landlord shall calculate such adjustment as soon as such CPI becomes available
and the parties shall reimburse each other as necessary.
Section 3.02. Payment of Ground Rent. All installments of
Ground Rent shall be paid in lawful funds of the United States of America, at
the address of Landlord set forth in Article XXIII or at such other address, to
such other party, or by such other means as Landlord may direct to Tenant from
time to time by written notice given in accordance with this Lease. Tenant
shall, except as specifically provided herein, pay all installments of Ground
Rent without any notice, demand, set-off, counterclaim, deduction, defense,
abatement, suspension, deferment, diminution or reduction whatsoever. The
covenant and obligation of Tenant to pay Ground Rent hereunder is absolute, and
shall be and remain independent of any other covenant imposed by this Lease
upon either Landlord or Tenant.
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<PAGE> 115
ARTICLE IV
USE
The Premises may be used and occupied for any purpose or
purposes not prohibited by applicable Legal Requirements (as hereinafter
defined). For purposes of this Lease, the term "Legal Requirements" shall mean
all federal, state, county, municipal and other governmental statutes, laws,
rules, orders, regulations, ordinances, judgments, decrees and injunctions
affecting the Premises or the construction, use, occupancy, repair, renovation,
replacement or alteration thereof, whether nor or hereafter enacted and in
force, including any of the same which may (a) require repairs, modifications
or alterations in or to the Premises or (b) in any way limit, restrict, or
impose conditions upon the use and authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Tenant (other than
encumbrances created by Landlord without the consent of Tenant), at any time in
force affecting the Premises.
ARTICLE V
NET LEASE
Landlord and Tenant acknowledge and agree that this Lease is
intended as a net lease, and that the Ground Rent and all Other Charges (as
hereinafter defined) are intended to be paid to Landlord or otherwise as
provided herein absolutely net to Landlord, without any notice, demand,
set-off, counterclaim, deduction, defense, abatement, suspension, deferment,
diminution, or reduction whatsoever except as specifically provided herein.
Without limiting the generality of the foregoing, Tenant shall (except as may
otherwise be specifically provided in this Lease) pay (or cause the payment of)
all costs, Impositions (as defined in Section 7.01(b)), insurance premiums, and
other expenses of every character, ordinary or extraordinary, foreseen or
unforeseen, in connection with this Lease or the possession, use, occupancy,
maintenance, repair, or rebuilding of the Premises, any Improvements (as
defined in Section 6.01) or any portion of either. As used herein, the term
"Other Charges" shall be defined as any and all sums, liabilities, obligations,
and other amounts, other than Ground Rent, which Tenant is or may be required
to pay or discharge (or to cause to be paid or discharged) in accordance with
the terms of this Lease, including but not limited to any interest, penalty, or
other sum which may be added to any sum payable by Tenant hereunder by reason
of Tenant's failure to pay any such sum as and when the same shall first be
deemed payable hereunder.
ARTICLE VI
IMPROVEMENTS
Section 6.01. Definitional. For purposes of this Lease, the
term "Improvements" shall mean all buildings, structures, improvements,
betterments, enhancements, installations and facilities, and all alterations,
modifications, additions, restorations and replacements thereof or thereto,
including, without limitation, all roadways, parking lots and parking areas,
landscaping and all utilities services facilities and installations which have
been, prior to the Term of this Lease, or are, during the Term of this Lease,
constructed, erected, installed or otherwise placed on, over or under the Land
or any portion thereof by or on behalf of Tenant.
Section 6.02. Construction of Improvements. Landlord hereby
approves of all of the Improvements constructed on the Land by or on behalf of
Tenant prior to the Term of this Lease. Tenant shall have the exclusive right
(without having to obtain
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Landlord's consent) at any time and from time to time during the Term of this
Lease, but shall not be obligated to, construct any additional Improvements
which it deems necessary or desirable upon the Land. Any additional
Improvements constructed by or on behalf of Tenant shall be completed at the
sole cost, expense and risk of Tenant and at no cost or expense to Landlord,
and Landlord shall not, by virtue of any provision of this Lease, have or be
deemed to have assumed any duty, liability, or obligation for the construction
or completion of any such Improvements. The design, construction, and
completion of any additional Improvements shall be performed (a) in accordance
with the provisions of this Lease; (b) substantially in accordance with all
appropriate architectural and/or engineering plans, specifications and criteria
therefor; and (c) in compliance with all Legal Requirements applicable to such
Improvements or to the Premises.
Section 6.03. Title to Improvements. At all times during the
Term of this Lease, title to all Improvements shall be owned and held by, and
shall belong to, Tenant or its successors in interest. Landlord shall, during
such period, neither have nor claim any right, title, or interest in or to any
Improvements. In the event that Tenant shall not have exercised its option or
its right of first refusal to purchase the Premises as set forth in Article
XXXII or in Article XXXIII, respectively, upon the termination of the Term of
this Lease, at Landlord's option to be exercised by written notice to Tenant
prior to the date of such termination, either (a) ownership of and title to all
Improvements shall automatically pass to and vest in Landlord, "AS IS" in their
then current condition, without the necessity of any further instrument,
conveyance, act or action, or (b) Tenant shall raze the Improvements and remove
all of the debris resulting therefrom from the Land.
ARTICLE VII
IMPOSITIONS
Section 7.01. Payment by Tenant. (a) Tenant shall pay (or
shall cause to be paid), as and when the same shall be and become due and
payable and prior to the date on which any penalty, fine, or interest may be
imposed by law for delinquency or non-payment, and further agrees to indemnify
Landlord for and hold Landlord harmless from and against, all Impositions (as
defined in Section 7.01(b)) levied upon, assessed against, or otherwise payable
with respect to the Premises and the Improvements and/or the transactions
contemplated by this Lease and imposed against Landlord or Tenant, or against
the Premises, any Improvements or any portion thereof or interest therein, by
any federal, state, or local government or taxing authority upon or with
respect to the Premises, the Improvements or any portion thereof or interest
therein, or upon the leasing, possession, use, occupancy, or operation of the
Premises or any part thereof, or upon or with respect to this Lease (excluding,
however, (x) any tax upon, or measured by, the net income of Landlord or any
tax in lieu of such an income tax; (y) any Imposition assessed or imposed with
respect to any taxing period, or portion thereof, following the expiration or
termination of the Term of this Lease; and (z) any Imposition, or any increased
amount of any Imposition otherwise payable by Tenant hereunder, which may be
assessed, imposed, or created in consequence of any election, choice or other
voluntary act by Landlord which is not consented to, in writing, by Tenant; all
of such excluded Impositions shall be paid by Landlord, and Landlord hereby
covenants and agrees to pay such excluded Impositions as and when the same
shall be due and payable), for and with respect to all taxing periods, or
portions thereof, commencing as of the Commencement Date and concluding upon
the date on which the Term of this Lease shall expire or be terminated.
(b) For purposes of this Lease, the term "Impositions" shall
mean all taxes (including, without limitation, all ad valorem, sales and use,
single business, gross receipts,
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<PAGE> 117
transaction privilege, rent or similar taxes, but excluding federal, state, or
local income taxes imposed upon Landlord), assessments (including, without
limitation, all assessments, both general and special, for public improvements
or benefits, whether or not commenced or completed prior to the date hereof and
whether or not to be completed within the Term of this Lease), ground rents,
water, sewer or other rents and charges, excises, tax levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
in respect of the Premises, any Improvement and/or the Ground Rent (including
all interest and penalties thereon due to any failure or delay in payment by
Tenant), which at any time may, with respect to the Term of this Lease, be
assessed or imposed on or in respect of or be a lien upon (a) Landlord, (b) the
Premises and/or any Improvements, and any portion of or interest in either, or
any rent therefrom or any estate, right, title or interest therein, or (c) any
occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the leasing or use of the Premises.
(c) Landlord shall notify Tenant as promptly as possible
after Landlord shall become aware of the existence or the amount of any
Impositions payable by Tenant hereunder of which Landlord shall have knowledge,
and shall furnish Tenant with true and complete copies of each tax bill and/or
statement therefor which may be received by Landlord, promptly after Landlord's
receipt of the same. Landlord's failure to provide any such notice or to
furnish such materials to Tenant shall not defer or diminish Tenant's
obligations under this Section 7.01. Landlord shall, upon Tenant's request,
provide written notice to each governmental authority which levies, assesses,
or collects any Imposition payable by Tenant pursuant to this Lease that all
assessment notices, tax bills, statements, and other written notices in respect
of such Impositions should, throughout the Term of this Lease, be provided
directly to Tenant. Tenant's obligation to pay Impositions as provided herein
shall be deemed to become absolutely fixed upon the respective dates on which
the same shall become a lien or charge upon the Premises or any Improvement.
If any Imposition may, at the option of the taxpayer, be paid in installments
(regardless of whether interest shall accrue on the unpaid balance thereof),
Tenant may, without the necessity of obtaining Landlord's consent, elect to pay
such Imposition, together with any interest thereon, in installments, as and
when such installments become due and prior to the date(s) on which any fine,
penalty, fee, or further interest may be added thereto. Tenant shall, at its
sole cost and expense, prepare and file all returns and reports in respect of
any Imposition as may be required by governmental or taxing authorities. In
the event that applicable laws or regulations shall require that any such
report or return be filed by Landlord, Tenant shall so notify Landlord and
shall prepare such report or return so as to enable Landlord to complete and
file the same in a timely manner, in accordance with the requirements of
applicable laws or regulations. Tenant may, notwithstanding anything in this
Section 7.01 to the contrary, contest the validity or amount of any Imposition
in accordance with the provisions of Article XIII, below.
Section 7.02. Apportionment at Conclusion of Term.
Impositions for any partial taxing period at the expiration or termination of
the Term of this Lease shall be prorated as between Landlord and Tenant on the
basis of the most recent tax duplicates or official tax records then available.
Such prorations shall be recalculated at such time as actual tax bills for the
periods in question become available. Any amounts payable in connection with
such re-prorations shall be paid by certified or immediately available funds
within thirty (30) days after the calculation thereof.
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Section 7.03. Proof of Payment. If so requested by Landlord,
Tenant shall promptly furnish Landlord with satisfactory proof of Tenant's
payment of all Impositions payable by Tenant pursuant to the terms of this
Lease. Tenant's obligation to pay Impositions as provided herein shall survive
the expiration or other termination of this Lease as to any of the foregoing
payable with respect to periods prior to such expiration or termination.
ARTICLE VIII
INSURANCE
Section 8.01. Fire and Extended Coverage Insurance. Tenant
shall, at no cost to Landlord, maintain or cause to be maintained, at all times
during the Term of this Lease, fire and extended coverage insurance (and,
during any periods of substantial construction, comprehensive builder's risk
insurance) on all Improvements on a replacement cost basis, with such
deductibles and co-insurance provisions as Tenant may in its discretion deem to
be appropriate from time to time; provided, however, that said co-insurance
shall in no event reduce the coverage to be provided by said insurance
(disregarding any deductibles) to an amount less than 80% of the replacement
cost of the Improvements (exclusive of the cost of foundations, excavations and
footings below the lowest basement floor).
Section 8.02. Tenant's Liability Insurance. Tenant shall, at
no expense to Landlord, maintain or cause to be maintained at all times during
the Term of this Lease comprehensive public liability insurance against claims
for personal injury, death or property damage occurring upon, in or about the
Premises or any Improvements, affording at a minimum protection having a
combined single limit of $2,000,000 for bodily injury and $250,000 for property
damage.
Section 8.03. General Provisions Regarding Insurance. Each
policy of insurance required by the terms of this Article VIII shall be written
by companies qualified to issue insurance in the state in which the Premises
are located. Each such policy shall be for the benefit of Landlord and Tenant,
as their respective interests may appear, and shall name Landlord as an
additional party insured. Each policy of insurance required of Tenant
hereunder shall provide for not less than thirty (30) days' written notice to
Landlord prior to any cancellation, termination, non-renewal, or diminution in
coverage.
Section 8.04. Evidence of Insurance Coverage. If so
requested by Landlord, Tenant shall deliver to Landlord from time to time
certificates of insurance evidencing all of the insurance then required to be
maintained by Tenant by the terms of this Lease, together with proof of payment
of current premiums therefor.
Section 8.05. Waiver of Subrogation. To the extent permitted
by law, Landlord and Tenant each hereby releases the other from any and all
liability or responsibility to the other or to anyone claiming by, through or
under the other, by way of subrogation or otherwise, for any loss or damage
caused by fire or any other casualty in respect of any real, personal, or other
property located in, at, or upon the Premises or any Improvement, and in
respect of the same, whether or not such fire or other casualty shall have been
caused by the fault or negligence of either party or anyone for whom said party
may be responsible. If the same shall be generally available from its
insurance carriers, Tenant shall require its fire, extended coverage and other
casualty insurance policies to include a clause or endorsement whereby the
insurer waives any rights of subrogation against Landlord.
Section 8.06. Proceeds. All proceeds of any insurance
required to be maintained by Section 8.01 of this Lease which are
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or become payable in the event of any casualty or loss thereby insured shall be
paid solely to Tenant. Tenant shall have the exclusive right and authority to
adjust losses and execute proof of loss under all such insurance.
Section 8.07. Blanket Policies. Tenant may, at its option,
satisfy the requirements of this Article VIII by one or more so-called
"blanket" insurance policies which cover properties in addition to the
Premises, provided that any such blanket policy or policies shall comply with
the specific provisions and allocations of coverage set forth in this Article
VIII.
ARTICLE IX
REPAIR AND MAINTENANCE
Section 9.01. Tenant's Obligations. As between Landlord and
Tenant, Tenant shall, at all times during the Term of this Lease, perform such
repairs and replacements with respect to the Premises and any Improvements as
Tenant deems necessary or appropriate in its sole discretion.
Section 9.02. Landlord Not Obligated. Under no circumstances
shall Landlord be required to maintain all or any portion of the Premises or
any Improvements, to make any repairs, replacements or renewals of any nature
or description to the same, or to make any expenditure or incur any obligation
with respect to any of the foregoing.
ARTICLE X
ALTERATIONS
Section 10.01. Definitional. For purposes of this Lease, the
term "Alterations" shall mean and include each and every change, modification,
alteration, enlargement, diminution, demolition, reconstruction and replacement
of or to all or any portion of the Premises or any Improvements made during the
Term of this Lease.
Section 10.02. Alterations Permitted. Tenant may, at
Tenant's sole cost and expense and at no cost to Landlord, but shall not be
obligated to, perform or cause the performance of any and all Alterations which
Tenant shall determine to be necessary or appropriate in connection with the
development, use, and/or occupancy of the Premises or any Improvements, upon
and subject to the following conditions and requirements:
(a) all Alterations shall be performed and completed in
compliance with all Legal Requirements relevant to the performance and
completion thereof; and
(b) all Alterations shall be performed and completed by
or on behalf of Tenant, at no cost, expense, risk, or obligation of or
to Landlord.
ARTICLE XI
CONDEMNATION
Section 11.01. Total Taking; Termination of Lease. For
purposes of this Lease, the term "Taking" shall mean appropriation, acquisition
of any title by eminent domain or condemnation, and any voluntary private
conveyance in lieu thereof, covering all or any portion of the Premises or any
Improvement, or any interest in the same, made as the result of or as
settlement of any appropriation, condemnation, or other eminent domain
proceeding affecting the same (without regard to whether any such proceeding
shall actually have been commenced). If,
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during the Term of this Lease, all of the Premises shall be subject to a
permanent Taking, or if so much of the Premises shall be subject to a Taking
that Tenant's continued use and development of that portion of the Premises
excluded from such Taking shall, in Tenant's sole judgment, be economically,
operationally or otherwise infeasible (in either case, a "Total Taking"), this
Lease shall automatically terminate upon the date on which title to the
Premises (or such substantial portion thereof) shall vest in the condemning
authority. Ground Rent and all Other Charges shall be abated as of the date of
such termination. The condemnation award payable in consequence of such Total
Taking, or the consideration payable in consideration for a private sale in
lieu of condemnation, as the case may be, shall be divided as between Landlord
and Tenant in such a manner as to provide Landlord with that portion of such
award or consideration representing the value of Landlord's interest in the
Land in its unimproved state; Tenant shall, accordingly, be entitled to receive
the balance of any such proceeds, including but not limited to any value which
may be ascribed to any Improvements and to the value, as at the date of such
Total Taking, of Tenant's leasehold interest and estate in and to the Premises.
Landlord and Tenant each hereby assigns and releases to the other its
respective right, title and interest in and to that portion of any proceeds and
awards which may be available in consequence of any Total Taking to the extent
necessary or appropriate to facilitate the division of such proceeds in this
Section 11.01.
Section 11.02. Partial Taking. If, during the Term of this
Lease, the Premises shall be subject to a taking other than a Total Taking (and
any Taking, whether permanent or temporary, other than a Total Taking, is
referred to herein as a "Partial Taking"), this Lease shall not be terminated
as a result of the same but shall continue in full force and effect as to the
balance of the Premises excluded from such Partial Taking. In such event,
Tenant shall be entitled to utilize all awards, proceeds, damages, and other
compensation payable in consequence of such Partial Taking (including but not
limited to any of the same which would, absent the provisions of this Lease,
have been payable to Landlord, all of which Landlord hereby assigns to Tenant)
for the restoration of that portion of the Premises not subject to such Partial
Taking. Effective upon the date on which title to that portion of the Premises
which is subject to any such Partial Taking shall vest in the condemning
authority, the Ground Rent shall be reduced by a fraction, the denominator of
which shall be the fair market value of the Land immediately prior to such
taking and the numerator of which shall be the fair market value of the Land
immediately after such Partial Taking. Ground Rent shall not be abated in the
event of any Partial Taking which is temporary in nature, but Tenant shall be
entitled to receive the entire amount of all awards, proceeds, damages and
other compensation payable in connection therewith.
Section 11.03. Remedies. In the event of any Taking,
Landlord and Tenant shall be entitled to participate in all proceedings with
respect to any Taking, and may pursue all awards, damages, and compensation
payable in connection therewith in their individual and respective behalf as
their interests may appear, whether or not this Lease has been terminated
pursuant to this Article XI, as if this Lease had not expired, ceased and
terminated.
ARTICLE XII
DAMAGE OR DESTRUCTION
In the event of any damage or destruction to any Improvements
during the Term of this Lease by fire or other insurable casualty (a
"Casualty"), such Casualty shall not operate to terminate this Lease. This
Lease shall continue in full force and effect notwithstanding the occurrence of
any such Casualty, and Tenant shall, at its election but in each case at no
expense
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to Landlord (a) restore or rebuild (or cause to be restored or rebuilt) the
affected Improvements to a condition equal to or greater in value to that just
prior to such Casualty; (b) replace such damaged or destroyed Improvements with
other Improvements which Tenant believes would more effectively enhance the
overall value and utility of the Premises; or (c) raze the damaged portion of
the Improvements and remove all of the debris resulting therefrom from the
Land.
ARTICLE XIII
PERMITTED CONTESTS
Notwithstanding any provision of this Lease which specifically
requires Tenant to pay any Imposition, to observe, perform, or comply with any
Legal Requirement, or to pay, discharge, satisfy or release any Lien (as
defined in Article XIV), Tenant may contest the validity, amount, or
application to Tenant, to the Premises or any Improvement or to this Lease or
Tenant's obligations hereunder, of any Imposition, Legal Requirement or Lien,
so long as the Land is not thereby subjected to imminent loss or forfeiture.
Any contest conducted pursuant to this Article XIII (all such contests are
referred to herein as "Permitted Contests") shall be conducted by appropriate
legal (or, if appropriate, administrative) proceedings initiated in good faith
and thereafter prosecuted with due diligence, at no cost or expense to
Landlord.
ARTICLE XIV
LIENS ON PREMISES
Except as specifically provided herein, Tenant shall not have
any right, power or authority whatsoever to create, impose, establish or cause
the creation, imposition, or establishment of any lien, encumbrance, charge,
levy or other imposition upon the fee simple interest and estate of Landlord in
and to the Premises or any portion thereof or any of the rights, title and
interests of Landlord in or to the reversionary estate of Landlord in or to any
of the same (in any case, a "Lien"). If any Lien arises or is asserted in
consequence of any act, omission, or obligation of Tenant, Tenant shall cause
such Lien to be cancelled and discharged of record by payment, deposit, bond,
order of court of competent jurisdiction or otherwise within thirty (30) days
after Tenant's receipt of notice of the existence or pendency of the same,
subject, however, to Tenant's right to contest the validity, amount, or
applicability of such Lien pursuant to Article XIII, above.
ARTICLE XV
DEFAULTS
Section 15.01. Events of Default by Tenant. The occurrence
of any one or more of the following events shall constitute an Event of Default
by Tenant under this Lease:
(a) if default shall be made in the payment of any
installment or other payment of Ground Rent or Other Charges when and
as the same shall become due and payable, and such default shall
continue for fifteen (15) days after Tenant's receipt of Landlord's
notice to Tenant of such default; or
(b) if Tenant shall default in the due performance of or
compliance with any of the terms hereof (other than those referred to
in paragraph (a) of this Section 15.01) and any such default shall
continue for more than thirty (30) days after Tenant's receipt of
Landlord's notice to Tenant thereof, unless such default is not
susceptible to correction
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using reasonable ameliorative procedures commenced by or on behalf of
Tenant within such thirty (30) day period and thereafter prosecuted
with due diligence, in which case Tenant shall not be deemed to have
committed an Event of Default hereunder provided that Tenant (or any
party acting for or on behalf of Tenant) shall continue diligently to
prosecute such curative procedures to a timely completion.
Section 15.02. Events of Default by Landlord. The occurrence
of any one or more of the following events shall constitute an Event of Default
by Landlord under this Lease:
(a) if default shall be made in the payment of any monetary
obligation required to be paid by Landlord pursuant to the terms of
this Lease, when and as the same shall become due and payable, and
such default shall continue for fifteen (15) days after the date of
Landlord's receipt of Tenant's notice of such default; or
(b) if Landlord shall default in the due performance of or
compliance with any of the terms hereof (other than those referred to
in paragraph (a) of this Section 15.02) and such default shall
continue for more than thirty (30) days after Landlord' receipt of
Tenant's notice to Landlord thereof, unless such default is not
susceptible to correction using reasonable ameliorative procedures
commenced by or on behalf of Landlord within such thirty (30) day
period and thereafter prosecuted with due diligence, in which case
Landlord shall not be deemed to have committed an Event of Default
hereunder provided that Landlord (or any party acting for or on behalf
of Landlord) shall continue diligently to prosecute such curative
procedures to a timely completion.
ARTICLE XVI
REMEDIES UPON DEFAULT
Section 16.01. Remedies of Landlord for Event of Default by
Tenant. (a) If an Event of Default by Tenant shall have occurred as provided
at Section 15.01, above, and for so long as the same shall remain uncured,
Landlord shall have all of the following rights and remedies:
(i) to institute and prosecute an appropriate
action, suit, or other proceeding to collect all defaulted
monetary obligations of Tenant to Landlord under this Lease;
(ii) to institute and prosecute an appropriate
action, suit, or other proceeding (at law or in equity) to
compel, require, or otherwise enforce Tenant's obligations to
observe and perform each and all of its covenants,
obligations, and undertakings under this Lease; or
(iii) to exercise any one or more of the legal or
equitable rights or remedies which may, in such event, be
available to Landlord in consequence of the subsisting Event
of Default by Tenant; any one or more of such rights or
remedies may be exercised concurrently or sequentially, at
Landlord's discretion, and the prosecution of any specific
right or remedy shall not constitute an election of the same
as an exclusive remedy or as any waiver of other rights and
remedies which may then or thereafter be available to Landlord
in respect of such Event of Default by Tenant.
(b) Without limiting the availability of the rights and
remedies provided for Landlord in the preceding paragraph, Landlord may, at its
option, terminate this Lease and extinguish Tenant's leasehold interest in and
to the Premises and
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Improvements only upon the occurrence of one or more of the following
conditions precedent to Landlord's right so to terminate this Lease:
(i) Tenant shall default in the payment of any installment of
Ground Rent or Other Charges on more than three (3) occasions in any
Lease Year;
(ii) Tenant, having received written notice from Landlord
asserting the existence of an Event of Default in Tenant's observance
or performance of any non-monetary obligation of Tenant hereunder,
shall thereafter fail or refuse to commence actions for the correction
of such Event of Default within sixty (60) days thereafter or, if
specifically requested in such notice from Landlord, Tenant shall fail
within such sixty (60) day period to provide Landlord with reasonable
evidence that such Event of Default shall promptly be remedied to
Landlord's reasonable satisfaction.
If Landlord shall exercise its right and option to terminate this Lease as
aforesaid, Landlord shall at all times thereafter undertake and perform such
actions as may be necessary or appropriate in order to realize the optimal
value of the ownership and use of the Premises, thereby mitigating any damages
or losses which Landlord would or might otherwise incur.
Section 16.02. Remedies of Tenant for Event of Default by
Landlord. If an Event of Default by Landlord shall have occurred as provided
at Section 15.02, above, and for so long as the same shall remain uncured,
Tenant shall have all of the following rights and remedies:
(a) to institute and prosecute an appropriate action, suit,
or other proceeding to collect all defaulted monetary obligations of
Landlord to Tenant under this Lease;
(b) to institute and prosecute an appropriate action, suit,
or other proceeding (at law or in equity) to compel, require, or
otherwise enforce Landlord's obligations to observe and perform each
and all of its covenants, obligations, and undertakings under this
Lease; or
(c) to exercise any one or more of the legal or equitable
rights or remedies which may, in such event, be available to Tenant in
consequence of the subsisting Event of Default by Landlord; any one or
more of such rights or remedies may be exercised concurrently or
sequentially, at Tenant's discretion, and the prosecution of any
specific right or remedy shall not constitute an election of the same
as an exclusive remedy or as any waiver of other rights and remedies
which may then or thereafter be available to Tenant in respect of such
Event of Default by Landlord.
ARTICLE XVII
PARTIES' RIGHT TO PERFORM OTHER PARTY'S COVENANTS
If either party shall fail to make any payment or to perform
any act required to be made or performed by it hereunder (except in the case of
Permitted Contests), the other party may, upon thirty (30) days' prior written
notice, and without waiving or releasing any obligation or Event of Default, at
any time thereafter make such payment or perform such act for the account and
at the expense of the other party. Without limiting the generality of the
foregoing, Landlord may, after not less than thirty (30) days' prior written
notice of Landlord's intention to do so, enter upon the Premises for such
purpose and take all such action as it may consider necessary or appropriate to
perform such acts as may be necessary to effect performance of any such
defaulted obligation of Tenant. No such entry shall be deemed an
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eviction of Tenant. Neither party shall have any obligation to exercise any of
the rights or remedies set forth in this Article XVII.
ARTICLE XVIII
NO WAIVER
No consent or waiver, express or implied, by either party
hereto with respect to any breach or default by the other party in the latter's
observance or performance of any of its covenants or obligations under this
Lease shall be deemed or construed to be a consent to or waiver of any other
such breach or default. The failure or delay on the part of either party to
complain of any act or omission of the other party or to declare a breach of or
default under this Lease, irrespective of the duration of any such failure or
delay, shall not constitute a waiver by such party of its rights hereunder
except as may expressly be provided herein. No waiver by either party of any
default or breach by the other party in the latter's performance of any of the
covenants or obligations under this Lease shall be effective unless the same
shall be in writing and executed by the party to be charged with such waiver.
ARTICLE XIX
ACCESS BY LANDLORD
In the event that Landlord reasonably determines that an Event
of Default exists, Landlord and Landlord's agents, employees and
representatives may enter the Premises and the Improvements at reasonable times
following forty-eight (48) hours prior written notice to Tenant for the purpose
of examining and inspecting the Premises and the Improvements; provided,
however, that Landlord and Landlord's agents, employees and representatives
shall observe and comply with all reasonable rules and regulations with regard
to access to the Premises as may from time to time be established by or on
behalf of Tenant.
ARTICLE XX
ASSIGNMENTS AND SUBLETTING
Section 20.01. No Assignment or Subletting Without Consent.
Except to the extent specifically provided in this Article XX or elsewhere in
this Lease, Tenant shall not assign, transfer or convey any of its right, title
or interest in or to the Premises or under and pursuant to this Lease, or
sublet all or any portion of the Premises, without procuring the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.
Section 20.02. Specific Assignments and Sublettings
Permitted. Notwithstanding Section 20.01, above, to the contrary, Tenant may,
without the necessity of obtaining Landlord's consent thereto, assign, transfer
or convey all of its right, title, or interest under and pursuant to this Lease
or the Premises or any portion thereof, or sublet all or any portion of the
Premises, to any entity which (a) is owned or controlled (whether directly or
indirectly) by Tenant, (b) is owned or controlled (whether directly or
indirectly) by one or more of the persons or parties who own or control Tenant,
(c) owns or controls (whether directly or indirectly) Tenant, or (d) is a
successor to Tenant by merger, consolidation or purchase of assets. For the
purposes of this Article XX, one party shall be deemed to be "owned or
controlled" by another if the latter shall own, hold, or otherwise control,
directly or indirectly, not less than fifty-one percent (51%) of the
outstanding ownership interests in the former.
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Section 20.03 Leasehold Mortgages. Notwithstanding Section
20.01, above, or any other provision of this Lease to the contrary, Tenant may,
without the necessity of obtaining Landlord's consent thereto, from time to
time grant leasehold mortgages with respect to this Lease and the Premises. In
connection therewith, Landlord shall, upon Tenant's request but at Landlord's
election, either (a) subordinate its fee simple interest in the Premises to the
lien of any such leasehold mortgage, or (b) execute an amendment to this Lease
containing such leasehold mortgage protections as the leasehold mortgagee
reasonably may request.
ARTICLE XXI
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
Section 21.01. By Tenant. Tenant represents and warrants to
Landlord, and covenants and agrees with Landlord, as follows:
(a) Tenant is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Tenant
has all corporate power and authority necessary to hold property under
lease and to enter into and perform its obligations and agreements
under this Lease.
(b) This Lease has been duly authorized by, and executed and
delivered on behalf of, Tenant and is the legal, valid and binding
obligation of Tenant, enforceable in accordance with its terms. The
execution and delivery by Tenant of this Lease are not, and the
performance by Tenant of its obligations under this Lease shall not
be: (i) inconsistent with Tenant's Articles of Incorporation and
Bylaws; or (ii) in contravention of any law, governmental rule or
regulation, judgment or order applicable to Tenant.
Section 21.02. By Landlord. Landlord warrants and represents
to Tenant, and covenants and agrees with Tenant, as follows:
(a) Landlord is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
Landlord has all corporate power and authority necessary to own
property in fee simple, to lease such property to third parties and to
enter into and perform its obligations and agreements under this Lease.
(b) This Lease has been duly authorized by, and executed and
delivered on behalf of, Landlord, and is the legal, valid and binding
obligation of Landlord, enforceable in accordance with its terms. The
execution and delivery by Landlord of this Lease are not, and the
performance by Landlord of its obligations shall not be: (i)
inconsistent with Landlord's Articles of Incorporation and Bylaws; or
(ii) in contravention or violation of any law, governmental rule or
regulation, judgment, or order.
(c) Landlord owns marketable, indefeasible, fee simple title
to the Premises and each and every component thereof and interest
therein, and has all requisite right, power and capacity to lease the
same to Tenant as provided by this Lease.
(d) There are no actions, suits, or proceedings pending, or
to the knowledge of Landlord threatened, in any court or before any
governmental or quasi-governmental commission, board or authority
which, if determined adversely to Landlord, would have a material,
adverse effect upon the Premises or Landlord's right, title, and
interest in and to the same, upon this Lease, and/or upon the ability
of Landlord to perform its obligations under this Lease.
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ARTICLE XXII
ESTOPPEL CERTIFICATES
Section 22.01. Tenant's Estoppel. Tenant shall, at any time
and from time to time, upon not less than fifteen (15) days' prior written
request by Landlord, execute, acknowledge and deliver to or as directed by
Landlord a certificate stating: (a) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, stating that this Lease
is in full force and effect as modified, and identifying all such
modifications); (b) the dates through which Ground Rent and Other Charges have
been paid; (c) that, to the knowledge of the signer of such certificate,
Landlord is not in default in the performance of any covenant, agreement or
condition contained in this Lease, or specifying each such default of which the
signer may have knowledge; and (d) such other reasonable and pertinent
information with respect to this Lease or the Premises as Landlord may
reasonably request. Any statement delivered pursuant to this Section 22.01 may
be relied upon by Landlord for the veracity of the information set forth
therein.
Section 22.02. Landlord's Estoppel. Landlord shall, at any
time and from time to time, upon not less than fifteen (15) days' prior written
request by Tenant, execute, acknowledge, and deliver to or as directed by
Tenant a statement in writing, executed by a duly-authorized representative of
Landlord and addressed to Tenant or to any party designated by Tenant,
certifying as follows: (a) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, stating that this Lease is in
full force and effect as modified, and identifying all such modifications); (b)
the dates through which Ground Rent and Other Charges have been paid; (c) that,
to the knowledge of the signer of such certificate, Tenant is not in default in
the performance of any covenant, agreement, or condition contained in this
Lease, or specifying each such default of which the signer may have knowledge;
and (d) such other reasonable and pertinent information with respect to this
Lease or the Premises as Tenant may request. Any statement delivered pursuant
to this Section 22.02 may be relied upon by Tenant and by any actual or
prospective holder of a Leasehold Mortgage for the veracity of the information
set forth therein.
ARTICLE XXIII
NOTICES
For the purposes of all notices and communications between the
parties, the addresses of Landlord and Tenant shall be as follows:
Landlord:
Tenant:
Any notices and other communications to be delivered by either party to the
other pursuant to this Lease shall be in writing and shall be deemed delivered
as follows, except as otherwise specifically provided in this Lease: (a) when
hand delivered or telecopied (provided that telecopied notices must be
confirmed within any applicable time period for the notice in question plus two
(2) days by one of the following methods of notice); (b) one (1) business day
after mailing by Federal Express or other overnight courier service; or (c)
three (3) business days after deposit (or, in the case of any notices sent by
Tenant to Landlord for the purpose of exercising Tenant's rights and options to
extend the Basic Term or any Extension Term or Tenant's right of first refusal
to purchase the Premises, upon deposit) in the
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United States mail by registered or certified mail, postage prepaid, return
receipt requested, addressed to the party to be charged with notice at the
address or the telecopier number recited above or at such other address or
telecopier number as either party from time to time may designate by
notice delivered to the other; provided, however, that no notice of change of
address or telecopier number shall be deemed given until received by the party
to be notified. Except as otherwise specifically provided herein, in the
computation of any period of time which shall be required or permitted
hereunder or under any law for any notice or other communication or for the
performance of any term, condition, covenant or obligation, the day from which
such period runs shall be excluded and the last day of such period shall be
included unless it is a Saturday, Sunday or legal holiday, in which case the
period shall be deemed to run until the end of the next day which is not a
Saturday, Sunday or legal holiday.
ARTICLE XXIV
COVENANT OF QUIET ENJOYMENT
Landlord, for itself and its successors and assigns, warrants
to and covenants with Tenant that provided that Tenant shall pay all Ground
Rent and Other Charges and shall otherwise observe and perform the covenants
and obligations on Tenant's part to be kept and performed under this Lease,
Tenant shall have, hold and enjoy the quiet enjoyment and possession of all of
the Premises during the Term of this Lease, without any let, hindrance, or
molestation of any person or party whatsoever.
ARTICLE XXV
FORCE MAJEURE
Tenant shall have no responsibility or liability whatsoever
for, and shall be excused from, the observance or performance of any covenant
or obligation of Tenant hereunder to the extent that any such observance or
performance is rendered impossible, impracticable or economically infeasible,
in whole or in part, by any act of God (including but not limited to lightning,
storm, flood, tornado or earthquake), fire, explosion, Legal Requirements,
shortages of labor, fuel or materials, acts of the public enemy, war (declared
or undeclared), riot or insurrection, the discontinuation, suspension or
interruption of or interference with any utility or service supplied to Tenant
or the Premises or any portion thereof, any strike, lockout or other labor
dispute, or any other cause or circumstance beyond the control of Tenant (other
than the unavailability of funds to Tenant). No provision of this Lease shall
in any event require Tenant to settle or compromise any strike, lockout or
other labor difficulties or disputes; Landlord hereby specifically acknowledges
and agrees that the resolution of any such difficulties or disputes shall be
within the sole discretion of Tenant. In no event shall any delay or hindrance
in, or any prevention of, the observance or performance of any covenant or
obligation of Tenant under this Lease constitute a default or Event of Default
by Tenant, or entitle Landlord to take any remedial or enforcement action,
under this Lease.
ARTICLE XXVI
MEMORANDUM OF LEASE
Each party shall, from time to time at the request of the
other party, promptly cause to be executed and delivered to the other party an
appropriate instrument, in recordable form, constituting a memorandum or short
form of lease setting forth a description of the Premises, the Term of this
Lease (including Tenant's rights to extend the Term of this Lease as provided
at
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Section 2.02), and Tenant's option and right of first refusal to purchase the
Premises as provided at Article XXXII and Article XXXIII, respectively, and
containing such other terms or conditions of this Lease or any amendment hereto
(other than those pertaining to the payment of Ground Rent) as may be required
by any Legal Requirement or as either party may reasonably request.
ARTICLE XXVII
HOLDOVER
If, at the expiration or termination of this Lease (by lapse
of time or otherwise), Tenant continues to occupy the Premises, the
Improvements or any part thereof, Tenant shall thereafter be a tenant from
month-to-month (on a calendar month basis) at a monthly rent equivalent to the
monthly installment of Ground Rent payable by Tenant during the last month of
the Term of this Lease, and otherwise upon and subject to all of the other
terms and conditions of this Lease. In the event of any such holding over,
Landlord and Tenant agree that either party hereto shall have the right to
terminate said month-to-month tenancy as of the last day of any calendar month
by giving the other party not less than thirty (30) days' prior written notice
thereof.
ARTICLE XXVIII
SURRENDER OF PREMISES
Upon the expiration or other termination of the Term of this
Lease, Tenant shall quietly and peaceably surrender unto Landlord all of
Tenant's leasehold interest in and to the Premises and all Improvements located
thereon. Concurrently with such surrender, title to all Improvements shall
automatically pass to and vest in Landlord, subject, however, to the continuing
rights of the owners or holders of any interest which may, as provided in this
Lease, survive the expiration or termination hereof.
ARTICLE XXIX
INDEMNIFICATIONS
Section 29.01. By Tenant. Tenant shall, and hereby covenants
and agrees to, indemnify, save harmless and defend Landlord from and against
all Losses (as defined in Section 29.03) (a) for any death of or injury to any
person or destruction of or damage to any property occurring upon the Premises
or any portion thereof during the Term of this Lease, or (b) for Tenant's
failure to perform and comply with this Lease, but only to the extent that such
Losses arise as a direct or proximate result of any act, action or omission of
Tenant, its subtenant(s) or their respective officers, employees, agents or
invitees.
Section 29.02. By Landlord. Landlord shall, and hereby
covenants and agrees to, indemnify, save harmless and defend Tenant and every
person or entity holding any rights or interests hereunder by, through or under
Tenant from and against all Losses (a) for any death of or injury to any person
or destruction of or damage to any property occurring upon the Premises or any
portion thereof during the Term of this Lease, or (b) for Landlord's failure to
perform and comply with the provisions of this Lease, but only to the extent
that such Losses arise as a direct or proximate result of any act, action or
omission of Landlord or its officers, employees, agents or invitees.
Section 29.03. General. For purposes of this Lease, the term
"Losses" shall mean any and all losses, damages, claims, suits, actions,
judgments, liabilities and expenses, including without limitation environmental
damages and remediation expenses, expenses of consultants and reasonable
attorneys' fees.
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ARTICLE XXX
NO MERGER OF ESTATES
Landlord and Tenant specifically agree that there shall be no
merger of Landlord's fee interest and estate in and to the Premises and
Tenant's leasehold estate in and to the Premises under this Lease, whether by
operation of law, by implication, or otherwise, unless Landlord and Tenant
shall have joined in the execution and recording, in the real property records
of the county in which the Premises are located, of an instrument specifically
effecting such merger.
ARTICLE XXXI
HAZARDOUS AND TOXIC CONDITIONS
Section 31.01. Indemnification by Tenant. Tenant shall
indemnify and hold Landlord harmless from and against any and all Losses,
including without limitation remediation costs and consultants' fees, arising
out of or with respect to the presence in, on or under the Premises or the
Improvements of any materials classified as toxic or hazardous under applicable
federal, state or local laws, ordinances and requirements of governmental
authorities with competent jurisdiction, but only to the extent that the
presence of such materials is as the result of any actions of Tenant, its
subtenant(s) or any of their respective officers, employees, agents or
invitees.
Section 31.02. Indemnification by Landlord. Landlord shall
indemnify and hold Tenant harmless from and against any and all Losses,
including without limitation remediation costs and consultants' fees, arising
out of or with respect to the presence in, on or under the Premises or the
Improvements of any materials classified as toxic or hazardous under applicable
federal, state or local laws, ordinances and requirements of governmental
authorities with competent jurisdiction, but only to the extent that the
presence of such materials is as the result of any actions of Landlord or its
officers, employees, agents or invitees.
ARTICLE XXXII
OPTION TO PURCHASE PREMISES
(a) Tenant shall have the right and option to purchase the
Premises at any time during the Term of this Lease upon not less than ninety
(90) days prior written notice to Landlord (an "Exercise Notice"). The failure
of Tenant to exercise its right and option to purchase the Premises on one or
more occasions shall not affect Tenant's right to exercise such right and
option with respect to the Premises on any subsequent occasions.
(b) In the event that Tenant delivers an Exercise Notice to
Landlord, Landlord shall convey the Premises to Tenant on the following terms
and conditions: (1) the purchase price for the Premises (the "Purchase Price")
shall be the value determined under subparagraph (c) below (the "Fair Market
Value"); (2) the closing of the transaction (the "Option Closing") shall occur
on the date set forth in the Exercise Notice; (3) at the Option Closing, as a
condition to the Option Closing, (a) Landlord shall convey fee simple title to
the Premises to Tenant by general warranty deed in form satisfactory to Tenant,
free and clear of all exceptions to title other than those exceptions to title
to which the Premises were subject on the date on which the Premises initially
were leased to Tenant pursuant to the Existing Lease (as defined in Article
XXXVI) (the "Permitted Exceptions"); (b) Landlord shall deliver to Tenant an
ALTA Form B - October 1970
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title insurance policy in the amount of the Purchase Price, without the
so-called standard exceptions, containing only the Permitted Exceptions and
insuring such title or interest to be vested in Tenant; and (c) all permits,
licenses and other approvals which may be required by any federal, state or
local governmental authority with competent jurisdiction with respect to the
transaction contemplated hereunder shall have been obtained to the satisfaction
of Tenant, in its sole judgment; (4) Landlord and Tenant each shall pay fifty
percent (50%) of any escrow fees; and (5) all closing costs (including, without
limitation, the cost of the title policy and costs of deed transfer, but
expressly excluding attorneys' fees) shall be apportioned between the parties
in accordance with the local customs of the county and state in which the
Premises are located. The provisions of this Article XXXII and the indemnities
set forth in this Lease shall survive the Option Closing.
(c) Fair Market Value shall be determined (in the event that
Landlord and Tenant fail to agree thereupon within twenty (20) days after
Tenant's delivery to Landlord of an Exercise Notice) by an appraisal process,
the costs and expenses of which shall be shared equally by Landlord and Tenant,
as follows: (i) each party, by written notice to the other, promptly shall
appoint a qualified appraiser with more than five (5) years of experience in
the metropolitan area surrounding the Premises who is a member of The American
Institute of Real Estate Appraisers; (ii) the appraisers so selected shall be
supplied with all data relevant to the fair market value of the Premises and
shall agree to meet within thirty (30) days after their appointment; (iii) such
appraisers then shall appraise the Premises; (iv) after completing their
appraisals, each appraiser shall furnish a written report thereof to each
party, and the fair market value of the Premises finally shall be determined to
be the simple average of the two (2) appraised values if the appraised value
reported by the first appraiser shall deviate from the appraised value reported
by the second appraiser by less than ten percent (10%), or, in the event that
the appraised value reported by the first appraiser shall deviate from the
appraised values reported by the second appraiser by ten percent (10%) or more,
the two (2) appraisers, within ten (10) days after completion of the first two
(2) appraisals, shall select a third appraiser who shall be qualified as
described above and who shall be instructed to complete, within thirty (30)
days after such selection, an appraisal of the Premises, whereupon the fair
market value of the Premises finally shall be determined to be equal to the
appraised value determined by the third appraiser, except that (A) if the third
appraised value of the Premises is higher than the higher of the appraised
values reported by the first two (2) appraisers, then the fair market value of
the Premises finally shall be determined to be equal to the higher of the
appraised values reported by the first two (2) appraisers, and (B) if the third
appraised value of the Premises is lower than the lower of the appraised values
reported by the first two (2) appraisers, then the fair market value of the
Premises finally shall be determined to be equal to the lower of the appraised
values reported by the first two (2) appraisers.
ARTICLE XXXIII
RIGHT OF FIRST REFUSAL TO PURCHASE PREMISES
(a) In the event that Landlord, at any time during the Term of
this Lease, desires to transfer, assign or otherwise convey (collectively,
"Sell") the Premises to a third party, pursuant either to a bonafide written
offer which Landlord desires to make or a bonafide written offer which Landlord
intends to accept, then Landlord, prior to making or accepting such offer,
shall deliver to Tenant notice of such intention (the "Landlord Notice"),
accompanied by a true and correct copy of the written offer identifying the
contemplated date of closing of the transaction, together with evidence
satisfactory to Tenant that
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Landlord intends to make or to accept such offer, as applicable (collectively,
the "Stated Terms"). For a period of thirty (30) days after its receipt of the
Landlord Notice, accompanied by the Stated Terms (the "Refusal Period"), Tenant
shall have the right, by notice (the "Refusal Notice") delivered to Landlord
within the Refusal Period, to purchase the Premises subject to the Stated
Terms. Tenant shall have the right at any time during the Term of this Lease
to perform soil, environmental and other tests on the Premises, repairing all
damage caused by such tests.
(b) In the event that Tenant delivers a Refusal Notice to
Landlord within the Refusal Period, Landlord shall sell the Premises to Tenant
on the terms and conditions set forth in the Stated Terms. In such event,
notwithstanding any terms or conditions set forth in the Stated Terms to the
contrary, (1) the purchase price of the Premises (the "Refusal Price") shall be
the purchase price set forth in the Stated Terms; (2) the closing of the
transaction (the "Refusal Closing") shall occur on the date set forth in the
Stated Terms, provided that in the event that such date shall occur after the
expiration of the Term of this Lease, the Term of this Lease automatically
shall be extended upon the same terms and conditions until the Refusal Closing
shall occur (or until such other date as the parties may agree); (3) at the
Refusal Closing, as a condition thereto, (a) Landlord shall convey fee simple
title to the Premises to Tenant by general warranty deed in form satisfactory
to Tenant, free and clear of all exceptions to title other than the Permitted
Exceptions; (b) Landlord shall deliver to Tenant an ALTA Form B - October 1970
title insurance policy in the amount of the Refusal Price, without the
so-called "standard exceptions", containing only the Permitted Exceptions and
insuring such title or interest to be vested in Tenant; and (c) all permits,
licenses and other approvals which may be required by any federal, state or
local governmental authority with competent jurisdiction with respect to either
the Premises or the transaction contemplated hereunder shall have been obtained
to the satisfaction of Tenant, in its sole judgment; (4) Landlord and Tenant
each shall pay fifty percent (50%) of any escrow fees; and (5) all closing
costs (including, without limitation, the cost of the title policy and costs of
deed transfer, but expressly excluding attorneys' fees) shall be apportioned
between the parties in accordance with the local customs of the county and
state in which the Premises are located. The provisions of this Article XXXIII
and the indemnities set forth in this Lease shall survive the Refusal Closing.
(c) In the event that Tenant affirmatively elects not to
exercise its foregoing right of first refusal with respect to the Premises or
fails to deliver to Landlord any Refusal Notice within the applicable Refusal
Period with respect to the Premises, this Lease shall continue in full force
and effect, and Landlord shall have the right to Sell the Premises on terms and
conditions not less favorable to Landlord than the Stated Terms. If the terms
and conditions on which Landlord is willing to Sell the Premises become less
favorable to Landlord than the Stated Terms (and Landlord and Tenant
specifically acknowledge and agree, without limiting the generality of the
foregoing, that any revision which would decrease the monetary obligations of
the prospective purchaser of the Premises or increase the monetary obligations
of Landlord would render such terms and conditions less favorable to Landlord
for the purposes hereof), then Landlord promptly shall deliver to Tenant notice
of such revised terms and conditions, and Tenant may deliver to Landlord,
within ten (10) days after Landlord's delivery of such notice to Tenant, a
Refusal Notice evidencing Tenant's election to purchase the Premises, in which
event Tenant and Landlord shall close such transaction pursuant to this Article
XXXIII on such revised terms and conditions. If Landlord shall not close any
transaction which is subject to the terms of this Article XXXIII within one
hundred eighty (180) days after the earlier to occur of (1) Tenant's delivery
to Landlord of Tenant's affirmative election not to exercise its right of first
refusal or (2) the later to occur of the expiration of the applicable Refusal
Period or the expiration of the above-mentioned
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ten (10) day period, then Tenant's right of first refusal shall be reinstated
and shall continue to apply and Landlord shall not Sell the Premises without
complying again with the provisions of this Article XXXIII.
ARTICLE XXXIV
DISPUTE RESOLUTION
(a) The parties will attempt in good faith to resolve any
controversy arising out of or relating to this Lease promptly by negotiations
between authorized representatives of the parties begun by written notice from
one party to the other.
(b) If the controversy has not been resolved within (30)
thirty days of the date of written notice thereof under subparagraph (a),
either party may initiate mediation of the controversy or claim in accordance
with American Arbitration Association Real Estate Industry Mediation Rules or
may proceed directly to arbitration under Article XXXIV(c).
(c) If the matter has not been resolved pursuant to the
aforesaid mediation procedure within (60) sixty days of the initiation of such
procedure, or if either party refuses to participate in a mediation, the
controversy shall be settled by arbitration as follows: either party may
initiate such arbitration by delivery of notice to the other setting forth the
matter to be determined and naming one arbitrator. The other party, within ten
(10) days after such delivery, shall name a second arbitrator and deliver
notice thereof to the initiating party. The two (2) arbitrators shall meet
promptly and try to resolve the matter, and their written decision shall be
final and binding on the parties. If such arbitrators shall fail to reach a
decision within thirty (30) days after the appointment of the second
arbitrator, such arbitrators shall name a third arbitrator within the
succeeding period of five (5) days. The three (3) arbitrators promptly shall
meet thereafter for consideration of the matter to be determined, and the
written decision of any two (2) arbitrators shall be final and binding on the
parties. In the event that the party not initiating the arbitration proceeding
fails to appoint a second arbitrator, and/or in the event that two (2)
arbitrators appointed are unable to agree upon the appointment of a third
arbitrator within the prescribed time, the court of general jurisdiction of the
political subdivision in which the Premises shall be located may, within the
prescribed time, appoint such second and/or third arbitrator, as the case may
be, and the arbitration shall proceed pursuant to this Article XXXIV. All
arbitrators shall be individuals with at least five (5) years substantial
experience in negotiating and valuing commercial real property ground leases
and/or with the particular matter subject to arbitration, as appropriate.
Arbitration shall be conducted pursuant to the rules then in effect of the
American Arbitration Association and the decision of the arbitrators may be
entered and enforced as a judgment in accordance with the applicable laws of
the jurisdiction in which the Premises shall be located. Each party shall bear
its own attorney fees and expenses and those of the arbitrator it selects. The
fees and expenses of the third arbitrator and the arbitration hearing shall be
shared equally. The place of arbitration shall be in the County and State
where the Premises are located. The arbitrators are not empowered to award
damages in excess of actual, compensatory damages.
(d) All deadlines specified in this Article XXXIV may be
extended by mutual agreement.
(e) The procedures specified in this Article XXXIV shall be
the sole and exclusive procedures for the resolution of disputes between the
parties arising out of or relating to this Lease; provided, however, that a
party may seek a preliminary injunction or other preliminary judicial relief if
in its judgment such action is necessary to avoid irreparable damage. Despite
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such action the parties will continue to participate in good faith in the
procedures specified in this Article XXXIV. All applicable statutes of
limitation shall be tolled while the procedures specified in this Article XXXIV
are pending. The parties shall take such action, if any, required to
effectuate such tolling.
ARTICLE XXXV
MISCELLANEOUS
Section 35.01. Survival. Any and all covenants and
obligations of either party under this Lease which are not or may not be fully
observed and performed prior to the termination or expiration of this Lease (by
lapse of time or otherwise) shall survive such termination or expiration
unless and except to the extent the same may hereafter expressly be released in
writing by the other party hereto.
Section 35.02. Amendment. This Lease may not be modified,
amended or supplemented except by a written agreement executed on behalf of
both Landlord and Tenant.
Section 35.03. Brokers. Landlord and Tenant each represents
and warrants to the other that it has not dealt with any real estate broker,
agent, consultant, or finder in connection with the negotiation of this Lease.
Each of the parties agrees to indemnify and save the other party harmless of
and from any and all claims, damages, costs, expenses and liability whatsoever
which may arise based upon (or alleged to be based upon) any broker's or
agent's fee or finder's commission or any compensation to any person or entity
in respect of the transaction contemplated by this Lease where such claim,
damage, cost, expense or liability arises out of (or is asserted or alleged to
arise out of) any act or omission of the respective indemnifying party or any
of its officers, employees or agents.
Section 35.04. Rights and Remedies Cumulative. No right or
remedy specified herein or otherwise conferred upon Landlord or Tenant, as the
case may be, shall be exclusive of any other right or remedy; all rights and
remedies of either party shall be cumulative and in addition to every other
right and remedy of such party whether the same shall arise or be created
hereunder, at law or in equity. Every such right and remedy may be exercised
by Landlord or Tenant, as the case may be, from time to time and as often as
occasion may arise or be deemed expedient.
Section 35.05. Third Party Rights. Nothing herein, express
or implied, is intended or shall be construed to confer upon or give to any
person or entity, other than the parties hereto, any right or remedy under or
by reason of this Lease.
Section 35.06. Severability. If any term or condition of
this Lease or the application thereof to any person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this Lease and the
application of such term or condition to any other persons or circumstances
shall not be affected thereby, and shall be enforced to the greatest extent
permitted by law.
Section 35.07. Captions. The Article and Section captions
contained in this Lease and in the table of contents hereof are for convenience
of reference only, and are not intended and shall not be deemed or construed to
limit, enlarge or affect the scope or meaning of this Lease or any term of
condition thereof.
Section 35.08. Interpretation. The following rules and
principles shall each apply in the interpretation of this Lease: (a) any term
used in this Lease shall be deemed to include each other gender as appropriate
and the singular of such term shall include the plural and vice versa, whether
or not such term is a
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defined term herein; (b) any term, condition or covenant in this Lease which is
to be observed or performed by Tenant may also be performed by any other person
or entity on behalf of Tenant; such party's performance shall constitute full
satisfaction of any such term, condition, or covenant; (c) the "Exhibits" to
which reference is made in this Lease are each attached hereto and incorporated
in this Lease in their entirety; (d) except to the extent expressly provided to
the contrary herein, any term, condition or covenant in this Lease which is to
be observed or performed by or on behalf of either party hereto shall be
observed or performed at the sole cost and expense of the party to observe or
perform the same; (e) the words "herein", "hereunder", and other words of
similar import refer to this Lease as a whole and not to any Article, Section,
or other subdivision of this instrument; and (f) any consent, approval,
response or other action required of or permitted by Landlord pursuant to this
Lease shall not be unreasonably withheld or delayed.
Section 35.09. Negation of Partnership. Nothing contained in
this Lease shall be construed or interpreted as creating any agency,
partnership, co-partnership or joint venture relationship between the parties
hereto.
Section 35.10. Applicable Law. This Lease shall be governed
by the laws of the state in which the Premises are located.
Section 35.11. Entire Agreement. There are no terms,
conditions, covenants, obligations, representations or warranties, express or
implied, collateral or otherwise, forming part of or in any way affecting or
relating to this Lease except as expressly set forth herein. Landlord and
Tenant acknowledge and agree that this Lease constitutes the entire agreement
between them with respect to the matters contained herein.
Section 35.12. Execution in Counterparts. This Lease may be
executed in multiple counterparts, each of which fully executed counterparts
shall be deemed an original; it shall not be necessary in making proof of this
Lease to produce or account for more than one such counterpart. All
counterparts of this Lease shall constitute a single, unified instrument.
Section 35.13. Binding Effect. This Lease, and the terms and
conditions set forth herein, shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
Section 35.14. Further Assurances. Each of Landlord and
Tenant agrees that it shall, promptly after its receipt of the other's written
request therefor, execute, acknowledge (if appropriate), and deliver to or as
directed by the other party such additional documents, instruments, and further
assurances consistent with the terms of this Lease as may be necessary or
appropriate (in the judgment of the requesting party) to evidence, confirm, or
establish the demise of the Premises and/or the rights of the respective
parties intended to be affected or created by this Lease.
ARTICLE XXXVI
EXISTING LEASE
The parties acknowledge that the Premises currently are being
leased by Landlord to Tenant pursuant to a ____________________________________
(the "Existing Lease"). As of the Commencement Date, the Existing Lease shall
terminate and neither Landlord nor Tenant shall have any further liabilities or
obligations under the Existing Lease except for any which may have accrued
thereunder prior to the Commencement Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease
to be executed as of the date indicated below.
Signed and acknowledged "LANDLORD"
in the presence of: ------------------------------------
By:
- ----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
- ----------------------------------- Its:
--------------------------------
Name:
------------------------------
"TENANT"
------------------------------------
By:
- ----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
- ----------------------------------- Its:
--------------------------------
Name:
------------------------------
STATE OF OHIO )
) SS.
COUNTY OF )
--------
Before me, a Notary Public in and for said County and State,
personally appeared the above-named _____________________, by
_________________________, its ___________________________, who acknowledged
that ___ did sign the foregoing instrument on behalf of the corporation, and
that the same is the free act and deed of the corporation and ___ free act and
deed as such officer and as an individual.
IN WITNESS WHEREOF, I hereunto have set my hand and seal at
________, Ohio this ____ day of December, 1995.
-----------------------------
Notary Public
My commission expires:
-------
STATE OF OHIO )
) SS.
COUNTY OF )
--------
Before me, a Notary Public in and for said County and State,
personally appeared the above-named _____________________, by
_________________________, its ___________________________, who acknowledged
that ___ did sign the foregoing instrument on behalf of the corporation, and
that the same is the free act and deed of the corporation and ___ free act and
deed as such officer and as an individual.
IN WITNESS WHEREOF, I hereunto have set my hand and seal at
________, Ohio this ____ day of December, 1995.
-----------------------------
Notary Public
My commission expires:
--------
<PAGE> 136
ANNEX 8
SERVICES AND SUPPORT AGREEMENT
BETWEEN
ROADWAY SERVICES, INC.
AND
ROADWAY EXPRESS, INC.
<PAGE> 137
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Term of the Agreement . . . . . . . . . . . . . . . . . . 2
ARTICLE II SERVICES TO BE PROVIDED . . . . . . . . . . . . . . . . . 2
2.1 Corporate Services Provided . . . . . . . . . . . . . . . 2
2.2 Payment for Services . . . . . . . . . . . . . . . . . . . 3
ARTICLE III TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Automatic Termination . . . . . . . . . . . . . . . . . . 3
3.2 Termination with Notice . . . . . . . . . . . . . . . . . 4
3.3 Mutual Cooperation and Additional Assumptions . . . . . . 4
ARTICLE IV GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . 5
4.4 Force Majeure . . . . . . . . . . . . . . . . . . . . . . 5
4.5 Severability . . . . . . . . . . . . . . . . . . . . . . . 6
4.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . 6
4.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
i
<PAGE> 138
SERVICES AND SUPPORT AGREEMENT
THIS SERVICES AND SUPPORT AGREEMENT ("Agreement"), dated as
January 2, 1996, is made and entered into by and between ROADWAY SERVICES,INC.,
an Ohio corporation ("RSI"), and ROADWAY EXPRESS, INC., a Delaware corporation
and a wholly-owned subsidiary of RSI ("REX").
WITNESSETH:
WHEREAS, the Board of Directors of RSI has determined that it
is advisable to pursue a tax-free spin-off (the "Spin-Off") of REX; and
WHEREAS, pursuant to the Spin-Off, RSI and REX have entered
into a Distribution Agreement (the "Distribution Agreement") pursuant to which
RSI will distribute not less than 95% of the outstanding shares of capital
stock of REX to shareholders of RSI (the "Distribution"); and
WHEREAS, RSI and REX have agreed to enter into this Agreement
in order for RSI or REX, as the case may be, following the Spin-Off, to assist
the other by providing certain services and support not otherwise specified in
any of the Other Agreements (as defined in the Distribution Agreement);
NOW THEREFORE, in consideration of these premises and the
mutual promises and conditions contained herein, RSI and REX hereby agree as
follows:
<PAGE> 139
ARTICLE I
TERM
1.1 Term of the Agreement. The term of this Agreement
shall be from the date hereof (the "Effective Date") to and including the first
anniversary of the date of this Agreement (the "Term"). On not less than
thirty (30) days' notice prior to the expiration of the Term or any subsequent
term, the Term may be extended upon the written request of REX to RSI.
ARTICLE II
SERVICES TO BE PROVIDED
2.1 Corporate Services Provided. RSI shall provide to
REX during the Term of this Agreement the services listed on Annex A attached
hereto other than the Record Detention Services specified therein, and REX
shall provide to RSI during the term of this Agreement the Record Detention
Services listed on such Annex A (collectively, the "Services"). The Services
shall be provided at then prevailing market rates, or if for any reason a
market rate for any particular Service is not readily determinable, at the then
existing internal allocated expense attributed to such Service by the provider
of such Service. The Services are based on the understanding of the parties
hereto of the support and administrative services reasonably required by REX at
the date of this Agreement. If, following the Distribution, REX reasonably
determines that additional services consistent with the recent historical
practice of RSI should be provided by RSI, the parties agree to negotiate in
good faith to
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modify this Agreement appropriately with respect to such additional services,
together with such additional services as, from time to time, the parties
hereto mutually agree in writing to be provided hereunder. In the event the
parties hereto agree that RSI shall provide such additional services, the
parties hereto further agree that such agreement to provide such additional
services shall also amend Section 2.2 as provided herein and Annex A hereto to
reflect such agreement of the parties.
2.2 Payment for Services. (a) REX shall pay RSI or RSI
shall pay REX, as the case may be, on a quarterly basis, amounts payable
hereunder in respect of any services provided hereunder or in the case of
additional services agreed to pursuant to Section 2.2, such fees as the parties
shall agree.
(b) Charges for the services shall be invoiced on or
about the tenth (10th) day of the calendar month next following the calendar
fiscal quarter in which the Services have been performed, and such invoice
shall be paid within thirty (30) days following receipt thereof.
ARTICLE III
TERMINATION
3.1 Automatic Termination. This Agreement automatically
shall terminate at the conclusion of the Term unless such Term is extended in
accordance with Section 1.1 hereto.
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3.2 Termination with Notice. If either RSI or REX (the
"Defaulting Party") shall fail adequately to perform in any material respect
any of its material obligations under this Agreement, whether voluntarily or
involuntarily, the other may terminate this Agreement upon sixty (60) days'
written notice to the Defaulting Party that it has so failed to perform its
obligations under this Agreement, unless during such period the Defaulting
Party shall have remedied such failure.
3.3 Mutual Cooperation and Additional Assumptions. Prior
to the termination of this Agreement, the parties shall work together in good
faith to facilitate an orderly transition of responsibility for the Services,
and each party shall deliver to the other party copies of such documents,
records and information as are necessary to achieve such transition. Upon the
termination of this Agreement, each party promptly shall deliver to the other
party copies of all remaining documents, records and information in such
party's possession that may be necessary for the other party to assume complete
internal responsibility for all of the Services.
ARTICLE IV
GENERAL
4.1 Non-Waiver. The failure of either party to enforce
at any time or for any period any of the provisions hereof shall not be
construed to be a waiver of such provisions or of the right of such party
thereafter to enforce each and every such provision.
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4.2 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be delivered by
hand, mailed by registered or certified mail (return receipt requested), or
sent by telecopy or by a recognized overnight courier service, to the parties
at the following addresses (or such other addresses for a party as shall be
specified by like notice) and shall be deemed given on the date on which such
notice is received:
To REX at: Roadway Express, Inc.
1077 Gorge Boulevard
P.O. Box 471
Akron, Ohio 44309-0471
Attention: General Counsel
Telecopier Number:
To RSI at: Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44309-0088
Attention: General Counsel
Telecopier Number:
4.3 Governing Law. This Agreement shall be governed by
and enforced in accordance with the internal laws of the State of Ohio, without
regard to the conflicts of law principles thereof.
4.4 Force Majeure. No person providing Services shall be
liable for any failure of, or delay in the performance of, Services under this
Agreement for the period that such failure or delay is due to acts of God,
public enemy, civil war, strikes or labor disputes, or any other cause beyond
its reasonable control. Each of RSI and REX agrees to notify the other
promptly of the occurrence of any such cause and to carry out this Agreement as
promptly as practicable after such cause is terminated.
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4.5 Severability. In the event any provision of this
Agreement or portion thereof is found to be wholly or partially invalid,
illegal or unenforceable in any judicial proceeding, then such provision shall
be deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law as if such
provision had been originally incorporated herein as so modified or restricted,
or as if such provision had not been originally incorporated herein, as the
case may be.
4.6 Entire Agreement. This Agreement supersedes and
cancels any and all previous agreements, written or oral, between the parties
relating to the subject matter hereof. This Agreement and the Other Agreements
expresses the complete and final understanding of the parties with respect to
the subject matter thereto and may not be changed in any way, except by an
instrument in writing signed by both parties.
4.7 Assignment. Neither of the parties shall assign any
of its rights or obligations under this Agreement without the prior written
consent of the other party, which consent shall not unreasonably be withheld.
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IN WITNESS WHEREOF, the parties have hereunto signed this
Agreement as of the day and year first above written.
ROADWAY SERVICES, INC.
By
-----------------------------------
Name:
Title:
ROADWAY EXPRESS, INC.
By:
-----------------------------------
Name:
Title:
<PAGE> 145
ANNEX A
CORPORATE SERVICES TO BE PROVIDED
TO REX BY RSI
TAX SERVICES:
1. Coordinate and assist with the preparation of United States
federal and state income and franchise tax returns.
2. Coordinate and assist with the preparation of payroll,
unemployment, sales and use tax returns.
3. Provide access to historical tax records, including asset
basis data and date requested for audits.
HUMAN RESOURCES SERVICES:
Coordinate and assist with employee benefit administration,
including administration of defined benefit pension plans and
401(k) plans.
INSURANCE SERVICES:
1. Maintain relationships with brokers.
2. Coordinate claims processing and allocation between RSI and
REX.
3. Determine allocation of costs.
4. Assist with reserve computations.
FINANCIAL SERVICES:
1. Assist with consolidation procedures with respect to fourth
quarter of 1995.
2. Provide access to historical records.
3. Assist with preparation of opening balance sheet.
4. Assist with appropriate year-end disclosures.
TREASURY SERVICES:
Assist with lockbox and cash collections and payment cutoffs.
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EXECUTIVE SERVICES:
1. Assist with public company reporting and other issues.
2. Assist with historical records.
RECORD DETENTION SERVICES:
Maintenance of corporate records at storage facility located
in Akron, Ohio.
Maintenance and Storage Costs
Retrieval Cost
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ANNEX 9
LEASE
BY AND BETWEEN
_____________________, LANDLORD
AND
______________________, TENANT
Dated as of January 2, 1996
Premises Situated in ____________________, ____________________
[NOTE: APPROPRIATE CHANGES WILL BE MADE TO THIS LEASE FORM (WHICH CONTEMPLATES
THE LEASE OF AN ENTIRE TRUCK TERMINAL) TO ADAPT IT FOR USE AS THE FORM FOR THE
LEASE FROM SDC TO REX OF A PORTION OF A TERMINAL IN COLUMBUS, OHIO]
<PAGE> 148
LEASE
THIS LEASE (the "Lease") is made as of January 2, 1996 by and between
_________________________, a Delaware corporation, as landlord (the
"Landlord"), and _______________________________, a ______________ corporation,
as tenant (the "Tenant").
1 Demise: In consideration of the undertakings of the parties
contained herein, Landlord leases to Tenant, and Tenant leases from Landlord,
the premises described in Section 2 (the "Premises") for use as a truck
terminal facility and any other use permitted by law, on the terms and
conditions contained in this instrument.
2 Premises: During the Term of this Lease (as defined in
Section 3.3), the Premises shall be located for street numbering purposes at
_________________________________ and shall consist of:
(A) Exclusive use of all of the buildings and improvements located
thereon (collectively, "Landlord's Building") and of all of the adjoining
exterior loading, parking and drive areas (collectively, the "Exclusive
Space"); and
(B) The right of Tenant, Tenant's invitees and Tenant's vehicles
to continuous access to all of the Exclusive Space and adjoining public
streets; and the right to use the roof of Landlord's Building for the purpose
of installing an antenna for Tenant's communication system (the "Roof
Antenna").
The improved real property comprised by Landlord's Building and the exterior
Exclusive Space are further described or depicted on Exhibit "A" attached
hereto and incorporated herein by this reference.
3 Term:
3.1 Primary Term: The primary term of this Lease shall be for the
period January 2, 1996 to January 1, 1997 (the "Primary Term") unless this
Lease shall be earlier terminated as hereinafter provided.
3.2 Extension Terms: Tenant shall have the option to extend the
Primary Term for the extension period set forth below (the "Extension Term"),
upon the terms of this Lease, except as otherwise provided in Section 4(B):
(A) Extension Term: One (1) one (1) year renewal option, from
January 2, 1997 through January 1, 1998.
(B) Exercise Date: Tenant shall deliver to Landlord notice of its
election so to extend the Primary Term on or before November
2, 1996.
3.3 Term of this Lease: The Primary Term and the Extension Term
(if elected by Tenant) sometimes shall be referred to collectively as the "Term
of this Lease".
3.4 Tenant's Termination Right: Tenant shall have the right, upon
written notice to Landlord and without penalty, to terminate this Lease
effective as of any date during the Primary Term or the Extension Term, which
termination date shall be specified in such notice. In the event of such
termination, neither party shall have any further liability under this Lease
except with respect to any Rent or other obligations of either party accrued
prior to the effective date of termination.
4 Rent: During the Term of this Lease, Tenant shall pay rent to
Landlord at the address set forth in Section 26 in monthly installments (the
"Rent")as set forth in Subparagraphs
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(A) and (B) below. The first monthly installment of Rent shall be payable in
advance within ten (10) days following the date of this Lease (the "Rent
Commencement Date"), and subsequent monthly installments of Rent shall be
payable on or before the first business day of each calendar month thereafter.
Rent for partial months at the inception or the termination of the Lease shall
be prorated.
(A) Primary Term: Monthly installments of $______.
(B) Option to Extend: Monthly installments equal to the
monthly Rent for the Primary Term multiplied by a factor equal to one (1) plus
or minus the decimal equivalent of fifty percent (50%) of the total change, if
any, in the U.S. Department of Labor Price Index for Urban Consumers, All
Items, 1982-84=100, for the period from three (3) months prior to the
commencement date of the Primary Term through three (3) months prior to the
commencement date of the Extension Term.
5 Real Estate Taxes and Assessments:
5.1 Payment by Landlord: During the Term of this Lease, Landlord
shall pay, as the same may become due and payable and before any fine, penalty,
interest or other charge may be added for nonpayment, all real estate taxes and
assessments, general and special, against the Premises (the "Taxes and
Assessments").
5.2 Reimbursement in Full of Taxes and Assessments:
Notwithstanding the provisions of Section 5.1, Tenant shall reimburse Landlord
for one hundred percent (100%) (the "Tenant's Share") of real estate taxes and
assessments, general and special, levied against the Premises (the "Taxes and
Assessments") for each twelve (12) month period of the Term of this Lease (a
"Lease Year"); provided, however, that Tenant shall reimburse Landlord for
assessments only to the extent that such assessments shall be attributable to
the Term of this Lease, amortized over the longest permissible term and paid in
periodic installments with other real estate taxes. Reimbursement shall be
made by Tenant to Landlord within thirty (30) days after Landlord's delivery to
Tenant of a paid tax bill showing payment in full of the Taxes and Assessments
currently due and payable, together with a calculation of Tenant's Share
thereof. In no event shall Tenant be responsible for paying any share of:
(a) any increase in taxes attributable to Landlord's sale or transfer of the
Premises (or any interest therein) during the Term of this Lease; or (b) any
income, franchise, estate, inheritance or other taxes or assessments which
shall not be denoted specifically as real estate taxes or assessments.
5.3 Right to Contest: Tenant may initiate proceedings to contest
the Taxes and Assessments. If required by law, Landlord shall join in any such
proceedings initiated by Tenant, provided that Tenant shall pay all costs and
expenses, charges, interest and penalties in connection therewith, including
reasonable costs and expenses incurred by Landlord. Tenant shall continue to
reimburse Landlord under Section 5.2 for all Taxes and Assessments which
Landlord is or becomes obligated to pay pursuant to Section 5.1 during the
pendency of any such proceedings. Upon conclusion of such proceedings, Tenant
shall be entitled to credit for Tenant's Share of any Taxes and Assessments
refunded to Landlord as a result of any such proceedings.
6 Utilities: During the Term of this Lease, Tenant shall pay
for all utility services consumed by Tenant upon the Premises, including
without limitation gas and electricity, sanitary and storm sewer, water and
telephone services. To the extent that any utility services supplied to the
Premises are
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billed directly to Landlord, Tenant shall reimburse Landlord, within thirty
(30) days after Landlord's delivery to Tenant of an invoice therefor, for that
portion of such utility services which is attributable directly to Tenant's use
of the particular utility service.
7 Possession of Premises: Tenant shall be entitled to
possession of the Premises on the date of this Lease.
8 Tenant Improvements: Subject to obtaining Landlord's written
consent for structural improvements (not to be unreasonably withheld) Tenant,
at its sole cost and expense, shall have the right, but shall not be obligated,
during the Term of this Lease to improve, alter and renovate the Premises in
any manner which Tenant deems necessary or desirable to adapt the same for the
conduct of its business operations, including, without limitation, painting,
decorating, redecorating and installing partitions, floor coverings, wall
coverings, drop ceilings and light fixtures. Tenant shall perform all work
described in this Section 8 according to the standards set forth in Section
18.1(B). Unless otherwise agreed in writing by the parties and subject to
Section 9 below, any improvements, alterations and renovations to the Premises
by Tenant pursuant to this Section 8 shall remain on the Premises upon the
expiration or earlier termination of this Lease.
9 Trade Fixtures; Personal Property: Tenant, at its sole cost
and expense, shall have the right, but shall not be obligated, to install, use,
replace, and remove its trade fixtures and personal property, such as, without
limitation, telephone, teletype and other communications equipment, machinery,
conveyor systems, modular docks, dock levelers, task lights, office furniture,
office trailers and its Roof Antenna. Upon the expiration of the Term of this
Lease or the earlier termination of this Lease, Tenant shall have the right to
remove such trade fixtures and personal property from the Premises, provided
that Tenant shall repair all damage to the Premises resulting from such
removal.
10 Maintenance and Repairs by Landlord:
10.1 General Requirements: Landlord, at its sole cost and
expense, shall perform during the Term of this Lease all necessary maintenance
and repairs with respect to all of the structure and exterior of Landlord's
Building and the other Exclusive Space including, without limitation, the roof
and roof membrane, exterior walls, foundation, supports, roof vents, and
downspouts; provided, however, that Landlord shall not be responsible for
maintenance or repair to any improvements made by Tenant.
10.2 Timely Performance: In the event of an emergency (defined
as any condition other than damage or destruction described in Section 14 or
eminent domain described in Section 16 which impairs Tenant's ability to use and
occupy the Premises for the conduct of its business operations) and Landlord's
failure to perform promptly any of Landlord's maintenance and repair obligations
as described in Section 10.1, or in a non-emergency and Landlord's failure to
perform such maintenance and repair obligations within fifteen (15) days after
Tenant's delivery to Landlord of notice of the need for any such maintenance or
repair, Tenant shall have the rights and remedies referred to in Section 17,
which Section shall be applied without the further notice and cure provisions
set forth therein.
11 Maintenance and Repairs by Tenant: Tenant, at its sole cost
and expense, shall keep the Exclusive Space in a clean and orderly condition,
repairing or replacing all broken glass, light
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bulbs or fixtures, windows, and utility systems serving the Exclusive Space as
well as performing any patching and pothole maintenance to the yard and drive
areas and performing all routine landscaping maintenance to the exterior
Exclusive Space. Tenant shall further, at its sole cost and expense, make any
other repairs and maintenance occasioned by the negligence or misconduct of
Tenant or Tenant's invitees and shall be responsible for repairs and
maintenance to Tenant's personal property. If Tenant fails to perform its
maintenance and repair obligations within (15) days after Landlord's delivery
to Tenant of notice of the need therefor, then Landlord shall have the right,
upon delivery of three (3) business days' notice to Tenant, to perform all or
part of such maintenance and repairs, at the sole cost and expense of Tenant,
and Tenant shall reimburse Landlord for such costs and expenses within thirty
(30) days after Landlord's delivery to Tenant of an invoice therefor.
12 Insurance:
12.1 Casualty Insurance; Premium Reimbursement: At all times
during the Term of this Lease, Landlord, at its initial cost and expense, shall
cause the Premises to be fully and adequately insured with a customary policy of
fire and extended coverage insurance (including flooding, vandalism, malicious
mischief and special extended perils or all risk) in an amount not less than the
full replacement cost of the Premises, with a standard inflation guard
endorsement or, in the event the parties have agreed upon a fixed amount of
insurance, with a fixed amount endorsement. Such insurance policy shall name
both Landlord and Tenant as insureds, as their interests may appear.
Notwithstanding the foregoing provisions, for each Lease Year Tenant shall
reimburse Landlord for Tenant's Share of Landlord's casualty insurance premiums
with respect to the Premises (the "Premiums") for such Lease Year. Reimbursement
shall be made by Tenant to Landlord within thirty (30) days after Landlord's
delivery to Tenant of a paid bill showing payment in full of the Premiums
currently due and payable, together with a calculation of Tenant's Share
thereof.
12.2 Public Liability Insurance: At all times during the Term of
this Lease, Tenant shall maintain in full force and effect a public liability
insurance policy for the Premises with respect to Tenant's sole negligence with
coverage limits of $2,000,000 for bodily injury and $250,000 for property
damage. Such insurance policy shall name the Landlord as an additional insured
with respect to Tenant's sole negligence, as its interests may appear, and may
be provided under Tenant's blanket insurance policy in effect from time to time.
12.3 Certificates: Any insuring party shall, upon request,
provide an insured party with adequate evidence of the continued existence of
applicable insurance coverage by certificate(s) of insurance. Each such
certificate shall contain an agreement by the insurer that such insurance
coverage shall not be modified or canceled without delivery of at least thirty
(30) days' written notice to the insured party.
13 Mutual Subrogation Waiver: In the event that any portion of
the Premises or Tenant's trade fixtures or personal property in the Premises
shall be damaged or destroyed by fire, explosion or other casualty required to
be insured against pursuant to Section 12, whether or not such damage or
destruction is caused, or claimed to be caused, by the negligence or misconduct
of Landlord or Tenant, or any of their respective officers, employees, agents,
contractors or invitees, neither Landlord, Tenant nor their respective insurance
company(ies), shall have any right of action, by way of subrogation or
otherwise, against Tenant or Landlord, or any of their respective
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officers, employees, agents, contractors or invitees, arising from such damage
or destruction, and each policy of insurance required pursuant to Section 12.1
shall provide a waiver and release by the insurer of any such right. Landlord
and Tenant further agree that during or after Tenant's occupancy of the
Premises, each will indemnify and hold the other harmless from any claim
against the other made by way of subrogation by Landlord's or Tenant's fire and
extended coverage insurance carrier(s).
14 Damage or Destruction:
14.1 Repair and Restoration: In the event that the Premises
shall be damaged or destroyed by fire, casualty, or other risk required to be
insured against pursuant to Section 12.1 or at law, Tenant promptly shall
deliver to Landlord notice thereof. Unless terminated pursuant to Section 14.2,
this Lease shall remain in full force and effect, and Landlord, at its sole cost
and expense, shall promptly repair the damage or destruction and restore the
Premises to substantially that condition existing immediately prior to such
damage or destruction. If Tenant remains in occupancy of the Premises, Landlord
shall exercise such repair and restoration efforts in a manner so as not to
interfere unreasonably with the use and occupancy of the Premises by Tenant for
the conduct of its business operations. Until the completion of Landlord's
repair and restoration pursuant to this Section 14.1, Tenant's obligation to pay
Rent and other amounts payable by Tenant hereunder shall be abated as of the
date of the damage or destruction in proportion to the extent that the value of
the Premises for the use and occupancy thereof by Tenant for the conduct of its
business operations shall be reduced, in Tenant's reasonable judgment.
14.2 Rights of Termination: Landlord's and Tenant's respective
rights to terminate this Lease upon the occurrence of certain damage or
destruction shall be governed as follows:
(A) If the Premises shall be damaged or destroyed to the extent of
more than fifty percent (50%) of the full replacement cost thereof, then either
Landlord or Tenant may elect to terminate this Lease by delivery of notice to
the other within thirty (30) days after the date of such damage or destruction;
or
(B) If any portion of the Premises shall be rendered untenantable, in
Tenant's reasonable judgment, for the use and occupancy thereof by Tenant for
the conduct of its business operations as a result of any damage or
destruction, or if Tenant reasonably shall anticipate that the repair and
restoration of any such damage or destruction shall not be completed within
sixty (60) days after the date of the damage or destruction and Landlord shall
not have provided Tenant with temporary substitute premises acceptable to
Tenant, in Tenant's reasonable judgment, then Tenant may elect to terminate
this Lease by delivery of notice to Landlord within thirty (30) days after the
date of such damage or destruction; and
(C) Upon delivery of any notice pursuant to Section 14.2(A) or
14.2(B), this Lease shall terminate as of the date of the damage or destruction
unless otherwise provided in such notice, and Tenant shall have no further
liabilities or obligations hereunder other than to pay Rent accrued hereunder
as of the date of such termination.
15 Eminent Domain:
15.1 Repair and Restoration: In the event that any portion of
the Premises shall be taken or threatened to be taken under the power of eminent
domain or settlement in lieu thereof for any
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public or quasi-public use, Landlord promptly shall deliver to Tenant notice
thereof. Unless terminated pursuant to Section 15.2, this Lease shall remain
in full force and effect, and Landlord, at its sole cost and expense, shall
repair the damage and restore the Premises so as to constitute the remaining
portion thereof a complete architectural unit. If Tenant remains in occupancy
of the Premises, Landlord shall exercise such repair and restoration efforts in
a manner so as not to interfere unreasonably with the use and occupancy of the
Premises by Tenant for the conduct of its business operations. Until the
completion of Landlord's repair and restoration pursuant to this Section,
Tenant's obligation to pay Rent and other amounts payable by Tenant hereunder
shall be abated as of the date on which possession of the Premises or portion
thereof shall be required by the public or quasi-public body in proportion to
the extent that the value of the Premises for the use and occupancy thereof by
Tenant for the conduct of its business operations shall be reduced, in Tenant's
reasonable judgment.
15.2 Rights of Termination: If, as a result of any of the events
for which notice is required to be given to Tenant under Section 15.1, the
Premises no longer shall be fit and suitable for the use and occupancy thereof
by Tenant for the conduct of its business operations by reason of a material
reduction of any portion of the Exclusive Space, Tenant may elect to terminate
this Lease by delivery of notice to Landlord. In such event, this Lease shall
terminate effective as of the later to occur of (a) the date of actual vacation
of the Premises by Tenant, or (b) a date not more than 60 days in advance of the
date on which possession of the Premises is required by the public or
quasi-public body; and thereupon Tenant shall have no further liabilities or
obligations hereunder other than to pay Rent accrued hereunder as of such date
of termination.
16 Tenant's Default; Landlord's Remedies:
16.1 Tenant Default: Each of the following events shall
constitute a default of this Lease by Tenant (a "Tenant Default"):
(A) The failure of Tenant to pay any Rent or other amount payable by
Tenant hereunder within five (5) days after the date on which Tenant receives
from Landlord notice specifically describing such failure; and
(B) Subject to cure by Landlord under Section 11, the failure of
Tenant to perform any other term, condition, covenant or obligation of this
Lease on the part of Tenant to be performed within thirty (30) days after the
date on which Tenant receives from Landlord notice specifically describing such
failure; provided, however, that if Tenant shall exercise in good faith
diligent efforts within such thirty (30) day period to cure the failure
specified in the notice but shall not be able to do so because of a cause or
causes beyond the control of Tenant, then any such failure shall not be
considered a Tenant Default so long as Tenant shall continue to exercise in
good faith such diligent efforts to cure such failure and shall do so within a
reasonable period of time.
16.2 Landlord's Remedies: In the event of a Tenant Default,
Landlord shall have the following rights and remedies which shall be exercisable
three (3) business days after the date on which Tenant receives from Landlord
additional notice with respect thereto:
(A) To enter upon the Premises and again have, repossess and enjoy
the same as if this Lease had not been made, and all terms, conditions,
covenants and obligations of this Lease on the
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part of Landlord to be performed shall cease and terminate, without prejudice,
however, to the right of Landlord to recover from Tenant all Rent accrued
hereunder as of the date of such entry by Landlord; and
(B) To relet the Premises for the remainder of the then existing
Primary Term or Extension Term for the highest rent reasonably obtainable and
to recover from Tenant any deficiency, as it accrues, between the amount so
obtained and Rent payable by Tenant hereunder; provided, however, that Landlord
shall be obligated in such event to exercise in good faith diligent efforts to
mitigate its damages by reletting the Premises for the highest rent reasonably
obtainable under the circumstances; and
(C) To pursue all other rights and remedies to which Landlord may be
entitled hereunder, at law or in equity.
17 Landlord's Default; Tenant's Remedies: In the event of any
failure by Landlord to perform any term, condition, covenant or obligation of
this Lease on the part of Landlord to be performed within fifteen (15) days
after the date on which Landlord receives from Tenant notice specifically
describing such failure, Tenant (in addition to all other remedies to which
Tenant may be entitled under this instrument or at law or in equity) may cure
such default by Landlord on behalf of, and at the sole cost and expense of,
Landlord, including a supervision charge of twenty percent (20%) of all costs
and expenses incurred by Tenant. Landlord shall reimburse Tenant for its costs
and expenses in connection therewith within thirty (30) days after Tenant's
delivery to Landlord of an invoice therefor, failing which Tenant may offset
such costs and expenses against any Rent and other amounts payable by Tenant
hereunder. The foregoing notwithstanding, if Landlord shall exercise in good
faith diligent efforts within such fifteen (15) day period to cure the failure
specified in the notice but shall not be able to do so because of acts of God,
riots, or labor strikes, then any such failure shall not be considered a default
of this Lease by Landlord so long as Landlord shall continue to exercise in good
faith such diligent efforts to cure such failure and shall do so within a
reasonable period of time.
18 Warranties and Representations:
18.1 Compliance with Laws:
(A) Landlord warrants and represents that Landlord's maintenance and
repairs under Section 10.1 shall be done in a good and workmanlike manner and
comply with all laws, ordinances and requirements, including without limitation
the procuring of all building and other permits, licenses, approvals and
certificates of occupancy and the observance of applicable building, zoning and
other code requirements of governmental authorities with competent
jurisdiction. Notwithstanding any provision of this Lease to the contrary, if
any improvements, alterations or renovations to the Premises shall be required
by any law, ordinance or requirement of any governmental authority with
competent jurisdiction, then Landlord, at its sole cost and expense, shall
perform such improvements, alterations or renovations in a timely manner.
(B) Tenant represents and warrants that Tenant's maintenance and
repairs and its use and occupancy of the Premises for the conduct of its
business operations shall comply with all applicable laws, ordinances and
requirements of governmental authorities with competent jurisdiction; provided,
however, that: (i) no alleged violation by Tenant of any such law, ordinance
or requirement shall be deemed to constitute a Tenant Default so long as Tenant
shall contest, in good faith, the validity of such
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law, ordinance or requirement or the existence of the alleged violation
thereof; and (ii) Tenant shall not be obligated to incur costs or expenses for
improvements, alterations or renovations to the Premises required from time to
time by any applicable law, ordinance or requirement of a governmental
authority with competent jurisdiction.
18.2 Warranty of Title: Landlord warrants and represents that
Landlord is the fee simple owner of the Premises with full authority to execute,
deliver and perform this Lease.
18.3 Fuel Tanks: Landlord warrants and represents that the
Premises do not presently contain any underground or aboveground fuel storage
tanks and related piping, venting and dispensing systems (collectively, "Fuel
Tanks") and Landlord agrees that it shall not install, cause to be installed, or
permit the installation of, any Fuel Tanks within the physical boundaries of the
Premises during the Term of this Lease. Tenant covenants that it shall not
install or cause to be installed any Fuel Tanks within the Premises during the
Term of this Lease.
18.4 Hazardous and Toxic Conditions:
(A) If a toxic or hazardous condition caused by Landlord is
discovered on the Premises, then (i) Landlord shall: (a) promptly give Tenant
written notice of such condition; and (b) immediately cause such toxic or
hazardous condition to be cleaned up and brought into compliance with
applicable laws, ordinances and requirements of governmental authorities with
competent jurisdiction, and (ii) Landlord agrees to indemnify Tenant pursuant
to the provisions of Section 20 hereof against any Losses (as defined in
Section 20) incurred by Tenant arising out of any such Landlord-caused toxic or
hazardous condition.
(B) If a toxic or hazardous condition caused by Tenant is discovered
on the Premises, then (i) Tenant shall: (a) promptly give Landlord written
notice of such condition; and (b) immediately cause such toxic or hazardous
condition to be cleaned up and brought into compliance with applicable laws,
ordinances and requirements of governmental authorities with competent
jurisdiction, and (ii) Tenant agrees to indemnify Landlord pursuant to the
provisions of Section 20 hereof against any Losses incurred by Landlord arising
out of any such Tenant-caused toxic or hazardous condition.
18.5 Broker's Commission: Landlord and Tenant each warrants and
represents for the benefit of the other that it has not dealt with any real
estate broker, finder or agent in connection with this Lease.
19 Landlord's Right of Entry: Following reasonable notice to
Tenant, Landlord may enter upon the Premises as often as Landlord may deem
reasonably necessary for the purposes of performing such maintenance and
repairs, inspecting the Premises, offering the Premises for lease (but only
during the period which commences sixty (60) days prior to the expiration of the
then existing Primary Term or Extension Term) or offering the Premises for sale.
Landlord's right of entry shall be exercised in a manner and at times such that
there shall be no unreasonable interference with the use and occupancy of the
Premises by Tenant for the conduct of its business operations.
20 Mutual Indemnification: Each party (the "Indemnitor")
agrees to indemnify, defend and hold the other party (the "Indemnitee") harmless
from and against any and all losses, damages, claims, suits, actions, judgments,
liabilities and expenses, including, without limitation, environmental damages
and remediation expenses, reasonable attorneys' fees
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<PAGE> 156
(collectively, "Losses"), arising out of, or with respect to: (a) any breach
of any warranty or representation or any covenant or agreement of the
Indemnitor under this Lease; or (b) any injury to, or death of, persons and/or
any damage to, or destruction of, property, on or about the Premises and
attributable to the negligence or misconduct of the Indemnitor, or its
officers, employees, agents, contractors or invitees, except for any such
breach, any injury or death or any damage or destruction arising out of, or
with respect to, the negligence or misconduct of the Indemnitee, or any of its
officers, employees, agents, contractors or invitees, or as otherwise
specifically provided in this Lease; provided, however, that the
indemnification obligation created by this Section shall be expressly
conditioned upon the Indemnitee (i) delivering to the Indemnitor prompt notice
of any event giving rise to such indemnification obligation and (ii) providing
the Indemnitor the opportunity to defend itself and the Indemnitee from and
against any Losses.
21 Transfers:
21.1 Assignment and Subletting: Except as provided in this
Section 21.1, Tenant shall not assign this Lease nor sublet any portion of the
Premises, without the consent of Landlord, which consent shall not be
unreasonably withheld or delayed; provided, however, that Tenant shall have the
right, without the consent of Landlord, to assign this Lease or sublet any
portion of the Premises to Roadway Services, Inc., any of its wholly-owned
subsidiaries or any successor by merger or purchase of assets. Absent the
written agreement of Landlord, no assignment of this Lease or subletting of all
or any portion of the Premises shall relieve Tenant of any of the terms,
conditions, covenants and obligations of this Lease on the part of Tenant to be
performed.
21.2 Notice of Sale: If Landlord desires to sell the Premises,
Landlord shall inform Tenant by notice under Section 26 hereof. In the event
Tenant does not purchase such space and Landlord, at any time before the
expiration or earlier termination of the Term of this Lease, shall transfer,
assign or otherwise convey to a third party any portion of its right, title and
interest in and to the Premises, Landlord shall deliver to Tenant notice of the
name and address of the purchaser of such right, title or interest at least ten
(10) days prior to the closing of any such transaction.
22 Holding Over: If Tenant shall continue to occupy the
Premises after the expiration of the Term of this Lease or the earlier
termination of this Lease, then Tenant shall be deemed to be occupying the
Premises as a tenant from month-to-month, subject to the terms and conditions of
this Lease; provided, however, that either party shall have the right to
terminate such month-to-month tenancy upon delivery of thirty (30) days' notice
to the other.
23 Quiet Enjoyment: Landlord covenants and agrees that Tenant
shall have the peaceful and quiet possession and enjoyment of the Premises
(subject to all mortgages and other matters to which this Lease is or shall
become, subordinate in accordance with the provisions of Section 24) for the
conduct of its business operations during the Term of this Lease, without
hindrance by Landlord or any party whatsoever.
24 Subordination and Attornment: Tenant covenants and agrees,
on the terms and conditions provided in this Section 24, that this Lease shall
be subordinate to any institutional mortgage or deed of trust that hereafter
shall encumber the Premises, provided that each mortgagee or beneficiary shall
execute and deliver to Tenant a non-disturbance, attornment and
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subordination agreement stating (in addition to other reasonable terms, if any)
in substance that (i) if Tenant is not in default hereunder, the right of
possession of Tenant to the Premises shall not be affected or disturbed by any
mortgagee in the exercise of any of its rights under a mortgage or the note
secured thereby, and any sale of the Premises pursuant to the exercise of any
rights and remedies under a mortgage or otherwise shall be made subject to
Tenant's right of possession to the Premises under this Lease; and (ii) Tenant
shall attorn to any mortgagee or purchaser at a foreclosure sale (a
"Purchaser") upon acquisition of title to the Premises by a mortgagee or
Purchaser and notice to Tenant thereof, and this Lease shall continue in full
force and effect between Tenant and such mortgagee or Purchaser. Upon Tenant's
receipt and approval of such a non-disturbance/attornment agreement from a
mortgagee or beneficiary from time to time, Tenant covenants and agrees to
attorn to such mortgagee or beneficiary upon foreclosure.
25 Surrender of Premises: Upon the expiration or earlier
termination of the Term of this Lease, Tenant shall deliver up and surrender the
Premises to Landlord in as good order and condition as upon the date of this
Lease, subject to: (a) Tenant's improvements, alterations and renovations to
the Premises; (b) normal wear and tear; (c) damage by fire, explosion or other
casualty; (d) maintenance, repairs and restoration for which Tenant shall not be
responsible hereunder; and (e) Tenant's removal of its trade fixtures.
26 Notices; Computation of Time: For the purposes of payments
of Rent and other amounts payable by Tenant to Landlord hereunder all notices to
Tenant shall be sent to:
----------------------------
----------------------------
----------------------------
----------------------------
FAX #: ( ) -
--- --- ----
For the purposes of all other notices and communications between the
parties, the addresses of Landlord and Tenant shall be as follows:
Landlord:
----------------------------
----------------------------
----------------------------
----------------------------
FAX#: ( ) -
--- --- ----
Tenant:
----------------------------
----------------------------
----------------------------
----------------------------
FAX#: ( ) -
--- --- ----
Any notices and other communications to be delivered by either party to the
other pursuant to this Lease shall be in writing and shall be deemed delivered
as follows, except as otherwise specifically provided in this Lease: (a) when
hand delivered or telecopied (provided that telecopied notices must be
confirmed within any applicable time period plus two (2) days by one of the
following methods of notice); (b) one (1) business day after mailing by Federal
Express or other overnight courier service; or (c) three (3) business days
after deposit (or, in the case of any notices sent by Tenant to Landlord for
the purpose of exercising rights and options to extend the Primary Term, upon
deposit) in the United States mail by registered or certified mail, postage
prepaid, return receipt requested, addressed to the party to be charged with
notice at the above-recited address or the
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above-recited telecopier number or such other address or telecopier number as
either party from time to time may designate by notice delivered to the other;
provided, however, that no notice of change of address or telecopier number
shall be deemed given until received by the party to be notified. Except as
otherwise specifically provided herein, in the computation of any period of
time which shall be required or permitted hereunder or under any law for any
notice or other communication or for the performance of any term, condition,
covenant or obligation, the day from which such period runs shall be excluded
and the last day of such period shall be included unless it is a Saturday,
Sunday or legal holiday, in which case the period shall be deemed to run until
the end of the next day which is not a Saturday, Sunday or legal holiday.
27 Recording: If Landlord or Tenant requests, the parties
shall execute and acknowledge a short form of lease for recording purposes,
which short form of lease shall be recorded at the expense of the party
requesting the same, which party shall pay any documentary transfer tax or other
special tax or assessment associated with, or triggered by, such recording.
28 Signs: Tenant shall have exclusive sign rights for the
Premises, exterior and interior, and shall have the right to erect and display
signs on the Premises and on such other areas of the Premises as Tenant
reasonably may request, subject only to compliance with applicable laws,
ordinances and requirements of governmental authorities with competent
jurisdiction.
29 Dispute Resolution: Any and all disputes between Landlord
and Tenant which may arise under this Lease shall be resolved in accordance with
the Alternative Dispute Resolution Agreement of even date herewith by and
between Roadway Services, Inc. (Tenant's parent corporation) and Landlord.
30 Miscellaneous:
(A) This Lease: (i) contains the entire agreement between the
parties and no promise, representation, warranty, covenant, agreement, or
understanding not specifically set forth in this Lease shall be binding upon
either party; (ii) may not be amended, modified, or supplemented in any manner
except in writing signed by the parties; (iii) shall be construed and governed
under the laws of the state where the Premises are located; (iv) shall not be
construed more stringently in favor of one party against the other regardless
of which party has prepared the same; (v) shall be binding upon, and inure to
the benefit of, the parties and their respective heirs, executors,
administrators, personal and legal representatives, successors, and permitted
assigns; (vi) shall not be binding until this Lease shall be executed and
delivered by the parties, to each other; and (vii) may be executed in counter
parts, each of which shall be deemed an original, but which all together
constitute the same instrument.
(B) Any person executing this Lease on behalf of a corporation,
trust, or partnership represents and warrants that such person is authorized to
execute and deliver this Lease on behalf of the entity.
(C) The failure of either party to insist upon strict performance
of any provision of this Lease shall not be deemed a waiver of any rights or
remedies at any other time.
(D) The exhibits attached hereto are incorporated herein by this
reference.
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<PAGE> 159
(E) In the event of any conflict between this Lease and an
exhibit, the exhibit shall control.
(F) Headings are for convenience only and are not a part of this
Lease.
(G) The invalidity or unenforceability of any term or provision
shall not affect the validity or enforceability of the remainder of this Lease.
(H) The parties agree to obtain, execute, deliver, and file such
additional documents, instruments, and consents as may be reasonably requested
by either party, at the sole cost and expense of the requesting party, in order
to fully effectuate the terms and conditions of this Lease.
31 Existing Lease: The parties acknowledge that the Premises
currently are being leased by Landlord to Tenant pursuant to a Master Lease
Agreement dated as of May 3, 1993 (the "Existing Lease"). As of the date of
this Lease, the Existing Lease shall terminate and neither Landlord nor Tenant
shall have any further liabilities or obligations under the Existing Lease
except for any which may have accrued thereunder prior to the date of this
Lease.
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<PAGE> 160
IN WITNESS WHEREOF, the parties have executed this Lease as of
the date first stated on page one hereof.
Signed and acknowledged LESSOR
in the presence of:
------------------------------------
By:
- ----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
- ----------------------------------- Its:
--------------------------------
Name:
------------------------------
Signed and acknowledged LESSEE
in the presence of:
------------------------------------
By:
- ----------------------------------- ---------------------------------
Name: Name:
------------------------------ -------------------------------
- ----------------------------------- Its:
--------------------------------
STATE OF )
--------) SS.
COUNTY OF )
--------
Before me, a Notary Public in and for said County and State,
personally appeared the above-named _____________________, by
_________________________, its ___________________________, who acknowledged
that ___ did sign the foregoing instrument on behalf of the corporation, and
that the same is the free act and deed of the corporation and ___ free act and
deed as such officer and as an individual.
IN WITNESS WHEREOF, I hereunto have set my hand and seal at
________, Ohio this ____ day of December, 1995.
-----------------------------
Notary Public
STATE OF )
--------) SS.
COUNTY OF )
--------
Before me, a Notary Public in and for said County and State,
personally appeared the above-named _____________________, by
_________________________, its ___________________________, who acknowledged
that ___ did sign the foregoing instrument on behalf of the corporation, and
that the same is the free act and deed of the corporation and ___ free act and
deed as such officer and as an individual.
IN WITNESS WHEREOF, I hereunto have set my hand and seal at
________, Ohio this ____ day of December, 1995.
-----------------------------
Notary Public
<PAGE> 161
ANNEX 10
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT ("Agreement") is made this 2nd day of
January, 1996 by and between Roadway Express, Inc., a Delaware corporation
("REX"), on its own behalf and on behalf of its direct and indirect subsidiaries
(the "REX Subsidiaries"), and Roadway Services, Inc., an Ohio corporation
("RSI"), on its own behalf and on behalf of its direct and indirect subsidiaries
other than REX and the REX Subsidiaries (the "RSI Subsidiaries").
RECITALS
WHEREAS, REX is a wholly-owned subsidiary of RSI;
WHEREAS, RSI intends to distribute Common Stock, $.01 par value per
share, of REX (the "Common Stock") to shareholders of RSI (the "Distribution");
WHEREAS, immediately following the Distribution on the date of the
Distribution (the "Closing Date"), RSI will own less than 10% of the outstanding
Common Stock of REX;
WHEREAS, REX and the domestic REX Subsidiaries have been or will be
included in Consolidated Federal Income Tax Returns filed or to be filed by RSI
on behalf of Parent's Group;
WHEREAS, RSI and/or one or more RSI Subsidiaries, on the one hand, and
REX and/or one or more REX Subsidiaries, on the other hand, have been or will be
included in one or more Unitary, Consolidated, or Combined Tax Returns;
<PAGE> 162
AND WHEREAS, the parties hereto desire to allocate responsibility for
the payment of federal, state, local, and foreign Taxes attributable, allocable,
or apportionable to REX and/or the REX Subsidiaries, on the one hand, and/or RSI
and/or the RSI Subsidiaries, on the other hand, for the Period in which the
Distribution occurs and for Periods prior and subsequent to such Period, provide
for the consequences of post-Closing Date adjustments of such Taxes, and agree
as to related matters;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used herein the following terms, when capitalized, shall have the
following meanings:
1.1 "Affiliated Group" shall mean an "affiliated group" as defined in
section 1504(a) of the Code.
1.2 "Code" shall mean the Internal Revenue Code of 1986, as amended and
as in effect from time to time, and any law which shall have been a predecessor
or shall be a successor thereto. A reference to any section of the Code means
such section as in effect from time to time and any comparable provision of any
predecessor or successor law.
1.3 "Consolidated Income Tax Returns" shall mean all federal Tax
Returns for Income Taxes which have been or will be
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filed by RSI on behalf of Parent's Group, and "Consolidated Income Taxes" shall
mean the Taxes shown or required to be shown on such Tax Returns.
1.4 "Final Determination" shall mean, in the context of federal Income
Taxes, with respect to any issue or item for any Period, (i) a final,
unappealable decision by a court of competent jurisdiction, (ii) the expiration
of the time for assessment of Taxes or filing a claim for refund or, if a refund
claim has been timely filed, the expiration of the time for instituting suit in
respect of such refund claim, if no further adjustment to the items of income,
gain, deduction, loss, or credit for such Period may thereafter be made, (iii)
the execution of a closing agreement under section 7121 of the Code, (iv) the
acceptance by the IRS or its counsel of a tender pursuant to an offer in
compromise pursuant to section 7122 of the Code, (v) the execution of a Form
870A, or (vi) any other final and irrevocable determination of Taxes for any
Period. In the context of other Taxes, "Final Determination" shall mean, with
respect to any issue or item for any Period, any final, unappealable, and
irrevocable determination of Taxes for such Period.
1.5 "IRS" shall mean the United States Internal Revenue Service or any
successor thereto.
1.6 "Parent's Group" shall mean any Affiliated Group including RSI or
any predecessor or successor thereof.
1.7 When used in the context of federal income taxes, "Period" shall
mean any taxable year or other period which is
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treated as a taxable year (including any Short Period) for purposes of the Code.
When used in the context of any other Taxes, "Period" shall mean any taxable
year or other period with respect to which any such Taxes may be imposed under
any applicable statute, rule, or regulation.
1.8 "Regulations" shall mean the Treasury regulations in effect from
time to time under the Code.
1.9 "Short Period" shall mean, with respect to REX and the domestic REX
Subsidiaries, any Period beginning on January 1 of any year and ending at the
end of the Closing Date in the same year.
1.10 "State Income Taxes" shall mean all Taxes measured on or by income
imposed by any State of the United States of America or political subdivision
thereof and shall include State Taxes denominated or in the nature of franchise
Taxes including, but not limited to, the Michigan Single Business Tax.
1.11 "Tax" and "Taxes" shall mean all income taxes (including federal
income taxes, State income taxes, and foreign income taxes imposed under
Subtitle A of the Code or similar laws of any taxing authority having effect
prior to or on the Closing Date) (referred to herein as "Income Taxes"), payroll
and employee withholding taxes (imposed under Chapters 21 through 24 of the Code
or any similar or comparable payroll and employee withholding taxes (including
disability withholding taxes imposed by the laws of any taxing authority) having
effect prior to or on the Closing Date), other domestic and foreign withholding
taxes, sales and use taxes, excise taxes, real and personal property
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taxes, and any other governmental imposition generally referred to as or in the
nature of a tax, whether arising before, on, or after the Closing Date. Except
as may be otherwise provided in Section 3.1(b) or Section 3.2(b), below, any
reference in this Agreement to a particular type of Tax (or refund thereof)
enumerated in this Section 1.11 shall also be deemed to refer to any interest,
additions to Tax, or penalties that may be payable in respect thereof.
1.12 "Tax Returns" shall mean all reports, estimates, information
statements, and returns relating to, or required to be filed in connection with,
any Taxes pursuant to the statutes, rules and regulations of any federal, state,
local, or foreign taxing authority.
1.13 "Unitary Amount" shall have the meaning set forth in Section
3.2(a).
1.14 "Unitary, Consolidated, or Combined Tax Returns" shall mean any
State Income Tax Return or other Tax Return which has been or will be filed in a
Unitary State by RSI or any RSI Subsidiary which computes the Taxes (the
"Unitary, Consolidated, or Combined Taxes") payable to such Unitary State in
respect of the operations or assets of more than one corporation based on
so-called "combined or consolidated reporting" or apportionment of business
income under the so-called "unitary business" concept.
1.15 "Unitary State" shall mean any State of the United States of
America which, for the Period in question, shall permit or require the
computation of Taxes payable to it in respect of
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the operations or assets of more than one corporation based on so-called
"combined or consolidated reporting" or apportionment of business income under
the so-called "unitary business" concept.
ARTICLE II
PREPARATION OF RETURNS, CONTROVERSIES
2.1 Returns and Controversies--Consolidated Income Tax Returns and
Estimates.
(a) Tax Returns and Payment. RSI shall have exclusive authority to
report for Consolidated Income Tax purposes the operations of Parent's Group,
including the operations of REX and the domestic REX Subsidiaries for any Period
ending at the end of or before the Closing Date. Subject to the terms of this
Agreement, RSI shall be responsible for the timely filing of, and shall be
liable, and shall indemnify REX and the REX Subsidiaries, for the full and
timely payment of all amounts shown to be due on, Consolidated Income Tax
Returns and estimates of Parent's Group for such Periods; provided, however,
that REX shall be responsible for providing RSI with all information reasonably
required by RSI with respect to the operations and assets of REX and the
domestic REX Subsidiaries so as to permit RSI to prepare and file such
Consolidated Income Tax Returns and estimates and to pay such Consolidated
Income Taxes and estimates on a timely basis. In calculating amounts to be shown
as due on the Consolidated Income Tax Return which includes any Short Period,
all items of REX and each domestic REX Subsidiary
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(including items of REX and each domestic REX Subsidiary triggered by reason of
the Distribution) shall be taken into account in accordance with Regulations
Section1.1502-76(b) and no election shall be made under Regulations
Section1.1502-76(b)(2)(ii) or Regulations Section1.1502-76(b)(2)(iii).
(b) Controversies. RSI shall have exclusive authority to represent REX
and the domestic REX Subsidiaries before the IRS or any other governmental
agency or authority or any court regarding Consolidated Income Taxes and
estimates for Periods covered by Consolidated Income Tax Returns and estimates
referred to in section 2.1(a) above, including, but not limited to, (i) the
exclusive control of any response to any examination by the IRS or any other
taxing authority and (ii) the exclusive control over any contest of any issue
through a Final Determination, including, but not limited to (A) whether and in
what forum to conduct such contest and (B) whether and on what basis to settle
such contest.
RSI shall timely notify REX of any correspondence and Tax controversies
with any taxing authority relating to items of REX or any domestic REX
Subsidiary and will promptly provide REX with copies of all such correspondence.
Subject to RSI's exclusive authority as provided for herein, REX shall have the
right to consult with RSI with respect to the handling of any such
correspondence or controversies. REX shall exercise such right, if at all, on a
timely basis. RSI shall permit REX to attend any hearing or other proceedings
relating to any such controversies.
7
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2.2 Returns and Controversies -- State Income Tax and Other Tax Returns
and Estimates in Unitary States.
(a) Tax Returns and Payments. RSI or its delegee RSI Subsidiary shall
have exclusive authority to report, for purposes of Unitary, Consolidated, or
Combined Tax Returns, the operations and assets of RSI and/or any RSI
Subsidiary, on the one hand, and REX and/or any REX Subsidiary, on the other
hand. Subject to the terms of this Agreement, RSI shall be responsible for the
timely filing of, and shall be liable, and shall indemnify REX and the REX
Subsidiaries, for the full and timely payment of all amounts shown to be due on,
such Unitary, Consolidated, or Combined Tax Returns and estimates; provided,
however, that REX shall be responsible for providing RSI or its delegee with all
information reasonably required by RSI or its delegee with respect to the
operations and assets of REX and/or any REX Subsidiary so as to permit RSI or
its delegee to prepare and file such Unitary, Consolidated, or Combined Tax
Returns and estimates and to pay such Unitary, Consolidated, or Combined Taxes
and estimates on a timely basis.
(b) Controversies. RSI or its delegee shall have exclusive authority to
represent REX and the REX Subsidiaries before any governmental agency or any
court regarding Unitary, Consolidated, or Combined Tax Returns and estimates for
Periods covered by any Unitary, Consolidated, or Combined Returns and estimates
referred to in section 2.2(a) above, including, but not limited to, (i) the
exclusive control of any response to any examination by any taxing authority,
and (ii) the exclusive
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<PAGE> 169
control over any contest of any issue therein through a Final Determination,
including, but not limited to (A) whether and in what forum to conduct such
contest and (B) whether and on what basis to settle such contest.
RSI or its delegee shall timely notify REX of any correspondence and
Tax controversies with any taxing authority relating to items of REX or any REX
Subsidiary and will promptly provide REX with copies of all such correspondence.
Subject to RSI's exclusive authority as provided for herein, REX shall have the
right to consult with RSI with respect to the handling of any such
correspondence or controversies. REX shall exercise such right, if at all, on a
timely basis. RSI or its delegee shall permit REX to attend any hearing or other
proceedings relating to such controversies.
2.3 Returns and Controversies--All other Taxes.
(a) Tax and Information Returns. Except as otherwise provided herein or
as the parties may otherwise agree, REX shall have exclusive authority with
regard to all Taxes of REX and the REX Subsidiaries and REX shall be responsible
for the correct and timely filing of, and shall be liable for the full and
timely payment of, all such Taxes.
(b) Controversies. Except as otherwise provided herein or as the
parties may otherwise agree, REX, at its expense, shall have exclusive authority
to represent itself and the REX Subsidiaries before the IRS or any other taxing
authority or any court regarding the Tax consequences of the operations and
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assets of REX and the REX Subsidiaries with respect to all Taxes covered by
Section 2.3(a) above.
ARTICLE III
COMPUTATIONS AND PAYMENTS OF TAXES; INDEMNIFICATIONS
3.1 Consolidated Income Taxes.
(a) Initial Computation. For each Period, including any Short Period,
for which REX is included in a Consolidated Income Tax Return of Parent's Group,
the Tax liability of REX and each domestic REX Subsidiary shall be calculated in
accordance with Regulations Section1.1552-1(a)(2) and, using a percentage of
100%, Regulations 1.1502-33(d)(3). See Example (2) of Regulations
Section1.1502-33(d)(6). Any resulting positive amount (i.e., an amount owed by
REX or any domestic REX Subsidiary) is hereinafter referred to as a "REX
Payable." Any resulting negative amount (i.e., an amount owed to REX or any
domestic REX Subsidiary) is hereinafter referred to as a "REX Receivable." The
REX Payables and the REX Receivables for REX and each domestic REX Subsidiary
for each such Period shall be aggregated, and the resulting number, positive
(i.e., REX Payables exceed REX Receivables) or negative (i.e., REX Receivables
exceed REX Payables), is hereinafter referred to as the "Aggregate." If the
Aggregate is a positive number, REX shall pay the Aggregate to RSI to the extent
not previously paid by REX or a REX Subsidiary. If the Aggregate is a negative
number, RSI shall pay the Aggregate to REX to the extent not previously paid to
REX or a REX Subsidiary.
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(b) Subsequent Adjustments; Indemnifications. RSI shall be responsible
and liable, and shall indemnify REX and its Subsidiaries, for any and all
increases in Consolidated Income Taxes and shall be entitled to any refund of
any and all decreases in Consolidated Income Taxes which may be determined
pursuant to a Final Determination and which are allocable to RSI or any domestic
RSI Subsidiary for all Periods ending before the Closing Date and for any Period
which includes the Short Period. REX shall be responsible and liable, and shall
indemnify RSI and the RSI Subsidiaries, for any and all increases (including any
increase arising from a loss of foreign Tax credits due to any reduction in
foreign Taxes of REX or any REX Subsidiary), and shall be entitled to any
refunds, of Consolidated Income Taxes for all Periods ending before the Closing
Date and for any Period which includes the Short Period which are allocable to
REX or any REX domestic Subsidiary. For purposes of determining the amount of
any Consolidated Income Tax increases or refunds that are allocable to REX or
any domestic REX Subsidiary, on the one hand, or to RSI or any domestic RSI
Subsidiary, on the other hand, the amounts computed under Section 3.1(a) above
shall be recomputed to take into account all adjustments made in accordance with
the Final Determination. REX shall also be responsible and liable, and shall
indemnify RSI and the RSI Subsidiaries, for any and all interest, additions to
Tax, and penalties with respect to any and all increases which are allocable to
REX or any REX Subsidiary except to the extent (and until) it is determined,
pursuant to the Alternative Dispute Resolution Agreement (executed by the
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parties in connection with the Distribution) as a result of a submission by REX,
that equity requires that RSI pay such interest, additions to Tax, and/or
penalties.
3.2 Unitary, Consolidated, or Combined Taxes.
(a) Tax Returns. For any Period during which REX or any REX Subsidiary
is included in a Unitary, Consolidated, or Combined Tax Return filed or to be
filed by RSI or its delegee pursuant to Section 2.2(a) above, RSI or its delegee
shall compute for each Unitary State for such Period (i) the total or "combined"
income, loss, or other taxable amounts for the Period for which such Unitary,
Consolidated, or Combined Tax Return was or is to be filed, (ii) the amount of
Tax due with respect to the amounts computed under (i) above, and (iii) the
amount of such Tax as is properly apportioned to REX or any REX Subsidiary for
such Period (the "Unitary Amount"). All such computations shall be made on a
basis consistent with the computations of such amounts in prior Tax Returns for
the respective Unitary States except to the extent otherwise required by the
laws, rules, or regulations of the respective states or other applicable
authority or as a result of a change in factual circumstances. RSI or its
delegee shall notify REX of the Unitary Amount, and the computations thereof,
for each of REX and each REX Subsidiary for each Unitary State for each such
Period. REX shall pay to RSI, or RSI shall pay to REX, amounts with respect to
all Unitary States and all applicable Periods in accordance with the principles
of Section 3.1(a) above.
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(b) Subsequent Adjustments; Indemnifications. RSI shall be responsible
and liable, and shall indemnify REX and its Subsidiaries, for any and all
increases in Unitary, Consolidated, or Combined Taxes and shall be entitled to
any refund of any and all decreases in Unitary, Consolidated, or Combined Taxes
for any Period referred to in Section 3.2(a) above which may be determined
pursuant to a Final Determination and which are allocable to RSI or any RSI
Subsidiary. REX shall be responsible and liable, and shall indemnify RSI and the
RSI Subsidiaries, for any and all increases and shall be entitled to any refunds
of Unitary, Consolidated, or Combined Taxes for any Period referred to in
Section 3.2(a) above which may be determined pursuant to a Final Determination
and which are allocable to REX or any domestic REX Subsidiary. For purposes of
determining the amount of any Unitary, Consolidated, or Combined Tax increases
or refunds that are allocable to REX or any REX Subsidiary, on the one hand, or
to RSI or any RSI Subsidiary, on the other hand, RSI or its delegee shall
recompute the Unitary Amount for the Unitary State for the Period involved in
the manner provided in Section 3.2(a) above to take into account all adjustments
made in accordance with the Final Determination. REX shall also be responsible
and liable, and shall indemnify RSI and the RSI Subsidiaries, for any and all
interest, additions to Tax, and penalties with respect to any and all increases
which are allocable to REX or any REX Subsidiary except to the extent (and
until) it is determined, pursuant to the Alternative Dispute Resolution
Agreement (executed by the parties in connection with
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the Distribution) as a result of a submission by REX, that equity requires that
RSI pay such interest, additions to Tax, and/or penalties.
3.3 All Other Taxes. REX shall be responsible and liable for, and shall
indemnify and hold RSI and the RSI Subsidiaries harmless from, any increases in,
and shall be entitled to any refund resulting from any decreases in, any and all
Taxes of REX or any REX Subsidiary described in Section 2.3(a) above.
3.4 Time of Payment. Any amounts to be paid pursuant to Section 3.1(a)
or Section 3.2(a) above or Section 5.3 below shall be paid and made current not
less than 5 days before the applicable Tax Return is due. Amounts owed by either
party hereto in respect of Tax refunds received by such party to which the other
party is entitled hereunder shall be paid by the party receiving the refund to
the other party within 5 days after the receipt or credit of such refund, and
amounts owed by either party hereto in respect of Tax increases (including any
Tax increases under Section 5.3 or Section 5.4 below) shall be paid by such
party to the other party within 30 days after the Final Determination with
respect thereto.
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ARTICLE IV
COOPERATION BY THE PARTIES
4.1 Record Retention. RSI and REX agree that all Tax records within the
possession of either shall be retained for as long as they may be material.
4.2 Cooperation re Tax Return Filings and Controversies.
(a) In General. Each party hereto agrees that it will cooperate with
the other, and its representatives, in a prompt and timely manner, in connection
with (i) the preparation and filing of, and (ii) any administrative or judicial
proceeding involving, any Tax Return filed or required to be filed hereunder by
RSI or its delegee which includes REX or any REX Subsidiary. Such cooperation
shall include, but not be limited to, (i) the execution and delivery to RSI or
its delegee by REX and/or the REX Subsidiaries of any power of attorney required
to allow RSI and its counsel to represent REX and/or any REX Subsidiary in any
controversy which RSI shall have the right to control pursuant to Section 2.1(b)
or Section 2.2(b) above and (ii) making available to the other party, during
normal business hours, all books, records (including, but not limited to, work
papers and schedules), information, officers, and employees (without substantial
interruption of employment) reasonably requested and necessary or useful in
connection with any Tax inquiry, audit, investigation, dispute, litigation, or
other matter. Notwithstanding the foregoing, neither party shall be required to
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furnish to the other federal Income Tax Returns or drafts thereof (except as
otherwise expressly provided herein or as is reasonably necessary to implement
the provisions of Section 5.2 below), for any Period, except that RSI or its
delegee shall furnish to REX the portions of such Tax Returns reporting the
operations of REX and/or any REX Subsidiary and the related portions of all
reports relating to the examination by the IRS or any other governmental agency
or taxing authority of such Tax Returns.
(b) Draft Consolidated Income Tax Return. In furtherance of Section
2.1(a) above, RSI shall prepare and, not less than 15 days before filing,
furnish to REX draft federal (and, to the extent applicable, state) income Tax
Returns reporting the operations and assets of REX and the REX Subsidiaries for
1995 and for any Short Period. Such draft Tax Returns shall be prepared without
regard to the items of income, gain, deduction, loss, or credit of RSI or any
RSI Subsidiary. Except as RSI may otherwise determine after consulting with REX,
all items of income, gain, deduction, loss, and credit of REX and each REX
Subsidiary shall be reported on a basis consistent with the reporting of such
items (or substantially similar items) of REX and the REX Subsidiaries for prior
Periods unless applicable law or a change in factual circumstances requires
otherwise.
(c) Draft Unitary, Consolidated, or Combined Tax Returns. In
furtherance of Section 2.2(a), above, RSI or its delegee shall prepare and, not
less than 15 days before filing, furnish to REX draft Tax Returns for each
Unitary State reporting
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the operations and assets of REX and/or each REX Subsidiary, as appropriate.
Each such draft Tax Return shall be prepared based on "combined or consolidated
reporting" or apportionment of business income under the "unitary business"
concept. Except as RSI or its delegee may otherwise determine after consulting
with REX, all items of income, gain, deduction, loss, and credit included in
such draft Tax Returns shall be reported therein on a basis consistent with the
reporting of such items (or substantially similar items) of REX and/or each such
REX Subsidiary for prior Periods unless applicable law or a change in factual
circumstances requires otherwise.
ARTICLE V
MISCELLANEOUS
5.1 Prior Tax Sharing Agreements. This Agreement terminates and
supersedes any and all other Tax sharing or Tax allocation agreements or
practices in effect between RSI and/or any RSI Subsidiary, on the one hand, and
REX and/or any REX Subsidiary on the other hand, regardless of the Period for
which such Taxes are imposed.
5.2 Carrybacks. Deductions, losses, or credits of REX or any REX
Subsidiary arising in a Period in which the entity generating them is not
included in a Consolidated Income Tax Return pursuant to Section 2.1(a) above or
a Unitary, Consolidated, or Combined Income Tax Return pursuant to Section
2.2(a) above may, under applicable law, be available for
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carryback to a Period in which the entity generating them was so included. To
the extent applicable law allows such a carryback to be waived, REX shall have
the exclusive authority to determine whether or not to waive such carryback. To
the extent the carryback is not waivable or not waived, RSI shall be entitled to
the benefits of such carryback but shall pay to REX an amount equal to the
reduction in Taxes of RSI or any RSI Subsidiary attributable to such carryback.
To the extent any such carryback causes RSI or any RSI Subsidiary to incur any
additional Tax, REX shall pay to RSI an amount equal to such additional Tax. RSI
shall cooperate, as is reasonably necessary, in the implementation of this
Section 5.2.
5.3 Taxable Inclusions. Neither REX nor any REX Subsidiary shall take
or permit to be taken any action (including, without limitation, the making of
loans from a foreign REX Subsidiary to RSI or an RSI Subsidiary or the
maintenance of excess passive assets under section 956A of the Code by any
foreign REX Subsidiary) which may result in dividend income or other taxable
inclusion to RSI or any RSI Subsidiary for Tax purposes. REX will compensate RSI
for any such dividend income or other taxable inclusion in an amount equal to
the additional Taxes owed by RSI or any RSI Subsidiary as a result of any such
inclusion.
5.4 Foreign Taxes. Neither REX nor any REX Subsidiary shall take any
action regarding foreign Taxes with respect to any Period ending before or which
includes the Closing Date without consulting RSI. REX shall timely notify RSI of
any
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correspondence and Tax controversies with any foreign taxing authority relating
to REX or any REX Subsidiary and will promptly provide RSI with copies of all
such correspondence. RSI shall have the right to consult with REX with respect
to the handling of any such correspondence or controversies. RSI shall exercise
such right, if at all, on a timely basis. REX shall permit RSI to attend any
hearing or other proceedings relating to any such controversies. Should any
change in the liability of REX or any REX Subsidiary for any foreign Taxes occur
which affects liability for Taxes with respect to any Tax Return filed pursuant
to Section 2.1(a) or Section 2.2(a) above, a calculation consistent with the
principles of Section 3.1 or Section 3.2 above, as the case may be, shall
determine the appropriate settlement between RSI and REX.
5.5 Effectiveness of this Agreement; Survival of Obligations. This
Agreement shall be effective only from and after the Closing Date. With respect
to any particular item of Tax liability, the covenants and obligations contained
in this Agreement shall not terminate until a Final Determination as to such
item and any payment required hereunder have been made.
5.6 Complete Agreement. This Agreement and other agreements and
documents referred to herein shall constitute the entire agreement between the
parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments, and writings with respect to such subject
matter.
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5.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
5.8 Notices. All notices and other communications hereunder shall be in
writing and shall be delivered by hand, mailed by registered or certified mail
(return receipt requested), or sent by courier or other express delivery that
provides for independent delivery verification to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and shall be deemed given on the date on which such notice or
communication is delivered to the addressees at the address specified below:
(a) If to RSI:
if by hand:
Roadway Services, Inc.
1077 Gorge Boulevard
P.O. Box 88
Akron, Ohio 44309-0088
Attention: General Counsel
if by mail:
Roadway Services, Inc.
1077 Gorge Boulevard
Akron, Ohio 44310
Attention: General Counsel
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(b) If to REX:
if by hand:
Roadway Express, Inc.
1077 Gorge Boulevard
P.O. Box 471
Akron, Ohio 44309-0471
Attention: General Counsel
if by mail:
Roadway Express, Inc.
1077 Gorge Boulevard
Akron, Ohio 44310
Attention: General Counsel
5.9 Amendments. This Agreement may not be modified or amended except by
an agreement in writing signed by the parties hereto.
5.10 Successors and Assigns. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns; provided, however, that, except as
specifically provided herein, no party may assign or delegate any of its rights
or obligations under this Agreement without the consent of the other party,
which consent shall not be unreasonably withheld.
5.11 No Third-Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and their Subsidiaries and shall not be deemed to
confer upon any third party any remedy, claim, liability, reimbursement, claim
of action, or other right in excess of those existing without reference to this
Agreement.
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5.12 Titles and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
5.13 Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
Roadway Express, Inc.
By:
--------------------------
Title:
-----------------------
Roadway Services, Inc.
By:
--------------------------
Title:
-----------------------
<PAGE> 184
ANNEX 11
SECOND RESTATED
CERTIFICATE OF INCORPORATION
OF
ROADWAY EXPRESS, INC.
We, the undersigned, Michael W. Wickham, Chairman of the Board of
Directors, and John M. Glenn, Secretary, of Roadway Express, Inc., a corporation
organized for profit and existing under the General Corporation Law of the State
of Delaware (the "Company") hereby certify that the following are true facts as
recorded in the books and records of the Company now in the official custody of
said Secretary:
This Second Restated Certificate of Incorporation was proposed by the
Company's Board of Directors in a resolution duly adopted by said Board in
accordance with Section 242 of the General Corporation Law of the State of
Delaware on December 15, 1995. Thereafter, the Company's Board of Directors
called for a special meeting of stockholders and directed that this Second
Restated Certificate of Incorporation be considered; and
This Second Restated Certificate of Incorporation was adopted by
written consent of the sole stockholder of the Company in accordance with
Section 242 of the General Corporation Law of the State of Delaware and without
the actual holding of a formal meeting pursuant to Section 228 of the General
Corporation Law of the State of Delaware;
The aforesaid Board of Directors resolution and stockholder adoption
have not been rescinded nor in any way amended, and that the resolution and
adoption are in full force and effect as of this date;
<PAGE> 185
Roadway Express, Inc. is the present name of the Company, and February
15, 1954 is the date of filing of its original Certificate of Incorporation with
the Secretary of State of the State of Delaware;
This Second Restated Certificate of Incorporation has been adopted in
accordance with Section 245 of the General Corporation Law of the State of
Delaware and restates, integrates and further amends the provisions of the
Restated Certificate of Incorporation of the Company as heretofore amended or
supplemented and was duly adopted by the Board of Directors and the stockholders
of the Company.
FIRST: The name of this Corporation is Roadway Express, Inc.
SECOND: The registered office of this Corporation, Roadway Express,
Inc., in the State of Delaware is 1209 Orange Street, in the City of Wilmington,
County of New Castle, and THE CORPORATION TRUST COMPANY is the registered agent
of this Corporation at the address of its registered office.
THIRD: The nature of the business and the objects and purposes proposed
to be transacted, promoted, and carried on, are to do any or all the things
herein mentioned, as fully and to the same extent as natural persons might or
could do, and in any part of the world, viz:
(1) Transport Traffic for hire by any means or methods;
(2) Contract or arrange for the provision of the transportation of
Traffic by others as an independent contractor, agent, or broker;
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(3) Deal in Transport Instrumentalities and in the Securities of a
Person who Deals therein, or who is engaged in the transportation of Traffic;
(4) Invest in, control, solely or jointly, or in common with other
Persons, any Person who is engaged in any one or more of the above described
businesses; and
(5) Any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which this Corporation
shall have authority to issue is 120,000,000, consisting of 20,000,000 shares of
Preferred Stock, $.01 par value per share ("Preferred Stock"), and 100,000,000
shares of Common Stock, $.01 par value per share ("Common Stock").
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors hereby is authorized to provide for the issuance
of shares of Preferred Stock in series, and by filing a certificate pursuant to
the applicable law of the State of Delaware (a "Preferred Stock Designation"),
to establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the shares
of each such series and the qualifications, limitations and restrictions
thereof. The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(a) The designation of the series, which may be by distinguishing
number, letter and title.
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(b) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the creation of the
series) increase or decrease (but not below the number of shares thereof then
outstanding).
(c) Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series.
(d) The dates at which dividends, if any, shall be payable.
(e) The redemption rights and price or prices, if any, for shares of
the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of this Corporation.
(h) Whether the shares of the series shall be convertible into shares
of any other class or series of shares, or any other security, of this
Corporation or any other corporation, and, if so, the specification of such
other class or series or such other security, the conversion price or prices or
rate or rates, any adjustments thereof, the date or dates as of which such
shares shall be convertible and all other terms and conditions upon which such
conversion may be made.
(i) Restrictions on the issuance of shares of the same series or of
any other class or series.
(j) The voting rights, if any, of the holders of such series.
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The Common Stock shall be subject to the express terms of the Preferred
Stock and any series thereof. Each share of Common Stock shall be equal to each
other share of Common Stock. The holders of Common Stock shall be entitled to
one vote for each such share upon all questions presented to the stockholders.
Except as otherwise provided in this Certificate of Incorporation or by
the Board of Directors in a Preferred Stock Designation, the Common Stock shall
have the exclusive right to vote for the election of Directors and for all other
purposes, and holders of Preferred Stock shall not be entitled to receive notice
of any meeting of stockholders at which they are not entitled to vote.
This Corporation shall be entitled to treat the person in whose name
any share of its stock is registered as the owner thereof for all purposes and
shall not be bound to recognize any equitable or other claim to, or interest in,
such share on the part of any other person, whether or not this Corporation
shall have notice thereof, except as expressly provided by applicable laws.
FIFTH: The business and affairs of the Corporation shall be managed by
and under the direction of the Board of Directors. In furtherance of, and not in
limitation of, the powers conferred by statute, the Board of Directors is
expressly authorized and empowered:
(a) to adopt, amend or repeal the By-Laws of this Corporation;
provided, however, that the By-Laws adopted by the Board of Directors under the
powers hereby conferred may be amended or repealed by the Board of Directors or
by the
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stockholders having power with respect thereto, except that Section 2 of Article
I, Section 4 of Article I, all of Article II, Section 1 (first paragraph) of
Article III, Section 2 (second paragraph) of Article III, Section 3 (first
paragraph) of Article III and Section 4 of Article VI of the By-Laws shall not
be amended or repealed, nor shall any provision inconsistent with such By-Laws
be adopted, without the affirmative vote of the holders of at least 80 percent
of the combined voting power of all shares of this Corporation entitled to vote
generally in the election of Directors, voting together as a single class.
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 80 percent of the
combined voting power of all shares of this Corporation entitled to vote
generally in the election of Directors, voting together as a single class, shall
be required to amend, repeal or adopt any provision inconsistent with this
Section (a) of Article FIFTH; and
(b) from time to time to determine whether and to what extent, and at
what times and places, and under what conditions and regulations, the accounts
and books of this Corporation, or any of them, shall be open to inspection of
stockholders; and no stockholder shall have any right to inspect any account,
book or document of this Corporation except as conferred by applicable law.
SIXTH: Subject to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional Directors under specific circumstances:
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(a) any action required or permitted to be taken by the stockholders
of this Corporation must be effected at a duly called annual or special meeting
of stockholders of this corporation and may not be effected by any consent in
writing of such stockholders.
(b) special meetings of the stockholders of the Corporation may be
called only (i) by the Chairman of the Board of Directors, and (ii) shall be
called within 10 days after receipt of the written request of the Board of
Directors, pursuant to a resolution approved by a majority of the Whole Board;
and
(c) the business permitted to be conducted at any special meeting of
the stockholders is limited to the business brought before the meeting by the
Chairman or by the Secretary at the request of a majority of the Board of
Directors.
Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, the affirmative vote of at least 80 percent of the combined
voting power of all shares of the Corporation entitled to vote generally in the
election of Directors voting together as a single class, shall be required to
amend, repeal or adopt any provision consistent with this Article SIXTH. For
purposes of this Certificate of Incorporation, the "Whole Board" is defined as a
total number of Directors which this Corporation would have if there were no
vacancies.
SEVENTH: Section 1. Number and Election of Directors.
Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to
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dividends or upon liquidation to elect additional Directors under specified
circumstances, the number of Directors of this Corporation shall be fixed by the
By-Laws of the Corporation and may be increased or decreased from time to time
in such manner as may be prescribed by the By-Laws, but in no case shall the
number be less than three.
Election of Directors need not be by written ballot except and to the
extent provided for the in By-Laws of this Corporation.
Section 2. Stockholder Nomination of Director Candidates.
Advance notice of stockholder nominations for the election of Directors
and advance notice of business to be brought by stockholders before an annual
meeting shall be given in the manner provided in the By-Laws of this
Corporation.
Section 3. Newly Created Directorships and Vacancies.
Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation to
elect additional Directors under specified circumstances, newly created
directorships resulting from any increase in the number of Directors and any
vacancy on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled solely by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors, or by a sole remaining
Director. Any Director elected in accordance with the preceding sentence shall
hold office for the remainder of the full term of the class of Directors in
which
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the new directorship was created or the vacancy occurred and until such
Director's successor shall have been elected and qualified. No decrease in the
number of Directors constituting the Board of Directors shall shorten the term
of an incumbent Director.
Section 4. Removal of Directors.
Subject to the rights of the holders of any class or series of stock
having preference over the Common Stock as to dividends or upon liquidation to
elect additional Directors under specified circumstances, any Director may be
removed from office only by the affirmative vote of the holders of at least 80
percent of the combined voting power of the outstanding shares of Voting Stock
(as defined below), voting together as a single class.
For purposes of this Article SEVENTH, "Voting Stock" shall mean the
outstanding shares of capital stock of this Corporation entitled to vote
generally in the election of Directors. In any vote required by or provided for
in this Article EIGHTH, each share of Voting Stock shall have the number of
votes granted to it generally in the election of Directors.
Section 5. Amendment.
Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, the affirmative vote of the holders of at least 80 percent of
the combined voting power of the outstanding shares of the Voting Stock, voting
together as a single class, shall be required to amend, repeal or adopt any
provision inconsistent with this Article SEVENTH.
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EIGHTH: Section 1. Elimination of Certain Liability of Directors.
To the full extent permitted by the General Corporation Law of the
State of Delaware or any other applicable laws presently or hereafter in effect,
no Director of this Corporation shall be personally liable to this Corporation
or its stockholders for or with respect to any acts or omissions in the
performance of his duties as a Director of this Corporation. Any amendment or
repeal of this Article EIGHTH shall not adversely affect any right or protection
of a Director of this Corporation existing immediately prior to such amendment
or repeal.
Section 2. Indemnification.
Each person who is or was or had agreed to become a Director or officer
of this Corporation, or each person who is or was serving or who agreed to serve
at the request of the Board of Directors or an officer of this Corporation as an
employee or agent of this Corporation or as a Director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise (including the heirs, executors, administrators or estate of such
person), shall be indemnified by this Corporation to the full extent permitted
from time to time by the General Corporation Law of the State of Delaware or any
other applicable laws as presently or hereafter in effect.
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Without limiting the generality or the effect of the foregoing, this Corporation
may enter into one or more agreements with any person which provide for
indemnification greater or different than that provided in this Article EIGHTH.
Any amendment or repeal of this Article EIGHTH shall not adversely affect any
right or protection existing hereunder immediately prior to such amendment or
repeal.
NINTH: This Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation, including a Preferred
Stock Designation, in the manner now or hereafter prescribed by statute, and
this Certificate of Incorporation, including any applicable Preferred Stock
Designation, and all rights conferred upon stockholders herein are created
subject to this reservation.
IN WITNESS WHEREOF, Roadway Express, Inc. has caused this Second
Restated Certificate of Incorporation to be signed by Michael W. Wickham,
Chairman of the Board of Directors, and attested by John M. Glenn, its
Secretary, this 27th day of December, 1995.
ATTEST ROADWAY EXPRESS, INC.
/s/ John M. Glenn By /s/ Michael W. Wickham
- ----------------------------------- -----------------------------------
John M. Glenn Michael W. Wickham
Chairman of the Board of Directors
-11-
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ANNEX 12
SECOND RESTATED BY-LAWS
OF
ROADWAY EXPRESS, INC.
ARTICLE I
Stockholders' Meetings
Section 1. Annual Meeting. The annual meeting of stockholders of the
Corporation for the election of directors and the transaction of such business
as may properly be brought before such meeting shall be held on such date and at
such time as may be designated by the Board of Directors, or by the Chairman of
the Board of Directors, and specified in the notice of the meeting.
Section 2. Special Meetings. Special meetings of the stockholders of
the Corporation may be called only (i) by the Chairman of the Board of Directors
or his duly authorized representative, and (ii) shall be called within ten days
after receipt of the written request of the Board of Directors, pursuant to a
resolution approved by a majority of the Whole Board. Any such resolution shall
be sent to the Chairman of the Board of Directors and the Secretary of the
Corporation shall state the purposes of the proposed meetings. Special meetings
of holders of the outstanding Preferred Stock may be called in the manner and
for the purposes provided in the resolutions of the Board of Directors providing
for the issue of such stock as filed pursuant to the applicable law of the State
of Delaware (a "Preferred Stock Designation"). Business transacted at any
special meeting shall be limited to the purposes stated in the notice.
For purposes of these By-Laws, the "Whole Board" is defined as the total
number of Directors which the Corporation would have if there were no vacancies.
Section 3. Notice of Meetings. Not less than ten or more than sixty
days before the date fixed for a meeting of stockholders, written notice stating
the time, place, and purposes of such meeting such be given by or at the
direction of the Secretary or an Assistant Secretary or any other person or
persons required or permitted by these By-Laws to give such notice. The notice
shall be given by personal delivery or by mail to each stockholder entitled to
notice of the meeting who is of record as of the day next preceding the day on
which notice is given or, if a record date therefor is duly fixed, of record as
of the said date; if mailed, the notice shall be addressed to the stockholders
at their respective addresses as they appear on the records of the Corporation.
Notice of the time, place and purposes of any meeting of stockholders may be
waived in writing, either before or after the holding of such meeting, by any
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stockholder, which writing shall be filed with or entered upon the records of
the meeting.
Section 4. Notice of Stockholder Business. Except as otherwise
provided by law, at an annual meeting of stockholders, only such business shall
be conducted as shall have been properly brought before the meeting. In order
to be properly brought before the meeting, such business must have been either
(a) specified in the written notice of the meeting (or any supplement thereto)
given to the stockholders of record on the record date for such meeting by or at
the direction of the Board of Directors, (b) brought before the meeting by or at
the direction of the Board of Directors or the chairman of the meeting, or (c)
specified in a written notice given by or on behalf of a stockholder of record
on the record date for such meeting entitled to vote thereon, or a duly
authorized proxy for such stockholder, in accordance with the following
requirements. A notice referred to in clause (c) hereof must be addressed to
the attention of the Secretary of the Corporation, delivered personally or
mailed, and received at the principal executive office of the Corporation not
less than thirty days prior to the first anniversary date of the initial notice
referred to in clause (a) hereof of the previous year's annual meeting;
provided, however, that such notice shall not be required to be given more than
sixty days prior to the annual meeting of stockholders. Such notice referred to
in clause (c) hereof shall set forth (i) a full description of each item of
business proposed to be brought before the meeting, (ii) the name and address of
the person proposing to bring such business before the meeting, (iii) the class
and number of shares held of record, beneficially and represented by proxy by
such person as of the record date for the meeting (if such date has then been
made publicly available) and as of the date of such notice, and (iv) any
material interest of the stockholder in such business. No business shall be
brought before any annual meeting of stockholders of the Corporation otherwise
than as provided in this Section.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that any proposed item of business was not brought before
the meeting in accordance with the foregoing procedure and, if he should so
determine, he shall so declare to the meeting and the defective item of business
shall be disregarded.
Section 5. Inspectors; Opening and Closing the Polls. The Board of
Directors shall appoint inspectors of election to act as judges of the voting
and to determine those entitled to vote in a stockholders' meeting, or any
adjournment thereof, in advance of such meeting, but if the Board of Directors
fails to make such appointments, or if an appointee fails to serve, the chairman
of the meeting may appoint substitute inspectors. The
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inspectors shall have the duties prescribed by the General Corporation Law of
the State of Delaware.
The chairman of the meeting shall fix and announce at the meeting the
date and time of the opening and closing of the polls for each matter upon which
the stockholders will vote at a meeting.
Section 6. Quorum; Adjournment. Except as may be otherwise provided by
law or in a Preferred Stock Designation, at any meeting of the stockholders, the
holders of shares entitling them to exercise not less than a majority of the
voting power of the outstanding shares of the Corporation present in person or
by proxy shall constitute a quorum for such meeting; provided, however, that the
holders of a majority of the voting power of the shares represented threat,
whether or not a quorum is present, may adjourn such meeting from time to time;
if any meeting is adjourned, notice of such adjournment need not be given if the
time and place to which it is adjourned are fixed and announced at such meeting.
Section 7. Voting. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy appointed by a legally
sufficient instrument. The person appointed as proxy need not be a stockholder.
The chairman of the meeting shall determine whether the vote for Directors, the
vote upon any questions set forth in the proxy statement for the meeting and the
vote upon any other action of business shall be by written ballot.
All questions, except the election of Directors or as otherwise provided
in these By-Laws, the Certificate of Incorporation, a Preferred Stock
Designation or the laws of the State of Delaware, shall be decided by a majority
of vote of those present and voting, and, with respect to any election or
question to be decided by any class of stock voting as a class, by a majority
vote of those shares present or representative voting of that class. Except as
otherwise provided by law or except as otherwise provided in these By-Laws, the
Certificate of Incorporation or a Preferred Stock Designation shares that are
present or represented but abstain from voting on a question shall not be deemed
to have voted on such question.
Section 8. Confidential Voting. The Corporation's proxy ballot and
voting process for shareholders' meetings shall provide the means by which
shareholders may expressly elect to have their votes treated confidentially. The
particular vote of such shareholder shall not be disclosed except (a) in the
event of a proxy or consent solicitation in opposition to the Corporation; (b)
if disclosure is necessary to meet legal requirements or where such information
may be necessary to assist in the pursuit or defense of judicial action; (c) if
the shareholder subsequently requests or permits disclosure of its
<PAGE> 198
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vote; or (d) in the event the Corporation concludes in good faith that a bona
fide dispute exists as to the authenticity of one or more proxies, ballots or
votes, or as to the accuracy of any tabulation of such proxies, ballots or
votes.
Section 9. Approval and Ratification of Acts of Officers and Board.
Except as otherwise provided by the Certificate of Incorporation or by law, any
contract, act or transaction, prospective or past, of the Corporation, or of the
Board of Directors, or of the officers, may be approved or ratified at a meeting
of the stockholders. Such approval or ratification shall be as valid and
binding as though affirmatively voted for or consented to by every stockholder
of the Corporation.
Section 10. Order of Business. Unless otherwise determined by the
Board of Directors prior to the meeting, the chairman of the meeting shall
determine the order of business and shall have the authority in his discretion
to regulate the conduct of any such meeting, including, without limitation,
imposing restrictions on the persons (other than stockholders of the Corporation
or their duly appointed proxies) who may attend any such stockholders' meeting,
by ascertaining whether any stockholder or his proxy may be excluded from any
stockholders' meeting based upon any determination by the chairman, in his sole
discretion, that any such person has unduly disrupted or is likely to disrupt
the proceedings thereat, and by determining the circumstances in which any
person may make a statement or ask questions at any stockholders' meeting.
Section 11. Place of Meeting. Meetings of the stockholders shall be
held at such place, within or without the State of Delaware, as the Board of
Directors shall determine and shall be designated in the notice of said meeting.
ARTICLE II
Nomination of Director Candidates
Section 1. Notification of Nominees. Subject to the rights of holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of Directors may be
made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election of Directors
generally. However, any stockholder entitled to vote in the election of
Directors generally may nominate one or more persons for election as Directors
at a meeting only if written notice of such stockholder's intent to make such
nomination or nominations has been received by the Secretary of the Corporation
not less than 70 days in advance of such meeting; provided, however, that in the
event that the date
<PAGE> 199
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of the meeting was not publicly announced by the Corporation by mail, press
release or otherwise more than 80 days prior to the meeting, notice by the
stockholder to be timely must be delivered to the Secretary of the Corporation
not later than the close of business on the tenth day following the day on
which such announcement of the date of the meeting was communicated to
stockholders. Each such notice shall set forth: (a) the name and address of
the stockholder who intends to make the nomination and of the person or persons
to be nominated; (b) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote for the election of
Directors on the date of such notice and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the notice;
(c) a description of all arrangements or understandings between the stockholder
and each nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a Director of the Corporation
if so elected.
Section 2. Substitution of Nominees. In the event that a person is
validly designated as a nominee in accordance with Section 1 above, and shall
thereafter become unable or unwilling to stand for election to the Board of
Directors, the Board of Directors or the stockholder who proposed such nominee,
as the case may be, may designate a substitute nominee upon delivery, at or
prior to the meeting for the election of such nominee, of a written notice to
the Secretary setting forth such information regarding such substitute nominee
as would have been required to be delivered to the Secretary pursuant to Section
1 above had such substitute nominee been initially proposed as a nominee. Such
notice shall include a signed consent to serve as a Director of the Corporation,
if elected, of each such substitute nominee.
Section 3. Compliance with Procedures. If the chairman of the meeting
for the election of Directors determines that a nomination of any candidate for
election as a Director at such meeting was not made in accordance with the
applicable provisions of Sections 1 and 2 above, such nomination shall be void.
<PAGE> 200
6
ARTICLE III
Board of Directors
Section 1. Number, Powers and Responsibilities. Except as otherwise
fixed by, or pursuant to, the provisions of Article Fourth of the Certificate of
Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional Directors under specified circumstances, the
number of Directors shall be fixed from time to time by the Board of Directors,
but shall not be less than three persons.
Except where the law, the Certificate of Incorporation, or these By-Laws
require action to be authorized or taken by the stockholders, the powers of the
Corporation shall be exercised, its business and affairs conducted and its
property controlled, by the Directors.
Section 2. Election of Directors; Vacancies. The Directors shall be
elected at each annual meeting of stockholders or at a special meeting called
for the purpose of electing directors. At a meeting of stockholders at which
Directors are to be elected, only persons nominated a candidates shall be
eligible for election as Directors and the candidates receiving the greatest
number of votes shall be elected.
Except as otherwise fixed by or provided for or pursuant to the
provisions of Article Fourth of the Certificate of Incorporation relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect Directors under
specified circumstances, newly created directorships resulting from any increase
in the number of Directors and any vacancy on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of the remaining Directors, even though
less than a quorum of the Board of Directors, or by a sole remaining Director.
Any Director elected in accordance with the preceding sentence shall hold office
for the remainder of the full term of the class of Directors in which the new
directorship was created or the vacancy occurred and until such Director's
successor shall have been elected and qualified. No decrease in the number of
Directors constituting a Board of Directors shall shorten the term of any
incumbent Director.
Section 3. Removal; Resignations. Subject to the rights of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect additional Directors under specified circumstances,
any Director may be removed from office only by the affirmative vote of the
<PAGE> 201
7
holders of 80 percent of the combined voting power of the then outstanding
shares of Voting Stock, voting together as a single class. For purposes of
this paragraph of this Section 6 of this Article III, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors. In any vote required by or provided
for in this first paragraph of this Section 3 of this Article III, each share
of Voting Stock shall have the number of votes granted to it generally in the
election of Directors.
Any Director may resign at any time by a writing to that effect
delivered to the Secretary, such resignation to take effect immediately or at
such other time as the Director may specify.
Section 4. Meetings. Immediately after each annual meeting of the
stockholders, the newly elected Directors shall hold an organization meeting for
the purpose of electing officers and transacting any other business. Notice of
such meeting need not be given. Other meetings of the Board of Directors may be
held at any time within or without the State of Delaware in accordance with the
rules, resolutions, or other action by the Board, or upon the call of the
Chairman. Unless waived, a written notice shall be given to each Director at
least three days prior to any such other meeting. Unless otherwise expressly
stated in the notice thereof, any business may be transacted at any meeting of
the Board of Directors.
Section 5. Quorum; Adjournment. Subject to the second paragraph of
Section 2 of this Article III, at all meetings of Directors a quorum of the
Board of Directors shall consist of a majority of the directors then in office;
provided that a majority of the Directors present at a meeting duly held,
whether or not a quorum is present, may adjourn such meeting from time to time;
if any meeting is adjourned, notice of adjournment need not be given if the time
and place to which it is adjourned are fixed and announced at such meeting. At
such meeting of the Board of Directors at which a quorum is present, all
questions and business shall be determined by a majority vote of those present.
Section 6. Committees. The Board of Directors may from time to time
create or appoint by a majority vote of the Whole Board (as defined in Section 2
of Article I) an Executive Committee, a Finance Committee, a combined Executive
and Finance Committee, an Audit Committee, and any other committee or committees
deemed advisable by the Board for the proper transaction of the Corporation's
business. Any Executive or Finance Committee shall contain not less than two
directors. All committee members shall serve at the pleasure of, and be subject
at all times to the control and direction of, the Board. Any such committee
shall have such authority as adheres to the committee by virtue of the
provisions of this section or as may, from time to time, be lawfully delegated
by the Board. Any
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person dealing with the Corporation shall be entitled to rely upon any act of,
or authorization of an act by, such committees, to the same extent as an act or
authorization of the Board of Directors. Unless otherwise ordered by the Board
of Directors, any such committee may prescribe its own rules for calling and
holding meetings, and for its own method of procedure may act by a majority of
its members at a meeting or without a meeting by a writing or writing signed by
all of its members, shall keep minutes of its proceedings and shall report its
proceedings to the Board of Directors (when required or requested by a Director
to do so). The Directors may appoint one or more alternate members of any such
committee to take the place of any absent member or members at any meeting of
such committee. Each such alternate shall serve at the pleasure of, and be
subject at all times to the control and direction of, the Board of Directors.
Section 7. Compensation of Directors. The Board of Directors may
establish such reasonable compensation for, and reimbursement of the expenses
of, Directors for attendance at meetings of the Board of Directors or
committees, or for other services by Directors to the Corporation, as the Board
may determine. Such compensation may be in addition to that received by any
Director or any member of a committee as an officer or employee or agent of the
Corporation.
Section 8. Rules. The Board may adopt rules for its own government,
not inconsistent with law, the Certificate of Incorporation or these By-Laws.
ARTICLE IV
Officers
Section 1. Election and Designation of Officers. The Board of
Directors, at its organization meeting, may elect a Chairman of the Board of
Directors and shall elect a President, a Secretary, a Treasurer and, in its
discretion, at any meeting of the Board of Directors, may elect one or more Vice
Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers,
a Controller, one or more Assistant Controllers, and such other officers as the
Board of Directors may deem necessary. The Chairman of the Board, if any, and
the President shall be directors, but no one of the other officers need be a
Director. Any two or more of such offices may be held by the same person, but
no officer shall execute, acknowledge, or verify any instrument in more than one
capacity, if such instrument is required to be executed, acknowledged, or
verified by two or more officers.
Section 2. Term of Office; Vacancies. The officers of the Corporation
shall hold office until their successors are
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elected and qualified, except in case of resignation, death, or removal. The
Board of Directors may remove any officer at any time with or without cause by
a majority vote of the Whole Board (as defined in Section 2 of Article I). Any
vacancy in any office may be filled by the Board of Directors.
Section 3. Compensation of Officers. The Board of Directors shall have
authority to fix the salaries of all officers as well as bonuses, commissions
and other compensation that may be payable to them.
Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if any, shall preside at all meetings of stockholders and of
the Board of Directors and shall have such authority and perform such duties as
the Board may determine.
Section 5. President. Except for meetings at which the Chairman of the
Board of Directors, if any, presides in accordance with the preceding Section,
the President shall preside at all meetings of stockholders and of the Board of
Directors. Subject to directions of the Board of Directors, he shall have
general executive supervision over the property, business, and affairs of the
Corporation.
Section 6. Vice Presidents. In case of the absence or disability of
the President, or when circumstances prevent the President from acting, the
Executive Vice President of the Corporation, if any, shall perform all the
duties and possess all the authority of the President until the Board of
Directors shall either fill the vacancy or otherwise, in its full discretion,
specifically provide with respect to the succession of all duties and
responsibilities of the President.
Section 7. Secretary. The Secretary shall keep the minutes of meetings
of the stockholders and of the Board of Directors. He shall keep such books as
may be required by the Board, and shall give notices of stockholders' meetings
and of Board meetings required by law, or by these By-Laws or otherwise.
Section 8. Treasurer. The Treasurer shall receive and have in charge
all money, bills, notes, bonds, stocks in other corporations, and similar
property belonging to the Corporation, and shall do with the same as may be
ordered by the Board of Directors. He shall keep accurate financial accounts
and hold the same open for the inspection and examination of the directors.
Section 9. Controller. The Controller shall exercise a general check
upon the disbursement of funds of the Corporation and shall have general charge
and supervision of the preparation of financial reports.
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Section 10. Other Officers. The Assistant Secretaries, Assistant
Treasurers, and Assistant Controllers, if any, in addition to such authority and
duties as the Board of Directors may determine, shall have such authority and
perform such duties as may be directed by their respective principal officers.
Section 11. Authority and Duties. The officers shall have such
authority and perform such duties, in addition to those specifically set forth
in these By-Laws, as the Board of Directors may determine. The Board of
Directors is authorized to delegate the duties of any officer to any other
officer and generally to control the action of the officers and to require the
performance of duties in addition to those mentioned herein.
ARTICLE V
Record Dates
The Board of Directors shall have the right to fix a time, not more than
sixty days nor less than ten days preceding the date of any meeting of
stockholders, or not more than sixty days preceding the date fixed for the
payment of any dividend or distribution, or not more than sixty days preceding
the date for the allotment of rights among stockholders to purchase or to
convert shares or other securities of the Corporation, subject to contract
rights with respect thereto, as a record date for the determination of the
stockholders entitled to notice of and to vote at any such meeting, or entitled
to receive payments of any such dividend, distribution or allotment of rights,
or to exercise the rights in respect to any purchase or conversion of shares or
other securities, and in such cases, only the persons who are stockholders of
record on the date so fixed shall be entitled to notice of and to vote at such
meeting or to receive payment of such dividend, distribution or allotment of
rights or to exercise such rights for the conversion or purchase of shares or
other securities, as the case may be, and the Board of Directors may close the
share transfer books of the Corporation against transfer of shares during the
whole or any part of such period. Notwithstanding the foregoing, the record
date fixed by the Board of Directors shall not precede the date upon which the
resolution fixing such record date is adopted by the Board.
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ARTICLE VI
Execution of Documents
The Board of Directors is authorized to determine or provide the method
of determining how all documents evidencing conveyances by or contracts or other
obligations of the Corporation and all checks, drafts, notes, bonds, bills of
exchange and orders for the payment of money of or by the Corporation shall be
signed, countersigned or endorsed.
ARTICLE VII
Certificates for Shares
Section 1. Forms of Certificates and Signatures. Each holder of shares
is entitled to one or more certificates, signed by the President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer, or an
Assistant Treasurer of the Corporation, which shall certify the number and class
of shares held by him in the Corporation. When such a certificate is
countersigned by an incorporated transfer agent or registrar, the signature of
any of said officers of the Corporation may be facsimile. Although any officer
of the Corporation whose manual or facsimile signature is affixed to such a
certificate so countersigned ceases to be such officer before the certificate is
delivered, such certificate nevertheless shall be effective in all respects when
delivered.
Section 2. Classes of Stock. The designations, preferences and
relative participating optional or other special rights of the various classes
of stock or series thereof, and the qualifications, limitations or restrictions
thereof, shall be set forth in full or summarized on the face or back of the
certificates which the Corporation issues to represent its stock, or in lieu
thereof, such certificate shall set forth the office of the Corporation from
which the holders of certificates may obtain a copy of such information.
Section 3. Transfer of Shares. Shares of the Corporation shall be
transferable upon the books of the Corporation by the holders thereof, in
person, or by a duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares of the same class or series, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of the authenticity of the signatures to such assignment and
power of transfer as the Corporation or its agents may reasonably require.
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Section 4. Lost, Stolen, or Destroyed Certificates. Any executive
officer of the Corporation may cause the Corporation to issue a new certificate
for shares in place of any certificate theretofore issued by it and alleged to
have been lost, stolen, or destroyed, and such executive officer may, in his
discretion, require the owner, or his legal representatives, to give the
Corporation a bond containing such terms as such executive officer may require
to protect the Corporation or any person injured by the execution and delivery
of a new certificate.
Section 5. Transfer Agents and Registrars. The Board of Directors may
appoint, or revoke the appointment of, transfer agents and registrars and may
require all certificates for shares to bear the signatures of such transfer
agents and registrars, or any of them. The Board of Directors shall have
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, and registration of certificates for shares of
the Corporation.
ARTICLE VIII
General
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
the calendar year, except as otherwise be determined from time to time by the
Board of Directors.
Section 2. Corporate Seal. The seal of the Corporation shall be
circular in form with the name of the Corporation and the words "Corporate Seal
of Delaware" stamped across the center. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 3. Amendments. Subject to the provisions of the Certificate
of Incorporation and these By-Laws, may be amended or repealed at any regular
meeting of the stockholders or at any special meeting thereof or at any special
meeting thereof called for that purpose by a majority vote of the shares
represented and entitled to vote at such meeting provided that in such notice of
such special meeting, notice of such purpose shall be given.
Subject to the laws of the State of Delaware, the Certificate of
Incorporation and these By-Laws, the Board of Directors may by majority vote of
those present at any meeting at which a quorum is present, amend or repeal these
By-Laws or adopt such other By-Laws as in their judgment may be advisable for
the regulation of the conduct of the affairs of the Corporation.
<PAGE> 1
EXHIBIT 10.2
FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT
FIRST AMENDMENT AND WAIVER, dated as of September 28, 1995 (this
"Amendment"), to the Credit Agreement, dated as of March 24, 1995 (the "Credit
Agreement"), among ROADWAY SERVICES, INC., an Ohio corporation (the
"Borrower"), the several banks and other financial institutions parties thereto
(the "Lenders") and CHEMICAL BANK, a New York banking corporation, as agent (in
such capacity the "Agent") for the Lenders.
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Agent and the Lenders to agree to
amend certain provisions of the Credit Agreement and to waive certain other
provisions of the Credit Agreement as set forth in this Amendment; and
WHEREAS, the Agent and the Lenders are willing to agree to such amendments
and waivers, but only on the terms and subject to the conditions set forth in
this Amendment;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
2. Amendment to Section 1.1. Section 1.1 is hereby amended by:
(a) adding thereto the following definitions in the proper alphabetical
order:
"Spin-Off": the distribution by the Borrower to the shareholders of the
Borrower of the Capital Stock of Roadway Express Inc., a Delaware corporation.
"Utilization Fee": as defined in subsection 2.4A.
(b) amending the definition of "Minimum Consolidated Net Worth" by deleting
the amount "$750,000,000" therein and substituting in lieu thereof the amount
of "$700,000,000."
3. Amendment to Section 2. Section 2 is hereby amended by adding thereto
the following subsection 2.4A:
<PAGE> 2
2
"Section 2.4A Utilization Fee. The Borrower agrees to pay to the Agent for
the account of each Lender a utilization fee (the "Utilization Fee") on the
aggregate principal amount of the Loans outstanding for each day during which
the aggregate principal amount of the Loans exceeds 66-2/3% of the Commitments,
payable quarterly in arrears on the last day of each March, June, September and
December and, if applicable, on the Termination Date or such later date upon
which the Loans shall be paid in full. The Utilization Fee will be equal to
the applicable rate per annum set forth under the heading "Utilization Fee" on
Schedule II hereto which corresponds to the Debt/Capitalization Ratio
determined from the financial statements and compliance certificate relating to
the end of the fiscal quarter immediately preceding the fiscal quarter with
respect to which the Utilization Fee is due; provided that in the event that
the financial statements required to be delivered pursuant to subsections
5.1(a) and (b), as applicable, and the related compliance certificate required
to be delivered pursuant to subsection 5.2(a), are not delivered when due, then
(x) if such financial statements and certificate are delivered after the date
such financial statements and certificate were required to be delivered and the
Utilization Fee increases from that applicable to the prior period as a result
of the delivery of such financial statements, then the Utilization Fee during
the period from the date upon which such financial statements were required to
be delivered (without giving effect to any applicable cure period) until the
date upon which they actually are delivered shall, except as otherwise provided
in clause (z) below, be the Utilization Fee as so increased; (y) if such
financial statements and certificate are delivered after the date such
financial statements and certificate were required to be delivered and the
Utilization Fee decreases from that applicable to the prior period as a result
of the delivery of such financial statements, then such decrease in the
Utilization Fee shall not become applicable until the date upon which the
financial statements and certificate actually are delivered; and (z) if such
financial statements and certificate are not delivered prior to the expiration
of the applicable cure period, then, effective upon such expiration, for the
period from the date upon which such financial statements and certificate were
required to be delivered (after the expiration of the applicable cure period)
until two Business Days following the date upon which they actually are
delivered, the Utilization Fee shall be .125% (it being understood that the
foregoing shall not limit the rights of the Agent and the Banks set forth in
Section 7)."
4. Amendment to Subsection 2.4. The third sentence of subsection 2.4 is
hereby amended by deleting the words "subsection 5.2(b)" in the proviso thereto
and substituting therefor the words "subsection 5.2(a)."
<PAGE> 3
3
5. Amendment to Subsection 2.13(a). Subsection 2.13(a) is hereby amended
by:
(a) inserting the words "Utilization Fee" immediately after the words
"Facility Fee" in the first sentence thereof; and
(b) inserting the words "and Utilization Fee" immediately following the
words "Facility Fee" in the second sentence thereof.
6. Amendment to Subsection 2.12(c). Subsection 2.12(c) is hereby amended
by:
(a) inserting the words ", utilization fee" after the words "facility fee"
in clause (iii) thereof; and
(b) inserting the words ", utilization fee" after the words "facility fee"
in clause (v) thereof.
7. Amendment to Subsection 2.15(a). The second sentence of Subsection
2.15(a) is hereby amended by inserting the words "and Utilization Fees payable
hereunder" immediately after the words "Revolving Credit Loans."
8. Amendment to Subsection 3.1. Subsection 3.1 is hereby amended by
inserting after the words "sale, transfer or other disposition" the words
"(other than the Spin-Off)."
9. Amendment to Subsection 3.2. Subsection 3.2 is hereby amended by
inserting after the words "development or event" the words "(other than the
Spin-Off)."
10. Waiver of Subsection 6.3. The Lenders hereby waive compliance by the
Borrower with the provisions of subsection 6.3 of the Credit Agreement to the
extent, and only to the extent, necessary for the Borrower to effectuate the
Spin-Off.
11. Waiver of Subsection 6.4. The Lenders hereby waive compliance by the
Borrower with the provisions of subsection 6.4 of the Credit Agreement to the
extent, and only to the extent, necessary for the Borrower to effectuate the
Spin-Off.
12. Amendment to Schedule II. Schedule II is hereby amended by deleting
the existing Schedule II and substituting therefor Schedule II to this
Amendment.
13. Representations and Warranties. The Borrower hereby confirms that,
after giving effect to the amendments and waiver provided for herein, (i) the
representations and warranties contained in Section 3 of the Credit Agreement
are true and correct in all material respects on and as of the date hereof and
no Default or Event of Default has occurred and is
<PAGE> 4
4
continuing, and (ii) the Borrower has all necessary power and has taken all
corporate action necessary to approve and authorize this Amendment.
14. No Other Amendments or Waivers. Except as expressly amended hereby,
the Credit Agreement shall continue to be, and shall remain, in full force and
effect in accordance with its terms.
15. Counterparts. This Amendment may be executed by the parties hereto in
any number of separate counterparts, and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
16. Conditions of Effectiveness. This Amendment shall become effective on
the later of (a) the date on which the Spin-Off is consummated and (b) the date
on which the Borrower and the Majority Lenders shall have executed a
counterpart of this Amendment, and the Agent shall have received confirmation
of such execution.
17. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
18. Costs and Expenses. Borrower agrees to pay all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Agent in
connection with the preparation, execution and delivery of this Amendment.
<PAGE> 5
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
date set forth above.
ROADWAY SERVICES, INC.
By:____________________________________
Title:
CHEMICAL BANK, as Agent and as a Lender
By:____________________________________
Title:
ABN-AMRO BANK N.V.
By:____________________________________
Title:
NATIONAL CITY BANK
By:____________________________________
Title:
SOCIETY NATIONAL BANK
By:____________________________________
Title:
BANK ONE, AKRON, N.A.
By:____________________________________
Title:
<PAGE> 6
6
Schedule II
APPLICABLE MARGIN/FACILITY FEE/UTILIZATION FEE
<TABLE>
<CAPTION>
Debt/Capitalization Applicable Facility Utilization
Ratio Level Margin Fee Fee
- ------------------- ----- ---------- -------- -----------
<S> <C> <C> <C> <C>
Equal to or less I .14% .06% .05%
than 10%:
Equal to or less II .165% .065% .05%
than 20% but greater
than 10%:
Equal to or less III .20% .075% .075%
than 25% but greater
than 20%:
Equal to or less IV .21% .09% .075%
than 30% but greater
than 25%:
Equal to or less V .24% .12% .10%
than 40% but greater
than 30%:
Less than 50% but VI .30% .20% .125%
greater than 40%:
Greater than or VII .50% .25% .125%
equal to 50%:
</TABLE>
<PAGE> 1
EXHIBIT 99
[ROADWAY SERVICES, INC. LETTERHEAD]
NEWS RELEASE
CONTACT: Doug Duncan
216-643-6704
FOR IMMEDIATE RELEASE
RSI BOARD DECLARES SPINOFF OF ROADWAY EXPRESS
AKRON, Ohio, December 29, 1995 - The Board of Directors of Roadway Services,
Inc. (RSI) today declared the spinoff distribution to RSI shareholders of at
least 95 percent of the shares of RSI's largest subsidiary, Roadway Express,
Inc. (REX). This represents the final step in the spinoff process, following
recent shareholder approval of both the spinoff and the associated change of
RSI's corporate name in January 1996 to Caliber System, Inc.
"The Board's declaration ushers in a new year of significant
opportunity for our shareholders, our employees and our customers," said Daniel
J. Sullivan, chairman, president and chief executive officer of Roadway
Services. "It culminates a process of great change and improvement that began
when we announced the spinoff of REX in August. Since then, we have reorganized
RSI's management team, streamlined our operations, exited the air freight
business and commenced consolidation of our regional carrier group under Viking
Freight System, Inc. These dramatic initiatives allow RSI to pursue its vision
for long-term growth as Caliber System, Inc., a corporate identity that will
soon be synonymous with precision, value and quality in the transportation and
logistics industry."
-more-
<PAGE> 2
RSI SPINOFF DISTRIBUTION
PAGE 2 OF 2
RSI shareholders of record at the close of business on December 29,1995
will be entitled to the distribution of REX common stock, based on a
distribution ratio of one share of REX common stock for every two shares of RSI
common stock held on that date. The company anticipates that REX share
certificates will be mailed on or about January 12, 1996.
On August 23, 1995, Roadway Services, Inc. announced the planned
spinoff of Roadway Express. The company later approved, on December 18, 1995,
the Roadway Regional Group's plan to consolidate its four regional freight
carriers into one superregional carrier, Viking Freight System, Inc.
With the spinoff's completion, Caliber System, Inc. will comprise all
of RSI's remaining operations, including: Roadway Package System, a small
package carrier; Roadway Logistics Systems, a contract logistics service;
Roberts Express, a critical-shipment carrier; and Viking Freight System, a
superregional freight carrier with customers throughout North America.
REX common stock is expected to trade on the Nasdaq Stock Market on a
when-issued basis, beginning on January 2, 1996, and will trade regular way
commencing January 15, 1996 under the symbol "ROAD." RSI common stock is traded
on the New York Stock Exchange under the symbol "CBB" and will trade
ex-distribution on January 16, 1996.
##
