-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D/IryBL/oKzhnWJpc9EEdN58g5g4nKcIzAI6svd5Uf6Vmd8YIjQRMtMeXdpJQFLD 30LnnzfkighkZbSZdxuJsQ== 0000950124-99-003672.txt : 20020715 0000950124-99-003672.hdr.sgml : 19990610 ACCESSION NUMBER: 0000950124-99-003672 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 22 FILED AS OF DATE: 19990609 GROUP MEMBERS: JPF ACQUISITION CORP GROUP MEMBERS: YELLOW CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: JEVIC TRANSPORTATION INC CENTRAL INDEX KEY: 0001044066 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 222373402 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-51859 FILM NUMBER: 99642907 BUSINESS ADDRESS: STREET 1: 600 CREEK RD P O BOX 5157 CITY: DELANCO STATE: NJ ZIP: 08075 BUSINESS PHONE: 6094617111 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: JEVIC TRANSPORTATION INC CENTRAL INDEX KEY: 0001044066 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 222373402 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-51859 FILM NUMBER: 99642908 BUSINESS ADDRESS: STREET 1: 600 CREEK RD P O BOX 5157 CITY: DELANCO STATE: NJ ZIP: 08075 BUSINESS PHONE: 6094617111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JPF ACQUISITION CORP CENTRAL INDEX KEY: 0001088273 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 10990 ROE AVENUE STREET 2: P.O. BOX 7563 CITY: OVERLAND PARK STATE: KS ZIP: 66207 BUSINESS PHONE: 9136966100 MAIL ADDRESS: STREET 1: 10990 ROE AVENUE STREET 2: P.O. BOX 7563 CITY: OVERLAND PARK STATE: KS ZIP: 66207 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JPF ACQUISITION CORP CENTRAL INDEX KEY: 0001088273 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: 10990 ROE AVENUE STREET 2: P.O. BOX 7563 CITY: OVERLAND PARK STATE: KS ZIP: 66207 BUSINESS PHONE: 9136966100 MAIL ADDRESS: STREET 1: 10990 ROE AVENUE STREET 2: P.O. BOX 7563 CITY: OVERLAND PARK STATE: KS ZIP: 66207 SC 14D1 1 SCHEDULE 14D1 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 ------------------------ JEVIC TRANSPORTATION, INC. (NAME OF SUBJECT COMPANY) JPF ACQUISITION CORP. YELLOW CORPORATION (BIDDERS) ------------------------ COMMON STOCK, NO PAR VALUE (TITLE OF CLASS OF SECURITIES) 47719P107 (CUSIP NUMBER OF CLASS OF SECURITIES) ------------------------ WILLIAM F. MARTIN, JR., ESQ. SENIOR VICE PRESIDENT YELLOW CORPORATION P.O. BOX 7563 10990 ROE AVENUE OVERLAND PARK, KANSAS 66211 TELEPHONE: (913) 696-6100 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS) WITH A COPY TO: W. LESLIE DUFFY, ESQ. CAHILL GORDON & REINDEL 80 PINE STREET NEW YORK, NEW YORK 10005-1702 TELEPHONE: (212) 701-3000 CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE** ---------------------- ---------------------- $172,170,642.00 $34,434.13
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * For purposes of calculating the filing fee only. This calculation assumes the purchase of an aggregate of 5,739,544 outstanding Class A Common Shares at a purchase price of $14.00 per Class A Common Share and an aggregate of 6,558,359 Common Shares consisting of 4,994,303 outstanding Common Shares and 1,564,056 Common Shares issuable upon exercise of options at a purchase price of $14.00 per Common Share. ** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the aggregate Shares purchased. [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and date of its filing. Amount Previously Paid: None Form or Registration No.: Not Applicable Filing Party: Not Applicable Date Filed: Not Applicable
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 SCHEDULE 14D-1 - --------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS Yellow Corporation I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS I.R.S. No. 48-0948788 - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCES OF FUNDS (See Instructions) BK, WC - --------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0* - --------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - --------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0% - --------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON (See Instructions) HC and CO - ---------------------------------------------------------------------------
2 3 SCHEDULE 14D-1 - --------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS JPF Acquisition Corp. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS I.R.S. No. NA - --------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - --------------------------------------------------------------------------- 3 SEC USE ONLY - --------------------------------------------------------------------------- 4 SOURCES OF FUNDS (See Instructions) AF - --------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [ ] - --------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey - --------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0* - --------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - --------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0% - --------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON (See Instructions) CO - ---------------------------------------------------------------------------
* On June 6, 1999, Yellow Corporation ("Parent"), JPF Acquisition Corp. (the "Purchaser"), and each holder of Class A Common Shares (each, a "Class A Common Shareholder" and, together, the "Class A 3 4 Common Shareholders") entered into a Tender and Voting Agreement (the "Tender and Voting Agreement") pursuant to which, under certain circumstances set forth therein, the Class A Common Shareholders have agreed to tender 5,701,794 Class A Common Shares in the aggregate in the Offer. The Tender and Voting Agreement is described in more detail in Section 10 of the Offer to Purchase dated June 9, 1999, attached hereto as Exhibit (a)(1). The Tender and Voting Agreement is attached hereto as Exhibit (c)(1). This Schedule 14D-1 Tender Offer Statement and Schedule 13D (this "Statement") relates to the offer by JPF Acquisition Corp., a New Jersey corporation (the "Purchaser"), and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), to purchase all outstanding shares of Class A Common Stock, no par value (the "Class A Common Shares"), and all outstanding shares of Common Stock, no par value (the "Common Shares" and, together with the Class A Common Shares, the "Shares"), of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Copies of the Offer to Purchase and the Letter of Transmittal are annexed hereto as Exhibits (a)(1) and (a)(2), respectively. ITEM 1. SECURITY AND SUBJECT COMPANY. (a) The name of the subject company is Jevic Transportation, Inc., a New Jersey corporation (the "Company"). The address of the Company's principal executive offices is 600 Creek Road, Delanco, New Jersey 08075. (b) The information set forth in the Introduction of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Price Range of Shares; Dividends on Shares") of the Offer to Purchase is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. This Statement is being filed on behalf of Parent and the Purchaser for purposes of the Schedule 14D-1 and Schedule 13D. The information set forth in the Introduction, Section 8 ("Certain Information Concerning Parent and the Purchaser") and Schedule I ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase is incorporated herein by reference. (e)-(f) During the last five years, neither Parent nor the Purchaser, nor, to the best knowledge of Parent and the Purchaser, the persons listed in Schedule I ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase, has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a)-(b) The information set forth in the Introduction, Sections 8 ("Certain Information Concerning Parent and the Purchaser"), 9 ("Background of the Offer"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements") and Schedule I ("Directors and Executive Officers of Parent and the Purchaser") of the Offer to Purchase is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(b) The information set forth in Section 12 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. 4 5 ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. (a)-(b) The information set forth in the Introduction, and Sections 9 ("Background of the Offer"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements"), and 11 ("Purpose of the Offer; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements") of the Offer to Purchase is incorporated herein by reference. (d)-(e) The information set forth in Sections 9 ("Background of the Offer"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements"), 11 ("Purpose of the Offer; Plans for the Company"), and 14 ("Dividends and Distributions") of the Offer to Purchase is incorporated herein by reference. (f)-(g) The information set forth in Sections 11 ("Purpose of the Offer; Plans for the Company") and 13 ("Effect of the Offer on the Market for the Shares; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a)-(b) The information set forth in the Introduction, Sections 8 ("Certain Information Concerning Parent and the Purchaser") and 9 ("Background of the Offer") of the Offer to Purchase and the Tender and Voting Agreement, a copy of which is attached hereto as Exhibit (c)(1), are incorporated herein by reference. ITEM 7.CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. The information set forth in the Introduction, and Sections 9 ("Background of the Offer") and 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements") of the Offer to Purchase and the Tender and Voting Agreement, a copy of which is attached hereto as Exhibit (c)(1), are incorporated herein by reference. ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. The information set forth in the Introduction and Sections 9 ("Background of the Offer") and 17 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. The information set forth in Section 8 ("Certain Information Concerning Parent and the Purchaser") of the Offer to Purchase is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. (a) The information set forth in Sections 7 ("Certain Information Concerning the Company"), 8 ("Certain Information Concerning Parent and the Purchaser"), 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements") and 11 ("Purpose of the Offer; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. (b)-(c), (e) The information set forth in Sections 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements") and 16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Sections 10 ("The Merger Agreement; The Tender and Voting Agreement; The Employment Agreements"), 11 ("Purpose of the Offer; Plans for the Company"), and 13 ("Effect of the Offer on the Market for the Shares; Exchange Act Registration; Margin Regulations") of the Offer to Purchase is incorporated herein by reference. 5 6 (f) The information set forth in the Offer to Purchase and the Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) -- Offer to Purchase dated June 9, 1999. (a)(2) -- Letter of Transmittal. (a)(3) -- Notice of Guaranteed Delivery. (a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) -- Text of Press Release issued by Parent on June 7, 1999. (a)(8) -- Form of Summary Advertisement dated June 9, 1999. (b)(1) -- Revolving Credit Agreement, dated as of September 24, 1997. (b)(2) -- Receivables Purchase Agreement, dated as of August 2, 1996. (c)(1) -- Tender and Voting Agreement among Parent, the Purchaser and the Class A Common Shareholders dated June 6, 1999. (c)(2) -- Agreement and Plan of Merger among Parent, the Purchaser and the Company dated June 6, 1999. (c)(3) -- Employment Agreement of Raymond M. Conlin. (c)(4) -- Employment Agreement of Brian J. Fitzpatrick. (c)(5) -- Employment Agreement of Paul J. Karvois. (c)(6) -- Employment Agreement of Joseph A. Librizzi. (c)(7) -- Amended and Restated Severance Agreement of Raymond M. Conlin. (c)(8) -- Amended and Restated Severance Agreement of Brian J. Fitzpatrick. (c)(9) -- Amended and Restated Severance Agreement of Paul J. Karvois. (c)(10) -- Amended and Restated Severance Agreement of Joseph A. Librizzi. (c)(11) -- Confidentiality Agreement between Parent and the Company dated December 22, 1998. (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable.
6 7 SIGNATURE After due inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. JPF ACQUISITION CORP. By: /s/ WILLIAM F. MARTIN, JR. ------------------------------------ Name: William F. Martin, Jr. Title: Vice President YELLOW CORPORATION By: /s/ WILLIAM F. MARTIN, JR. ------------------------------------ Name: William F. Martin, Jr. Title: Senior Vice President Dated: June 9, 1999 7 8 EXHIBIT INDEX
EXHIBIT SEQUENTIAL NO. DESCRIPTION PAGE NUMBER - ------- ----------- ----------- (a)(1) -- Offer to Purchase dated June 9, 1999. (a)(2) -- Letter of Transmittal. (a)(3) -- Notice of Guaranteed Delivery. (a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) -- Text of Press Release issued by Parent on June 7, 1999. (a)(8) -- Form of Summary Advertisement dated June 9, 1999. (b)(1) -- Revolving Credit Agreement, dated as of September 24, 1997. (b)(2) -- Receivables Purchase Agreement, dated as of August 2, 1996. (c)(1) -- Tender and Voting Agreement among Parent, the Purchaser and the Class A Common Shareholders dated June 6, 1999. (c)(2) -- Agreement and Plan of Merger among Parent, the Purchaser and the Company dated June 6, 1999. (c)(3) -- Employment Agreement of Raymond M. Conlin. (c)(4) -- Employment Agreement of Brian J. Fitzpatrick. (c)(5) -- Employment Agreement of Paul J. Karvois. (c)(6) -- Employment Agreement of Joseph A. Librizzi. (c)(7) -- Amended and Restated Severance Agreement of Raymond M. Conlin. (c)(8) -- Amended and Restated Severance Agreement of Brian J. Fitzpatrick. (c)(9) -- Amended and Restated Severance Agreement of Paul J. Karvois. (c)(10) -- Amended and Restated Severance Agreement of Joseph A. Librizzi. (c)(11) -- Confidentiality Agreement between Parent and the Company dated December 22, 1998. (d) -- Not applicable. (e) -- Not applicable. (f) -- Not applicable.
8 EX-99.(A)(1) 2 OFFER TO PURCHASE DATED JUNE 9, 1999 1 EXHIBIT (A)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING CLASS A COMMON SHARES AND ALL OUTSTANDING COMMON SHARES OF JEVIC TRANSPORTATION, INC. AT $14.00 NET PER CLASS A COMMON SHARE AND $14.00 NET PER COMMON SHARE BY JPF ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED. THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED AS OF JUNE 6, 1999 (THE "MERGER AGREEMENT"), BY AND AMONG YELLOW CORPORATION ("PARENT"), JPF ACQUISITION CORP. (THE "PURCHASER") AND JEVIC TRANSPORTATION, INC. (THE "COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AND HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 51% OF THE COMMON SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"), (II) THERE BEING VALIDLY TENDERED ALL OF THE OUTSTANDING CLASS A COMMON SHARES AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"), AND ALL APPLICABLE FOREIGN ANTITRUST STATUTES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION. ------------------------ IMPORTANT Any Shareholder (as defined) desiring to tender all or any portion of such Shareholder's Shares (as defined) should either (i) complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal, have such Shareholder's signature thereon guaranteed if required by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or such facsimile) and any other required documents to the Depositary (as defined) and either deliver the certificates for such Shares to the Depositary along with the Letter of Transmittal (or facsimile) or deliver such Shares pursuant to the procedure for book-entry transfer as set forth in Section 2 hereof, or (ii) request such Shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such Shareholder. A Shareholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such Shareholder desires to tender such Shares. As used herein "Class A Common Shares" means the Class A Common Stock, no par value, of the Company; "Common Shares" means the Common Stock, no par value, of the Company; "Shares" means the Class A Common Shares together with the Common Shares; and "Shareholder" means a holder of Shares. If a Shareholder desires to tender Shares and such Shareholder's certificates for Shares are not immediately available or the procedure for book-entry transfer cannot be completed on a timely basis, or time will not permit all required documents to reach the Depositary prior to the Expiration Date (as defined), such Shareholder's tender may be effected by following the procedure for guaranteed delivery set forth in Section 2. Questions and requests for assistance may be directed to J.P. Morgan Securities Inc., who is acting as the Dealer Manager, or ChaseMellon Shareholder Services L.L.C., who is acting as the Information Agent, at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or from brokers, dealers, commercial banks, trust companies and other nominees. ------------------------ The Dealer Manager for the Offer is: J.P. MORGAN & CO. June 9, 1999 2 TABLE OF CONTENTS
PAGE ---- INTRODUCTION............................................................. 1 SECTION 1. TERMS OF THE OFFER.......................................... 2 SECTION 2. PROCEDURES FOR TENDERING SHARES............................. 4 SECTION 3. WITHDRAWAL RIGHTS........................................... 7 SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.......................... 7 SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................... 8 SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.............. 9 SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.................. 9 SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER..... 10 SECTION 9. BACKGROUND OF THE OFFER..................................... 12 SECTION 10. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; THE EMPLOYMENT AGREEMENTS....................................... 14 SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY................. 24 SECTION 12. SOURCE AND AMOUNT OF FUNDS.................................. 24 SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS............... 25 SECTION 14. DIVIDENDS AND DISTRIBUTIONS................................. 26 SECTION 15. CERTAIN CONDITIONS OF THE OFFER............................. 26 SECTION 16. CERTAIN LEGAL MATTERS....................................... 28 SECTION 17. FEES AND EXPENSES........................................... 30 SECTION 18. MISCELLANEOUS............................................... 30 SCHEDULE I. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER........................................... S-1
i 3 TO THE HOLDERS OF SHARES OF JEVIC TRANSPORTATION, INC.: INTRODUCTION JPF Acquisition Corp. (the "Purchaser"), a New Jersey corporation and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), hereby offers to purchase all outstanding shares of Class A Common Stock, no par value (the "Class A Common Shares"), and all outstanding shares of Common Stock, no par value (the "Common Shares" and, together with the Class A Common Shares, the "Shares"), of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context indicates otherwise, as used herein, "Shares" shall mean the Class A Common Shares together with the Common Shares; and "Shareholders" shall mean holders of Shares. Tendering Shareholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares pursuant to the Offer. However, any tendering Shareholder or other payee who fails to complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal may be subject to a required backup federal income tax withholding of 31% of the gross proceeds payable to such Shareholder or other payee pursuant to the Offer. See Section 2. The Purchaser will pay all charges and expenses of J.P. Morgan Securities Inc., as Dealer Manager (in such capacity, the "Dealer Manager"), ChaseMellon Shareholder Services L.L.C., as Depositary (in such capacity, the "Depositary"), and ChaseMellon Shareholder Services L.L.C., as Information Agent (in such capacity, the "Information Agent"), incurred in connection with the Offer. THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED AS OF JUNE 6, 1999 (THE "MERGER AGREEMENT"), BY AND AMONG PARENT, THE PURCHASER AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER OF THE PURCHASER WITH AND INTO THE COMPANY (THE "MERGER") AND HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 51% OF THE COMMON SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"), (II) THERE BEING VALIDLY TENDERED ALL OF THE OUTSTANDING CLASS A COMMON SHARES AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"), AND ALL APPLICABLE FOREIGN ANTITRUST STATUTES. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION. At the effective time of the Merger (the "Effective Time"), each Share then outstanding will be converted into the right to receive an amount in cash equal to the Offer Price (the "Merger Price"). The Merger Agreement is more fully described in Section 10. The Merger Agreement provides that, except as provided therein, following satisfaction or waiver of the conditions to the Offer and subject to the terms and conditions thereof, the Purchaser will accept for payment, in accordance with the terms of the Offer, all Shares validly tendered pursuant to the Offer and not withdrawn 4 as soon as it is permitted to do so pursuant to applicable law. The Offer will not remain open following the time Shares are accepted for payment. Under the New Jersey Business Corporation Act (the "New Jersey Act"), if the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the outstanding Class A Common Shares and 90% of the outstanding Common Shares, the Purchaser will be able to approve the Merger Agreement and the transactions contemplated thereby without a vote of the Shareholders. In such event, Parent, the Purchaser and the Company have agreed in the Merger Agreement to take, at the request of the Purchaser and subject to the satisfaction of the conditions set forth in the Merger Agreement, all necessary and appropriate actions to cause the Merger to become effective as soon as practicable after such acquisition without a meeting of Shareholders, in accordance with Section 14A:10-5.1 of the New Jersey Act. If, however, the Purchaser does not acquire at least 90% of the outstanding Class A Common Shares and 90% of the outstanding Common Shares pursuant to the Offer or otherwise and a vote of the Shareholders is required under the New Jersey Act, a significantly longer period of time would be required to effect the Merger. In the Merger Agreement, Parent, the Purchaser and the Company have agreed that if immediately prior to the scheduled Expiration Date all of the conditions to the Offer are then satisfied or waived, but the Shares tendered pursuant to the Offer are less than 90% of the outstanding Class A Common Shares and 90% of the outstanding Common Shares, the Purchaser may extend the Offer for a period or periods aggregating up to ten business days from the Initial Expiration Date (as hereinafter defined), and thereafter with the prior written consent of the Company. Concurrently with the execution of the Merger Agreement, Parent, the Purchaser and each holder of Class A Common Shares (each, a "Class A Common Shareholder" and, together, the "Class A Common Shareholders") entered into a Tender and Voting Agreement (the "Tender and Voting Agreement") dated June 6, 1999 pursuant to which, subject to the terms and conditions of the Tender and Voting Agreement, the Class A Common Shareholders have agreed to tender 5,701,794 Class A Common Shares in the aggregate in the Offer. The Tender and Voting Agreement is more fully described in Section 10. The Company has represented and warranted that, as of June 5, 1999, there were outstanding 5,739,544 Class A Common Shares and 4,994,303 Common Shares and options to acquire 1,564,056 Common Shares. The Merger Agreement provides, among other things, that the Company will not, without the prior written consent of Parent, issue any additional Shares (except on the exercise of outstanding options). Based on the foregoing and allowing no additional Shares (or options, warrants or rights exercisable for, or securities convertible into, Shares) to have been issued (other than Common Shares issued pursuant to the exercise of the stock options referred to above), if the Purchaser were to purchase 6,148,952 Shares pursuant to the Offer, the Minimum Condition would be satisfied. THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. SECTION 1. TERMS OF THE OFFER Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date. The term "Initial Expiration Date" means 12:00 midnight, New York City time, on Wednesday, July 7, 1999, unless and until the Purchaser, in its sole discretion, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall mean the latest time and date at which the Offer, as so extended by the Purchaser, will expire. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the expiration or termination of all waiting periods imposed by the HSR Act and all applicable foreign antitrust statutes. See Section 15. If such conditions are not satisfied prior to the Expiration Date, the Purchaser reserves the right (but shall not be obligated) to, subject to the terms of the Merger Agreement, (i) decline to 2 5 purchase any of the Shares tendered and terminate the Offer, (ii) waive any of the conditions to the Offer, to the extent permitted by applicable law, and, subject to complying with applicable rules and regulations of the Securities and Exchange Commission (the "Commission"), purchase all Shares validly tendered or (iii) extend the Offer and, subject to the right of Shareholders to withdraw Shares until the Expiration Date, retain the Shares tendered during the period or periods for which the Offer is extended. Subject to the Merger Agreement and the applicable rules and regulations of the Commission, the Purchaser reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether any of the events set forth in Section 15 hereof have occurred or been determined by the Purchaser to have occurred, to (a) extend the period of time during which the Offer is open, and thereby delay acceptance for payment of any Shares, by giving oral or written notice of such extension and delay to the Depositary and (b) waive any condition or amend the Offer in any other respect by giving oral or written notice of such waiver or amendment to the Depositary. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the right of a tendering Shareholder to withdraw such Shareholder's Shares. See Section 3. Under no circumstances will interest be paid on the purchase price for tendered Shares, whether or not the Purchaser exercises its right to extend the Offer. The Merger Agreement provides that the Purchaser may not waive the Minimum Condition or amend the conditions or terms of the Offer without prior written consent of the Company; provided, however, that if all of the conditions to the Offer are then satisfied or waived, Parent shall, in order to permit the Merger to become effective without a meeting of Shareholders of the Company in accordance with Section 14A:10A-1 of the New Jersey Act, have the right to extend the Offer for a period or periods aggregating up to ten business days from the then effective Expiration Date, and thereafter with the prior written consent of the Company. The rights reserved by the Purchaser in the two preceding paragraphs are in addition to the Purchaser's rights pursuant to Section 15. There can be no assurance that the Purchaser will exercise its right to extend the Offer. Any extension, amendment, delay, waiver or termination will be followed as promptly as practicable by public announcement. In the case of an extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires that the announcement be issued no later than the earlier of (i) 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date, or (ii) the first opening of the Nasdaq National Market on the next business day after the previously scheduled Expiration Date, in accordance with the public announcement requirements of Rule 14e-1 under the Exchange Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material change in the information published, sent or given to Shareholders in connection with the Offer be promptly disseminated to Shareholders in a manner reasonably designed to inform Shareholders of such change), and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser will not have any obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release to the Dow Jones News Service. As used in this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1 under the Exchange Act. If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment (whether before or after its acceptance for payment of Shares) for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering Shareholders are entitled to withdrawal rights as described in Section 3. However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities tendered by or on behalf of holders of securities promptly after the termination or withdrawal of such bidder's offer. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will extend the Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in the 3 6 percentage of securities sought, will depend upon the facts and circumstances then existing, including the relative materiality of the changed terms. For information with respect to a change in price or a change in the percentage of securities sought, a minimum period of 10 business days is required to allow for adequate dissemination to Shareholders and investor response. If the Purchaser should decide to change the price offered or the percentage of Shares sought, such change will be applicable to all Shareholders who hold any Shares. The Merger Agreement provides that the Company will supply the Purchaser with the Company's Shareholder lists and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares, and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Shareholder lists, or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares, by the Purchaser following receipt of such lists or listings from the Company. SECTION 2. PROCEDURES FOR TENDERING SHARES Valid Tender. For a Shareholder validly to tender Shares pursuant to the Offer, either (a) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), together with any required signature guarantees, or in the case of a book-entry transfer, an Agent's Message (as defined below), and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, and either (i) certificates for tendered Shares ("Share Certificates") must be received by the Depositary at one of such addresses or (ii) such Shares must be delivered pursuant to the procedures for book-entry transfer set forth below (and a Book-Entry Confirmation (as defined below) received by the Depositary), in each case prior to the Expiration Date, or (b) the tendering Shareholder must comply with the guaranteed delivery procedures set forth below. Book-Entry Transfer. The Depositary will establish accounts with respect to the Shares at The Depositary Trust Company (the "Book-Entry Transfer Facility") for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message, and any other required documents, must, in any case, be transmitted to, and received by, the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering Shareholder must comply with the guaranteed delivery procedures described below. The confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility as described above is referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. The term "Agent's Message" means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. Participants in the Book-Entry Transfer Facility's system may tender their Shares in accordance with the Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP"), to the extent it is available to such participants for the Shares they wish to tender. A Shareholder tendering through ATOP must expressly acknowledge that the Shareholder has received and agreed to be bound by the Letter of Transmittal and that the Letter of Transmittal may be enforced against such Shareholder. 4 7 THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (a) if the Letter of Transmittal is signed by the registered holder (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered holder has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (an "Eligible Institution"). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If Share Certificates are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or Share Certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the Share Certificates surrendered, the tendered Share Certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders appear on the Share Certificates, with the signatures on the Share Certificates or stock powers guaranteed as described above. See Instructions 1 and 5 to the Letter of Transmittal. Guaranteed Delivery. If a Shareholder desires to tender Shares pursuant to the Offer and such Shareholder's Share Certificates are not immediately available or the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, such Shareholder's tender may be effected if all the following conditions are met: (i) the tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary, as provided below, prior to the Expiration Date; and (iii) the Share Certificates, representing all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with respect to all such Shares), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other required documents are received by the Depositary within three trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the New York Stock Exchange (the "NYSE") is open for business. The Notice of Guaranteed Delivery may be delivered by hand to the Depositary or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of (a) Share Certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering Shareholders may be paid at different times depending upon when Share Certificates 5 8 or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the Offer Price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making such payment. The Purchaser's acceptance for payment of Shares validly tendered pursuant to the Offer will constitute a binding agreement between the tendering Shareholder and the Purchaser upon the terms and subject to the conditions of the Offer. Appointment as Proxy. By executing a Letter of Transmittal as set forth above, a tendering Shareholder irrevocably appoints designees of the Purchaser as such Shareholder's attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of such Shareholder's rights with respect to the Shares tendered by such Shareholder and accepted for payment by the Purchaser. All such proxies will be irrevocable and considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by such Shareholder with respect to such Shares will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective). The designees of the Purchaser will thereby be empowered to exercise all voting and other rights with respect to such Shares in respect of any annual, special, adjourned or postponed meeting of the Company's Shareholders, actions by written consent in lieu of any such meeting or otherwise, as they in their sole discretion deem proper. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares, including voting at any meeting of Shareholders. The foregoing proxies are effective only upon acceptance for payment of Shares pursuant to the Offer. Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular Shareholder whether or not similar defects or irregularities are waived in the case of other Shareholders. No tender of Shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding on all parties. Backup Withholding. In order to avoid "backup withholding" of federal income tax on payments of cash pursuant to the Offer, a Shareholder surrendering Shares in the Offer must, unless an exemption applies, provide the Depositary with such Shareholder's correct taxpayer identification number ("TIN") on a Substitute Form W-9 and certify under penalties of perjury that such TIN is correct and that such Shareholder is not subject to backup withholding. If a Shareholder does not provide such Shareholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service may impose a penalty on such Shareholder and the payment of cash to such Shareholder pursuant to the Offer may be subject to backup withholding of 31% of the amount of such payment. All Shareholders surrendering Shares pursuant to the Offer should complete and sign the main signature form and the Substitute Form W-9 included as part of the Letter of Transmittal to provide the information and certification necessary to avoid backup withholding (unless an applicable exemption exists and is proved in a manner satisfactory to the Purchaser and the Depositary). Non-corporate foreign Shareholders should complete and sign the main signature form and a Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the Depositary, in order to avoid backup withholding. See Instruction 10 to the Letter of Transmittal. 6 9 SECTION 3. WITHDRAWAL RIGHTS Except as otherwise provided in this Section 3, tenders of Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to the procedures set forth below at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after August 8, 1999. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of this Offer to Purchase and must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If Share Certificates have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been delivered pursuant to the procedure for book-entry transfer as set forth in Section 2, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by again following one of the procedures described in Section 2 at any time prior to the Expiration Date. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. None of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and will pay for all Shares validly tendered promptly after the Expiration Date. All questions as to the satisfaction of such terms and conditions will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. See Sections 1, 10 and 15. The Purchaser expressly reserves the right, in its sole discretion, to delay acceptance for payment of Shares in order to comply in whole or in part with any applicable law, including, without limitation, the HSR Act. See Section 16. Any such delays will be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or return tendered securities promptly after the termination or withdrawal of such bidder's offer). In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) Share Certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and (c) any other documents required by the Letter of Transmittal. The per Share consideration paid to any Shareholder pursuant to the Offer will be the highest per Share consideration paid to any other Shareholder of the same class pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered to the Purchaser as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which 7 10 will act as agent for validly tendering Shareholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering Shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Upon the deposit of funds with the Depositary for the purpose of making payments to tendering Shareholders, the Purchaser's obligation to make such payment shall be satisfied and tendering Shareholders must thereafter look solely to the Depositary for payment of amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal, as well as any charges and expenses of the Depositary, the Dealer Manager and the Information Agent. If the Purchaser is delayed in its acceptance for payment of or payment for Shares or is unable to accept for payment or pay for Shares pursuant to the Offer, then, without prejudice to the Purchaser's rights under the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent tendering Shareholders are entitled to exercise, and duly exercise, withdrawal rights as described in Section 3. If any tendered Shares are not purchased pursuant to the Offer for any reason, Share Certificates for any such unpurchased Shares will be returned, without expense to the tendering Shareholder (or, in the case of Shares delivered by book-entry transfer of such Shares into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 2, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable after the expiration, termination or withdrawal of the Offer. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to Parent, or to one or more direct or indirect wholly owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering Shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The receipt of cash pursuant to the Offer or the Merger will be a taxable transaction for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for federal income tax purposes, a tendering Shareholder will recognize gain or loss equal to the difference between the amount of cash received by the Shareholder pursuant to the Offer or the Merger and the aggregate tax basis in the Shares tendered by the Shareholder and purchased pursuant to the Offer or converted in the Merger, as the case may be. Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer or converted in the Merger, as the case may be. If Shares are held by a Shareholder as capital assets, gain or loss recognized by the Shareholder will be capital gain or loss, which, in the case of non-corporate Shareholders, generally will be long-term capital gain or loss subject to a maximum federal income tax rate of 20% if the Shareholder's holding period for the Shares exceeds one year. Special rules (and generally lower maximum rates) apply for non-corporate Shareholders in lower tax brackets. Long-term capital gains recognized by a corporate Shareholder will be taxed at a maximum federal income tax rate of 35%. THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED AS COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX- 8 11 EXEMPT ORGANIZATIONS, PASS-THROUGH ENTITIES AND INVESTORS IN SUCH ENTITIES AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER. SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES The Common Shares are included for trading on the Nasdaq National Market (the "Nasdaq Stock Market") under the symbol "JEVC". The Common Shares began trading on the Nasdaq Stock Market on October 7, 1997. The Class A Common Shares are not listed on a national securities exchange or included for trading on the Nasdaq Stock Market. The following table sets forth the high and low sales prices per Common Share, as reported in publicly available sources for the periods indicated. The Company did not pay any dividends on the Common Shares during such periods.
HIGH LOW ------ ------ 1997: Fourth quarter (commencing October 7, 1997).............. $18.88 $15.38 1998: First quarter............................................ 17.25 13.88 Second quarter........................................... 16.00 10.50 Third quarter............................................ 12.00 5.50 Fourth quarter........................................... 9.13 5.50 1999: First quarter............................................ 8.00 5.00 Second quarter (through June 4, 1999).................... 11.50 6.50
On June 4, 1999, the last full trading day prior to the first public announcement of the Purchaser's intention to commence a tender offer for the Shares, the last reported sale price of the Common Shares was $10.75 per Common Share. On June 8, 1999, the last full day prior to the commencement of the Offer, the last reported sale price of the Common Shares was $13.75 per Common Share. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON SHARES. SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY The Company is a New Jersey corporation with its principal offices at 600 Creek Road, Delanco, New Jersey 08075. According to the Company's Annual Report on Form 10-K for 1998 (the "Company 10-K"), the Company is a motor carrier that combines the high revenue yield characteristics of a typical less-than- truckload ("LTL") carrier, an industry designation for shipments weighing less than 10,000 pounds, with the operating flexibility and low fixed costs of a truckload carrier. The Company utilizes a simplified in-route delivery system in which over 70% of the Company's shipments are delivered to their destinations directly from line-haul trailers, eliminating the need for an expensive network of labor-intensive breakbulk terminals, which most LTL carriers use to distribute shipments. The Company's revenue per terminal for 1998 was approximately $33.2 million. The Company serves shippers throughout the eastern half of the United States and in selected markets in the remainder of the continental United States and Canada. Selected Financial Information. Set forth below is certain selected consolidated financial information with respect to the Company and its consolidated subsidiaries excerpted from the information contained in the Company 10-K and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "Company 10-Q"). More comprehensive financial information is included in the Company 10-K, the Company 10-Q and other documents filed by the Company with the Commission, and the following summary 9 12 is qualified in its entirety by reference to such information. The Company 10-K, the Company 10-Q and such other documents should be available for inspection and copies thereof should be obtainable in the manner set forth below under "-- Available Information". JEVIC TRANSPORTATION, INC. SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED FISCAL YEAR ENDED MARCH 31, DECEMBER 31, -------------------- -------------------------------- 1999 1998 1998 1997 1996 -------- -------- -------- -------- -------- Statement of Income Data: Revenues.......................... $ 65,832 $ 54,899 $226,123 $190,821 $154,799 Operating Income.................. 4,924 3,809 16,686 15,439 9,390 Net Income........................ 2,532 2,222 9,321 2,418 6,195 Basic Earnings Per Share.......... .24 .21 0.87 0.31 0.90 Diluted Earnings Per Share........ .24 .20 0.86 0.30 0.88 Balance Sheet Data: Total Assets...................... $164,804 $117,290 $147,839 $113,368 $ 82,355 Long-Term Debt.................... 30,409 15,207 31,008 15,679 28,855 Total Shareholders' Equity........ 77,935 67,859 75,305 65,537 24,071
Available Information. The Company is subject to the informational requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. Information as of particular dates concerning the Company's directors and officers, their remuneration, stock options and other matters, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be disclosed in proxy statements distributed to the Company's Shareholders and filed with the Commission. Such reports, proxy statements and other information are available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such information are obtainable from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and other information. Such reports, proxy statements and other information concerning the Company may also be inspected at the offices of the Nasdaq Stock Market, Reports Section, at 1753 K Street, N.W., Washington, D.C. 20006. Company Information. The information concerning the Company contained in this Offer to Purchase has been provided by and represented and warranted by the Company. Although Parent and the Purchaser do not have any knowledge that any such information is untrue, neither the Purchaser nor Parent takes any responsibility for the accuracy or completeness of such information or for any failure by the Company to disclose events that may have occurred and may affect the significance or accuracy of any such information. SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER Parent is a Delaware corporation with its principal executive offices located at 10990 Roe Avenue, P.O. Box 7563, Overland Park, KS 66211. The Purchaser is a newly incorporated New Jersey corporation and a wholly owned subsidiary of the Parent which to date has not conducted any business other than in connection with the Offer and the Merger. The principal executive offices of the Purchaser are located at 10990 Roe Avenue, P.O. Box 7563, Overland Park, KS 66211. 10 13 Except as set forth in this Offer to Purchase, neither Parent, the Purchaser or any other affiliate of Parent nor, to the best knowledge of Parent and the Purchaser, any of the persons listed in Schedule I hereto, or any associate or majority-owned subsidiary of such persons (collectively, the "Purchaser Entities"), beneficially owns an equity security of the Company, and no Purchaser Entity, or, to the best knowledge of Parent, the Purchaser, or any other affiliate of Parent, any of the other persons referred to above, or any of the respective directors, executive officers or subsidiaries of any of the foregoing, has effected any transaction in any equity security of the Company during the past 60 days. Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge of any Purchaser Entity, any of the persons listed in Schedule I hereto has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, without limitation, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge of any Purchaser Entity, any of the persons listed in Schedule I hereto has had any transactions with the Company or any of its executive officers, directors or affiliates that would require reporting under the rules of the Commission. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between any Purchaser Entity, or their respective subsidiaries, or, to the best knowledge of any Purchaser Entity, any of the persons listed in Schedule I hereto, on the one hand, and the Company or its executive officers, directors or affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors, or a sale or other transfer of a material amount of assets that would require reporting under the rules of the Commission. Selected Financial Information. Set forth below is certain selected consolidated financial information with respect to Parent and its consolidated subsidiaries excerpted from the information contained in Parent's Annual Report on Form 10-K for 1998 (the "Parent 10-K") and Parent's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "Parent 10-Q"). More comprehensive financial information is included in the Parent 10-K, the Parent 10-Q and other documents filed by Parent with the Commission, and the following summary is qualified in its entirety by reference to such information. The Parent 10-K, the Parent 10-Q and such other documents are obtainable for inspection and copies thereof are obtainable in the manner set forth below under "-- Available Information." YELLOW CORPORATION SELECTED FINANCIAL INFORMATION (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31, FISCAL YEAR ENDED DECEMBER 31, ----------------------- ------------------------------------ 1999 1998 1998 1997 1996 ---------- ---------- ---------- ---------- ---------- Statement of Operations Data: Operating Revenue.................. $ 727,498 $ 692,460 $2,900,577 $2,898,414 $2,654,991 Income (Loss) From Operations...... 11,752 8,909 83,396 98,677 (7,749) Net Income (Loss).................. 4,775 (647) (28,669) 52,435 (27,180) Basic Earnings (Loss) per share.... .19 (.02) (1.07) 1.86 (.97) Diluted Earnings (Loss) per share........................... .19 (.02) (1.06) 1.83 (.97) Balance Sheet Data: Total Assets....................... $1,074,980 $1,210,690 $1,105,685 $1,270,812 $1,227,807 Long-Term Debt..................... 156,765 162,272 156,988 163,080 192,492 Total Shareholders' Equity......... 365,163 430,107 371,252 445,851 395,700
11 14 Available Information. Parent is subject to the informational requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. Information as of particular dates concerning Parent's directors and officers, their remuneration, stock options and other matters, the principal holders of Parent's securities and any material interest of such persons in transactions with Parent is required to be disclosed in proxy statements distributed to Parent's shareholders and filed with the Commission. Such reports, proxy statements and other information are available for inspection at the public reference facilities of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661. Copies of such information are obtainable from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and other information. Such reports, proxy statements and other information concerning Parent may also be inspected at the offices of the Nasdaq Stock Market, Reports Section, at 1753 K Street, N.W., Washington, D.C. 20006. SECTION 9. BACKGROUND OF THE OFFER In late October 1998, Samuel A. Woodward, Senior Vice President of Operations and Planning of Parent, contacted Harry J. Muhlschlegel, Chief Executive Officer and Chairman of the Board of the Company, to discuss the possibility of exploring a strategic relationship between Parent and the Company. On November 10, 1998, Mr. Woodward met with Mr. Muhlschlegel and Brian J. Fitzpatrick, Senior Vice President and Chief Financial Officer of the Company, and discussed possible strategic relationships between Parent and the Company. At this meeting, the participants concluded that discussions concerning a possible strategic alliance or business combination involving Parent and the Company should continue. On December 15, 1998, Mr. Woodward met with Messrs. Muhlschlegel, Karvois and Fitzpatrick. At this meeting, Mr. Woodward indicated that Parent was primarily interested in pursuing a business combination with the Company. After the December 15, 1998 meeting, the Company's legal counsel distributed a form of confidentiality agreement to Parent, which was negotiated over the course of the following week and was executed by Parent and the Company on December 22, 1998. On January 8, 1999, Mr. Woodward contacted Mr. Muhlschlegel to schedule a meeting at which Parent could further explore the potential benefits to both companies of a business combination. On January 12, 1999, Mr. Woodward, William F. Martin, Jr., General Counsel of the Company, and the president of Parent's information services subsidiary met with Messrs. Muhlschlegel, Karvois and Fitzpatrick and the Company's legal counsel to explore such benefits and to preliminarily discuss the structure of a potential business combination. On February 18, 1999, Mr. Muhlschlegel contacted Mr. Woodward to further discuss the potential operating benefits that could result from a business combination and to schedule a meeting where representatives of Parent could meet with a larger group of management of the Company. On March 2, 1999, Mr. Woodward and certain operations personnel of Parent met with Messrs. Muhlschlegel, Karvois and Fitzpatrick and certain operations personnel of the Company to discuss potential operating benefits that could result from a business combination. On March 24, 1999, Mr. Woodward contacted Messrs. Muhlschlegel, Karvois and Fitzpatrick to arrange to have them meet with A. Maurice Myers, Chief Executive Officer of Parent, and H.A. Trucksess, III, Senior Vice President and Chief Financial Officer of Parent. On March 29, 1999, Messrs. Myers and Trucksess met with Mr. Muhlschlegel, Karvois and Fitzpatrick to discuss the status of discussions between the parties. At this meeting, it was determined that the parties would proceed with negotiations with respect to the terms of a business combination. On April 9, 1999, Mr. Woodward contacted Mr. Muhlschlegel to schedule meetings at which the parties would begin negotiating the terms of a business combination. On April 15, 1999, the Company's legal counsel 12 15 contacted Mr. Martin to discuss the agenda of such meetings, which were scheduled for April 28-29, 1999. On April 28, 1999, Messrs. Myers, Martin and Woodward met with Messrs. Muhlschlegel, Karvois and Fitzpatrick and the Company's legal counsel for a dinner discussion in anticipation of a formal negotiating session the following day. On April 29, 1999, Mr. Martin, together with legal counsel to Parent and a representative of J.P. Morgan Securities Inc., financial advisor to Parent, commenced such negotiations with Messrs. Muhlschlegel, Karvois and Fitzpatrick and the Company's legal counsel. During the period from May 1, 1999 through May 17, 1999, representatives of J.P. Morgan Securities Inc. and Janney Montgomery Scott Inc., financial advisor to the Company, conferred and discussed the potential financial impact of combining the two companies. On May 17, 1999, Mr. Martin of Parent, together with Parent's legal and financial advisors, met with the Company's legal and financial advisors to continue to negotiate the terms of a transaction. On May 18, 1999, tentative agreement on the form of the transaction and the consideration to the Company's shareholders was reached in discussions between Mr. Myers and Mr. Muhlschlegel, subject to continuing due diligence and negotiation and the approval of the Boards of Directors of Parent and the Company. On May 20, 1999, Parent's legal counsel distributed first drafts of the Merger Agreement and the Tender and Voting Agreement to the Company and its counsel. On May 20, 1999, Mr. Muhlschlegel contacted Mr. Myers and informed him that the Company's Board of Directors was considering soliciting from third parties other offers to purchase the Company. Mr. Myers informed Mr. Muhlschlegel that in the event the Company's Board determined to solicit other offers, he could not assure Mr. Muhlschlegel that Parent would continue to be willing to proceed with a transaction. Mr. Myers also informed Mr. Muhlschlegel that in the event the Company's Board agreed not to solicit any offers from third parties, the Merger Agreement would not contain provisions of a nature that would be preclusive with respect to unsolicited third party proposals. On May 21, 1999, Mr. Muhlschlegel contacted Mr. Myers and informed him that the Company's Board had determined not to solicit third party offers on the condition that the Merger Agreement not contain provisions of a nature that would be preclusive with respect to third party proposals. Mr. Myers informed Mr. Muhlschlegel that Parent was willing to proceed with the transaction on this basis. On May 24, 1999, Mr. Martin contacted Mr. Fitzpatrick to schedule Parent's legal, tax and accounting due diligence review. During May 26-28, 1999, representatives of Parent conducted their legal, tax and accounting due diligence. On May 26, 1999, Mr. Myers contacted Mr. Muhlschlegel and indicated Parent's interest in revising certain severance agreements of certain officers of the Company and in having certain officers of the Company enter into employment agreements with Parent to provide appropriate incentives to retain such officers on a long term basis. On May 27, 1999, Mr. Muhlschlegel contacted Mr. Myers and scheduled a meeting at which Mr. Myers could discuss these employment matters with the applicable officers of the Company. On May 28, 1999, Mr. Martin, together with Parent's legal counsel, contacted the Company's legal counsel to discuss the Company's comments on the drafts of the Merger Agreement and the Tender and Voting Agreement. On the basis of these discussions, revised drafts of the Merger Agreement and the Tender and Voting Agreement were thereafter distributed to the Company and its legal counsel. On June 2, 1999, Mr. Myers met with officers of the Company and negotiated Parent's proposed amendments to their severance agreements and the proposed employment agreements. In addition, Mr. Martin, together with Parent's legal counsel, contacted the Company's legal counsel to discuss the Company's comments on the revised drafts of Merger Agreement and the Tender and Voting Agreement. On this basis of these discussions, revised drafts of the Merger Agreement and the Tender and Voting Agreement were distributed to the Company and its counsel. During June 3-6, 1999 the parties' respective legal counsel and financial advisors conferred to finalize the Merger Agreement and the Tender and Voting Agreement and related documentation. 13 16 On June 4, 1999, Mr. Myers contacted Mr. Muhlschlegel and informed him that the Board of Directors of Parent had unanimously approved the Merger Agreement and the Tender Voting Agreement, subject to the finalization of the Merger Agreement and the Tender and Voting Agreement and related documentation. On June 4, 1999, Mr. Muhlschlegel contacted Mr. Myers and informed him that, subject to the finalization of the Merger Agreement and the Tender and Voting Agreement and related documentation, the Board of Directors of the Company had unanimously approved the Merger Agreement, the Offer and the Merger and would recommend that the Shareholders accept the Offer and adopt and approve the Merger Agreement. On June 6, 1999, the Merger Agreement and the Tender and Voting Agreement were executed by the parties thereto, and the applicable officers of the Company executed the amendments to their severance agreements and executed their employment agreements. On June 7, 1999, the terms of the Merger Agreement and the Tender and Voting Agreement were publicly announced. SECTION 10. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; THE EMPLOYMENT AGREEMENTS The following is a summary of certain provisions of the Merger Agreement, the Tender and Voting Agreement, the Employment Agreements and the Amended and Restated Severance Agreements. This summary is qualified in its entirety by reference to the Merger Agreement, the Tender and Voting Agreement, the Employment Agreements and the Amended and Restated Severance Agreements, which are incorporated by reference and copies of which have been filed with the Commission as exhibits to the Schedule 14D-1. The Merger Agreement, the Tender and Voting Agreement, the Employment Agreements and the Amended and Restated Severance Agreements may be examined and copies may be obtained at the places set forth in Section 8 of this Offer to Purchase under "Available Information". (A) THE MERGER AGREEMENT The Offer. The Merger Agreement provides that the Purchaser will commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions of the Offer, as set forth in Section 15, the Purchaser will purchase all Shares validly tendered pursuant to the Offer at a price of $14.00 per Share, net to the seller in cash, without interest thereon. The Merger Agreement provides that, without the prior written consent of the Company, the Purchaser will not decrease the price per Class A Common Share or Common Share or change the form of consideration payable in the Offer, decrease the number of Shares sought to be purchased in the Offer, change the conditions set forth in the Offer, waive or reduce the Minimum Condition, impose additional conditions to the Offer or amend any other term of the Offer in any manner adverse to the holders of any Shares; provided, however, that if all the conditions to the Offer are then satisfied or waived, the Parent, in order to permit the Merger to become effective without a meeting of Shareholders in accordance with Section 14A:10-5.1 of the New Jersey Act, shall have the right (i) to extend the Offer for a period or periods aggregating up to ten business days from the then effective Expiration Date and (ii) thereafter to extend the Offer with the prior written consent of the Company; and provided, further, that if Parent elects to extend the Offer pursuant to clause (i) above, Parent and the Purchaser shall be deemed to have permanently and irrevocably waived all of the conditions to the Offer (other than the Minimum Condition and the conditions set forth in clause (a) of the conditions to the Offer) and provided, further, that the Purchaser may extend the Offer to the extent any conditions to the Offer have not been satisfied on the applicable Expiration Date. Recommendation. The Merger Agreement provides that, subject to the conditions thereof, the Board of Directors of the Company has (i) determined that the Offer and the Merger are fair to and in the best interests of the Company and its Shareholders, (ii) irrevocably approved the Tender and Voting Agreement, the Offer and the Merger in accordance with Section 14A:10A-1 of the New Jersey Act (and for purposes of any other applicable state takeover law), and (iii) resolved to recommend acceptance of the Offer and approval and adoption of the Merger and the Merger Agreement by the Company's Shareholders (in accordance with the requirements of the Company's Restated Certificate of Incorporation and applicable law). 14 17 The Merger. Following the consummation of the Offer, the Merger Agreement provides that, subject to the terms and conditions thereof, and in accordance with the New Jersey Act, at the Effective Time, the Purchaser will be merged with and into the Company. As a result of the Merger, the separate corporate existence of the Purchaser will cease and the Company will continue as the surviving corporation (the "Surviving Corporation"). The Merger Agreement provides that Parent, the Purchaser and the Company shall use their reasonable best efforts to consummate the Merger as soon as practicable. Under the New Jersey Act, the approval of the Board of Directors of the Company and the affirmative vote of holders of a majority of the outstanding Shares is required to approve and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger. Section 14A:10A-4 of the New Jersey Act prevents certain "business combinations" with an "interested stockholder" (generally, any person who owns or has the right to acquire 10% or more of a corporation's outstanding voting stock) for a period of five years following the time such person became an interested stockholder, unless, among other things, prior to the time the interested stockholder became such the board of directors of the corporation approved the business combination. Section 14A:10A-5 of the New Jersey Act further provides that a business combination is permissible if approved by two-thirds of the outstanding shares of voting stock of the Company, excluding voting stock held by any "interested stockholder," or if certain price criteria and procedural standards are satisfied. The Board of Directors of the Company has unanimously approved the Offer, the Merger, the Merger Agreement and the Tender and Voting Agreement and the transactions contemplated thereby for the purposes of Section 14A:10A-4 of the New Jersey Act. Pursuant to the Merger Agreement, the Company will, if required by the Company's Restated Certificate of Incorporation and/or applicable law in order to consummate the Merger, duly call, give notice of, convene and hold a special meeting of its Shareholders (the "Special Meeting") as soon as practicable following the acceptance for payment and purchase of the Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon the Merger and the adoption of the Merger Agreement. The Merger Agreement provides that the Company will (a) prepare and file with the Commission a preliminary proxy or information statement and (b) use its reasonable best efforts to (x) obtain and furnish the information required to be included by the Commission in a definitive proxy or information statement (the "Statement") and (y) obtain the necessary approvals of the Merger and the Merger Agreement from its Shareholders. The Board of Directors of the Company, subject to the fiduciary obligation of the Board under applicable law, will include in the Statement the recommendation of the Board that the Shareholders of the Company vote in favor of the approval of the Merger and the Merger Agreement. Parent agrees that it will vote, or cause to be voted, all of the Shares then owned by it and the Purchaser or any of its other subsidiaries in favor of the Merger and adoption of the Merger Agreement. If the Purchaser acquires at least a majority of the Shares on a fully diluted basis, pursuant to the Offer or otherwise, the Purchaser will have sufficient voting power to approve the Merger, even if no other Shareholder votes in favor of the Merger. The Merger Agreement provides that in the event that Parent, the Purchaser or any other subsidiary of Parent acquires at least 90% of the outstanding Class A Common Shares and at least 90% of the outstanding Common Shares on a fully diluted basis, pursuant to the Offer or otherwise, Parent, the Purchaser and the Company will, at the request of the Parent and subject to the terms and conditions of the Merger Agreement, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of Shareholders of the Company, in accordance with Section 14A:10-5.1 of the New Jersey Act. Conversion of Securities. At the Effective Time, each Share issued and outstanding prior to the Effective Time shall be converted into the right to receive in cash the Merger Price. Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent or the Purchaser, in the treasury of the Company or by any wholly owned subsidiary of the Company ("Excluded Shares") shall be canceled and retired. Pursuant to the Merger Agreement, the Board of Directors of the Company has adopted such resolutions, and has agreed to take such other actions as may be necessary, so that each outstanding option (an "Option") granted under the Company's 1994 Stock Option Plan and the 1997 Incentive Plan (collectively, the "Option 15 18 Plans"), whether or not then exercisable or vested, shall become fully exercisable and vested and, except to the extent that Parent or the Purchaser and the holder of any such Option otherwise agree, immediately following consummation of the Offer, the Company shall pay to such holders of Options an amount in respect thereof equal to the product of (A) the excess of the Merger Price over the exercise price thereof and (B) the number of Shares subject thereto (such payment to be net of taxes required by law to be withheld with respect thereto); provided that the foregoing shall be subject to the obtaining of any necessary consents of holders of awards of Options under the Option Plans, it being agreed that the Company will use its best efforts to obtain any such consent. Board of Directors. Upon payment by the Purchaser for Shares pursuant to the Offer representing at least a majority of the votes entitled to be cast by all holders of Shares and from time to time thereafter so long as the Purchaser and/or Parent (and/or their respective wholly-owned subsidiaries) continue to hold at least such number of Shares, Parent will be entitled to designate such number of directors, rounded up to the next whole number, on the Company's Board of Directors as is equal to the product of the total number of directors on the Company's Board (determined after giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that the aggregate number of Shares beneficially owned by Parent or its affiliates bears to the total number of Shares outstanding. The Company shall, upon request of Parent, promptly take all actions necessary to cause Parent's designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors. If Parent's designees are so elected, prior to the Effective Time the Board shall always have at least one member who is neither an officer, director, stockholder or designee of Parent or any of its affiliates. The Company's obligation to appoint Parent's designees to the Board of Directors is subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Representations and Warranties. Pursuant to the Merger Agreement, the Company has made customary representations and warranties to Parent and the Purchaser with respect to, among other things, its organization and qualifications, capitalization, authority, financial statements, public filings, litigation, compliance with law, employee benefit plans, intellectual property, material contracts, insurance, labor matters, real property matters, suppliers and customers, accounts receivable, "Year 2000" compliance, environmental matters, granting of certain approvals, opinion of financial advisor, information in the Statement, tax status and the absence of material adverse change on the Company or any of its subsidiaries since March 31, 1999. Parent and the Purchaser have made customary representations and warranties to the Company with respect to, among other things, its organization and qualifications, authority, public filings, information in the Statement and financing for the Offer. Covenants. The Merger Agreement contains certain restrictive covenants as to the conduct of the Company, Parent, the Purchaser and the Surviving Corporation in contemplation of the Merger including, without limitation, access by Parent and the Purchaser to information concerning the Company, use of reasonable best efforts to consummate the Merger, use of reasonable best efforts to ensure that the conditions set forth in Section 15 are satisfied, and notification of the other parties of certain matters. Conduct of Business of the Company. Pursuant to the Merger Agreement, the Company has agreed that, except with the prior written consent of Parent or as otherwise required by the Merger Agreement, during the period from execution of the Merger Agreement to the Effective Time, the Company and its subsidiaries will conduct operations only in the ordinary course of business consistent with past practice and will use reasonable best efforts to preserve intact the business organization of the Company and each of its subsidiaries, to keep available the services of its and their present officers and employees, and to preserve the good will of those having business relationships with it. No Solicitation. Pursuant to the Merger Agreement, the Company has represented and warranted to, and covenanted and agreed with, Parent and the Purchaser that neither the Company nor any of its subsidiaries has any agreement, arrangement or understanding with any potential acquiror that, directly or indirectly, would be violated, or require any payments, by reason of the execution, delivery and/or consummation of the Merger Agreement. The Merger Agreement provides that the Company shall, and shall cause its subsidiaries and its and their officers, directors, employees, investment bankers, attorneys and other agents and representatives to, immediately cease any existing discussions or negotiations with any person other 16 19 than Parent or the Purchaser (a "Third Party") heretofore conducted with respect to any Acquisition Transaction (as hereinafter defined). The Merger Agreement provides that the Company and the Board of Directors of the Company shall not, and the Company shall cause its subsidiaries and its and their respective officers, directors, employees, investment bankers, attorneys and other agents and representatives not to, directly or indirectly, (w) withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of the Board of Directors of the Company of the Merger Agreement or any of the transactions contemplated thereby or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to the Shareholders, (x) solicit, initiate, continue, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries, proposals or offers from any Third Party with respect to, or that could reasonably be expected to lead to, any acquisition or purchase of a material portion of the assets or business of, or a 15% or more voting equity interest in (including by way of a tender offer), or any amalgamation, merger, consolidation or business combination with, or any recapitalization or restructuring, or any similar transaction involving, the Company or any of its subsidiaries (the foregoing being referred to collectively as an "Acquisition Transaction"), or (y) negotiate, explore or otherwise communicate in any way with any Third Party with respect to any Acquisition Transaction or enter into, approve or recommend any agreement, arrangement or understanding requiring the Company to abandon, terminate or fail to consummate the Offer and/or the Merger or any other transaction contemplated by the Merger Agreement. The Merger Agreement provides that notwithstanding anything to the contrary in the foregoing, the Company may, prior to the purchase of Shares pursuant to the Offer, in response to an unsolicited written proposal with respect to an Acquisition Transaction involving the acquisition of all of the Shares (or all or substantially all of the assets of the Company and its subsidiaries) from a Third Party or in response to an unsolicited all cash tender offer for any and all Shares (i) furnish or disclose non-public information to such Third Party, (ii) negotiate, discuss or otherwise communicate with such Third Party and (iii) in the case of an unsolicited all cash tender offer for any and all Shares, withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of the Merger Agreement and the transactions contemplated thereby or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to Shareholders, in each case only if the Board of Directors of the Company determines in good faith: (1) (after consultation with Janney Montgomery Scott Inc.) that such proposal or such unsolicited all cash tender offer, as the case may be, is more favorable to the Shareholders from a financial point of view than the transaction contemplated by the Merger Agreement (including any adjustment to the terms and conditions proposed by Parent and the Purchaser in response to such proposal or such unsolicited all cash tender offer, as the case may be), (2) (after consultation with Janney Montgomery Scott Inc.) that sufficient financing is obtainable with respect to such proposal or such unsolicited all cash tender offer, as the case may be, such that the proposed Acquisition Transaction will be consummated without material delay and (3) that the proposed Acquisition Transaction (including, if applicable, such an unsolicited all cash tender offer) is not subject to any regulatory approvals that could reasonably be expected to prevent or materially delay its consummation (a proposal with respect to an Acquisition Transaction (including, if applicable, such an unsolicited all cash tender offer) meeting the requirements of clauses (1) through (3) is referred to herein as a "Superior Proposal"). The Merger Agreement also provides that prior to furnishing or disclosing any non-public information to, or entering into negotiations, discussions or other communications with, such Third Party, the Company shall receive from such Third Party an executed confidentiality agreement with terms no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement between the Company and Parent (the "Confidentiality Agreement"), but which confidentiality agreement shall not provide for any exclusive right to negotiate with the Company or any payments by the Company. The Merger Agreement also provides that the Company shall provide to Parent copies of all such non-public information delivered to such Third Party concurrently with such delivery. The Merger Agreement provides that, notwithstanding the foregoing, the Company and the Board of Directors of the Company shall not, and the Company shall cause its affiliates not to, withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of this Agreement or any of the transactions contemplated hereby, or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to Shareholders or enter into a definitive agreement with respect to a Superior Proposal unless (w) the Company has given Parent three business days' notice of the intention of the Board of Directors to withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the 17 20 approval or recommendation of the Merger Agreement or any of the transactions contemplated thereby, or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to the Shareholders or the intention of the Company to enter into such definitive agreement, as the case may be, (x) if Parent makes a counter-proposal within such three business day period, the Board of Directors of the Company shall have determined, in light of any such counter-proposal, that the Third Party Acquisition Transaction proposal is still a Superior Proposal, (y) the Company concurrently terminates the Merger Agreement in accordance with the terms thereof and pays any Termination Fee (as defined) required under the termination provisions of the Merger Agreement and agrees to pay any other amounts required under such provisions, and (z) with respect to a definitive agreement, such agreement permits the Company to terminate it if it receives a Superior Proposal, such termination and related provisions to be on terms no less favorable to the Company, including as to fees and reimbursement of expenses, as those contained in the Merger Agreement. The Merger Agreement provides that the Company shall promptly (but in any event within one day of the Company becoming aware of same) advise Parent of the receipt by the Company, any of its subsidiaries or any of its or their bankers, attorneys or other agents or representatives of any inquiries or proposals relating to an Acquisition Transaction and of certain actions taken with respect thereto. The Merger Agreement provides that the Company shall promptly (but in any event within one day of the Company becoming aware of same) provide Parent with a copy of any such inquiry or proposal in writing and a written statement with respect to any such inquiries or proposals not in writing, which statement shall include the identity of the parties making such inquiries or proposal and the material terms thereof. The Merger Agreement provides that the Company shall, from time to time, promptly (but in any event within one day of the Company becoming aware of same) inform Parent of the status and content of and developments with respect to any discussions regarding any Acquisition Transaction with a Third Party, including (i) the calling of meetings of the Board of Directors of the Company to take action with respect to such Acquisition Transaction, (ii) the execution of any letters of intent, memoranda of understanding or similar non-binding agreements with respect to such Acquisition Transaction, (iii) the waiver of any standstill agreement to which the Company is or becomes a party, (iv) the determination by the Board of Directors of the Company to recommend to the Shareholders that they approve or accept a Superior Proposal or withdraw or modify in a manner adverse to the Parent its approval or recommendation of the Merger Agreement or the transactions contemplated thereby, (v) the determination by the Company to publicly disclose receipt of a Superior Proposal and (vi) the waiver by the Company of any confidentiality agreement with a person proposing a Superior Proposal. The Merger Agreement provides that for the avoidance of doubt, the Company agrees that it will not enter into any definitive agreement with respect to a Superior Proposal unless and until Parent has been given notice of the identity of the parties making such Superior Proposal, the terms thereof and developments referred to in the preceding sentence and the intent to enter into such a definitive agreement at least three business days prior to the entering into such agreement. State Takeover Laws. The Merger Agreement provides that the Company shall, upon the request of the Purchaser, take all reasonable steps to assist in any challenge by the Purchaser to the validity or applicability to the transactions contemplated by the Merger Agreement, including the Offer and the Merger, and the Tender and Voting Agreement of any state takeover law. The Merger Agreement provides that the Board of Directors of the Company shall not amend, modify or rescind the approval of any purchase of Shares in the Offer for purposes of Section 14A:10A-1 of the New Jersey Act. Indemnification. Pursuant to the Merger Agreement, all rights to indemnification now existing in favor of any director or officer of the Company, as provided in the Company's Restated Certificate of Incorporation or by laws, in an agreement between any such person and the Company, or otherwise in effect on the date thereof shall survive the Merger and shall continue in full force and effect indefinitely after the Effective Time. The Merger Agreement provides that Parent also agrees to indemnify all current and former directors and officers of the Company ("Indemnified Parties") to the fullest extent permitted by applicable law with respect to all acts and omissions arising out of such individuals' services as officers or directors of the Company or any of its subsidiaries or as trustees or fiduciaries of any plan for the benefit of employees occurring prior to the Effective Time. The Merger Agreement provides that without limitation of the foregoing, in the event any such Indemnified Party is or becomes involved in any capacity in any action, proceeding or investigation in 18 21 connection with any matter, including, without limitation, the transactions contemplated by the Merger Agreement, occurring prior to, and including, the Effective Time, Parent will pay as incurred such Indemnified Party's reasonable legal and other expenses of counsel selected by the Indemnified Party and reasonably acceptable to Parent (including the cost of any investigation, preparation and settlement) incurred in connection therewith; provided, however, that Parent shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations be liable for fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all Indemnified Parties. The Merger Agreement provides that Parent shall be entitled to participate in the defense of any such action or proceeding, and counsel selected by the Indemnified Party shall, to the extent consistent with their professional responsibilities, cooperate with Parent and any counsel designated by Parent. The Merger Agreement provides that Parent shall pay all reasonable expenses, including attorneys' fees, that may be incurred by any Indemnified Party in enforcing the indemnity and other obligations provided for in the Merger Agreement. The Merger Agreement provides that Parent agrees that the Company and, from and after the Effective Time, the Surviving Corporation shall cause to be maintained in effect for not less than six years from the Effective Time the current policies of the directors' and officers' liability insurance maintained by the Company; provided that the Surviving Corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are no less advantageous and provided that such substitution shall not result in any gaps or lapses in coverage with respect to matters occurring prior to the Effective Time; and provided, further, that the Surviving Corporation shall not be required to pay an annual premium in excess of 200% of the last annual premium paid by the Company prior to the date of the Merger Agreement and if the Surviving Corporation is unable to obtain the insurance required by the Merger Agreement it shall obtain as much comparable insurance as possible for an annual premium equal to such maximum amount. Employee Matters. The Merger Agreement provides that on and after the Effective Time, Parent shall cause the Surviving Corporation and its subsidiaries to promptly pay or provide when due all compensation and benefits earned through or prior to the Effective Time as provided pursuant to the terms of any Company employee benefit plans disclosed to Parent ("Company Plans") for all employees (and former employees) and directors (and former directors) of the Company and its subsidiaries. Pursuant to the Merger Agreement, Parent and Company have agreed that the Surviving Corporation and its subsidiaries shall pay promptly or provide when due all compensation and benefits required to be paid pursuant to the terms of any individual agreement with any employee, former employee, director or former director in effect as of the date of the Merger Agreement and disclosed to Parent. The Merger Agreement provides that if employees of the Surviving Corporation and its subsidiaries become eligible to participate in a medical, dental or health plan of Parent or its subsidiaries, Parent shall cause such plan to (i) waive any preexisting condition limitations for conditions under the applicable medical, health or dental plans of the Company and its subsidiaries (other than any limitation already in effect with respect to the applicable employee that has not been satisfied as of the Effective Time under the applicable Company Plan) and (ii) honor any deductible and out-of-pocket expenses incurred by the employees and their beneficiaries under such plans during the portion of the calendar year prior to such participation. Waiver. The Merger Agreement provides that, prior to the Effective Time, the parties may (i) extend the time for the performance of any of the obligations or other acts of any other party, (ii) waive any inaccuracies in the representations and warranties contained in the Merger Agreement by any other party or in any document, certificate or writing delivered pursuant thereto by any other party or (iii) waive compliance with any of the agreements of any other party or with any conditions to its own obligations. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. 19 22 Termination. The Merger Agreement provides that it may be terminated and the Merger contemplated thereby may be abandoned at any time prior to the Effective Time, whether or not approval thereof by the Shareholders has been obtained: (a) by the mutual written consent of Parent and the Company; (b) by the Company if the Company is not in material breach of any of its representations, warranties, covenants or agreements contained in the Merger Agreement and if (i) the Purchaser fails to commence the Offer as provided in the Merger Agreement, (ii) the Purchaser shall not have accepted for payment and paid for Shares pursuant to the Offer in accordance with the terms hereof on or before August 31, 1999 (provided that if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, termination pursuant to this clause (ii) may not occur until after October 31, 1999), (iii) the Purchaser fails to purchase validly tendered Shares in violation of the terms of the Offer or the Merger Agreement or (iv) the Merger shall not have occurred on or before December 31, 1999; (c) by Parent or the Company if the Offer is terminated or withdrawn pursuant to its terms without any Shares being purchased in the Offer; provided that Parent may terminate the Merger Agreement pursuant to this clause only if Parent's or the Purchaser's termination or withdrawal of the Offer is not in violation of the terms of the Merger Agreement or the Offer; (d) by Parent or the Company if any court or other government or subdivision thereof, or any administrative governmental or regulatory authority, agency, commission, tribunal or body, domestic, foreign or supranational (a "Governmental Entity") shall have issued, enacted, entered, promulgated or enforced any order, judgment, decree, injunction, or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Offer or the Merger and such order, judgment, decree, injunction, ruling or other action shall have become final and nonappealable; (e) by the Company if prior to the purchase by the Purchaser of any Shares in the Offer (i) there shall have occurred, on the part of Parent or the Purchaser, a material breach of any representation or warranty, covenant or agreement contained in the Merger Agreement which is not curable or, if curable, is not cured within ten business days after written notice of such breach is given by the Company to the party committing the breach or (ii)(A)(x) the Company proposes entering into a definitive agreement with respect to a Superior Proposal or (y) the Board of Directors of the Company recommends a Third Party Acquisition Transaction which is an unsolicited all cash tender offer for any and all Shares and which constitutes a Superior Proposal, (B) the Company gives Parent the three business days' notice as required pursuant to the Merger Agreement, (C) if a counter-proposal was made by Parent within such three business day period, the Board of Directors of the Company has determined, in light of the counter-proposal, that the Third Party Acquisition Transaction (or proposal therefor) is still a Superior Proposal as required by the Merger Agreement, and (D) the Company pays any Termination Fee and any other amounts required under the Merger Agreement; (f) by Parent if prior to the purchase by the Purchaser of any Shares in the Offer (i) there shall have occurred, on the part of the Company, a material breach of any representation, warranty, covenant or agreement contained in the Merger Agreement which is not curable or, if curable, is not cured within ten business days after written notice of such breach is given by Parent to the Company or (ii) there shall have occurred, on the part of any shareholder party to the Tender and Voting Agreement, a material breach of any representation, warranty, covenant or agreement contained in the Tender and Voting Agreement which is not curable or, if curable, is not cured within five business days after written notice of such breach is given by Parent to the applicable shareholder or (iii) if the Board of Directors of the Company or committee thereof shall have withdrawn or modified (or shall have resolved to withdraw or modify) in a manner adverse to Parent, its approval or recommendation of the Merger Agreement or any of the transactions contemplated thereby or shall have recommended (or resolved to recommend) an Acquisition Transaction (other than the Offer and Merger) to the Shareholders; or 20 23 (g) by Parent if it is not in material breach of its obligations under the Merger Agreement or under the Offer and no Shares shall have been purchased pursuant to the Offer on or before August 31, 1999 (provided that if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, termination pursuant to this clause (g) may not occur until October 31, 1999). Fees and Expenses. (a) The Merger Agreement provides that whether or not the Merger is consummated, all costs and expenses incurred in connection with the Offer, the Merger Agreement and the transactions contemplated thereby shall be paid by the party incurring such expenses. (b) The Merger Agreement provides that in the event it is terminated pursuant to clause (e)(ii) or clause (f)(iii) under "-- Termination" above, then the Company shall (i) promptly reimburse Parent for the documented fees and expenses of Parent and the Purchaser related to the Merger Agreement and the transactions contemplated thereby not to exceed $1.0 million, and (ii) promptly pay Parent a termination fee (a "Termination Fee") of $4.75 million, in each case by wire transfer of same day funds to an account designated by Parent as a condition of such termination. In the event the Merger Agreement is terminated pursuant to clause (f)(i) or clause (f)(ii) under "-- Termination" above, the Company shall promptly reimburse Parent for the documented fees and expenses of Parent and the Purchaser related to the Merger Agreement and the transactions contemplated hereby not to exceed $1.0 million by wire transfer of same day funds to an account designated by Parent. (c) The Merger Agreement provides that in the event that (i) prior to the termination of the Merger Agreement, a Third Party shall have made a proposal regarding an Acquisition Transaction and (ii) thereafter (x) such proposal is publicly disclosed and August 31, 1999 occurs (or, if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, October 31, 1999 occurs) without the Minimum Condition being satisfied (other than as a result of a material breach of the Merger Agreement by Parent or the Purchaser that has not been cured within the time period set forth in the Merger Agreement) or (y) the Merger Agreement is terminated (A) by the Company pursuant to clause (b)(ii) or clause (c) under "-- Termination" above or (B) by Parent pursuant to clause (f)(i), clause (f)(ii) or clause (g) under "-- Termination" above, and, in each case, at the time the event giving rise to the right to so terminate the Merger Agreement, such Third Party Acquisition Transaction proposal shall not have been withdrawn, and (iii) prior to twelve months after any termination of the Merger Agreement the Company shall have entered into an agreement for a Third Party Acquisition Transaction which constitutes a Superior Proposal, or a Third Party Acquisition Transaction which constitutes a Superior Proposal shall have been consummated, then the Company shall promptly, but in no event later than immediately prior to, and as a condition of, entering into such definitive agreement, or, if there is no such definitive agreement then immediately upon consummation of the Acquisition Transaction, reimburse Parent for the documented fees and expenses of Parent and the Purchaser relating the Merger Agreement and the transactions contemplated thereby (to the extent not previously reimbursed and without duplication of any amounts pursuant to clause (b) above) not to exceed $1.0 million and pay Parent a Termination Fee of $4.75 million (it being understood that only one Termination Fee shall be payable pursuant to clause (b) above and this clause (c) in the aggregate), which amounts shall be payable by wire transfer of same day funds to an account designated by Parent. (B) THE TENDER AND VOTING AGREEMENT Concurrently with the execution and delivery of the Merger Agreement, the Company, Parent, Purchaser and the Class A Common Shareholders entered into the Tender and Voting Agreement. Tender of Shares. Pursuant to the Tender and Voting Agreement, Parent and the Purchaser have jointly and severally agreed: (i) subject to the conditions of the Offer and the other terms and conditions of the Merger Agreement, that the Purchaser will purchase all Shares tendered pursuant to the Offer as promptly as practicable following commencement of the Offer and that the Purchaser will consummate the Merger in accordance with the terms of the Merger Agreement; and (ii) not to decrease the price per share to be paid to 21 24 the Company's shareholders in the Offer below $14.00 per share. Pursuant to the Tender and Voting Agreement, each Class A Common Shareholder has agreed to (i) tender such Class A Common Shareholder's Class A Common Shares ("Subject Shares") other than Contributed Shares (as defined below), if applicable, into the Offer promptly, and in any event no later than the fifth business day following the commencement of the Offer, or, if such Class A Common Shareholder has not received the Offer Documents (as defined in the Merger Agreement) by such time, within two business days following receipt of such documents, and (ii) not withdraw any Subject Shares so tendered. Each of Harry J. Muhlschlegel and Karen B. Muhlschlegel shall be permitted not to tender into the Offer 18,875 of their Subject Shares (for a total of 37,750 Subject Shares, collectively herein referred to as the "Contributed Shares"); provided that, so long as the Purchaser notifies Mr. and Mrs. Muhlschlegel at least eight hours prior to the purchase of Shares by the Purchaser pursuant to the Offer, Mr. and Mrs. Muhlschlegel shall be obligated to contribute their Contributed Shares to the capital of the Company prior to the purchase of Shares by the Purchaser pursuant to the Offer. The foregoing obligations of the parties to the Tender and Voting Agreement shall terminate on the Termination Date. As used in the Tender and Voting Agreement, "Termination Date" means the date the Merger Agreement is terminated in accordance with its terms. Transfer of Subject Shares. The Tender and Voting Agreement provides that, until the Termination Date, each Class A Common Shareholder will not, except as required pursuant to the terms of the Tender and Voting Agreement, (i) sell, offer to sell, pledge or otherwise dispose of any of such Class A Common Shareholder's Subject Shares; (ii) enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Subject Shares or any interest therein; (iii) grant any proxy, power- of-attorney or other authorization or consent in or with respect to such Subject Shares; (iv) deposit such Subject Shares into a voting trust or enter into a voting agreement or assignment with respect to the Subject Shares; or (v) take any other action with respect to such Subject Shares that would in any way restrict, limit or interfere with the performance of such Class A Common Shareholder's obligations under the Tender and Voting Agreement. No Solicitation. The Tender and Voting Agreement provides that each Class A Common Shareholder represents and warrants to, and covenants and agrees with, Parent and the Purchaser that such Class A Common Shareholder does not have any agreement, arrangement or understanding with any potential acquiror of the Company that, directly or indirectly, would be violated, or require any payments, by reason of the execution, delivery and/or consummation of the Tender and Voting Agreement. The Tender and Voting Agreement also provides that each Class A Common Shareholder shall, and shall cause its agents and representatives to, immediately cease any existing discussions or negotiations with any Third Party heretofore conducted with respect to any Acquisition Transaction. The Tender and Voting Agreement provides that, until the Termination Date, each Class A Common Shareholder shall not, and shall cause its agents and representatives not to, directly or indirectly, (x) solicit, initiate, continue, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries, proposals or offers from any Third Party with respect to, or that could reasonably be expected to lead to, any Acquisition Transaction or (y) negotiate, explore or otherwise communicate in any way with any Third Party with respect to any Acquisition Transaction. The Tender and Voting Agreement provides that if the Board of Directors of the Company determines that a Third Party proposal for an Acquisition Transaction constitutes a Superior Proposal in accordance with the provisions of the Merger Agreement discussed above under "-- The Merger Agreement -- No Solicitation," then, notwithstanding the provisions of this paragraph, the Class A Common Shareholders shall be permitted to negotiate, discuss or otherwise communicate with such Third Party with respect to a tender and voting agreement with terms no less favorable in the aggregate to each Class A Common Shareholder than those contained in the Tender and Voting Agreement; provided that no Class A Common Shareholder shall enter into any such tender and voting agreement (i) prior to the Termination Date or (ii) with any Third Party with whom negotiations for an Acquisition Transaction had taken place prior to the Termination Date, if such tender and voting agreement contains provisions less favorable in the aggregate to such Class A Common Shareholder than those contained in the Tender and Voting Agreement. In addition, the provisions of this paragraph shall not be deemed to prohibit any Class A Common Shareholder who is an officer or director of the Company from taking actions permitted to be taken by an officer or director, as the 22 25 case may be, in such Class A Common Shareholder's capacity as an officer and/or director, as the case may be, of the Company. The Tender and Voting Agreement further provides that until the Termination Date, each Class A Common Shareholder shall promptly (but in any event within one day of such Class A Common Shareholder becoming aware of same) (i) advise Parent of the receipt by such Class A Common Shareholder or any of its agents or representatives of any inquiries or proposals relating to an Acquisition Transaction, (ii) provide Parent with a copy of any such inquiry or proposal in writing and a written statement with respect to any such inquiries or proposals not in writing, which statement shall include the identity of the parties making such inquiries or proposal and the material terms thereof and (iii) inform Parent of the status and content of and developments with respect to any discussions regarding any Acquisition Transaction with a Third Party. Voting of Subject Shares. The Tender and Voting Agreement provides that, until the Termination Date, each Class A Common Shareholder shall, at any meeting of the stockholders of the Company, however called, or in connection with any written consent of the stockholders of the Company, vote (or cause to be voted) all Shares beneficially owned by such Class A Common Shareholder (i) in favor of the Merger, the execution and delivery by the Company of the Merger Agreement and the approval of the terms thereof and each of the other actions contemplated by the Merger Agreement and the Tender and Voting Agreement and any actions required in furtherance thereof; (ii) against any other Acquisition Transaction and against any action or agreement that would impede, frustrate, prevent or nullify the Merger Agreement or the Tender and Voting Agreement or the transactions contemplated thereby, or result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which would result in any of the conditions to the Merger in the Merger Agreement not being fulfilled; and (iii) if requested by Parent, in favor of a stockholder resolution proposed by Parent in accordance with the New Jersey Act, the purpose of which is to cause the Offer and the Merger to be consummated and which does not relate to election of directors. Best Efforts. The Tender and Voting Agreement provides that, subject to the terms and conditions thereof, until the Termination Date, each Class A Common Shareholder agrees to use all reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by the Tender and Voting Agreement and the Merger Agreement. The Tender and Voting Agreement provides that, until the Termination Date, each Class A Common Shareholder shall properly consult with Parent and the Purchaser and provide any necessary information and material with respect to all filings with any Governmental Entity in connection with the Tender and Voting Agreement and the Merger Agreement and the transactions contemplated thereby. (C) THE EMPLOYMENT AGREEMENTS; THE AMENDED AND RESTATED SEVERANCE AGREEMENTS On June 4, 1999, the Company entered into employment agreements with seven of its officers (the "Company Executives"), including four executive officers (Raymond M. Conlin, Brian J. Fitzpatrick, Paul J. Karvois and Joseph A. Librizzi). Pursuant to such agreements, each Company Executive will continue his employment in his current position receiving base salary, a minimum target bonus, and other Company benefits. Parent is also a party to these employment agreements and has agreed to cause the Surviving Corporation to satisfy the Company's obligations thereunder effective upon the date on which Shares are purchased pursuant to the Offer (the "Purchase Date"). In addition, under the employment agreements, Parent agrees to grant to the Company Executives as of the Purchase Date stock options to purchase Parent common stock (Mr. Conlin -- 20,000 shares; Mr. Fitzpatrick -- 20,000 shares; Mr. Karvois -- 30,000 shares; and Mr. Librizzi -- 20,000 shares) and to cause the Surviving Corporation to provide certain specified perquisites after the Purchase Date. With respect to calendar years after the Purchase Date, the Company Executives will be entitled to participate in Parent's stock option plans on terms and conditions substantially similar to those generally applicable to executives of Parent and its subsidiaries. The employment agreements recognize the Company's obligation to pay benefits under certain amended and restated severance agreements (the "Severance Agreements") entered into between the Company and the Company Executives (if the conditions set forth in such severance agreements are met), but vary the terms of prior severance agreements 23 26 so that certain contemplated changes in a Company Executive's responsibilities and benefits after the Purchase Date will not be considered "Good Reason" entitling the Company Executive upon termination of employment to benefits under the applicable severance agreement. The Severance Agreements provide certain additional benefits to each Company Executive if, within two years of the Purchase Date, (i) he is terminated by the Company without cause or (ii) he resigns for good reason. In such circumstances, the Company Executive will be entitled to receive a lump sum payment equal to two times the sum of (a) the Company Executive's salary, at the greater of his salary immediately prior to the Purchase Date or on the date of termination, plus (b) the Company Executive's bonus, at the greater of his target bonus for the year of his termination or the best actual bonus he received in the five previous years. In addition, under the Severance Agreements on the Purchase Date, the Company will pay to the Company Executives who are executive officers bonuses is an aggregate amount of approximately $875,000 (Mr. Conlin -- $55,000; Mr. Fitzpatrick -- $280,000; Mr. Karvois -- $315,000; and Mr. Librizzi -- $225,000). SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY Purpose. The purpose of the Offer and the Merger is to enable Parent to acquire control of, and the entire equity interest in, the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of all the Shares. Parent will consummate, as soon as practicable following the consummation of the Offer, the Merger. The purpose of the Merger is to acquire all Shares not purchased pursuant to the Offer or otherwise. Pursuant to the Merger, each then outstanding Share (other than Excluded Shares) will be converted into the right to receive an amount in cash equal to the Merger Price. Plans for the Company. It is expected that, initially following the Merger, the Company will become part of Parent's newly formed regional carrier group and that the business and operations of the Company will, except as set forth in this Offer to Purchase, be continued by the Company substantially as they are currently being conducted. Parent will continue to evaluate the business and operations of the Company during the pendency, and following the consummation, of the Offer and the Merger, and will take such actions as it deems appropriate under the circumstances then existing. Parent intends to seek additional information about the Company during this period. Thereafter, Parent intends to review such information as part of a comprehensive review of the Company's business, operations, capitalization and management with a view to optimizing the Company's potential in conjunction with Parent's business. Except as described in this Offer to Purchase, Parent and the Purchaser have no present plans or proposals that would result in an extraordinary corporate transaction, such as a merger, consolidation, reorganization, liquidation or sale or transfer of a material amount of assets, involving the Company or any of its subsidiaries, or any material changes in the Company's present capitalization, dividend policy, employee benefit plans, corporate structure or business or any material changes or reductions in the composition of its management or personnel. SECTION 12. SOURCE AND AMOUNT OF FUNDS The Purchaser estimates that the total amount of funds required to purchase the Shares that are outstanding on a fully diluted basis (such basis assumes all Shares underlying vested and unvested Options are issued and outstanding) pursuant to the Offer and to consummate the Merger under the Merger Agreement, to refinance indebtedness of the Company which may become payable as a result of the Offer and the Merger and to pay fees and expenses related to the Offer and the Merger will be approximately $220.0 million. The Purchaser estimates that exercise of options issued and outstanding prior to the Merger will generate approximately $10.3 million in additional funds (or will offset uses of funds by a corresponding amount in the event of a cashless exercise of such options). The Purchaser plans to obtain all funds needed for the Offer and the Merger from Parent. Parent intends to obtain these funds by borrowing from an existing $300 million revolving credit facility (the "Revolving Facility") created under a credit agreement by and among Parent, NationsBank, N.A., individually and as documentation agent, the First Union National Bank of Chicago, 24 27 individually, as issuer and as agent and the several lenders from time to time parties thereto (as defined therein) dated as of September 24, 1997 (the "Credit Agreement"), a copy of which has been filed with the Commission as an Exhibit to the Schedule 14D-1 and is incorporated herein by reference. Parent may elect to obtain a portion of such funds from an asset-backed securitization agreement involving Parent's accounts receivable (the "Receivables Purchase Agreement"), a copy of which has been filed with the Commission as an Exhibit to the Schedule 14D-1 and is incorporated herein by reference. Parent does not consider that there are any conditions or restrictions that would limit it from obtaining these funds under the Credit Agreement or the Receivables Purchase Agreement. Such borrowings may be repaid by Parent from time to time, in whole or in part, from internally generated funds or from the proceeds of other borrowings. The Revolving Facility bears interest at a rate equal to a spread over a reference rate chosen by Parent from various options and matures on September 24, 2001. The Revolving Facility is unsecured. The Receivables Purchase Agreement, entered into among Yellow Receivables Corporation ("YRC"), Falcon Asset Securitization Corporation ("Falcon"), certain investors party thereto and The First National Bank of Chicago ("First Chicago"), as agent for Falcon, is subject to a facility limit of $150 million. The Receivables Purchase Agreement permits the sale of accounts receivable to YRC, a wholly-owned, special purpose corporation of Parent. YRC in turn sells an undivided interest to Falcon or the investors party to such agreement in a revolving pool of eligible receivables as funding is required. For receivable interests held by Falcon, YRC may select a discount rate equal to, (i) with the concurrence of First Chicago, the CP Composite Rate or a rate agreed to by Falcon equivalent to the rate commercial paper with similar terms may be sold by any placement agent or commercial paper dealer reasonably selected by Falcon plus any applicable issuing and paying agent fees and commissions or (ii) the rate per annum equal to the corporate base rate, prime rate or base rate of interest, as applicable, announced by First Chicago changing when such rate changes (the "Base Rate"). For receivable interests held by investors, YRC may select an applicable discount rate for receivables equal to (i) the Base Rate or (ii) the rate per annum equal to the sum of (x) the rate at which deposits in U.S dollars are offered by First Chicago to first-class banks in the London interbank market on a certain date, divided by one minus the applicable reserve requirement plus (y) .75%. The interests of Falcon and the investors are secured by an interest in YRC's right, title and interest in the receivables, payments on those receivables and the proceeds thereof and all other rights relating to such receivables. The Receivables Purchase Agreement terminates on August 1, 1999. The Offer is not conditioned upon obtaining financing. SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS The Purchaser intends to seek to cause the Company to terminate the registration of the Common Shares under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If registration of the Common Shares is not terminated prior to the Merger, the registration of the Common Shares under the Exchange Act will be terminated following the consummation of the Merger. Market for the Common Shares. The purchase of Common Shares pursuant to the Offer will reduce the number of holders of Common Shares and the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Common Shares held by the public. Depending upon the aggregate market value and per share price of any Common Shares not purchased pursuant to the Offer, the Common Shares may no longer meet the standards of the National Association of Securities Dealers, Inc. (the "NASD") for continued inclusion in the Nasdaq Stock Market, which require that an issuer have at least 500,000 publicly held shares with a market value of $1,000,000 held by at least 300 stockholders holding round lots and have net tangible assets of at least $2,000,000, total market capitalization of at least $35,000,000, and net income of at least $500,000 in the most recently completed fiscal year or two of the three most recently completed fiscal years. If these standards are not met, the Common Shares might nevertheless continue to be included in the Nasdaq Stock Market with quotations published in the Nasdaq "additional list," or in one of the "local lists." However, if the number of round lot holders of Common Shares falls below 300, or if the number of publicly held Common Shares falls below 100,000, or if there are not at least two market makers for such Common Shares, NASD rules provide that the Common Shares would no longer be "qualified" for Nasdaq Stock Market reporting, and the Nasdaq Stock Market would cease to 25 28 provide any quotations. Common Shares held directly or indirectly by an officer or director of the Company, or by any beneficial owner of more than 10% of the total Common Shares outstanding, ordinarily will not be considered publicly held for this purpose. If, as a result of the purchase of Common Shares pursuant to the Offer or otherwise, the Common Shares no longer meet the NASD requirements for continued inclusion in any tier of the Nasdaq National Market or in any other tier of the Nasdaq Stock Market, and the Common Shares are no longer included in any tier of the Nasdaq Stock Market, the market for such Common Shares could be adversely affected. In the event the Common Shares no longer meet the requirements of the NASD for inclusion in any tier of the Nasdaq Stock Market, quotations might still be available from other sources. The extent of the public market for Common Shares and availability of such quotations would, however, depend upon the number of holders of Common Shares remaining at such time, the interest in maintaining a market in the Common Shares on the part of securities firms, the possible termination of registration under the Exchange Act, as described below, and other factors. Exchange Act Registration. The Common Shares are currently registered under the Exchange Act. Registration of the Common Shares under the Exchange Act may be terminated upon application of the Company to the Commission if the Common Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Common Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its Shareholders and to the Commission and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with Shareholders' meetings and the related requirement of furnishing an annual report to Shareholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 or 144A promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. The Purchaser intends to seek to cause the Company to apply for termination of registration of the Common Shares under the Exchange Act as soon after the completion of the Offer as the requirements for such termination are met. If registration of the Common Shares is not terminated prior to the Merger, then the Common Shares will be delisted from all stock exchanges and the registration of the Common Shares under the Exchange Act will be terminated following the consummation of the Merger. Margin Regulations. The Common Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Common Shares. Depending upon factors similar to those described above regarding listing and market quotations, it is possible that, following the Offer, the Common Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. SECTION 14. DIVIDENDS AND DISTRIBUTIONS The Merger Agreement provides that, prior to the Effective Time, without the prior written consent of Parent, the Company will not (i) declare or pay any dividend on its capital stock, (ii) except as explicitly permitted by the Merger Agreement, issue, sell or pledge (or authorize or propose the issuance, sale or pledge of) any additional shares of its capital stock or securities convertible into or exercisable or exchangeable for shares of its capital stock or (iii) purchase or otherwise acquire, or propose to purchase or otherwise acquire, any outstanding Shares. SECTION 15. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other provisions of the Offer, in addition to (and not in limitation of) the Purchaser's right to extend and amend the Offer at any time in its sole discretion (subject to the terms of the 26 29 Merger Agreement), the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, pay for, and may delay the acceptance for payment of or, subject to the regulations referred to above, the payment for, any tendered Shares, and may terminate or amend the Offer, if (i) there are not validly tendered and not withdrawn prior to the expiration date for the Offer (the "Expiration Date") that number of Shares which represent at least 51% of the outstanding Common Shares on a fully diluted basis (including Common Shares issuable upon conversion of Class A Common Shares) on the date of purchase (the "Minimum Condition"), (ii) all of the outstanding Class A Common Shares are not validly tendered and not withdrawn prior to the Expiration Date, (iii) any applicable waiting periods under the HSR Act or any applicable foreign antitrust statute shall not have expired or (iv) at any time on or after June 6, 1999 and before the expiration of the Offer, any of the following events shall occur: (a) any law, statute, rule, regulation or ordinance is enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, or any other action is taken by any Governmental Entity that would reasonably be expected to, directly or indirectly, (i) make illegal or otherwise directly or indirectly restrain or prohibit the acquisition by Parent or the Purchaser of any Shares under the Offer or the making or consummation of the Offer or the Merger, the performance by the Company of any of its material obligations under the Merger Agreement or the consummation of any purchase of Shares contemplated by the Merger Agreement or the Tender and Voting Agreement, (ii) prohibit or limit the ownership or operation by the Company, Parent or any of their respective subsidiaries of any portion of the business or assets of the Company or any Subsidiary or of Parent or any of its subsidiaries or compels the Company or Parent to dispose of or hold separate any portion of the business or assets of the Company or any Subsidiary or of Parent or any of its subsidiaries as a result of the Offer or the Merger, (iii) impose limitations on the ability of Parent or the Purchaser to acquire or hold, or exercise full rights of ownership of, any Shares accepted for payment pursuant to the Offer, including, without limitation, the right to vote such Shares on all matters properly presented to the shareholders of the Company or (iv) prohibit Parent or any of its subsidiaries from effectively controlling any portion of the business or operations of the Company or any Subsidiary; or (b) the Company and the Purchaser and Parent shall have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement shall have been terminated in accordance with its terms; or (c) any event shall have occurred or condition exist that has or could reasonably be expected to have, a Material Adverse Effect on the Company (as defined in the Merger Agreement); or (d)(i) the Board of Directors of the Company or any committee thereof withdraws or modifies in a manner adverse to Parent or the Purchaser its approval or recommendation of the Offer, the Merger or the Merger Agreement, or approves or recommends any proposal for an Acquisition Transaction with a Third Party or (ii) the Company enters into any agreement to consummate any Acquisition Transaction with a Third Party; or (e) any of the representations and warranties of the Company set forth in the Merger Agreement that are not qualified as to materiality are not true and correct or the representations and warranties of the Company set forth in the Merger Agreement that are qualified as to materiality would not be true and correct, but for such qualification, and the events or conditions giving rise to such representations and warranties not being true and correct but for such qualification could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, in each case at the date of the Merger Agreement or at the scheduled expiration of the Offer (as though made as of such date, except that those representations and warranties that address matters only as of a particular date shall remain true and correct as of such date) which have not been cured within the time period specified in Article VIII of the Merger Agreement or the Purchaser shall have failed to receive a certificate executed by the President or a Vice President of the Company, dated as of the scheduled expiration date, to the effect that the conditions set forth in this clause (e) have not occurred; or 27 30 (f) the Company shall have breached or failed to perform in any material respect any of its obligations, covenants or agreements under the Merger Agreement, or the Purchaser shall have failed to receive a certificate executed by the President or a Vice President of the Company, dated as of the scheduled expiration of the Offer, that the conditions set forth in this clause (f) have not occurred; or (g) any shareholder party to any Tender and Voting Agreement shall have breached or failed to perform in any material respect any of such shareholder's obligations, covenants or agreements thereunder; or (h) all Consents of Governmental Entities and other Persons (other than lenders) listed in Section 4.05 of the Company Disclosure Statement shall not have been obtained with no material adverse conditions attached and no material expense imposed on the Company or any of its subsidiaries; or (i) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (iii) a commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (iv) any limitation (whether or not mandatory) by any United States governmental authority on the extension of credit generally by banks or other financial institutions, or (v) a change in general financial, bank or capital market conditions which materially and adversely affects the ability of financial institutions in the United States to extend credit or syndicate loans or (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof. The Merger Agreement provides that the foregoing conditions are for the benefit of Parent and the Purchaser and may be asserted by Parent or the Purchaser regardless of the circumstances giving rise to any such conditions and may be waived by Parent or the Purchaser in whole or in part at any time and from time to time in their sole discretion. The Merger Agreement provides that the failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. SECTION 16. CERTAIN LEGAL MATTERS General. Except as otherwise disclosed herein, based on a review of publicly available information filed by the Company with the Commission, neither the Purchaser nor Parent is aware of (i) any license or regulatory permit that appears to be material to the business of the Company and its subsidiaries, taken as a whole, that might be adversely affected by the acquisition of Shares by the Purchaser pursuant to the Offer or the Merger or (ii) any approval or other action, by any governmental, administrative or regulatory agency or authority, domestic, foreign or supranational, that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, the Purchaser currently contemplates that such approval or action would be sought. While the Purchaser does not currently intend to delay the acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or action, if needed, would be obtained or would be obtained without substantial conditions or that adverse consequences might not result to the business of the Company, the Purchaser or Parent or that certain parts of the businesses of the Company, the Purchaser or Parent might not have to be disposed of in the event that such approvals were not obtained or any other actions were not taken. The Purchaser's obligation under the Offer to accept for payment and pay for Shares is subject to certain conditions. See Sections 10 and 15. United States Antitrust Approvals. Under the HSR Act, and the rules and regulations that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. Parent intends to file a Notification and Report Form with respect to the Offer and the Merger Agreement promptly. 28 31 Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares under the Offer may not be consummated until the expiration of a 15-calendar day waiting period following the filing by Parent. Parent intends to make such filing on June 9, 1999. Accordingly, the waiting period with respect to the Offer would expire at 11:59 p.m., New York City time, on June 25, 1999 unless Parent receives a request for additional information or documentary material, or the Antitrust Division and the FTC terminate the waiting period prior thereto. If, within such 15-day period, either the Antitrust Division or the FTC requests additional information or material from Parent concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by Parent with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of Parent. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Sections 10 and 15. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of Parent or its subsidiaries. Private parties and state attorneys general may also bring action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which Parent and the Company are engaged, Parent and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. Other State Laws. A number of other states have adopted laws and regulations applicable to attempts to acquire securities of corporations which are incorporated, or have substantial assets, Shareholders, principal executive offices or principal places of business, or whose business operations otherwise have substantial economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute, which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the Indiana Control Share Acquisition Act was constitutional. Such Act, by its terms, is applicable only to corporations that have a substantial number of Shareholders in Indiana and are incorporated there. Subsequently, a number of federal courts ruled that various state takeover statutes were unconstitutional insofar as they apply to corporations incorporated outside the state of enactment. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws. The Purchaser does not know whether any of these laws will, by their terms, apply to the Offer and has not complied with any such laws. Should any person seek to apply any state takeover law, the Purchaser will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover laws is applicable to the Offer and the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer, the Purchaser might be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, the Purchaser might be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer. In such case, the Purchaser may not be obligated to accept for payment any Shares tendered. See Section 15. Other Antitrust Approvals. In connection with the acquisition of the Shares pursuant to the Offer, the laws of certain foreign countries and jurisdictions may require the filing of information with, or the obtaining of the approval of, governmental authorities in such countries and jurisdictions. The governments in such countries and jurisdictions might attempt to impose additional conditions on the Company's operations conducted in such countries and jurisdictions as a result of the acquisition of the Shares pursuant to the Offer 29 32 or the Merger. There can be no assurance that the Purchaser will be able to cause the Company or its subsidiaries to satisfy or comply with such laws or that compliance or non-compliance will not have adverse consequences for the Company or any subsidiary after purchase of the Shares pursuant to the Offer or the Merger. SECTION 17. FEES AND EXPENSES J.P. Morgan Securities Inc. is acting as Dealer Manager in connection with the Offer and is providing certain financial advisory services to Purchaser and Parent in connection with the Offer. Parent has paid J.P. Morgan Securities Inc. an engagement fee of $300,000 and has agreed to pay an additional fee of $1.4 million upon consummation of the Offer. Parent has also agreed to reimburse J.P. Morgan Securities Inc. for its expenses, including fees and expenses of its counsel, and to indemnify J.P. Morgan Securities Inc. and certain related persons against certain liabilities and expenses, including certain liabilities and expenses under the federal securities laws. ChaseMellon Shareholder Services L.L.C. has been retained by the Purchaser as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee Shareholders to forward material relating to the Offer to beneficial owners of Shares. The Purchaser will pay the Information Agent reasonable and customary compensation for all such services in addition to reimbursing the Information Agent for reasonable out-of-pocket expenses in connection therewith. The Purchaser has agreed to indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including, without limitation, certain liabilities under the federal securities laws. ChaseMellon Shareholder Services L.L.C. has been retained as the Depositary. The Purchaser will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, will reimburse the Depositary for its reasonable out-of-pocket expenses in connection therewith and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including, without limitation, certain liabilities under the federal securities laws. Except as set forth above, neither Parent nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees will, upon request, be reimbursed by Parent or the Purchaser for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. SECTION 18. MISCELLANEOUS The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. To the extent the Purchaser or Parent becomes aware of any state law that would limit the class of offerees in the Offer, the Purchaser will amend the Offer and, depending on the timing of such amendment, if any, will extend the Offer to provide adequate dissemination of such information to such holders of Shares prior to the expiration of the Offer. In any jurisdiction the securities, blue sky or other laws of which require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by the Dealer Manager or one or more registered brokers or dealers licensed under the laws of such jurisdiction. No person has been authorized to give any information or to make any representation on behalf of the Purchaser or Parent not contained herein or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. The Purchaser and Parent have filed with the Commission a Tender Offer Statement on Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain additional 30 33 information with respect to the Offer, and may file amendments thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected and copies may be obtained in the manner set forth in Section 7 with respect to the Company (except that such material will not be available at the regional Offices of the Commission). JPF ACQUISITION CORP. DATED: JUNE 9, 1999 31 34 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER Parent. Set forth below are the name, business address and present principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each director and executive officer of Parent. Except as otherwise noted, the business address of each such person is 10990 Roe Avenue, P.O. Box 7563, Overland Park, Kansas 66211. Unless indicated, each such person is a citizen of the United States and has held his or her present position as set forth below for the past five years. Directors of Parent are indicated by an asterisk.
CITIZENSHIP, PRINCIPAL OCCUPATION OR EMPLOYMENT, NAME 5-YEAR EMPLOYMENT HISTORY - ---- ------------------------------------------------ Klaus E. Agthe*.............................. Citizen of the United States and Germany. Agthe Consult, Inc. Formerly director and North American Liaison for P.O. Box 297 the VIAG Group, Munich, Germany (an Old Greenwich, CT 06870 international holding company). Cassandra C. Carr*........................... Senior Vice President, Human Resources SBC SBC Communications, Inc. Communications, Inc., San Antonio, Texas 175 East Houston St. (Telecommunications) (since 1994). Formerly Suite 1304 President, Texas Division (1993-1994). San Antonio, Texas 78205 Howard M. Dean*.............................. Chairman and Chief Executive Officer (formerly Dean Foods Company President and Chief Executive Officer) of Dean 3600 North River Road Foods Company, Franklin Park, IL (processor and Franklin Park, IL 60131 distributor of food products); Director of Nalco Chemical Company and Ball Corporation. Ronald T. LeMay*............................. President, Director and Chief Operating Officer Sprint Corporation of Sprint Corporation, Kansas City, MO 2330 Shawnee Mission Parkway (Telecommunications) (since October 1997). Westwood, KS 66205 Formerly Chairman and Chief Executive Officer of Waste Management, Inc. (July 1997 - October 1997); Director, President and Chief Operating Officer of Sprint Corporation, Kansas City, MO (1996-1997), Chief Executive Officer of the Sprint Telecommunications Venture (1995-1996); Vice Chairman of Sprint Corporation (March 1995- February 1996); Director, President, and Chief Operating Officer, Long Distance Division, Sprint Corporation (October 1989 - March 1995); Director of Imation Corporation and Ceridian Corporation. John C. McKelvey*............................ President and Chief Executive Officer of Midwest Midwest Research Institute Research Institute, Kansas City, MO (scientific 425 Volker Boulevard Kansas City, MO and technical research). 64110
S-1 35
CITIZENSHIP, PRINCIPAL OCCUPATION OR EMPLOYMENT, NAME 5-YEAR EMPLOYMENT HISTORY - ---- ------------------------------------------------ A. Maurice Myers*............................ Chairman of Parent (since July, 1996). President and Chief Executive Officer of Parent (since March, 1996). Formerly President and Chief Operating Officer America West Airlines, Inc., Phoenix, AZ (January 1994 - December 1995); President and Chief Executive Officer of Aloha Air Group, Inc., Honolulu, HI (August 1983 - December 1993); Director of Hawaiian Electric Industries, Inc. William L. Trubeck*.......................... Senior Vice President-Finance and Chief International Multifoods Corporation Financial Officer, President, Latin American 200 East Lake Street Wayzata, MN 55391 Operations, International MultiFoods, Inc., Minneapolis, MN (food distribution and production) (since February 1997). Formerly Senior Vice President-Finance and Chief Financial Officer of SPX Corporation, Muskegon, MI (November 1994 - October 1996); Senior Vice President and Chief Financial Officer of Honeywell, Inc., Minneapolis, MN (April 1993 - October 1994). William F. Martin, Jr........................ Senior Vice President -- Legal/Corporate Secretary of Parent (since December 1993); Vice President and Secretary of Parent (prior to December 1993); Vice President and Secretary of Yellow Freight System, Inc. (prior to May 1992). H.A. Trucksess, III.......................... Senior Vice President -- Finance and Chief Financial Officer of Parent (since June 1994) and Treasurer of Parent (since December 1995); Vice President and Chief Financial Officer of Preston Corporation (prior to June 1994). Carl W. Vogt*................................ Senior Partner, Fulbright & Jaworski, L.L.P., Fulbright & Jaworski, L.L.P. Washington, DC (since 1994). Formerly Chairman, 801 Pennsylvania Avenue N.W. Washington, National Transportation Safety Board, DC 20004-2604 Washington, DC (1992-1994); Managing Partner, Fulbright & Jaworski, L.L.P., Washington, DC (prior to 1994). Samuel A. Woodward........................... Senior Vice President -- Operations and Planning of Parent (since July 1996); Senior Vice President and Managing Officer of SH&E, a management consulting business (prior to July 1996). William D. Zollars*.......................... President of Yellow Freight System, Inc. the Parent's principal operation subsidiary (since September, 1995). Formerly Senior Vice President, Ryder Integrated Logistics Inc., Miami, FL (1994-1996).
S-2 36 The Purchaser. The name and position with the Purchaser of each director and executive officer of the Purchaser are set forth below. Except as otherwise noted, the business address of each such person is 10990 Roe Avenue, P.O. Box 7563, Overland Park, Kansas 66207. Each such person is a citizen of the United States. The present principal occupation or employment and five-year employment history of Mr. Trucksess and Mr. Martin are set forth in this Schedule I above. Mr. Berkowitz is, and has been for more than five years, the Assistant Treasurer of Parent.
NAME POSITION WITH THE PURCHASER - ---- --------------------------- H.A. Trucksess, III......................................... Director, President William F. Martin, Jr....................................... Director, Vice President and Secretary Lawrence D. Berkowitz....................................... Director, Assistant Secretary and Treasurer
S-3 37 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each Shareholder of the Company or such Shareholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. By Mail: By Hand: By Overnight Courier: Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept. Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660 Department Department
Facsimile Transmission: (201) 296-4293 Confirmation of Facsimile Transmission: (201) 296-4860 Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses or telephone numbers set forth below. Additional copies of this Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. 450 West 33rd Street -- 14th Floor New York, NY 10001 (212) 273-8035 (Call Collect) or Call Toll Free: (800) 814-0304 The Dealer Manager for the Offer is: J.P. MORGAN & CO. 60 Wall Street New York, NY 10260 (212) 648-3509 or Call Toll Free (877) 874-2781 EX-99.(A)(2) 3 LETTER OF TRANSMITTAL 1 EXHIBIT (A)(2) LETTER OF TRANSMITTAL TO TENDER CLASS A COMMON SHARES AND TO TENDER COMMON SHARES OF JEVIC TRANSPORTATION, INC. PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 9, 1999 BY JPF ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. By Mail: By Hand: By Overnight Courier: Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept. Attn: Reorganization Department Attn: Reorganization Department Ridgefield Park, NJ 07660
Facsimile Transmission: (201) 296-4293 Confirmation of Facsimile Transmission: (201) 296-4860 - -------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - -------------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S). (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR ON SHARE CERTIFICATE(S)) SHARE CERTIFICATE(S) TENDERED (ATTACH ADDITIONAL LIST, IF NECESSARY) - -------------------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES REPRESENTED SHARE CERTIFICATE BY SHARE NUMBER OF SHARES TYPE OF SHARES* NUMBER(S)** CERTIFICATE(S)** TENDERED*** ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------ - -------------------------------------------------------------------------------------------------------------------------- Total Class A Shares: - -------------------------------------------------------------------------------------------------------------------------- Total Common Shares: - --------------------------------------------------------------------------------------------------------------------------
* Please indicate if Class A Common Shares or Common Shares are being tendered. ** Need not be completed by shareholders delivering Shares by book-entry transfer or in accordance with DTC's ATOP procedures for transfers. *** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. - -------------------------------------------------------------------------------- 2 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by shareholders either if certificates evidencing Shares (as defined below) are to be forwarded herewith or if delivery of Shares is to be made by book-entry transfer to the Depositary's account at the Depositary Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the book-entry transfer procedure described in Section 2 of the Offer to Purchase (as defined below). Holders who are participants ("Participants") in DTC may execute their tender through the Automated Tender Offer Program of DTC as set forth in Section 2 of the Offer to Purchase. Shareholders whose certificates evidencing Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in Section 2 of the Offer to Purchase. See Instruction 2. [ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: Account Number: ------------------------------- Transaction Code Number: ------------------------------- [ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s): Window Ticket Number (if any): Date of Execution of Notice of Guaranteed Delivery: Name of Institution which Guaranteed Delivery: 2 3 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY. Ladies and Gentlemen: The undersigned hereby tenders to JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), the above-described shares of Class A Common Stock, no par value (the "Class A Common Shares"), and/or the above-described shares of Common Stock, no par value (the "Common Shares" and, together with Class A Common Shares, the "Shares"), of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), pursuant to Purchaser's offer to purchase all outstanding Shares, at $14.00 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of wholly owned subsidiaries of Parent, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Unless the context indicates otherwise, as used herein, "Shares" shall mean Class A Common Shares together with the Common Shares; and "Shareholders" shall mean holders of Shares. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith, in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all the Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after June 6, 1999 (collectively, "Distributions"), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned irrevocably appoints H.A. Trucksess, III, William F. Martin, Jr. and Lawrence D. Berkowitz as proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights with respect to the Shares tendered by the undersigned and accepted for payment by the Purchaser (and any and all Distributions). All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment will be effective if, when, and only to the extent that, the Purchaser accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by the undersigned with respect to such Shares (and such other Shares and securities) will, without further action, be revoked, and no subsequent proxies may be given nor any subsequent written consent executed by the undersigned (and, if given or executed, will not be deemed to be effective) with respect thereto. The designees of the Purchaser named above will, with respect to the Shares and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual or special meeting of the shareholders of the Company or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise, and the Purchaser reserves the right to require that, in order for Shares or other securities to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions, and that when such Shares 3 4 are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price, the amount or value of such Distribution as determined by the Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as otherwise stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 2 of the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. The Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer, including, without limitation, the undersigned's representation and warranty that the undersigned owns the Shares being tendered. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please issue the check for the purchase price of all Shares purchased, and return all Share Certificates evidencing Shares not purchased or not tendered, in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered." Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail the check for the purchase price of all Shares purchased and all Share Certificates evidencing Shares not tendered or not purchased (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not purchased or not tendered in the name(s) of, and mail such check and Share Certificates to, the person(s) so indicated. The undersigned recognizes that the Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if the Purchaser does not purchase any of the Shares tendered hereby. 4 5 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Issue: [ ] Check [ ] Share Certificate(s) to: Name: ------------------------------------------------ (PRINT) Address: --------------------------------------------- - ----------------------------------------------------- - ----------------------------------------------------- (ZIP CODE) - ----------------------------------------------------- TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER (SEE SUBSTITUTE FORM W-9) ON REVERSE SIDE SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be mailed to someone other than the undersigned, or to the undersigned at an address other than that shown under "Description of Shares Tendered." Mail: [ ] Check [ ] Share Certificate(s) to: Name: ------------------------------------------------ (PRINT) Address: --------------------------------------------- - ----------------------------------------------------- - ----------------------------------------------------- (ZIP CODE) 5 6 IMPORTANT SHAREHOLDERS: SIGN HERE (ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- SIGNATURE(S) OF SHAREHOLDER(S) Dated: - ------------------------------, 1999 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, attorney- in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5 hereof.) Name(s): ------------------------------------------------------------------------ (PLEASE PRINT) Capacity (full title): ---------------------------------------------------------- Address: ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (ZIP CODE) Area Code and Telephone No.: ---------------------------------------------------- Tax Identification or Social Security No.: -------------------------------------- (SUBSTITUTE FORM W-9 INCLUDED HEREIN) GUARANTEE OF SIGNATURE(S) (IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5 HEREOF) FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN THE SPACE BELOW 6 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder has (have) completed neither the box entitled "Special Payment Instructions" nor the box entitled "Special Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of Transmittal is to be used if Share Certificates are to be forwarded herewith, if Shares are to be delivered by book-entry transfers pursuant to the procedure set forth in Section 2 of the Offer to Purchase, or if Shares are to be delivered through DTC's Automated Tender Offer Program. Share Certificates evidencing all physically tendered Shares, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, together in each case with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), or an Agent's Message in connection with a book-entry transfer or tender pursuant to ATOP procedures, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the reverse hereof prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Shareholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in Section 2 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates evidencing all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, in each case together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent's Message, and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in Section 2 of the Offer to Purchase. Participants in DTC may tender their Shares in accordance with DTC's Automated Tender Offer Program ("ATOP"), to the extent it is available to such participants for the Shares they wish to tender. A shareholder tendering through the ATOP must expressly acknowledge that the shareholder has received and agreed to be bound by the Letter of Transmittal and that the Letter of Transmittal may be enforced against such shareholder. If the tender is not made through ATOP, Share Certificates, as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein on or prior to the Expiration Date to be effective. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING 7 8 SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a facsimile hereof), all tendering shareholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein under "Description of Shares Tendered" is inadequate, the type of Shares, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate schedule and attached hereto. 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the expiration or termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Share tendered hereby is owned of record by two or more persons, all such persons must sign this Letter of Transmittal. If any of the Shares tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity for the registered holder, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of such person's authority so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, the Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued in the name of, a person other than the 8 9 registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to the Purchaser of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates evidencing the Shares tendered hereby. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" on the reverse hereof, the appropriate boxes on the reverse of this Letter of Transmittal must be completed. 8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. 9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Dealer Manager or the Information Agent at their respective addresses or telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. 10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such shareholder is not subject to backup withholding of federal income tax. If a tendering Shareholder has been notified by the Internal Revenue Service that such Shareholder is subject to back-up withholding, such Shareholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such shareholder has since been notified by the Internal Revenue Service that such Shareholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering shareholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such shareholder. If the tendering Shareholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such Shareholder should write "Applied For" in the space provided for the TIN in Part III of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part III and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such shareholder until a TIN is provided to the Depositary. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). 9 10 IMPORTANT TAX INFORMATION Under the federal income tax law, a Shareholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payor) with such shareholder's correct TIN on Substitute Form W-9 below. If such Shareholder is an individual, the TIN is such Shareholder's social security number. If the Depositary is not provided with the correct TIN, the Shareholder may be subject to penalties imposed by the Internal Revenue Service. In addition, payments that are made to such Shareholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. Certain Shareholders (including, among others, corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the Shareholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a Shareholder with respect to Shares purchased pursuant to the Offer, the Shareholder is required to notify the Depositary of such Shareholder's correct TIN by completing the form below certifying (a) that the TIN provided on Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that (i) such Shareholder has not been notified by the Internal Revenue Service that such Shareholder is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such Shareholder that such shareholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The Shareholder is required to give the Depositary the social security number or employer identification number of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering Shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the Shareholder should write "Applied For" in the space provided for the TIN in Part III, and sign and date the Substitute Form W-9. If "Applied For" is written in Part III and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such Shareholder until a TIN is provided to the Depositary. 10 11 ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING: - ------------------------------------------------------------------------------------------------------------- PAYOR: CHASEMELLON SHAREHOLDER SERVICES L.L.C. - ------------------------------------------------------------------------------------------------------------- SUBSTITUTE PART I -- Taxpayer Identification PART III -- Social FORM W-9 Number -- For all accounts, enter Security Number or taxpayer identification number in Employee ID Number the box at right. (For most -------------------------------- individuals, this is your social (If awaiting TIN write security number. If you do not "Applied For") have a number, see Obtaining a Number in the enclosed Guidelines.) Certify by signing and dating below. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payor. --------------------------------------------------------------------- DEPARTMENT OF THE TREASURY INTERNAL PART II -- For Payees exempt from backup withholding, see the REVENUE SERVICE enclosed Guidelines and complete as instructed therein. PAYOR'S REQUEST FOR TAXPAYER --------------------------------------------------------------------- IDENTIFICATION NUMBER ("TIN") CERTIFICATION -- Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding either because I am exempt from backup withholding, or I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or the IRS has notified me that I am no longer subject to backup withholding. - ------------------------------------------------------------------------------------------------------------- Certificate Instructions -- You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). (Also see instructions in the enclosed Guidelines.) - ------------------------------------------------------------------------------------------------------------- Signature ----------------------------------------------------------------------------------------------------------- Date ----------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. 11 12 The Information Agent for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. 450 West 33rd Street -- 14th Floor New York, NY 10001 (212) 273-8035 (Call Collect) or Call Toll Free: (800) 814-0304 The Dealer Manager for the Offer is: J.P. MORGAN & CO. 60 Wall Street New York, NY 10260 (212) 648-3509 or Call Toll-Free (877) 874-2781 JUNE 9, 1999 EX-99.(A)(3) 4 NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT (a)(3) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF CLASS A COMMON SHARES AND TENDER OF COMMON SHARES OF JEVIC TRANSPORTATION, INC. TO JPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates (the "Share Certificates") evidencing Class A Common Stock, no par value (the "Class A Common Shares"), and Common Stock, no par value (the "Common Shares" and, together with Class A Common Shares, the "Shares") of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), are not immediately available, (ii) time will not permit all required documents to reach ChaseMellon Shareholder Services L.L.C., as Depositary (the "Depositary"), prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) the procedure for book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary. See Section 2 of the Offer to Purchase. Unless the context indicates otherwise, as used herein, "Shares" shall mean Class A Common Shares together with the Common Shares; and "Shareholder" shall mean holders of Shares. The Depositary for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. By Mail: By Hand: By Overnight Courier: Post Office Box 3301 120 Broadway -- 13th Floor 85 Challenger Road South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept. Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660 Department Department
Facsimile Transmission: (201) 296-4293 Confirmation of Facsimile Transmission: (201) 296-4860 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 LADIES AND GENTLEMEN: The undersigned hereby tenders to JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedures described in Section 2 of the Offer to Purchase. Number of Shares (specify type (Class A Common Shares and/or Common Shares) and number): - ------------------------------------------------------ - ------------------------------------------------------ Certificate Nos. (if available): - ------------------------------------------------------ [ ] Check box if Shares will be tendered by book-entry transfer through DTC's ATOP: Account Number: ---------------------------------- Name(s) of Record Holder(s): - ------------------------------------------------------ - ------------------------------------------------------ Please Print Address(es): --------------------------------------- - ------------------------------------------------------ Zip Code Area Code and Tel. No.: -------------------------- Signature(s): --------------------------------------- - ------------------------------------------------------ Dated: ------------------------, 1999 2 3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEES) The undersigned, a firm that is a commercial bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program hereby guarantees delivery to the Depositary, at one of its addresses set forth above, of Share Certificates evidencing the Shares tendered hereby in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (pursuant to the procedures for book-entry transfer, set forth in Section 2 of the Offer to Purchase), in each case with delivery of a properly completed and duly executed Letter of Transmittal (or a facsimile thereto) with any required signature guarantees, or an Agent's Message (as defined in Section 2 of the Offer to Purchase), and any other documents required by the Letter of Transmittal, within three New York Stock Exchange, Inc. trading days after the date of execution of this Notice of Guaranteed Delivery. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and Share Certificates to the Depositary within the time period shown herein. Failure to do so could result in financial loss to such Eligible Institution. - ------------------------------------------------------ Name of Firm - ------------------------------------------------------ Address - ------------------------------------------------------ Zip Code Area Code and Tel. No. --------------------------- - ------------------------------------------------------ Authorized Signature - ------------------------------------------------------ Title Name: ---------------------------------------------- Please Print Date: , 1999 NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 3 EX-99.(A)(4) 5 LETTER TO BROKERS, DEALERS, COMM BANKS, AND OTHERS 1 EXHIBIT (A)(4) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING CLASS A COMMON SHARES AND ALL OUTSTANDING COMMON SHARES OF JEVIC TRANSPORTATION, INC. AT $14.00 NET PER CLASS A COMMON SHARE AND $14.00 NET PER COMMON SHARE BY JPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED. June 9, 1999 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), to act as Dealer Manager in connection with the Purchaser's offer to purchase all outstanding shares of Class A Common Stock, no par value (the "Class A Common Shares"), and all outstanding shares of Common Stock, no par value (the "Common Shares"), of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") enclosed herewith. Unless the context indicates otherwise, as used herein, "Shares" shall mean Class A Common Shares together with Common Shares; and "Shareholders" shall mean holders of Shares. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. 2 Also enclosed is the letter to Shareholders of the Company from the Chairman of the Board and Chief Executive Officer of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, or who hold Shares registered in their own names, we are enclosing the following documents: 1. The Offer to Purchase, dated June 9, 1999; 2. The Company's Solicitation/Recommendation Statement on Schedule 14D-9; 3. The Letter of Transmittal to be used by holders of Shares in accepting the Offer and tendering Shares; 4. The Notice of Guaranteed Delivery to be used to accept the Offer if the certificates evidencing such Shares (the "Share Certificates") are not immediately available or time will not permit all required documents to reach the Depositary (as defined in the Offer to Purchase) prior to the Expiration Date (as defined in the Offer to Purchase) or the procedure for book-entry transfer cannot be completed by the Expiration Date; 5. A letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominees, with space provided for obtaining such clients' instructions with regard to the Offer; 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withheld; and 7. A return envelope addressed to the Depositary. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will purchase, by accepting for payment, and will pay for the Shares validly tendered prior to the Expiration Date promptly after the Expiration Date. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, tendered Shares as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the Share Certificates, timely confirmation of a book-entry transfer of such Shares, if such procedure is available, into the Depositary's account at The Depository Trust Company ("DTC") pursuant to the procedures set forth in Section 2 of the Offer to Purchase, or confirmation of surrender of Shares through DTC's Automated Tender Offer Program ("ATOP"), (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in Section 2 of the Offer to Purchase), in the case of a book-entry transfer or tender pursuant to ATOP procedures and (iii) any other documents required by the Letter of Transmittal. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager, the Information Agent and the Depositary as described in Section 17 of the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients. The Purchaser will pay any stock transfer taxes incident to the transfer to it of validly tendered Shares, except as otherwise provided in Instruction 6 of the Letter of Transmittal. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 2 3 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999 UNLESS THE OFFER IS EXTENDED. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees and any other required documents, should be sent to the Depositary, and certificates evidencing the tendered Shares should be delivered or such Shares should be tendered by book-entry transfer or in accordance with DTC's ATOP procedures, all in accordance with the Instructions set forth in the Letter of Transmittal and the Offer to Purchase. If holders of Shares wish to tender Shares, but it is impracticable for them to forward their Share Certificates or other required documents to the Depositary prior to the Expiration Date or to comply with the procedures for book-entry transfer or ATOP on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified under Section 2 of the Offer to Purchase. Any inquiries you may have with respect to the Offer should be addressed to ChaseMellon Shareholder Services L.L.C., the Information Agent, or J.P. Morgan Securities Inc., the Dealer Manager, at their respective addresses and telephone numbers set forth on the back cover page of the offer to Purchase. Additional copies of the enclosed materials may be obtained by calling ChaseMellon Shareholder Services L.L.C., the Information Agent, collect at (212) 273-8035 or toll-free at (800) 814-0304, or from brokers, dealers, commercial banks or trust companies. Very truly yours, J.P. Morgan Securities Inc. NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(5) 6 LETTER TO CLIENTS 1 EXHIBIT (A)(5) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING CLASS A COMMON SHARES AND ALL OUTSTANDING COMMON SHARES OF JEVIC TRANSPORTATION, INC. AT $14.00 NET PER CLASS A COMMON SHARE AND $14.00 NET PER COMMON SHARE BY JPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED. June 9, 1999 To Our Clients: Enclosed for your consideration are the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer") in connection with the Offer by JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), to purchase all outstanding shares of Class A Common Stock, no par value (the "Class A Common Shares"), and all outstanding shares of Common Stock, no par value (the "Common Shares", of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase. Unless the context indicates otherwise, "Shares" shall mean the Class A Common Shares together with Common Shares; and "Shareholders" shall mean holders of Shares. Also enclosed is the letter to shareholders of the Company from the Chairman of the Board and Chief Executive Officer of the Company accompanied by the Company's Solicitation/Recommendation Statement on Schedule 14D-9. Shareholders whose certificates evidencing Shares (the "Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required by the Letter of Transmittal to the Depositary prior to the Expiration Date (as defined in the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer to the Depositary's account at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase) on a timely basis and who wish to tender 2 their Shares must do so pursuant to the guaranteed delivery procedure described in Section 2 of the Offer to Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures does not constitute delivery to the Depositary. THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS BEING FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account upon the terms and subject to the conditions set forth in the Offer to Purchase. Your attention is invited to the following: 1. The tender price is $14.00 per Share, net to you in cash, without interest thereon. 2. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Wednesday, July 7, 1999, unless the Offer is extended. 3. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of June 6, 1999 (the "Merger Agreement"), by and among Parent, the Purchaser and the Company. The Merger Agreement provides that, among other things, following the consummation of the Offer and the satisfaction or waiver of the other conditions set forth in the Merger Agreement, the Purchaser will be merged with and into the Company (the "Merger"). At the effective time of the Merger, each outstanding Share (other than Shares held in the treasury of the Company, owned by Parent, the Purchaser or any wholly owned subsidiary of Parent or the Company) will be converted into the right to receive the per Share price paid in the Offer, without interest. 4. The Board of Directors of the Company has unanimously determined that the Offer and the Merger are fair to and in the best interests of the Company and its Shareholders and has unanimously approved the Offer and the Merger Agreement and unanimously recommends that the Company's Shareholders accept the Offer and tender their Shares pursuant to the Offer. 5. The Offer is being made for all outstanding Shares. Tendering shareholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and any supplements or amendments thereto and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. To the extent the Purchaser or Parent becomes aware of any state law that would limit the class of offerees in the Offer, the Purchaser will amend the Offer and, depending on the timing of such amendment, if any, will extend the Offer to provide adequate dissemination of such information to such holders of Shares prior to the expiration of the Offer. In any jurisdiction the securities, blue sky or other laws of which require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by J.P. Morgan Securities Inc. or one or more registered brokers or dealers licensed under the laws of such jurisdiction. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form contained in this letter. An envelope in which to return your instructions to 2 3 us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the instruction form contained in this letter. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. If holders of Shares wish to tender Shares, but it is impracticable for them to forward their Share Certificates or other required documents to the Depositary prior to the Expiration Date or to comply with the procedures for book-entry transfer on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified under Section 2 of the Offer to Purchase. 3 4 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING CLASS A COMMON SHARES AND ALL OUTSTANDING COMMON SHARES OF JEVIC TRANSPORTATION, INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated June 9, 1999, and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), in connection with the Offer by the Purchaser and to purchase all outstanding Shares at $14.00 per Share, net to the seller in cash without interest thereon. This will instruct you to tender to the Purchaser the number of Shares indicated below (or, if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer and the related Letter of Transmittal. Number and Type (Class A Common Shares and/or Common Shares) of Shares to be Tendered*: ---------- ------------------------------------------------------------------------------ SIGN HERE Account Number: -------------------- Signature(s) -------------------- Dated: -------------------- , 1999 ------------------------------------------------------------------------------ Please type or print name(s) ------------------------------------------------------------------------------ Please type or print address(es) here ------------------------------------------------------------------------------ Area Code and Telephone Number ------------------------------------------------------------------------------ Taxpayer Identification or Social Security Number(s) - --------------- * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 4 EX-99.(A)(6) 7 GUIDELINES FOR CERTIFICATION OF TAXPAYERS ID 1 EXHIBIT (A)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER -- Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer: ------------------------------------------------------------------ GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF -- - --------------------------------------------------------------------- 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of the ac- account) count or, if combined funds, the first individual on the account(2) 3. Husband and wife (joint account) The actual owner of the ac- count or, if joint funds, either person(2) 4. Custodian account of a minor The minor(3) (Uniform Gift to Minors Act) 5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the minor(2) 6. Account in the name of guardian The ward, minor, or incompe- or committee for a designated tent person(4) ward, minor, or incompetent person 7. a. The usual revocable savings The grantor-trustee(2) trust account (grantor is also trustee) b. So-called trust account that The actual owner(2) is not a legal or valid trust under State law 8. Sole proprietorship account The owner(5) - --------------------------------------------------------------------- GIVE THE EMPLOYER IDEN- FOR THIS TYPE OF ACCOUNT: TIFICATION NUMBER OF -- - --------------------------------------------------------------------- 9. A valid trust, estate, or The legal entity (Do not pension trust furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(1) 10. Corporate account The corporation 11. Religious, charitable, or The organization educational organization account 12. Partnership account held in the The partnership name of the business 13. Association, club, or other The organization tax-exempt organization 14. A broker or registered nominee The broker or nominee 15. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
------------------------------------------------------------------ (1) List first and circle the name of the legal trust, estate or pension trust. (2) List first and circle the name of the person whose number you furnish. (3) Circle the minor's name and furnish the minor's social security number. (4) Circle the ward, minor's or incompetent person's name and furnish such person's social security number. (5) Show the name of the owner. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. OBTAINING A NUMBER If you don't have a TIN or you don't know your number, obtain Internal Revenue Service Form SS-5, Application for a Social Security Number Card or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEE EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: - - An organization exempt from tax under section 501(a) or an individual retirement account. - - The United States or any wholly owned agency or instrumentality thereof. - - A state, the District of Columbia, a possession of the United States or any political subdivision of any of the foregoing, or any wholly owned agency or instrumentality of any one or more of the foregoing. - - A foreign government, a political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing (as defined in section 7701(a)(18)). Other payees that may be exempt from backup withholding on certain payments include the following: - - A corporation. - - A financial institution. - - A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States. - - A real estate investment trust. - - A common trust fund operated by a bank under section 584(a). - - A trust exempt from tax under section 664 or described in section 4947. - - An entity registered at all times during the tax year under the Investment Company Act of 1940. - - A foreign central bank of issue. - - A middleman known in the investment community as a nominee or who is listed in the most recent publication of the American Society of Corporate Secretaries, Inc., Nominee List. Payment of dividends and patronage dividends not generally subject to backup withholding include the following: - - Payments to nonresident aliens subject to withholding under section 1441. - - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - - Payments or patronage dividends where the amount received is not paid in money. - - Payments made by certain foreign organizations. Payments of interest not generally subject to backup withholding include the following: - - Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt interest dividends under section 852). - - Payments described in section 6049(b)(5) to non-resident aliens. - - Payments on tax-free covenant bonds under section 1451. - - Payments made by certain foreign organizations. Exempt payees described above should file Substitution Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM AND RETURN IT TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045 and 6050A. PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, interest or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. -- If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 20% on any portion of an underpayment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(7) 8 TEXT OF PRESS RELEASE 1 EXHIBIT (A)(7) June 7, 1999 FOR IMMEDIATE RELEASE YELLOW CORPORATION MAKES TENDER OFFER TO ACQUIRE JEVIC TRANSPORTATION, INC. OVERLAND PARK, KAN. -- Yellow Corporation (NASDAQ: YELL) and Jevic Transportation, Inc. (NASDAQ: JEVC) today announced that the Jevic Board of Directors has recommended that its shareholders accept a tender offer by Yellow to acquire all 11.5 million shares of Jevic at $14 per share. If the tender is successful, Jevic will become part of Yellow Corp.'s newly formed regional transportation services holding company. The new carrier group would become one of the nation's largest regional LTL transportation companies. The value of the tender offer, including debt assumption, is approximately $200 million and is also subject to regulatory approval. The transaction is to be financed through existing debt facilities and could be completed early in the third quarter of 1999. Jevic is a fully-integrated regional and inter-regional less-than-truckload and truckload carrier. In 1998, Jevic reported revenue of $226.1 million and operating income of $16.7 million, for an operating ratio of 92.6. Net income was $9.3 million, up from $7.8 million in the prior year. In the first quarter of 1999, Jevic reported revenue of $65.8 million, an increase of 19.9 percent over revenue in the 1998 first quarter. First quarter 1999 operating income was $4.9 million, up 29.3 percent from the prior year period. The first quarter 1999 operating ratio was 92.5. "As one of the premier transportation services companies in our industry today, Jevic is an excellent fit with Yellow Corporation's regional transportation strategy," said A. Maurice Myers, chairman, president and CEO of Yellow Corporation. "Jevic has established itself as one of the best performing carriers in our rapidly consolidating industry. They have grown quickly and have maintained excellent profitability." With the addition of Jevic, Yellow Corporation annual revenue from its regional carrier group will approach $800 million. "With this critical mass, it is obvious that our regional carrier group demands its own management and structure to best serve the fast growing regional market sector. A search is currently underway internally and externally for a President for this new holding company." The acquisition of Jevic would give Yellow's regional carrier group significant additional regional service coverage in the Northeast and Upper Midwest. Other regional Yellow Corporation companies include Saia, an LTL carrier serving the Southeast, WestEx, serving California and the Southwest, and Action Express, serving the Pacific Northwest and Rocky Mountain States. It is Yellow Corporation's intent to operate Jevic as a separate, stand-alone company within the regional carrier holding company. No reductions in the current Jevic workforce are expected to result from the acquisition. Jevic employs approximately 2,300 people, including 1,200 drivers. Jevic founder Harry Muhlschlegel will remain as Chief Executive Officer and current President and Chief Operating Officer Paul Karvois will continue, after closing, along with all members of his current management team. "Yellow Corporation's newly formed regional transportation group is very exciting," said Muhlschlegel, who with his wife Karen founded Jevic in 1982. "This is the next logical step for us. We have proven that our business philosophy and operating model works in today's market. We've kept our focus on our people first, especially our drivers, because they are the ones who deliver the service our customers expect. Of most importance to our employees and our customers, this transaction will have no impact on day-to-day operations and have a very positive impact long-term on our ability to keep growing and providing the service our customers demand." 2 Jevic operates a unique hybrid less-than-truckload and truckload network that de-emphasizes the need for large breakbulk facilities where freight often is re-handled. Origin terminals build loads that are sequenced within the trailers for easy delivery by the driver along a flexible route. The operating model has significantly reduced cost-per-shipment and claims while increasing revenue per ton and maintaining high on-time reliability. Jevic's regional facilities are located in the metropolitan areas of Atlanta, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Houston and Philadelphia. Its headquarters are in Delanco, New Jersey, in the Philadelphia metropolitan area. Yellow Corporation is a holding company with operating subsidiaries specializing in national regional and international less-than-truckload transportation services. Headquartered in Overland Park, Kansas, Yellow employs approximately 29,700 people. Statements contained in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to inflation, labor relations, inclement weather, competitor pricing activity, expense volatility and a downturn in general economic activity. Analyst Contact: H.A. (Bert) Trucksess III 913-696-6105 Media Contact: Roger Dick 913-696-6184
EX-99.(A)(8) 9 SUMMARY ADVERTISEMENT DATED JUNE 9, 1999 1 EXHIBIT (A)(8) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer is made solely by the Offer to Purchase dated June 9, 1999 and the related Letter of Transmittal. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by J.P. Morgan Securities Inc. (the "Dealer Manager") or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. NOTICE OF OFFER TO PURCHASE FOR CASH ALL OUTSTANDING CLASS A COMMON SHARES AND ALL OUTSTANDING COMMON SHARES OF JEVIC TRANSPORTATION, INC. AT $14.00 NET PER CLASS A COMMON SHARE AND $14.00 NET PER COMMON SHARE BY JPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YELLOW CORPORATION JPF Acquisition Corp., a New Jersey corporation (the "Purchaser") and a wholly owned subsidiary of Yellow Corporation, a Delaware corporation ("Parent"), is offering to purchase all outstanding shares of Class A Common Stock, no par value (the "Class A Common Shares"), and all outstanding shares of Common Stock, no par value (the "Common Shares"), of Jevic Transportation, Inc., a New Jersey corporation (the "Company"), at a price of $14.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 9, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context indicates otherwise, as used herein, "Shares" shall mean the Class A Common Shares together with Common Shares; and "Shareholders" shall mean holders of Shares. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JULY 7, 1999, UNLESS THE OFFER IS EXTENDED. 2 THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY TENDERED A NUMBER OF SHARES THAT WOULD REPRESENT AT LEAST 51% OF COMMON SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) THERE BEING VALIDLY TENDERED ALL OF THE OUTSTANDING CLASS A COMMON SHARES ON THE DATE OF PURCHASE AND (III) THE EXPIRATION OR TERMINATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER, AND CERTAIN OTHER APPLICABLE ANTITRUST STATUTES. THE OFFER IS NOT SUBJECT TO ANY FINANCING CONDITION. SEE SECTION 15 OF THE OFFER TO PURCHASE. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 6, 1999, among the Company, Parent and the Purchaser, pursuant to which, after the completion of the Offer, the Purchaser will be merged with and into the Company (the "Merger") and each issued and outstanding Share (other than Shares owned by Parent, the Purchaser or any other subsidiary of Parent) shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive, without interest, an amount in cash equal to the Share price paid pursuant to the Offer. Concurrently with the execution of the Merger Agreement, Parent, the Purchaser and each holder of Class A Common Shares entered into a Tender and Voting Agreement (the "Tender and Voting Agreement") pursuant to which, subject to the terms and conditions of the Tender and Voting Agreement, the Class A Common Share holders have agreed to tender (and not withdraw) 5,701,794 Class A Common Shares in the aggregate in the Offer. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. The purpose of the Offer is to enable Parent to acquire control of, and the entire equity interest in, the Company. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered to the Purchaser as, if and when the Purchaser gives oral or written notice to the Depositary (as defined in the Offer to Purchase) of the Purchaser's acceptance for payment of such Shares. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for validly tendering shareholders for the purpose of receiving payments from the Purchaser and transmitting such payments to validly tendering shareholders. Under no circumstances will interest on the purchase price for Shares be paid by the Purchaser, regardless of any extension of the Offer or delay in making such payment. In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the "Share Certificates") or timely confirmation of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer to Purchase) pursuant to the procedures set forth in Section 2 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in Section 2 of the Offer to Purchase), and (iii) any other documents required by the Letter of Transmittal. The Purchaser expressly reserves the right, in its sole discretion, at any time or from time to time, to extend for any reason the period of time during which the Offer is open, including the occurrence of any condition specified in Section 15 of the Offer to Purchase, by giving oral or written notice of such extension to the Depositary. During any such extension, all Shares previously tendered and not withdrawn will remain 2 3 subject to the Offer, subject to the rights of a tendering shareholder to withdraw his Shares. Any such extension will be followed as promptly as practicable by public announcement thereof, such announcement to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date of the Offer. Tenders of Shares made pursuant to the Offer are irrevocable except that such Shares may be withdrawn at any time prior to 12:00 midnight, New York City time, on Wednesday, July 7, 1999 (or, if the Purchaser shall have extended the period of time for which the Offer is open, the latest time and date at which the Offer, as so extended by the Purchaser, shall expire) and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after August 8, 1999. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at its address set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 2 of the Offer to Purchase), unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the Book-Entry Transfer Facility procedures. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Offer to Purchase and the related Letter of Transmittal and, if required, other relevant materials will be mailed to record holders of Shares whose names appear on the Company's shareholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares by the Purchaser. THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 3 4 Questions and requests for assistance may be directed to the Dealer Manager or the Information Agent at their respective addresses and telephone numbers as set forth below. The Purchaser will not pay any fees or commissions to any broker or dealer or to any other person (other than the Dealer Manager and the Information Agent) for soliciting tenders of Shares pursuant to the Offer. Additional copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks and trust companies, and will be furnished promptly at the Purchaser's expense. The Information Agent for the Offer is: CHASEMELLON SHAREHOLDER SERVICES L.L.C. 450 West 33rd Street -- 14th Floor New York, NY 10001 (212) 273-8035 (Call Collect) or Call Toll Free: (800) 814-0304 The Dealer Manager for the Offer is: J.P. MORGAN & CO. 60 Wall Street New York, NY 10260 (212) 648-3509 or Call Toll-Free (877) 874-2781 June 9, 1999 4 EX-99.(B)(1) 10 REVOLVING CREDIT AGREEMENT 1 EXHIBIT (B)(1) REVOLVING CREDIT AGREEMENT DATED AS OF SEPTEMBER 24, 1997 AMONG YELLOW CORPORATION NATIONSBANK, N.A., INDIVIDUALLY AND AS DOCUMENTATION AGENT THE FIRST NATIONAL BANK OF CHICAGO, INDIVIDUALLY, AS ISSUER AND AS AGENT AND THE LENDERS LISTED HEREIN 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I. DEFINITIONS............................................... 1 ARTICLE II. THE FACILITY............................................. 12 2.1. The Facility................................................ 12 2.1.1. Description of Facility..................................... 12 2.1.2. Facility Amount............................................. 12 2.1.3. Availability of Facility.................................... 12 2.2. Ratable Advances............................................ 12 2.2.1. Ratable Advances............................................ 12 2.2.2. Ratable Advance Rate Options................................ 13 2.2.3. Method of Selecting Rate Options and Interest Periods for Ratable Advances............................................ 13 2.3. Competitive Bid Advances.................................... 13 2.3.1. Competitive Bid Option...................................... 13 2.3.2. Competitive Bid Quote Request............................... 13 2.3.3. Invitation for Competitive Bid Quotes....................... 14 2.3.4. Submission and Contents of Competitive Bid Quotes........... 14 2.3.5. Notice to Borrower.......................................... 15 2.3.6. Acceptance and Notice by Borrower........................... 15 2.3.7. Allocation by Agent......................................... 15 2.3.8. Competitive Bid Auction Fees................................ 15 2.4. Facility Letters of Credit.................................. 16 2.4.1. Obligation to Issue......................................... 16 2.4.2. Conditions for Issuance..................................... 16 2.4.3. Procedure for Issuance of Facility Letters of Credit........ 16 2.4.4. Reimbursement Obligations................................... 17 2.4.5. Participation............................................... 17 2.4.6. Compensation for Facility Letters of Credit................. 18 2.4.7. Letter of Credit Collateral Account......................... 18 2.4.8. Nature of Obligations....................................... 18 2.5. Fees........................................................ 19 2.5.1. Agent's Fees................................................ 19 2.5.2. Facility Fee................................................ 19 2.5.3. Utilization Fee............................................. 19 2.6. General Facility Terms...................................... 19 2.6.1. Method of Borrowing......................................... 19 2.6.2. Minimum Amount of Each Advance.............................. 20 2.6.3. Payment on Last Day of Interest Period...................... 20 2.6.4. Optional Principal Payments................................. 20 2.6.5. Interest Periods............................................ 20 2.6.6. Default Rate................................................ 20 2.6.7. Interest Payment Dates; Interest Basis...................... 20 2.6.8. Method of Payment........................................... 20 2.6.9. Notes; Telephonic Notices................................... 21 2.6.10. Notification of Advances, Interest Rates and Prepayments.... 21 2.6.11. Non-Receipt of Funds by the Agent........................... 21 2.6.12. Cancellation................................................ 21
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PAGE ---- 2.6.13. Lending Installations....................................... 21 2.6.14. Withholding Tax Exemption................................... 22 2.6.15. Application of Payments with Respect to Defaulting Lenders..................................................... 22 ARTICLE III. CHANGE IN CIRCUMSTANCES................................. 23 3.1. Yield Protection............................................ 23 3.2. Changes in Capital Adequacy Regulations..................... 23 3.3. Availability of Rate Options................................ 24 3.4. Funding Indemnification..................................... 24 3.5. Lender Statements; Survival of Indemnity.................... 24 3.6. References to Lender to Include Issuer...................... 24 ARTICLE IV. CONDITIONS PRECEDENT..................................... 24 4.1. Initial Credit Extension.................................... 24 4.2. Refinancing Credit Extension................................ 25 4.3. Each Credit Extension (other than a Refinancing Credit Extension).................................................. 26 ARTICLE V. REPRESENTATIONS AND WARRANTIES............................ 26 5.1. Corporate Existence and Standing............................ 26 5.2. Authorization and Validity.................................. 26 5.3. No Conflict; Government Consent............................. 26 5.4. Financial Statements........................................ 26 5.5. Material Adverse Change..................................... 27 5.6. Taxes....................................................... 27 5.7. Litigation and Contingent Obligations....................... 27 5.8. Subsidiaries................................................ 27 5.9. ERISA....................................................... 27 5.10. Accuracy of Information..................................... 27 5.11. Regulation U................................................ 27 5.12. Material Agreements......................................... 27 5.13. Compliance With Laws........................................ 27 5.14. Investment Company Act...................................... 28 5.15. Public Utility Holding Company Act.......................... 28 5.16. Ownership of Property....................................... 28 ARTICLE VI. COVENANTS................................................ 28 6.1. Financial Reporting......................................... 28 6.2. Use of Proceeds; Regulation U............................... 29 6.3. Notice of Default........................................... 29 6.4. Conduct of Business......................................... 29 6.5. Taxes....................................................... 29 6.6. Insurance................................................... 29 6.7. Compliance with Laws........................................ 29 6.8. Environmental Covenant...................................... 29 6.9. Maintenance of Property..................................... 30 6.10. Inspection.................................................. 30 6.11. Merger...................................................... 30 6.12. Sale of Assets.............................................. 30 6.13. Liens....................................................... 30 6.14. Guaranties, Loans, Advances and Investments................. 31 6.15. Affiliates.................................................. 32
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PAGE ---- 6.16. Adjusted Consolidated Tangible Net Worth.................... 32 6.17. Consolidated Indebtedness to Total Indebtedness Ratio....... 32 6.18. Employee Benefit Plans...................................... 32 6.19. Other Agreements............................................ 32 6.20. Subsidiary Dividends and Indebtedness....................... 32 6.21. Ownership of Yellow Freight................................. 33 6.22. Additional Material Subsidiaries............................ 33 ARTICLE VII. DEFAULTS............................................... 33 ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES......... 35 8.1. Acceleration; Collateral Shortfall.......................... 35 8.2. Amendments.................................................. 35 8.3. Preservation of Rights...................................... 36 ARTICLE IX. GENERAL PROVISIONS....................................... 36 9.1. Survival of Representations................................. 36 9.2. Governmental Regulation..................................... 36 9.3. Taxes....................................................... 36 9.4. Headings.................................................... 36 9.5. Entire Agreement............................................ 37 9.6. Several Obligations; Benefits of this Agreement............. 37 9.7. Expenses; Indemnification................................... 37 9.8. Numbers of Documents........................................ 37 9.9. Accounting.................................................. 37 9.10. Severability of Provisions.................................. 37 9.11. Nonliability of Lenders..................................... 37 9.12. CHOICE OF LAW............................................... 37 9.13. CONSENT TO JURISDICTION..................................... 38 9.14. WAIVER OF JURY TRIAL........................................ 38 9.15. Confidentiality............................................. 38 ARTICLE X. THE AGENT................................................. 38 10.1. Appointment................................................. 38 10.2. Powers...................................................... 38 10.3. General Immunity............................................ 38 10.4. No Responsibility for Loans, Recitals, etc.; Delivery of Documents................................................... 38 10.5. Action on Instructions of Lenders........................... 39 10.6. Employment of Agents and Counsel............................ 39 10.7. Reliance on Documents; Counsel.............................. 39 10.8. Agent's Reimbursement and Indemnification................... 39 10.9. Rights as a Lender.......................................... 39 10.10. Lender Credit Decision...................................... 40 10.11. Successor Agent............................................. 40 10.12. Notice of Default........................................... 40 ARTICLE XI. SETOFF; RATABLE PAYMENTS................................. 40 11.1. Setoff...................................................... 40 11.2. Ratable Payments............................................ 40
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PAGE ---- ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....... 41 12.1. Successors and Assigns...................................... 41 12.2. Participations.............................................. 41 12.2.1. Permitted Participants; Effect.............................. 41 12.2.2. Voting Rights............................................... 41 12.2.3. Benefit of Setoff........................................... 41 12.3. Assignments................................................. 42 12.3.1. Permitted Assignments....................................... 42 12.3.2. Effect; Effective Date...................................... 42 12.4. Dissemination of Information................................ 42 12.5. Tax Treatment............................................... 42 ARTICLE XIII. NOTICES................................................ 43 13.1. Giving Notice............................................... 43 13.2. Change of Address........................................... 43 ARTICLE XIV. COUNTERPARTS............................................ 43 EXHIBITS Exhibit "A" -- Note (Ratable Loans).................................. 48 Exhibit "B" -- Note (Competitive Bid Loans).......................... 50 Exhibit "C" -- Competitive Bid Quote Request......................... 52 Exhibit "D" -- Invitation for Competitive Bid Quotes................. 53 Exhibit "E" -- Competitive Bid Quote................................. 54 Exhibit "F" -- Form of Opinion of Counsel to Yellow Corporation...... 55 Exhibit "G" -- Loan/Credit Related Money Transfer Instructions....... 57 Exhibit "H" -- Compliance Certificate................................ 58 Exhibit "I" -- Form of Assignment Agreement.......................... 60 SCHEDULES Schedule "1" -- Potential Liabilities not Provided For in Financial Statements........................................... 64 Schedule "2" -- Yellow Corporation Subsidiaries...................... 68 Schedule "3" -- Notices of Legal or Regulatory Violations............ 69 Schedule "4" -- Specified Liens in Existence on the Closing Date..... 70
iv 6 YELLOW CORPORATION REVOLVING CREDIT AGREEMENT This Revolving Credit Agreement, dated as of September 24, 1997, is among Yellow Corporation, a Delaware corporation, the Lenders (as defined below), NationsBank, N.A., as Documentation Agent, and The First National Bank of Chicago, as Issuer and as Agent. The parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement: "Absolute Rate" means, with respect to an Absolute Rate Loan made by a given Lender for the relevant Absolute Rate Interest Period, the rate of interest per annum (rounded to the nearest 1/100 of 1%) offered by such Lender and accepted by the Borrower. "Absolute Rate Advance" means a borrowing hereunder consisting of the aggregate amount of the several Absolute Rate Loans made by some or all of the Lenders to the Borrower at the same time and for the same Interest Period. "Absolute Rate Auction" means a solicitation of Competitive Bid Quotes setting forth Absolute Rates pursuant to Section 2.3. "Absolute Rate Interest Period" means, with respect to an Absolute Rate Advance, a period of not less than 30 days and not more than six months, commencing on a Business Day selected by the Borrower pursuant to this Agreement. If such Absolute Rate Interest Period would end on a day which is not a Business Day, such Absolute Rate Interest Period shall end on the next succeeding Business Day, unless such next succeeding Business Day is after the Termination Date, in which case such Absolute Rate Interest Period shall end on the next preceding Business Day. No Absolute Rate Interest Period may end after the Termination Date. "Absolute Rate Loan" means a Loan which bears interest at the Absolute Rate. "Adjusted Consolidated EBITDA" means, for any period, the sum of (i) Consolidated EBITDA plus (ii) Special Subsidiary Discontinuation/Restructuring Charges incurred or taken by the Borrower during such period, provided that the cumulative amount of Special Subsidiary Discontinuation/Restructuring Charges included in Adjusted Consolidated EBITDA pursuant to this clause (ii) during the term of this Agreement shall not exceed $115,000,000 (which is a pre-tax amount). "Adjusted Consolidated Tangible Net Worth" means the sum of (i) Consolidated Tangible Net Worth, plus (ii) the cumulative amount of Special Subsidiary Discontinuation/Restructuring Charges incurred or taken by the Borrower for fiscal quarters ending on September 30, 1997 or thereafter (such amount to be adjusted quarterly upon delivery by the Borrower of its financial statements described in Section 6.1(ii)), provided that the cumulative amount of Special Subsidiary Discontinuation/Restructuring Charges included in Adjusted Consolidated Tangible Net Worth pursuant to this clause (ii) during the term of this Agreement shall not exceed $75,000,000 (which is an after-tax amount). "Advance" means a borrowing hereunder consisting of the aggregate amount of the several Loans made by some or all of the Lenders to the Borrower on the same Borrowing Date, at the same Rate Option (or on the same interest basis in the case of Competitive Bid Advances) and for the same Interest Period and includes a Competitive Bid Advance. "Affiliate" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. 1 7 "Agent" means The First National Bank of Chicago in its capacity as agent for the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to Article X. "Agent's Fee Letter" is defined in Section 2.3.8. "Aggregate Commitment" means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. "Agreement" means this revolving credit agreement, as it may be amended or modified and in effect from time to time. "Agreement Accounting Principles" means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.4, provided that, to the extent that generally accepted accounting principles as in effect at any time permit alternative methods of accounting for particular events or transactions, the Borrower may, with the concurrence of its independent certified public accountants, vary its selection of such methods during different accounting periods so long as any inconsistency in the application of generally accepted accounting principles resulting therefrom is disclosed and explained to the Lenders. "Alternate Base Rate" means, for any day, a rate of interest per annum equal to the higher of (i) the Corporate Base Rate or (ii) the Federal Funds Effective Rate most recently determined by the Agent plus 1/2% per annum. Changes in the rate of interest on that portion of any Advance maintained as a Floating Rate Advance will take effect simultaneously with each change in the Alternate Base Rate. "Applicable Facility Fee Rate" means (i) during any Level 1 Rating Period, 0.08% per annum, (ii) during any Level 2 Rating Period, 0.10% per annum, (iii) during any Level 3 Rating Period, 0.125% per annum, (iv) during any Level 4 Rating Period, 0.15% per annum, (v) during any Level 5 Rating Period, 0.175% per annum and (vi) during any Level 6 Rating Period, 0.20% per annum. "Applicable Margin" means (i) during any Level 1 Rating Period, 0.17% per annum, (ii) during any Level 2 Rating Period, 0.20% per annum, (iii) during any Level 3 Rating Period, 0.225% per annum, (iv) during any Level 4 Rating Period, 0.25% per annum, (v) during any Level 5 Rating Period, 0.325% per annum and (vi) during any Level 6 Rating Period, 0.40% per annum. "Applicable Utilization Fee Rate" means (i) during any Level 1, 2 or 3 Rating Period, 0.05% per annum, (ii) during any Level 4 or 5 Rating Period, 0.10% per annum and (iii) during any Level 6 Rating Period, 0.15% per annum. "Article" means an article of this Agreement unless another document is specifically referenced. "Authorized Officer" means either of the Treasurer or Assistant Treasurer of the Borrower, acting singly. "Board of Directors" means the board of directors of a Person or any duly authorized committee of such board of directors to the extent that such committee is authorized to perform the functions of such board of directors. Unless otherwise expressly provided or unless the context otherwise requires, all references herein to the "Board of Directors" shall mean the Board of Directors of the Borrower. "Borrower" means Yellow Corporation, a Delaware corporation, and its permitted successors and assigns. "Borrowing Date" means a date on which an Advance is made hereunder. "Business Day" means (i) with respect to any borrowing, payment or rate selection of Eurodollar Ratable Advances or Eurodollar Bid Rate Advances, a day other than Saturday or Sunday on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities and on which dealings in United States dollars are carried on in the London interbank market and (ii) for all other purposes, a day other than Saturday or Sunday on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities. 2 8 "Capitalized Lease" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "Change in Control" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Borrower. "Closing Date" means September 24, 1997, or such other Business Day thereafter agreed upon by the parties hereto on which the Agent shall have determined that the conditions set forth in Section 4.1 have been fulfilled or waived. "Code" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "Commitment" means, for each Lender, the obligation of such Lender to make Ratable Loans and participate in Facility Letters of Credit in an amount not exceeding in the aggregate at any one time the amount set forth opposite its signature below, as such amount may be modified from time to time pursuant to the terms of this Agreement. "Competitive Bid Advance" means a borrowing hereunder consisting of the aggregate amount of the several Competitive Bid Loans made by some or all of the Lenders to the Borrower at the same time and for the same Interest Period. "Competitive Bid Borrowing Notice" is defined in Section 2.3.6. "Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute Rate Loan, or both, as the case may be. "Competitive Bid Margin" means the margin above or below the applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan, expressed as a percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from such Eurodollar Base Rate. "Competitive Bid Note" means a promissory note in substantially the form of Exhibit "B" hereto, with appropriate insertions, duly executed and delivered to the Agent by the Borrower for the account of a Lender and payable to the order of such Lender, including any amendment, modification, renewal or replacement of such promissory note. "Competitive Bid Quote" means a Competitive Bid Quote substantially in the form of Exhibit "E" hereto completed and delivered by a Lender to the Agent in accordance with Section 2.3.4. "Competitive Bid Quote Request" means a Competitive Bid Quote Request substantially in the form of Exhibit "C" hereto completed and delivered by the Borrower to the Agent in accordance with Section 2.3.2. "Condemnation" is defined in Section 7.8. "Consolidated Assets" means, at any date, all amounts which, in conformity with Agreement Accounting Principles, would be included as assets on a consolidated balance sheet of the Borrower and its Subsidiaries as at such date. "Consolidated EBITDA" means Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income, (i) Net Interest Expense, (ii) income taxes, (iii) depreciation, and (iv) amortization, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with Agreement Accounting Principles. 3 9 "Consolidated Indebtedness" means, at any date, all Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis in accordance with Agreement Accounting Principles. "Consolidated Net Income" means, for any period, the net income or loss of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with Agreement Accounting Principles. "Consolidated Tangible Net Worth" means, at any date, the consolidated net worth of the Borrower and its Subsidiaries at such date after subtracting therefrom the aggregate amount of any intangible assets of the Borrower and its Subsidiaries, including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks, brand names and operating rights, all determined in accordance with Agreement Accounting Principles. "Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code. "Corporate Base Rate" means a rate per annum equal to the corporate base rate of interest announced by First Chicago from time to time, changing when and as said corporate base rate changes. "Credit Extension" means the making of any Advance or the issuance of any Facility Letter of Credit pursuant to this Agreement. "Credit Extension Date" means the date on which any Credit Extension is made hereunder. "Current Payment Obligations" means (when used in Sections 5.9 and 7.11 only), as of any date of determination, payment obligations which are past due, are due on or will become due within 12 months after such date. "Default" means an event described in Article VII. "Defaulting Lender" means any Lender that, in breach of this Agreement, (i) on any Borrowing Date fails to make available to the Agent such Lender's Loans required to be made to the Borrower on such Borrowing Date or (ii) shall not have made a payment to the Issuer pursuant to Section 2.4.5(b). Once a Lender becomes a Defaulting Lender, such Lender shall continue as a Defaulting Lender until such time as such Defaulting Lender makes available to the Agent the amount of such Defaulting Lender's Loans and/or to the Issuer such payments requested by the Issuer, together with all other amounts then due and payable to the Agent and/or the Issuer by such Defaulting Lender pursuant to this Agreement. "Dollars" and "$" mean lawful money of the United States of America. "Environmental Laws" means all applicable federal, state or local statutes, laws, ordinances, codes, rules, regulations and guidelines (including consent decrees and administrative orders) relating to public health and safety and protection of the environment. "Equipment" means all equipment, machinery, furniture and goods used or usable by the Borrower in its business and all other tangible personal property (other than inventory), and all accessions and additions thereto, excluding such of the foregoing as have been attached to real property in such a manner that their removal would cause damage to the realty and which have therefore taken on the character of real property. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower or any Subsidiary of the Borrower, or is under common control (within the meaning of Section 414(c) of the Code) with the Borrower or any Subsidiary of the Borrower. "Eurodollar Auction" means a solicitation of Competitive Bid Quotes setting forth Competitive Bid Margins pursuant to Section 2.3. 4 10 "Eurodollar Base Rate" means, with respect to a Eurodollar Ratable Advance or a Eurodollar Bid Rate Advance for the relevant Eurodollar Interest Period, the rate determined by the Agent to be the arithmetic average of the rates reported to the Agent by each Reference Bank as the rate at which deposits in U.S. dollars are offered by such Reference Bank to first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Eurodollar Interest Period, in the approximate amount of such Reference Bank's relevant Eurodollar Ratable Loan or, in the case of a Eurodollar Bid Rate Advance, the amount of the Eurodollar Bid Rate Advance requested by the Borrower, and having a maturity approximately equal to such Eurodollar Interest Period. If any Reference Bank fails to provide such quotation to the Agent, then the Agent shall determine the Eurodollar Base Rate on the basis of the quotations of the remaining Reference Bank(s). "Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan made by a given Lender for the relevant Eurodollar Interest Period, the sum of (i) the Eurodollar Base Rate, rounded, if necessary, to the next higher 1/16 of 1%, and (ii) the Competitive Bid Margin offered by such Lender and accepted by the Borrower. "Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears interest at a Eurodollar Bid Rate. "Eurodollar Bid Rate Loan" means a Loan which bears interest at the Eurodollar Bid Rate. "Eurodollar Interest Period" means, with respect to a Eurodollar Ratable Advance or a Eurodollar Bid Rate Advance, a period of one, two, three or six months commencing on a Business Day selected by the Borrower pursuant to this Agreement. Such Eurodollar Interest Period shall end on (but exclude) the day which corresponds numerically to such date one, two, three or six months (as applicable) thereafter, provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Eurodollar Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If a Eurodollar Interest Period would otherwise end on a day which is not a Business Day, such Eurodollar Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new month, such Eurodollar Interest Period shall end on the Business Day immediately preceding the day (which was not a Business Day) upon which such Eurodollar Interest Period would otherwise have ended. No Eurodollar Interest Period may end after the Termination Date. "Eurodollar Ratable Advance" means an Advance which bears interest at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2. "Eurodollar Ratable Loan" means a Loan which bears interest at a Eurodollar Rate requested by the Borrower pursuant to Section 2.2. "Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable to that Eurodollar Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to that Eurodollar Interest Period, plus (ii) the Applicable Margin. The Eurodollar Rate shall be rounded, if necessary, to the next higher 1/16 of 1%. "Existing Credit Agreement" is defined in Section 4.1. "Facility Letter of Credit" means a standby Letter of Credit issued by the Issuer pursuant to Section 2.4. Upon the satisfaction of the conditions to the initial Credit Extension set forth in Sections 4.1 and 4.3, each Letter of Credit issued under the Existing Credit Agreement shall be deemed for all purposes to be a Facility Letter of Credit issued hereunder and each Lender shall be deemed to hold a participation equal to its Pro Rata Share in such Facility Letter of Credit. "Facility Letter of Credit Obligations" means, as at the time of any determination thereof, all liabilities, whether actual or contingent, of the Borrower with respect to the Facility Letters of Credit, including the sum of (a) Reimbursement Obligations and (b) the aggregate undrawn face amount of the outstanding Facility Letters of Credit. 5 11 "Federal Funds Effective Rate" means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion. "First Chicago" means The First National Bank of Chicago in its individual capacity, and its successors. "Fixed Rate" means the Eurodollar Rate, the Eurodollar Bid Rate or the Absolute Rate. "Fixed Rate Advance" means an Advance which bears interest at a Fixed Rate. "Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate. "Floating Rate" means, for any day, a rate per annum equal to the Alternate Base Rate, in each case changing when and as the Alternate Base Rate changes. "Floating Rate Advance" means an Advance which bears interest at the Floating Rate. "Floating Rate Loan" means a Loan which bears interest at the Floating Rate. "Floating Rate Interest Period" means, with respect to a Floating Rate Advance, a period of 30 days commencing on a Business Day selected by the Borrower pursuant to this Agreement. If such Floating Rate Interest Period would end on a day which is not a Business Day, such Floating Rate Interest Period shall end on the next succeeding Business Day. No Floating Rate Interest Period may end after the Termination Date. "Guarantors" means, collectively, the Original Guarantors, any other Person which becomes a party to the Guaranty after the date hereof, and any successor or assign of any of the foregoing Persons (except to the extent such successor or assign is relieved from its obligations under the Guaranty pursuant to the provisions of this Agreement), and "Guarantor" means any one of such Persons, provided that any Person released from the Guaranty pursuant to the provisions of Section 6.22 shall no longer be a "Guarantor" unless and until such Person re-executes the Guaranty pursuant to the provisions of Section 6.22. "Guaranty" means that certain Guaranty dated as of September 24, 1997 executed by the Guarantors in favor of the Agent, for the ratable benefit of the Lenders, as it may be amended or modified and in effect from time to time. "Hazardous Material" means (i) any Hazardous Substance; (ii) any Hazardous Waste; (iii) any petroleum product; or (iv) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance within the meaning of any other federal, state or local law, regulation, ordinance or requirement (including consent decrees and administrative orders) relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, all as amended or hereafter amended. "Hazardous Substance" means any "hazardous substance," as defined by CERCLA. "Hazardous Waste" means any "hazardous waste," as defined by the Resource Conservation and Recovery Act, as amended. "Indebtedness" of a Person means, without duplication, such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens on or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) Capitalized Lease Obligations, (vi) outstanding principal balances (representing securitized but unliquidated assets) under asset securitization agreements (including, 6 12 without limitation, the outstanding principal balance of accounts receivable under Receivables Transactions), and (vii) all guaranties of or other contingent obligations with respect to indebtedness of Persons other than the Borrower or any Subsidiary, including without limitation contingent obligations with respect to Letters of Credit. "Interest Period" means a Eurodollar Interest Period, an Absolute Rate Interest Period or a Floating Rate Interest Period. "Invitation for Competitive Bid Quotes" means an Invitation for Competitive Bid Quotes substantially in the form of Exhibit "D" hereto, completed and delivered by the Agent to the Lenders in accordance with Section 2.3.3. "Issuer" means The First National Bank of Chicago, in its capacity as issuer of Facility Letters of Credit under Section 2.4. "LC Application" is defined in Section 2.4.3. "Lenders" means the lending institutions listed on the signature pages of this Agreement, including, without limitation, First Chicago in its capacity as a lender, and their respective successors and assigns. "Lending Installation" means, with respect to a Lender, the Issuer or the Agent, any office, branch, subsidiary or affiliate of such Lender, the Issuer or the Agent. "Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable. "Letter of Credit Collateral Account" is defined in Section 2.4.7. "Level 1 Rating Period" means any period during which the Borrower's senior unsecured long-term debt is rated A- or higher by S&P (or a comparable rating from any generally recognized successor to S&P) or A3 or higher by Moody's (or a comparable rating from any generally recognized successor to Moody's), provided, however, that notwithstanding the foregoing provisions of this definition, if the rating by Moody's or its successor and the rating by S&P or its successor differ by two or more of the rating grades used by such agencies, the Rating Period which would exist if the Borrower's senior unsecured long-term debt were rated by both such agencies at one rating grade above the lower of such rating grades shall be deemed to exist. "Level 2 Rating Period" means any period which does not qualify as a Level 1 Rating Period during which the Borrower's senior unsecured long-term debt is rated BBB+ or higher by S&P (or a comparable rating from any generally recognized successor to S&P) and Baa1 or higher by Moody's (or a comparable rating from any generally recognized successor to Moody's). "Level 3 Rating Period" means any period which does not qualify as a Level 1 or Level 2 Rating Period during which the Borrower's senior unsecured long-term debt is rated BBB+ or higher by S&P (or a comparable rating from any generally recognized successor to S&P) or Baa1 or higher by Moody's (or a comparable rating from any generally recognized successor to Moody's), provided, however, that notwithstanding the foregoing provisions of this definition, if the rating by Moody's or its successor and the rating by S&P or its successor differ by two or more of the rating grades used by such agencies, the Rating Period which would exist if the Borrower's senior unsecured long-term debt were rated by both such agencies at one rating grade above the lower of such rating grades shall be deemed to exist. "Level 4 Rating Period" means any period which does not qualify as a Level 1, Level 2 or Level 3 Rating Period during which the Borrower's senior unsecured long-term debt is rated BBB or higher by S&P (or a comparable rating from any generally recognized successor to S&P) or Baa2 or higher by Moody's (or a comparable rating from any generally recognized successor to Moody's), provided, however, that notwithstanding the foregoing provisions of this definition, if the rating by Moody's or its successor and the rating by S&P or its successor differ by two or more of the rating grades used by such agencies, the Rating Period which would exist if the Borrower's senior unsecured long-term debt were rated by both such agencies at one rating grade above the lower of such rating grades shall be deemed to exist. 7 13 "Level 5 Rating Period" means any period which does not qualify as a Level 1, Level 2, Level 3 or Level 4 Rating Period during which the Borrower's senior unsecured long-term debt is rated BBB- or higher by S&P (or a comparable rating from any generally recognized successor to S&P) and Baa3 or higher by Moody's (or a comparable rating from any generally recognized successor to Moody's). "Level 6 Rating Period" means any period which does not qualify as a Level 1, Level 2, Level 3, Level 4 or Level 5 Rating Period. "Lien" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "Loan" means, with respect to a Lender, such Lender's portion, if any, of any Advance. "Loan Documents" means this Agreement, the Notes, the Guaranty and the LC Applications. "Margin Stock" means "margin stock" as defined in Regulation U. "Material Adverse Effect" means a material adverse effect on (i) the business, Property, condition (financial or other), results of operations, or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its obligations under the Loan Documents, or (iii) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Agent, the Issuer or the Lenders thereunder. "Material Subsidiary" means, as of any time of determination, any Subsidiary of the Borrower (i) the assets of which comprise more than 10% of the Consolidated Assets of the Borrower and its Subsidiaries as of the end of the Borrower's most recent fiscal year, or (ii) revenue attributable to which comprises more than 10% of the consolidated revenue of the Borrower and its Subsidiaries for the Borrower's most recent fiscal year. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions. "Net Interest Expense" means, for any period, the difference of (i) interest expense (including interest, yield, discount, or similar amounts paid in connection with any receivables securitization, however characterized), minus (ii) interest income. "Notes" means, collectively, the Competitive Bid Notes and the Ratable Notes; and "Note" means any one of the Notes. "Notice of Assignment" is defined in Section 12.3.2. "Obligations" means all unpaid principal of and accrued and unpaid interest on the Notes, all accrued and unpaid fees, all Facility Letter of Credit Obligations and all expenses, reimbursements, indemnities and other obligations of the Borrower or any Subsidiary Co-Applicant to the Lenders or to any Lender, the Issuer, the Agent or any indemnified party hereunder arising under the Loan Documents. "Officer's Certificate" shall mean a certificate signed in the name of the Borrower by an Authorized Officer. "Original Guarantors" means, collectively, Yellow Freight, Preston Trucking Company, Inc., Saia Motor Freight Line, Inc. and WestEx, Inc. "Participants" is defined in Section 12.2.1. "Payment Date" means the last day of each calendar quarter. "PBGC" means the Pension Benefit Guaranty Corporation, or any successor thereto. 8 14 "Person" means any natural person, corporation, firm, joint venture, partnership, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which the Borrower or any member of the Controlled Group may have any liability. "Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "Pro Rata Share" means, for each Lender, the ratio of such Lender's Commitment to the Aggregate Commitment. "Purchasers" is defined in Section 12.3.1. "Ratable Advance" means a borrowing hereunder consisting of the aggregate amount of the several Ratable Loans made by the Lenders to the Borrower at the same time, at the same Rate Option and for the same Interest Period. "Ratable Borrowing Notice" is defined in Section 2.2.3. "Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2 hereof. "Ratable Note" means a promissory note in substantially the form of Exhibit "A" hereto, duly executed and delivered to the Agent by the Borrower for the account of a Lender and payable to the order of such Lender in the amount of its Commitment, including any amendment, modification, renewal or replacement of such promissory note. "Rate Option" means the Eurodollar Rate or the Floating Rate. "Rating Period" means a Level 1 Rating Period, a Level 2 Rating Period, a Level 3 Rating Period, a Level 4 Rating Period, a Level 5 Rating Period or a Level 6 Rating Period. "Receivables Corp." means Yellow Receivables Corporation, a special-purpose Subsidiary of Yellow Freight. "Receivables Purchaser" means a purchaser of accounts receivable from Receivables Corp. pursuant to a Receivables Transaction. "Receivables Transactions" means, collectively, (i) the creation of Receivables Corp. to purchase accounts receivable generated by and owed to certain Subsidiaries of the Borrower, (ii) the entry by Receivables Corp. into one or more receivables purchase agreements with Receivables Purchasers, pursuant to which each Receivables Purchaser will, from time to time, purchase from Receivables Corp. undivided interests in the receivables described in clause (i), and (iii) the entry by Receivables Corp. into such ancillary agreements, documents and instruments as are necessary or advisable in connection with such receivables purchase agreements, provided that (x) the outstanding principal amount of the financing provided by all Receivables Purchasers pursuant to such receivables purchase agreements shall not exceed $150,000,000 in the aggregate at any time and (y) the primary structural terms of each such receivables purchase agreement, including without limitation the amount of any recourse to the Borrower or any of its Subsidiaries for uncollectible receivables, shall be reasonably satisfactory to the Agent in each case. "Reference Banks" means The First National Bank of Chicago, Morgan Guaranty Trust Company of New York and NationsBank, N.A. "Refinancing Credit Extension" (i) when used to refer to an Advance means an Advance which, after giving effect to the Advance and the application of the proceeds thereof, does not increase the aggregate amount of outstanding Advances; provided, however, that any Ratable Advance the proceeds of which are used, all or in part, to repay any Competitive Bid Loan shall not be deemed to be a Refinancing Credit Extension and (ii) when used to refer to the issuance of a Facility Letter of Credit means a Facility Letter of 9 15 Credit which, after giving effect to the issuance thereof, does not increase the aggregate amount of Facility Letter of Credit Obligations. "Refinancing Loan" means, with respect to a Lender, such Lender's ratable share of a Refinancing Credit Extension which is an Advance. "Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. "Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. "Reimbursement Obligations" means, at any time, the aggregate of the obligations of the Borrower to the Lenders and the Issuer in respect of all unreimbursed payments or disbursements made by the Issuer and the Lenders under or in respect of the Facility Letters of Credit (including, without limitation, the Borrower's obligation to reimburse the Issuer for draws on Facility Letters of Credit pursuant to Section 2.4.4(b)). "Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided, however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code. "Required Lenders" means Lenders in the aggregate having at least 66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 66 2/3% of the aggregate unpaid principal amount of the outstanding Advances and participations in Facility Letters of Credit. "Reserve Requirement" means, with respect to a Eurodollar Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities (in the case of Eurodollar Ratable Advances). "Revenue Equipment" means that Property of the Borrower or any Subsidiary which is so designated on the Borrower's consolidated balance sheets provided to the Lenders under Section 6.1(i) and (ii), exclusive of any real property which may fall under such designation. "S&P" means Standard and Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "Section" means a numbered section of this Agreement, unless another document is specifically referenced. "Significant Restructuring" means, with respect to a Subsidiary of the Borrower, a reorganization or discontinuation of all or a significant portion of the business or operations of such Subsidiary. "Single Employer Plan" means a Plan maintained by the Borrower or any member of the Controlled Group for employees of the Borrower or any member of the Controlled Group. "Special Subsidiary Discontinuation/Restructuring Charges" means cash or non-cash adjustments to or charges against income specifically identified in the Borrower's internal books of account as incurred in connection with the liquidation and dissolution of or a Significant Restructuring of one of the Borrower's Subsidiaries, provided that only adjustments or charges with respect to one particular Subsidiary of the Borrower (which Subsidiary shall be the same Subsidiary for the term of this Agreement) will be defined as Special Subsidiary Discontinuation/Restructuring Charges. 10 16 "Stock Acquisition" means any transaction, or any series of related transactions, consummated after the date of this Agreement, by which the Borrower directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation or other Person which have ordinary voting power for the election of directors or other governing body (other than securities having such power only by reason of the happening of a contingency), provided, however, that such term shall not include any such transaction (or series of transactions) which has been approved as to its terms by the Board of Directors of the Borrower and (prior to the commencement of such transaction or series of transactions) by the Board of Directors or other governing body of the corporation or other Person whose securities are to be acquired. "Subsidiary" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the Borrower. "Subsidiary Co-Applicant" is defined in Section 2.4.1. "Substantial Portion" means, with respect to the Property of the Borrower and its Subsidiaries, Property which represents more than 10% of the Consolidated Assets of the Borrower and its Subsidiaries as would be shown in the consolidated financial statements of the Borrower and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made. "Termination Date" means September 24, 2001. "Termination Event" means any of the following: (i) the filing by the Borrower, any of its Subsidiaries, any of its ERISA Affiliates or any plan administrator under Title IV of ERISA of a notice of the termination of, or the intent to terminate, any Single Employer Plan; (ii) the institution by the PBGC of proceedings for the termination of any Single Employer Plan; or the receipt by the Borrower, any of its Subsidiaries, or any of its ERISA Affiliates of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or (iii) the complete or partial withdrawal by the Borrower, any of its Subsidiaries, or any of its ERISA Affiliates from any Multiemployer Plan, a default, within the meaning of Section 4219(c)(5) of ERISA, by the Borrower or any member of the Controlled Group with respect to any Multiemployer Plan, or the receipt by the Borrower, any of its Subsidiaries, or any of its ERISA Affiliates of notice from a Multiemployer Plan that it is in reorganization or insolvency or that it intends to terminate or has been terminated. Once a Termination Event occurs with respect to a Plan, such Termination Event shall be deemed to continue in effect for the purposes of this Agreement until all payment obligations and other liabilities of any member of the Controlled Group with respect thereto have been discharged. "Transferee" is defined in Section 12.4. "Transferor Lender" is defined in Section 12.3.1. "Type" means, with respect to any Advance, its nature as a Floating Rate Advance, Eurodollar Ratable Advance, Eurodollar Bid Rate Advance or Absolute Rate Advance. "Unfunded Liabilities" means the amount (if any) by which the actuarial present value of all accumulated vested nonforfeitable benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans and calculated in accordance with Statement of Financial Accounting Standards No. 35. 11 17 "Unmatured Default" means an event or condition which but for the lapse of time or the giving of notice, or both, would constitute a Default. "Wholly-Owned Subsidiary" of a Person means any Subsidiary of such Person all of the outstanding voting stock of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person. "Yellow Freight" means Yellow Freight System, Inc., an Indiana corporation. The foregoing definitions shall be equally applicable to both the singular and the plural forms of the defined terms. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles, applied in a manner consistent with that used in the preparation of the most recent financial statements submitted by the Borrower pursuant to Section 6.1 (or, before any financial statements have been submitted pursuant to Section 6.1, in a manner consistent with that used in the preparation of the financial statements referred to in Section 5.4). ARTICLE II THE FACILITY 2.1. The Facility. 2.1.1. Description of Facility. The Lenders grant to the Borrower a revolving credit facility pursuant to which, and upon the terms and subject to the conditions herein set forth: (i) each Lender severally agrees to make Ratable Loans to the Borrower in accordance with Section 2.2; (ii) each Lender severally agrees to participate in Facility Letters of Credit issued by the Issuer in accordance with Section 2.4; and (iii) each Lender may, in its sole discretion, make bids to make Competitive Bid Loans to the Borrower in accordance with Section 2.3. 2.1.2. Facility Amount. In no event may the sum of (i) the aggregate principal amount of all outstanding Advances (including both the Ratable Advances and the Competitive Bid Advances) plus (ii) the Facility Letter of Credit Obligations exceed the Aggregate Commitment. The Borrower agrees that if at any time any such excess shall arise, it shall immediately pay to the Agent (or deposit into the Letter of Credit Collateral Account, to the extent that all Loans have been fully repaid) the amount necessary to eliminate such excess, without presentment, demand, protest or notice of any kind from the Agent, the Issuer or any Lender, all of which the Borrower hereby expressly waives. 2.1.3. Availability of Facility. Subject to the terms hereof, the facility is available from the date hereof to the Termination Date. Subject to the terms of this Agreement, the Borrower may borrow, repay and reborrow and the Borrower may request the issuance of Facility Letters of Credit at any time prior to the Termination Date. The Commitments to lend and participate in Facility Letters of Credit hereunder shall expire on the Termination Date. 2.2. Ratable Advances. 2.2.1. Ratable Advances. Each Ratable Advance hereunder shall consist of borrowings made from the several Lenders ratably in proportion to the amounts of their respective Commitments. The aggregate outstanding amount of Competitive Bid Advances shall reduce the amount available for borrowing under each Lender's Commitment ratably in the proportion such Lender's Commitment bears to the Aggregate 12 18 Commitment regardless of which Lender or Lenders make such Competitive Bid Advances. Ratable Advances shall be evidenced by the Ratable Notes. No Ratable Advance may mature after the Termination Date. 2.2.2. Ratable Advance Rate Options. The Ratable Advances may be Floating Rate Advances or Eurodollar Ratable Advances, or a combination thereof, selected by the Borrower in accordance with Section 2.2.3. 2.2.3. Method of Selecting Rate Options and Interest Periods for Ratable Advances. The Borrower shall select the Rate Option and Interest Period applicable to each Ratable Advance from time to time. The Borrower shall give the Agent irrevocable notice (a "Ratable Borrowing Notice") not later than 11:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance and 10:00 a.m. (Chicago time) three Business Days before the Borrowing Date of each Eurodollar Ratable Advance. Notwithstanding the foregoing, a Ratable Borrowing Notice for a Floating Rate Advance may be given not later than 30 minutes after the time at which the Borrower is required to reject one or more bids offered in connection with an Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable Borrowing Notice for a Eurodollar Ratable Advance may be given not later than 30 minutes after the time the Borrower is required to reject one or more bids offered in connection with a Eurodollar Auction pursuant to Section 2.3.6. A Ratable Borrowing Notice shall specify: (i) the Borrowing Date, which shall be a Business Day, of such Ratable Advance; (ii) the aggregate amount of such Ratable Advance; (iii) the Rate Option selected for such Ratable Advance; and (iv) in the case of each Eurodollar Ratable Advance, the Interest Period applicable thereto (which may not end after the Termination Date). 2.3. Competitive Bid Advances. 2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant to Section 2.2, but subject to the terms and conditions of this Agreement (including, without limitation, the limitation set forth in Section 2.1.2 as to the maximum aggregate principal amount of all outstanding Advances and Facility Letter of Credit Obligations hereunder), the Borrower may, as set forth in this Section 2.3, request the Lenders, prior to the Termination Date, to make offers to make Competitive Bid Advances to the Borrower. Each Lender may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section 2.3. Competitive Bid Advances shall be evidenced by the Competitive Bid Notes. 2.3.2. Competitive Bid Quote Request. When the Borrower wishes to request offers to make Competitive Bid Loans under this Section 2.3, it shall transmit to the Agent by telecopy a Competitive Bid Quote Request substantially in the form of Exhibit "C" hereto so as to be received no later than (x) 10:00 a.m. (Chicago time) at least four Business Days prior to the Borrowing Date proposed therein, in the case of a Eurodollar Auction, or (y) 9:00 a.m. (Chicago time) at least one Business Day prior to the Borrowing Date proposed therein, in the case of an Absolute Rate Auction, specifying: (i) the proposed Borrowing Date, which shall be a Business Day, for the proposed Competitive Bid Advance; (ii) the aggregate principal amount of such Competitive Bid Advance; (iii) whether the Competitive Bid Quotes requested are to set forth a Competitive Bid Margin or an Absolute Rate, or both; and (iv) the Interest Period applicable thereto (which may not end after the Termination Date). The Borrower may request offers to make Competitive Bid Loans for more than one Interest Period in a single Competitive Bid Quote Request. No Competitive Bid Quote Request shall be given within five Business 13 19 Days (or such other number of days as the Borrower and the Agent may agree) of any other Competitive Bid Quote Request. To the extent that a Competitive Bid Quote Request does not conform substantially to the format of Exhibit "C" hereto, it shall be rejected. 2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any event before the close of business on the same Business Day of receipt of a Competitive Bid Quote Request that is not rejected pursuant to Section 2.3.2, the Agent shall send to each of the Lenders by telecopy an Invitation for Competitive Bid Quotes substantially in the form of Exhibit "D" hereto, which shall constitute an invitation by the Borrower to each Lender to submit Competitive Bid Quotes offering to make the Competitive Bid Loans to which such Competitive Bid Quote Request relates in accordance with this Section 2.3. 2.3.4. Submission and Contents of Competitive Bid Quotes. (a) Each Lender may, in its sole discretion, submit a Competitive Bid Quote containing an offer or offers to make Competitive Bid Loans in response to any Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must comply with the requirements of this Section 2.3.4 and must be submitted to the Agent by telecopy at its offices specified in or pursuant to Article XIII not later than (x) 9:00 a.m. (Chicago time) at least three Business Days prior to the proposed Borrowing Date, in the case of a Eurodollar Auction or (y) 9:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case of an Absolute Rate Auction; provided that Competitive Bid Quotes submitted by First Chicago may only be submitted if the Agent or First Chicago notifies the Borrower of the terms of the offer or offers contained therein not later than 15 minutes prior to the latest time at which the relevant Competitive Bid Quotes must be submitted by the other Lenders. Subject to Articles IV and VIII, any Competitive Bid Quote so made shall be irrevocable except with the written consent of the Agent given on the instructions of the Borrower. (b) Each Competitive Bid Quote shall be in substantially the form of Exhibit "E" hereto and shall in any case specify: (i) the proposed Borrowing Date, which shall be the same as that set forth in the applicable Invitation for Competitive Bid Quotes; (ii) the principal amount of the Competitive Bid Loan for which each such offer is being made, which principal amount (1) may be greater than, less than or equal to the Commitment of the quoting Lender, (2) must be at least $2,000,000 and an integral multiple of $500,000, and (3) may not exceed the principal amount of Competitive Bid Loans for which offers were requested; (iii) in the case of a Eurodollar Auction, the Competitive Bid Margin offered for each such Competitive Bid Loan; (iv) the minimum amount, if any, of the Competitive Bid Loan which may be accepted by the Borrower; (v) in the case of an Absolute Rate Auction, the Absolute Rate offered for each such Competitive Bid Loan; and (vi) the identity of the quoting Lender. (c) The Agent shall reject any Competitive Bid Quote that: (i) is not substantially in the form of Exhibit "E" hereto or does not specify all of the information required by Section 2.3.4(b); (ii) contains qualifying, conditional or similar language, other than any such language contained in Exhibit "E"; (iii) proposes terms other than or in addition to those set forth in the applicable Invitation for Competitive Bid Quotes; or (iv) arrives after the time set forth in Section 2.3.4(a). 14 20 If any Competitive Bid Quote shall be rejected pursuant to this Section 2.3.4(c), then the Agent shall notify the relevant Lender of such rejection as soon as practical. 2.3.5. Notice to Borrower. The Agent shall promptly notify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a Lender that is in accordance with Section 2.3.4 and (ii) of any Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a previous Competitive Bid Quote submitted by such Lender with respect to the same Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by the Agent unless such subsequent Competitive Bid Quote specifically states that it is submitted solely to correct a manifest error in such former Competitive Bid Quote. The Agent's notice to the Borrower shall specify the aggregate principal amount of Competitive Bid Loans for which offers have been received for each Interest Period specified in the related Competitive Bid Quote Request and the respective principal amounts and Competitive Bid Margins (and resulting Eurodollar Bid Rates) or Absolute Rates, as the case may be, so offered. 2.3.6. Acceptance and Notice by Borrower. Not later than (x) 10:00 a.m. (Chicago time) at least three Business Days prior to the proposed Borrowing Date, in the case of a Eurodollar Auction or (y) 10:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case of an Absolute Rate Auction, the Borrower shall notify the Agent of its acceptance or rejection of the offers of which it received notification pursuant to Section 2.3.5. The failure by the Borrower to give such notice to the Agent shall be deemed to be a rejection of all such offers. In the case of acceptance, such notice (a "Competitive Bid Borrowing Notice") shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Competitive Bid Quote in whole or in part (subject to the terms of Section 2.3.4(b)(iv) and Section 2.6.2); provided that: (i) the aggregate principal amount of each Competitive Bid Advance may not exceed the applicable amount set forth in the related Competitive Bid Quote Request; (ii) acceptance of offers may only be made on the basis of ascending Competitive Bid Margins (and resulting Eurodollar Bid Rates) or Absolute Rates, as the case may be; and (iii) the Borrower may not accept any offer that is described in Section 2.3.4(c) (and is not subsequently corrected by the relevant Lender) or that otherwise fails to comply with the requirements of this Agreement. 2.3.7. Allocation by Agent. If offers are made by two or more Lenders with the same Competitive Bid Margins (and resulting Eurodollar Bid Rates) or Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which offers are accepted for the related Interest Period, the principal amount of Competitive Bid Loans in respect of which such offers are accepted shall be allocated by the Agent among such Lenders as nearly as possible (in such multiples, not greater than $1,000,000, as the Agent may deem appropriate) in proportion to the aggregate principal amount of such offers; provided, however, that no Lender shall be allocated a portion of any Competitive Bid Advance which is less than the minimum amount which such Lender has indicated that it is willing to accept. Allocations by the Agent of the amounts of Competitive Bid Loans shall be conclusive in the absence of manifest error. The Agent shall promptly, but in any event on the same Business Day, notify each Lender of its receipt of a Competitive Bid Borrowing Notice and the aggregate principal amount of such Competitive Bid Advance allocated to each participating Lender. Upon request by any Lender at the completion of the bidding process in response to any Competitive Bid Quote Request, the Agent will disclose to such Lender the range of the pricing of all offers accepted by the Borrower and allocated to Lenders. 2.3.8. Competitive Bid Auction Fees. The Borrower hereby agrees to pay to the Agent, for its own account, competitive bid auction fees in the amounts set forth in that certain Agent's Fee Letter dated July 15, 1997 from the Agent to the Borrower (the "Agent's Fee Letter"), such fees to be due and payable on the date any offer to make a Competitive Bid Loan is accepted by the Borrower. 15 21 2.4. Facility Letters of Credit. 2.4.1. Obligation to Issue. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Borrower herein set forth, The First National Bank of Chicago, in its capacity as the Issuer hereunder, hereby agrees to issue upon the request of the Borrower and for the account of the Borrower or for the account of the Borrower and any Subsidiary of the Borrower which is a co-applicant with the Borrower for such Facility Letter of Credit on the form of application described in Section 2.4.3(a) (each such Subsidiary a "Subsidiary Co-Applicant"), through such of the Issuer's Lending Installations or Affiliates as the Issuer, the Borrower and the Subsidiary Applicant (if any) may mutually agree, one or more Facility Letters of Credit in accordance with this Section 2.4, from time to time during the period, commencing on the Closing Date and ending on the Business Day prior to the Termination Date. All Facility Letters of Credit shall be denominated and drawable in U.S. Dollars. 2.4.2. Conditions for Issuance. In addition to being subject to the satisfaction of the conditions contained in Section 4.2, the obligation of the Issuer to issue any Facility Letter of Credit is subject to the satisfaction in full of the following conditions: (i) the aggregate maximum amount then available for drawing under Facility Letters of Credit issued by the Issuer, after giving effect to the Facility Letter of Credit requested hereunder, shall not exceed any limit imposed by law or regulation upon the Issuer; (ii) after giving effect to the requested issuance of any Facility Letter of Credit, the sum of (x) the Facility Letter of Credit Obligations plus (y) the total aggregate unpaid principal balance of the Advances does not exceed the Aggregate Commitment; (iii) the requested Facility Letter of Credit has an expiration date not later than the earlier of (x) the Business Day prior to the Termination Date and (y) one year after its date of issuance; (iv) the Borrower shall have delivered to the Issuer at such times and in such manner as the Issuer may reasonably prescribe such documents and materials as may be required pursuant to the terms of the proposed Facility Letter of Credit and the proposed Facility Letter of Credit shall be satisfactory to the Issuer as to form and content; and (v) as of the date of issuance, no order, judgment or decree of any court, arbitrator or governmental authority shall purport by its terms to enjoin or restrain the Issuer from issuing the Facility Letter of Credit and no law, rule or regulation applicable to the Issuer and no request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over the Issuer shall prohibit or request that the Issuer refrain from the issuance of Letters of Credit generally or the issuance of that Facility Letter of Credit. 2.4.3. Procedure for Issuance of Facility Letters of Credit. (a) The Borrower shall give the Issuer five Business Days' prior written notice of any requested issuance of a Facility Letter of Credit under this Agreement. Such notice (the "LC Application") shall be on such standard application form as may be prescribed by the Issuer, shall be irrevocable and shall specify the stated amount of the Facility Letter of Credit requested, the effective date (which day shall be a Business Day) of issuance of such requested Facility Letter of Credit, the date on which such requested Facility Letter of Credit is to expire (which date shall be a Business Day and shall in no event be later than the Business Day prior to the Termination Date), the purpose for which such Facility Letter of Credit is to be issued, and the Person for whose benefit the requested Facility Letter of Credit is to be issued. At the time such LC Application is delivered, the Borrower shall also provide the Issuer with a copy of the form of the Facility Letter of Credit it is requesting be issued. The Issuer shall promptly forward to the Lenders a copy of the LC Application. (b) IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE TERMS OF THE LC APPLICATION, THE TERMS OF THIS AGREEMENT SHALL CONTROL, PROVIDED THAT ANY SUBSIDIARY CO-APPLICANT SHALL, AS AND TO THE EXTENT SET FORTH IN THE RELEVANT LC APPLICATION, BE JOINTLY AND SEVERALLY LIABLE WITH THE BORROWER FOR THE REIMBURSEMENT OBLIGATIONS WITH RESPECT 16 22 TO THE FACILITY LETTER(S) OF CREDIT ISSUED IN RESPONSE TO SUCH LC APPLICATION, NOTWITHSTANDING THE FACT THAT SUCH SUBSIDIARY CO-APPLICANT IS NOT A SIGNATORY TO THIS AGREEMENT. (c) Subject to the terms and conditions of this Section 2.4.3 and provided that the applicable conditions set forth in Article IV and Section 2.4.2 hereof have been satisfied, the Issuer shall, on the requested date, issue a Facility Letter of Credit in accordance with the Issuer's usual and customary business practices. (d) The Issuer shall not extend or amend any Facility Letter of Credit unless the requirements of this Section 2.4.3 are met as though a new Facility Letter of Credit was being requested and issued. 2.4.4. Reimbursement Obligations. (a) The Borrower agrees to pay to the Agent for the account of the Issuer the amount of all Reimbursement Obligations, interest and other amounts payable to the Issuer under or in connection with any Facility Letter of Credit immediately when due, irrespective of any claim, set-off, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against the Issuer or any other Person, under all circumstances, including without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Loan Documents; (ii) the existence of any claim, setoff, defense or other right which the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time against a beneficiary named in a Facility Letter of Credit or any transferee of any Facility Letter of Credit (or any Person for whom any such transferee may be acting), the Issuer, any Lender, or any other Person, whether in connection with this Agreement, any Facility Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between the Borrower or any Subsidiary or Affiliate of the Borrower and the beneficiary named in any Facility Letter of Credit); (iii) any draft, certificate or any other document presented under any Facility Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; (v) the occurrence of any Default or Unmatured Default; (vi) with respect to any Facility Letter of Credit for which there is a Subsidiary Co-Applicant, any defense to payment of such Reimbursement Obligations based on the status of the Borrower as a co-applicant for such Facility Letter of Credit, including without limitation any defense to payment which might be available to a guarantor or surety, all of which are hereby explicitly waived by the Borrower, which hereby agrees and acknowledges that its undertaking to pay all Reimbursement Obligations, including without limitation Reimbursement Obligations arising with respect to Facility Letters of Credit for which there is a Subsidiary Co-Applicant, is a primary obligation and not one of surety. (b) The Issuer shall promptly notify the Borrower of any draw under a Facility Letter of Credit. The Borrower shall reimburse the Issuer for the amount of each drawing under a Facility Letter of Credit no later than the Business Day after the payment by the Issuer. Any Reimbursement Obligation with respect to any Facility Letter of Credit shall bear interest from the date of the relevant drawing under the pertinent Facility Letter of Credit at the interest rate for past due Floating Rate Loans calculated in accordance with Section 2.6.6. 2.4.5. Participation. (a) Immediately upon issuance by the Issuer of any Facility Letter of Credit in accordance with the procedures set forth in Section 2.4.3 each Lender shall be deemed to have irrevocably and unconditionally purchased and received from the Issuer, without recourse or warranty, an undivided interest and participation equal to its Pro Rata Share in such Facility Letter of Credit. (b) In the event that the Issuer makes any payment under any Facility Letter of Credit and neither the Borrower nor any Subsidiary shall have repaid such amount to the Issuer pursuant to Section 2.4.4, the Issuer 17 23 shall promptly notify each Lender of such failure, and each Lender shall promptly and unconditionally pay to the Agent for the account of the Issuer the amount of such Lender's Pro Rata Share of the unreimbursed amount of any such payment. If any Lender fails to make available to the Agent for the account of the Issuer any amounts due to the Issuer pursuant to this Section 2.4.5(b), the Issuer shall be entitled to recover such amount, together with interest thereon at the Federal Funds Effective Rate, for the first three Business Days after such Lender receives such notice and thereafter, at the Floating Rate, payable (i) on demand, (ii) by setoff against any payments made to the Issuer for the account of such Lender or (iii) by payment to the Issuer by the Agent of amounts otherwise payable to such Lender under this Agreement. The failure of any Lender to make available to the Agent its Pro Rata Share of the unreimbursed amount of any such payment shall not relieve any other Lender of its obligation hereunder to make available to the Agent its Pro Rata Share of the unreimbursed amount of any payment on the date such payment is to be made, but no Lender shall be responsible for the failure of any other Lender to make available to the Agent its Pro Rata Share of the unreimbursed amount of any payment on the date such payment is to be made. (c) Whenever the Issuer receives a payment on account of a Reimbursement Obligation, including any interest thereon, it shall promptly pay to each Lender which has funded its participating interest therein, in immediately available funds, an amount equal to such Lender's Pro Rata Share thereof. "Lien" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). (e) In the event any payment by the Borrower or any Subsidiary or Affiliate of the Borrower received by the Issuer or the Agent with respect to a Facility Letter of Credit and distributed to the Lenders on account of their participations is thereafter set aside, avoided or recovered from the Issuer or the Agent in connection with any receivership, liquidation, reorganization or bankruptcy proceeding, each Lender which received such distribution shall, upon demand by the Agent, contribute such Lender's Pro Rata Share of the amount set aside, avoided or recovered together with interest at the rate required to be paid by the Issuer upon the amount required to be repaid by it. 2.4.6. Compensation for Facility Letters of Credit. (a) The Borrower shall pay to the Issuer, for the ratable benefit of the Lenders, a Facility Letter of Credit fee at a per annum rate equal to the Applicable Margin on the average daily undrawn amount of all Facility Letters of Credit outstanding, such fee to be paid in arrears on each Payment Date and on the Termination Date. (b) In addition, the Borrower shall pay to the Issuer, for its own account, a Letter of Credit fronting fee in the amount set forth in the Agent's Fee Letter as well as the Issuer's reasonable and customary costs of issuing and servicing the Facility Letters of Credit. 2.4.7. Letter of Credit Collateral Account. The Borrower agrees that it will, upon the request of the Agent or the Required Lenders and until the final expiration date of any Facility Letter of Credit and thereafter as long as any amount is payable to the Issuer or the Lenders in respect of any Facility Letter of Credit, maintain a special collateral account (the "Letter of Credit Collateral Account") at the Agent's office at the address specified pursuant to Article XIII, in the name of such Borrower but under the sole dominion and control of the Agent, for the benefit of the Lenders and in which such Borrower shall have no interest other than as set forth in Section 8.1. The Agent will invest any funds on deposit from time to time in the Letter of Credit Collateral Account in certificates of deposit of First Chicago having a maturity not exceeding 30 days. Nothing in this Section 2.4.7 shall either obligate the Agent to require the Borrower to deposit any funds in the Letter of Credit Collateral Account or limit the right of the Agent to release any funds held in the Letter of Credit Collateral Account in each case other than as required by Section 8.1. 2.4.8. Nature of Obligations. (a) As among the Borrower, the Issuer and the Lenders, the Borrower assumes all risks of the acts and omissions of, or misuse of the Facility Letters of Credit by, the respective beneficiaries of the Facility Letters of Credit. In furtherance and not in limitation of the foregoing, neither the Issuer nor the Lenders shall be responsible for (i) the forms, validity, sufficiency, accuracy, genuineness or 18 24 legal effect of any document submitted by any party in connection with the application for and issuance of any Facility Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Facility Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of a Facility Letter of Credit to comply fully with conditions required in order to draw upon such Facility Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of technical terms; (vi) misapplication by the beneficiary of a Facility Letter of Credit of the proceeds of any drawing under such Facility Letter of Credit; nor (viii) any consequences arising from causes beyond the control of the Issuer or the Lenders. (b) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the Issuer or any Lender under or in connection with the Facility Letters of Credit or any related certificates, if taken or omitted in good faith, shall not put the Issuer or such Lender under any resulting liability to the Borrower or any Subsidiary Co-Applicant or relieve the Borrower or any Subsidiary Co-Applicant of any of its obligations hereunder or under any LC Application to the Issuer, the Agent or any Lender. 2.5. Fees. 2.5.1. Agent's Fees. The Borrower hereby agrees to pay to the Agent fees in such amounts and at such times as are set forth in the Agent's Fee Letter. 2.5.2. Facility Fee. The Borrower hereby agrees to pay to the Agent for the account of each Lender a facility fee at the Applicable Facility Fee Rate on the average daily amount of such Lender's Commitment (without regard to usage) for the period from the Closing Date to and including the Termination Date (or such earlier date on which the Aggregate Commitment shall terminate or be cancelled, all of the Loans shall be repaid and all of the Facility Letters of Credit shall be terminated or fully cash collateralized pursuant to the terms hereof), payable in arrears on each Payment Date hereafter and on the Termination Date (or such earlier date on which the Aggregate Commitment shall terminate or be cancelled and all of the Loans shall be repaid and Facility Letters of Credit shall have terminated or fully cash collateralized pursuant to the terms hereof) for any period then ending for which such fee shall not have been theretofore paid. 2.5.3. Utilization Fee. In addition to the facility fee set forth in the preceding Section 2.5.2, the Borrower hereby agrees to pay to the Agent for the account of the Lenders a utilization fee for all periods during which the aggregate principal amount of Loans (including Competitive Bid Loans) and Facility Letter of Credit Obligations outstanding exceeds 50% of the then-current Aggregate Commitment. Such utilization fee shall be at a rate equal to the Applicable Utilization Fee Rate on the aggregate principal amount of Loans (including Competitive Bid Loans) and Facility Letter of Credit Obligations outstanding, shall be distributed to each Lender pro rata according to such Lender's proportion of such Loans (including Competitive Bid Loans) and participations in Facility Letters of Credit outstanding, and shall be payable in arrears on each Payment Date hereafter and on the Termination Date (or such earlier date on which the Aggregate Commitment shall terminate or be cancelled, all of the Loans shall be repaid and all of the Facility Letters of Credit shall be terminated or fully cash collateralized pursuant to the terms hereof) for any period then ending for which such fee shall not have been theretofore paid. 2.6. General Facility Terms. 2.6.1. Method of Borrowing. Not later than 12:00 noon (Chicago time) on each Borrowing Date (1:00 p.m., Chicago time, on each Borrowing Date in the case of Floating Rate Loans), each Lender shall make available its Loan or Loans in funds immediately available in Chicago, to the Agent at its address specified pursuant to Article XIII. The Agent shall deposit the funds so received from the Lenders in the Borrower's account at the Agent's main office in Chicago. Notwithstanding the foregoing provisions of this Section 2.6.1, to the extent that a Loan made by a Lender matures on the Borrowing Date of a requested 19 25 Loan, such Lender shall apply the proceeds of the Loan it is then making to the repayment of principal of the maturing Loan. 2.6.2. Minimum Amount of Each Advance. Each Advance shall be in the minimum amount of $10,000,000 (and in integral multiples of $5,000,000 if in excess thereof); provided, however, that any Floating Rate Advance may be in the aggregate amount of the unused Aggregate Commitment. 2.6.3. Payment on Last Day of Interest Period. Each Advance shall be paid in full by the Borrower on the last day of the Interest Period applicable thereto. 2.6.4. Optional Principal Payments. The Borrower may from time to time pay, without penalty, all outstanding Floating Rate Advances, or, in a minimum aggregate amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof), any portion of the outstanding Floating Rate Advances upon one Business Day's prior notice to the Agent. The Borrower may not voluntarily repay a Fixed Rate Advance prior to the last day of the applicable Interest Period. 2.6.5. Interest Periods. Subject to the provisions of Section 2.6.6, each Advance shall bear interest from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at the interest rate determined, pursuant to the terms of this Agreement, as applicable to such Advance. The Borrower shall not request a Fixed Rate Advance if, after giving effect to the requested Fixed Rate Advance, more than 10 separate Fixed Rate Advances would be outstanding. 2.6.6. Default Rate. Notwithstanding any other provision in this Agreement to the contrary, after the occurrence and during the continuance of a Default, each Advance shall bear interest until paid in full at a rate per annum equal to the greater of (i) the Alternate Base Rate plus 2% per annum, or (ii) the interest rate otherwise applicable to such Advance pursuant to the provisions of this Agreement other than this Section 2.6.6. 2.6.7. Interest Payment Dates; Interest Basis. Interest accrued on each Fixed Rate Advance shall be payable on the last day of its applicable Interest Period and on any date on which such Fixed Rate Advance is prepaid, whether due to acceleration or otherwise. Interest accrued on each Fixed Rate Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Interest accrued on each Floating Rate Advance shall be payable on each Payment Date, on any date on which such Floating Rate Advance is repaid, whether due to acceleration or otherwise, and on the Termination Date. Interest on Fixed Rate Advances and all fees under Sections 2.5.2 and 2.5.3 shall be calculated for the actual number of days elapsed on the basis of a year consisting of 360 days. Interest on Floating Rate Advances shall be calculated for the actual number of days elapsed on the basis of a year consisting of 365, or, when appropriate, 366 days. Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (Chicago time) at the place of payment. If any payment of principal of or interest on an Advance shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. 2.6.8. Method of Payment. Except as specifically provided in this Agreement and in the following sentence, all payments of principal, interest, Reimbursement Obligations and fees hereunder shall be made in immediately available funds to the Agent at the Agent's address specified pursuant to Article XIII or at any other Lending Installation of the Agent within the United States specified in writing by the Agent to the Borrower (at least one Business Day prior to the applicable due date) by noon (Chicago time) on the date when due and shall be applied (i) first, ratably among the relevant Lenders with respect to any principal and interest due in connection with Advances, (ii) second, to the Issuer with respect to any Reimbursement Obligations then due and payable and (iii) third, after all amounts described in clauses (i) and (ii) have been satisfied, ratably to any other Obligations then due. Each payment delivered to the Agent for the account of any Lender or the Issuer shall be delivered promptly by the Agent to such Lender or the Issuer, as the case may be, in the same type of funds which the Agent received, at such Lender's or the Issuer's address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Agent from such 20 26 Lender or the Issuer. Any payments not delivered by the Agent to any Lender within one Business Day of receipt thereof by the Agent shall bear interest at the Federal Funds Effective Rate until paid. The Agent is hereby authorized to charge the account of the Borrower for each payment of principal, interest, Reimbursement Obligations and fees as it becomes due hereunder. 2.6.9. Notes; Telephonic Notices. Each Lender is hereby authorized to record on the schedule attached to each of its Notes, or otherwise record in accordance with its usual practice, the date and amount of each of its Loans of the type evidenced by such Note; provided, however, that any failure to so record or any mistake in so recording shall not affect the Borrower's obligations under any Note. The Borrower hereby authorizes the Lenders and the Agent to extend Advances, effect Rate Option selections and submit Competitive Bid Quotes based on telephonic notices made by any person or persons the Agent or any Lender in good faith believes to be an Authorized Officer or an officer, employee or agent of the Borrower designated in writing by an Authorized Officer. The Borrower agrees to deliver promptly to the Agent a written confirmation of each telephonic notice signed by an Authorized Officer. If the written confirmation differs in any material respect from the action taken by the Agent and the Lenders, the records of the Agent and the Lenders shall govern absent manifest error. 2.6.10. Notification of Advances, Interest Rates and Prepayments. The Agent will notify each Lender of the contents of each borrowing notice, LC Application and payment notice received by it hereunder promptly after receipt thereof. The Agent will notify each Lender of the interest rate applicable to each Fixed Rate Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Corporate Base Rate. 2.6.11. Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or a payment under Section 2.4.5.(b) or (ii) in the case of the Borrower, a payment of principal, interest, fees or Reimbursement Obligations to the Agent or the Issuer for the account of the Lenders or the Issuer, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of repayment by a Lender of funds advanced to such Lender by the Agent, the Federal Funds Effective Rate for such day or (y) in the case of repayment by the Borrower of funds advanced to the Borrower by the Agent, the interest rate applicable to the relevant Loan or Reimbursement Obligation. 2.6.12. Cancellation. The Borrower may at any time after the date hereof cancel the Aggregate Commitment in whole, or in a minimum aggregate amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof ratably among the Lenders upon at least three Business Days' prior written notice to the Agent, which notice shall specify the amount of such reduction; provided, however, no such notice of cancellation shall be effective to the extent that it would reduce the Aggregate Commitment to an amount which would be less than the aggregate outstanding principal amount of Loans and Facility Letter of Credit Obligations at the time such cancellation is to take effect. Any notice of cancellation given pursuant to this Section shall be irrevocable and shall specify the date upon which such cancellation is to take effect. 2.6.13. Lending Installations. Each Lender may book its Loans and participations in Facility Letters of Credit at any Lending Installation selected by such Lender and may change its Lending Installation from time to time. Each Lender will notify the Agent and the Borrower on or prior to the date of this Agreement of the initial Lending Installation which it intends to utilize for each Type of Loan and each participation in Facility Letters of Credit hereunder. Each Lender may, by written notice to the Agent and the Borrower, change the Lending Installation through which Loans will be made by it and participations in Facility Letters of Credit booked by it and for whose account Loan and Reimbursement Obligation payments are to be made. 21 27 2.6.14. Withholding Tax Exemption. (a) Not later than ten Business Days after the Closing Date, each Lender that is not incorporated under the laws of the United States of America, or a state thereof, agrees that it will deliver to each of the Borrower and the Agent two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, certifying in either case that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to deliver to each of the Borrower and the Agent two additional copies of such form (or a successor form) on or before the date that such form expires (currently, three successive calendar years for Form 1001 and one calendar year for Form 4224) or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Agent, in each case certifying that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender advises the Borrower and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. (b) Except as otherwise required by law and subject to Section 2.6.14(a), each payment by the Borrower under this Agreement or any Loan Document shall be made without withholding for or on account of any present or future taxes (other than overall net income taxes on the recipient not required to be deducted or withheld) imposed by or within the jurisdiction in which the Borrower is domiciled, any jurisdiction from which the Borrower makes any payment, or (in each case) any political subdivision or taxing authority thereof or therein. If any such withholding is so required, the Borrower shall make the withholding, pay the amount withheld to the appropriate governmental authority before penalties attach thereto or interest accrues thereon and forthwith pay such additional amount as may be necessary to ensure that the net amount actually received by each Lender, the Issuer and the Agent free and clear of such taxes (including taxes on such additional amount) is equal to the amount which that Lender, the Issuer or the Agent (as the case may be) would have received had such withholding not been made. If the Agent, the Issuer or any Lender pays any amount in respect of such taxes, penalties or interest the Borrower shall reimburse the Agent, the Issuer or that Lender for that payment on demand in the currency in which such payment was made. If the Borrower pays any such taxes, penalties or interest, it shall deliver official tax receipts evidencing that payment or certified copies thereof to the Lender, the Issuer or the Agent on whose account such withholding was made (with a copy to the Agent if not the recipient of the original) on or before the thirtieth day after payment. To the extent that the Agent, the Issuer or any Lender actually receives a credit against or a reduction in its tax liability as a result of payments made by the Borrower pursuant to this Section 2.6.14(b), the Agent, the Issuer or such Lender, as the case may be, shall reimburse the Borrower for such credit or reduction at the time when such credit or reduction is no longer subject to challenge by the applicable taxing authority. 2.6.15. Application of Payments with Respect to Defaulting Lenders. No payments of principal, interest, Reimbursement Obligations or fees delivered to the Agent for the account of any Defaulting Lender shall be delivered by the Agent to such Defaulting Lender. Instead, such payments shall, for so long as such Defaulting Lender shall be a Defaulting Lender, be held by the Agent, and the Agent is hereby authorized and directed by all parties hereto to hold such funds in escrow and apply such funds as follows: (i) First, if applicable to any payments due to the Issuer pursuant to Section 2.4.5(b); and (ii) Second, to Loans required to be made by such Defaulting Lender on any Borrowing Date to the extent such Defaulting Lender fails to make such Loans. Notwithstanding the foregoing, upon the termination of the Aggregate Commitment and the payment and performance of all of the Obligations (other than those owing to a Defaulting Lender), any funds then held in escrow by the Agent pursuant to the preceding sentence shall be distributed to each Defaulting Lender, pro rata in proportion to amounts that would be due to each Defaulting Lender but for the fact that it is a Defaulting Lender. 22 28 ARTICLE III CHANGE IN CIRCUMSTANCES 3.1. Yield Protection. If, after the date of this Agreement, the adoption of any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change therein, or any change in the interpretation or administration thereof, or the compliance of any Lender therewith, (i) subjects the Agent, any Lender or any applicable Lending Installation to any tax, duty, charge or withholding on or from payments due from the Borrower (excluding, (x) in the case of the Agent and of each Lender, (1) United States federal taxation of its overall net income, and (2) taxes imposed on its overall net income, and franchise taxes imposed on it, by any jurisdiction outside of the United States of America or by the jurisdiction under the laws of which the Agent or such Lender (as the case may be) is organized or any political subdivision thereof or the jurisdiction in which the principal office of the Agent or such Lender (as the case may be) is located or any political subdivision thereof, and, (y) in the case of each Lender, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction in which its applicable Lending Installation is located or any political subdivision thereof), or changes the basis of taxation of payments to any Lender in respect of its Loans or Facility Letters of Credit (or participations therein) or other amounts due it hereunder, or (ii) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Fixed Rate Advances), or (iii) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation of making, funding or maintaining Loans or Facility Letters of Credit (or participations therein) or reduces any amount receivable by any Lender or any applicable Lending Installation in connection with Loans or Facility Letters of Credit (or participations therein), or requires any Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of Loans or Facility Letters of Credit (or participations therein) held or interest received by it, by an amount deemed material by such Lender, then, within 15 days of demand by such Lender, the Borrower shall pay such Lender that portion of such increased expense incurred or reduction in an amount received which such Lender determines is directly attributable to making, funding and maintaining its Loans and Facility Letters of Credit (or participations therein) and its Commitment. 3.2. Changes in Capital Adequacy Regulations. If a Lender determines that the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a Change (as hereinafter defined), then, within 15 days of demand by such Lender, the Borrower shall pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Agreement, its Loans and Facility Letters of Credit (or participations therein) or its obligation to make Loans and issue or participate in Facility Letters of Credit hereunder (after taking into account such Lender's policies as to capital adequacy). "Change" means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as hereinafter defined) or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled "International Convergence of 23 29 Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement. 3.3. Availability of Rate Options. If any Lender determines that maintenance of any of its Fixed Rate Loans at a suitable Lending Installation would violate any applicable law, rule, regulation or directive, whether or not having the force of law, or if the Required Lenders determine that (i) deposits of a type and maturity appropriate to match fund Fixed Rate Advances are not available or (ii) the interest rate applicable to a Type of Advance does not accurately reflect the cost of making or maintaining such Advance, then the Agent shall (x) suspend the availability of the affected Type of Advance and, to the extent that any Lender has so determined that maintenance of any Type of Fixed Rate Advance at a suitable Lending Installation would violate any applicable law, rule, regulation, or directive, whether or not having the force of law, require the Fixed Rate Loans of the affected Type made by such Lender to be repaid. 3.4. Funding Indemnification. If any payment of a Fixed Rate Advance occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment (whether mandatory or voluntary) or otherwise, or a Fixed Rate Advance is not made on the date specified by the Borrower for any reason other than default by the Lenders, the Borrower will indemnify each Lender for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain the Fixed Rate Advance. 3.5. Lender Statements; Survival of Indemnity. To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Fixed Rate Loans or Facility Letters of Credit (or participations therein) to reduce any liability of the Borrower to such Lender under Section 3.1 or 3.2 or to avoid the unavailability of a Type of Advance under Section 3.3, so long as such designation is not disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender as to the amount due, if any, under Section 3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrower in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Fixed Rate Loan shall be calculated as though each Lender funded its Fixed Rate Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Fixed Rate applicable to such Loan, whether in fact that is the case or not. Except as otherwise specifically provided herein, the amount specified in the written statement shall be payable on demand after receipt by the Borrower of the written statement. The obligations of the Borrower under Sections 3.1, 3.2 and 3.4 shall survive payment of the Obligations and termination of this Agreement. 3.6 References to Lender to Include Issuer. All references to "Lender" or "Lenders" in this Article III shall be deemed to include The First National Bank of Chicago in its capacity as Issuer. ARTICLE IV CONDITIONS PRECEDENT 4.1. Initial Credit Extension. Neither the Lenders nor the Issuer shall be required to make the initial Credit Extension hereunder unless (a) the Borrower has furnished to the Agent with sufficient copies for the Lenders: (i) Copies of the certificate of incorporation of the Borrower and of each Guarantor, together with all amendments, and a certificate of good standing of each such entity, both certified as of a date reasonably close to the Closing Date by the appropriate governmental officer in its jurisdiction of incorporation. (ii) Copies, certified as of the Closing Date by the Secretary or Assistant Secretary of the Borrower and of each Guarantor, of its by-laws and of its Board of Directors' resolutions authorizing the execution and delivery of the Loan Documents to which it is a party and the performance by each such entity of its obligations thereunder. 24 30 (iii) An incumbency certificate dated as of the Closing Date, executed by the Secretary or Assistant Secretary of the Borrower and of each Guarantor, which shall identify by name and title and bear the signature of the officers of such entity authorized to sign the Loan Documents to which it is a party and, in the case of the Borrower, to request Credit Extensions hereunder, upon which certificate the Lenders, the Issuer and the Agent shall be entitled to rely until informed of any change in writing by the Borrower. (iv) Counterparts of this Agreement executed by the Agent, the Issuer and the Borrower, and telecopy or telephone confirmation pursuant to Article XIII that this Agreement has been executed by the Lenders. (v) The Guaranty. (vi) A certificate, signed by the Treasurer of the Borrower or his designee, stating that on and as of the Closing Date (x) no Default or Unmatured Default has occurred and is continuing and (y) the representations and warranties contained in Article V are true and correct in all material respects. (vii) A written opinion of the Borrower's counsel dated the Closing Date addressed to the Agent, the Lenders and the Issuer and in form and substance substantially similar to that set forth in Exhibit "F" hereto. (viii) Ratable Notes and Competitive Bid Notes payable to the order of each of the Lenders. (ix) Written money transfer instructions, in substantially the form of Exhibit "G" hereto, addressed to the Agent and signed by an Authorized Officer, together with such other related money transfer authorizations as the Agent may have reasonably requested. (x) Such other documents as any Lender or its counsel may have reasonably requested. and (b) the following events shall have occurred or conditions shall have been fulfilled: (i) The Agent shall have received from the Borrower all fees, if any, required to be paid to the Agent on or prior to the Closing Date. (ii) All loans under that certain Credit Agreement dated as of June 23, 1995 (the "Existing Credit Agreement") among the Borrower, the banks party thereto and First Chicago, as agent, shall have been (or shall, concurrently with the initial Credit Extension, be) repaid and all commitments of the banks party to the Existing Credit Agreement to make loans thereunder shall have been (or shall, concurrently with the initial Credit Extension, be) cancelled. 4.2. Refinancing Credit Extension. Neither the Lenders nor the Issuer shall be required to make any Refinancing Credit Extension, unless on the Credit Extension Date: (i) There exists no Default or Unmatured Default. (ii) The representations and warranties contained in Article V (except the representations and warranties contained in Sections 5.5 and 5.7) are true and correct in all material respects as of such Credit Extension Date, except for changes in the Schedules hereto reflecting transactions permitted by this Agreement. (iii) All legal requirements arising under or in connection with the Loan Documents or applicable laws, rules or regulations and incident to the making of such Credit Extension shall be satisfactory to the Agent and its counsel. Each Ratable Borrowing Notice, Competitive Bid Quote Request or LC Application with respect to such Refinancing Credit Extension shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.2(i) and (ii) have been satisfied. 25 31 4.3. Each Credit Extension (other than a Refinancing Credit Extension). Neither the Lenders nor the Issuer shall be required to make any Credit Extension (other than a Refinancing Credit Extension), unless on the applicable Credit Extension Date: (i) There exists no Default or Unmatured Default. (ii) The representations and warranties contained in Article V (except the representations and warranties contained in Section 5.5) are true and correct in all material respects as of such Credit Extension Date, except for changes in the Schedules hereto reflecting transactions permitted by this Agreement. (iii) All legal requirements arising under or in connection with the Loan Documents or applicable laws, rules or regulations and incident to the making of such Credit Extension shall be satisfactory to the Agent and its counsel. Each Ratable Borrowing Notice, Competitive Bid Quote Request or LC Application with respect to each such Credit Extension shall constitute a representation and warranty by the Borrower that the conditions contained in Sections 4.3(i) and (ii) have been satisfied. ARTICLE V REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Lenders and to the Issuer that: 5.1. Corporate Existence and Standing. Each of the Borrower and its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted. 5.2. Authorization and Validity. Each of the Borrower and each Subsidiary Co-Applicant has the corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by each of the Borrower and each Subsidiary Co-Applicant of the Loan Documents to which it is a party and its performance of its obligations thereunder have been duly authorized by proper corporate proceedings, and the Loan Documents constitute (or, in the case of the LC Applications delivered after the date hereof, will, when executed and delivered, constitute) legal, valid and binding obligations of the Borrower or such Subsidiary Co-Applicant, as the case may be, enforceable against the Borrower or such Subsidiary Co-Applicant in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally. 5.3. No Conflict; Government Consent. Neither the execution and delivery by the Borrower and each Subsidiary Co-Applicant of the Loan Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or any of its Subsidiaries or the Borrower's or any such Subsidiary's articles or certificate of incorporation or by-laws or the provisions of any indenture, instrument or agreement to which the Borrower or any of its Subsidiaries is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of the Borrower or any of its Subsidiaries pursuant to the terms of any such indenture, instrument or agreement. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents. 5.4. Financial Statements. The June 30, 1997 consolidated financial statements of the Borrower and its Subsidiaries heretofore delivered to the Lenders were prepared in accordance with generally accepted accounting principles in effect on the date such statements were prepared and fairly present the consolidated 26 32 financial condition of the Borrower and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. 5.5. Material Adverse Change. Since June 30, 1997, there has been no change in the business, Property, condition (financial or other) or results of operations of the Borrower and its Subsidiaries which could have a Material Adverse Effect. 5.6. Taxes. The Borrower and its Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by the Borrower or any of its Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The United States income tax returns of the Borrower and its Subsidiaries have been audited by the Internal Revenue Service through the fiscal year ended December 31, 1992. The charges, accruals and reserves on the books of the Borrower or of such Subsidiary, as the case may be, in respect of any taxes or other governmental charges are adequate. 5.7. Litigation and Contingent Obligations. There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any of its Subsidiaries the probable outcome of which would have a Material Adverse Effect. Other than any potential liability incident to matters disclosed on Schedule "1" hereto, the Borrower has no material contingent obligations not provided for or disclosed in its financial statements referred to in Section 5.4. 5.8. Subsidiaries. Schedule "2" hereto contains an accurate list of all of the presently existing Subsidiaries of the Borrower, setting forth their respective jurisdictions of incorporation and the percentage of their respective capital stock owned by the Borrower or other Subsidiaries. All of the issued and outstanding shares of capital stock of such Subsidiaries have been duly authorized and issued and are fully paid and non-assessable. 5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not in the aggregate exceed $15,000,000. Each Single Employer Plan complies in all material respects with all applicable requirements of law and regulations, no Reportable Event has occurred with respect to any Single Employer Plan, neither the Borrower nor any other member of the Controlled Group has withdrawn from any Single Employer Plan or initiated steps to do so, and no steps have been taken to reorganize or terminate any Single Employer Plan. No Termination Event has occurred and is continuing with respect to any Plan which would cause the Borrower and the other members of the Controlled Group to incur aggregate Current Payment Obligations in excess of $25,000,000. 5.10. Accuracy of Information. No information, exhibit or report furnished by the Borrower or any of its Subsidiaries to the Agent or any Lender in connection with the negotiation of, or compliance with, the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading. 5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes less than 25% of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder. 5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction which might have a Material Adverse Effect. Neither the Borrower nor any Subsidiary of the Borrower is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default might have a Material Adverse Effect, or (ii) any agreement or instrument evidencing or governing Indebtedness in an aggregate amount exceeding $1,000,000. 5.13. Compliance With Laws. The Borrower and its Subsidiaries have complied with all applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government, or any instrumentality or agency thereof, having jurisdiction over the conduct of their business or the ownership of their Property, the non-compliance with which might have a Material Adverse Effect. Other than as set forth on Schedule 27 33 "3" hereto, neither the Borrower nor any of its Subsidiaries has received any notice to the effect that its operations are not in material compliance with any of the requirements of applicable federal, state or local environmental, health or safety statutes or regulations or the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non-compliance or remedial action might have a Material Adverse Effect. 5.14. Investment Company Act. Neither the Borrower nor any Subsidiary is an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 5.15. Public Utility Holding Company Act. Neither the Borrower nor any Subsidiary is a "holding company" or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 5.16. Ownership of Property. On the date of this Agreement, each of the Borrower and its Subsidiaries will have good title, free of all Liens other than those permitted by Section 6.13, to all of the Property and assets reflected in the financial statements referred to in Section 5.4 as owned by it. ARTICLE VI COVENANTS During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing: 6.1. Financial Reporting. The Borrower will cause to be maintained, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with Agreement Accounting Principles, and furnish to the Lenders: (i) Within 90 days after the close of each of its fiscal years, annual audited financial statements for itself and its consolidated Subsidiaries, including a balance sheet as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, which financial statements shall be included within an unqualified audit report certified by independent certified public accountants (the identity of such accountants to be acceptable to the Lenders), which statements shall be prepared in accordance with Agreement Accounting Principles on a consolidated basis (consolidating statements, which need not be certified by such accountants, will be provided upon request by any Lender), and which statements and audit report shall be accompanied by a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof. (ii) Within 45 days after the close of the first three quarterly periods of each of its fiscal years, for itself and its consolidated Subsidiaries, a consolidated unaudited balance sheet as at the close of each such period and consolidated profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its Treasurer or his designee. (iii) Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit "H" hereto signed by its Treasurer, or his designee, showing the calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof. (iv) If there are Unfunded Liabilities relating to any Single Employer Plan of the Borrower at the close of any fiscal year, a statement of the Unfunded Liabilities of such Single Employer Plan, certified as correct by an actuary enrolled under ERISA, within 270 days after the close of such fiscal year. 28 34 (v) As soon as possible and in any event within 10 days after the Borrower knows that any Reportable Event has occurred with respect to any Single Employer Plan, a statement, signed by the Treasurer of the Borrower, or his designee, describing said Reportable Event and the action which the Borrower proposes to take with respect thereto. (vi) As soon as possible and in any event within 10 days after receipt by the Borrower or any of its Subsidiaries, a copy of (a) any notice or claim to the effect that the Borrower or such Subsidiary is or may be liable to any Person as a result of the release by the Borrower or such Subsidiary or any other Person of any toxic or hazardous waste or substance into the environment, and (b) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Borrower or any of its Subsidiaries which, in any case, could have a Material Adverse Effect. (vii) Promptly upon the furnishing thereof to the shareholders of the Borrower, copies of all financial statements, reports and proxy statements so furnished. (viii) Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports or financial statements which the Borrower or any Subsidiary files with the Securities and Exchange Commission or the Interstate Commerce Commission or any agency succeeding to substantially all of the functions of either of such agencies. (ix) Such other information (including non-financial information) as the Agent or any Lender may from time to time reasonably request. 6.2. Use of Proceeds; Regulation U. The Borrower will, and will cause each Subsidiary to, use the proceeds of the Advances only in one or more of the following ways: as liquidity support for the issuance of commercial paper by the Borrower, for acquisitions permitted by the following sentence and for general corporate purposes of the Borrower. The Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds of the Advances to purchase or carry any "margin stock" (as defined in Regulation U) or to make any Stock Acquisition. Facility Letters of Credit will be used for general corporate purposes of the Borrower. 6.3. Notice of Default. The Borrower will, and will cause each Subsidiary to, give notice in writing to the Lenders within five Business Days of the occurrence of any Default or Unmatured Default and of any other development, financial or other (including, without limitation, the commencement of or significant developments in litigation, arbitration or other governmental proceedings), which might have a Material Adverse Effect. 6.4. Conduct of Business. The Borrower will, and will cause each Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted. 6.5. Taxes. The Borrower will, and will cause each Subsidiary to, pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside. 6.6. Insurance. The Borrower will, and will cause each Subsidiary to, maintain with financially sound and reputable insurance companies insurance on all of its Property in such amounts and covering such risks as is customarily maintained by companies similarly situated, and the Borrower will furnish to any Lender upon request full information as to the insurance carried. 6.7. Compliance with Laws. The Borrower will, and will cause each Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject. 6.8. Environmental Covenant. (a) The Borrower will, and will cause each of its Subsidiaries to use and operate all of its facilities and Property in material compliance with all Environmental Laws, keep all necessary permits, approvals, certificates and licenses in effect and remain in material compliance therewith, 29 35 and handle all Hazardous Materials in material compliance with all applicable Environmental Laws, and provide such information and certifications as the Agent or any Lender may reasonably request from time to time to insure compliance with this Section 6.8. (b) The Borrower will not, and will not permit any Subsidiary to, store, transport or arrange for the transportation of any (i) Hazardous Wastes, or (ii) other Hazardous Materials except to the extent allowed under applicable permits held by the Borrower or such Subsidiary. (c) The Borrower will not, and will not permit any Subsidiary to, engage in the storage, transportation or arrangement for transportation of Hazardous Materials as one of its primary businesses. 6.9. Maintenance of Property. The Borrower will, and will cause each Subsidiary to, do all things necessary to maintain, preserve, protect and keep its Property in good repair, working order and condition, and the Borrower will, and will cause each Subsidiary to, make all necessary and proper repairs, renewals and replacements so that such entity's business carried on in connection therewith may be properly conducted at all times. 6.10. Inspection. The Borrower will, and will cause each Subsidiary to, permit the Lenders, by their respective representatives and agents and (except during the continuance of a Default or Unmatured Default) with reasonable notice to the Borrower and during normal business hours, to inspect any of the Property, corporate books and financial records of the Borrower and of each Subsidiary, to examine and make copies of the books of accounts and other financial records of the Borrower and of each Subsidiary, and to discuss the affairs, finances and accounts of the Borrower and each Subsidiary with, and to be advised as to the same by, the Borrower's or such Subsidiary's officers at such reasonable times and intervals as the Lenders may designate. 6.11. Merger. The Borrower will not, nor will it permit any Subsidiary to, merge or consolidate with or into any other Person, except that a Subsidiary may merge with the Borrower or a Wholly-Owned Subsidiary, provided that the Borrower or a Wholly-Owned Subsidiary is the surviving corporation in any such merger or consolidation. 6.12. Sale of Assets. The Borrower will not, nor will it permit any Subsidiary to, lease, sell or otherwise dispose of its Property, to any other Person except for (i) sales of Revenue Equipment for fair value in the ordinary course of business, (ii) sales by the Borrower or any Subsidiary of accounts receivable pursuant to the Receivables Transactions (subject to the limitation on the amount of the financing which may be provided in all such transactions as set forth in the definition of the term "Receivables Transactions" herein), (iii) sales or other dispositions of Property for fair value by a Subsidiary to a Guarantor, (iv) sales or other dispositions of Property as part of a Significant Restructuring, and (v) other leases, sales or other dispositions of Property for fair value that, together with all other Property of the Borrower and its Subsidiaries previously leased, sold or disposed of as permitted by this clause (v) during the twelve-month period ending with the month in which any such lease, sale or other disposition occurs, has a value not exceeding $75,000,000. 6.13. Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur or permit to exist any Lien in, of or on any Property of the Borrower or any Subsidiary (including, without limitation, the capital stock of any direct or indirect Subsidiary of the Borrower) except: (i) Liens for taxes, assessments or governmental charges or levies thereon if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with Agreement Accounting Principles shall have been set aside on its books. (ii) Liens imposed by law (other than ERISA), such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due. (iii) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation (other than ERISA). 30 36 (iv) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or of its Subsidiaries. (v) Purchase money Liens granted to secure the purchase price of Equipment or to secure Indebtedness incurred solely for the purpose of financing the acquisition of such Equipment, provided that such Liens do not extend to any other assets of the Borrower or of any Subsidiary. (vi) Liens existing on assets at the time of their acquisition (whether such acquisition is by purchase of assets or stock or by merger), provided that such Liens are limited to the assets so acquired and do not extend to any other assets of the Borrower or any Subsidiary. (vii) Liens on real property granted to secure Indebtedness incurred in connection with the acquisition thereof, provided that such Liens do not extend to any other assets of the Borrower or of any Subsidiary. (viii) Liens in existence on the Closing Date on real or personal property securing Indebtedness or other obligations of the Borrower or any Subsidiary in an aggregate principal amount for the Borrower and all Subsidiaries not in excess of $30,000,000 at any one time outstanding incurred in connection with the issuance of obligations, the interest on which is exempt from federal income taxation under Section 103 of the Code, to finance the acquisition by the Borrower or such Subsidiary of real or personal property, provided that such Liens shall extend only to the assets being financed with the proceeds of such Indebtedness. (ix) Liens in existence on the Closing Date as set forth on Schedule "4". (x) Liens on accounts receivable (together with related collections and proceeds thereof, collateral insurance therefor, guaranties thereof, lockbox or other collection accounts related thereto and all records related thereto) of any Subsidiary which are transferred to Receivables Corp. as part of a Receivables Transaction (subject to the limitation on the amount of the financing which may be provided in all such transactions as set forth in the definition of the term "Receivables Transactions" herein). (xi) In addition to Liens permitted under any of the foregoing categories, Liens on real or personal property granted to secure Indebtedness incurred in the ordinary course of business not exceeding $50,000,000 in the aggregate. 6.14. Guaranties, Loans, Advances and Investments. The Borrower will not, and will not permit any Subsidiary to, become or be a guarantor or surety of, or otherwise become or be responsible in any manner (whether by agreement to purchase any obligations, stock, assets, goods or services, or to supply or advance any funds, assets, goods or services, or otherwise) with respect to any undertaking of any other Person, or make or permit to exist any loans or advances to any other Person or investments in any other Person or instrument, except for: (i) the Guaranty; (ii) the endorsement, in the ordinary course of collection, of instruments payable to it or to its order; (iii) guaranties or other contingent obligations, if after giving effect to the incurrence of such obligations, the aggregate of all such obligations of the Borrower and its Subsidiaries on a consolidated basis does not exceed 10% of Consolidated Tangible Net Worth, provided that any contingent obligation shall be excluded from the restriction imposed by this Section 6.14(iii) if pursuant to the terms thereof, (a) the Borrower or such Subsidiary is contingently liable solely with respect to a primary obligation (other than an obligation for Indebtedness) of the Borrower or any Subsidiary, and (b) such primary obligation is included among the liabilities shown on the Borrower's consolidated balance sheets submitted to the Lenders pursuant to Section 6.1; (iv) investment grade investments; 31 37 (v) loans, advances or other investments in an amount which, when computed in an aggregate amount for the Borrower and its Subsidiaries, shall not exceed 10% of Consolidated Tangible Net Worth at any one time outstanding; (vi) guaranties by the Borrower or any Subsidiary in an aggregate principal amount for the Borrower and all Subsidiaries not in excess of $30,000,000 at any one time outstanding incurred in connection with the issuance of obligations which are outstanding on the Closing Date, the interest on which is exempt from Federal income taxation under Section 103 of the Code to finance the acquisition by the Borrower or such Subsidiary of Property; (vii) guaranties, loans, advances or other investments in connection with a Receivables Transaction (provided that such Receivables Transaction complies in all respects with the provisions set forth in the definition of the term "Receivables Transactions" herein); and (viii) loans or advances by the Borrower to any Subsidiary, by any Subsidiary to the Borrower and by any Subsidiary to any other Subsidiary, and equity interests of the Borrower or any Subsidiary in any Subsidiary. 6.15. Affiliates. The Borrower will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except (i) pursuant to or in connection with a Receivables Transaction and (ii) any other transaction conducted in the ordinary course of business and pursuant to the reasonable requirements of the Borrower's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain in a comparable arms-length transaction. 6.16. Adjusted Consolidated Tangible Net Worth. The Borrower will maintain at all times Adjusted Consolidated Tangible Net Worth of not less than the sum of (i) $310,000,000 plus (ii) 50% of Consolidated Net Income earned in any fiscal year beginning with the fiscal year ending on December 31, 1997 (without deduction for losses), provided that the adjustment to minimum Adjusted Consolidated Tangible Net Worth as a result of this clause (ii) shall occur annually upon delivery by the Borrower of the financial statements described in Section 6.1(i) for the relevant fiscal year. 6.17. Consolidated Indebtedness to Adjusted Consolidated EBITDA Ratio. The Borrower will not permit the ratio (measured at the end of each fiscal quarter for the then-most recently ended four fiscal quarters) of (i) Consolidated Indebtedness to (ii) Adjusted Consolidated EBITDA to exceed 3.0 to 1.0. 6.18. Employee Benefit Plans. The Borrower will properly conduct, and cause each Subsidiary to properly conduct, each Single Employer Plan as to which it may have any liability in compliance with all applicable requirements of law and regulations. 6.19. Other Agreements. The Borrower will not, and will not permit any Subsidiary to, enter into any agreement containing any provision which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection with the transactions contemplated hereby. 6.20. Subsidiary Dividends and Indebtedness. (a) The Borrower will not, and will not permit any Subsidiary to, enter into any agreement which prohibits or in any manner restricts the right or ability of any Subsidiary to declare and pay any dividends or to make any loans or advances, whether in cash or in property, to the Borrower. (b) At any time when the Borrower's senior unsecured long-term debt is rated below BBB+ by S&P (or a comparable rating from any generally recognized successor to S&P) or below Baa1 by Moody's (or a comparable rating from any generally recognized successor to Moody's), the Borrower will not permit its Subsidiaries to incur or maintain any Indebtedness except for (i) Indebtedness owed to the Borrower or to a Wholly-Owned Subsidiary of the Borrower, (ii) Indebtedness secured by Liens permitted by the terms of Section 6.13(viii), (iii) Indebtedness incurred as part of a Receivables Transaction (subject to the limitation on the amount of the financing which may be provided in all such transactions as set forth in the definition of 32 38 the term Receivables Transactions' herein) and (iv) other Indebtedness not to exceed $75,000,000 in aggregate principal amount at any time. 6.21. Ownership of Yellow Freight. The Borrower will not, without the prior written consent of the Required Lenders, sell, transfer, assign, grant a Lien on or otherwise encumber or dispose of any capital stock of Yellow Freight. 6.22. Additional Material Subsidiaries. (a) The Borrower will cause any Person that becomes a Material Subsidiary after the date hereof (i) to execute and deliver to the Agent, within ten Business Days of becoming a Material Subsidiary, a counterpart of the Guaranty or a new guaranty in substantially the form of the Guaranty, in each case guarantying the obligations of the Borrower hereunder and (ii) to deliver to the Agent evidence of action of its board of directors or other governing body authorizing the execution, delivery and performance thereof. (b) If (i) as of the end of any fiscal year of the Borrower, the assets of any Guarantor (other than an Original Guarantor) comprise less than 5% of the Consolidated Assets of the Borrower and its Subsidiaries, and the revenue attributable to any such Guarantor (other than an Original Guarantor) comprises less than 5% of the consolidated revenue of the Borrower and its Subsidiaries for such fiscal year, or (ii) the Borrower or any Subsidiary sells or otherwise transfers all of the capital stock of any Guarantor to any Person which is not the Borrower or a Subsidiary or liquidates or dissolves any Guarantor in a transaction which, in any case described in this clause (b), is not otherwise prohibited by the terms of this Agreement, the Agent will, on behalf of the Lenders, execute and deliver to the Borrower a release of such Guarantor from its obligations under the Guaranty, provided that to the extent that any proceeds of any sale, transfer, liquidation or dissolution described in clause (ii) exceed $1,000,000, such transaction must be structured so that such proceeds are ultimately retained by the Borrower or by a Guarantor. ARTICLE VII DEFAULTS The occurrence of any one or more of the following events shall constitute a Default: 7.1. Any representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to the Lenders, the Issuer or the Agent under or in connection with this Agreement, any Credit Extension, any LC Application or any certificate or information delivered in connection with this Agreement or any other Loan Document shall be materially false on the date as of which made. 7.2. Nonpayment of principal of any Note or of any Reimbursement Obligation when due, or nonpayment of interest upon any Note or of any facility or utilization fee or other obligations under any of the Loan Documents within five days after the same becomes due. 7.3. The breach by the Borrower of any of the terms or provisions of Section 6.2, 6.3, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.20 or 6.21. 7.4. The breach by the Borrower (other than a breach which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement or the breach by the Borrower or any Subsidiary Co-Applicant of any of the terms or provisions of any LC Application which is not remedied within thirty days after written notice from the Agent, the Issuer or any Lender. 7.5. Failure of the Borrower or any of its Subsidiaries to pay when due principal, interest or other amounts under any Indebtedness the aggregate principal amount of which at the time of such failure exceeds $1,000,000; or the default by the Borrower or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement under which any Indebtedness the aggregate principal amount of which at the time of such default exceeds $10,000,000 was created or is governed, or any other event shall occur or condition exist, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any Indebtedness the aggregate principal amount of which exceeds $10,000,000 of the Borrower or any of its Subsidiaries shall be declared to 33 39 be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof; or the Borrower or any of its Subsidiaries shall not pay, or admit in writing its inability to pay, its debts generally as they become due. 7.6. The Borrower or any of its Subsidiaries shall (i) have an order for relief entered with respect to it under the Federal bankruptcy laws as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property, (iv) institute any proceeding seeking an order for relief under the Federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) take any corporate action to authorize or effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding described in Section 7.7. 7.7. Without the application, approval or consent of the Borrower or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for the Borrower or any of its Subsidiaries or any substantial part of its property, or a proceeding described in Section 7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 30 consecutive days. 7.8. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of (each a "Condemnation"), all or any portion of the Property of the Borrower and its Subsidiaries which, when taken together with all other Property of the Borrower and its Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such Condemnation occurs, constitutes a Substantial Portion. 7.9. The Borrower or any of its Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $10,000,000, which is not stayed on appeal or otherwise being appropriately contested in good faith. 7.10. The Borrower or any of its Subsidiaries shall be the subject of any proceeding or investigation pertaining to the release by the Borrower, any of its Subsidiaries or any other Person of any Hazardous Material into the environment, or there shall occur any violation of any Environmental Law which, in the case of any such proceeding, investigation or violation, would be reasonably likely to have a Material Adverse Effect. 7.11. (a) The aggregate Unfunded Liabilities under all Single Employer Plans shall at any time exceed $15,000,000, or any Reportable Event shall occur with respect to any Single Employer Plan. (b) Any Termination Event shall occur with respect to one or more Plans which, when taken together with any other Termination Events then existing with respect to Plans, will cause the Borrower and the other members of the Controlled Group to incur aggregate Current Payment Obligations in excess of $25,000,000. 7.12. Any Change in Control shall occur. 7.13. The Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Guaranty, or any Guarantor shall deny that it has any further liability under the Guaranty, or shall give notice to such effect, provided that this Section 7.13 shall not affect the Agent's power to release a Guarantor from its obligations under the Guaranty pursuant to Sections 6.22 and 8.2(v). 34 40 ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 8.1. Acceleration; Collateral Shortfall. (a) If any Default described in Section 7.6 or 7.7 occurs with respect to the Borrower, (i) the obligations of the Lenders to make Loans hereunder and to participate in Facility Letters of Credit and the obligations of the Issuer to issue Facility Letters of Credit shall automatically terminate and the Obligations shall immediately become due and payable without any election or action on the part of the Agent, the Issuer or any Lender and (ii) the Borrower will be and become thereby unconditionally obligated, without the need for demand or the necessity of any act or evidence, to deliver to the Agent, at its address specified pursuant to Article XIII for deposit into the Letter of Credit Collateral Account, an amount (the "Collateral Shortfall Amount") equal to the excess, if any, of (A) 100% of the sum of the aggregate maximum amount remaining available to be drawn under the Facility Letters of Credit (assuming compliance with all conditions for drawing thereunder) issued by the Issuer and outstanding as of such time, over (B) the amount on deposit in the Letter of Credit Collateral Account at such time that is free and clear of all rights and claims of third parties and that has not been applied by the Agent against the Obligations. (b) If any Default occurs and is continuing (other than a Default described in Section 7.6 or 7.7 with respect to the Borrower), (i) the Required Lenders (or the Agent, acting with the consent of or upon the direction of the Required Lenders) may terminate or suspend the obligations of the Lenders to make Loans and to participate in Facility Letters of Credit hereunder and the obligation of the Issuer to issue Facility Letters of Credit hereunder, or declare the Obligations to be due and payable, or both, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives and (ii) the Required Lenders (or the Agent, acting with the consent of or upon the direction of the Required Lenders) may, upon notice delivered to the Borrower and in addition to the continuing right to demand payment of all amounts payable under this Agreement, make demand on the Borrower to deliver, and the Borrower will, forthwith upon such demand and without necessity of further act or evidence, be and become thereby unconditionally and jointly and severally obligated to deliver, to the Agent, at its address specified pursuant to Article XIII, for deposit into the Letter of Credit Collateral Account an amount equal to the Collateral Shortfall Amount. (c) If at any time while any Default is continuing, the Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Agent may make demand on the Borrower to deliver, and the Borrower will, forthwith upon demand by the Agent and without necessity of further act or evidence, be and become thereby unconditionally obligated to deliver, to the Agent as additional funds to be deposited and held in the Letter of Credit Collateral Account an amount equal to such Collateral Shortfall Amount at such time. (d) The Agent may at any time or from time to time after funds are deposited in the Letter of Credit Collateral Account, apply such funds to the payment of the Obligations and any other amounts as shall from time to time have become due and payable by the Borrower or any Subsidiary Co-Applicant to the Lenders or the Issuer under the Loan Documents. (e) At any time while any Default is continuing, neither the Borrower, any Subsidiary Co-Applicant, nor any Person claiming on behalf of or through the Borrower or any Subsidiary Co-Applicant shall have any right to withdraw any of the funds held in the Letter of Credit Collateral Account. After all of the Obligations have been indefeasibly paid in full, any funds remaining in the Letter of Credit Collateral Account shall be returned by the Agent to the Borrower or paid to whomever may be legally entitled thereto at such time. (f) The Agent shall exercise reasonable care in the custody and preservation of any funds held in the Letter of Credit Collateral Account and shall be deemed to have exercised such care if such funds are accorded treatment substantially equivalent to that which the Agent accords its own property. 8.2. Amendments. Subject to the provisions of this Article VIII, the Required Lenders and the Borrower may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Borrower 35 41 hereunder or waiving any Default hereunder; provided, however, that no such supplemental agreement shall, without the consent of all of the Lenders: (i) Extend the maturity of any Loan or Note or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest or fees thereon. (ii) Reduce the amount of or extend the maturity of the Reimbursement Obligations, or reduce the rate or change the time of payment of any fees related to Facility Letters of Credit. (iii) Reduce the percentage specified in the definition of Required Lenders. (iv) Extend the Termination Date or increase the amount of the Commitment of any Lender hereunder, or permit the Borrower to assign its rights under this Agreement. (v) Release any Guarantor from its obligations under the Guaranty, except in accordance with the provisions of Section 6.22(b). (vi) Amend this Section 8.2 or Section 2.4.2(iii). No amendment of any provision of this Agreement relating to the Agent shall be effective without the written consent of the Agent. The Agent may waive payment of the fee required under Section 12.3.2 and release any Guarantor in accordance with the provisions of Section 6.22(b) without obtaining the consent of any other party to this Agreement. 8.3. Preservation of Rights. No delay or omission of the Lenders, the Issuer or the Agent to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein, and the making of a Credit Extension notwithstanding the existence of a Default or the inability of the Borrower to satisfy the conditions precedent to such Credit Extension shall not constitute any waiver or acquiescence. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lenders required pursuant to Section 8.2, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Agent, the Issuer and the Lenders until the Obligations have been paid in full. ARTICLE IX GENERAL PROVISIONS 9.1. Survival of Representations. All representations and warranties of the Borrower contained in this Agreement shall survive delivery of the Notes and the making of the Credit Extensions herein contemplated. 9.2. Governmental Regulation. Anything contained in this Agreement to the contrary notwithstanding, neither any Lender nor the Issuer shall be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 9.3. Taxes. Any taxes (excluding, (x) in the case of the Agent, the Issuer and each Lender, (1) United States federal taxation of its overall net income, and (2) taxes imposed on its overall net income, and franchise taxes imposed on it, by any jurisdiction outside of the United States of America or by the jurisdiction under the laws of which the Agent, the Issuer or such Lender (as the case may be) is organized or any political subdivision thereof or the jurisdiction in which the principal office of the Agent, the Issuer or such Lender (as the case may be) is located or any political subdivision thereof, and, (y) in the case of the Issuer and each Lender, taxes imposed on its overall net income, and franchise taxes imposed on it, by the jurisdiction in which its applicable Lending Installation is located or any political subdivision thereof) or other similar assessments or charges payable or ruled payable by any governmental authority in respect of the Loan Documents shall be paid by the Borrower, together with interest and penalties, if any. 9.4. Headings. Section headings in the Loan Documents are for convenience of reference only and shall not govern the interpretation of any of the provisions of the Loan Documents. 36 42 9.5. Entire Agreement. The Loan Documents embody the entire agreement and understanding among the Borrower, the Issuer, the Agent and the Lenders and supersede all prior agreements and understandings among the Borrower, the Issuer, the Agent and the Lenders relating to the subject matter thereof. 9.6. Several Obligations; Benefits of this Agreement. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns. 9.7. Expenses; Indemnification. The Borrower shall reimburse the Agent for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent) paid or incurred by the Agent in connection with the preparation, negotiation, execution, administration, syndication and amendment of the Loan Documents. The Borrower also agrees to reimburse the Agent, the Issuer and the Lenders for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, the Issuer and the Lenders, which attorneys may be employees of the Agent, the Issuer or the Lenders) paid or incurred by the Agent, the Issuer or any Lender in connection with the collection and enforcement of the Loan Documents. The Borrower further agrees to (x) indemnify the Agent, the Issuer and each Lender, and their respective directors, officers and employees, agents and directors ("Indemnified Persons") against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all reasonable expenses of litigation or preparation therefor whether or not the Agent or any Lender is a party thereto) which any of them may pay or incur arising out of or relating to the commitment letter dated July 15, 1997 relating to this transaction, this Agreement, the other Loan Documents, or any other transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of any Credit Extension hereunder, except to the extent any of the foregoing arises solely from the gross negligence or willful misconduct of the party seeking indemnification, and (y) to assert no claim against the Agent, the Issuer, any Lender or any other Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages. The obligations of the Borrower under this Section shall survive the termination of this Agreement and the Aggregate Commitment and the repayment of the Advances and the termination of the Facility Letters of Credit hereunder. 9.8. Numbers of Documents. All statements, notices, closing documents, and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders. 9.9. Accounting. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles. 9.10. Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 9.11. Nonliability of Lenders. The relationship between the Borrower on the one hand and the Lenders, the Issuer and the Agent, on the other hand, shall be solely that of borrower and lender. Neither the Agent, the Issuer nor any Lender shall have any fiduciary responsibilities to the Borrower. Neither the Agent, the Issuer nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the Borrower's business or operations. 9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE 37 43 OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS. 9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER. 9.15. Confidentiality. Each of the Lenders and the Issuer agrees to hold any information identified to it as confidential which it may receive from the Borrower pursuant to this Agreement in confidence, except for disclosure (i) to its Affiliates, to other Lenders or the Issuer and their respective Affiliates, (ii) to its legal counsel, accountants, and other professional advisors, (iii) to regulatory officials, (iv) as requested pursuant to or as required by law, regulation, or legal process, (v) in connection with any legal proceeding to which it is a party, (vi) permitted by Section 12.4, and (vii) of such portions of such information which is or becomes generally available to the public other than as a result of disclosure by it or its representatives. ARTICLE X THE AGENT 10.1. Appointment. The First National Bank of Chicago is hereby appointed Agent hereunder and under each other Loan Document, and each of the Lenders irrevocably (except to the extent provided in Section 10.11) authorizes the Agent to act as the agent of such Lender. The Agent agrees to act as such upon the express conditions contained in this Article X. The Agent shall not have a fiduciary relationship in respect of the Borrower or any Lender by reason of this Agreement. 10.2. Powers. The Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no duties or obligations to the Lenders (including, without limitation, duties or obligations to take action under the Loan Documents) other than those specifically set forth in the Loan Documents. 10.3. General Immunity. Neither the Agent nor any of its directors, officers, agents or employees shall be liable to the Borrower, the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith except for its or their own gross negligence or willful misconduct. 10.4. No Responsibility for Loans, Recitals, etc.; Delivery of Documents. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or 38 44 verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document; (iii) the satisfaction of any condition specified in Article IV, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith. The Agent will deliver to the Lenders copies of all documents received from the Borrower which are specifically required by the terms of the Loan Documents to be provided to the Lenders, together with any other documents which the Agent hereafter agrees in writing to deliver to the Lenders. 10.5. Action on Instructions of Lenders. The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders (or, when required hereunder, all of the Lenders), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Notes. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action. 10.6. Employment of Agents and Counsel. The Agent may execute any of its duties as Agent hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document. 10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent. 10.8. Agent's Reimbursement and Indemnification. The Lenders agree to reimburse and indemnify the Agent ratably in proportion to their respective Commitments (i) for any amounts not reimbursed by the Borrower for which the Agent is entitled to reimbursement by the Borrower under the Loan Documents, provided that, to the extent the Agent is subsequently reimbursed for such amounts by the Borrower, the Agent will refund any such amounts paid by the Lenders, (ii) for any other expenses incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution, delivery, administration (other than routine administrative duties under the Loan Documents) and enforcement of the Loan Documents and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Agent. The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Agreement and all Facility Letters of Credit. 10.9. Rights as a Lender. With respect to its Commitment, Loans made by it and the Notes issued to it, the Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a Lender, unless the context otherwise indicates, include the Agent in its individual capacity. The Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby from engaging with any other Person. The Agent, in its individual capacity, is not obligated to remain a Lender. 39 45 10.10. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent, the Issuer or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Agent, the Issuer or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 10.11. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders, the Issuer and the Borrower, and the Agent may be removed at any time with or without cause by written notice received by the Agent from the Required Lenders. Upon any such resignation or removal, the Required Lenders (with the consent of the Borrower at any time other than during the continuance of a Default) shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Agent's giving notice of resignation, then the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a successor Agent. Such successor Agent shall be a commercial bank having capital and retained earnings of at least $250,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent, and the retiring or removed Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any retiring or removed Agent's resignation or removal hereunder as Agent, the provisions of this Article X shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Loan Documents. 10.12. Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Unmatured Default hereunder unless the Agent has received written notice from a Lender or the Borrower referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a "notice of default". In the event that the Agent receives such a notice, the Agent shall give prompt notice thereof to the Lenders. ARTICLE XI SETOFF; RATABLE PAYMENTS 11.1. Setoff. In addition to, and without limitation of, any rights of the Lenders or the Issuer under applicable law, if the Borrower becomes insolvent, however evidenced, or any Default or Unmatured Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other Indebtedness at any time held or owing by any Lender or the Issuer to or for the credit or account of the Borrower may be offset and applied toward the payment of the Obligations owing to such Lender or the Issuer, whether or not the Obligations, or any part hereof, shall then be due. 11.2. Ratable Payments. If any Lender, whether by setoff or otherwise, has payment made to it upon its Loans or participations in Facility Letters of Credit (other than payments received pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Loans or participations in Facility Letters of Credit held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of Loans and participations in Facility Letters of Credit. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their Loans and participations in Facility Letters of Credit. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. 40 46 ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 12.1. Successors and Assigns. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower, the Agent, the Issuer and the Lenders and their respective successors and assigns, except that (i) the Borrower shall not have the right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with Section 12.3. Notwithstanding clause (ii) of this Section, any Lender may at any time, without the consent of the Borrower, the Issuer or the Agent and without the payment of any fee to the Agent, assign all or any portion of its rights under this Agreement and its Notes to a Federal Reserve Bank; provided, however, that no such assignment shall release the transferor Lender from its obligations hereunder. The Agent may treat the payee of any Note as the owner thereof for all purposes hereof unless and until such payee complies with Section 12.3 in the case of an assignment thereof or, in the case of any other transfer, a written notice of the transfer is filed with the Agent. Any assignee or transferee of a Note (other than a Federal Reserve Bank in the case of an assignment for security purposes) agrees by acceptance thereof to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the holder of any Note, shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note or Notes issued in exchange therefor. 12.2. Participations. 12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities ("Participants") participating interests in any Loan owing to such Lender, any participation in Facility Letters of Credit owned by such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. Unless a Default has occurred and is continuing, the consent of the Borrower and the Agent shall be required prior to such sale becoming effective with respect to a Participant which is not a Lender or an Affiliate of a Lender or of such Lender's parent corporation. Such consent shall not be unreasonably withheld. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the holder of any such Note for all purposes under the Loan Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower, the Issuer and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents. 12.2.2. Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan, Facility Letter of Credit or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan, Facility Letter of Credit or Commitment, postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Loan, Reimbursement Obligations, interest or fees in respect of any such Facility Letter of Credit or Commitment, releases any guarantor of any such Loan or Facility Letter of Credit or releases any collateral held in the Letter of Credit Collateral Account (except in accordance with Section 8.1) or any substantial portion of any other collateral, if any, securing any such Loan or Facility Letter of Credit. 12.2.3. Benefit of Setoff. The Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender. 41 47 12.3. Assignments. 12.3.1. Permitted Assignments. Any Lender may, in the ordinary course of its business and in accordance with applicable law and the provisions of this Section 12.3, at any time assign to one or more banks or other entities ("Purchasers") all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit "I" hereto or in such other form as may be agreed to by the parties thereto. The Lender which desires to make such an assignment (the "Transferor Lender") shall so inform the Borrower and the Agent in writing. The Borrower shall then have an exclusive period of 30 days after such notice from the Transferor Lender to locate a Purchaser (which may or may not be an entity recommended by the Transferor Lender) for that portion of the Transferor Lender's rights and obligations which are proposed to be sold and, if the Borrower locates a Purchaser within such period, the Transferor Lender will make the proposed assignment to such Purchaser as long as the terms of such assignment are no worse than the Transferor Lender could obtain in a sale to a Purchaser of its choice. If a sale to a Purchaser selected by the Borrower does not occur within such 30 day period, the Transferor Lender may, with the consent of the Agent and the Borrower (which shall not be unreasonably withheld or delayed), make the proposed assignment to a Purchaser of its choice. Notwithstanding the foregoing provisions, any Lender may make an assignment of all or any part of its rights and obligations under the Loan Documents (i) without the consent of the Borrower or the Agent and without giving the Borrower the 30-day exclusive period to locate a Purchaser described above if the Purchaser is another Lender or an Affiliate of a Lender or (ii) without the consent of the Borrower and without giving the Borrower the 30-day exclusive period to locate a Purchaser described above if a Default has occurred and is continuing. 12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a notice of assignment, substantially in the form attached as Exhibit "I" to Exhibit "I" hereto (a "Notice of Assignment"), together with any consents required by Section 12.3.1, and (ii) payment of a $3,500 fee to the Agent for processing such assignment, such assignment shall become effective on the effective date specified in such Notice of Assignment. The Notice of Assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment, Loans and participations in Facility Letters of Credit under the applicable assignment agreement are "plan assets" as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be "plan assets" under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Issuer, the Lenders or the Agent shall be required to release the Transferor Lender with respect to the percentage of the Aggregate Commitment, Loans and participation in Facility Letters of Credit assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3.2, the Transferor Lender, the Agent and the Borrower shall make appropriate arrangements so that replacement Notes are issued to such Transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment. 12.4. Dissemination of Information. The Borrower authorizes each Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "Transferee") and any prospective Transferee any and all information in such Lender's possession concerning the creditworthiness of the Borrower and its Subsidiaries; provided that each Transferee and prospective Transferee agrees to be bound by Section 9.15 of this Agreement. 12.5. Tax Treatment. If any interest in any Loan Document is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the Transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 2.6.14. 42 48 ARTICLE XIII NOTICES 13.1. Giving Notice. Except as otherwise permitted by Section 2.6.9 with respect to borrowing notices, all notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing and shall be sent by United States mail, telegraph, telex, FAX or nationally established overnight courier service, and shall be deemed received (i) when received by the addressee if sent via the United States mail, postage prepaid, (ii) when delivered to the appropriate office or machine operator for transmission, charges prepaid, if sent by telegraph or telex (answerback confirmed in the case of telexes), (iii) when receipt thereof by the addressee is confirmed by telephone if sent by FAX and (iv) one business day after delivery to an overnight courier service, if sent by such service, in each case addressed to such party at its address or facsimile number set forth below its signature hereto. 13.2. Change of Address. The Borrower, the Agent, the Issuer and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto. ARTICLE XIV COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Borrower, the Agent, the Issuer and the Lenders and each party has notified the Agent by facsimile or telephone that it has taken such action. IN WITNESS WHEREOF, the Borrower, the Lenders, the Issuer and the Agent have executed this Agreement as of the date first above written. YELLOW CORPORATION By: Print Name: Title: 10990 Roe Avenue Overland Park, Kansas 66211-1213 Attention: Lawrence D. Berkowitz Assistant Treasurer Telephone: (913) 696-6130 FAX: (913) 696-6122 43 49 Commitments $60,000,000 THE FIRST NATIONAL BANK OF CHICAGO Individually, as Issuer and as Agent By: Print Name: Title: One First National Plaza Suite 0374 Chicago, Illinois 60670 Attention: Timothy J. King Telephone: (312) 732-6456 FAX: (312) 732-3885 $50,000,000 NATIONSBANK, N.A. Individually, and as Documentation Agent By: Print Name: Title: Grand Cayman (North American No. 1) c/o New York Branch Financial Square, 23rd Floor 10th & Baltimore 5th Floor Kansas City, Missouri 64183 Attention: Bruce A. Easterly Telephone: (816) 979-7727 FAX: (816) 979-7426 $25.000,000 BANK OF HAWAII By: Print Name: Title: 1850 N. Central Avenue, Suite 400 Phoenix, Arizona 85004 Attention: Donna Parker Telephone: (602) 257-2436 FAX: (602) 257-2235 44 50 $25,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By: Print Name: Title: 60 Wall Street New York, New York 10260-0060 Attention: Charles H. King Vice-President Telephone: (212) 648-7138 FAX: (212) 648-5336 $25,000,000 ROYAL BANK OF CANADA By: Print Name: Title: Grand Cayman (North America No. 1) c/o New York Branch Financial Square, 23rd Floor New York, New York 10005-3531 Attention: Manager, Loans Administration Telephone: (212) 428-6311 FAX: (212) 428-2372 with a copy to: Financial Square 24th Floor New York, New York 10005-3531 Attention: Michael J. Madnick Manager Telephone: (212) 428-6203 FAX: (212) 428-6459 45 51 $25,000,000 WACHOVIA BANK, N.A. By: Print Name: Title: 191 Peachtree St., N.E. Mail Code GA-370 Atlanta, Georgia 30303 Attention: Mark L. Thomas Vice President Telephone: (404) 332-6450 FAX: (404) 332-6898 $15,000,000 BANQUE PARIBAS By: Print Name: Title: 227 W. Monroe, Suite 3300 Chicago, Illinois 60606 Attention: Nick Mast Telephone: (312) 853-6038 FAX: (312) 853-6020 $15,000,000 THE CHASE MANHATTAN BANK By: Print Name: Title: 270 Park Avenue, 47th Floor New York, New York 10017 Attention: Andris G. Kalnins Telephone: (212) 270-5732 FAX: (212) 270-5127 $15,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE By: Print Name: Title: 55 E. Monroe, 47th Floor Chicago, Illinois 60603 Attention: Paul Dytrych Telephone: (312) 917-7573 FAX: (312) 372-3724 46 52 $15,000,000 THE MITSUI TRUST AND BANKING COMPANY, LIMITED, NEW YORK BRANCH By: Print Name: Title: 1251 Avenue of the Americas, 39th Floor New York 10020-1104 Attention: Koichi Yokoyama Telephone: (312) 201-4700 FAX: (312) 201- $15,000,000 TOKAI BANK, LTD. By: Print Name: Title: 181 W. Madison Street, Suite 3600 Chicago, Illinois 60602 Attention: Thomas Kania Telephone: (312) 456-3422 FAX: (312) 977-0003 $15,000,000 UNION BANK OF CALIFORNIA, N.A. By: Print Name: Title: 350 California Street, 6th Floor San Francisco, California 94104 Attention: Alison Mason Telephone: (415) 705-7452 FAX: (415) 705-7566 $300,000,000 Aggregate Commitment 47 53 EXHIBIT "A" NOTE (RATABLE LOANS) $ September 24, 1997 Yellow Corporation, a Delaware corporation (the "Borrower"), promises to pay, on the Termination Date (as defined in the Agreement referred to below), to the order of (the "Lender") the lesser of the principal sum of Dollars or the aggregate unpaid principal amount of all Ratable Loans made by the Lender to the Borrower pursuant to Section 2.2 of that certain Revolving Credit Agreement, dated as of September 24, 1997, among the Borrower, The First National Bank of Chicago, individually, as Issuer and as Agent, and the financial institutions named therein, including the Lender (as the same may be amended or modified, the "Agreement"), in immediately available funds at the main office of The First National Bank of Chicago, as Agent, in Chicago, Illinois, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay each Ratable Loan in full on the last day of such Ratable Loan's applicable Interest Period. The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance with its usual practice, the date and amount of each Ratable Loan and the date and amount of each principal payment hereunder, provided that the failure by the Lender to so record or any mistake in so recording shall not affect the obligations of the Borrower hereunder. This Note (Ratable Loans) is one of the Notes issued pursuant to, and is subject to the terms of and entitled to the benefits of, the Agreement, to which Agreement reference is hereby made for a statement of the terms and conditions under which this Note may be prepaid or its maturity date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement. THIS NOTE (RATABLE LOANS) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. YELLOW CORPORATION By: Print Name: Title: 48 54 SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL TO NOTE (RATABLE LOANS) OF YELLOW CORPORATION DATED SEPTEMBER 24, 1997
PRINCIPAL MATURITY PRINCIPAL AMOUNT OF OF INTEREST AMOUNT UNPAID DATE LOAN PERIOD PAID BALANCE ---- --------- ----------- --------- -------
49 55 EXHIBIT "B" NOTE (COMPETITIVE BID LOANS) $300,000,000 September 24, 1997 Yellow Corporation, a Delaware corporation (the "Borrower"), promises to pay, on the Termination Date, to the order of (the "Lender") the aggregate unpaid principal amount of all Competitive Bid Loans made by the Lender to the Borrower pursuant to Section 2.3 of that certain Revolving Credit Agreement, dated as of September 24, 1997, among the Borrower, The First National Bank of Chicago, individually, as Issuer and as Agent, and the financial institutions named therein, including the Lender (as the same may be amended or modified, the "Agreement"), in immediately available funds at the main office of The First National Bank of Chicago, as Agent, in Chicago, Illinois, together with interest on the unpaid principal amount hereof at the rates and on the dates set forth in the Agreement. The Borrower shall pay each Competitive Bid Loan in full on the last day of such Competitive Bid Loan's applicable Interest Period. The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or otherwise record in accordance with its usual practice, the date and amount of each Competitive Bid Loan and the date and amount of each principal payment hereunder, provided that the failure by the Lender to so record or any mistake in so recording shall not affect the obligations of the Borrower hereunder. This Note (Competitive Bid Loans) is one of the Notes issued pursuant to, and is subject to the terms of and entitled to the benefits of, the Agreement, to which Agreement reference is hereby made for a statement of the terms and conditions under which this Note may be prepaid or its maturity date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Agreement. Each Note (Competitive Bid Loans) issued pursuant to the Agreement is in the amount of $300,000,000, provided, however, that the aggregate principal amount of all Loans outstanding from all Lenders under the Agreement shall not exceed $300,000,000 at any time. THIS NOTE (COMPETITIVE BID LOANS) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. YELLOW CORPORATION By: Print Name: Title: 50 56 SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL TO NOTE (COMPETITIVE LOANS) OF YELLOW CORPORATION DATED SEPTEMBER 24, 1997
PRINCIPAL MATURITY PRINCIPAL AMOUNT OF OF INTEREST AMOUNT UNPAID DATE LOAN PERIOD PAID BALANCE ---- --------- ----------- --------- --------
51 57 EXHIBIT "C" COMPETITIVE BID QUOTE REQUEST (SECTION 2.3.2) , 19 To: The First National Bank of Chicago, as agent (the "Agent") From: Yellow Corporation ("Borrower") Re: Revolving Credit Agreement dated as of September 24, 1997, among the Borrower, The First National Bank of Chicago, individually, as Issuer and as Agent, and the Lenders parties thereto We hereby give notice pursuant to Section 2.3.2 of the Agreement that we request Competitive Bid Quotes for the following proposed Competitive Bid Advance(s): Borrowing Date: , 19
PRINCIPAL AMOUNT (1) INTEREST PERIOD (2) -------------------- ------------------- $
Such Competitive Bid Quotes should offer a Competitive Bid Margin an Absolute Rate. Upon acceptance by the undersigned of any or all of the Competitive Bid Loans offered by Lenders in response to this request, the undersigned shall be deemed to affirm as of such date that the representations and warranties made in the Agreement are true and correct in all material respects to the extent specified in Article IV thereof. Capitalized terms used herein have the meanings assigned to them in the Agreement. YELLOW CORPORATION By: Print Name: Title: - --------------- (1) Amount must be at least $10,000,000 and an integral multiple of $5,000,000. (2) One, two, three or six months (Eurodollar Auction) or at least 30 days and up to six months (Absolute Rate Auction), subject to the provisions of the definitions of Eurodollar Interest Period and Absolute Rate Interest Period. 52 58 EXHIBIT "D" INVITATION FOR COMPETITIVE BID QUOTES (SECTION 2.3.3) , 19 To: Name of Lender Re: Invitation for Competitive Bid Quotes to Yellow Corporation (the "Borrower") Pursuant to Section 2.3.3 of the Revolving Credit Agreement dated as of September 24, 1997 among the Borrower, the Lenders parties thereto, and the undersigned, as Issuer and as Agent, we are pleased on behalf of the Borrower to invite you to submit Competitive Bid Quotes to the Borrower for the following proposed Competitive Bid Advance(s): Borrowing Date: , 19
PRINCIPAL AMOUNT INTEREST PERIOD ---------------- --------------- $
Such Competitive Bid Quotes should offer a Competitive Bid Margin an Absolute Rate. Your Competitive Bid Quote must comply with Section 2.3.4 of the Agreement and the foregoing terms in which the Competitive Bid Quote Request was made. Capitalized terms used herein have the meanings assigned to them in the Agreement. Please respond to this invitation by no later than 9:00 a.m. Chicago time on , 19 . THE FIRST NATIONAL BANK OF CHICAGO, as Agent By: Authorized Officer 53 59 EXHIBIT "E" COMPETITIVE BID QUOTE (SECTION 2.3.4) , 19 To: The First National Bank of Chicago, as Agent Attn: Re: Competitive Bid Quote to Yellow Corporation (the "Borrower") In response to your invitation on behalf of the Borrower dated , 19 , we hereby make the following Competitive Bid Quote pursuant to Section 2.3.4 of the Revolving Credit Agreement hereinafter referred to and on the following terms: 1. Quoting Lender: 2. Person to contact at Quoting Lender: 3. Borrowing Date: , 19 (1) 4. We hereby offer to make Competitive Bid Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:
PRINCIPAL INTEREST COMPETITIVE ABSOLUTE MINIMUM AMOUNT(2) PERIOD(3) BID(4) RATE(5) AMOUNT(6) - --------- --------- ----------- -------- --------- $
1. As specified in the related Invitation. 2. Principal amount bid for each Interest Period may not exceed principal amount requested. Bids must be made for $2,000,000 and an integral multiple of $500,000. 3. One, two, three or six months or at least 30 days and up to six months, as specified in the related Invitation. 4. Competitive Bid Margin over or under the Eurodollar Base Rate, rounded, if necessary, to the next higher 1/16 of 1%, determined for the applicable Interest Period. Specify percentage (rounded to the nearest 1/100 of 1%) and specify whether "PLUS" or "MINUS". 5. Specify rate of interest per annum (rounded to the nearest 1/100 of 1%) 6. Specify minimum amount which the Borrower may accept (see Section 2.3.4(b)(iv). We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Revolving Credit Agreement dated as of September 24, 1997, as amended or modified, among the Borrower, the Issuer, the Lenders parties thereto and yourselves, as Agent, irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which any offer(s) are accepted, in whole or in part. Dated: , 19 Very truly yours, NAME OF LENDER By: Authorized Officer 54 60 EXHIBIT "F" FORM OF OPINION OF COUNSEL TO YELLOW CORPORATION September 24, 1997 The Agent, the Issuer and the Lenders who are parties to the Revolving Credit Agreement described below Ladies and Gentlemen: I am counsel for Yellow Corporation, a Delaware corporation (the "Borrower"), and have represented the Borrower in connection with its execution and delivery of that certain Revolving Credit Agreement dated as of September 24, 1997 among the Borrower, The First National Bank of Chicago, as Agent and as Issuer, and the financial institutions party thereto (each, including The First National Bank of Chicago in its individual capacity, a "Lender" and collectively, the "Lenders"), providing for Advances and issuances of Facility Letters of Credit in an aggregate principal amount not exceeding $300,000,000 at any one time outstanding (the "Agreement"). All capitalized terms used in this opinion and not otherwise defined shall have the meanings attributed to them in the Agreement. I have examined the Borrower's, each Original Guarantor's and each Subsidiary Co-Applicant's (the Borrower, the Original Guarantors and the Subsidiary Co-Applicants are hereinafter collectively referred to as the "Credit Parties") certificate or articles of incorporation, by-laws, resolutions of each Credit Party's Board of Directors, the Loan Documents and such other matters of fact and law which I deem necessary in order to render this opinion. Based upon the foregoing, it is my opinion that: 1. Each of the Borrower and its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted. 2. Each Credit Party has the corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by each Credit Party of the Loan Documents to which it is a party and the payment and performance by each Credit Party of its respective obligations thereunder have been duly authorized by all necessary corporate action and proceedings on the part of each Credit Party and will not: (a) require any consent of any Credit Party's shareholders; (b) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower or any of its Subsidiaries or the Borrower's or any Subsidiary's certificate or articles of incorporation or by-laws or any indenture, instrument or agreement binding upon the Borrower or any of its Subsidiaries; or (c) result in, or require, the creation or imposition of any Lien in, of or on the Property of the Borrower or any of its Subsidiaries pursuant to the provisions of any indenture, instrument or agreement binding upon the Borrower or any of its Subsidiaries. 3. Each Loan Document (other than any LC Application which has not been executed and delivered on or prior to the Closing Date) has been duly executed and delivered by each Credit Party which is a party thereto and constitutes a legal, valid, and binding obligation of each such Credit Party enforceable in accordance with its terms except to the extent the enforcement thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and subject also to the availability of equitable remedies if equitable remedies are sought. Without limiting the foregoing, a Kansas court (or a federal court applying Kansas choice of law principles) would uphold the choice of the internal law of the State of Illinois as the law governing the interpretation of the Loan Documents. 55 61 4. There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the best of my knowledge, threatened against or affecting the Borrower or any of its Subsidiaries the probable outcome of which would have a Material Adverse Effect. 5. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents. 6. Neither the Borrower nor any Subsidiary is an "investment company" or a "company" 7. Neither the Borrower nor any Subsidiary is a "holding company" or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. I am licensed to practice in the State of Kansas and the opinions expressed above are limited to the laws of the State of Kansas, the corporate laws of the State of Delaware, and the Federal law of the United States of America. As the Loan Documents explicitly state that they are governed by the internal law of the State of Illinois, I have assumed (with your consent) for the purpose of rendering my opinions set forth herein that the substantive laws of the State of Illinois relating to the matters discussed herein are substantially similar to those of the State of Kansas. This opinion may be relied upon by the Agent, the Issuer, the Lenders and their participants, assignees and other transferees. Very truly yours, 56 62 EXHIBIT "G" LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION To The First National Bank of Chicago, as Agent (the "Agent") under the Credit Agreement Described Below. Re: Revolving Credit Agreement, dated as of September 24, 1997 (as the same may be amended or modified, the "Credit Agreement"), among Yellow Corporation (the "Borrower"), the Agent, the Issuer and the Lenders named therein Terms used herein and not otherwise defined shall have the meanings assigned thereto in the Credit Agreement. The Agent is specifically authorized and directed to act upon the following standing money transfer instructions with respect to the proceeds of Advances or other extensions of credit from time to time until receipt by the Agent of a specific written revocation of such instructions by the Borrower, provided, however, that the Agent may otherwise transfer funds as hereafter directed in writing by the Borrower in accordance with Section 13.1 of the Credit Agreement or based on any telephonic notice made in accordance with Section 2.6.9 of the Credit Agreement. - -------------------------------------------------------------------------------- Facility Identification Number(s) - -------------------------------------------------------------------------------- Customer/Account Name Transfer Funds To - -------------------------------------------------------------------------------- For Account No. - -------------------------------------------------------------------------------- Reference/Attention To - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Authorized Officer (Customer Representative) Date - -------------------------------------------------------------------------------- (Please Print) Signature - -------------------------------------------------------------------------------- Bank Officer Name Date - -------------------------------------------------------------------------------- (Please Print) Signature (Deliver Completed Form to Credit Support Staff For Immediate Processing) 57 63 EXHIBIT "H" COMPLIANCE CERTIFICATE To: The Lenders parties to the Agreement Described Below This Compliance Certificate is furnished pursuant to that certain Revolving Credit Agreement dated as of September 24, 1997 (as amended or modified from time to time, the "Agreement") among the Borrower, the Lenders party thereto and The First National Bank of Chicago, as Agent for the Lenders and as Issuer. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement. THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected Treasurer of the Borrower or his designee; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements to determine whether the Borrower has fulfilled all of its obligations under the Agreement and the Notes; 3. To the best of my knowledge after due inquiry, during such fiscal period and as at the date hereof, the Borrower has not been and is not in default in the fulfillment of any of the terms, covenants, provisions or conditions of the Agreement and no Default or Unmatured Default existed or exists, except as set forth below; 4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with Sections 6.12, 6.13, 6.14, 6.16 and 6.17 and 6.20 of the Agreement, all of which data and computations are true, complete and correct; 5. If the Borrower or any of its Subsidiaries has formed or acquired one or more Subsidiaries since the date of the preceding certificate delivered pursuant to Section 6.1(iii) of the Agreement, the name of each such Subsidiary, its jurisdiction of incorporation and a brief description of its business is described in a schedule attached hereto; and 6. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event: The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of , 19 . 58 64 SAMPLE SCHEDULE I TO COMPLIANCE CERTIFICATE Schedule of Compliance as of with Provisions of and of the Agreement. 59 65 EXHIBIT "I" FORM OF ASSIGNMENT AGREEMENT This Assignment Agreement (this "Assignment Agreement") between (the "Assignor") and (the "Assignee") is dated as of , 19 The parties hereto agree as follows: 1. PRELIMINARY STATEMENT. The Assignor is a party to a Revolving Credit Agreement (which, as it may be amended or modified from time to time is herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement. 2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor's rights and obligations under the Credit Agreement such that after giving effect to such assignment the Assignee shall have the percentage interest specified in Item 3 of Schedule 1 of all outstanding rights and obligations under the Credit Agreement relating to the facilities listed in Item 3 of Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans and participations in Facility Letters of Credit, if the applicable Commitment has been terminated) purchased by the Assignee hereunder is set forth in Item 4 of Schedule 1. 3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the "Effective Date") shall be the later of the date specified in Item 5 of Schedule 1 or two Business Days (or such shorter period agreed to by the Agent) after a Notice of Assignment substantially in the form of Exhibit "I" attached hereto has been delivered to the Agent. Such Notice of Assignment must include any consents required to be delivered to the Agent by Section 12.3.1 of the Credit Agreement. In no event will the Effective Date occur if the payments required to be made by the Assignee to the Assignor on the Effective Date under Sections 4 and 5 hereof are not made on the proposed Effective Date. The Assignor will notify the Assignee of the proposed Effective Date no later than the Business Day prior to the proposed Effective Date. As of the Effective Date, (i) the Assignee shall have the rights and obligations of a Lender under the Loan Documents with respect to the rights and obligations assigned to the Assignee hereunder and (ii) the Assignor shall relinquish its rights and be released from its corresponding obligations under the Loan Documents with respect to the rights and obligations assigned to the Assignee hereunder. 4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall be entitled to receive from the Agent all payments of principal, Reimbursement Obligations, interest and fees with respect to the interest assigned hereby. The Assignee shall advance funds directly to the Agent with respect to all Loans made and participations in Facility Letters of Credit funded on or after the Effective Date with respect to the interest assigned hereby. In consideration for the sale and assignment of Loans and participations in Facility Letters of Credit hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an amount equal to the principal amount of the portion of all Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect to each Fixed Rate Loan made by the Assignor and assigned to the Assignee hereunder which is outstanding on the Effective Date, (a) on the last day of the Interest Period therefor or (b) on such earlier date agreed to by the Assignor and the Assignee or (c) on the date on which any such Fixed Rate Loan either becomes due (by acceleration or otherwise) or is prepaid (the date as described in the foregoing clauses (a), (b) or (c) being hereinafter referred to as the "Payment Date"), the Assignee shall pay the Assignor an amount equal to the principal amount of the portion of such Fixed Rate Loan assigned to the Assignee which is outstanding on the Payment Date. If the Assignor and the Assignee agree that the Payment Date for such Fixed Rate Loan shall be the Effective Date, they shall agree to the interest rate applicable to the portion of such Loan assigned hereunder for the period from the Effective Date to the end of the existing Interest Period applicable to such Fixed Rate Loan (the "Agreed Interest Rate") and any interest received by the Assignee in excess of the Agreed Interest Rate shall be remitted to the Assignor. In the event interest for the period from the Effective Date to but not including the Payment Date is not paid by the Borrower with respect to any 60 66 Fixed Rate Loan sold by the Assignor to the Assignee hereunder, the Assignee shall pay to the Assignor interest for such period on the portion of such Fixed Rate Loan sold by the Assignor to the Assignee hereunder at the applicable rate provided by the Credit Agreement. In the event a prepayment of any Fixed Rate Loan which is existing on the Payment Date and assigned by the Assignor to the Assignee hereunder occurs after the Payment Date but before the end of the Interest Period applicable to such Fixed Rate Loan, the Assignee shall remit to the Assignor the excess of the prepayment penalty paid with respect to the portion of such Fixed Rate Loan assigned to the Assignee hereunder over the amount which would have been paid if such prepayment penalty was calculated based on the Agreed Interest Rate. The Assignee will also promptly remit to the Assignor (i) any principal payments received from the Agent with respect to Fixed Rate Loans prior to the Payment Date and (ii) any amounts of interest on Loans and Reimbursement Obligations and fees received from the Agent which relate to the portion of the Loans and participations in Facility Letters of Credit assigned to the Assignee hereunder for periods prior to the Effective Date, in the case of Floating Rate Loans or participations in Facility Letters of Credit, or the Payment Date, in the case of Fixed Rate Loans, and not previously paid by the Assignee to the Assignor.* In the event that either party hereto receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto. 5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a fee on each day on which a payment of interest or facility or letter of credit fees is made under the Credit Agreement with respect to the amounts assigned to the Assignee hereunder (other than a payment of interest or facility fees for the period prior to the Effective Date or, in the case of Fixed Rate Loans, the Payment Date, which the Assignee is obligated to deliver to the Assignor pursuant to Section 4 hereof). The amount of such fee shall be the difference between (i) the interest or fee, as applicable, paid with respect to the amounts assigned to the Assignee hereunder and (ii) the interest or fee, as applicable, which would have been paid with respect to the amounts assigned to the Assignee hereunder if each interest rate was of 1% less than the interest rate paid by the Borrower or if the facility fee was of 1% less than the facility fee paid by the Borrower, as applicable. In addition, the Assignee agrees to pay % of the processing fee required to be paid to the Agent in connection with this Assignment Agreement. 6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S LIABILITY. The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for (i) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Loan Document, including without limitation, documents granting the Agent, the Issuer, the Assignor and the other Lenders a security interest in assets of the Borrower, any Subsidiary Co-Applicant or any guarantor, (ii) any representation, warranty or statement made in or in connection with any of the Loan Documents, (iii) the financial condition or creditworthiness of the Borrower, any Subsidiary Co-Applicant or any guarantor, (iv) the performance of or compliance with any of the terms or provisions of any of the Loan Documents, (v) inspecting any of the Property, books or records of the Borrower, (vi) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Credit Extensions or (vii) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Credit Extensions or the Loan Documents. 7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (ii) agrees that it will, independently and - --------------- * Each Assignor may insert its standard payment provisions in lieu of the payment terms included in this Exhibit. 61 67 without reliance upon the Agent, the Issuer, the Assignor or any other Lender and based on such documents and information at it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, (iii) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender, (v) agrees that its payment instructions and notice instructions are as set forth in the attachment to Schedule 1, (vi) confirms that none of the funds, monies, assets or other consideration being used to make the purchase and assumption hereunder are "plan assets" as defined under ERISA and that its rights, benefits and interests in and under the Loan Documents will not be "plan assets" under ERISA, and (vii) attaches the forms prescribed by the Internal Revenue Service of the United States certifying that the Assignee is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes. 8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor harmless against any and all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee's non-performance of the obligations assumed under this Assignment Agreement. 9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the rights which are assigned to the Assignee hereunder to any Person, provided that (i) any such subsequent assignment does not violate any of the terms and conditions of the Loan Documents or any law, rule, regulation, order, writ, judgment, injunction or decree and that any consent required under the terms of the Loan Documents has been obtained and (ii) unless the prior written consent of the Assignor is obtained, the Assignee is not thereby released from its obligations to the Assignor hereunder, if any remain unsatisfied, including, without limitation, its obligations under Sections 4, 5 and 8 hereof. 10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate Commitment occurs between the date of this Assignment Agreement and the Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall remain the same, but the dollar amount purchased shall be recalculated based on the reduced Aggregate Commitment. 11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of Assignment embody the entire agreement and understanding between the parties hereto and supersede all prior agreements and understandings between the parties hereto relating to the subject matter hereof. 12. GOVERNING LAW. This Assignment Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Illinois. 13. NOTICES. Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof, the addresses of the parties hereto (until notice of a change is delivered) shall be the addresses set forth in the attachment to Schedule 1. 62 68 IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement by their duly authorized officers as of the date first above written. NAME OF ASSIGNOR By: Print Name: Title: NAME OF ASSIGNEE By: Print Name: Title: 63 69 SCHEDULE 1 TO ASSIGNMENT AGREEMENT 1. Description and Date of Credit Agreement: Revolving Credit Agreement dated as of September 24, 1997 among Yellow Corporation, the Lenders parties thereto and The First National Bank of Chicago, as Agent and as Issuer 2. Date of Assignment Agreement: , 19 3. Amounts (As of Date of Item 2 above): a. Total of Commitment (Loans and Facility Letter of Credit Participations)* under Credit Agreement $ b. Assignee's Percentage of Facility purchased under the Assignment Agreement** % c. Amount of Assigned Share in Facility purchased under the Assignment Agreement $ 4. Assignee's Aggregate (Loan Amount and Amount of Participations in Facility Letters of Credit)** Commitment Amount Purchased Hereunder: $ 5. Proposed Effective Date:
Accepted and Agreed: NAME OF ASSIGNOR NAME OF ASSIGNEE By: By: Title: Title:
ATTACHMENT TO SCHEDULE 1 TO ASSIGNMENT AGREEMENT Attach Assignee's Administrative Information Sheet, which must include notice address for the Assignor and the Assignee - --------------- * If a Commitment has been terminated, insert outstanding Loans and participations in Facility Letters of Credit in place of Commitment ** Percentage taken to 10 decimal places 64 70 EXHIBIT "I" TO ASSIGNMENT AGREEMENT NOTICE OF ASSIGNMENT , 19 To: Yellow Corporation The First National Bank of Chicago, as Agent From: NAME OF ASSIGNOR (the "Assignor") NAME OF ASSIGNEE (the "Assignee") 1. We refer to that Revolving Credit Agreement (the "Credit Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined herein shall have the meanings attributed to them in the Credit Agreement. 2. This Notice of Assignment (this "Notice") is given and delivered to the Borrower and the Agent pursuant to Section 12.3.2 of the Credit Agreement. 3. The Assignor and the Assignee have entered into an Assignment Agreement, dated as of , 19 (the "Assignment"), pursuant to which, among other things, the Assignor has sold, assigned, delegated and transferred to the Assignee, and the Assignee has purchased, accepted and assumed from the Assignor the percentage interest specified in Item 3 of Schedule 1 of all outstandings, rights and obligations under the Credit Agreement, including, without limitation, such interest in the Assignor's Commitment (if applicable) and the Loans owing to the Assignor relating to such facilities. The Effective Date of the Assignment shall be the later of the date specified in Item 5 of Schedule 1 to the Assignment ("Schedule 1") or two Business Days (or such shorter period as agreed to by the Agent) after this Notice of Assignment and any fee required by Section 12.3.2 of the Credit Agreement have been delivered to the Agent, provided that the Effective Date shall not occur if any condition precedent agreed to by the Assignor and the Assignee has not been satisfied. 4. The Assignor and the Assignee hereby give to the Borrower and the Agent notice of the assignment and delegation referred to herein. The Assignor will confer with the Agent before the date specified in Item 5 of Schedule 1 to determine if the Assignment Agreement will become effective on such date pursuant to Section 3 hereof, and will confer with the Agent to determine the Effective Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor shall notify the Agent if the Assignment Agreement does not become effective on any proposed Effective Date as a result of the failure to satisfy the conditions precedent agreed to by the Assignor and the Assignee. At the request of the Agent, the Assignor will give the Agent written confirmation of the satisfaction of the conditions precedent. 5. The Assignor or the Assignee shall pay to the Agent on or before the Effective Date the processing fee of $3,500 required by Section 12.3.2 of the Credit Agreement. 6. The Assignor and the Assignee request and direct that the Agent prepare and cause the Borrower to execute and deliver new Notes or, as appropriate, replacement notes, to the Assignor and the Assignee. The Assignor and, if applicable, the Assignee each agree to deliver to the Agent the original Notes received by it from the Borrower upon its receipt of new Notes in the appropriate amount. 7. The Assignee advises the Agent that notice and payment instructions are set forth in the attachment to Schedule 1. 8. The Assignee hereby represents and warrants that none of the funds, monies, assets or other consideration being used to make the purchase pursuant to the Assignment are "plan assets" as defined under ERISA and that its rights, benefits, and interests in and under the Loan Documents will not be "plan assets" under ERISA. 65 71 9. Each party consenting to the Assignment in the space indicated below hereby releases the Assignor from any obligations to it which have been assigned to the Assignee. NAME OF ASSIGNOR NAME OF ASSIGNEE By: By: Print Name: Title: Print Name: Title: ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO BY NAME OF AGENT BY YELLOW CORPORATION By: By: Print Name: Print Name: Title: Title:
66 72 SCHEDULE "1" POTENTIAL LIABILITIES NOT PROVIDED FOR IN FINANCIAL STATEMENTS None. 67 73 SCHEDULE "2" YELLOW CORPORATION SUBSIDIARIES Jurisdiction of
NAME INCORPORATION/DATE - ---- ------------------ I. Direct Subsidiaries of Yellow Corporation (incorporated 1/28/83 in Delaware) Yellow Consolidation Services, Inc. ........................ Delaware (7/30/92) Yellow Logistics Services, Inc. ............................ Delaware (7/29/91) Yellow Services, Inc. ...................................... Delaware (5/12/92) OPK Insurance Co., Ltd. .................................... Bermuda (8/11/92) WestEx, Inc. ............................................... Arizona (9/24/80) Yellow Freight System, Inc. ................................ Indiana (12/22/50) Preston Corporation ........................................ Maryland (3/02/83) II. Direct Subsidiaries of Yellow Freight System, Inc. Yellow Freight Mexicana S.A. de C.V. ....................... Mexico (12/21/90) Yellow Freight System of British Columbia, Inc. ............ Brit. Col., Canada (4/18/73) Yellow Freight System of Ontario, Inc. ..................... Ontario, Canada (5/20/41) Yellow Redevelopment Corporation ........................... Missouri (12/22/63) Yellow Relocation Services ................................. Kansas (3/20/89) Mission Supply Co. ......................................... Kansas (11/03/80) Yellow Receivables Corporation ............................. Delaware (7/23/96) III. Direct Subsidiaries of Preston Corporation Preston Trucking Company, Inc. ............................. Maryland (8/27/32) Saia Motor Freight Line, Inc. .............................. Louisiana (6/08/59) 151 Tire, Inc. ............................................. Maryland (12/1/95)
All subsidiaries are 100% owned by the respective owners shown above except for Yellow Freight Mexicana S.A. de C.V., which is 99.9% owned by Yellow Freight System, Inc. 68 74 SCHEDULE "3" NOTICES OF LEGAL OR REGULATORY VIOLATIONS None. 69 75 SCHEDULE "4" SPECIFIED LIENS IN EXISTENCE ON THE CLOSING DATE (SECTION 6.13(IX) LIENS) None. 70 EX-99.(B)(2) 11 RECEIVABLES PURCHASE AGREEMENT 1 EXHIBIT (b)(2) $150,000,000 RECEIVABLES PURCHASE AGREEMENT DATED AS OF AUGUST 2, 1996 AMONG YELLOW RECEIVABLES CORPORATION, AS SELLER AND FALCON ASSET SECURITIZATION CORPORATION AND THE FINANCIAL INSTITUTIONS PARTY HERETO, AS INVESTORS AND THE FIRST NATIONAL BANK OF CHICAGO, AS AGENT 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES Section 1.1. Purchase Facility........................................... 1 Section 1.2. Making Incremental Purchases................................ 1 Section 1.3. Selection of Tranche Periods and Discount Rates............. 2 Section 1.4. Percentage Evidenced by Receivable Interests................ 2 Section 1.5. Dividing or Combining Receivable Interests.................. 2 Section 1.6. Reinvestment Purchases and Pre-Liquidation Settlements...... 3 Section 1.7. Liquidation Settlement Procedures........................... 3 Deemed Collection of Dilutions and Certain Other Recourse Section 1.8. Obligations................................................. 4 Section 1.9. Discount; Payments and Computations, Etc.................... 4 Maximum Aggregate of Receivable Interests; Grant of Security Section 1.10. Interest.................................................... 5 Section 1.11. Seller's Extinguishment..................................... 5 Section 1.12. Servicer Fee................................................ 5 ARTICLE II LIQUIDITY FACILITY Section 2.1. Transfer to Investors....................................... 5 Section 2.2. Transfer Price Reduction Discount........................... 5 Section 2.3. Payments to FALCON.......................................... 6 Section 2.4. Limitation on Commitment to Purchase from FALCON............ 6 Section 2.5. Defaulting Investors........................................ 6 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1. Seller Representations and Warranties....................... 6 (a) Corporate Existence and Power........................... 6 (b) No Conflict............................................. 6 (c) Governmental Authorization.............................. 7 (d) Binding Effect.......................................... 7 (e) Accuracy of Information................................. 7 (f) Use of Proceeds......................................... 7 (g) Title to Receivables.................................... 7 (h) Good Title; Perfection.................................. 7 (i) Places of Business...................................... 7 (j) Collection Banks; etc................................... 8 (k) Material Adverse Effect................................. 8 (l) Names................................................... 8 (m) Actions, Suits.......................................... 8 (n) Credit and Collection Policies.......................... 8 (o) Payments to Originator.................................. 8 (p) Ownership of the Seller................................. 8 (q) Not an Investment Company............................... 8
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PAGE ---- (r) Purpose................................................. 8 (s) Net Receivables Balance................................. 9 (t) Contracts Governing Excluded Receivables................ 9 Section 3.2. Investor Representations and Warranties..................... 9 (a) Existence and Power..................................... 9 (b) No Conflict............................................. 9 (c) Governmental Authorization.............................. 9 (d) Binding Effect.......................................... 9 ARTICLE IV CONDITIONS OF PURCHASES Section 4.1. Conditions Precedent to Initial Purchase.................... 9 Section 4.2. Conditions Precedent to All Purchases and Reinvestments..... 9 ARTICLE V COVENANTS Section 5.1. Affirmative Covenants of Seller............................. 10 (a) Financial Reporting..................................... 10 (i) Annual Reporting....................................... 10 (ii) Quarterly Reporting................................... 10 (iii) Compliance Certificate................................ 10 (iv) Copies of Notices, Etc. under Sale Agreement and Other Transaction Documents....................................... 10 (v) Change in Credit and Collection Policy................. 10 (vi) Replacement of Contracts Applicable to Excluded Receivables........................................... 10 (vii) Other Information..................................... 10 (b) Notices................................................. 11 (i) Servicer Defaults or Potential Servicer Defaults....... 11 (ii) Judgment.............................................. 11 (iii) Litigation............................................ 11 (iv) Termination Date under Sale Agreement................. 11 (v) Downgrade.............................................. 11 (vi) Labor Strike, Walkout, Lockout or Slowdown............ 11 (c) Compliance with Laws.................................... 11 (d) Audits.................................................. 11 (e) Keeping and Marking of Records and Books................ 11 (f) Compliance with Invoices and Credit and Collection Policy.................................................. 12 (g) Purchase of Receivables from the Originator............. 12 (h) Ownership Interest...................................... 12 (i) Payment to the Originator............................... 12 (j) Performance and Enforcement of Sale Agreement........... 12 (k) Purchasers' Reliance.................................... 12 (l) Collections............................................. 13 (m) Minimum Net Worth....................................... 14 (n) Accounting for Collections of Excluded Receivables...... 14
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PAGE ---- Section 5.2. Negative Covenants of Seller................................ 14 (a) Name Change, Offices, Records and Books of Accounts..... 14 (b) Change in Payment Instructions to Obligors.............. 14 (c) Modifications to Invoices and Credit and Collection Policy.................................................. 15 (d) Sales, Liens, Etc....................................... 15 (e) Nature of Business; Other Agreements; Other Indebtedness............................................ 15 (f) Amendments to Sale Agreement............................ 15 (g) Amendments to Corporate Documents....................... 15 (h) Merger.................................................. 15 (i) Restricted Junior Payments.............................. 16 ARTICLE VI ADMINISTRATION AND COLLECTION Section 6.1. Designation of Servicer..................................... 16 Section 6.2. Duties of Servicer.......................................... 16 Section 6.3. Collection Notices.......................................... 17 Section 6.4. Responsibilities of the Seller.............................. 17 Section 6.5. Reports..................................................... 17 ARTICLE VII SERVICER DEFAULTS Section 7.1. Servicer Defaults........................................... 18 ARTICLE VIII INDEMNIFICATION Section 8.1. Indemnities by the Seller................................... 18 Section 8.2. Increased Cost and Reduced Return........................... 20 Section 8.3. Costs and Expenses Relating to this Agreement............... 20 ARTICLE IX THE AGENT Section 9.1. Authorization and Action.................................... 21 Section 9.2. Delegation of Duties........................................ 21 Section 9.3. Exculpatory Provisions...................................... 21 Section 9.4. Reliance by Agent........................................... 21 Section 9.5. Non-Reliance on Agent and Other Purchasers.................. 22 Section 9.6. Reimbursement and Indemnification........................... 22 Section 9.7. Agent in its Individual Capacity............................ 22 Section 9.8. Successor Agent............................................. 22 ARTICLE X ASSIGNMENTS; PARTICIPATIONS Section 10.1. Assignments................................................. 22 Section 10.2. Participations.............................................. 23
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PAGE ---- ARTICLE XI MISCELLANEOUS Section 11.1. Waivers and Amendments...................................... 23 Section 11.2. Notices..................................................... 24 Section 11.3. Ratable Payments............................................ 24 Section 11.4. Protection of Ownership Interests of the Purchasers......... 24 Section 11.5. Confidentiality............................................. 25 Section 11.6. Bankruptcy Petition......................................... 25 Section 11.7. Limitation of Liability..................................... 25 Section 11.8. CHOICE OF LAW............................................... 26 Section 11.9. CONSENT TO JURISDICTION..................................... 26 Section 11.10. WAIVER OF JURY TRIAL........................................ 26 Section 11.11. Integration; Survival of Terms.............................. 26 Section 11.12. Counterparts; Severability.................................. 26 Section 11.13. First Chicago Roles......................................... 26 Section 11.14. Characterization............................................ 27
EXHIBITS AND SCHEDULES EXHIBIT I DEFINITIONS EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS; FEDERAL EMPLOYER IDENTIFICATION NUMBER EXHIBIT III LOCKBOXES; COLLECTION ACCOUNTS; CONCENTRATION ACCOUNTS; AND DEPOSITARY ACCOUNTS EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT EXHIBIT VI CREDIT AND COLLECTION POLICY EXHIBIT VII FORM OF INVOICE(S) EXHIBIT VIII FORM OF MONTHLY REPORT EXHIBIT IX FORM OF PURCHASE NOTICE EXHIBIT X CONTRACTS APPLICABLE TO EXCLUDED CONTRACTS SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED TO THE AGENT ON OR PRIOR TO THE INITIAL PURCHASE
iv 6 THIS RECEIVABLES PURCHASE AGREEMENT, dated as of August 2, 1996, is by and among Yellow Receivables Corporation, a Delaware corporation (the "SELLER"), the Investors (hereinafter defined), Falcon Asset Securitization Corporation ("FALCON") and The First National Bank of Chicago, as Agent. Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in EXHIBIT I hereto. PRELIMINARY STATEMENTS The Seller desires to transfer and assign Receivable Interests to the Purchasers from time to time. FALCON may, in its absolute and sole discretion, purchase Receivable Interests from the Seller from time to time. The Investors shall, at the request of the Seller, purchase Receivable Interests from time to time. In addition, the Investors have agreed to provide a liquidity facility to FALCON. The First National Bank of Chicago has been requested and is willing to act as Agent on behalf of FALCON and the Investors in accordance with the terms hereof. ARTICLE I AMOUNTS AND TERMS OF THE PURCHASES Section 1.1. Purchase Facility. (a) Upon the terms and subject to the conditions hereof, the Seller may, at its option, sell and assign Receivable Interests to the Agent for the benefit of the Purchasers. FALCON may, at its option, instruct the Agent to purchase on behalf of FALCON, or if FALCON shall decline to purchase, unless the Seller cancels such purchase in accordance with SECTION 1.2, the Agent shall purchase on behalf of the Investors, Receivable Interests from time to time during the period from the date hereof to but not including the Facility Termination Date. The Seller hereby assigns, transfers and conveys to the Agent for the benefit of the relevant Purchaser(s), and the Agent hereby acquires, all of the Seller's now owned and existing and hereafter arising or acquired right, title and interest in and to the Receivable Interests. (b) The Seller may, upon at least 30 Business Days' notice to the Agent, terminate in whole or reduce in part, ratably among the Investors, the unused portion of the Purchase Limit; PROVIDED THAT each partial reduction of the Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple thereof. Section 1.2. Making Incremental Purchases. The Seller shall provide the Agent with a purchase notice, in substantially the form of EXHIBIT IX hereto (each, a "PURCHASE NOTICE"), at least one (1) Business Day prior to the initial purchase of Receivable Interests hereunder and at least three (3) Business Days prior to each subsequent Incremental Purchase. Each Purchase Notice shall, except as set forth below, be irrevocable and shall specify the requested Purchase Price (which shall not be less than $3,000,000) and date of such Incremental Purchase, together with the duration of the initial Tranche Period and the initial Discount Rate related thereto. Following receipt of a Purchase Notice, the Agent will determine whether FALCON agrees to make the purchase. If FALCON declines to make a proposed purchase, the Agent shall promptly advise the Seller and the Servicer of such fact, and (i) the Seller may thereupon cancel the Purchase Notice or (ii) in the absence of such a cancellation, the Incremental Purchase of the Receivable Interests will be made by the Investors. On the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set forth in ARTICLE IV, FALCON or each Investor, as applicable, shall deposit to the Facility Account, in immediately available funds, no later than 12:00 noon (Chicago time), an amount equal to (i) in the case of FALCON, the aggregate Purchase Price of each Receivable Interest FALCON is then purchasing or (ii) in the case of an Investor, such Investor's Pro Rata Share of the aggregate Purchase Price of each of the Receivable Interests the Investors are purchasing. 7 Section 1.3. Selection of Tranche Periods and Discount Rates. (a) Each Receivable Interest shall at all times have an associated amount of Capital, a Discount Rate and Tranche Period applicable to it. Not less than $3,000,000 of Capital may be allocated to any single Receivable Interest. The Seller shall request Discount Rates and Tranche Periods for the Receivable Interests of the Purchasers. For the Receivable Interests of FALCON, the Seller may select the CP Rate, with the concurrence of the Agent, or the Base Rate; for the Receivable Interests of the Investors, the Seller may select the LIBOR Rate or the Base Rate. The Seller shall by 9:00 a.m. (Chicago time): (i) at least three (3) Business Days prior to the expiration of any then existing Tranche Period with respect to which the LIBOR Rate is being requested as a new Discount Rate, (ii) at least one (1) Business Day prior to the expiration of any then existing Tranche Period with respect to which the CP Rate is being requested as a new Discount Rate, and (iii) at least one (1) Business Day prior to the expiration of any Tranche Period with respect to which the Base Rate is being requested as a new Discount Rate, give the Agent irrevocable notice of the new Tranche Period and Discount Rate for the Receivable Interest associated with such expiring Tranche Period. The Agent shall, promptly following its knowledge thereof, advise the Seller in any instance if the Tranche Period selected by the Seller at any time is not acceptable to FALCON or the Investors, as applicable. If the Seller fails to request timely a Discount Rate and/or a Tranche Period for any Receivable Interest pursuant to the terms of this SECTION 1.3, or the Seller and the Agent fail to agree on an acceptable duration for any Tranche Period, the Discount Rate shall be the CP Rate (if FALCON is the applicable Purchaser) or the Base Rate, in the Agent's sole discretion, and the applicable Tranche Period shall be a period of one Business Day commencing on the day requested in the Purchase Notice or the last day of the then expiring Tranche Period for such Receivable Interest, as applicable. Until the Seller gives notice to the Agent of another Discount Rate, the initial Discount Rate for any Receivable Interest transferred to the Investors pursuant to SECTION 2.1 shall be the Base Rate. (b) If any Investor notifies the Agent that it has determined that funding its Pro Rata Share of the Receivable Interests of the Investors at a LIBOR Rate would violate any applicable law, rule, regulation, or directive of any governmental or regulatory authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Receivable Interests at such LIBOR Rate are not available or (ii) such LIBOR Rate does not accurately reflect the cost of acquiring or maintaining a Receivable Interest at such LIBOR Rate, then the Agent shall suspend the availability of such LIBOR Rate and require the Seller to select a new Discount Rate for any Receivable Interest accruing Discount at such LIBOR Rate. Section 1.4. Percentage Evidenced by Receivable Interests. Each Receivable Interest shall be initially computed on its date of purchase. Thereafter, until its Liquidation Day, each Receivable Interest shall be automatically recomputed (or deemed to be recomputed) on each day prior to its Liquidation Day. The variable percentage represented by any Receivable Interest as computed (or deemed recomputed) as of the close of business on the day immediately preceding its Liquidation Day shall remain constant at all times after such Liquidation Day. Section 1.5. Dividing or Combining Receivable Interests. The Seller or the Agent may, upon notice to and consent by the other received not later than the applicable time required under SECTION 1.3(A) prior to the end of a Tranche Period for any Receivable Interest, take any of the following actions with respect to such Receivable Interest: (i) divide the Receivable Interest into two or more Receivable Interests having aggregate Capital equal to the Capital of such divided Receivable Interest, (ii) combine the Receivable Interest with another Receivable Interest with a Tranche Period ending on the same day, creating a new Receivable Interest having Capital equal to the Capital of the two Receivable Interests combined or (iii) combine the Receivable Interest with a Receivable Interest to be purchased on such day by such Purchaser, creating a new Receivable Interest having Capital equal to the Capital of the two Receivable Interests combined, PROVIDED THAT a Receivable Interest of FALCON may not be combined with a Receivable Interest of the Investors. 2 8 Section 1.6. Reinvestment Purchases and Pre-Liquidation Settlements. At any time that any Collection is received by the Servicer after the initial purchase, or any other Incremental Purchase, of a Receivable Interest hereunder and on or prior to the Liquidation Day of such Receivable Interest: (a) the Servicer (at any time the Servicer is not the Seller, the Originator or an Affiliate thereof) may retain a portion of such Collection in payment of any Servicer Fee then due and owing; (b) thereafter, the Servicer is hereby directed to pay a portion of the remainder, if any, of such Collection to the Agent in payment of any accrued and unpaid (i) Discount and (ii) fees under the Fee Letter, in each case that are due and owing on such day; and (c) thereafter, except to the extent the Seller wishes to reduce the outstanding amount of Capital of a Receivable Interest (in which case the provisions of SECTION 1.7 shall be applicable to the portion of such Receivable Interest represented by such reduction in Capital), the Seller hereby requests and the Purchasers hereby agree to make, simultaneously with such receipt, a reinvestment (each, a "REINVESTMENT") with that portion of the remainder of such Collection that is part of such Receivable Interest such that after giving effect to such Reinvestment, the amount of the Capital of such Receivable Interest immediately after any such receipt and corresponding Reinvestment shall be equal to the amount of the Capital immediately prior to such receipt; (d) thereafter, the Servicer (if the Servicer is the Seller, the Originator or an Affiliate thereof) may retain a portion of the remainder, if any, of such Collection to payment of the Servicer Fee; (e) thereafter, if requested by the Seller, any remaining portion of such Collection may be applied to making an additional Incremental Purchase in accordance with the terms of this Agreement; and (f) finally, any remaining portion of such Collection shall be paid to the Seller, as the Seller may direct; PROVIDED, HOWEVER, that in the event that such remaining portion follows an election by the Seller not to reinvest Collections pursuant to SECTION 1.6(C), the Servicer shall continue to hold, in trust in the Facility Account, the Seller's undivided percentage interest of such Collection which is not reinvested until the earlier to occur of (i) establishment by the Seller or the Servicer or subservicer of a software modification which enables the identification of Collections related to Excluded Receivables separate and apart from the Receivables and demonstration by the Seller that it is entitled to receive such remaining portion as a Collection in respect of an Excluded Receivable, or (ii) a subsequent Incremental Purchase in at least the amount of such un-reinvested funds. Section 1.7. Liquidation Settlement Procedures. On the Liquidation Day of a Receivable Interest and on each day thereafter, the Servicer shall set aside and hold in trust for (a) the holder of such Receivable Interest, the percentage evidenced by such Receivable Interest of Collections received on such day, and (b) for the Seller, all remaining Collections. On the last day of each Tranche Period of a Receivable Interest after the occurrence of its Liquidation Day: (i) until the Seller or the Servicer is able to identify which Collections relate to Excluded Receivables, the Servicer shall continue to hold, in trust in the Facility Account, the Seller's undivided percentage interest of all Collections in respect of such Receivable Interest which are received on and after the Liquidation Day of a Receivable Interest, (ii) once the Seller or the Servicer is able to identify which Collections relate to Excluded Receivables, the Servicer shall remit to the Seller the Seller's undivided percentage interest of all Collections in respect of such Receivable Interest which are received on and after the Liquidation Day of a Receivable Interest and all Collections in respect of Excluded Receivables, and (iii) the Servicer shall remit to the Agent's account the amounts set aside pursuant to the preceding clause (a), together with any remaining amounts set aside pursuant to SECTION 1.8 prior to such day, but not to exceed the sum of (A) the accrued Discount for such Receivable Interest, (B) the Capital of such Receivable Interest, (C) the aggregate of all fees and other amounts then owed hereunder or under the Fee Letter by Seller to the Agent or any of the Purchasers, and (D) the accrued Servicer Fee for such Receivable Interest. If there shall be insufficient funds on deposit for the Servicer to 3 9 distribute funds to the Agent in payment in full of the amounts described in the foregoing clause (iii), the Servicer shall distribute such funds: first, to reimbursement of the Agent's costs of collection and enforcement of this Agreement, second, to the Servicer (if the Servicer is not the Seller, the Originator or an Affiliate thereof) in payment of all accrued Servicer Fee in respect of such Receivable Interest, third, in payment of all accrued Discount for such Receivable Interest, fourth, in reduction of the Capital of the Receivable Interests, fifth, in payment of all fees under the Fee Letter and other amounts, if any, then due and owing hereunder to the Agent or the Purchasers, and sixth, to the Servicer (if the Seller, the Originator or an Affiliate thereof is the Servicer) in payment of all accrued Servicer Fee in respect of such Receivable Interest. Collections allocated to the Receivable Interests of the Investors shall be shared ratably by the Investors in accordance with their Pro Rata Shares. Collections applied to the payment of fees, expenses, Discount and all other amounts payable by the Seller to or for the account of the Agent and the Purchasers hereunder shall be allocated ratably among the Agent and the Purchasers in accordance with such amounts owing to each of them. To the extent Collections are available for such purpose in accordance with the foregoing, the accrued Servicer Fee in respect of each Receivable Interest shall be remitted to the Servicer. Following the date on which the Aggregate Unpaids are reduced to zero, the Servicer shall pay to Seller any remaining Collections set aside and held by the Servicer pursuant to this SECTION 1.7. Section 1.8. Deemed Collection of Dilutions and Certain Other Recourse Obligations. If on any day the Outstanding Balance of, or Finance Charges in respect of, a Receivable is either (a) reduced as a result of any defective or rejected services, any cash discount or any adjustment by the Seller or the Originator or (b) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation. If on any day any of the representations or warranties in SECTION 3.1 (other than SECTION 3.1(K)) are no longer true with respect to a Receivable, the Seller shall be deemed to have received on such day a Collection of such Receivable in full. If the Seller receives any Collections or is deemed to receive Collections pursuant to this SECTION 1.8 or otherwise, the Seller shall immediately pay such Collections or deemed Collections to the Servicer and, at all times prior to such payment, such Collections shall be held in trust by the Seller for the exclusive benefit of the Purchasers and the Agent. Section 1.9. Discount; Payments and Computations, Etc. (a) Discount shall accrue for each Receivable Interest for each day occurring during the Tranche Period for such Receivable Interest. On the last day of each Tranche Period, the Seller shall pay to the Agent an amount equal to the accrued and unpaid Discount for such Tranche Period. (b) Notwithstanding any limitation on recourse contained in this Agreement, the Seller shall pay to the Agent, for the account of the relevant Purchasers, the fees set forth in the Fee Letter, all amounts payable as Discount, all amounts payable pursuant to ARTICLE VIII, if any, all Servicer costs, if any, payable pursuant to SECTION 6.2 and on demand therefor, any Early Collection Fee. If any Person fails to pay any amount when due hereunder, such Person agrees to pay, on demand, the Default Fee. (c) All amounts to be paid or deposited by any Person hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (Chicago time) on the day when due in immediately available funds; if such amounts are payable to a Purchaser they shall be paid to the Agent, for the account of such Purchaser, at the account specified in SECTION 1.9(D) until otherwise notified by the Agent. The Agent shall, in accordance with its customary practice, provide invoices from time to time to the Seller in respect of Discount and other fees and expenses payable by the Seller hereunder. In the event the Seller shall at any time fail to pay any amount when due hereunder, the Agent may, on notice to the Seller, 4 10 debit the Facility Account for such amount. All computations of Discount and per annum fees hereunder and under the Fee Letter shall be made on the basis of a year of 360 days for the actual number of days elapsed (including the first but excluding the last day). All per annum fees shall be payable monthly in arrears. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day. (d) All amounts payable to the Agent or any Purchaser under this Agreement or the Fee Letter shall be made in immediately available funds to FMSD Clearing Account no. 7321-7683 at The First National Bank of Chicago, in Chicago, Illinois, ABA No. 071000013, Reference: Yellow Receivables Corporation, until otherwise notified by the Agent. Section 1.10. Maximum Aggregate of Receivable Interests; Grant of Security Interest. The Seller shall ensure that the aggregate Receivable Interests of the Purchasers shall at no time exceed 100%. If, on any day, the aggregate Receivable Interests of the Purchasers exceeds 100%, the Seller shall immediately pay to the Agent an amount to be applied to reduce the Capital of the Receivable Interests, such that after giving effect to such payment the aggregate of the Receivable Interest equals or is less than 100%. Such amount shall be applied to the reduction of the Capital of the Receivable Interests ratably in accordance with the percentages of the Receivable Interests. Any amounts received by the Investors pursuant to the preceding sentence shall be applied ratably in accordance with their Pro Rata Shares. The Seller hereby grants to the Agent for the ratable benefit of the Purchasers a security interest in all of its interest in the Receivables, Related Security, Collections and proceeds thereof to secure payment of the Aggregate Unpaids, including its indemnity obligations under ARTICLE VIII and all other obligations owed hereunder to the Purchasers. Section 1.11. Seller's Extinguishment. The Seller shall have the right, on not less than thirty (30) Business Days' written notice to the Agent, at any time following the reduction of the Capital to a level that is less than 5.0% of the original Purchase Limit, to repurchase from the Purchasers all, but not less than all, of the then outstanding Receivable Interests. The purchase price in respect thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase shall be without representation, warranty or recourse of any kind by, on the part of, or against any Purchaser or the Agent. Section 1.12. Servicer Fee. To the extent of available Collections in accordance with the priorities set forth in SECTIONS 1.6 and 1.7, on the first Business Day of each month while any Aggregate Unpaids are outstanding, the Servicer shall be paid a servicing and collection fee (the "SERVICER FEE") equal to 2.0% per annum on the average daily amount of Capital during the calendar month (or portion thereof) then most recently ended. The Servicer Fee shall be computed for actual days elapsed on the basis of a year consisting of 365 days. ARTICLE II LIQUIDITY FACILITY Section 2.1. Transfer to Investors. Each Investor hereby agrees, subject to SECTION 2.4, that immediately upon written notice from FALCON delivered on or prior to the Liquidity Termination Date, it shall acquire by assignment from FALCON, without recourse or warranty, its Pro Rata Share of one or more of the Receivable Interests of FALCON as specified by FALCON. Each Investor shall promptly pay to the Agent at an account designated by the Agent, for the benefit of FALCON, its Acquisition Amount. Unless an Investor has notified the Agent that it does not intend to pay its Acquisition Amount, the Agent may assume that such payment has been made and may, but shall not be obligated to, make the amount of such payment available to FALCON in reliance upon such assumption. FALCON hereby sells and assigns to the Agent for the ratable benefit of the Investors, and the Agent hereby purchases and assumes from FALCON, effective upon the receipt by FALCON of the FALCON Transfer Price, the Receivable Interests of FALCON which are the subject of any transfer pursuant to this ARTICLE II. Section 2.2. Transfer Price Reduction Discount. If the Adjusted Liquidity Price is included in the calculation of the FALCON Transfer Price for any Receivable Interest, each Investor agrees that the Agent 5 11 shall pay to FALCON the Reduction Percentage of any Discount received by the Agent with respect to such Receivable Interest. Section 2.3. Payments to FALCON. In consideration for the reduction of the FALCON Transfer Prices by the FALCON Transfer Price Reductions, effective only at such time as the aggregate amount of the Capital of the Receivable Interests of the Investors equals the FALCON Residual, each Investor hereby agrees that the Agent shall not distribute to the Investors and shall immediately remit to FALCON any Discount, Collections or other payments received by it to be applied pursuant to the terms hereof or otherwise to reduce the Capital of the Receivable Interests of the Investors. Section 2.4. Limitation on Commitment to Purchase from FALCON. Notwithstanding anything to the contrary in this Agreement, no Investor shall have any obligation to purchase any Receivable Interest from FALCON, pursuant to SECTION 2.1 or otherwise, if: (i) FALCON shall have voluntarily commenced any proceeding or filed any petition under any bankruptcy, insolvency or similar law seeking the dissolution, liquidation or reorganization of FALCON or taken any corporate action for the purpose of effectuating any of the foregoing; or (ii) involuntary proceedings or an involuntary petition shall have been commenced or filed against FALCON by any Person under any bankruptcy, insolvency or similar law seeking the dissolution, liquidation or reorganization of FALCON and such proceeding or petition shall have not been dismissed. Section 2.5. Defaulting Investors. If one or more Investors defaults in its obligation to pay its Acquisition Amount pursuant to SECTION 2.1 (each such Investor shall be called a "DEFAULTING INVESTOR" and the aggregate amount of such defaulted obligations being herein called the "FALCON TRANSFER PRICE DEFICIT"), then upon notice from the Agent, each Investor other than the Defaulting Investors (a "NON-DEFAULTING INVESTOR") shall promptly pay to the Agent, in immediately available funds, an amount equal to the lesser of (x) such Non-Defaulting Investor's proportionate share (based upon the relative Commitments of the Non-Defaulting Investors) of the FALCON Transfer Price Deficit and (y) the unused portion of such Non-Defaulting Investor's Commitment. A Defaulting Investor shall forthwith upon demand pay to the Agent for the account of the Non-Defaulting Investors all amounts paid by each Non-Defaulting Investor on behalf of such Defaulting Investor, together with interest thereon, for each day from the date a payment was made by a Non-Defaulting Investor until the date such Non-Defaulting Investor has been paid such amounts in full, at a rate per annum equal to the Federal Funds Effective Rate plus 0.5% for the two Business Days and 2.0% per annum thereafter. In addition, without prejudice to any other rights that FALCON may have under applicable law, each Defaulting Investor shall pay to FALCON forthwith upon demand, the difference between such Defaulting Investor's unpaid Acquisition Amount and the amount paid with respect thereto by the non-Defaulting Investors, together with interest thereon, for each day from the date of the Agent's request for such Defaulting Investor's Acquisition Amount pursuant to SECTION 2.1 until the date the requisite amount is paid to FALCON in full, at a rate per annum equal to the Federal Funds Effective Rate plus 2.0%. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1. Seller Representations and Warranties. The Seller hereby represents and warrants to the Purchasers that: (a) Corporate Existence and Power. The Seller is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted. (b) No Conflict. The execution, delivery and performance by the Seller of this Agreement and each other Transaction Document, and the Seller's use of the proceeds of purchases made hereunder, are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is 6 12 a party or by which it or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on assets of the Seller or its Subsidiaries (except created hereunder); and no transaction contemplated hereby requires compliance with any bulk sales act or similar law. This Agreement and each other Transaction Document has been duly authorized, executed and delivered by the Seller. (c) Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Seller of the Transaction Documents. (d) Binding Effect. The Transaction Documents constitute the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally. (e) Accuracy of Information. All information heretofore furnished by the Seller or any of its Affiliates to the Agent or the Purchasers for purposes of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by the Seller or any of its Affiliates to the Purchasers will be, true and accurate in every material respect, on the date such information is stated or certified and does not and will not contain any material misstatement of fact or omit to state a material fact or any fact necessary to make the statements contained therein not misleading. (f) Use of Proceeds. No proceeds of any purchase hereunder will be used (i) for a purpose which violates, or would be inconsistent with, Regulation G, T, U or X promulgated by the Board of Governors of the Federal Reserve System from time to time or (ii) to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended. (g) Title to Receivables. Each Receivable has been purchased by the Seller from the Originator in accordance with the terms of the Sale Agreement, and the Seller has thereby irrevocably obtained all legal and equitable title to, and has the legal right to sell and encumber, such Receivable, its Collections and the Related Security. Each such Receivable has been transferred to the Seller free and clear of any Adverse Claim. Without limiting the foregoing, there has been duly filed all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions (or any comparable law) to perfect the Seller's ownership interest in such Receivable. (h) Good Title; Perfection. Immediately prior to each purchase hereunder, the Seller shall be the legal and beneficial owner of the Receivables and Related Security with respect thereto, free and clear of any Adverse Claim, except as created by the Transaction Documents. This Agreement is effective to, and shall, upon each purchase hereunder, transfer to the relevant Purchaser or Purchasers (and such Purchaser or Purchasers shall acquire from the Seller) a valid and perfected first priority undivided percentage ownership interest in each Receivable existing or hereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, except as created by the Transactions Documents. (i) Places of Business. The principal places of business and chief executive office of the Seller and the offices where the Seller keeps all its Records are located at the address(es) listed on EXHIBIT II or such other locations notified to the Agent in accordance with SECTION 5.2(A) in jurisdictions where all action required by SECTION 5.2(A) has been taken and completed. The Seller's Federal Employer Identification Number is correctly set forth on EXHIBIT II. 7 13 (j) Collection Banks; etc. Except as otherwise notified to the Agent in accordance with SECTION 5.2(B): (i) the Seller has instructed, or has caused the Originator to instruct, all Obligors to pay all Collections directly to a segregated lock-box identified on EXHIBIT III hereto, (ii) in the case of all proceeds remitted to any such lock-box which is now or hereafter established, such proceeds will be deposited directly by the applicable Collection Bank into a concentration account or a depository account listed on EXHIBIT III, (iii) the names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts of the Seller at each Collection Bank, are listed on EXHIBIT III, and (iv) each lock-box and Collection Account to which Collections are remitted shall be subject to a Collection Account Agreement that is then in full force and effect. In the case of lock-boxes and Collection Accounts identified on EXHIBIT III which were established by the Originator or by any Person other than the Seller, exclusive dominion and control thereof has been transferred to the Seller. The Seller has not granted any Person, other than the Agent as contemplated by this Agreement, dominion and control of any lock-box or Collection Account, or the right to take dominion and control of any lock-box or Collection Account at a future time or upon the occurrence of a future event. (k) Material Adverse Effect. Since April 30, 1996, no event has occurred which would have a Material Adverse Effect. (l) Names. In the past five years, the Seller has not used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement. (m) Actions, Suits. There are no actions, suits or proceedings pending, or to the best of the Seller's knowledge, threatened, against or affecting the Seller or the Originator, or any of the respective properties of the Seller or the Originator, in or before any court, arbitrator or other body, which are reasonably likely to (i) adversely affect the collectibility of a material portion of the Receivables, (ii) materially adversely affect the financial condition of the Seller or the Originator or (iii) materially adversely affect the ability of the Seller or the Originator to perform its obligations under the Transaction Documents. Neither the Seller nor the Originator is in default with respect to any order of any court, arbitrator or governmental body. (n) Credit and Collection Policies. With respect to each Receivable, each of the Originator, the Seller and the Servicer has complied in all material respects with the Credit and Collection Policy. (o) Payments to Originator. With respect to each Receivable transferred to the Seller, the Seller has given reasonably equivalent value to the Originator in consideration for such transfer of such Receivable and the Related Security with respect thereto under the Sale Agreement and such transfer was not made for or on account of an antecedent debt. No transfer by the Originator of any Receivable is or may be voidable under any Section of the Bankruptcy Reform Act of 1978 (11 U.S.C. Section 101 et seq.), as amended. (p) Ownership of the Seller. The Originator owns, directly or indirectly, 100% of the issued and outstanding capital stock of the Seller. Such capital stock is validly issued, fully paid and nonassessable and there are no options, warrants or other rights to acquire securities of the Seller. (q) Not an Investment Company. The Seller is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended from time to time, or any successor statute. (r) Purpose. The Seller has determined that, from a business viewpoint, the purchase of Receivables and related interests from the Originator under the Sale Agreement, and the sale of Receivable Interests to the Purchasers and the other transactions contemplated herein, are in the best interest of the Seller. 8 14 (s) Net Receivables Balance. Both before and after giving effect to each Incremental Purchase and Reinvestment, the Net Receivables Balance equals or exceeds the product of (i) 100% + the Aggregate Reserve Percentage, multiplied by (ii) the aggregate Capital outstanding. (t) Contracts Governing Excluded Receivables. Aside from contracts applicable to Approved Offset Receivables, the only contracts listed on EXHIBIT X hereto are contracts of the Originator that (i) by virtue of their confidentiality provisions would preclude the Originator from disclosing to any Person information that is included on an Invoice, and/or (ii) by their terms preclude the assignment to any Person of any of the Originator's rights to payment thereunder (notwithstanding the provisions of Section 9-318 of the UCC). Section 3.2. Investor Representations and Warranties. Each Investor hereby represents and warrants to the Agent and FALCON that: (a) Existence and Power. Such Investor is a corporation or a banking association duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all corporate power to perform its obligations hereunder. (b) No Conflict. The execution, delivery and performance by such Investor of this Agreement are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any Adverse Claim on its assets. This Agreement has been duly authorized, executed and delivered by such Investor. (c) Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Investor of this Agreement. (d) Binding Effect. This Agreement constitutes the legal, valid and binding obligation of such Investor enforceable against such Investor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors' rights generally. ARTICLE IV CONDITIONS OF PURCHASES Section 4.1. Conditions Precedent to Initial Purchase. The initial purchase of a Receivable Interest under this Agreement is subject to the conditions precedent that (a) the Agent shall have received on or before the date of such purchase those documents listed on SCHEDULE A hereto, and (b) the Agent shall have been paid all fees required to be paid on such date pursuant to the terms of the Fee Letter. Section 4.2. Conditions Precedent to All Purchases and Reinvestments. Each purchase of a Receivable Interest (other than pursuant to SECTION 2.1) and each Reinvestment shall be subject to the further conditions precedent that: (a) in the case of each such purchase, the Servicer shall have delivered to the Agent on or prior to the date of such purchase, in form and substance satisfactory to the Agent, all Monthly Reports as and when due under SECTION 6.5; (b) on the date of each such purchase or Reinvestment, the following statements shall be true both before and after giving effect to such purchase or Reinvestment (and acceptance of the proceeds of such 9 15 purchase or Reinvestment shall be deemed a representation and warranty by the Seller that such statements are then true): (i) the representations and warranties set forth in SECTION 3.1 are correct on and as of the date of such purchase or Reinvestment as though made on and as of such date; PROVIDED, HOWEVER, that the representation and warranty set forth in SECTION 3.1(K) need only be true and correct as of the date of the initial purchase of Receivable Interests hereunder; (ii) no event has occurred, or would result from such purchase or Reinvestment, that will constitute a Servicer Default, and no event has occurred and is continuing, or would result from such purchase or Reinvestment, that would constitute a Potential Servicer Default; and (iii) the Liquidity Termination Date shall not have occurred, the aggregate Capital of all Receivable Interests shall not exceed the Purchase Limit and the aggregate Receivable Interests shall not exceed 100%; and (c) the Agent shall have received such other approvals, opinions or documents as it may reasonably request. ARTICLE V COVENANTS Section 5.1. Affirmative Covenants of Seller. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby covenants, individually and in its capacity as Servicer, that: (a) Financial Reporting. The Seller will maintain a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to the Agent: (i) Annual Reporting. Within 90 days after the close of each of its fiscal years, financial statements for such fiscal year certified in a manner acceptable to the Agent by the Chief Financial Officer of the Seller. (ii) Quarterly Reporting. Within 45 days after the close of the first three quarterly periods of each of its fiscal years, balance sheets as at the close of each such period and statements of income and retained earnings and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its Chief Financial Officer. (iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance certificate in substantially the form of EXHIBIT IV signed by the Seller's Chief Financial Officer and dated the date of such annual financial statement or such quarterly financial statement, as the case may be. (iv) Copies of Notices, Etc. under Sale Agreement and Other Transaction Documents. Forthwith upon its receipt of any notice, request for consent, financial statements of the Originator, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent or FALCON, copies of the same. (v) Change in Credit and Collection Policy. At least 30 days prior to the effectiveness of any material change in or amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice indicating such change or amendment. (vi) Replacement of Contracts Applicable to Excluded Receivables. Not less than once every 3 months while any Excluded Receivables exist (or more frequently if the Seller desires), an updated version of EXHIBIT X hereto. (vii) Other Information. Such other information (including non-financial information) as the Agent or any Purchaser may from time to time reasonably request. 10 16 (b) Notices. The Seller will notify the Agent in writing of any of the following immediately upon learning of the occurrence thereof, describing the same and, if applicable, the steps being taken with respect thereto: (i) Servicer Defaults or Potential Servicer Defaults. The occurrence of each Servicer Default or each Potential Servicer Default, by a statement of the Chief Financial Officer of the Seller; (ii) Judgment. The entry of any judgment or decree against the Seller; (iii) Litigation. The institution of any litigation, arbitration proceeding or governmental proceeding against the Seller or to which the Seller becomes party; (iv) Termination Date under Sale Agreement. The declaration by the Originator of the "TERMINATION DATE" under the Sale Agreement; (v) Downgrade. Any downgrade in the rating of any Indebtedness of the Seller, the Originator or Yellow Corporation by Standard & Poor's Ratings Group or by Moody's Investors Service, Inc., setting forth the Indebtedness affected and the nature of such change; and/or (vi) Labor Strike, Walkout, Lockout or Slowdown. The commencement or threat of any labor strike, walkout, lockout or concerted labor slowdown which prevents, or could reasonably be likely to prevent, pick-ups, shipments and/or deliveries by the Originator (collectively, "LABOR ACTIONS"). (c) Compliance with Laws. The Seller will comply in all material respects with all applicable laws, rules, regulations, orders writs, judgments, injunctions, decrees or awards to which it may be subject. (d) Audits. The Seller will furnish to the Agent from time to time such information with respect to it and the Receivables as the Agent may reasonably request. The Seller shall, from time to time during regular business hours as requested by the Agent upon reasonable notice, permit the Agent, or its agents or representatives (and shall cause the Originator to permit the Agent or its agents or representatives) (i) to examine and make copies of and abstracts from all Records in the possession or under the control of the Seller or the Originator relating to Receivables and the Related Security, including, without limitation, the related Invoices, and (ii) to visit the offices and properties of the Seller or the Originator for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to the Seller's or the Originator's financial condition or the Receivables and the Related Security or the Seller's performance hereunder, or the Originator's performance under any of the other Transaction Documents, or the Seller's or the Originator's performance under the Invoices with any of the officers or employees of the Seller or the Originator having knowledge of such matters. (e) Keeping and Marking of Records and Books. (i) The Seller will, and will cause the Originator to, maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Receivables (including, without limitation, records adequate to permit the immediate identification of each new Receivable and all Collections of and adjustments to each existing Receivable). The Seller will, and will cause the Originator to, give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. (ii) The Seller will, and will cause the Originator to, (a) on or prior to the date hereof, mark its master data processing records and other books and records relating to the Receivable Interests with a legend, acceptable to the Agent, describing the Receivable Interests and (b) upon the request of the Agent: (A) mark each Invoice with a legend describing the Receivable Interests and (B) deliver to the Agent all Invoices (including, without limitation, all multiple originals of any such Invoice) relating to the Receivables. 11 17 (f) Compliance with Invoices and Credit and Collection Policy. The Seller will, and will cause the Originator to, timely and fully (i) perform and comply with all provisions, covenants and other promises required to be observed by it under the Invoices (other than bills of lading) related to the Receivables, and (ii) comply in all material respects with any bills of lading included in the Invoices and with the Credit and Collection Policy. The Seller will, and will cause the Originator to, pay when due any taxes payable in connection with the Receivables. (g) Purchase of Receivables from the Originator. With respect to each Receivable purchased under the Sale Agreement, the Seller shall (or shall cause the Originator to) take all actions necessary to vest legal and equitable title to such Receivable and the Related Security irrevocably in the Seller, including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions (or any comparable law) to perfect the Seller's interest in such Receivable and such other action to perfect, protect or more fully evidence the interest of the Seller as the Agent may reasonably request. (h) Ownership Interest. The Seller shall take all necessary action to establish and maintain a valid and perfected first priority undivided percentage ownership interest in the Receivables and the Related Security and Collections with respect thereto, to the full extent contemplated herein, in favor of the Agent and the Purchasers, including, without limitation, taking such action to perfect, protect or more fully evidence the interest of the Agent and the Purchasers hereunder as the Agent may reasonably request. (i) Payment to the Originator. With respect to any Receivable purchased by the Seller from the Originator, such sale shall be effected under, and in strict compliance with the terms of, the Sale Agreement, including, without limitation, the terms relating to the amount and timing of payments to be made to the Originator in respect of the purchase price for such Receivable. (j) Performance and Enforcement of Sale Agreement. The Seller shall timely perform the obligations required to be performed by the Seller, and shall vigorously enforce the rights and remedies accorded to the Seller, under the Sale Agreement. The Seller shall take all actions to perfect and enforce its rights and interests (and the rights and interests of the Purchasers and the Agents, as assignees of the Seller) under the Sale Agreement as the Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in the Sale Agreement. (k) Purchasers' Reliance. The Seller acknowledges that the Purchasers are entering into the transactions contemplated by this Agreement in reliance upon the Seller's identity as a legal entity that is separate from the Originator. Therefore, from and after the date of execution and delivery of this Agreement, the Seller shall take all reasonable steps including, without limitation, all steps that the Agent or any Purchaser may from time to time reasonably request to maintain the Seller's identity as a separate legal entity and to make it manifest to third parties that the Seller is an entity with assets and liabilities distinct from those of the Originator and any Affiliates thereof and not just a division of the Originator. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, the Seller shall: (i) conduct its own business in its own name and require that all full-time employees of the Seller, if any, identify themselves as such and not as employees of the Originator (including, without limitation, by means of providing appropriate employees with business or identification cards identifying such employees as the Seller's employees); (ii) compensate all employees, consultants and agents directly, from the Seller's bank accounts, for services provided to the Seller by such employees, consultants and agents and, to the extent any employee, consultant or agent of the Seller is also an employee, consultant or agent of the Originator, allocate the compensation of such employee, consultant or agent between the Seller and the Originator on a basis which reflects the services rendered to the Seller and the Originator; 12 18 (iii) clearly identify its offices (by signage or otherwise) as its offices and, if such office is located in the offices of the Originator, the Seller shall lease such office at a fair market rent; (iv) have a separate telephone number, which will be answered only in its name and separate stationery, invoices and checks in its own name; (v) conduct all transactions with the Originator (including, without limitation, any delegation of its obligations hereunder as Servicer) strictly on an arm's-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between the Seller and the Originator on the basis of actual use to the extent practicable and, to the extent such allocation is not practicable, on a basis reasonably related to actual use; (vi) at all times have at least two members of its Board of Directors (each, an "INDEPENDENT DIRECTOR") who are not at such time, and have not have been at any time during the preceding five years (A) a director, officer, employee or affiliate of Yellow Corporation or any of its subsidiaries or affiliates, or (B) the beneficial owner at the time of such individual's appointment as an Independent Director or at any time thereafter while serving as an Independent Director, of five percent (5%) of the outstanding common shares of Yellow Corporation having general voting rights; provided, however, that a director who otherwise meets the description of Independent Director as set forth herein shall not be disqualified from serving as an Independent Director of the Seller if he or she is also a director of another corporation that is an Affiliate of Yellow Corporation with a certificate of incorporation substantially similar to the certificate of incorporation of the Seller; (vii) observe all corporate formalities as a distinct entity, and ensure that all corporate actions relating to (A) the selection, maintenance or replacement of the Independent Directors, (B) the dissolution or liquidation of the Seller or (C) the initiation of participation in, acquiescence in or consent to any bankruptcy, insolvency, reorganization or similar proceeding involving the Seller, are duly authorized by unanimous vote of its Board of Directors (including the Independent Directors); (viii) maintain the Seller's books and records separate from those of the Originator and otherwise readily identifiable as its own assets rather than assets of the Originator; (ix) prepare its financial statements separately from those of the Originator and insure that any consolidated financial statements of the Originator or any Affiliate thereof that include the Seller and which are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that the Seller is a separate corporate entity and that its assets will be available first and foremost to satisfy the claims of the creditors of the Seller; (x) except as herein specifically otherwise provided, not commingle funds or other assets of the Seller with those of the Originator and not maintain bank accounts or other depository accounts to which the Originator is an account party, into which the Originator makes deposits or from which the Originator has the power to make withdrawals; (xi) not permit the Originator to pay any of the Seller's operating expenses (except pursuant to allocation arrangements that comply with the requirements of this SECTION 5.1(K)); (xii) not permit the Seller to be named as an insured on the insurance policy covering the property of the Originator or enter into an agreement with the holder of such policy whereby in the event of a loss in connection with such property, proceeds are paid to the Seller; and (xiii) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion issued by Skadden, Arps, Slate, Meagher & Flom, as counsel for the Seller, in connection with the closing or initial purchase under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true and correct in all material respects at all times. (l) Collections. The Seller shall instruct all Obligors, or cause the Originator to instruct, all Obligors to pay all Collections directly to a segregated lock-box or other Collection Account listed on 13 19 EXHIBIT III, each of which is subject to a Collection Account Agreement. In the case of payments remitted to any such lock-box, the Seller shall cause all proceeds from such lock-box to be deposited directly by a Collection Bank into a Collection Account listed on EXHIBIT III, which is subject to a Collection Account Agreement. The Seller shall maintain exclusive dominion and control (subject to the terms of this Agreement) to each such Collection Account. In the case of any Collections received by the Seller or the Originator, the Seller shall remit (or shall cause the Originator to remit) such Collections to a Collection Account not later than the Business Day immediately following the date of receipt of such Collections, and, at all times prior to such remittance, the Seller shall itself hold (or, if applicable, shall cause the Originator to hold) such Collections in trust, for the exclusive benefit of the Purchasers and the Agent. In the case of any remittances received by the Seller in any such Collection Account that shall have been identified, to the satisfaction of the Servicer, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Seller shall promptly remit such items to the Person identified to it as being the owner of such remittances. From and after the date the Agent delivers to any of the Collection Banks a Collection Notice pursuant to SECTION 6.3, the Agent may request that the Seller, and the Seller thereupon promptly shall and shall direct the Originator to, direct all Obligors on Receivables to remit all payments thereon to a new depositary account (the "NEW CONCENTRATION ACCOUNT") specified by the Agent and, at all times thereafter the Seller shall not deposit or otherwise credit, and shall not permit the Originator or any other Person to deposit or otherwise credit to the New Concentration Account any cash or payment item other than Collections. Alternatively, the Agent may request that the Seller, and the Seller thereupon promptly shall, direct all Persons then making remittances to any Collection Account listed on EXHIBIT III which remittances are not payments on Receivables to deliver such remittances to a location other than an account listed on EXHIBIT III. (m) Minimum Net Worth. The Seller shall at all times maintain total assets which exceed its total liabilities by not less than 3% of the Outstanding Balance of the Receivables at such time. (n) Accounting for Collections of Excluded Receivables. As soon as practicable and in any event not later than October 31, 1996, the Seller shall (or shall require the Originator to) implement a modification to its accounting systems which enables the Seller (and/or the Originator as subservicer) to identify and track Collections in respect of the Excluded Receivables separately from the Collections in respect of the Receivables. Section 5.2. Negative Covenants of Seller. Until the date on which the Aggregate Unpaids have been indefeasibly paid in full, the Seller hereby covenants, individually and in its capacity as Servicer, that: (a) Name Change, Offices, Records and Books of Accounts. The Seller will not change its name, identity or corporate structure (within the meaning of Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief executive office or any office where Records are kept unless it shall have: (i) given the Agent at least 45 days prior notice thereof and (ii) delivered to the Agent all financing statements, instruments and other documents requested by the Agent in connection with such change or relocation. (b) Change in Payment Instructions to Obligors. The Seller will not add or terminate any bank as a Collection Bank from those listed in EXHIBIT III, or make any change in its instructions to Obligors regarding payments to be made to the Seller or payments to be made to any lock-box, Collection Account or Collection Bank, unless the Agent shall have received, at least fifteen (15) Business Days before the proposed effective date therefor: (i) written notice of such addition, termination or change, and (ii) with respect to the addition of a lock-box, Collection Account or Collection Bank, an executed account agreement and an executed Collection Account Agreement from such Collection Bank relating thereto; 14 20 PROVIDED, HOWEVER, that the Seller may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing lock-box or Collection Account that is subject to a Collection Account Agreement then in effect. (c) Modifications to Invoices and Credit and Collection Policy. The Seller will not make any change to the Credit and Collection Policy which would be reasonably likely to adversely affect the collectibility of any material portion of the Receivables or decrease the credit quality of any newly created Receivables. Except as provided in SECTION 6.2(C), the Seller, acting as Servicer or otherwise, will not extend, amend or otherwise modify the terms of any Receivable or any Invoice related thereto other than in accordance with the Credit and Collection Policy. (d) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Excluded Receivable or any Receivable, Related Security or Collections, or upon or with respect to any Invoice under which any Receivable arises, or any lock-box or Collection Account or assign any right to receive income in respect thereof (other than, in each case, the creation of the interests therein in favor of the Agent and the Purchasers provided for herein), and the Seller shall defend the right, title and interest of the Agent and the Purchasers in, to and under any of the foregoing property, against all claims of third parties claiming through or under the Seller or the Originator. (e) Nature of Business; Other Agreements; Other Indebtedness. The Seller shall not engage in any business or activity of any kind or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking other than the transactions contemplated and authorized by this Agreement and the Sale Agreement. Without limiting the generality of the foregoing, the Seller shall not create, incur, guarantee, assume or suffer to exist any indebtedness or other liabilities, whether direct or contingent, other than: (i) the incurrence of obligations under this Agreement, (ii) the incurrence of obligations, as expressly contemplated in the Sale Agreement, to make payment to the Originator thereunder for the purchase of Receivables from the Originator under the Sale Agreement, and (iii) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated in SECTION 5.1(K) of this Agreement. In the event the Seller shall at any time borrow a "REVOLVING LOAN" under the Sale Agreement, the obligations of the Seller in connection therewith shall be subordinated to the obligations of the Seller to the Purchasers and the Agent under this Agreement, on such terms as shall be satisfactory to the Agent. (f) Amendments to Sale Agreement. The Seller shall not, without the prior written consent of the Agent: (i) cancel or terminate the Sale Agreement, (ii) give any consent, waiver, directive or approval under the Sale Agreement, (iii) waive any default, action, omission or breach under the Sale Agreement, or otherwise grant any indulgence thereunder, or (iv) amend, supplement or otherwise modify any of the terms of the Sale Agreement. (g) Amendments to Corporate Documents. The Seller shall not amend its Certificate of Incorporation or By-Laws in any respect that would impair its ability to comply with the terms or provisions of any of the Transaction Documents, including, without limitation, SECTION 5.1(K) of this Agreement. (h) Merger. The Seller shall not merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise 15 21 contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, any Person. (i) Restricted Junior Payments. The Seller shall not make any Restricted Junior Payment if a Servicer Default or Potential Servicer Default exists or would result therefrom. ARTICLE VI ADMINISTRATION AND COLLECTION Section 6.1. Designation of Servicer. (a) The servicing, administration and collection of the Receivables shall be conducted by such Person (the "SERVICER") so designated from time to time in accordance with this SECTION 6.1. The Seller is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms of this Agreement. The Agent may at any time designate as Servicer any Person to succeed the Seller or any successor Servicer. (b) The Seller is permitted to delegate, and the Seller hereby advises the Purchasers and the Agent that it has delegated, to the Originator, as subservicer of the Servicer, certain of its duties and responsibilities as Servicer hereunder in respect of the Receivables transferred by the Originator to the Seller. Notwithstanding the foregoing, (i) the Seller shall be and remain primarily liable to the Agent and the Purchasers for the full and prompt performance of all duties and responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to deal exclusively with the Seller in matters relating to the discharge by the Servicer of its duties and responsibilities hereunder, and the Agent and the Purchasers shall not be required to give notice, demand or other communication to any Person other than the Seller in order for communication to the Servicer and its subservicer or other delegate in respect thereof to be accomplished. The Seller, at all times that it is the Servicer, shall be responsible for providing its subservicer or other delegate with any notice given under this Agreement. (c) Without the prior written consent of the Required Investors, (i) the Seller shall not be permitted to delegate any of its duties or responsibilities as Servicer to any Person other than the Originator, and then such delegation shall be limited to the activities of Servicer hereunder as the same may relate to the Receivables originated by the Originator, and (ii) no Originator shall be permitted to further delegate to any other Person any of the duties or responsibilities of the Servicer delegated to it by the Seller. If at any time the Agent shall designate as Servicer any Person other than the Seller, all duties and responsibilities theretofore delegated by the Seller to the Originator may, at the discretion of the Agent, be terminated forthwith on notice given by the Agent to the Seller. Section 6.2. Duties of Servicer. (a) The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the applicable Invoices and the Credit and Collection Policy. (b) The Servicer shall administer the Collections in accordance with the procedures described herein and in ARTICLE I. The Servicer shall set aside and hold in trust for the account of the Seller and the Purchasers their respective shares of the Collections of Receivables in accordance with SECTIONS 1.6 and 1.7. The Servicer shall upon the request of the Agent after the occurrence of a Liquidation Day, segregate, in a manner acceptable to the Agent, all cash, checks and other instruments received by it from time to time constituting Collections from the general funds of the Servicer or the Seller prior to the remittance thereof in accordance with SECTION 1.7. If the Servicer shall be required to segregate Collections pursuant to the preceding sentence, the Servicer shall segregate and deposit with a bank designated by the Agent such allocable share of Collections of Receivables set aside for the Purchasers on the first Business Day following receipt by the Servicer of such Collections, duly endorsed or with duly executed instruments of transfer. 16 22 (c) The Servicer, may, in accordance with the Credit and Collection Policy, extend the maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the Servicer may determine to be appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such extension or adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Defaulted Receivable or limit the rights of the Agent or the Purchasers under this Agreement. Notwithstanding anything to the contrary contained herein, from and after the occurrence of a Servicer Default, the Agent shall have the absolute and unlimited right to direct the Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any Related Security. (d) The Servicer shall hold in trust for the Seller and the Purchasers, in accordance with their respective interests in the Receivables, all Records that evidence or relate to the Receivables, the related Invoices and Related Security or that are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent, deliver or make available to the Agent all such Records, (x) if such demand is made at any time prior to the replacement of the Seller as Servicer hereunder, at the chief executive office of the Originator and (y) if such demand is made at any time after the replacement of the Seller as Servicer hereunder, to such location as the Agent may designate in writing. The Servicer shall, as soon as practicable following receipt thereof, turn over to the Seller (i) that portion of Collections of Receivables representing the Seller's undivided fractional ownership interest therein, less, in the event the Seller is not the Servicer, all reasonable out-of-pocket costs and expenses of the Servicer of servicing, administering and collecting the Receivables, and (ii) any cash collections or other cash proceeds received with respect to indebtedness not constituting Receivables. The Servicer shall, from time to time at the request of any Purchaser, furnish to the Purchasers (promptly after any such request) a calculation of the amounts set aside for the Purchasers pursuant to SECTION 1.7. (e) Any payment by an Obligor in respect of any indebtedness owed by it to the Seller shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor. Section 6.3. Collection Notices. The Agent is authorized at any time to date and to deliver to the Collection Banks a Collection Notice under any Collection Account Agreement. The Seller hereby transfers to the Agent for the benefit of the Purchasers, effective when the Agent delivers such notice, the exclusive ownership and control of the Collection Accounts. In case any authorized signatory of the Seller whose signature appears on a Collection Account Agreement shall cease to have such authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. The Seller hereby authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse the Seller's name on checks and other instruments representing Collections, (ii) enforce the Receivables, the related Invoices and the Related Security and (iii) take such action as shall be necessary or desirable to cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than the Seller. Section 6.4. Responsibilities of the Seller. Anything herein to the contrary notwithstanding, the exercise by the Agent and the Purchasers of their rights hereunder shall not release the Servicer or the Seller from any of their duties or obligations with respect to any Receivables or under the related Invoices. The Purchasers shall have no obligation or liability with respect to any Receivables or related Invoices, nor shall any of them be obligated to perform the obligations of the Seller. Section 6.5. Reports. On the 15th day of each month (or, if such date is not a Business Day, the next following Business Day), and at such other times as the Agent shall request, the Servicer shall prepare and forward to the Agent a Monthly Report. Promptly following any request therefor by the Agent, the Seller shall prepare and provide to the Agent a listing by Obligor of all Receivables together with an aging of such Receivables. If at any time an Approved Offset Receivable or a Supplemental Approved Offset Receivable ceases to be an Eligible Receivable because the Originator commences purchasing, on credit, goods or services 17 23 from the Obligor thereon, the Servicer shall, not later than 5 Business Days thereafter, deliver to the Agent a restated Monthly Report for the month preceding such occurrence deducting the Outstanding Balance of such Approved Offset Receivable or Supplemental Approved Offset Receivable, as the case may be, from the aggregate Outstanding Balance of Eligible Receivables previously reflected thereon. ARTICLE VII SERVICER DEFAULTS Section 7.1. Servicer Defaults. The occurrence of any one or more of the following events shall constitute a Servicer Default: (a) The Servicer or the Seller shall fail (i) to make when due any payment or deposit required hereunder, or (ii) to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (i) of this paragraph (a)) and such failure shall remain unremedied for five (5) Business Days following written notice thereof to the Servicer or the Seller, as applicable. (b) Any representation, warranty, certification or statement made by the Seller, the Servicer or the Originator in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto shall prove to have been incorrect in any material respect when made or deemed made. (c) (i) The Seller or the Servicer shall generally not pay its debts as such debts become due or shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Seller or the Servicer seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property, or (ii) the Seller or any Servicer shall take any corporate action to authorize any of the actions set forth in clause (i) above in this subsection (c). (d) As at the end of any calendar month: (i) the average of the Delinquency Ratios for each of the three consecutive calendar months then most recently ended shall exceed 4.00%; (ii) the Dilution Ratio for any calendar month shall exceed 3.25%; or (iii) the average of the Default Ratios for each of the three consecutive calendar months then most recently ended shall exceed 4.00%. (e) The Originator (i) shall fail to perform or observe any term, covenant or agreement contained in any other Transaction Document, or (ii) shall for any reason cease to transfer, or cease to have the legal capacity or otherwise be incapable of transferring, Receivables to the Seller, as purchaser under the Sale Agreement, or any "EVENT OF DEFAULT" or "POTENTIAL EVENT OF DEFAULT" shall occur under the Sale Agreement. (f) The aggregate Receivable Interests hereunder shall at any time exceed 100%. (g) A Change of Control shall occur. ARTICLE VIII INDEMNIFICATION Section 8.1. Indemnities by the Seller. Without limiting any other rights which the Agent or any Purchaser may have hereunder or under applicable law, the Seller hereby agrees to indemnify the Agent and each Purchaser and their respective officers, directors, agents and employees (each, an "INDEMNIFIED PARTY") from and against any and all damages, losses, claims, taxes, liabilities, costs, expenses and for all 18 24 other amounts payable, including reasonable attorneys' fees (which attorneys may be employees of the Agent or such Purchaser) and disbursements (all of the foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out of or as a result of this Agreement or the acquisition, either directly or indirectly, by a Purchaser of an interest in the Receivables, EXCLUDING, HOWEVER: (a) Indemnified Amounts to the extent final judgment of a court of competent jurisdiction holds such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification; (b) Indemnified Amounts to the extent the same includes losses in respect of Receivables which are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or (c) taxes imposed by the jurisdiction in which such Indemnified Party's principal executive office is located, on or measured by the overall net income of such Indemnified Party to the extent that the computation of such taxes is consistent with the Intended Characterization; PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the liability of the Seller or the Servicer or limit the recourse of the Purchasers to the Seller or Servicer for amounts otherwise specifically provided to be paid by the Seller or the Servicer under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, the Seller shall indemnify the Agent and the Purchasers for Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to the Seller or the Servicer) relating to or resulting from: (i) any representation or warranty made by the Seller, the Originator or the Servicer (or any officers of the Seller, the Originator or the Servicer) under or in connection with this Agreement, any other Transaction Document, any Monthly Report or any other information or report delivered by the Seller, the Originator or the Servicer pursuant hereto or thereto, which shall have been false or incorrect when made or deemed made; (ii) the failure by the Seller, the Originator or the Servicer to comply with any applicable law, rule or regulation with respect to any Receivable or Invoice related thereto, or the nonconformity of any Receivable or Invoice included therein with any such applicable law, rule or regulation; (iii) any failure of the Seller, the Originator or the Servicer to perform its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document; (iv) any products liability or similar claim arising out of or in connection with merchandise, insurance or services which are the subject of any Invoice; (v) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of any Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Invoice not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services; (vi) the commingling of Collections of Receivables at any time with other funds; (vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby or thereby, the use of the proceeds of a purchase, the ownership of the Receivable Interests or any other investigation, litigation or proceeding relating to the Seller or the Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby or thereby; 19 25 (viii) any inability to litigate any claim against any Obligor in respect of any Receivable as a result of such Obligor being immune from civil and commercial law and suit on the grounds of sovereignty or otherwise from any legal action, suit or proceeding; (ix) a Servicer Default described in SECTION 7.1(C); (x) the failure to vest and maintain vested in the Agent and the Purchasers, or to transfer to the Agent and the Purchasers, legal and equitable title to, and ownership of, a first priority perfected undivided percentage ownership (to the extent of the Receivable Interests contemplated hereunder) in the Receivables, the Related Security and the Collections, free and clear of any Adverse Claim; or (xi) any failure of the Seller to give reasonably equivalent value to the Originator under the Sale Agreement in consideration of the transfer by the Originator of any Receivable, or any attempt by any Person to void any such transfer under statutory provisions or common law or equitable action, including, without limitation, any provision of the Bankruptcy Code. Section 8.2. Increased Cost and Reduced Return. (a) If after the date hereof, any Funding Source shall be charged any fee, expense or increased cost on account of the adoption of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy) or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency (a "REGULATORY CHANGE"): (i) which subjects any Funding Source to any charge or withholding on or with respect to any Funding Agreement or a Funding Source's obligations under a Funding Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Funding Source of any amounts payable under any Funding Agreement (except for changes in the rate of tax on the overall net income of a Funding Source) or (ii) which imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of a Funding Source, or credit extended by a Funding Source pursuant to a Funding Agreement or (iii) which imposes any other condition the result of which is to increase the cost to a Funding Source of performing its obligations under a Funding Agreement, or to reduce the rate of return on a Funding Source's capital as a consequence of its obligations under a Funding Agreement, or to reduce the amount of any sum received or receivable by a Funding Source under a Funding Agreement or to require any payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon demand by the Agent, the Seller shall pay to the Agent, for the benefit of the relevant Funding Source, such amounts charged to such Funding Source or compensate such Funding Source for such reduction. (b) Payment of any sum pursuant to SECTION 8.2(A) shall be made by the Seller to the Agent, for the benefit of the relevant Funding Source, not later than ten (10) days after any such demand is made. A certificate of any Funding Source, signed by an authorized officer claiming compensation under this SECTION 8.2 and setting forth the additional amount to be paid for its benefit and explaining the manner in which such amount was determined shall be conclusive evidence of the amount to be paid, absent manifest error. Section 8.3. Costs and Expenses Relating to this Agreement. The Seller shall pay to the Agent and FALCON on demand all costs and out-of-pocket expenses in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder, including without limitation, the cost of FALCON's auditors auditing the books, records and procedures of the Seller, reasonable fees and out-of-pocket expenses of legal counsel for FALCON and the Agent (which such counsel may be employees of FALCON or the Agent) with respect thereto and with respect to advising FALCON and the Agent as to their respective rights and remedies under this Agreement. The Seller shall pay to the Agent on demand any and all costs and expenses of the Agent and the Purchasers, if any, including reasonable counsel fees and expenses in connection with the enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following a Servicer Default. 20 26 ARTICLE IX THE AGENT Section 9.1. Authorization and Action. Each Purchaser hereby designates and appoints First Chicago to act as its agent hereunder and under each other Transaction Document, and authorizes the Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent by the terms of this Agreement and the other Transaction Documents together with such powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for the Agent. In performing its functions and duties hereunder and under the other Transaction Documents, the Agent shall act solely as agent for the Purchasers and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Seller or any of its successors or assigns. The Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to this Agreement, any other Transaction Document or applicable law. The appointment and authority of the Agent hereunder shall terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each Purchaser hereby authorizes the Agent to execute on behalf of such Purchaser (the terms of which shall be binding on such Purchaser) each of the Uniform Commercial Code financing statements, together with such other instruments or documents determined by the Agent to be necessary or desirable in order to perfect, evidence or more fully protect the interest of the Purchasers contemplated hereunder. Section 9.2. Delegation of Duties. The Agent may execute any of its duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Section 9.3. Exculpatory Provisions. Neither the Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for any recitals, statements, representations or warranties made by the Seller contained in this Agreement, any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement, or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, or any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of the Seller to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in ARTICLE IV, or for the perfection, priority, condition, value or sufficiency or any collateral pledged in connection herewith. The Agent shall not be under any obligation to any Purchaser to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Seller. The Agent shall not be deemed to have knowledge of a Servicer Default or Potential Servicer Default unless the Agent has received notice from the Seller or a Purchaser. Section 9.4. Reliance by Agent. The Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Seller), independent accountants and other experts selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of FALCON or the Required Investors or all of the Purchasers, as applicable, as it deems appropriate and it shall first be indemnified to its satisfaction by the Purchasers, PROVIDED THAT unless and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Purchasers. The Agent shall in all cases be fully protected in acting, 21 27 or in refraining from acting, in accordance with a request of FALCON or the Required Investors or all of the Purchasers, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Purchasers. Section 9.5. Non-Reliance on Agent and Other Purchasers. Each Purchaser expressly acknowledges that neither the Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent hereafter taken, including, without limitation, any review of the affairs of the Seller, shall be deemed to constitute any representation or warranty by the Agent. Each Purchaser represents and warrants to the Agent that it has and will, independently and without reliance upon the Agent or any other Purchaser and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Seller and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto. Section 9.6. Reimbursement and Indemnification. The Investors agree to reimburse and indemnify the Agent and its officers, directors, employees, representatives and agents ratably according to their Pro Rata Shares, to the extent not paid or reimbursed by the Seller (i) for any amounts for which the Agent, acting in its capacity as Agent, is entitled to reimbursement by the Seller hereunder and (ii) for any other expenses incurred by the Agent, in its capacity as Agent and acting on behalf of the Purchasers, in connection with the administration and enforcement of this Agreement and the other Transaction Documents. Section 9.7. Agent in its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Seller or any Affiliate of the Seller as though the Agent were not the Agent hereunder. With respect to the acquisition of Receivable Interests pursuant to this Agreement, the Agent shall have the same rights and powers under this Agreement as any Purchaser and may exercise the same as though it were not the Agent, and the terms "Investor," "Purchaser," "Investors" and "Purchasers" shall include the Agent in its individual capacity. Section 9.8. Successor Agent. The Agent may, upon five days' notice to the Seller and the Purchasers, and the Agent will, upon the direction of all of the Purchasers (other than the Agent, in its individual capacity) resign as Agent. If the Agent shall resign, then the Required Investors during such five-day period shall appoint from among the Purchasers a successor agent. If for any reason no successor Agent is appointed by the Required Investors during such five-day period, then effective upon the termination of such five day period, the Purchasers shall perform all of the duties of the Agent hereunder and under the other Transaction Documents and the Seller shall make all payments in respect of the Aggregate Unpaids directly to the applicable Purchasers and for all purposes shall deal directly with the Purchasers. After the effectiveness of any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and the provisions of this ARTICLE IX and ARTICLE VIII shall continue in effect for its benefit with respect to any actions taken or omitted to be taken by it while it was Agent under this Agreement and under the other Transaction Documents. ARTICLE X ASSIGNMENTS; PARTICIPATIONS Section 10.1. Assignments. (a) The Seller and each Investor hereby agree and consent to the complete or partial assignment by FALCON of all of its rights under, interest in, title to and obligations under this Agreement to the Investors pursuant to SECTION 2.1 or to any other Person, and upon such assignment, FALCON shall be released from its obligations so assigned. Further, the Seller and each Investor hereby agree that any assignee of FALCON of this Agreement or all or any of the Receivable Interests of FALCON shall have all of the rights and benefits under this Agreement as if the term "FALCON" explicitly referred to such party, and no such assignment shall in any way impair the rights and benefits of FALCON hereunder. The Seller shall not have the right to assign its rights or obligations under this Agreement. 22 28 (b) Any Investor may at any time and from time to time assign to one or more Persons ("PURCHASING INVESTORS") all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement, in a form and substance satisfactory to the Agent (the "ASSIGNMENT AGREEMENT"), executed by such Purchasing Investor and such selling Investor. The consent of FALCON shall be required prior to the effectiveness of any such assignment. Each assignee of an Investor must have a short-term debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by Moody's Investors Service, Inc. and must agree to deliver to the Agent, promptly following any request therefor by the Agent or FALCON, an enforceability opinion in form and substance satisfactory to the Agent and FALCON. Upon delivery of the executed Assignment Agreement to the Agent, such selling Investor shall be released from its obligations hereunder to the extent of such assignment. Thereafter the Purchasing Investor shall for all purposes be an Investor party to this Agreement and shall have all the rights and obligations of an Investor under this Agreement to the same extent as if it were an original party hereto and no further consent or action by the Seller, the Purchasers or the Agent shall be required. (c) Each of the Investors agrees that in the event that it shall cease to have a short-term debt rating of A-1 or better by Standard & Poor's Corporation and P-1 by Moody's Investors Service, Inc. (an "AFFECTED INVESTOR"), such Affected Investor shall be obliged, at the request of FALCON or the Agent, to assign all of its rights and obligations hereunder to (x) another Investor or (y) another financial institution nominated by the Agent and acceptable to FALCON, and willing to participate in this Agreement through the Liquidity Termination Date in the place of such Affected Investor; provided that the Affected Investor receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Investor's Pro Rata Share of the Capital and Discount owing to the Investors and all accruing but unpaid fees and other costs and expenses payable in respect of its Pro Rata Share of the Receivable Interests. Section 10.2. Participations. Any Investor may, in the ordinary course of its business at any time sell to one or more Persons (each, a "PARTICIPANT") participating interests in its Pro Rata Share of the Receivable Interests of the Investors, its obligation to pay FALCON its Acquisition Amounts or any other interest of such Investor hereunder. Notwithstanding any such sale by an Investor of a participating interest to a Participant, such Investor's rights and obligations under this Agreement shall remain unchanged, such Investor shall remain solely responsible for the performance of its obligations hereunder, and the Seller, FALCON and the Agent shall continue to deal solely and directly with such Investor in connection with such Investor's rights and obligations under this Agreement. Each Investor agrees that any agreement between such Investor and any such Participant in respect of such participating interest shall not restrict such Investor's right to agree to any amendment, supplement, waiver or modification to this Agreement, except for any amendment, supplement, waiver or modification described in clause (i) of SECTION 11.1(B). ARTICLE XI MISCELLANEOUS Section 11.1. Waivers and Amendments. (a) No failure or delay on the part of any party hereto in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. (b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing in accordance with the provisions of this SECTION 11.1(B). FALCON, the Seller and the Agent, at the direction of the Required Investors, may enter into written modifications or waivers of any provisions of this Agreement, PROVIDED, HOWEVER, that no such modification or waiver shall: (i) without the consent of each affected Purchaser, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by the Seller or the Servicer, (B) reduce the rate or extend the time of payment of Discount (or any component thereof), (C) reduce any fee payable to the 23 29 Agent for the benefit of the Purchasers, (D) except pursuant to ARTICLE X hereof, change the amount of the Capital of any Purchaser, an Investor's Pro Rata Share or an Investor's Commitment, (E) amend, modify or waive any provision of the definition of Required Investors or this SECTION 11.1(B), (F) consent to or permit the assignment or transfer by the Seller of any of its rights and obligations under this Agreement, (G) change the definition of "ELIGIBLE RECEIVABLE," "DILUTION RESERVE", "DISCOUNT RESERVE," "LOSS RESERVE PERCENTAGE," "AGGREGATE RESERVE PERCENTAGE" or "DEFAULT RATIO," or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner which would circumvent the intention of the restrictions set forth in such clauses; or (ii) without the written consent of the then Agent, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of such Agent. Notwithstanding the foregoing, (i) without the consent of the Investors, the Agent may, with the consent of the Seller, amend this Agreement solely to add additional Persons as Investors hereunder and (ii) without the consent of the Seller, the Agent, the Required Investors and FALCON may enter into amendments to modify any of the terms or provisions of ARTICLE II, ARTICLE IX, ARTICLE X or SECTION 11.13 provided that such amendment has no negative impact upon the Seller. Any modification or waiver made in accordance with this SECTION 11.1 shall apply to each of the Purchasers equally and shall be binding upon the Seller, the Purchasers and the Agent. Section 11.2. Notices. (a) Except as provided in subsection (b) below, all communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof. All such communications and notices shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective when received through the mails, transmitted by telecopy, delivered to the telegraph company, confirmed by telex answerback or delivered to the cable company, respectively, except that communications and notices to the Agent or any Purchaser pursuant to ARTICLE I or II shall not be effective until received by the intended recipient. (b) The Seller hereby authorizes the Agent to effect purchases and Tranche Period and Discount Rate selections based on telephonic notices made by any Person whom the Agent in good faith believes to be acting on behalf of the Seller. The Seller agrees to deliver promptly to the Agent a written confirmation of each telephonic notice signed by an authorized officer of the Seller. However, the absence of such confirmation shall not affect the validity of such notice. If the written confirmation differs from the action taken by the Agent, the records of the Agent shall govern absent manifest error. Section 11.3. Ratable Payments. If any Purchaser, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser (other than payments received pursuant to SECTION 8.2 or 8.3) in a greater proportion than that received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of the Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser will hold its ratable proportion of the Aggregate Unpaids; provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Section 11.4. Protection of Ownership Interests of the Purchasers. (a) The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that the Agent may request, to perfect, protect or more fully evidence the Receivable Interests, or to enable the Agent or the Purchasers to exercise and enforce their rights and remedies hereunder. The Agent may, or the Agent may direct the Seller to, notify the Obligors of Receivables, at any time following the replacement of the Seller as Servicer and at the Seller's expense, of the ownership interests of the Purchasers under this Agreement and 24 30 may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Agent or its designee. The Seller shall, at any Purchaser's written request, withhold the identity of such Purchaser in any such notification. (b) If the Seller or the Servicer fails to perform any of its obligations hereunder, the Agent or any Purchaser may (but shall not be required to) perform, or cause performance of, such obligation; and the Agent's or such Purchaser's costs and expenses incurred in connection therewith shall be payable by the Seller (if the Servicer that fails to so perform is the Seller or an Affiliate thereof) as provided in SECTION 8.3, as applicable. The Seller and the Servicer each irrevocably authorizes the Agent at any time and from time to time in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of the Seller and the Servicer (i) to execute on behalf of the Seller as debtor and to file financing statements necessary or desirable in the Agent's sole discretion to perfect and to maintain the perfection and priority of the interest of the Purchasers in the Receivables and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing statement in such offices as the Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Purchasers in the Receivables. This appointment is coupled with an interest and is irrevocable. Section 11.5. Confidentiality. (a) The Seller shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and the other confidential proprietary information with respect to the Agent and FALCON and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that the Seller and its officers and employees may disclose such information to the Seller's external accountants and attorneys and as required by any applicable law or order of any judicial or administrative proceeding. In addition, the Seller may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law). (b) Anything herein to the contrary notwithstanding, the Seller hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Agent, the Investors or FALCON by each other, (ii) by the Agent or the Purchasers to any prospective or actual assignee or participant of any of them or (iii) by the Agent to any rating agency, Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to FALCON or any entity organized for the purpose of purchasing, or making loans secured by, financial assets for which First Chicago acts as the administrative agent and to any officers, directors, employees, outside account-ants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information in a manner consistent with the practice of the Agent for the making of such disclosures generally to Persons of such type. In addition, the Purchasers and the Agent may disclose any such nonpublic information pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law). Section 11.6. Bankruptcy Petition. The Seller, the Agent and each Investor hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all outstanding senior indebtedness of FALCON, it will not institute against, or join any other Person in instituting against, FALCON any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. Section 11.7. Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of FALCON, the Agent or any Investor, no claim may be made by the Seller, the Servicer or any other Person against FALCON, the Agent or any Investor or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; 25 31 and the Seller hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. Section 11.8. CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS. Section 11.9. CONSENT TO JURISDICTION. THE SELLER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT AND THE SELLER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST THE SELLER IN THE COURTS OF ANY OTHER JURISDICTION WHEREIN ANY ASSETS OF THE SELLER OR THE ORIGINATOR MAY BE LOCATED. ANY JUDICIAL PROCEEDING BY THE SELLER AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR A PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS. Section 11.10. WAIVER OF JURY TRIAL. THE AGENT, THE SELLER AND EACH PURCHASER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY THE SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. Section 11.11. Integration; Survival of Terms. This Agreement, the Collection Account Agreements, and the Fee Letter contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all prior oral or written understandings. The provisions of ARTICLE VIII and SECTION 11.6 shall survive any termination of this Agreement. Section 11.12. Counterparts; Severability. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 11.13. First Chicago Roles. Each of the Investors acknowledges that First Chicago and certain of its Affiliates including (First Chicago Capital Markets, Inc.) act, or may in the future act, (i) as administrative agent for FALCON, (ii) as issuing and paying agent for the Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for the Commercial Paper and (iv) to provide other services from time to time for FALCON (collectively, the "FIRST CHICAGO ROLES"). Without limiting the generality of this SECTION 11.13, each Investor hereby acknowledges and consents to any and all First Chicago Roles and agrees that in connection with any First Chicago Role, First Chicago may take, or refrain from taking, any action which it, in its discretion, deems appropriate, including, without limitation, in 26 32 its role as administrative agent for FALCON, the giving of notice to the Agent of a mandatory purchase pursuant to SECTION 2.1. Section 11.14. Characterization. (a) It is the intention of the parties hereto that each purchase hereunder shall constitute an absolute and irrevocable sale, which purchase shall provide the applicable Purchaser with the full benefits of ownership of the applicable Receivable Interest. Except as specifically provided in this Agreement, each sale of a Receivable Interest hereunder is made without recourse to the Seller; PROVIDED, HOWEVER, that (i) the Seller shall be liable to each Purchaser and the Agent for all representations, warranties and covenants made by the Seller pursuant to the terms of this Agreement, and (ii) such sale does not constitute and is not intended to result in an assumption by any Purchaser or the Agent or any assignee thereof of any obligation of the Seller or the Originator or any other person arising in connection with the Receivables, the Related Security, or the related Invoices, or any other obligations of the Seller or the Originator. (b) If the conveyance by the Seller to the Purchasers of interests in Receivables hereunder shall be characterized as a secured loan and not a sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and that the Seller shall be deemed to have granted to the Agent for the ratable benefit of the Purchasers a duly perfected security interest in all of the Seller's right, title and interest in, to and under the Receivables, the Collections, each Collection Account, all Related Security, all payments on or with respect to such Receivables, all other rights relating to and payments made in respect of the Receivables, and all proceeds of any thereof prior to all other liens on and security interests therein. After a Servicer Default, the Agent and the Purchasers shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided to a secured creditor after default under the UCC and other applicable law, which rights and remedies shall be cumulative. 27 33 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date hereof. YELLOW RECEIVABLES CORPORATION By: -------------------------------------- Name: Title: Address for Notices: Yellow Receivables Corporation 10990 Roe Avenue P.O. Box 7489 Overland Park, KS 66211 Attention: Chet Lamkey Phone: (913) 344-3325 Fax: (913) 344-4849 FALCON ASSET SECURITIZATION CORPORATION By: -------------------------------------- Authorized Signatory c/o The First National Bank of Chicago Asset-Backed Finance One First National Plaza Chicago, Illinois 60670-0079 Attention: Alison Dolin Fax: (312) 732-4487 INVESTORS: Commitment $150,000,000 THE FIRST NATIONAL BANK OF CHICAGO, as an Investor and as Agent By: -------------------------------------- Authorized Agent The First National Bank of Chicago Suite 0079, 1-21 One First National Plaza Chicago, Illinois 60670 Attention: Alison Dolin Fax: (312) 732-4487 $150,000,000 PURCHASE LIMIT 28 34 EXHIBIT I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "ACQUISITION AMOUNT" means, on the date of any purchase from FALCON of Receivable Interests pursuant to SECTION 2.1, (i) with respect to each Investor other than First Chicago, the lesser of (a) such Investor's Pro Rata Share of the FALCON Transfer Price and (b) such Investor's unused Commitment and (ii) with respect to First Chicago, the difference between (a) the FALCON Transfer Price and (b) the aggregate amount payable by all other Investors on such date pursuant to clause (i) above. "ADJUSTED LIQUIDITY PRICE" means, in determining the FALCON Transfer Price for any Receivable Interest, an amount equal to: (i) DC + (ii) RI X NDR 1 + .50 X (LRP + DRP) where: RI = the undivided percentage interest evidenced by such Receivable Interest. DC = the Deemed Collections. NDR = the Outstanding Balance of all non-Defaulted Receivables. LRP = the Loss Reserve Percentage. DRP = the Dilution Reserve Percentage. Each of the foregoing shall be determined from the most recent Monthly Report received from the Servicer. "ADVERSE CLAIM" means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person's assets or properties in favor of any other Person. "AFFILIATE" means, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the other Person, whether through ownership of voting securities, by contract or otherwise. In addition, for purposes of the definitions of "CONCENTRATION LIMIT," "ELIGIBLE RECEIVABLE" and "NET RECEIVABLES BALANCE," a Person shall be deemed to control another Person if such Person owns more than 50% of any class of voting securities (or corresponding interest in the case of non-corporate entities) of the other Person. "AGENT" means First Chicago in its capacity as agent for the Purchasers pursuant to ARTICLE IX, and not in its individual capacity as an Investor, and any successor Agent appointed pursuant to ARTICLE IX. "AGGREGATE RESERVE PERCENTAGE" means, on any date of determination, the greater of (a) the sum of the Loss Reserve Percentage, the Dilution Reserve Percentage, the Discount Reserve Percentage and the Servicer Fee Percentage, each as then in effect, and (b) 20%. "AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all accrued and unpaid Discount, Capital and all other amounts owed (whether due or accrued) hereunder or under the Fee Letter to the Agent and the Purchasers at such time, plus all accrued and unpaid Servicer Fees owed hereunder to the Servicer. "AGREEMENT" means this Receivables Purchase Agreement, as it may be amended or modified and in effect from time to time. 35 "APPROVED OFFSET RECEIVABLE" means any Receivable arising under contract numbers 39, 45, 56, 111, 146 and 152 on EXHIBIT X hereto for so long as the Originator does not purchase goods or services on credit from the Obligor thereon. "BASE RATE" means a rate per annum equal to the corporate base rate, prime rate or base rate of interest, as applicable, announced by the Reference Bank from time to time, changing when and as such rate changes; PROVIDED, HOWEVER, that from and after the occurrence of a Servicer Default, and during the continuation thereof, the "BASE RATE" shall mean a rate per annum equal to the sum of 2% per annum PLUS the corporate base rate, prime rate or base rate of interest, as applicable, announced by the Reference Bank from time to time, changing when and as such rate changes. "BUSINESS DAY" means any day on which banks are not authorized or required to close in New York, New York or Chicago, Illinois and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the LIBOR Rate, any day on which dealings in dollar deposits are carried on in the London interbank market. "CAPITAL" of any Receivable Interest means, at any time, the Purchase Price of such Receivable Interest (and after giving effect to any adjustments contemplated in SECTION 1.5), minus the sum of the aggregate amount of Collections and other payments received by the Agent which in each case are applied to reduce such Capital; PROVIDED THAT such Capital shall be restored in the amount of any Collections or payments so received and applied if at any time the distribution of such Collections or payments are rescinded or must otherwise be returned for any reason. "CHANGE OF CONTROL" means (i) any Person or Persons acting in concert shall acquire beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock of Yellow Corporation; or (ii) during any period of twelve (12) consecutive months, commencing before or after the date hereof, individuals who at the beginning of such twelve-month period were directors of the Originator shall cease for any reason to constitute a majority of the board of directors of the Originator; or (iii) the Originator shall cease to own, free and clear of all Adverse Claims, all of the outstanding shares of voting stock of the Seller on a fully diluted basis; or (iv) Yellow Corporation shall cease to own, free and clear of all Adverse Claims, all of the outstanding shares of voting stock of the Originator on a fully diluted basis. "COLLECTION ACCOUNT" means each concentration account, depositary account, lock-box account or similar account in which any Collections are collected or deposited. "COLLECTION ACCOUNT AGREEMENT" means, in the case of any actual or proposed Collection Account, an agreement in substantially the form of EXHIBIT V hereto. "COLLECTION BANK" means, at any time, any of the banks or other financial institutions holding one or more Collection Accounts. "COLLECTION NOTICE" means a notice, in substantially the form of the Collection Notice contained in EXHIBIT V hereto, from the Agent to a Collection Bank. "COLLECTIONS" means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Receivable and all amounts payable to the Purchasers by the Seller pursuant to SECTION 1.8. "COMMERCIAL PAPER" means promissory notes of FALCON issued by FALCON in the commercial paper market. "COMMITMENT" means, for each Investor, the commitment of such Investor to purchase its Pro Rata Share of Receivable Interests from (i) the Seller and (ii) FALCON, such Pro Rata Share not to exceed, in the aggregate, the amount set forth opposite such Investor's name on the signature pages of this Agreement, as such amount may be modified in accordance with the terms hereof. 36 "CONCENTRATION LIMIT" means: (a) for any Obligor and its Affiliates considered as if they were one and the same Obligor, an amount equal to (i) 3.00%, multiplied by (ii) the aggregate Outstanding Balance of all Eligible Receivables at such time; (b) at any time, for all Government Receivables, 5% of the aggregate Outstanding Balance of all Eligible Receivables at such time; and (c) at any time, for that portion of the Receivables representing Deferred Revenue, 10% of the aggregate Outstanding Balance of all Eligible Receivables at such time; PROVIDED, HOWEVER, that: (i) the Concentration Limit set forth in the preceding clause (c) will automatically become zero (A) at all times while any Labor Action remains is pending, and (B) immediately following the threat of any Labor Action and for so long as the Agent, FALCON or the Required Investors reasonably believe(s) such threat is likely to be carried out, and (ii) the Agent may from time to time designate other amounts (each, a "SPECIAL CONCENTRATION LIMIT") for any Obligor or class of Receivables, it being understood and agreed that the Agent, FALCON or the Required Investors may, upon not less than three Business Days' notice to the Seller, cancel any Special Concentration Limit. "CP RATE" means (a) if applicable, unless and until the Agent advises the Seller to the contrary, the CP Composite Rate or (b) the rate, requested by the Seller and agreed to by FALCON, equivalent to the rate (or if more than one rate, the weighted average of the rates) at which Commercial Paper having a term equal to the relevant Tranche Period may be sold by any placement agent or commercial paper dealer reasonably selected by FALCON, as agreed between each such dealer or agent and FALCON plus any and all applicable issuing and paying agent fees and commissions of placement agents and commercial paper dealers in respect of such Commercial Paper; PROVIDED, HOWEVER, that if the rate (or rates) as agreed between any such agent or dealer and FALCON is a discount rate (or rates), the "CP Rate" for such Tranche Period shall be the rate (or if more than one rate, the weighted average of the rates) resulting from FALCON's converting such discount rate (or rates) to an interest-bearing equivalent rate per annum. "CREDIT AND COLLECTION POLICY" means the Seller's credit and collection policies and practices relating to Invoices and Receivables existing on the date hereof and summarized in EXHIBIT VI hereto, as modified from time to time in accordance with this Agreement. It is understood that the Credit and Collection Policy of the Seller in respect of any Receivable shall be the credit and collection policies of the Originator thereof. To the extent the Originator shall not have comprehensively reduced to writing its credit and collection policies, the Credit and Collection Policy in respect of Receivables originated by the Originator shall be those credit and collection policies of the Originator in effect on the date hereof and disclosed to the Agent on or prior to the date hereof. "DAYS OUTSTANDING" means, at any time: (a) one-half of the sum of the beginning and ending Outstanding Balances of all Receivables during the month most recently ended, multiplied by (b) the number of days in the month most recently ended divided by the aggregate amount payable pursuant to Invoices generated during that month. "DEEMED COLLECTIONS" means the aggregate of all amounts owing to FALCON pursuant to SECTIONS 1.8 and 8.1. "DEFAULT FEE" means with respect to any amount due and payable by the Seller hereunder or under the Fee Letter, an amount equal to interest on any such amount at a rate per annum equal to 2% above the Base Rate; PROVIDED, HOWEVER, that such interest rate will not at any time exceed the maximum rate permitted by applicable law. "DEFAULT RATIO" means, at any time, a fraction (expressed as a percentage) having (a) a numerator equal to the sum of (i) the Outstanding Balance of all Receivables that remained outstanding 151 37 to 180 days after their respective initial invoice dates, plus (ii) the aggregate Outstanding Balance of Receivables that were written off as uncollectible during the month most recently ended that, if not so written off, would have been outstanding not more than 150 days after their respective invoice dates, and (b) a denominator equal to the aggregate amount payable pursuant to Invoices generated five (5) months prior to the month most recently ended. "DEFAULTED RECEIVABLE" means a Receivable: (i) as to which any payment, or part thereof, remains unpaid for 150 days or more from the original invoice date for such payment; (ii) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in SECTION 7.1(C) (as if references to the Seller therein refer to such Obligor); (iii) as to which the Obligor thereof, if a natural person, is deceased; or (iv) which has been identified by the Seller as uncollectible. "DEFERRED REVENUE" means any Receivable which has been booked as an asset on the Originator's balance sheet (prior to giving effect to any sale or contribution of such Receivable by the Originator to the Seller) but as to which delivery of the underlying goods has not yet been completed in accordance with the Invoice or underlying purchase order. "DELINQUENCY RATIO" means, as of the last day of any calendar month, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that are then Delinquent Receivables, divided by (ii) the aggregate Outstanding Balance of all Receivables as of such date. "DELINQUENT RECEIVABLE" means a Receivable (other than a Defaulted Receivable) as to which any payment, or part thereof, remains unpaid for 120 days but less than 150 days from the original invoice date for such payment. "DILUTION HORIZON RATIO" means, on any date of determination: (i) the aggregate amount of Receivables generated during the 4-month period then most recently ended, divided by (ii) the Net Receivables Balance on such date. "DILUTION RESERVE PERCENTAGE" means, on any date of determination, the percentage determined pursuant to the following formula: (2.25 x ED) + (DS - ED) X (DS/ED) X DHR where: ED = the Expected Dilution on such date; DS = the Dilution Spike as of such date; and DHR = the Dilution Horizon Ratio on such date. "DILUTION RATIO" means, as of the last day of any calendar month, a percentage equal to (i) the aggregate amount of Dilutions which occurred during such month, divided by (ii) the aggregate amount of Receivables generated by the Originator 4 months prior to such month. "DILUTION RESERVE" means, on any date, an amount equal to (i) the Dilution Reserve Percentage, multiplied by (ii) the Net Receivables Balance as of the opening of business of the Servicer on such date. "DILUTION SPIKE" means, on any date of determination, the highest Dilution Ratio for any month during the 12 months then most recently ended. "DILUTIONS" means, at any time, the aggregate amount of reductions in the Outstanding Balances of the Receivables as a result of any setoff, discount, adjustment or otherwise, other than cash Collections on account of the Receivables. "DISCOUNT" means, for each Receivable Interest for any Tranche Period: AD DR X C X --360 38 where: DR = the Discount Rate for such Receivable Interest for such Tranche Period; C = the Capital of such Receivable Interest during such Tranche Period; and AD = the actual number of days elapsed during such Tranche Period; PROVIDED, THAT no provision of this Agreement shall require the payment or permit the collection of Discount in excess of the maximum permitted by applicable law; and PROVIDED FURTHER, that Discount for any Tranche Period shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason. "DISCOUNT RATE" means the LIBOR Rate, the CP Rate or the Base Rate, as applicable; PROVIDED THAT from and after the occurrence of a Servicer Default, the Discount Rate in respect of each Receivable Interest and Tranche Period shall be the Base Rate. "DISCOUNT RESERVE" means, on any date of determination, the amount determined pursuant to the following formula: (D + F) + (C X 1.5 X DR) X 2 X DSO 360 where: D = the accrued and unpaid Discount for all Receivable Interests as of the date of determination; the aggregate amount of accrued and unpaid Servicer Fees and other fees owing pursuant to the Fee Letter as of the date of determination; C = the aggregate Capital outstanding as of the date of determination; DR = the highest Discount Rate applicable on the date of determination; and DSO = the Days Outstanding. "DISCOUNT RESERVE PERCENTAGE" means, on any date of determination, a percentage equal to (i) the Discount Reserve divided by (ii) the Net Receivables Balance. "EARLY COLLECTION FEE" means, for any Receivable Interest which has its Capital reduced, or its Tranche Period terminated prior to the date on which it was originally scheduled to end, the excess, if any, of (i) the Discount that would have accrued during the remainder of the Tranche Period subsequent to the date of such reduction or termination on the Capital of such Receivable Interest if such reduction or termination had not occurred, over (ii) the sum of (a) to the extent all or a portion of such Capital is allocated to another Receivable Interest, the Discount actually accrued during such period on such Capital for the new Receivable Interest, and (b) to the extent such Capital is not allocated to another Receivable Interest, the income, if any, actually received during such period by the holder of such Receivable Interest from investing the portion of such Capital not so allocated. In the event that the amount referred to in clause (ii) exceeds the amount referred to in clause (i), the relevant Purchaser or Purchasers agree to pay to the Seller the amount of such excess. "ELIGIBLE RECEIVABLE" means, at any time: (i) a Receivable the Obligor of which (a) if a natural person, is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States, and (b) is not an Affiliate of any of the parties hereto, (ii) a Receivable as to which no payment, or part thereof, remains unpaid for 120 days or more from the original invoice date, and such Receivable is not a Defaulted Receivable, 39 (iii) a Receivable which arises under an Invoice that requires payment within 60 days after the original invoice date therefor and has not had its payment terms extended, (iv) a Receivable which is an account receivable representing all or part of the sales price of merchandise, insurance and services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended, (v) a Receivable which is an "account" within the meaning of Section 9-106 of the UCC of all applicable jurisdictions, (vi) a Receivable which is denominated and payable only in United States dollars in the United States, (vii) a Receivable which arises under an Invoice in substantially the form of one of the form invoices set forth on EXHIBIT VII hereto or otherwise approved by the Agent in writing, which, together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable by the Seller and its assignees against such Obligor in accordance with its terms, (viii) a Receivable which arises under an Invoice which (a) does not require the Obligor under such Invoice to consent to the transfer, sale or assignment of the rights and duties of the Originator or any of its assignees under such Invoice and (b) is not subject to a confidentiality provision that would have the effect of restricting the ability of the Agent or any Purchaser to exercise its rights under this Agreement, including, without limitation, its right to review the Invoice, (ix) a Receivable which arises under an Invoice that contains an obligation to pay a specified sum of money, (x) a Receivable (A) which is not subject to any right of rescission, counterclaim, any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor or the Originator or any other Adverse Claim, and (B) which, unless such Receivable is an Approved Offset Receivable or a Supplemental Approved Offset Receivable, is not subject to any right of set-off in respect of all or any portion of the Outstanding Balance thereof then being proposed for inclusion in Net Receivables Balance as of any date, (xi) a Receivable as to which (A) at any time while any Labor Action is pending or threatened, the Originator has satisfied and fully performed all obligations on its part with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor, and (B) at any time while no such Labor Action is pending or threatened, a Receivable as to which the Originator has commenced shipment of the underlying goods in accordance with the applicable Invoice or purchase order and no further action is required to be performed by any Person with respect thereto other than the completion of shipment by the Originator and payment thereon by the applicable Obligor, (xii) a Receivable all right, title and interest to and in which has been validly transferred by the Originator directly to the Seller under and in accordance with the Sale Agreement, and the Seller has good and marketable title thereto free and clear of any Adverse Claim, (xiii) a Receivable which, together with the Invoice related thereto, was created in compliance with each, and does not contravene any, law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no part of the Invoice related thereto is in violation of any such law, rule or regulation, (xiv) a Receivable which satisfies all applicable requirements of the Credit and Collection Policy, (xv) a Receivable which was generated in the ordinary course of the Originator's business in connection with the provision of shipping services for the applicable Obligor by the Originator, 40 (xvi) that portion of a Receivable which arises solely from the sale of freight shipping and ancillary services to the related Obligor by the Originator (and not that portion which arises from the provision of services by an interline carrier), and the Originator shall have transferred such Receivable to the Seller, (xvii) a Receivable as to which the Agent has not notified the Seller that the Agent has determined that such Receivable or class of Receivables is not acceptable as an Eligible Receivable, including, without limitation, because such Receivable arises under an Invoice that is not acceptable to the Agent, and (xviii) a Receivable the Obligor of which is not the Obligor (or the Affiliate of an Obligor) in respect of Receivables of which more than 50% of the aggregate Outstanding Balance is more than 120 days past their respective invoice dates. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "EXCLUDED RECEIVABLE" means any Receivable (other than an Approved Offset Receivable) which arises under a contract listed on EXHIBIT X hereto unless and until such contract is replaced, restated, amended or otherwise modified to eliminate (i) any confidentiality provision, if applicable, that purport to preclude the Originator from disclosing information that would be included on an Invoice, and (ii) any provision that purports to preclude the assignment of any of the Originator's rights to payment thereunder. "EXPECTED DILUTION" means, on any date of determination, the average of the Dilution Ratios for the 12 months then most recently ended. "FACILITY ACCOUNT" means the Seller's Account No. 55-66681 at First Chicago. "FACILITY TERMINATION DATE" means the earliest of (i) the Liquidity Termination Date, (ii) the date the Seller shall exercise its right to repurchase the outstanding Receivable Interests pursuant to SECTION 1.11, (iii) any date selected by the Seller on not less than fifteen (15) Business Days' prior written notice to the Agent; PROVIDED THAT if any Person then acting as Agent hereunder shall have elected or been required to resign as Agent pursuant to SECTION 9.8, the Seller may elect, by written notice to the Agent given promptly following notice to the Seller of such resignation, to have the Facility Termination Date occur on the effective date of such resignation; (iv) the date of the occurrence of a Servicer Default involving the Seller and of the type described in SECTION 7.1(C), (v) any date following the occurrence, and during the continuance, of a Servicer Default which the Required Investors declare to be the Facility Termination Date, and (vi) the date on which the Originator ceases selling and/or contributing Receivables to the Seller pursuant to the Sale Agreement and/or the Subscription Agreement referred to therein. "FALCON RESIDUAL" means the sum of the FALCON Transfer Price Reductions. "FALCON TRANSFER PRICE" means, with respect to the assignment by FALCON of one or more Receivable Interests to the Agent for the benefit of the Investors pursuant to SECTION 2.1, the sum of (i) the lesser of (a) the Capital of each Receivable Interest and (b) the Adjusted Liquidity Price of each Receivable Interest and (ii) all accrued and unpaid Discount for such Receivable Interests. "FALCON TRANSFER PRICE REDUCTION" means in connection with the assignment of a Receivable Interest by FALCON to the Agent for the benefit of the Investors, the positive difference between (i) the Capital of such Receivable Interest and (ii) the Adjusted Liquidity Price for such Receivable Interest. "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating interest rate per annum equal for each day during such period equal to (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite Closing Quotations for U.S. Governments Securities; or (ii) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:30 a.m. (Chicago time) for such day on such transactions received by the Reference Bank from three federal funds brokers of recognized standing selected by it. 41 "FEE LETTER" means that certain letter agreement dated as of the date hereof between the Seller and the Agent, as it may be amended or modified and in effect from time to time. "FINANCE CHARGES" means, with respect to an Invoice, any finance, interest, late payment charges or similar charges owing by an Obligor pursuant to such Invoice. "FIRST CHICAGO" means The First National Bank of Chicago in its individual capacity and its successors. "FUNDING AGREEMENT" means this Agreement and any agreement or instrument executed by any Funding Source with or for the benefit of FALCON. "FUNDING SOURCE" means (i) any Investor or (ii) any insurance company, bank or other financial institution providing liquidity, credit enhancement or back-up purchase support or facilities to FALCON. "GOVERNMENT RECEIVABLE" means a Receivable as to which the Obligor is the United States federal government, any political subdivision thereof, or any agency of the foregoing. "INCREMENTAL PURCHASE" means a purchase of one or more Receivable Interests which increases the total outstanding Capital hereunder. "INTENDED CHARACTERIZATION" means, for income tax purposes, the characterization of the acquisition by the Purchasers of Receivable Interests as a loan or loans by the Purchasers to the Seller secured by the Receivables, the Related Security, the Collection Accounts and the Collections. "INVESTORS" means the financial institutions listed on the signature pages of this Agreement under the heading "INVESTORS" and their respective successors and assigns. "INVOICE" means, collectively, with respect to any Receivable, any and all instruments, bills of lading, invoices or other writings which evidence such Receivable or the goods underlying such Receivable. "LABOR ACTIONS" has the meaning set forth in SECTION 5.1(B)(VI). "LIBOR RATE" means the rate per annum equal to the sum of (i) (a) the rate at which deposits in U.S. Dollars are offered by the Reference Bank to first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of the relevant Tranche Period, such deposits being in the approximate amount of the Capital of the Receivable Interest to be funded or maintained, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Tranche Period plus (ii) 0.75%. The LIBOR Rate shall be rounded, if necessary, to the next higher 1/16 of 1%. "LIQUIDATION DAY" means, for any Receivable Interest, the earliest to occur of (i) any Business Day so designated by the Agent on or at any time following any day on which the conditions precedent set forth in SECTION 4.2 are not satisfied, (ii) any Business Day so designated by the Seller or FALCON after the occurrence of the Termination Date, (iii) the Business Day immediately prior to the occurrence of a Servicer Default set forth in SECTION 7.1(C), and (iv) the Business Day, if any, on which the aggregate outstanding amount of Capital of all Receivable Interests is decreased after giving effect to any Reinvestments on such day. "LIQUIDITY TERMINATION DATE" means August 1, 1999 (or if such date is not a Business Day, the next preceding Business Day. "LOSS RESERVE PERCENTAGE" means, on any date of determination, (a) 2.25, multiplied by (b) the highest of the past 12 rolling 3-month average Default Ratio, multiplied by (c) a fraction having a numerator equal to the aggregate amount of Receivables generated during the preceding 4 months and denominator equal to the Net Receivables Balance on the date of determination. "LOSS-TO-LIQUIDATION RATIO" means, for any month, a percentage equal to: (i) the amount of Receivables which were written-off as uncollectible any time during such month in accordance with the Credit and Collection Policy, divided by (ii) the aggregate amount of Collections during each such month. 42 "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the financial condition, business or operations of the Seller or the Originator, (ii) the ability of the Seller or the Originator to perform its obligations under any Transaction Document, (iii) the legality, validity or enforceability of this Agreement, any Transaction Document or any Collection Account Agreement or Collection Notice relating to a Collection Account into which a material portion of Collections are deposited, (iv) the Seller's or any Purchaser's interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any material portion of the Receivables. "MONTHLY REPORT" means a report, in substantially the form of EXHIBIT VIII hereto (appropriately completed), furnished by the Servicer to the Agent pursuant to SECTION 6.5. "NET RECEIVABLES BALANCE" means, at any time, the aggregate Outstanding Balance of all Eligible Receivables at such time, reduced by the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Concentration Limit for such Obligor. "NEW CONCENTRATION ACCOUNT" has the meaning set forth in SECTION 5.1(I). "OBLIGOR" means a Person obligated to make payments pursuant to an Invoice. "ORIGINATOR" means Yellow Freight System, Inc., an Indiana corporation. "OUTSTANDING BALANCE" of any Receivable at any time means the then outstanding principal balance thereof, and shall exclude any interest or finance charges thereon, without regard to whether any of the same shall have been capitalized. "PERSON" means an individual, partnership, corporation, association, trust, or any other entity, or organization, including a government or political subdivision or agent or instrumentality thereof. "POTENTIAL SERVICER DEFAULT" means an event which, with the passage of time or the giving of notice, or both, would constitute a Servicer Default. "PRO RATA SHARE" means, for each Investor, the Commitment of such Investor divided by the Purchase Limit, adjusted as necessary to give affect to the application of the terms of SECTION 2.5. "PURCHASE LIMIT" means the aggregate of the Commitments of the Investors hereunder (which aggregate amount is $150,000,000 as of the date of this Agreement). "PURCHASE PRICE" means, with respect to any Incremental Purchase, the least of: (a) the amount of Capital requested by the Seller, (b) the remaining unused portion of the Purchase Limit, and (c) the maximum amount by which the aggregate outstanding Capital could be increased such that after giving effect to such increase in Capital, the Net Receivables Balance will equal or exceed the product of (i) the sum of 100% plus the Aggregate Reserve Percentage, times (ii) the aggregate outstanding Capital after giving effect to such Incremental Purchase. "PURCHASER" means FALCON or an Investor, as applicable. "RECEIVABLE" means the indebtedness and other obligations owed (at the time it arises, and before giving effect to any transfer or conveyance contemplated under the Sale Agreement or hereunder) to the Originator, whether constituting an account, chattel paper, instrument or general intangible, arising in connection with the provision of freight shipping and ancillary services by the Originator and includes, without limitation, the obligation to pay any Finance Charges with respect thereto; PROVIDED, HOWEVER, that the term "RECEIVABLE" shall not include any Excluded Receivable. Indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual Invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction. 43 "RECEIVABLE INTEREST" means, at any time, an undivided percentage ownership interest associated with a designated amount of Capital, Discount Rate and Tranche Period selected pursuant to SECTION 1.3 in (i) all Receivables transferred to or otherwise acquired or held by the Seller and arising prior to the time of the most recent computation or recomputation of such undivided interest pursuant to SECTION 1.4, (ii) all Related Security with respect to such Receivables, and (iii) all Collections with respect to, and other proceeds of, such Receivables. Such undivided percentage interest shall equal: C NRB - (ARP X NRB) where: C = the Capital of such Receivable Interest. ARP = the Aggregate Reserve Percentage. NRB = the Net Receivables Balance. "RECORDS" means, with respect to any Receivable, all Invoices and other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to such Receivable, any Related Security therefor and the related Obligor. "REDUCTION PERCENTAGE" means, for any Receivable Interest acquired by the Investors from FALCON for less than the Capital of such Receivable Interest, a percentage equal to a fraction the numerator of which is the FALCON Transfer Price Reduction for such Receivable Interest and the denominator of which is the Capital of such Receivable Interest. "REFERENCE BANK" means First Chicago or such other bank as the Agent shall designate with the consent of the Seller. "REQUIRED INVESTORS" means, at any time, Investors with Commitments in excess of 66 2/3% of the Purchase Limit. "RELATED SECURITY" means, with respect to any Receivable: (i) all of the Seller's interest in the goods, the shipment of which gave rise to such Receivable, and any and all insurance contracts with respect thereto, (ii) all other security interests or liens and property subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Invoice related to such Receivable or otherwise, together with all financing statements and security agreements describing any collateral securing such Receivable, (iii) all guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Invoice related to such Receivable or otherwise, (iv) all Records related to such Receivables, (v) all of the Seller's right, title and interest in, to and under the Sale Agreement and each bill of lading, instrument, document or agreement executed in connection therewith in favor of or otherwise for the benefit of the Seller; and (vi) all proceeds of any of the foregoing. "RESERVE REQUIREMENT" means the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed against the Reference Bank in respect of Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time. 44 "RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of capital stock of the Seller now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock to the Originator, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of the Seller now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or interest, fees or other charges on or with respect to, and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to the Indebtedness evidenced by the Subordinated Note (as defined in the Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of the Seller now or hereafter outstanding, and (v) any payment of management fees by the Seller. "SALE AGREEMENT" means that certain Receivables Sale Agreement of even date herewith between the Seller, as purchaser, and the Originator, as seller, as the same may be amended, restated, supplemented or otherwise modified from time to time. "SECTION" means a numbered section of this Agreement, unless another document is specifically referenced. "SERVICER" means at any time the Person (which may be the Agent) then authorized pursuant to ARTICLE VI to service, administer and collect Receivables. "SERVICER DEFAULT" has the meaning specified in ARTICLE VII. "SERVICER FEE" has the meaning specified in SECTION 1.12. "SERVICER FEE RESERVE" means, on any date, an amount determined pursuant to the following formula: SFP X NRB X 2 X DSO 360 where: SFP = the Servicer Fee Percentage as of the date of determination; NRB = the Net Receivables Balance as of the opening of business of the Servicer on such date; and DSO = the Days Outstanding on such date of determination. "SERVICER FEE PERCENTAGE" means 2% or such other percentage as may be agreed upon between the Agent and the Servicer as an arms-length rate for the Servicer Fee. "SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "SUBSIDIARY" shall mean a Subsidiary of the Seller. "SUPPLEMENTAL APPROVED OFFSET RECEIVABLE" means any Receivable arising under contract numbers 1, 9, 22, 67, 107, 110, 116 or 187 on EXHIBIT X hereto from and after the time such Receivable is no longer an Excluded Receivable but only for so long as the Originator does not purchase goods or services on credit from the applicable Obligor. "TERMINATION DATE" means, for any Receivable Interest, the Facility Termination Date, and, solely with respect to a Receivable Interest of FALCON, that Business Day so designated by the Seller or FALCON by notice to the other. "TRANCHE PERIOD" means, with respect to any Receivable Interest: 59 45 (i) if Discount for such Receivable Interest is calculated with respect to the CP Rate, a period of days not to exceed 270 days commencing on a Business Day requested by the Seller and agreed to by FALCON; (ii) if Discount for such Receivable Interest is calculated on the basis of the LIBOR Rate, a period of one, two or three months, or such other period as may be mutually agreeable to the Agent and the Seller, commencing on a Business Day selected by the Seller or the Agent pursuant to this Agreement. Such Tranche Period shall end on the day in the applicable succeeding calendar month which corresponds numerically to the beginning day of such Tranche Period, provided, however, that if there is no such numerically corresponding day in such succeeding month, such Tranche Period shall end on the last Business Day of such succeeding month; and (iii) if Discount for such Receivable Interest is calculated on the basis of the Base Rate, a period of one Business Day. If any Tranche Period would end on a day which is not a Business Day, such Tranche Period shall end on the next succeeding Business Day, PROVIDED, HOWEVER, that in the case of Tranche Periods corresponding to the LIBOR Rate, if such next succeeding Business Day falls in a new month, such Tranche Period shall end on the immediately preceding Business Day. In the case of any Tranche Period for any Receivable Interest of which commences before the Termination Date and would otherwise end on a date occurring after the Termination Date, such Tranche Period shall end on the Termination Date. The duration of each Tranche Period which commences after the Termination Date shall be of such duration as selected by the Agent. "TRANSACTION DOCUMENTS" means, collectively, this Agreement, the Sale Agreement, the Fee Letter, each Collections Notice and all other instruments, documents and agreements executed and delivered by the Seller or the Originator in connection herewith. "UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction. ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF ILLINOIS, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN SUCH ARTICLE 9.60 46 EXHIBIT II CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS; FEDERAL EMPLOYER IDENTIFICATION NUMBER Chief Executive Office: 10990 Roe Avenue Overland Park, KS 66211 Location of Records: 10990 Roe Avenue Overland Park, KS 66211 Federal Employer Identification Number: Yellow Receivables Corporation 52-1985649 Trade Names and Assumed Names: None (other than its corporate name, Yellow Receivables Corporation) 47 EXHIBIT III LOCKBOXES; COLLECTION ACCOUNTS; CONCENTRATION ACCOUNTS; AND DEPOSITARY ACCOUNTS YELLOW FREIGHT SYSTEM, INC. TYPE OF ACCT. ACCOUNT# BANK NAME CITY, STATE Concentration 010100006289 Boatmen's First National Bank, Kansas City, Missouri YELLOW RECEIVABLES CORPORATION Collection 010161073442 Boatmen's First National Bank, Kansas City, Missouri Collection 010161035591* Boatmen's First National Bank, Kansas City, Missouri Depository 55-66681 The First National Bank of Chicago, Chicago, Illinois Concentration 55-03450* The First National Bank of Chicago, Chicago, Illinois Collection 03268-43* National Bank of Detroit, Detroit, Michigan - --------------- * Assigned to Yellow Receivables Corporation by Yellow Freight System, Inc. 48 EXHIBIT IV FORM OF COMPLIANCE CERTIFICATE TO: THE FIRST NATIONAL BANK OF CHICAGO, AS AGENT This Compliance Certificate is furnished pursuant to that certain Receivables Purchase Agreement dated as of August 2, 1996, among Yellow Receivables Corporation (the "SELLER"), the Purchasers party thereto, and The First National Bank of Chicago, as agent for such Purchasers (the "AGREEMENT"). THE UNDERSIGNED HEREBY CERTIFIES THAT: 1. I am the duly elected of the Seller; 2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Seller and its Subsidiaries during the accounting period covered by the attached financial statements; 3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes a Servicer Default or Potential Servicer Default, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate , except as set forth below. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Seller has taken, is taking, or proposes to take with respect to each such condition or event: The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of , 19 . 49 SCHEDULE I TO COMPLIANCE REPORT A. Schedule of Compliance with SECTION 7.1(d) of the Agreement. Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Purchase Agreement. This schedule relates to the month ended: 50 EXHIBIT V FORM OF COLLECTION ACCOUNT AGREEMENT ON LETTERHEAD OF SELLER 19 LOCK-BOX BANK/CONCENTRATION BANK/DEPOSITARY BANK RE: YELLOW RECEIVABLES CORPORATION YELLOW FREIGHT SYSTEM, INC. LADIES AND GENTLEMEN: You have exclusive control of P.O. Box # in ** city, state, zip code ** (the "LOCK-BOX") for the purpose of receiving mail and processing payments therefrom pursuant to that certain ** name of lock-box agreement ** between you and Yellow Freight System, Inc. dated (the "AGREEMENT"). You hereby confirm your agreement to perform the services described therein. Among the services you have agreed to perform therein, is to endorse all checks and other evidences of payment, and credit such payments to checking account no. maintained with you in the name of Yellow Freight System, Inc. (the "LOCK- BOX ACCOUNT"). Yellow Freight System, Inc. ("YFSI") hereby transfers and assigns all of its right, title and interest in and to, and exclusive ownership and control over, the Lock-Box and the Lock-Box Account to Yellow Receivables Corporation ("YELLOW-SPC"). YFSI and Yellow-SPC hereby request that the name of the Lock-Box Account be changed to the Yellow Receivables Corporation, as "COLLECTION AGENT" for the benefit of The First National Bank of Chicago ("FNBC"), as agent under that certain Receivables Purchase Agreement (the "RECEIVABLES PURCHASE AGREEMENT") dated as of August 2, 1996 among Yellow-SPC, Falcon Asset Securitization Corporation, certain financial institutions parties thereto and FNBC. Yellow-SPC hereby irrevocably instructs you, and you hereby agree, that upon receiving notice from FNBC in the form attached hereto as Annex A: (i) the name of the Lock-Box Account will be changed to FNBC for itself and as agent (or any designee of FNBC) and FNBC will have exclusive ownership of and access to such Lock-Box Account, and neither YFSI, Yellow-SPC nor any of their respective affiliates will have any control of such Lock-Box Account or any access thereto, (ii) you will either continue to send the funds from the Lock-Box to the Lock-Box Account, or will redirect the funds as FNBC may otherwise request, (iii) you will transfer monies on deposit in the Lock-Box Account, at any time, as directed by FNBC, (iv) all services to be performed by you under the Agreement will be performed on behalf of FNBC, and (v) all correspondence or other mail which you have agreed to send to either YFSI or Yellow-SPC will be sent to FNBC at the following address: The First National Bank of Chicago Suite 0079, 21st Floor One First National Plaza Chicago, Illinois 60670 Attention: Credit Manager, Asset-Backed Finance Moreover, upon such notice, FNBC for itself and as agent will have all rights and remedies given to YFSI or Yellow-SPC under the Agreement. Each of YFSI and Yellow-SPC agrees, however, to continue to pay all fees and other assessments due thereunder at any time. You hereby acknowledge that monies deposited in the Lock-Box Account or any other account established with you by FNBC for the purpose of receiving funds from the Lock-Box are subject to the liens of FNBC for itself and as agent under the Receivables Purchase Agreement, and will not be subject to deduction, set-off, banker's lien or any other right you or any other party may have against YFSI or Yellow-SPC, except that you may debit the Lock-Box Account for any items deposited therein that are returned or 51 otherwise not collected and for all charges, fees, commissions and expenses incurred by you in providing services hereunder, all in accordance with your customary practices for the charge back of returned items and expenses. This letter agreement and the rights and obligations of the parties hereunder will be governed by and construed and interpreted in accordance with the laws of the State of Illinois. This letter agreement may be executed in any number of counterparts and all of such counterparts taken together will be deemed to constitute one and the same instrument. This letter agreement contains the entire agreement between the parties, and may not be altered, modified, terminated or amended in any respect, nor may any right, power or privilege of any party hereunder be waived or released or discharged, except upon execution by all parties hereto of a written instrument so providing. In the event that any provision in this letter agreement is in conflict with, or inconsistent with, any provision of the Agreement, this letter agreement will exclusively govern and control. Each party agrees to take all actions reasonably requested by any other party to carry out the purposes of this letter agreement or to preserve and protect the rights of each party hereunder. Please indicate your agreement to the terms of this letter agreement by signing in the space provided below. This letter agreement will become effective immediately upon execution of a counterpart of this letter agreement by all parties hereto. Very truly yours, YELLOW FREIGHT SYSTEM, INC. By: -------------------------------------- Title: -------------------------------------- YELLOW RECEIVABLES CORPORATION By: -------------------------------------- Title: -------------------------------------- Acknowledged and agreed to this day of , 1996: COLLECTION BANK By: -------------------------------------- Acknowledged and agreed to this day of , 1996: THE FIRST NATIONAL BANK OF CHICAGO (for itself and as Agent) By: -------------------------------------- Authorized Agent 52 ANNEX A FORM OF COLLECTION NOTICE On letterhead of FNBC , 19 COLLECTION BANK/DEPOSITARY BANK/CONCENTRATION BANK RE: YELLOW RECEIVABLES CORPORATION Ladies and Gentlemen: We hereby notify you that we are exercising our rights pursuant to that certain letter agreement among Yellow Freight System, Inc., Yellow Receivables Corporation, you and us, to have the name of, and to have exclusive ownership and control of, account number (the "LOCK-BOX ACCOUNT") maintained with you, transferred to us. Lock-Box Account will henceforth be a zero-balance account, and funds deposited in the Lock-Box Account should be sent at the end of each day to . You have further agreed to perform all other services you are performing under that certain agreement dated between you and Yellow Freight System, Inc. on our behalf. We appreciate your cooperation in this matter. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO (for itself and as agent) By: -------------------------------------- Authorized Agent 53 EXHIBIT VI CREDIT AND COLLECTION POLICY TO BE PROVIDED BY THE SELLER 54 EXHIBIT VII FORM OF INVOICE(S) TO BE PROVIDED BY THE SELLER 55 EXHIBIT VIII FORM OF MONTHLY REPORT TO BE PROVIDED BY FIRST CHICAGO 56 EXHIBIT IX FORM OF PURCHASE NOTICE Date The First National Bank of Chicago, as Agent for the Purchasers parties to the Receivables Purchase Agreement referred to below Suite 0079, 1-21 One First National Plaza Chicago, Illinois 60670 Attention: Asset-Backed Finance Gentlemen: The undersigned, Yellow Receivables Corporation, refers to the Receivables Purchase Agreement, dated as of August 2, 1996 (the "RECEIVABLES PURCHASE AGREEMENT", the terms defined therein being used herein as therein defined), among the undersigned, Falcon Asset Securitization Corporation ("FALCON"), certain Investors parties thereto and The First National Bank of Chicago, as Agent for FALCON and such Investors, and hereby gives you notice, irrevocably, pursuant to SECTION 1.2 of the Receivables Purchase Agreement that the undersigned hereby requests a Purchase under the Receivables Purchase Agreement, and in that connection sets forth below the information relating to such Purchase (the "PROPOSED PURCHASE") as required by SECTION 1.2 of the Receivables Purchase Agreement: (i) The Business Day of the Proposed Purchase is , 19 . (ii) The requested Purchase Price in respect of the Proposed Purchase is $ . (iii) The requested Purchaser in respect of the Proposed Purchase is FALCON are the Investors. (iv) The duration of the initial Tranche Period for the Proposed Purchase is days months. (v) The Discount Rate related to such initial Tranche Period is requested to be the CP LIBOR Base Rate. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Purchase (before and after giving effect to the Proposed Purchase): (A) the representations and warranties set forth in SECTION 3.1 (other than SECTION 3.1(K)(1) of the Receivables Purchase Agreement are correct on and as of such date, as though made on and as of such date; (B) no event has occurred, or would result from the Proposed Purchase that will constitute a Servicer Default, and no event has occurred and is continuing, or would result from such Proposed Purchase, that would constitute a Potential Servicer Default; and (C) the Liquidity Termination Date shall not have occurred, the aggregate Capital of all Receivable Interests shall not exceed the Purchase Limit and the aggregate Receivable Interests shall not exceed 100%. Very truly yours, YELLOW RECEIVABLES CORPORATION By: -------------------------------------- Title: (1) Bracketed language should only be included after the initial purchase of Receivable Interests hereunder. 57 EXHIBIT X CONTRACTS APPLICABLE TO EXCLUDED CONTRACTS TO BE PROVIDED BY SELLER 58 SCHEDULE A DOCUMENTS AND RELATED ITEMS TO BE DELIVERED TO THE AGENT ON OR PRIOR TO THE INITIAL PURCHASE I. RECEIVABLES SALE AGREEMENT A. Receivables Sale Agreement dated as of August 2, 1996 (the "SALE AGREEMENT") by and between Yellow Freight System, Inc., an Indiana corporation (the "ORIGINATOR"), and Yellow Receivables Corporation, a Delaware corporation ("YELLOW-SPC"), with the following exhibits: Exhibit I -- Definitions Exhibit II -- Places of Business of Originator; Locations of Records; Trade Names; Prior Names; Federal Employer I.D. Number Exhibit III -- Lockboxes; Collection Accounts; Concentration Accounts; and Depositary Accounts Exhibit IV -- Compliance Certificate Exhibit V -- Collection Account Agreement Exhibit VI -- Credit and Collection Policy Exhibit VII -- Form(s) of Invoice(s) Exhibit VIII -- Monthly Report Exhibit IX -- Stockholder and Subscription Agreement Exhibit X -- Subordinated Revolving Note Exhibit XI -- Contracts Applicable to Excluded Receivables B. Subordinated Revolving Note dated August 2, 1996 executed by Yellow-SPC in favor of the Originator. C. Stockholder and Subscription Agreement dated as of August 2, 1996 by and between the Originator and Yellow-SPC. D. Certificate of the Originator's Assistant Secretary certifying: 1. An attached copy of the Originator's Articles of Incorporation (certified within 60 days prior to closing by the Indiana Secretary of State) 2. An attached copy of the Originator's By-Laws 3. An attached copy of resolutions of the Originator's Board of Directors authorizing the Originator's execution, delivery and performance of the Sale Agreement and related documents 4. The names, titles and specimen signatures of the Originator's officers authorized to execute and deliver the Sale Agreement and related documents E. Good standing certificates for the Originator from the following states certified within 60 days prior to closing: 1. Indiana 2. Kansas F. Pre-filing state and federal tax lien, judgment lien and UCC lien searches against the Originator from the following jurisdictions: 1. Kansas 2. As applicable for tax and judgment liens, Johnson County, Kansas. 59 G. UCC Financing Statements naming the Originator, as debtor, Yellow-SPC, as secured party, and The First National Bank of Chicago, as Agent, as assignee of secured party, for filing in the following jurisdictions: 1. Secretary of State of Kansas H. Post-filing UCC lien searches against the Originator from the following jurisdictions: 1. Secretary of State of Kansas I. Collection Account Agreements 1. Boatmen's 2. First Chicago 3. National Bank of Detroit J. Opinions: 1. Corporate/UCC opinions 2. True Sale/Non-consolidation opinion K. CFO's Certificate re no Event of Default or Potential Event of Default and absence of Material Adverse Effect since April 30, 1996. M. UCC-3 Termination Statements from the following: II. Receivables Purchase Agreement A. Receivables Purchase Agreement dated as of August 2, 1996 (the "INVESTOR AGREEMENT") by and among Yellow-SPC, Falcon Asset Securitization Corporation ("FALCON"), various Investors, and The First National Bank of Chicago, as Agent (in such capacity, the "AGENT") with the following exhibits: Exhibit I -- Definitions Exhibit II -- Places of Business of Yellow-SPC; Locations of Records; Trade Names; Federal Employer I.D. Number Exhibit III -- Lockboxes; Collection Accounts; Concentration Accounts; and Depositary Accounts Exhibit IV -- Compliance Certificate Exhibit V -- Collection Account Agreement Exhibit VI -- Credit and Collection Policy Exhibit VII -- Form(s) of Invoice(s) Exhibit VIII -- Monthly Report Exhibit IX -- Form of Purchase Notice Exhibit X -- Contracts Applicable to Excluded Receivables B. Fee Letter dated of August 2, 1996 by and between Yellow-SPC and the Agent. C. Certificate of Yellow-SPC's Assistant Secretary certifying: 1. An attached copy of Yellow-SPC's Certificate of Incorporation(certified within 30 days prior to closing by the Delaware Secretary of State) 2. An attached copy of Yellow-SPC's By-Laws 3. An attached copy of resolutions of Yellow-SPC's Board of Directors authorizing Yellow-SPC's execution, delivery and performance of the investors agreement and related documents 4. The names, titles and specimen signatures of Yellow-SPC's officers authorized to execute and deliver the Investor Agreement and related documents 60 D. Good standing certificates for Yellow-SPC from the following states certified within 30 days prior to closing: 1. Delaware 2. Kansas E. UCC Financing Statements naming Yellow-SPC, as debtor, and the Agent, as secured party, for filing in the following jurisdictions: 1. Secretary of State of Kansas F. Post-filing UCC lien searches against Yellow-SPC from the following jurisdictions: 1. Secretary of State of Kansas G. Collection Account Agreements 1. Boatmen's 2. First Chicago 3. National Bank of Detroit H. Purchase Notice executed by Yellow-SPC I. Opinion of Yellow-SPC's re corporate/UCC issues J. CFO's Certificate re no Servicer Default or Potential Servicer Default and absence of Material Adverse Effect since April 30, 1996. EX-99.(C)(1) 12 TENDER AND VOTING AGREEMENT 1 EXHIBIT (C)(1) TENDER AND VOTING AGREEMENT TENDER AND VOTING AGREEMENT, dated as of June 6, 1999, among Yellow Corporation, a Delaware corporation ("Parent"), JPF Acquisition Corp., a New Jersey corporation and a wholly owned subsidiary of Parent (the "Purchaser"), and Harry J. Muhlschlegel, Karen B. Muhlschlegel, the Harry J. Muhlschlegel Grantor Retained Annuity Trust dated 3/27/99, the Karen B. Muhlschlegel Grantor Retained Annuity Trust dated 3/7/99, the Vicki L. Whithall 1996 Trust, the Jeffrey Muhlschlegel 1996 Trust and the Jennifer B. Muhlschlegel 1996 Trust (each, a "Stockholder" and, together, the "Stockholders"). WITNESSETH WHEREAS, each Stockholder is the owner of that number of shares of Class A Common Stock, no par value ("Class A Common Shares"), of Jevic Transportation, Inc. (the "Company") set forth opposite the name of such Stockholder on Annex A attached hereto (such Stockholder's "Subject Shares"); WHEREAS, Parent, the Purchaser and the Company have entered into an Agreement and Plan of Merger (as such agreement may hereafter be amended from time to time, the "Merger Agreement"), which provides, among other things, that upon the terms and subject to the conditions therein, the Purchaser will (i) make a cash tender offer (the "Offer") for all of the outstanding Class A Common Shares and all of the outstanding shares of Common Stock, no par value ("Common Shares" and, together with the Class A Common Shares, the "Shares"), of the Company and (ii) after expiration of the Offer, merge with and into the Company (the "Merger"); WHEREAS, as an inducement and a condition to entering into the Merger Agreement, Parent and the Purchaser have required that the Stockholders and the Company agree, and the Stockholders and the Company have agreed, to enter into this Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows: 1. Representations and Warranties of the Stockholders. Each Stockholder represents and warrants to Parent and the Purchaser as follows: (a) Such Stockholder is the sole record and beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such Stockholder's Subject Shares and, there exist no liens, claims, security interests, options, proxies, voting agreements, charges, obligations, understandings, arrangements or other encumbrances of any nature whatsoever, except for restrictions applicable thereto under federal and state securities laws ("Liens"), affecting such Subject Shares. (b) Such Stockholder's Subject Shares and the certificates representing such Subject Shares are now and at all times until the Termination Date (as defined herein) will be held by such Stockholder free and clear of all Liens, except for the Liens arising hereunder. (c) This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming due authorization, execution and delivery by Parent and the Purchaser, constitutes a valid and binding agreement of such Stockholder, enforceable against such Stockholder in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy or other laws affecting the enforcement of creditors' rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law. (d) The execution and delivery of this Agreement by such Stockholder does not, and the performance by such Stockholder of its obligations hereunder will not, constitute a violation of, conflict with, result in a default (or an event which, with notice or lapse of time or both, would result in a default) under, or result in the creation of any Lien on any of such Stockholder's Subject Shares 2 under, (i) any contract, commitment, agreement, partnership agreement, understanding, arrangement or restriction of any kind to which such Stockholder is a party or by which such Stockholder is bound, (ii) any judgment, writ, decree, order or ruling applicable to such Stockholder or (iii) any law applicable to such Stockholder. (e) To such Stockholder's knowledge, neither the execution and delivery of this Agreement nor the performance of Stockholder's obligations hereunder will require any consent, authorization or approval of, filing with or notice to, any court, administrative agency or other governmental body or authority other than any required notices or filings pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the "HSR Act"), state antitrust laws or the federal securities laws. (f) Except for such Stockholder's Subject Shares, such Stockholder does not, directly or indirectly, own beneficially or of record any Shares or any option, warrant or other right to acquire Shares nor is such Stockholder subject to any contract, commitment, arrangement, understanding or relationship that allows or obligates it to vote or acquire any security of the Company. 2. Representation and Warranties of Parent and the Purchaser. Parent and the Purchaser jointly and severally represent and warrant to each Stockholder as follows: (a) Each of Parent and the Purchaser is duly organized and validly existing and in good standing under the laws of its jurisdiction of incorporation, has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly and validly executed and delivered by each of Parent and the Purchaser and constitutes the legal, valid and binding obligation of each of Parent and the Purchaser enforceable against each of Parent and Purchaser in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law. (b) The execution and delivery of this Agreement by each of Parent and the Purchaser does not, and the performance by each of Parent and the Purchaser of its obligations hereunder will not, constitute a violation of, conflict with, or result in a default (or an event which, with notice or lapse of time or both, would result in a default) under, its charter or bylaws or any contract, commitment, agreement, understanding, arrangement or restriction of any kind to which Parent or the Purchaser is a party or by which Parent or the Purchaser is bound or any judgment, writ, decree, order or ruling applicable to Parent or the Purchaser. (c) Neither the execution and delivery of this Agreement nor the performance by each of Parent and the Purchaser of its obligations hereunder will violate any order, writ, injunction, judgment, law, decree, statute, rule or regulation applicable to Parent or the Purchaser or require any consent, authorization or approval of, filing with, or notice to, any court, administrative agency or other governmental body or authority other than any required notices or filings pursuant to the HSR Act, state antitrust laws or the federal securities laws. 3. Tender of Shares. (a) Parent and the Purchaser jointly and severally agree: (i) subject to the conditions of the Offer set forth in Annex A to the Merger Agreement and the other terms and conditions of the Merger Agreement, that the Purchaser will purchase all Shares tendered pursuant to the Offer as promptly as practicable following commencement of the Offer and that the Purchaser will consummate the Merger in accordance with the terms of the Merger Agreement; 3 (ii) not to decrease the price per share to be paid to the Company's shareholders in the Offer below $14.00 per share; and (iii) the provisions of Sections 3(a)(i) and 3(a)(ii) shall survive the termination of this Agreement. (b) Each Stockholder will (i) tender such Stockholder's Subject Shares (other than such Stockholder's Excluded Shares (as defined below), if applicable) into the Offer promptly, and in any event no later than the fifth business day following the commencement of the Offer, or, if such Stockholder has not received the Offer Documents (as defined in the Merger Agreement) by such time, within two business days following receipt of such documents, and (ii) not withdraw any Subject Shares so tendered. Each of Harry J. Muhlschlegel and Karen B. Muhlschlegel shall be permitted to not tender into the Offer 18,875 of their Subject Shares (for a total of 37,750 Subject Shares, collectively herein referred to as the "Excluded Shares"); provided that, so long as the Purchaser notifies Mr. and Mrs. Muhlschlegel at least eight hours prior to the purchase of Shares by the Purchaser pursuant to the Offer, Mr. and Mrs. Muhlschlegel shall be obligated to contribute their respective Excluded Shares to the capital of the Company prior to the purchase of Shares by the Purchaser pursuant to the Offer. Upon the purchase of all such Stockholder's Subject Shares pursuant to the Offer in accordance with this Section 3, this Agreement will terminate. Each Stockholder will receive the same price per Share received by other stockholders of the Company in the Offer with respect to Subject Shares tendered by it in the Offer. In the event that, notwithstanding the provisions of the first sentence of this Section 3(b), any Subject Shares are for any reason withdrawn from the Offer or are not purchased pursuant to the Offer, such Subject Shares will remain subject to the terms of this Agreement. Each Stockholder acknowledges that the Purchaser's obligation to accept for payment and pay for the Subject Shares in the Offer is subject to all the terms and conditions of the Offer. On the date the Subject Shares are accepted for payment and purchased by the Purchaser pursuant to the Offer, the Purchaser shall make payment by wire transfer or other method (as agreed by the Purchaser and such Stockholder) of the purchase price for such Subject Shares to an account designated by such Stockholder. (c) Each Stockholder hereby agrees to permit Parent and the Purchaser to publish and disclose in the Offer Documents and, if approval of the shareholders of the Company is required under applicable law, the Statement (as defined in the Merger Agreement), its identity and ownership of Shares and the nature of its commitments, arrangements and understandings under this Agreement. (d) The obligations of the parties under this Section 3 shall terminate on the Termination Date. 4. Termination Date. As used in this Agreement, "Termination Date" means the date the Merger Agreement is terminated in accordance with its terms. 5. Transfer of Subject Shares. Until the Termination Date, each Stockholder will not, except as required pursuant to the terms of this Agreement, (i) sell, offer to sell, pledge or otherwise dispose of any of such Stockholder's Subject Shares; (ii) enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Subject Shares or any interest therein; (iii) grant any proxy, power-of-attorney or other authorization or consent in or with respect to such Subject Shares; (iv) deposit such Subject Shares into a voting trust or enter into a voting agreement or assignment with respect to the Subject Shares; or (v) take any other action with respect to such Subject Shares that would in any way restrict, limit or interfere with the performance of such Stockholder's obligations hereunder. 6. No Solicitation. (a) Each Stockholder represents and warrants to, and covenants and agrees with, Parent and the Purchaser that such Stockholder does not have any agreement, arrangement or understanding with any potential acquiror of the Company that, directly or indirectly, would be violated, or require any payments, by reason of the execution, delivery and/or consummation of this Agreement. 4 (b) Each Stockholder shall, and shall cause its agents and representatives to, immediately cease any existing discussions or negotiations with any Third Party (as defined in the Merger Agreement) heretofore conducted with respect to any Acquisition Transaction (as defined in the Merger Agreement). Until the Termination Date, each Stockholder shall not, and shall cause its agents and representatives not to, directly or indirectly, (x) solicit, initiate, continue, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries, proposals or offers from any Third Party with respect to, or that could reasonably be expected to lead to, any Acquisition Transaction or (y) negotiate, explore or otherwise communicate in any way with any Third Party with respect to any Acquisition Transaction. If the Board of Directors of the Company determines that a Third Party proposal for an Acquisition Transaction constitutes a Superior Proposal (as defined in the Merger Agreement) in accordance with the provisions of Section 6.06 of the Merger Agreement, then, notwithstanding the provisions of this Section 6(b), the Stockholders shall be permitted to negotiate, discuss or otherwise communicate with such Third Party with respect to a tender and voting agreement with terms no less favorable in the aggregate to each Stockholder than those contained in this Agreement; provided that no Stockholder shall enter into any such tender and voting agreement (i) prior to the Termination Date or (ii) with any Third Party with whom negotiations for an Acquisition Transaction had taken place prior to the Termination Date if such tender and voting agreement contains provisions less favorable in the aggregate to such Stockholder than those contained in this Agreement. In addition, the provisions of this Section 6(b) shall not be deemed to prohibit any Stockholder who is an officer or director of the Company from taking actions permitted to be taken by an officer or director, as the case may be, in such Stockholder's capacity as an officer and/or director, as the case may be, of the Company. (c) Until the Termination Date, each Stockholder shall promptly (but in any event within one day of such Stockholder becoming aware of same) (i) advise Parent of the receipt by such Stockholder or any of its agents or representatives of any inquiries or proposals relating to an Acquisition Transaction, (ii) provide Parent with a copy of any such inquiry or proposal in writing and a written statement with respect to any such inquiries or proposals not in writing, which statement shall include the identity of the parties making such inquiries or proposal and the material terms thereof and (iii) inform Parent of the status and content of and developments with respect to any discussions regarding any Acquisition Transaction with a Third Party. 7. Voting of Subject Shares. (a) Voting of Subject Shares. Until the Termination Date, each Stockholder shall, at any meeting of the stockholders of the Company, however called, or in connection with any written consent of the stockholders of the Company, vote (or cause to be voted) all Shares beneficially owned by such Stockholder (i) in favor of the Merger, the execution and delivery by the Company of the Merger Agreement and the approval of the terms thereof and each of the other actions contemplated by the Merger Agreement and this Agreement and any actions required in furtherance thereof and hereof; (ii) against any other Acquisition Transaction and against any action or agreement that would impede, frustrate, prevent or nullify the Merger Agreement or this Agreement or the transactions contemplated hereby and thereby, or result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or which would result in any of the conditions to the Merger in the Merger Agreement not being fulfilled; and (iii) if requested by Parent, in favor of a stockholder resolution proposed by Parent in accordance with the New Jersey Act, the purpose of which is to cause the Offer and the Merger to be consummated and which does not relate to election of directors. (b) Best Efforts. Subject to the terms and conditions of this Agreement, until the Termination Date, each Stockholder agrees to use all reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement and the Merger Agreement. Until the Termination Date, each Stockholder shall properly consult with Parent and the Purchaser and provide any necessary information and material with respect to all filings with any 5 Governmental Entity in connection with this Agreement and the Merger Agreement and the transactions contemplated hereby and thereby. 8. Miscellaneous. (a) Entire Agreement. This Agreement and the Merger Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. (b) Binding Agreement. This Agreement and the obligations hereunder shall attach to the Subject Shares and shall be binding upon any person or entity to which record or beneficial ownership of the Subject Shares shall pass, whether by operation of law or otherwise, including, without limitation, any Stockholder's administrators or successors. Notwithstanding any transfer of Subject Shares, the transferor shall remain liable for the performance of all obligations of the transferor under this Agreement. (c) Assignment. This Agreement shall not be assigned by operation of law or otherwise without the prior written consent of the other parties hereto, provided that Parent or the Purchaser may assign, in its sole discretion, its rights and obligations hereunder to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve Parent or the Purchaser of its obligations hereunder if such assignee does not perform such obligations. (d) Amendments, Waivers, Etc. This Agreement may not be amended, changed, supplemented, waived or otherwise modified or terminated, except upon the execution and delivery of a written agreement executed by the parties hereto. (e) Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given by hand delivery or telecopy (with a confirmation copy sent for next day delivery via courier service, such as Federal Express), or by any courier service, such as Federal Express, providing proof of delivery. All communications hereunder shall be delivered to the respective parties at the following addresses: If to a Stockholder: At the address of such Stockholder set forth on Annex A, with copies as set forth on such Annex A. If to Parent or the Purchaser: Yellow Corporation 10990 Roe Avenue Overland Park, KS 66207 Attention: William F. Martin, General Counsel Telephone No.: (913) 696-6106 Telecopy No.: (913) 696-6116 Copy to: Cahill Gordon & Reindel 80 Pine Street New York, New York 10005 Attention: W. Leslie Duffy Telephone No.: (212) 701-3000 Telecopy No.: (212) 269-5420 or to such other address as the person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. (f) Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not 6 affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein. (g) Specific Performance. Each of the parties hereto recognizes and acknowledges that a breach by it of any covenants or agreements contained in this Agreement will cause each of the other parties to sustain damages for which it would not have an adequate remedy at law for money damages, and therefore in the event of any such breach the aggrieved party shall be entitled to the remedy of specific performance of such covenants and agreements and injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity. (h) Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. (i) No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. (j) No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any person or entity who or which is not a party hereto. (k) Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New Jersey, without giving effect to the principles of conflicts of law thereof. (l) Waiver of Jury Trial. Each party hereto hereby waives any right to a trial by jury in connection with any action, suit or proceeding brought in connection with this Agreement. (m) Descriptive Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. (n) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement. IN WITNESS WHEREOF, Parent, the Purchaser, the Stockholders and the Company have caused this Agreement to be duly executed as of the day and year first above written. YELLOW CORPORATION By: /s/ A. MAURICE MYERS ------------------------------------ Name: A. Maurice Myers Title: President and Chief Executive Officer JPF ACQUISITION CORP. By: /s/ WILLIAM F. MARTIN, JR. ------------------------------------ Name: William F. Martin, Jr. Title: Vice President /s/ HARRY J. MUHLSCHLEGEL -------------------------------------- Harry J. Muhlschlegel 7 /s/ KAREN B. MUHLSCHLEGEL -------------------------------------- Karen B. Muhlschlegel HARRY J. MUHLSCHLEGEL GRANTOR RETAINED ANNUITY TRUST DATED 3/27/99 By: /s/ HARRY J. MUHLSCHLEGEL ------------------------------------ Name: Harry J. Muhlschlegel Title: Trustee KAREN B. MUHLSCHLEGEL GRANTOR RETAINED ANNUITY TRUST DATED 3/27/99 By: /s/ KAREN B. MUHLSCHLEGEL ------------------------------------ Name: Karen B. Muhlschlegel Title: Trustee VICKI L. WHITTALL 1996 TRUST By: /s/ BRUCE D. BURDICK ------------------------------------ Name: Bruce D. Burdick Title: Trustee By: /s/ GEORGE K. REYNOLDS, III ------------------------------------ Name: George K. Reynolds, III Title: Trustee JEFFREY MUHLSCHLEGEL 1996 TRUST By: /s/ BRUCE D. BURDICK ------------------------------------ Name: Bruce D. Burdick Title: Trustee By: /s/ GEORGE K. REYNOLDS, III ------------------------------------ Name: George K. Reynolds, III Title: Trustee JENNIFER B. MUHLSCHLEGEL 1996 TRUST By: /s/ BRUCE D. BURDICK ------------------------------------ Name: Bruce D. Burdick Title: Trustee By: /s/ GEORGE K. REYNOLDS, III ------------------------------------ Name: George K. Reynolds, III Title: Trustee 8 ANNEX A
NUMBER OF CLASS A STOCKHOLDER ADDRESS* COMMON SHARES - ----------- -------- ------------- Harry J. Muhlschlegel Jevic Transportation, Inc. 894,717 600 Creek Road Delanco, NJ 08075 Karen B. Muhlschlegel Jevic Transportation, Inc. 894,852 600 Creek Road Delanco, NJ 08075 Harry J. Muhlschlegel Harry J. Muhlschlegel 1,600,000 Grantor Retained Jevic Transportation, Inc. Annuity Trust 600 Creek Road Dated 3/27/99 Delanco, NJ 08075 Karen B. Muhlschlegel Karen B. Muhlschlegel 1,600,000 Guarantor Retained Jevic Transportation, Inc. Annuity Trust 600 Creek Road Dated 3/27/99 Delanco, NJ 08075 Vicki L. Whittall c/o George K. Reynolds, 249,992 1996 Trust III, Esquire, Co-Trustee George, Feinblatt, Rothman, Hoffberger & Hollander, LLC The Garrett Building 233 E. Redwood Street Baltimore, MD 21202 Jeffrey Muhlschlegel George K. Reynolds, Inc., 249,991 1996 Trust Esquire, Co-Trustee George, Feinblatt, Rothman, Hoffberger & Hollander, LLC The Garrett Building 233 E. Redwood Street Baltimore, MD 21202 Jennifer B. Muhlschlegel George K. Reynolds, III, 249,992 1996 Trust Esquire, Co-Trustee George, Feinblatt, Rothman, Hoffberger & Hollander, LLC The Garrett Building 233 E. Redwood Street Baltimore, MD 21202
- --------------- * All notices shall be sent with a copy to: Pepper Hamilton LLP 300 Two Logan Square Philadelphia, PA 19103 Attention: Barry M. Abelson Fax: 215-981-4750 A-1 EX-99.(C)(2) 13 AGREEMENT AND PLAN OF MERGER 1 EXHIBIT (C)(2) AGREEMENT AND PLAN OF MERGER DATED AS OF JUNE 6, 1999 BY AND AMONG YELLOW CORPORATION, JPF ACQUISITION CORP. AND JEVIC TRANSPORTATION, INC. 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I THE OFFER SECTION 1.01. The Offer................................................... 1 SECTION 1.02. Company Actions............................................. 2 SECTION 1.03. Directors................................................... 3 ARTICLE II THE MERGER SECTION 2.01. The Merger.................................................. 4 SECTION 2.02. Effective Time; Closing..................................... 4 SECTION 2.03. Effects of the Merger....................................... 4 SECTION 2.04. Certificate of Incorporation and ByLaws of the Surviving 4 Corporation................................................. SECTION 2.05. Directors................................................... 4 SECTION 2.06. Officers.................................................... 4 SECTION 2.07. Conversion of Shares........................................ 4 SECTION 2.08. Conversion of Purchaser Common Stock........................ 4 SECTION 2.09. Company Option Plans........................................ 5 SECTION 2.10. Shareholders' Meeting....................................... 5 SECTION 2.11. Merger Without Meeting of Shareholders...................... 5 SECTION 2.12. Earliest Consummation....................................... 6 ARTICLE III PAYMENT FOR SHARES SECTION 3.01. Payment for Shares.......................................... 6 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY SECTION 4.01. Organization and Qualification; Subsidiaries................ 7 SECTION 4.02. Authority Relative to This Agreement........................ 7 SECTION 4.03. No Conflict; Required Filings and Consents.................. 7 SECTION 4.04. Certain Approvals........................................... 8 SECTION 4.05. Opinion of Financial Advisor................................ 8 SECTION 4.06. Brokers..................................................... 8 SECTION 4.07. Capitalization.............................................. 8 SECTION 4.08. SEC Reports and Financial Statements........................ 9 SECTION 4.09. Information................................................. 10 SECTION 4.10. Litigation.................................................. 10 SECTION 4.11. Compliance with Applicable Laws............................. 10 SECTION 4.12. Employee Benefit Plans...................................... 10 SECTION 4.13. Intellectual Property....................................... 12 SECTION 4.14. Environmental Matters....................................... 12 SECTION 4.15. Material Adverse Change..................................... 14 SECTION 4.16. Taxes....................................................... 14 SECTION 4.17. Labor Matters............................................... 15 SECTION 4.18. Material Contracts.......................................... 16 SECTION 4.19. Insurance................................................... 16 SECTION 4.20. Real Property............................................... 16 SECTION 4.21. Suppliers and Customers..................................... 17 SECTION 4.22. Accounts Receivable......................................... 17 SECTION 4.23. Owner/Operators, Agents and Contractors..................... 17
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PAGE ---- SECTION 4.24. Year 2000................................................... 17 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER SECTION 5.01. Organization and Qualification.............................. 18 SECTION 5.02. Authority Relative to this Agreement........................ 18 SECTION 5.03. No Conflict; Required Filings and Consents.................. 18 SECTION 5.04. Information................................................. 19 SECTION 5.05. Financing................................................... 19 ARTICLE VI COVENANTS SECTION 6.01. Conduct of Business of the Company.......................... 19 SECTION 6.02. Access to Information....................................... 21 SECTION 6.03. Reasonable Best Efforts..................................... 21 SECTION 6.04. Public Announcements........................................ 21 SECTION 6.05. Indemnification............................................. 21 SECTION 6.06. No Solicitation............................................. 22 SECTION 6.07. Notification of Certain Matters............................. 24 SECTION 6.08. State Takeover Laws......................................... 24 SECTION 6.09. Employee Matters............................................ 24 ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER SECTION 7.01. Conditions to Each Party's Obligation to Effect the 25 Merger...................................................... ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER SECTION 8.01. Termination................................................. 25 SECTION 8.02. Effect of Termination....................................... 26 SECTION 8.03. Fees and Expenses........................................... 26 SECTION 8.04. Amendment................................................... 27 SECTION 8.05. Extension; Waiver........................................... 27 ARTICLE IX MISCELLANEOUS SECTION 9.01. Non-Survival of Representations and Warranties.............. 27 SECTION 9.02. Entire Agreement; Assignment................................ 27 SECTION 9.03. Validity.................................................... 28 SECTION 9.04. Notices..................................................... 28 SECTION 9.05. Governing Law; Jurisdiction................................. 28 SECTION 9.06. Descriptive Headings........................................ 28 SECTION 9.07. Counterparts................................................ 28 SECTION 9.08. Parties in Interest......................................... 29 SECTION 9.09. Certain Definitions......................................... 29 SECTION 9.10. Remedies.................................................... 29 ANNEX I -- CONDITIONS TO THE OFFER
ii 4 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER dated as of June 6, 1999, by and among Yellow Corporation, a Delaware corporation ("Parent"), JPF Acquisition Corp., a New Jersey corporation and an indirect wholly-owned subsidiary of Parent (the "Purchaser"), and Jevic Transportation, Inc., a New Jersey corporation (the "Company"). WHEREAS, as a condition and inducement to Parent's willingness to enter into this Agreement, Parent, the Purchaser and the holders of shares of Class A Common Stock, no par value (the "Class A Common Shares"), of the Company have entered into a Tender, Voting and Option Agreement, dated the date hereof (the "Tender and Voting Agreement"); WHEREAS, the Board of Directors of the Company has approved the Tender and Voting Agreement and the transactions contemplated thereby; WHEREAS, the respective Boards of Directors of Parent, the Purchaser and the Company have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement; WHEREAS, in furtherance of such acquisition, Parent proposes to cause the Purchaser to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all of the shares of Class A Common Shares and all of the shares of Common Stock, no par value, of the Company (the "Common Shares" and, together with Class A Common Shares, the "Shares") at a price per Share of $14.00 net to the seller in cash (such price, as it may hereafter be increased in accordance with the terms of this Agreement, the "Offer Price") upon the terms and subject to the conditions set forth in this Agreement; WHEREAS, the Board of Directors of the Company has unanimously approved this Agreement, the Offer and the Merger (as hereinafter defined), has determined that the Offer and the Merger are fair and in the best interests of the Company's shareholders (the "Shareholders") and is recommending that the Shareholders accept the Offer and tender all their Shares and adopt and approve this Agreement; WHEREAS, the respective Boards of Directors of Parent, the Purchaser and the Company have approved the merger of the Purchaser with and into the Company, as set forth below (the "Merger"), in accordance with the New Jersey Business Corporation Act (the "New Jersey Act") and upon the terms and subject to the conditions set forth in this Agreement, whereby each issued and outstanding Class A Common Share and Common Share not owned directly or indirectly by Parent or the Company will be converted into the right to receive the Offer Price in cash; WHEREAS, Parent, the Purchaser and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and also to prescribe various conditions to the Offer and the Merger. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, Parent, the Purchaser and the Company agree as follows: ARTICLE I THE OFFER SECTION 1.01. The Offer. (a) So long as none of the events set forth in clauses (a) through (i) of Annex I hereto ("conditions to the Offer") shall have occurred or exist, the Purchaser shall, and Parent shall cause the Purchaser to, commence (within the meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as promptly as practicable after the date hereof, but in any event not later than June 14, 1999, the Offer for all outstanding Shares at the Offer Price, net to the seller in cash. The initial expiration date for the Offer shall be the twentieth business day from and after the date the Offer is commenced, 5 including the date of commencement as the first business day in accordance with Rule 14d-2 under the Exchange Act. As promptly as practicable, the Purchaser shall file with the Securities and Exchange Commission (the "SEC" or the "Commission") the Purchaser's Tender Offer Statement on Schedule 14D-1 (together with any supplements or amendments thereto, the "Offer Documents"), which shall contain (as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to Purchase") which shall be mailed to the holders of Shares with respect to the Offer. The obligation of the Purchaser to accept for payment or pay for any Shares tendered pursuant to the Offer will be subject only to the satisfaction or waiver of the conditions to the Offer. Without the prior written consent of the Company, the Purchaser shall not decrease the price per Share or change the form of consideration payable in the Offer, decrease the number of Shares sought to be purchased in the Offer, change the conditions to the Offer, waive or reduce the Minimum Condition (as defined in Annex I), impose additional conditions to the Offer or amend any other term of the Offer in any manner adverse to the holders of Shares; provided, however, that if all of the conditions to the Offer are then satisfied or waived, the Parent, in order to permit the Merger to become effective without a meeting of Shareholders in accordance with Section 14A:10-5.1 of the New Jersey Act, shall have the right (i) to extend the Offer for a period or periods aggregating up to ten business days from the then effective expiration date and (ii) thereafter to extend the Offer with the prior written consent of the Company; provided, further, that if Parent elects to extend the Offer pursuant to clause (i) above, Parent and the Purchaser shall be deemed to have permanently and irrevocably waived all of the conditions to the Offer (other than the Minimum Condition and the conditions set forth in clause (a) of the conditions to the Offer) and provided, further, that Parent may extend the Offer to the extent any conditions to the Offer have not been satisfied on the applicable expiration date. Subject to the terms of the Offer and this Agreement and the satisfaction or waiver of all the conditions of the Offer as of any expiration date, Parent will accept for payment and pay for all Shares validly tendered and not withdrawn pursuant to the Offer as soon as practicable after such expiration date of the Offer. (b) Parent and Purchaser hereby represent and warrant to the Company that the Offer Documents will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Shareholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by Parent or the Purchaser with respect to information supplied by or on behalf of the Company in writing for inclusion in the Offer Documents. Each of Parent and the Purchaser, on the one hand, and the Company, on the other hand, agrees promptly to correct any information provided by or on behalf of it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect, and the Purchaser further agrees to take (and Parent shall cause the Purchaser to take) all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to Shareholders, in each case as and to the extent required by applicable federal securities laws. SECTION 1.02. Company Actions. (a) Contemporaneously with the filing of the Offer Documents, the Company shall file with the SEC and mail to the Shareholders a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (together with any amendments or supplements thereto, the "Schedule 14D-9"). The Schedule 14D-9 will set forth, and the Company hereby represents, that the Board of Directors of the Company, at a meeting duly called and held on June 3, 1999 (the "Company Board Meeting"), has (i) determined that the Offer and the Merger are fair to and in the best interests of the Company and its Shareholders, (ii) irrevocably approved the Tender and Voting Agreement, the Offer and the Merger in accordance with Section 14A:10A-1 of the New Jersey Act (and for purposes of any other applicable state takeover law) and (iii) resolved to recommend acceptance of the Offer and approval and adoption of the Merger and this Agreement by the Company's Shareholders (in accordance with the requirements of the Company's Restated Certificate of Incorporation and of applicable law); provided, however, that, subject to Section 8.03, such recommendation may be withdrawn, modified or amended to the extent that the Board of Directors of the Company determines reasonably and in good faith that it is necessary under applicable law to do so in the exercise of its fiduciary 2 6 obligations after being advised with respect thereto by outside counsel; provided, further, however, that notwithstanding any withdrawal, modification or amendment of such recommendation, the Company agrees that if the Purchaser purchases Shares pursuant to the Offer, this Agreement shall be submitted to the Shareholders for approval and adoption at the Special Meeting (if a vote of Shareholders is required to effect the Merger) whether or not the Board of Directors determines at any time subsequent to the Company Board Meeting that this Agreement is no longer advisable and recommends that Shareholders reject it. (b) The Schedule 14D-9 will comply in all material respects with the provisions of applicable federal securities laws and, on the date filed with the SEC and on the date first published, sent or given to the Shareholders, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that no representation is made by the Company with respect to information supplied by or on behalf of the Parent or Purchaser in writing for inclusion in the Schedule 14D-9. Each of the Company, on the one hand, and Parent and the Purchaser, on the other hand, agrees promptly to correct any information provided by either of them for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to the Shareholders, in each case as and to the extent required by applicable federal securities law. (c) In connection with the Offer, the Company will promptly furnish the Purchaser with such information and assistance as the Purchaser or its agents or representatives may reasonably request in connection with communicating the Offer to the record and beneficial holders of the Securities, including, without limitation, its stockholders list, mailing labels, security position listings and non-objecting beneficial owners list. (d) To the knowledge of the Company, all of its directors and executive officers intend to tender their Shares pursuant to the Offer. SECTION 1.03. Directors. (a) Subject to compliance with applicable law, promptly upon the payment by the Purchaser for Shares pursuant to the Offer representing at least a majority of the votes entitled to be cast by all holders of Shares, and from time to time thereafter so long as the Purchaser and/or Parent (and/or their respective wholly-owned subsidiaries) continue to hold at least such number of Shares, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as is equal to the product of the total number of directors on the Board of Directors of the Company (determined after giving effect to the directors elected pursuant to this sentence) multiplied by the percentage that the aggregate number of Shares beneficially owned by Parent or its affiliates bears to the total number of Shares then outstanding, and the Company shall, upon request of Parent, promptly take all actions necessary to cause Parent's designees to be so elected, including, if necessary, seeking the resignations of one or more existing directors; provided, however, that prior to the Effective Time (as defined in Section 2.02), the Board shall always have at least one member who is neither an officer, director or designee of the Parent ("Purchaser Insiders"). (b) The Company's obligations to appoint Parent's designees to the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all actions required pursuant to such Section and Rule in order to fulfill its obligations under this Section 1.03 and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under such Section and Rule in order to fulfill its obligations under this Section 1.03. Parent will supply any information with respect to itself and its officers, directors and affiliates required by such Section and Rule to the Company. (c) From and after the election or appointment of Parent's designees pursuant to this Section 1.03 and prior to the Effective Time, any amendment or termination of this Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or the 3 7 Purchaser or waiver of any of the Company's rights hereunder, or any other action taken by the Board of Directors of the Company in connection with this Agreement, will require the concurrence of a majority of the directors of the Company then in office who are not Purchaser Insiders. ARTICLE II THE MERGER SECTION 2.01. The Merger. Upon the terms and subject to the satisfaction or waiver of the conditions hereof, and in accordance with the applicable provisions of this Agreement and the New Jersey Act, at the Effective Time (as defined in Section 2.02) the Purchaser shall be merged with and into the Company. Following the Merger, the separate corporate existence of the Purchaser shall cease and the Company shall continue as the surviving corporation (the "Surviving Corporation"). SECTION 2.02. Effective Time; Closing. As soon as practicable but in no event later than the fifth business day after the satisfaction or waiver of the conditions described in Article VII hereof, (a) if a vote of Shareholders is required to effect the Merger, the Company and the Purchaser shall execute in the manner required by the New Jersey Act and deliver to the Secretary of State of the State of New Jersey a duly executed and verified certificate of merger or (b) if the Merger may be consummated without a vote of Shareholders, Purchaser shall execute in the manner required by the New Jersey Act and deliver to the Secretary of State of New Jersey a duly executed and verified certificate of merger. The parties shall take such other and further actions as may be required by law to make the Merger effective. The Merger shall become effective upon filing of the certificate of merger, unless a later time is specified in such certificate. The time the Merger becomes effective in accordance with applicable law is referred to as the "Effective Time." SECTION 2.03. Effects of the Merger. The Merger shall have the effects set forth in Section 14A:10-6 of the New Jersey Act. SECTION 2.04. Certificate of Incorporation and ByLaws of the Surviving Corporation. (a) The certificate of incorporation of the Purchaser, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation, until thereafter amended in accordance with the provisions thereof and hereof and applicable law. (b) Subject to the provisions of Section 6.05 of this Agreement, the by-laws of the Purchaser in effect at the Effective Time shall be the by-laws of the Surviving Corporation, until thereafter amended in accordance with the provisions thereof and hereof and applicable law. SECTION 2.05. Directors. Subject to applicable law, the directors of the Purchaser immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. SECTION 2.06. Officers. The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. SECTION 2.07. Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each Share issued and outstanding immediately prior to the Effective Time (other than Shares held by Parent, the Purchaser, any direct or indirect wholly-owned subsidiary of Parent, in the treasury of the Company or by any direct or indirect wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger and without any action on the part of the holder thereof, shall be canceled and retired and shall cease to exist with no payment being made with respect thereto ("Excluded Shares")) shall be converted into the right to receive in cash the Offer Price (the "Merger Price"). SECTION 2.08. Conversion of Purchaser Common Stock. At the Effective Time, each share of common stock, no par value, of the Purchaser issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and 4 8 become one validly issued, fully paid and nonassessable shares of common stock, no par value, of the Surviving Corporation. SECTION 2.09. Company Option Plans. The Board of Directors of the Company has adopted such resolutions, and shall take such other actions as may be necessary, so that each outstanding option (an "Option") granted under the Company's 1994 Stock Option Plan and 1997 Incentive Plan (collectively, the "Option Plans"), whether or not then exercisable or vested, shall become fully exercisable and vested and, except to the extent that Parent or the Purchaser and holder of any such Option otherwise agree, immediately following consummation of the Offer, the Company shall pay to such holders of Options an amount in respect thereof equal to the product of (i) the excess of the Merger Price over the exercise price thereof and (ii) the number of Shares subject thereto (such payment to be net of taxes required by law to be withheld with respect thereto); provided that the foregoing shall be subject to the obtaining of any necessary consents of holders of awards of Options under the Option Plans, it being agreed that the Company will use its best efforts to obtain any such consent. SECTION 2.10. Shareholders' Meeting. (a) If required by the Company's Restated Certificate of Incorporation and/or applicable law in order to consummate the Merger, the Company, acting through its Board of Directors, shall, in accordance with applicable law: (i) duly call, give notice of, convene and hold a special meeting of its Shareholders (the "Special Meeting") as soon as practicable following the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer for the purpose of considering and taking action upon this Agreement, whether or not the Board of Directors determines at any time subsequent to the Company Board Meeting that this Agreement is no longer advisable and recommends that Shareholders reject it; (ii) prepare and file with the SEC a preliminary proxy statement or, if the Purchaser shall have accepted for payment and purchased Shares permitting the Purchaser to cast at least a majority of the votes entitled to be cast by all holders of Shares on a fully diluted basis, information statement relating to the Merger and this Agreement and use its reasonable best efforts (x) to obtain and furnish the information required to be included by the SEC in the Statement (as hereinafter defined) and, after consultation with Parent, to respond promptly to any comments made by the SEC with respect to the preliminary proxy or information statement and cause a definitive proxy or information statement (the "Statement") to be mailed to its Shareholders and (y) to obtain the necessary approvals of the Merger and this Agreement by its Shareholders; and (iii) subject to the fiduciary obligations of the Board of Directors of the Company under applicable law as advised by outside counsel, include in the Statement the recommendation of the Board of Directors of the Company that Shareholders vote in favor of the approval of the Merger and the adoption of this Agreement; provided, however, that notwithstanding any withdrawal, modification or amendment of the recommendation of the Board of Directors of the Company made at the Company Board Meeting, the Company agrees that if the Purchaser purchases Shares pursuant to the Offer, this Agreement shall be submitted to the Shareholders for approval and adoption at the Special Meeting whether or not the Board of Directors determines at any time subsequent to the Company Board Meeting that this Agreement is no longer advisable and recommends that Shareholders reject it. (b) Parent agrees that it will vote, or cause to be voted, all of the Shares then owned by it, the Purchaser or any of its other subsidiaries in favor of the approval of the Merger and the adoption of this Agreement. SECTION 2.11. Merger Without Meeting of Shareholders. Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any other subsidiary of Parent shall acquire at least 90% of the outstanding Class A Common Shares and 90% of the outstanding Common Shares pursuant to the Offer, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the acceptance for payment of and payment for Shares by the Purchaser pursuant to the Offer without a meeting of Shareholders, in accordance with Section 14A:10-5.1 of the New Jersey Act. 5 9 SECTION 2.12. Earliest Consummation. Each party hereto shall use its reasonable best efforts to consummate the Merger as soon as practicable. ARTICLE III PAYMENT FOR SHARES SECTION 3.01. Payment for Shares. (a) From and after the Effective Time, a bank or trust company or stock transfer agent mutually acceptable to Parent and the Company (pursuant to an agreement satisfactory to Parent and the Company) shall act as paying agent (the "Paying Agent") in effecting the payment of the Merger Price in respect of certificates (the "Certificates") that, prior to the Effective Time, represented Shares entitled to payment of the Merger Price pursuant to Section 2.07. (b) Promptly after the Effective Time, the Paying Agent shall mail to each record holder of Certificates (other than Certificates representing Excluded Shares) a form of letter of transmittal which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates to the Paying Agent and instructions for use in surrendering such Certificates and receiving the aggregate Merger Price in respect thereof. Upon the surrender of each such Certificate, Parent shall make funds available to the Paying Agent to enable it to, and the Paying Agent shall, pay the holder of such Certificate the Merger Price multiplied by the number of Shares formerly represented by such Certificate in consideration therefor, and such Certificate shall forthwith be canceled. Until so surrendered, each such Certificate (other than Certificates representing Excluded Shares) shall represent solely the right to receive the aggregate Merger Price relating thereto. No interest or dividends shall be paid or accrued on the Merger Price. If the Merger Price (or any portion thereof) is to be delivered to any person other than the person in whose name the Certificate surrendered is registered, it shall be a condition to such right to receive such Merger Price that the Certificate so surrendered shall be properly endorsed or otherwise be in proper form for transfer and that the person surrendering such Certificates shall pay to the Paying Agent any transfer or other taxes required by reason of the payment of the Merger Price to a person other than the registered holder of the Certificate surrendered, or shall establish to the satisfaction of the Paying Agent that such tax has been paid or is not applicable. (c) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the holder of such Certificate, the Paying Agent shall issue in exchange for such lost, stolen or destroyed Certificate the Merger Price deliverable in respect thereof, provided that the holder of such Certificate shall, as a condition precedent to the payment thereof, give the Surviving Corporation a bond in such sum as it may direct or otherwise indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against it with respect to the Certificate claimed to have been lost, stolen or destroyed. (d) After the Effective Time, there shall be no transfers on the stock transfer books of the Surviving Corporation of any Shares which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Paying Agent, they shall be surrendered and canceled in return for the payment of the aggregate Merger Price relating thereto, as provided in this Article III. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent and the Purchaser that except as set forth in the section or subsection of the Company Disclosure Statement corresponding to the section or subsection of this 6 10 Article IV delivered to Parent and the Purchaser prior to the execution hereof (the "Company Disclosure Statement"): SECTION 4.01. Organization and Qualification; Subsidiaries. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Each subsidiary (as defined in Section 9.09) of the Company (the "Subsidiaries") is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Company and each of the Subsidiaries has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failures to have such power or authority, or the failures to be so qualified, licensed or in good standing, individually, and in the aggregate, would not have a Material Adverse Effect on the Company (as defined below). The Company does not directly or indirectly own any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation (other than a Subsidiary), partnership, joint venture or other business association or entity. The term "Material Adverse Effect on the Company" means any change in, or effect on, the business, results of operations, assets, condition (financial or otherwise) or prospects of the Company or any of the Subsidiaries that is or could reasonably be expected to be materially adverse to the Company and the Subsidiaries taken as a whole. SECTION 4.02. Authority Relative to This Agreement. The Company has all necessary corporate power and authority to execute and deliver this Agreement and the Tender and Voting Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Tender and Voting Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the Board of Directors of the Company and no other corporate proceedings on the part of the Company are necessary to authorize or approve this Agreement or the Tender and Voting Agreement or to consummate the transactions contemplated hereby or thereby (other than, with respect to the Merger, the approval and adoption of the Merger and this Agreement by holders of a majority of the outstanding Shares to the extent required by the Company's Restated Certificate of Incorporation and by applicable law). This Agreement has been duly and validly executed and delivered by the Company and, assuming the due and valid authorization, execution and delivery of this Agreement by Parent and the Purchaser, constitutes valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to the enforcement of creditors' rights generally (the "Bankruptcy Exceptions") and (ii) is subject to general principles of equity and any implied covenant of good faith and fair dealing. The Board of Directors of the Company has, at the Company Board Meeting, approved and adopted this Agreement, the Offer, the Merger, the Tender and Voting Agreement and the other transactions contemplated hereby and thereby, determined that the Offer Price to be received by the holders of Shares pursuant to the Offer and the Merger is fair to the Shareholders, recommended that the Shareholders approve and adopt this Agreement, the Merger and the other transactions contemplated hereby and tender their Shares pursuant to the Offer and approved the submission of this Agreement to the Shareholders at the Special Meeting (if required to consummate the Merger) if the Purchaser purchases Shares pursuant to the Offer whether or not the Board of Directors of the Company determines at any time subsequent to the Company Board Meeting that this Agreement no longer advisable and recommends that Shareholders reject it. SECTION 4.03. No Conflict; Required Filings and Consents. (a) None of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will require any consent, waiver, approval, authorization or permit of, or registration or filing with or notification to (any of the foregoing being a "Consent"), any government or subdivision thereof, or any administrative, governmental or regulatory authority, agency, commission, tribunal or 7 11 body, domestic, foreign or supranational (a "Governmental Entity") or person who is not a Governmental Entity, except for (i) compliance with any applicable requirements of the Exchange Act, (ii) the filing of a certificate of merger pursuant to the New Jersey Act, (iii) applicable state takeover and environmental statutes and (iv) compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). (b) Except as set forth in clause (a) of this Section 4.03, none of the execution and delivery of this Agreement by the Company, the consummation by the Company of the transactions contemplated hereby or compliance by the Company with any of the provisions hereof will (i) conflict with or violate the Restated Certificate of Incorporation or bylaws of the Company or the comparable organizational documents of any of the Subsidiaries, (ii) conflict with or violate any statute, ordinance, rule, regulation, order, judgment or decree applicable to the Company or the Subsidiaries, or by which any of them or any of their respective properties or assets may be bound or affected, or (iii) result in a violation or breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any material benefit or the creation of any Lien (as defined) on any of the property or assets of the Company or any of the Subsidiaries (any of the foregoing referred to in clause (ii) or this clause (iii) being a "Violation") pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries or any of their respective properties may be bound or affected, except for Violations which, individually or in the aggregate, would not have a Material Adverse Effect on the Company. SECTION 4.04. Certain Approvals. The Board of Directors of the Company has taken appropriate irrevocable action (a) such that the provisions of Section 14A:10A-1 of the New Jersey Act will not apply to the Offer, the Merger or any of the other transactions contemplated by this Agreement or the Tender and Voting Agreement and (b) such that the provisions of any other state takeover law will not be applicable to the Offer, the Merger or any of the other transactions contemplated by this Agreement or the Tender and Voting Agreement. SECTION 4.05. Opinion of Financial Advisor. The Company has received the written opinion of Janney Montgomery Scott Inc. to the effect that, as of the date hereof, the Offer Price is fair to the Shareholders from a financial point of view. SECTION 4.06. Brokers. Except for the engagement of Janney Montgomery Scott Inc. (a copy of whose engagement letter previously has been delivered by the Company to Parent), none of the Company, any of the Subsidiaries or any of their respective officers, directors or employees has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated by this Agreement. SECTION 4.07. Capitalization. The Company has heretofore made available to Parent and the Purchaser a complete and correct copy of the Restated Certificate of Incorporation and the by-laws, each as amended to the date hereof, of the Company. The authorized capital stock of the Company consists of 10,000,000 Class A Common Shares, 40,000,000 Common Shares and 10,000,000 shares of Preferred Stock, no par value (the "Preferred Stock"). As of the close of business on the day prior to execution of this Agreement, there were no shares of Preferred Stock issued or outstanding. As of the close of business on the day prior to execution of this Agreement, (i) there were 5,739,544 Class A Common Shares issued, none of which were owned by the Company or a wholly-owned Subsidiary and (ii) there were 4,994,303 Common Shares issued, none of which were owned by the Company or a wholly-owned Subsidiary. The Company has no shares of capital stock reserved for issuance, except that, as of the day prior to execution of this Agreement, there were 1,564,056 Common Shares reserved for issuance pursuant to Options outstanding on the date hereof pursuant to the Option Plans as listed in Section 4.07 of the Company Disclosure Statement. Since the day prior to execution of this Agreement, the Company has not issued any Options or shares of capital stock except pursuant to the exercise of Options outstanding as of such date and in accordance with their terms or pursuant to the conversion of Class A 8 12 Shares into Common Shares. All the outstanding Shares are, and all Common Shares which may be issued pursuant to the exercise of outstanding Options will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") of the Company or any of the Subsidiaries issued and outstanding. Except for the Options, there are no existing options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of the Subsidiaries, obligating the Company or any of the Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of the Subsidiaries or securities convertible into or exchangeable for such shares or equity interests or obligations of the Company or any of the Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment. There are no outstanding contractual obligations of the Company or any of the Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of the Company or any of its Subsidiaries. Each of the outstanding shares of capital stock of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and such shares of the Subsidiaries as are owned by the Company or by a wholly owned Subsidiary are free and clear of any lien, claim, option, charge, security interest, limitation, encumbrance and restriction of any kind (any of the foregoing being a "Lien"). Section 4.07 of the Company Disclosure Statement contains a complete list as of the date hereof of each Subsidiary and sets forth with respect to each of the Subsidiaries its name and jurisdiction of organization and the number of shares of capital stock or share capital owned by the Company and each other person. SECTION 4.08. SEC Reports and Financial Statements. (a) The Company has filed with the SEC all forms, reports, schedules, registration statements and definitive proxy statements required to be filed by the Company with the SEC until the date hereof (the "SEC Reports"). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act or the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder applicable, as the case may be, to such SEC Reports, and, as of their respective dates, none of the SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (b) The consolidated balance sheets as of December 31, 1998 and 1997 and the related consolidated statements of income, shareholders' equity and cash flows (including the notes thereto) for each of the three years in the period ended December 31, 1998 (including the related notes and schedules thereto) of the Company contained in the Company's Form 10-K for the year ended December 31, 1998 included in the SEC Reports present fairly the consolidated financial position and the consolidated results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates or for the periods presented therein in conformity with United States generally accepted accounting principles applied on a consistent basis as of and during the periods involved ("GAAP"). (c) The consolidated balance sheets and the related statements of income and cash flows (including in each case the related notes thereto) of the Company contained in the Forms 10-Q for the periods ended March 31, 1999 included in the SEC Reports (collectively, the "Quarterly Financial Statements") have been prepared in accordance with the requirements for interim financial statements contained in Regulation S-X under the Exchange Act. The Quarterly Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly and do present fairly the consolidated financial position, results of operations and cash flows of the Company and its consolidated Subsidiaries for the period presented therein in conformity with GAAP applied on a consistent basis during the periods involved. (d) The Company and the Subsidiaries have no liabilities or obligations of any nature (whether absolute, accrued, contingent, unmatured, unaccrued, unliquidated, unasserted, conditional or otherwise) 9 13 except for liabilities or obligations (i) reflected or reserved against on the balance sheet as at March 31, 1999 included in the Quarterly Financial Statements (the "Company Balance Sheet"), (ii) incurred in the ordinary course of business consistent with past practice since such date or (iii) which would not, individually or in the aggregate, have a Material Adverse Effect on the Company. SECTION 4.09. Information. None of the information supplied by the Company in writing specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9 (including the information included therein in order to comply with Section 14(f) of the Exchange Act and Rule 14f-1 thereunder), (iii) the Statement or (iv) any other document to be filed with the SEC or any other Governmental Entity in connection with the transactions contemplated by this Agreement (the "Other Filings") will, at the respective times filed with the SEC or other Governmental Entity and, in addition, in the case of the Statement, at the date it or any amendment or supplement is mailed to Shareholders, at the time of the Special Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation is made by the Company with respect to statements made therein based on information supplied by or on behalf of Parent or the Purchaser in writing specifically for inclusion in the Statement. SECTION 4.10. Litigation. There is no suit, action or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company or any of the Subsidiaries, except for suits, actions and proceedings that, individually or in the aggregate, would not have a Material Adverse Effect on the Company, nor is there any judgment, decree, injunction or order of any Governmental Entity or arbitrator outstanding against the Company or any of the Subsidiaries, except for judgments, decrees, injunctions and orders that would not, individually or in the aggregate, have a Material Adverse Effect on the Company. SECTION 4.11. Compliance with Applicable Laws. The Company and the Subsidiaries have been in compliance with all laws, regulations and orders of any Governmental Entity applicable to it or the Subsidiaries, except for such failures so to comply which, individually and in the aggregate, would not have a Material Adverse Effect on the Company. The business operations of the Company and the Subsidiaries have not been conducted in violation of any law, ordinance or regulation of any Governmental Entity, except for possible violations which, individually or in the aggregate, would not have a Material Adverse Effect on the Company. Neither the Company, any Subsidiary nor any director, officer, agent, employee or other person associated with or acting on behalf of any of them has (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment or made any unlawful expenditures relating to political activity, or made any direct or indirect unlawful payments to governmental officials or others or established or maintained any unlawful or unrecorded funds in violation of Section 30A of the Exchange Act or (ii) accepted or received any unlawful contributions, payments, gifts or expenditures. SECTION 4.12. Employee Benefit Plans. (a) Section 4.12 of the Company Disclosure Statement includes a complete list of all bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance, incentive, or other employee benefit plans, programs and agreements providing benefits to any employee, former employee, director or former director of the Company or any of the Subsidiaries sponsored or maintained by or on behalf of the Company or any of the Subsidiaries or to which the Company or any of the Subsidiaries contributes or is obligated to contribute (collectively, the "Plans"). Without limiting the generality of the foregoing, the term "Plans" includes all employee welfare benefit plans within the meaning of Section 3(l) of the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder ("ERISA") and all employee pension benefit plans within the meaning of Section 3(2) of ERISA. 10 14 (b) With respect to each Plan, the Company has made available to Parent a true, correct and complete copy of: (i) all plan documents, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current summary plan description, if any; (iv) the most recent annual financial report, if any; (v) the most recent actuarial report, if any; and (vi) the most recent determination letter from the Internal Revenue Service (the "IRS"), if any. (c) The Company and each of the Subsidiaries has complied, and is now in compliance, in all material respects with all provisions of ERISA, the Code and all laws and regulations applicable to the Plans. With respect to each Plan that is intended to be a "qualified plan" within the meaning of Section 401(a) of the Code, the IRS has issued a favorable determination letter, and to the knowledge of the Company nothing has occurred at the date hereof that would reasonably be expected to cause the loss of such qualification. (d) All contributions required to be made to any Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected in the financial statements of the Company included in the SEC Reports to the extent required under generally accepted accounting principles. (e) With respect to each plan which is subject to Title IV or Section 302 of ERISA or Section 412 of the Code maintained or contributed to (or required to be contributed to) by the Company, any Subsidiary or any ERISA Affiliate (as hereinafter defined), (i) there does not now exist, nor do any circumstances exist that could result in, any liability of the Company or any of the Subsidiaries under Title IV of ERISA (other than for the payment of premiums, all of which have been paid when due), (ii) neither the Company nor any of the Subsidiaries has incurred any accumulated funding deficiency within the meaning of Section 302 of ERISA or Section 412 of the Code (whether or not waived) and there has been no waiver or application for a waiver of any minimum funding standard or extension of any amortization period under Section 412 of the Code or Part 3 of Subtitle B of Title I of ERISA, (iii) no "reportable event" (as such term is defined in Section 4043 of ERISA and the regulations thereunder) has occurred or is expected to occur, (iv) no notice of intent to terminate has been filed with the Pension Benefit Guaranty Corporation, (v) the Pension Benefit Guaranty Corporation has not instituted any proceedings to terminate the plan or to appoint a trustee to administer the plan, and (vi) there has been no event requiring disclosure under Section 4063(a) of ERISA. For purposes of this Section 4.12, the term "ERISA Affiliate" shall mean any business or entity (whether or not incorporated) which is a member of the same "controlled group of corporations", under "common control" or an "affiliated service group" with the Company or any Subsidiary within the meaning of Section 414(b), (c) or (m) of the Code, or is under "common control" with the Company or any Subsidiary within the meaning of Section 4001(a)(14) of ERISA. (f) Neither the Company nor any Subsidiary nor any ERISA Affiliate has been required to contribute to, or incurred any withdrawal liability (within the meaning of Section 4201 of ERISA) with respect to any plan which is a multiemployer plan as defined in ERISA Section 3(37) (a "Multiemployer Plan"). Neither the Company nor any Subsidiary nor any ERISA Affiliate has completely or partially withdrawn from any Multiemployer Plan. No Multiemployer Plan as to which the Company, any Subsidiary or any ERISA Affiliate is required to contribute is in reorganization within the meaning of Part 3 of Subtitle E of Title IV of ERISA. The Company has delivered to Parent a schedule showing the contributions of the Company, any of the Subsidiaries, and any ERISA Affiliates to each of the Multiemployer Plans for the most recent five plan years. (g) The execution of, and performance of the transactions contemplated in, this Agreement will not, either alone or upon the occurrence of subsequent events, result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any employee or former employee of the Company or any of the Subsidiaries. The only severance agreements or severance policies applicable to the 11 15 Company or any of the Subsidiaries in the event of a change of control of the Company are the agreements referred to in Section 4.12 of the Company Disclosure Statement. (h) There are no pending actions, claims or lawsuits which have been asserted, instituted or, to the knowledge of the Company, threatened in connection with any of the Plans (other than routine claims for benefits). (i) Neither the Company nor any of the Subsidiaries maintains or contributes to any plan or arrangement which provides or has any liability to provide life insurance or medical or other welfare benefits to any employee, former employee, director or former director upon his retirement or termination of service, and neither the Company nor any of the Subsidiaries has ever represented, promised or contracted (whether in oral or written form) to any employee, former employee, director or former director that such benefits would be provided. (j) The Company and the Subsidiaries are in compliance with the continuation coverage provisions of Section 601 et seq. of ERISA and Section 4980B of the Code. SECTION 4.13. Intellectual Property. (a) Except as would not, individually and in the aggregate, have a Material Adverse Effect on the Company, (i) the Company and each of the Subsidiaries owns, has the right to acquire or is licensed or otherwise has the right to use (in each case, clear of any Liens of any kind), all Intellectual Property (as defined below) used in or necessary for the conduct of its business as currently conducted, (ii) except for Intellectual Property which is the subject of a patent application of which the Company has no knowledge, no claims are pending or, to the knowledge of the Company, threatened that the Company or any of the Subsidiaries is infringing on or otherwise violating the rights of any person with regard to any Intellectual Property and (iii) to the knowledge of the Company, no person is infringing on or otherwise violating any right of the Company or any of the Subsidiaries with respect to any Intellectual Property owned by and/or licensed to the Company or the Subsidiaries. (b) For purposes of this Agreement, "Intellectual Property" shall mean patents, copyrights, trademarks (registered or unregistered), service marks, brand names, trade dress, trade names, computer software programs and applications (including imbedded software), the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing; and trade secrets and rights in any jurisdiction to limit the use or disclosure thereof by any person. SECTION 4.14 Environmental Matters. Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company, (i) no Hazardous Substances (as defined below) are present at, on or under any real property currently or, to the Company's knowledge, formerly owned, leased or operated by the Company or any Subsidiary to an extent or in a manner or condition now requiring investigation, response, corrective action or other action, or, to the Company's knowledge, that could result in liability of, or costs to, the Company or any of the Subsidiaries, under any Environmental Law (as defined below), (ii) there is currently no civil, criminal or administrative action, suit, demand, hearing, proceeding notice of violation, investigation, notice or demand letter, or request for information pending or to the knowledge of the Company, threatened, under any Environmental Law against the Company or any of the Subsidiaries, (iii) the Company and the Subsidiaries have not received any claims or notices alleging liability under any Environmental Law, and the Company has no knowledge of any circumstances that would reasonably be expected to result in such claims or notices, (iv) the Company and each of the Subsidiaries are currently in compliance, and within the period of applicable statutes of limitation have complied, with all, and, to the Company's knowledge, have no liability under any, applicable Environmental Laws, (v) the Company has not been notified about any property or facility currently or, to the Company's knowledge as of the date hereof, formerly owned, leased or operated by the Company or any of the Subsidiaries or any of their respective predecessors-in-interest, or at which Hazardous Substances of the Company or any of the Subsidiaries have been stored, treated or disposed of is listed or proposed for listing on the National Priorities List or 12 16 the Comprehensive Environmental Response, Compensation and Liability Information System, both promulgated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or on any comparable state or foreign list established under any Environmental Law, (vi) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not affect the validity or require the transfer of any Environmental Permits held by the Company or any of the Subsidiaries, and will not require any notification, disclosure, registration, reporting, filing, investigation, remediation or other action under any Environmental Law, (vii) no friable asbestos is present in, on, or at any property, facility or equipment of the Company or any of the Subsidiaries, (viii) there are no past or present events, conditions, activities, or practices which could reasonably be expected to prevent the Company and the Subsidiaries' compliance with any Environmental Law, or which would reasonably be expected to give rise to any liability of the Company or any of the Subsidiaries under any Environmental Law, (ix) no Lien has been asserted or recorded, or to the knowledge of the Company and each of the Subsidiaries threatened, under any Environmental Law with respect to any assets, facility, inventory, or property currently owned, leased or operated by the Company or any of the Subsidiaries, (x) neither the Company nor any of the Subsidiaries has assumed by contract or agreement any liabilities or obligations arising under any Environmental Law including, without limitation, any such liabilities or obligations with respect to formerly owned, leased or operated real property or facilities, or former divisions or subsidiaries, (xi) neither the Company nor any of the Subsidiaries has entered into or agreed to any judgment, decree or order by any judicial or administrative tribunal or agency and neither the Company nor any of the Subsidiaries is subject to any judgment, decree order or agreement, in each case relating to compliance with any Environmental Law or requiring the Company or any of the Subsidiaries to conduct any investigation, response, corrective or other action with respect to any Hazardous Materials under any Environmental Law, and (xii) there are no underground storage tanks or above storage tanks or related piping at any real property owned, operated or leased by the Company or any of the Subsidiaries, and any former such tanks and piping on any such property which have been removed or closed, have been removed or closed in accordance with applicable Environmental Laws. For purposes of this Agreement, the term "Environmental Laws" means the common law and all applicable federal, state, local and foreign laws, rules, regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder relating to pollution or protection of human health and safety or the environment (including, without limitation, ambient air, indoor air, surface water, ground water, land surface, subsurface strata, and natural resources such as wetlands, flora, fauna), including without limitation, laws relating to emissions, discharges, releases or threatened releases of Hazardous Materials into the environment, or otherwise relating to the manufacture, processing, generation, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. For purposes of this Agreement, the term "Hazardous Materials" means any pollutant, contaminant, toxic, hazardous or extremely hazardous substance, constituent or waste, or any other constituent, waste, chemical, compound, material or substance, including without limitation, petroleum or any petroleum product, including crude oil or any fraction thereof, subject to regulation by or that can give rise to liability under any Environmental Law. For purposes of this Agreement, the term "Environmental Permit" means any permit, license, approval, consent or other authorization provided or issued by any government or regulatory authority pursuant to an Environmental Law. The Company has made available to the Purchaser and Parent all records and files, including, but not limited to, all assessments, reports, studies, audits, analyses, tests and data in the possession or control of the Company or any Subsidiary relating to the existence of Hazardous Materials at facilities or properties currently or formerly owned, operated, leased or used by the Company or any of the Subsidiaries or in any way concerning compliance by the Company and any Subsidiaries with, or liability of any of them, under, any Environmental Law. 13 17 SECTION 4.15. Material Adverse Change. (a) Since March 31, 1999, there has not been any change, or any development that is reasonably likely to result in a change, in the business, results of operations, assets, condition (financial or otherwise) or prospects of the Company or any of the Subsidiaries that is materially adverse, or is reasonably expected to be materially adverse, to the Company and the Subsidiaries taken as a whole. Since March 31, 1999, the Company and the Subsidiaries have conducted their businesses only in the ordinary course of business consistent with past practices and there has not been, directly or indirectly: (i) any declaration, setting aside or payment of any dividend or other distribution with respect to any capital stock of the Company; (ii) any split, combination or reclassification of any of its capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company's capital stock; (iii) any payment or granting by the Company or any of the Subsidiaries of any increase in compensation to any director, officer or, other than in the ordinary course of business consistent with past practice, employee of the Company or any of the Subsidiaries; (iv) any granting by the Company or any of the Subsidiaries to any such director, officer or, other than in the ordinary course of business consistent with past practice, employee of any increase in severance or termination pay; (v) any entry by the Company or any of the Subsidiaries into any employment, severance or termination agreement with any such director, officer or, other than in the ordinary course of business consistent with past practice; (vi) any adoption or increase in payments to or benefits under any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement or other employee benefit plan for or with any employees of the Company or any of the Subsidiaries; (vii) any change in accounting methods, principles or practices by the Company or any of the Subsidiaries, except insofar as may have been required by changes in GAAP; or (viii) any agreement to do any of the things described in the preceding clauses (i) through (vii). SECTION 4.16. Taxes. (i) The Company and each Subsidiary have prepared and timely filed with the appropriate governmental agencies all Tax Returns required to be filed for any period (or portion thereof) through the date hereof, taking into account any extension of time to file granted to or obtained on behalf of the Company and/or such Subsidiary, and each such Tax Return is accurate and complete; (ii) the Company and each Subsidiary have timely paid all Taxes due and payable by them through the date hereof and have made adequate provision (in accordance with GAAP) for any Taxes attributable to any taxable period (or portion thereof) of the Company and/or such Subsidiary ending on or prior to the date hereof that are not yet due and payable; (iii) the Company and each Subsidiary have withheld and paid in a timely manner all Taxes required to have been withheld and paid by them; (iv) any deficiencies or assessments asserted in writing against the Company and/or any Subsidiary by any taxing authority through the date hereof have been paid or fully and finally settled; (v) neither the Company nor any Subsidiary is presently under examination or audit by any taxing authority and, to the best knowledge of the Company, no examination or audit of the Company or any Subsidiary is pending or threatened by any taxing authority; (vi) no extension of the period for assessment or collection of any Tax of the Company or any Subsidiary is currently in effect and no extension of time within which to file any Tax Return of the Company or any Subsidiary has been requested, which Tax Return has not since been filed; (vii) neither the Company nor any Subsidiary has made or agreed to make or was or is required to make any adjustment under Section 481 of the Code (or any similar provision of state, local or foreign law); (viii) there are no Tax sharing agreements or arrangements to which the Company or any Subsidiary is a party other than the Tax Indemnity Agreement dated October 3, 1997; (ix) neither the Company nor any 14 18 Subsidiary has made an election under Section 341(f) of the Code (or any similar provision of state, local or foreign law); (x) neither the Company nor any Subsidiary is a party to any agreement or arrangement that provides for the payment of any amount, or the provision of any other benefit, that could constitute a "parachute payment" within the meaning of Section 280G of the Code (or any similar provision of state, local or foreign law); (xi) no stock of the Company is a "United States real property interest," within the meaning of Section 897(c) of the Code; and (xii) the Company has delivered to Purchaser true and complete copies of (a) all Federal, state, local and foreign income or franchise Tax Returns filed by the Company and/or any Subsidiary for all open years (except for those Tax Returns that have not yet been filed) and (b) any audit reports issued by the IRS or any other taxing authority with respect to any period that is still open. SECTION 4.17. Labor Matters. (a) Neither the Company nor any of the Subsidiaries is party to any collective bargaining or other labor union contract. There are no petitions for union representation election, labor disputes, strikes, work stoppages, work slowdowns, "work-to-rule" actions or similar actions against the Company or any of the Subsidiaries pending or, to the Company's knowledge, threatened which may interfere with the respective business activities of the Company or any of the Subsidiaries. There is no unfair labor practice charge or complaint against the Company or any Subsidiary pending or, to the knowledge of the Company, threatened before the national Labor Relations Board or any similar state or foreign agency. To the knowledge of the Company, no charges with respect to or relating to the Company or any Subsidiary are pending before the Equal Employment Opportunity Commission or any other Governmental Entity responsible for the prevention of unlawful employment practices or any Governmental Entity responsible for the enforcement of employee health and safety (including under the Occupational Safety and Health Act and the regulations thereunder). The Company has not received notice of the intent of any federal, state, local or foreign agency responsible for the enforcement of labor or employment laws or employee health and safety laws to conduct an investigation with respect to or relating to the Company or any Subsidiary and no such investigation is in progress. There are no complaints, lawsuits or other proceedings pending or, to the knowledge of the Company, threatened in any forum by or on behalf of any present or former employee of the Company or any Subsidiary, any applicant for employment or classes of the foregoing alleging any breach by the Company or any Subsidiary of any express or implied contract of employment, any laws governing employment or the termination thereof or other discriminatory, wrongful or tortious conduct in connection with the employment relationship or any employee health and safety laws. (b) The Company and each of the Subsidiaries has paid in full, or fully accrued for in the financial statements of the Company, all wages, salaries, commissions, bonuses, severance payments, vacation payments, holiday pay, sick pay, pay in lieu of compensatory time and other compensation due or to become due to all current and former employees of the Company and each Subsidiary for all services performed by any of them on or prior to the date hereof. The Company and each of its Subsidiaries has withheld and paid in a timely manner all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee or independent contractor. The Company and the Subsidiaries are in compliance with all applicable federal, state, local and foreign laws, rules and regulations relating to the employment of labor including, without limitation, laws, rules and regulations relating to payment of wages, employment and employment practices, terms and conditions of employment, hours, immigration, discrimination, child labor, occupational health and safety, collective bargaining and the payment and withholding of taxes and other sums required by governmental authorities. (c) Since the enactment of the Worker Adjustment and Retraining Notification Act (the "WARN Act"), (i) neither the Company nor any Subsidiary has effectuated a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment or facility of the Company or any Subsidiary, (ii) there has not occurred a "mass Layoff" (as defined in the WARN Act) affecting any site of employment or facility of the Company or any Subsidiary; nor has the Company or any Subsidiary been affected by any transaction or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state, local or 15 19 foreign law or regulation, and (iii) none of the employees of the Company or any Subsidiary has suffered an "employment loss" (as defined in the WARN Act) during the six-month period prior to the date of this Agreement. SECTION 4.18. Material Contracts. There are no (i) agreements of the Company or any of the Subsidiaries containing an unexpired covenant not to compete or similar restriction applying to the Company or any of the Subsidiaries, (ii) interest rate, currency or commodity hedging, swap or similar derivative transactions to which the Company or any of the Subsidiaries is a party, (iii) providing for payment based on revenues, sales or profits, (iv) agreements between the Company or any of the Subsidiaries, on the one hand, and any affiliate of the Company, on the other hand or (iv) other contracts or amendments thereto that would be required to be filed and have not been filed as an exhibit to a Form 10-K filed by the Company with the SEC as of the date of this Agreement (collectively, the "Material Contracts"). Assuming each Material Contract constitutes a valid and binding obligation of each other party thereto, each Material Contract is a valid and binding obligation of the Company or the applicable Subsidiary, as the case may be. To the Company's knowledge, each Material Contract is a valid and binding obligation of each other party thereto, and each such Material Contract is in full force and effect and is enforceable by the Company or the applicable Subsidiary in accordance with its terms, except as such enforcement may be limited by the Bankruptcy Exceptions and subject to general principles of equity (whether considered in a proceeding at law or in equity) and any implied covenant of good faith and fair dealing. To the best knowledge of the Company, there are no existing defaults (or circumstances or events that, with the giving of notice or lapse of time or both would become defaults) of the Company, any Subsidiary or any third party under any of the Material Contracts. SECTION 4.19. Insurance. The Company and the Subsidiaries have obtained and maintained in full force and effect insurance with responsible and reputable insurance companies or associations in such amounts, on such terms and covering such risks, as is consistent with industry practice for companies (i) engaged in similar businesses and (ii) of at least similar size to that of the Company and the Subsidiaries, and have maintained in full force and effect public liability insurance, insurance against claims for personal injury or death or property damage occurring in connection with any of the activities of the Company or the Subsidiaries or any of the properties owned, occupied or controlled by the Company or any of the Subsidiaries, in such amount as reasonably deemed necessary by the Company. Section 4.19 of the Company Disclosure Statement sets forth a complete and correct list of all insurance policies (including a brief summary of the nature and terms thereof and any amounts paid or payable to the Company or any of the Subsidiaries thereunder, or, lieu thereof, a copy of the cover page for each such policy) providing coverage in favor of the Company or any of the Subsidiaries or any of their respective properties. Each such policy is in full force and effect, no notice of termination, cancellation or reservation of rights has been received with respect to any such policy, there is no material default with respect to any provision contained in any such policy, and there has not been any failure to give any notice or present any claim under any such policy in a timely fashion or in the manner or detail required by any such policy, except for any such failures to be in full force and effect, any such terminations, cancellations, reservations or defaults, or any such failures to give notice or present claims which would not, individually or in the aggregate, have a Material Adverse Effect on the Company. The Company Balance Sheet reflects adequate reserves for any insurance programs which require (or have required) the Company or any of the Subsidiaries to retain a portion of each loss, including, but not limited to, deductible and self-insurance programs. SECTION 4.20. Real Property. Section 4.20 of the Company Disclosure Statement identifies all real property owned, leased or used by the Company or any of the Subsidiaries in the conduct of its business. The Company and each of the Subsidiaries has good and marketable title to all of its owned properties and assets, free and clear of all liens (statutory or otherwise), mortgages, chattels, pledges, privileges, security interests, hypothecations or encumbrances, except for those disclosed in the financial statements included in the SEC Report and except for liens for taxes not yet due and payable and such liens or other imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby; and all leases pursuant to which the Company or any of 16 20 the Subsidiaries lease from others real property are valid and effective in accordance with their respective terms except where the lack of such validity and effectiveness would not have a Material Adverse Effect on the Company. SECTION 4.21. Suppliers and Customers. Except as would not, individually and in the aggregate, have a Material Adverse Effect on the Company, since March 31, 1999, no licensor, vendor, supplier, licensee or customer of the Company or any of the Subsidiaries has canceled or otherwise modified its relationship with the Company or any of the Subsidiaries other than consistent with past practice and, to the Company's knowledge, (i) no such person has notified the Company or any Subsidiary of its intention to do so, and (ii) the consummation of the transactions contemplated hereby will not adversely affect any of such relationships. SECTION 4.22. Accounts Receivable. Subject to any reserves set forth in the Company Balance Sheet, the accounts receivable shown in the Company Balance Sheet arose in the ordinary course of business, were not, as of the date of the Company Balance Sheet, subject to any material discount, contingency, claim of offset or recoupment or counterclaim, and represented, as of the date of the Company Balance Sheet, bona fide claims against debtors for sales, leases, licenses and other charges. All accounts receivable of the Company and the Subsidiaries arising after the date of the Company Balance Sheet through the date of this Agreement arose in the ordinary course of business and, as of the date of this Agreement, are not subject to any material discount, contingency, claim of offset or recoupment or counterclaim, except for normal reserves consistent with past practice. The amount carried for doubtful accounts and allowances disclosed in the Company Balance Sheet is believed by the Company as of the date of this Agreement to be sufficient to provide for any losses which may be sustained or realization of the accounts receivable shown in the Company Balance Sheet. SECTION 4.23. Owner/Operators, Agents and Contractors. The Company and/or the Subsidiaries utilize, and have previously utilized, owner/operators, contractors, agents, or other individuals in their operations for whom the Company and/or the Subsidiaries have adopted the position that said owner/operators, contractors, agents or other individuals are not employees for tax reporting and withholding or any other purpose. The procedures adopted and implemented by the Company and/or the Subsidiaries for the utilization of said owner/operators, contractors, agents and other individuals have been designed to comply in all material respects with the criteria set forth in all applicable federal or state statutes, rules, regulations, orders, opinions and other authority for the treatment by the Company and/or the Subsidiaries of said owner/operators, contractors, agents and other individuals as non-employees. SECTION 4.24. Year 2000. Either (i) all Information Systems and Equipment (as defined below) are in all material respects either Year 2000 Compliant (as defined below) or (ii) any reprogramming, remediation, or any other corrective action, including the internal testing of all such Information Systems and Equipment, will be completed in all material respects by August 31, 1999. Further, to the extent that such reprogramming/remediation and testing action is required, the cost thereof, as well as the cost of the reasonably foreseeable consequence of failure to become Year 2000 Compliant, to the Company and the Subsidiaries (including, without limitation, reprogramming errors and the failure of other systems or equipment) will not result in a Material Adverse Effect on the Company. "Year 2000 Compliant" means that all Information Systems and Equipment accurately process date data (including, but not limited to, calculating, comparing and sequencing), before, during and after the year 2000, as well as same and multi-century dates, or between the years 1999 and 2000, taking into account all leap years, including the fact that the year 2000 is a leap year, and further, that when used in combination with, or interfacing with, other Information Systems and Equipment, shall accurately accept, release and exchange date data, and shall in all material respects continue to function in the same manner as it performs today and shall not otherwise materially impair the accuracy or functionality of Information Systems and Equipment. "Information Systems and Equipment" means all computer hardware, firmware and software, as well as other information processing systems, or any equipment containing embedded microchips, 17 21 whether directly owned, licensed, leased, operated or otherwise controlled by the Company or any of the Subsidiaries, including through third-party service providers, and which, in whole or in part, are used, operated, relied upon, or integral to, the Company's or any of the Subsidiaries' conduct of their business. ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER Parent and the Purchaser, jointly and severally, represent and warrant to the Company as follows: SECTION 5.01. Organization and Qualification. Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Each of Parent and the Purchaser has the requisite corporate power and authority to own, operate or lease its properties and to carry on its business as it is now being conducted, and is duly qualified or licensed to do business, and is in good standing, in each jurisdiction in which the nature of its business or the properties owned, operated or leased by it makes such qualification, licensing or good standing necessary, except where the failure to have such power or authority, or the failure to be so qualified, licensed or in good standing, would not have a Material Adverse Effect on Parent (as defined below). The term "Material Adverse Effect on Parent" means any change or prospective change in, or effect or prospective effect on, the business, results of operations, condition (financial or otherwise) of prospects of Parent or any of its subsidiaries that is or could reasonably be expected to be materially adverse to Parent and its subsidiaries taken as a whole. SECTION 5.02. Authority Relative to this Agreement. Each of Parent and the Purchaser has all necessary corporate power and authority to execute and deliver this Agreement and the Tender and Voting Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Tender and Voting Agreement by Parent and the Purchaser and the consummation by Parent and the Purchaser of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by the respective Boards of Directors of Parent and the Purchaser and no other corporate proceedings on the part of Parent or the Purchaser are necessary to authorize or approve this Agreement and the Tender and Voting Agreement or to consummate the transactions contemplated hereby and thereby. This Agreement and the Tender and Voting Agreement have been duly executed and delivered by each of Parent and the Purchaser and, assuming the due and valid authorization, execution and delivery by the Company (and, with respect to the Tender and Voting Agreement, the other parties thereto), constitute valid and binding obligations of each of Parent and the Purchaser enforceable against each of them in accordance with its terms, except that such enforceability (i) may be limited by the Bankruptcy Exceptions and (ii) is subject to general principles of equity. SECTION 5.03. No Conflict; Required Filings and Consents. (a) None of the execution and delivery of this Agreement or the Tender and Voting Agreement by Parent and the Purchaser, the consummation by Parent and the Purchaser of the transactions contemplated hereby or thereby or compliance by Parent and the Purchaser with any of the provisions hereof or thereof will require any Consent of any Governmental Entity or person who is not a Governmental Entity, except for (i) compliance with any applicable requirements of the Exchange Act, (ii) the filing of a certificate of merger pursuant to the New Jersey Act, (iii) applicable state takeover and environmental statutes and (iv) compliance with the HSR Act. (b) Except as set forth in clause (a) of this Section 5.03, none of the execution and delivery of this Agreement by Parent or the Purchaser, the consummation by Parent or the Purchaser of the transactions contemplated hereby or compliance by Parent or the Purchaser with any of the provisions hereof will (i) conflict with or violate the organizational documents of Parent or the Purchaser, (ii) conflict with or violate any statute, ordinance, rule, regulation, order, judgment or decree applicable to Parent or the Purchaser, or any of their subsidiaries, or by which any of them or any of their respective properties or 18 22 assets may be bound or affected, or (iii) result in a Violation pursuant to any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which Parent or the Purchaser, or any of their respective subsidiaries, is a party or by which any of their respective properties or assets may be bound or affected. SECTION 5.04. Information. None of the information supplied or to be supplied by Parent and the Purchaser in writing specifically for inclusion in (i) the Offer Documents, (ii) the Schedule 14D-9 (including the information included therein in order to comply with Section 14(f) of the Exchange Act and Rule 14f-1 thereunder), (iii) the Statement or (iv) the Other Filings will, at the respective times filed with the SEC or such other Governmental Entity and, in addition, in the case of the Statement, at the date it or any amendment or supplement is mailed to Shareholders, at the time of the Special Meeting and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. SECTION 5.05. Financing. Parent has available sufficient cash in immediately available funds, together with available credit lines, to pay or to cause the Purchaser to pay the Offer Price with respect to all Shares permitted to be outstanding pursuant to this Agreement. ARTICLE VI COVENANTS SECTION 6.01. Conduct of Business of the Company. Except as required by this Agreement or with the prior written consent of Parent, during the period from the date of this Agreement to the Effective Time, the Company will, and will cause each of the Subsidiaries to, conduct its operations only in the ordinary course of business consistent with past practice and will use its reasonable best efforts, and will cause each of the Subsidiaries to use its reasonable best efforts, to preserve intact the business organization of the Company and each of the Subsidiaries, to keep available the services of its and their present officers and employees, and to preserve the good will of those having business relationships with it. Without limiting the generality of the foregoing, and except as otherwise required or permitted by this Agreement or as set forth in Section 6.01 of the Company Disclosure Statement, the Company will not, and will not permit any of the Subsidiaries to, prior to the Effective Time, without the prior written consent of Parent: (a) adopt any amendment to its certificate of incorporation or by laws or comparable organizational documents; (b) except for issuances of capital stock of the Subsidiaries to the Company or a wholly-owned Subsidiary, issue, reissue or sell, or authorize the issuance, reissuance or sale of (i) additional shares of capital stock of any class, or securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, other than the issuance of Common Shares pursuant to: (A) the exercise of Options outstanding on the date hereof pursuant to the terms thereof as in effect on the date hereof or as modified as contemplated by Section 2.10, or (B) the conversion of Class A Common Shares, or (ii) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding on the date hereof; (c) declare, set aside or pay any dividend or other distribution (whether in cash, capital stock, rights thereto or other assets, securities or property or any combination thereof) in respect of any class or series of its capital stock other than between any of the Company and any of the wholly-owned Subsidiaries; (d) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; (e) except for (A) increases in salary, wages and benefits of non-executive officers or employees of the Company or the Subsidiaries in the ordinary course of business consistent with past practice, (B) increases in salary, wages and benefits granted to officers and employees of the Company or the Subsidiaries in conjunction with new hires, promotions or other changes in job status in the ordinary 19 23 course of business consistent with past practice, or (C) increases in salary, wages and benefits to employees of the Company pursuant to collective bargaining agreements entered into in the ordinary course of business consistent with past practice, (i) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from the Company or any of the Subsidiaries), or (ii) pay any benefit not required by any existing plan or arrangement, or (iii) grant any severance or termination pay (except pursuant to existing agreements, plans or policies and as required by such agreements, plans or polices), or (iv) enter into any employment or severance agreement with, any director, officer or other employee of the Company or any of the Subsidiaries, or (v) establish, adopt, enter into, or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, except in each case to the extent required by applicable law or regulation; (f) acquire, sell, lease, mortgage, encumber or dispose of any assets (other than inventory) or securities with a value, individually or in the aggregate, in excess of $20.0 million, in the case of rolling stock, or $3.0 million in the case of other assets or securities, or enter into any commitment to do any of the foregoing or enter into any material commitment or transaction outside the ordinary course of business consistent with past practice other than transactions between a wholly-owned Subsidiary and the Company or another wholly-owned Subsidiary of the Company; (g) (i) incur, assume or pre-pay any long-term debt or incur or assume any short-term debt, except that the Company and the Subsidiaries may incur, assume or pre-pay debt in the ordinary course of business consistent with past practice under existing lines of credit, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except in the ordinary course of business consistent with past practice, or (iii) make any loans, advances or capital contributions to, or investments in, any other person except in the ordinary course of business consistent with past practice and except for loans, advances, capital contributions or investments between any wholly-owned Subsidiary and the Company or another wholly-owned Subsidiary; (h) modify, amend or terminate any of the Material Contracts or waive, release or assign any rights or claims thereunder, except in the ordinary course of business and consistent with past practice; (i) change any of the accounting methods used by it unless required by GAAP, make any material Tax election or change or revoke any material Tax election already made, adopt, request or consent to any new material Tax accounting method, change any material Tax accounting method unless required by applicable law, enter into any material closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such claim or assessment; (j) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of the Subsidiaries (other than the Merger); (k) pay, discharge or satisfy, or fail to pay, discharge or satisfy, any claim, liability or obligation (contingent or otherwise), other than in the ordinary course of business and consistent with past practice; (l) take, or agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Article VII or any of the conditions to the Offer not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms thereof or materially delay such consummation; or (m) enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing. 20 24 SECTION 6.02. Access to Information. From the date hereof until the Effective Time, the Company will, and will cause the Subsidiaries, and each of its and their respective officers, directors, employees, counsel, advisors and representatives (collectively, the "Company Representatives") to, provide Parent, the Purchaser and any person providing financing for the Offer or the Merger ("Financing Sources") and their respective officers, employees, counsel, advisors, representatives (collectively, the "Parent Representatives") reasonable access, during normal business hours and upon reasonable notice, to the officers and employees, offices and other facilities and to the books and records of the Company and the Subsidiaries, as will permit Parent and the Purchaser to make inspections of such as either of them may reasonably require during normal business hours and will cause the Company Representatives and the Company's Subsidiaries to furnish Parent, the Purchaser and the Parent Representatives to the extent available with such other information with respect to the business, operations and prospects of the Company and the Subsidiaries during normal business hours as Parent and the Purchaser may from time to time reasonably request. Unless otherwise required by law, Parent and the Purchaser will, and will cause the Parent Representatives to, hold any such information in confidence until such time as such information otherwise becomes publicly available through no wrongful act of Parent, the Purchaser or the Parent Representatives. The Company agrees to make reasonably available its executive officers for presentations to any Financing Sources. In the event of termination of this Agreement for any reason, Parent and the Purchaser will, and will cause the Parent Representatives to, return to the Company all copies of written information furnished by the Company or any of the Company Representatives to Parent or the Purchaser or the Parent Representatives and destroy all memoranda, notes and other writings prepared by Parent, the Purchaser or the Parent Representatives based upon or including the information furnished by the Company or any of the Company Representatives to Parent or the Purchaser or the Parent Representatives (and Parent will certify to the Company that such destruction has occurred). SECTION 6.03. Reasonable Best Efforts. Subject to the terms and conditions herein provided and to applicable legal requirements, each of the parties hereto agrees to use its reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, and to assist and cooperate with the other parties hereto in doing, as promptly as practicable, all things necessary, proper or advisable under applicable laws and regulations to ensure that the conditions set forth in Annex I and Article VII are satisfied and to consummate and make effective the transactions contemplated by the Offer and this Agreement. In addition, if at any time prior to the Effective Time any event or circumstance relating to either the Company or Parent or the Purchaser or any of their respective subsidiaries, should be discovered by the Company or Parent, as the case may be, and which should be set forth in an amendment to the Offer Documents or Schedule 14D-9, the discovering party will promptly inform the other party of such event or circumstance. If at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, including the execution of additional instruments, the proper officers and directors of each party to this Agreement shall take all such necessary action. SECTION 6.04. Public Announcements. So long as this Agreement is in effect, Parent, the Purchaser and the Company agree to use reasonable efforts to consult with each other before issuing any press release or otherwise making any public statement with respect to the transactions contemplated by this Agreement. SECTION 6.05. Indemnification. (a) Parent agrees that all rights to indemnification now existing in favor of any director or officer of the Company as provided in the Company's Restated Certificate of Incorporation or by laws, in an agreement between any such person and the Company, or otherwise in effect on the date hereof shall survive the Merger and shall continue in full force and effect indefinitely after the Effective Time. Parent also agrees to indemnify all current and former directors and officers of the Company ("Indemnified Parties") to the fullest extent permitted by applicable law with respect to all acts and omissions arising out of such individuals' services as officers or directors of the Company or any of the Subsidiaries or as trustees or fiduciaries of any plan for the benefit of employees occurring prior to the Effective Time. Without limitation of the foregoing, in the event any such Indemnified Party is or becomes involved in any capacity in any action, proceeding or investigation in connection with any matter, including, without limitation, the transactions contemplated by this Agreement, 21 25 occurring prior to, and including, the Effective Time, Parent will pay as incurred such Indemnified Party's reasonable legal and other expenses of counsel selected by the Indemnified Party and reasonably acceptable to Parent (including the cost of any investigation, preparation and settlement) incurred in connection therewith; provided, however, that Parent shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations be liable for fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all Indemnified Parties. Parent shall be entitled to participate in the defense of any such action or proceeding, and counsel selected by the Indemnified Party shall, to the extent consistent with their professional responsibilities, cooperate with Parent and any counsel designated by Parent. Parent shall pay all reasonable expenses, including attorneys' fees, that may be incurred by any Indemnified Party in enforcing the indemnity and other obligations provided for in this Section 6.05. (b) Parent agrees that the Company and, from and after the Effective Time, the Surviving Corporation shall cause to be maintained in effect for not less than six years from the Effective Time the current policies of the directors' and officers' liability insurance maintained by the Company; provided that the Surviving Corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are no less advantageous; and provided that such substitution shall not result in any gaps or lapses in coverage with respect to matters occurring prior to the Effective Time; and provided, further, that the Surviving Corporation shall not be required to pay an annual premium in excess of 200% of the last annual premium paid by the Company prior to the date hereof and if the Surviving Corporation is unable to obtain the insurance required by this Section 6.05(b) it shall obtain as much comparable insurance as possible for an annual premium equal to such maximum amount. SECTION 6.06. No Solicitation. (a) The Company represents and warrants to, and covenants and agrees with, Parent and the Purchaser that neither the Company nor any of the Subsidiaries has any agreement, arrangement or understanding with any potential acquiror that, directly or indirectly, would be violated, or require any payments, by reason of the execution, delivery and/or consummation of this Agreement. The Company shall, and shall cause the Subsidiaries and its and their officers, directors, employees, investment bankers, attorneys and other agents and representatives to, immediately cease any existing discussions or negotiations with any person other than Parent or the Purchaser (a "Third Party") heretofore conducted with respect to any Acquisition Transaction (as hereinafter defined). The Company and the Board of Directors of the Company shall not, and the Company shall cause the Subsidiaries and its and their respective officers, directors, employees, investment bankers, attorneys and other agents and representatives not to, directly or indirectly, (w) withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of the Board of Directors of the Company of this Agreement or any of the transactions contemplated hereby or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to the Shareholders, (x) solicit, initiate, continue, facilitate or encourage (including by way of furnishing or disclosing non-public information) any inquiries, proposals or offers from any Third Party with respect to, or that could reasonably be expected to lead to, any acquisition or purchase of a material portion of the assets or business of, or a 15% or more voting equity interest in (including by way of a tender offer), or any amalgamation, merger, consolidation or business combination with, or any recapitalization or restructuring, or any similar transaction involving, the Company or any of the Subsidiaries (the foregoing being referred to collectively as an "Acquisition Transaction"), or (y) negotiate, explore or otherwise communicate in any way with any Third Party with respect to any Acquisition Transaction or enter into, approve or recommend any agreement, arrangement or understanding requiring the Company to abandon, terminate or fail to consummate the Offer and/or the Merger or any other transaction contemplated hereby. Notwithstanding anything to the contrary in the foregoing, the Company may, prior to the purchase of Shares pursuant to the Offer, in response to an unsolicited written proposal with respect to an Acquisition Transaction involving the acquisition of all of the Shares (or all or substantially all of the assets of the Company and the Subsidiaries) from a Third Party or in response to an unsolicited all cash tender offer for any and all Shares (i) furnish or disclose non-public information to such Third Party, (ii) negotiate, discuss or otherwise communicate with such Third Party and (iii) in the case of an unsolicited all cash tender offer for any and all Shares, withdraw or modify (or resolve to 22 26 withdraw or modify) in a manner adverse to Parent the approval or recommendation of this Agreement and the transactions contemplated hereby or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to Shareholders, in each case only if the Board of Directors of the Company determines in good faith: (1) (after consultation with Janney Montgomery Scott Inc.) that such proposal or such unsolicited all cash tender offer, as the case may be, is more favorable to the Shareholders from a financial point of view than the transaction contemplated hereby (including any adjustment to the terms and conditions proposed by Parent and the Purchaser in response to such proposal or such unsolicited all cash tender offer, as the case may be), (2) (after consultation with Janney Montgomery Scott Inc.) that sufficient financing is obtainable with respect to such proposal or such unsolicited all cash tender offer, as the case may be, such that the proposed Acquisition Transaction will be consummated without material delay and (3) that the proposed Acquisition Transaction (including, if applicable, such an unsolicited all cash tender offer) is not subject to any regulatory approvals that could reasonably be expected to prevent or materially delay its consummation (a proposal with respect to an Acquisition Transaction (including, if applicable, such an unsolicited all cash tender offer) meeting the requirements of clauses (1) through (3) is referred to herein as a "Superior Proposal"). Prior to furnishing or disclosing any non-public information to, or entering into negotiations, discussions or other communications with, such Third Party, the Company shall receive from such Third Party an executed confidentiality agreement with terms no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement between the Company and Parent (the "Confidentiality Agreement"), but which confidentiality agreement shall not provide for any exclusive right to negotiate with the Company or any payments by the Company. The Company shall provide to Parent copies of all such non-public information delivered to such Third Party concurrently with such delivery. Notwithstanding the foregoing, the Company and the Board of Directors of the Company shall not, and the Company shall cause its affiliates not to, withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of this Agreement or any of the transactions contemplated hereby, or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to the Shareholders or enter into a definitive agreement with respect to a Superior Proposal unless (w) the Company has given Parent three business days' notice of the intention of the Board of Directors to withdraw or modify (or resolve to withdraw or modify) in a manner adverse to Parent the approval or recommendation of this Agreement or any of the transactions contemplated hereby, or recommend (or resolve to recommend) an Acquisition Transaction with a Third Party to the Shareholders or the intention of the Company to enter into such definitive agreement, as the case may be, (x) if Parent makes a counter-proposal within such three business day period, the Board of Directors of the Company shall have determined, in light of any such counter-proposal, that the Third Party Acquisition Transaction proposal is still a Superior Proposal, (y) the Company concurrently terminates this Agreement in accordance with the terms hereof and pays any Termination Fee (as defined) required under Section 8.03(b) and agrees to pay any other amounts required under such Section 8.03(b), and (z) with respect to a definitive agreement, such agreement permits the Company to terminate it if it receives a Superior Proposal, such termination and related provisions to be on terms no less favorable to the Company, including as to fees and reimbursement of expenses, as those contained herein. (b) The Company shall promptly (but in any event within one day of the Company becoming aware of same) advise Parent of the receipt by the Company, any of the Subsidiaries or any of its or their bankers, attorneys or other agents or representatives of any inquiries or proposals relating to an Acquisition Transaction and any actions taken pursuant to Section 6.08(a). The Company shall promptly (but in any event within one day of the Company becoming aware of same) provide Parent with a copy of any such inquiry or proposal in writing and a written statement with respect to any such inquiries or proposals not in writing, which statement shall include the identity of the parties making such inquiries or proposal and the material terms thereof. The Company shall, from time to time, promptly (but in any event within one day of the Company becoming aware of same) inform Parent of the status and content of and developments with respect to any discussions regarding any Acquisition Transaction with a Third Party, including (i) the calling of meetings of the Board of Directors of the Company to take action with respect to such Acquisition Transaction, (ii) the execution of any letters of intent, memoranda of understanding or similar non-binding agreements with respect to such Acquisition Transaction, (iii) the waiver of any standstill agreement to which the Company is or becomes a party, (iv) the determination by the Board of Directors of the Company to recommend to the Shareholders 23 27 that they approve or accept a Superior Proposal or withdraw or modify in a manner adverse to the Parent its approval or recommendation of this Agreement or the transactions contemplated hereby, (v) the determination by the Company to publicly disclose receipt of a Superior Proposal and (vi) the waiver by the Company of any confidentiality agreement with a person proposing a Superior Proposal. For the avoidance of doubt, the Company agrees that it will not enter into any definitive agreement with respect to a Superior Proposal unless and until Parent has been given notice of the identity of the parties making such Superior Proposal, the terms thereof and developments referred to in the preceding sentence and the intent to enter into such a definitive agreement at least three business days prior to the entering into such agreement. SECTION 6.07. Notification of Certain Matters. Parent and the Company shall promptly notify each other of (a) the occurrence or non-occurrence of any fact or event which would be reasonably likely (i) to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date hereof to the Effective Time or (ii) to cause any covenant, condition or agreement hereunder not to be complied with or satisfied in all material respects and (b) any failure of the Company or Parent, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder in any material respect; provided, however, that no such notification shall affect the representations or warranties of any party or the conditions to the obligations of any party hereunder. SECTION 6.08. State Takeover Laws. The Company shall, upon the request of the Purchaser, take all reasonable steps to assist in any challenge by the Purchaser to the validity or applicability to the transactions contemplated by this Agreement, including the Offer and the Merger, and the Tender and Voting Agreement of any state takeover law. The Board of Directors of the Company shall not amend, modify or rescind the approval of any purchase of Shares in the Offer for purposes of Section 14A:10A-1 of the New Jersey Act. SECTION 6.09. Employee Matters. (a) On and after the Effective Time, Parent shall cause the Surviving Corporation and its subsidiaries to promptly pay or provide when due all compensation and benefits earned through or prior to the Effective Time as provided pursuant to the terms of any Company Plans disclosed in the Company Disclosure Statement for all employees (and former employees) and directors (and former directors) of the Company and its subsidiaries. Parent and the Company agree that the Surviving Corporation and its subsidiaries shall pay promptly or provide when due all compensation and benefits required to be paid pursuant to the terms of any individual agreement with any employee, former employee, director or former director in effect as of the date hereof and disclosed in the Company Disclosure Schedule. (b) If employees of the Surviving Corporation and its subsidiaries become eligible to participate in a medical, dental or health plan of Parent or its subsidiaries, Parent shall cause such plan to (i) waive any preexisting condition limitations for conditions under the applicable medical, health or dental plans of the Company and its subsidiaries (other than any limitation already in effect with respect to the applicable employee that has not been satisfied as of the Effective Time under the applicable Company Plan) and (ii) honor any deductible and out-of-pocket expenses incurred by the employees and their beneficiaries under such plans during the portion of the calendar year prior to such participation. (c) Nothing in this Section 6.09 shall require the continued employment of any person or prevent the Company and/or the Surviving Corporation and their subsidiaries from taking any action or refraining from taking any action that the Company and its subsidiaries prior to the Effective Time, could have taken or refrained from taking. 24 28 ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of Parent, the Purchaser and the Company to consummate the Merger are subject to the satisfaction or waiver in writing by each party hereto, at or before the Effective Time, of each of the following conditions: (a) Purchase of Shares. The Purchaser shall have accepted for payment and paid for Shares pursuant to the Offer in accordance with the terms hereof. (b) Shareholder Approval. The Shareholders shall have duly approved and adopted this Agreement and the transactions contemplated by this Agreement, to the extent required under applicable law. (c) Injunctions; Illegality. The consummation of the Merger shall not be restrained, enjoined or prohibited by any order, judgment, decree, injunction or ruling of a court of competent jurisdiction or any Governmental Entity and there shall not have been any statute, rule or regulation enacted, promulgated or deemed applicable to the Merger by any Governmental Entity which prevents the consummation of the Merger. (d) Antitrust. The expiration or termination of all applicable waiting periods relating to the Merger under the HSR Act and any applicable foreign antitrust laws, if applicable, shall have occurred. ARTICLE VIII TERMINATION; AMENDMENTS; WAIVER SECTION 8.01. Termination. This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time prior to the Effective Time, whether or not approval thereof by the Shareholders has been obtained: (a) by the mutual written consent of Parent and the Company; (b) by the Company if the Company is not in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement and if (i) the Purchaser fails to commence the Offer as provided in Section 1.01 hereof, (ii) the Purchaser shall not have accepted for payment and paid for Shares pursuant to the Offer in accordance with the terms thereof on or before August 31, 1999 (provided that if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, termination pursuant to this clause (ii) may not occur until after October 31, 1999), (iii) the Purchaser fails to purchase validly tendered Shares in violation of the terms of the Offer or this Agreement or (iv) the Merger shall not have occurred on or before December 31, 1999; (c) by Parent or the Company if the Offer is terminated or withdrawn pursuant to its terms without any Shares being purchased thereunder; provided that Parent may terminate this Agreement pursuant to this Section 8.01(c) only if Parent's or the Purchaser's termination or withdrawal of the Offer is not in violation of the terms of this Agreement or the Offer; (d) by Parent or the Company if any court or other Governmental Entity shall have issued, enacted, entered, promulgated or enforced any order, judgment, decree, injunction, or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Offer or the Merger and such order, judgment, decree, injunction, ruling or other action shall have become final and nonappealable; (e) by the Company if prior to the purchase by the Purchaser of any Shares in the Offer (i) there shall have occurred, on the part of Parent or the Purchaser, a material breach of any representation or warranty, covenant or agreement contained in this Agreement which is not curable or, if curable, is not cured within ten business days after written notice of such breach is given by the Company to the party committing the breach or (ii) (A) (x) the Company proposes entering into a definitive agreement with respect to a Superior Proposal or (y) the Board of Directors of the Company recommends a Third Party 25 29 Acquisition Transaction which is an unsolicited all cash tender offer for any and all Shares and which constitutes a Superior Proposal, (B) the Company gives Parent the three business days' notice as required pursuant to the last sentence of Section 6.06(a), (C) if a counter-proposal was made by Parent within such three business day period, the Board of Directors of the Company has determined, in light of the counter-proposal, that the Third Party Acquisition Transaction (or proposal therefor) is still a Superior Proposal as required by the last sentence of Section 6.06(a) and (D) the Company pays any Termination Fee and any other amounts required under Section 8.03(b); (f) by Parent if prior to the purchase by the Purchaser of any Shares in the Offer (i) there shall have occurred, on the part of the Company, a material breach of any representation, warranty, covenant or agreement contained in this Agreement which is not curable or, if curable, is not cured within ten business days after written notice of such breach is given by Parent to the Company, (ii) there shall have occurred, on the part of any shareholder party to the Tender and Voting Agreement, a material breach of any representation, warranty, covenant or agreement contained in the Tender and Voting Agreement which is not curable or, if curable, is not cured within five business days after written notice of such breach is given by Parent to the applicable shareholder or (iii) if the Board of Directors of the Company or committee thereof shall have withdrawn or modified (or shall have resolved to withdraw or modify) in a manner adverse to Parent, its approval or recommendation of this Agreement or any of the transactions contemplated hereby or shall have recommended (or resolved to recommend) an Acquisition Transaction (other than the Offer and Merger) to the Shareholders; or (g) by Parent if it is not in material breach of its obligations hereunder or under the Offer and no Shares shall have been purchased pursuant to the Offer on or before August 31, 1999 (provided that if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, termination pursuant to this clause (g) may not occur until October 31, 1999). SECTION 8.02. Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.01, this Agreement shall forthwith become void and have no effect, without any liability on the part of any party or its directors, officers or stockholders, other than the provisions of this Section 8.02, Section 8.03 and the last sentence of Section 6.08, which shall survive any such termination. Nothing contained in this Section 8.02 shall relieve any party from liability for any breach of this Agreement or the Confidentiality Agreement. SECTION 8.03. Fees and Expenses. (a) Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Offer, this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses. (b) In the event this Agreement is terminated pursuant to Section 8.01(e)(ii) or 8.01(f)(iii), then the Company shall (i) promptly reimburse Parent for the documented fees and expenses of Parent and the Purchaser related to this Agreement and the transactions contemplated hereby not to exceed $1.0 million and (ii) promptly pay Parent a Termination Fee of $4.75 million, in each case by wire transfer of same day funds to an account designated by Parent as a condition of such termination. In the event this Agreement is terminated pursuant to Section 8.01(f)(i) or 8.01(f)(ii), the Company shall promptly reimburse Parent for the documented fees and expenses of Parent and the Purchaser related to this Agreement and the transactions contemplated hereby not to exceed $1.0 million by wire transfer of same day funds to an account designated by Parent. (c) In the event that (i) prior to the termination of this Agreement, a Third Party shall have made a proposal regarding an Acquisition Transaction and (ii) thereafter (x) such proposal is publicly disclosed and August 31, 1999 occurs (or, if the only unsatisfied condition to the Offer at August 31, 1999 is the expiration or termination of all applicable waiting periods relating to the Offer under the HSR Act, October 31, 1999 occurs) without the Minimum Condition being satisfied (other than as a result of a material breach hereof by Parent or the Purchaser that has not been cured within the time period set forth in Article VIII of this 26 30 Agreement) or (y) the Agreement is terminated (A) by the Company pursuant to Section 8.01(b)(ii) or 8.01(c) or (B) by Parent pursuant to 8.01(f)(i), 8.01(f)(ii) or 8.01(g) and, in each case, at the time the event giving rise to the right to so terminate this Agreement, such Third Party Acquisition Transaction proposal shall not have been withdrawn, and (iii) prior to twelve months after any termination of this Agreement the Company shall have entered into a definitive agreement for a Third Party Acquisition Transaction which constitutes a Superior Proposal, or a Third Party Acquisition Transaction which constitutes a Superior Proposal shall have been consummated, then the Company shall promptly, but in no event later than immediately prior to, and as a condition of, entering into such definitive agreement, or, if there is no such definitive agreement then immediately upon consummation of the Acquisition Transaction, reimburse Parent for the documented fees and expenses of Parent and the Purchaser relating to this Agreement and the transactions contemplated hereby (to the extent not previously reimbursed and without duplication of any amounts reimbursed pursuant to Section 8.03(b))not to exceed $1.0 million and pay Parent a Termination Fee of $4.75 million (it being understood that only one Termination Fee shall be payable pursuant to Section 8.03(b) and 8.03(c) in the aggregate), which amounts shall be payable by wire transfer of same day funds to an account designated by Parent. (d) The Company acknowledges that the agreements contained in Section 8.03(b) and (c) are an integral part of the transactions contemplated in this Agreement, and that, without these agreements, Parent and Purchaser would not enter into this Agreement; accordingly, if the Company fails to promptly pay the amount due pursuant to Section 8.03(b) and (c), and, in order to obtain such payment, Parent or the Purchaser commences a suit that results in a judgment against the Company for the fee and expenses set forth in Sections 8.03(b) and (c), the Company shall pay to Parent its costs and expenses (including reasonable attorneys' fees) in connection with such suit. SECTION 8.04. Amendment. Subject to Section 1.03(c), this Agreement may be amended by the Company, Parent and the Purchaser at any time before or after any approval of this Agreement by the Shareholders but, after any such approval, no amendment shall be made which decreases the Merger Price or which adversely affects the rights of the Shareholders hereunder without the approval of such Shareholders. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties. SECTION 8.05. Extension; Waiver. Subject to Section 1.03(c), at any time prior to the Effective Time, the parties hereto may (i) extend the time for the performance of any of the obligations or other acts of any other party hereto, (ii) waive any inaccuracies in the representations and warranties contained herein by any other party or in any document, certificate or writing delivered pursuant hereto by any other party or (iii) waive compliance with any of the agreements of any other party or with any conditions to its own obligations. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. ARTICLE IX MISCELLANEOUS SECTION 9.01. Non-Survival of Representations and Warranties. The representations and warranties made in this Agreement shall not survive beyond the Effective Time. SECTION 9.02. Entire Agreement; Assignment. (a) This Agreement (including the documents and the instruments referred to herein), the Tender and Voting Agreement and the Confidentiality Agreement constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof. (b) Neither this Agreement nor any of the rights, interests or obligations hereunder will be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 27 31 SECTION 9.03. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, each of which shall remain in full force and effect. SECTION 9.04. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by overnight courier or facsimile (with receipt confirmed) to the respective parties as follows: If to Parent or the Purchaser: Yellow Corporation 10990 Roe Avenue Overland Park, KS 66207 Attention: William F. Martin, Jr., General Counsel Fax: (913) 696-6116 with a copy to: Cahill Gordon & Reindel 80 Pine Street New York, New York 10005 Attention: W. Leslie Duffy, Esq. Fax: 212-269-5420 If to the Company: Jevic Transportation, Inc. 600 Creek Road Delanco, NJ 08075 Attention: Harry J. Muhlschlegel Chief Executive Officer and Chairman of the Board Fax: (609) 764-7237 with a copy to: Pepper Hamilton LLP 3000 Two Logan Square Philadelphia, PA 19103 Attention: Barry M. Abelson Fax: 215-981-4750 or to such other address as the person to whom notice is given may have previously furnished to the other in writing in the manner set forth above (provided that notice of any change of address shall be effective only upon receipt thereof). SECTION 9.05. Governing Law; Jurisdiction. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. (b) In addition, each of the parties hereto agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than a federal or state court sitting in the State of New Jersey. SECTION 9.06. Descriptive Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. SECTION 9.07. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same agreement. 28 32 SECTION 9.08. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, except with respect to Sections 2.09, 3.02 and 6.05, nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. SECTION 9.09. Certain Definitions. As used in this Agreement: (a) the term "affiliate", as applied to any person, shall mean any other person directly or indirectly controlling, controlled by, or under common control with, that person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as applied to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise; (b) the term "person" shall include individuals, corporations, partnerships, trusts, other entities and groups (which term shall include a "group" as such term is defined in Section 13(d)(3) of the Exchange Act); (c) the term "subsidiary" or "subsidiaries", means, with respect to Parent, the Company, or any other person, any corporation, partnership, joint venture or other legal entity of which Parent, the Company or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, stock or other equity interests the holders of which are generally entitled to more than 50% of the vote for the election of the board of directors or other governing body of such corporation or other legal entity; (d) The term "Tax" or "Taxes" means (i) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, alternative minimum, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any taxing authority in connection with any item described in clause (i) and (iii) all transferee, successor, joint and several or contractual liability (including, without limitation, liability pursuant to Treas. Reg. sec. 1.1502-6 (or any similar state, local or foreign provision)) in respect of any items described in clause (i) or (ii); (e) The term "Tax Return" means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of any Taxes; and (f) the term "Termination Fee" means a fee payable by the Company to Parent pursuant to Section 8.03(b) or Section 8.03(c) of this Agreement. SECTION 9.10. Remedies. Except as set forth below, the parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and, accordingly, it is agreed that the parties shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. In the event of a termination of this Agreement pursuant to which a Termination Fee is paid pursuant to Section 8.03 hereof, the receipt of such Termination Fee shall serve as payment of liquidated damages with respect to any breach of this Agreement by the party paying such Termination Fee giving rise to such termination, and receipt of such Termination Fee shall be the sole and exclusive remedy (at law or in equity) with respect to any such breach. 29 33 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on its behalf by its respective officer thereunto duly authorized, all as of the day and year first above written. YELLOW CORPORATION By: /s/ A. MAURICE MYERS ------------------------------------ Name: A. Maurice Myers Title: President and Chief Executive Officer JPF ACQUISITION CORP. By: /s/ WILLIAM F. MARTIN, JR. ------------------------------------ Name: William F. Martin, Jr. Title: Vice President JEVIC TRANSPORTATION, INC. By: /s/ HARRY J. MUHLSCHLEGEL ------------------------------------ Name: Harry J. Muhlschlegel Title: Chairman and Chief Executive Officer 30 34 ANNEX I Conditions to the Offer. Notwithstanding any other provisions of the Offer, in addition to (and not in limitation of) the Purchaser's right to extend and amend the Offer at any time in its sole discretion (subject to the terms of the Merger Agreement), the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, pay for, and may delay the acceptance for payment of or, subject to the regulations referred to above, the payment for, any tendered Shares, and may terminate or amend the Offer, if (i) there are not validly tendered and not withdrawn prior to the expiration date for the Offer (the "Expiration Date") that number of Shares which represent at least 51% of the outstanding Common Shares on a fully diluted basis (including Common Shares issuable upon conversion of Class A Common Shares) on the date of purchase (the "Minimum Condition"), (ii) all of the outstanding Class A Shares are not validly tendered and not withdrawn prior to the Expiration Date, (iii) any applicable waiting periods under the HSR Act or any applicable foreign antitrust statute shall not have expired or (iv) at any time on or after June 6, 1999 and before the expiration of the Offer, any of the following events shall occur: (a) any law, statute, rule, regulation, ordinance or injunction is enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, or any other action is taken by any Governmental Entity that would reasonably be expected to, directly or indirectly, (i) make illegal or otherwise directly or indirectly restrain or prohibit the acquisition by Parent or Purchaser of any Shares under the Offer or the making or consummation of the Offer or the Merger, the performance by the Company of any of its material obligations under the Merger Agreement or the consummation of any purchase of Shares contemplated by the Merger Agreement, (ii) prohibit or limit the ownership or operation by the Company, Parent or any of their respective subsidiaries of any portion of the business or assets of the Company or any Subsidiary or of Parent or any of its subsidiaries or compel the Company or Parent to dispose of or hold separate any portion of the business or assets of the Company or any Subsidiary or of Parent or any of its subsidiaries as a result of the Offer or the Merger, (iii) impose limitations on the ability of Parent or the Purchaser to acquire or hold, or exercise full rights of ownership of, any Shares accepted for payment pursuant to the Offer, including, without limitation, the right to vote such Shares on all matters properly presented to the shareholders of the Company or (iv) prohibit Parent or any of its subsidiaries from effectively controlling any portion of the business or operations of the Company or any Subsidiary; or (b) the Company and the Purchaser and Parent shall have reached an agreement that the Offer or the Merger Agreement be terminated, or the Merger Agreement shall have been terminated in accordance with its terms; or (c) any event shall have occurred or condition exist that has or could reasonably be expected to have, a Material Adverse Effect on the Company (as defined in the Merger Agreement); or (d) (i) the Board of Directors of the Company or any committee thereof withdraws or modifies in a manner adverse to Parent or the Purchaser its approval or recommendation of the Offer, the Merger or the Merger Agreement, or approves or recommends any proposal for an Acquisition Transaction with a Third Party or (ii) the Company enters into any agreement to consummate any Acquisition Transaction with a Third Party; or (e) any of the representations and warranties of the Company set forth in the Merger Agreement that are not qualified as to materiality are not true and correct or the representations and warranties of the Company set forth in the Merger Agreement that are qualified as to materiality would not be true and correct, but for such qualification, and the events or conditions giving rise to such representations and warranties not being true and correct but for such qualification could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, in each case at the date of the Merger Agreement or at the scheduled expiration of the Offer (as though made as of such date, except that those representations and warranties that address matters only as of a particular date shall remain true and correct as of such date) which have not been cured within the time period specified in Article VIII of the Merger Agreement or the Purchaser shall have failed to receive a certificate executed 1 35 by the President or a Vice President of the Company, dated as of the scheduled expiration date, to the effect that the conditions set forth in this clause (e) have not occurred; or (f) the Company shall have breached or failed to perform in any material respect any of its obligations, covenants or agreements under the Merger Agreement or the Purchaser shall have failed to receive a certificate executed by the President or a Vice President of the Company, dated as of the scheduled expiration of the Offer, that the conditions set forth in this clause (f) have not occurred; or (g) any shareholder party to any Tender and Voting Agreement shall have breached or failed to perform in any material respect any of such shareholder's obligations, covenants or agreements thereunder; or (h) all Consents of Governmental Entities and other Persons (other than lenders) listed in Section 4.05 of the Company Disclosure Statement shall not have been obtained with no material adverse conditions attached and no material expense imposed on the Company or any of the Subsidiaries; or (i) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on the New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (iii) a commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (iv) any limitation (whether or not mandatory) by any United States governmental authority on the extension of credit generally by banks or other financial institutions, or (v) a change in general financial, bank or capital market conditions which materially and adversely affects the ability of financial institutions in the United States to extend credit or syndicate loans or (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof. The foregoing conditions are for the benefit of Parent and the Purchaser and may be asserted by Parent or the Purchaser regardless of the circumstances giving rise to any such conditions and may be waived by Parent or the Purchaser in whole or in part at any time and from time to time in their sole discretion. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. The capitalized terms used in this Annex I shall have the meanings set forth in the Agreement to which it is annexed, except that the term "Merger Agreement" shall be deemed to refer to the Agreement to which this Annex I is appended. 2 EX-99.(C)(3) 14 EMPLOYMENT AGREEMENT - RAYMOND M. CONLIN 1 EXHIBIT (c)(3) EMPLOYMENT AGREEMENT THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Raymond M. Conlin, (the "Executive"). WHEREAS, Yellow and the Company are currently engaged in the negotiation of an Agreement and Plan of Merger (the "Purchase Agreement") pursuant to which Yellow would, through an indirect wholly owned subsidiary, acquire all the shares of common stock of the Company; and WHEREAS, the Boards of Directors of the Company and Yellow have approved the employment of the Executive on the terms and conditions set forth in this Agreement; and WHEREAS, the Executive is willing, for the considerations provided, to continue in the employment of the Company on the terms and conditions set forth in this Agreement; NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby accepts such continued employment, upon the terms and conditions set forth in this Agreement. On and after the effective date of the merger of the "Purchaser" (as defined in the Purchase Agreement) into the Company contemplated by the Purchase Agreement (the "Merger Date"), Yellow shall cause the "Surviving Corporation" as defined in the Purchase Agreement to satisfy the Company's obligations under this Agreement; provided, however, that Yellow shall have no obligations or liabilities under this Agreement unless and until the Effective Date, (as defined below) occurs. On and after the Merger Date, said Surviving Corporation shall be the "Company" for purposes of this Agreement. 2. Term. This Agreement shall become effective on, and the term (the "Term") of the Executive's employment under this Agreement shall commence on, the date on which the Purchaser purchases shares of the Company's stock pursuant to a tender offer (the "Effective Date") and shall continue until the date of termination of the Executive's employment with the Company. 3. Position and Duties. During the Term, the Executive shall serve as Senior Vice President Administration of the Company, and shall have such responsibilities and authority as is commensurate with such office. The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. 2 4. Compensation. During the Term, the Company shall provide the Executive with the following compensation and other benefits: (a) Base Salary. The Company shall pay the Executive base salary at the initial rate of $135,000 per annum, which shall be payable in accordance with the standard payroll practices of the Company. At no time during the Term shall the Executive's base salary be decreased from the rate then in effect except with the written consent of the Executive. (b) Bonus. During the Term, the Executive shall participate in the annual bonus program maintained for the executive officers of the Company. The Executive's target bonus for each fiscal year during the Term shall be no less than 30% of his annual base salary for that year. (c) Other Company, Benefits. During the Term, the Executive shall be entitled to participate in, and to receive benefits under, the benefit plans and programs that are at the applicable time available to executives of the Company generally and on terms and conditions that are no less favorable than those applicable to executives of the Company generally. (d) Stock Options. As of the Effective Date, Yellow shall grant to the Executive an option to purchase 20,000 shares of common stock of Yellow with the following principal terms: (i) an exercise price equal to the closing price of Yellow common stock as reported by NASDAQ on June 4, 1999, (ii) vesting and becoming exercisable at the rate of 25% on the first anniversary of the Effective Date, 25% on the second anniversary, 25% on the third anniversary, and the remaining 25% on the fourth anniversary, and (iii) other terms and conditions substantially similar to stock options granted to executives generally under Yellow's 1996 Stock Option Plan. With respect to calendar years beginning after the Effective Date, the Executive during the Term shall participate in Yellow's stock option plans on terms and conditions substantially similar to those generally applicable to executives of Yellow and its subsidiaries. (e) Perquisites. On and after the Effective Date, Yellow shall cause the Company during the Term to provide to the Executive the perquisites listed in Appendix A hereto. 3 5. Right to Terminate Employment. The Company reserves the right to terminate the Executive's employment hereunder at any time, subject, however, to the termination procedures set forth in Section 7 of the Amended and Restated Severance Agreement dated as of June 4, 1999 between the Company and the Executive (the "Severance Agreement") to the extent such procedures are then applicable pursuant to the terms of the Severance Agreement. The Executive reserves the right to resign from employment with the Company at any time, subject, however, to any limitations on such right that may then be applicable pursuant to the terms of the Severance Agreement. 6. Relationship of this Agreement to Severance Agreement. Nothing in this Agreement shall affect in any way the rights and obligations of the Company and the Executive under the Severance Agreement, except that the Executive hereby agrees to the following modifications of the Severance Agreement, effective as of the Effective Date: (i) an act or failure to act constituting "Good Reason" as described in subsection (i) of Section 15 (M) of the Severance Agreement shall not be deemed to occur on or after the Effective Date so long as the Executive has the title, responsibilities and authority set forth in Section 3 of this Agreement (notwithstanding changes in the Executive's status, responsibilities and authority resulting from the Company's ceasing to be a separate public company), and (ii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the cessation of the Executive's participation in the Company's stock option and other stock-based plans so long as Yellow complies with Section 4 (d) of this Agreement on and after the Effective Date, and (iii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15(M) of the Severance Agreement shall not be deemed to occur by reason of the limitation of the Executive's target bonus to the level provided for in Section 4 (b) of this Agreement, and (iv) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the elimination or modification of any perquisites or fringe benefits enjoyed by the Executive before the Effective Date (other than benefits under any Company "employee benefit plan" as defined in Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended) so long as the Company provides the perquisites set forth in Appendix A hereto, and 4 (v) Yellow's execution of this Agreement shall be deemed to fully satisfy the Company's obligations pursuant to Section 9.1 of the Severance Agreement. 7. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the party against whom such waiver, modification or discharge is sought to be enforced (with such signature, in the case of the Company or Yellow, to be made by a duly authorized officer thereof). No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net of withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. IN WITNESS WHEREOF, this Agreement has been executed, as of the date first written, on behalf of the Company by its duly authorized officer, on behalf of Yellow by its duly authorized officer, and by the Executive. JEVIC TRANSPORTATION, INC /s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel - ------------------------------------- -------------------------------- Secretary YELLOW CORPORATION /s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III - ------------------------------------- -------------------------------- Secretary EXECUTIVE By: /s/ Raymond M. Conlin -------------------------------- 5 APPENDIX A Under Section 4 (e) of the Employment Agreement between the Executive, Jevic Transportation, Inc. and Yellow Corporation the following perquisites shall be provided: (A) Car Allowance. Executive shall be provided a car or car allowance at least equal to that provided under Jevic Transportation, Inc.'s policy dated March 5, 1996. (B) Vacation. Executive will be entitled to annual vacation at least equal to that currently provided as an employee of Jevic Transportation under their current policy and practice. (C) Supplemental Retirement Plan. Continued eligibility to participate in Jevic Transportation's non-qualified supplemental retirement arrangements through Fidelity Investments. (D) Split Dollar Life Insurance. Continued participation in the Split Dollar Life Insurance Program currently provided as an Executive of Jevic. (E) Financial Planning/Tax Preparation. Executive will be entitled to an annual reimbursement of expenses in conjunction with personal financial planning and/or income tax return preparation not to exceed $1,500. (F) Executive Physical. Executive will be reimbursed up to $350 annually for expenses in conjunction with a physical examination. This benefit shall be in addition to any amounts otherwise payable under Jevic's Medical Benefit Plan. EX-99.(C)(4) 15 EMPLOYMENT AGREEMENT - BRIAN J. FITZPATRICK 1 EXHIBIT (c)(4) EMPLOYMENT AGREEMENT THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Brian J. Fitzpatrick, (the "Executive"). WHEREAS, Yellow and the Company are currently engaged in the negotiation of an Agreement and Plan of Merger (the "Purchase Agreement") pursuant to which Yellow would, through an indirect wholly owned subsidiary, acquire all the shares of common stock of the Company; and WHEREAS, the Boards of Directors of the Company and Yellow have approved the employment of the Executive on the terms and conditions set forth in this Agreement; and WHEREAS, the Executive is willing, for the considerations provided, to continue in the employment of the Company on the terms and conditions set forth in this Agreement; NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby accepts such continued employment, upon the terms and conditions set forth in this Agreement. On and after the effective date of the merger of the "Purchaser" (as defined in the Purchase Agreement) into the Company contemplated by the Purchase Agreement (the "Merger Date"), Yellow shall cause the "Surviving Corporation" as defined in the Purchase Agreement to satisfy the Company's obligations under this Agreement; provided, however, that Yellow shall have no obligations or liabilities under this Agreement unless and until the Effective Date (as defined below) occurs. On and after the Merger Date, said Surviving Corporation shall be the "Company" for purposes of this Agreement. 2. Term. This Agreement shall become effective on, and the term (the "Term") of the Executive's employment under this Agreement shall commence on, the date on which the Purchaser purchases shares of the Company's stock pursuant to a tender offer (the "Effective Date") and shall continue until the date of termination of the Executive's employment with the Company. 3. Position and Duties. During the Term, the Executive shall serve as Senior Vice President - CFO of the Company, and shall have such responsibilities and authority as is commensurate with such office. The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. 2 4. Compensation. During the Term, the Company shall provide the Executive with the following compensation and other benefits: (a) Base Salary. The Company shall pay the Executive base salary at the initial rate of $191,200 per annum, which shall be payable in accordance with the standard payroll practices of the Company. At no time during the Term shall the Executive's base salary be decreased from the rate then in effect except with the written consent of the Executive. (b) Bonus. During the Term, the Executive shall participate in the annual bonus program maintained for the executive officers of the Company. The Executive's target bonus for each fiscal year during the Term shall be no less than 30% of his annual base salary for that year. (c) Other Company, Benefits. During the Term, the Executive shall be entitled to participate in, and to receive benefits under, the benefit plans and programs that are at the applicable time available to executives of the Company generally and on terms and conditions that are no less favorable than those applicable to executives of the Company generally. (d) Stock Options. As of the Effective Date, Yellow shall grant to the Executive an option to purchase 20,000 shares of common stock of Yellow with the following principal terms: (i) an exercise price equal to the closing price of Yellow common stock as reported by NASDAQ on June 4, 1999, (ii) vesting and becoming exercisable at the rate of 25% on the first anniversary of the Effective Date, 25% on the second anniversary, 25% on the third anniversary, and the remaining 25% on the fourth anniversary, and (iii) other terms and conditions substantially similar to stock options granted to executives generally under Yellow's 1996 Stock Option Plan. With respect to calendar years beginning after the Effective Date, the Executive during the Term shall participate in Yellow's stock option plans on terms and conditions substantially similar to those generally applicable to executives of Yellow and its subsidiaries. (e) Perquisites. On and after the Effective Date, Yellow shall cause the Company during the Term to provide to the Executive the perquisites listed in Appendix A hereto. 3 5. Right to Terminate Employment. The Company reserves the right to terminate the Executive's employment hereunder at any time, subject, however, to the termination procedures set forth in Section 7 of the Amended and Restated Severance Agreement dated as of June 4, 1999 between the Company and the Executive (the "Severance Agreement") to the extent such procedures are then applicable pursuant to the terms of the Severance Agreement. The Executive reserves the right to resign from employment with the Company at any time, subject, however, to any limitations on such right that may then be applicable pursuant to the terms of the Severance Agreement. 6. Relationship of this Agreement to Severance Agreement. Nothing in this Agreement shall affect in any way the rights and obligations of the Company and the Executive under the Severance Agreement, except that the Executive hereby agrees to the following modifications of the Severance Agreement, effective as of the Effective Date: (i) an act or failure to act constituting "Good Reason" as described in subsection (i) of Section 15 (M) of the Severance Agreement shall not be deemed to occur on or after the Effective Date so long as the Executive has the title, responsibilities and authority set forth in Section 3 of this Agreement (notwithstanding changes in the Executive's status, responsibilities and authority resulting from the Company's ceasing to be a separate public company), and (ii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the cessation of the Executive's participation in the Company's stock option and other stock-based plans so long as Yellow complies with Section 4 (d) of this Agreement on and after the Effective Date, and (iii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15(M) of the Severance Agreement shall not be deemed to occur by reason of the limitation of the Executive's target bonus to the level provided for in Section 4 (b) of this Agreement, and (iv) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the elimination or modification of any perquisites or fringe benefits enjoyed by the Executive before the Effective Date (other than benefits under any Company "employee benefit plan" as defined in Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended) so long as the Company provides the perquisites set forth in Appendix A hereto, and 4 (v) Yellow's execution of this Agreement shall be deemed to fully satisfy the Company's obligations pursuant to Section 9.1 of the Severance Agreement. 7. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the party against whom such waiver, modification or discharge is sought to be enforced (with such signature, in the case of the Company or Yellow, to be made by a duly authorized officer thereof). No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net of withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. IN WITNESS WHEREOF, this Agreement has been executed, as of the date first written, on behalf of the Company by its duly authorized officer, on behalf of Yellow by its duly authorized officer, and by the Executive. JEVIC TRANSPORTATION, INC /s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel - ------------------------------------- ------------------------------- Secretary YELLOW CORPORATION /s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III - ------------------------------------- ------------------------------- Secretary EXECUTIVE By: /s/ Brian J. Fitzpatrick ------------------------------- 5 APPENDIX A Under Section 4 (e) of the Employment Agreement between the Executive, Jevic Transportation, Inc. and Yellow Corporation the following perquisites shall be provided: (A) Car Allowance. Executive shall be provided a car or car allowance at least equal to that provided under Jevic Transportation, Inc.'s policy dated March 5, 1996. (B) Vacation. Executive will be entitled to annual vacation at least equal to that currently provided as an employee of Jevic Transportation under their current policy and practice. (C) Supplemental Retirement Plan. Continued eligibility to participate in Jevic Transportation's non-qualified supplemental retirement arrangements through Fidelity Investments. (D) Split Dollar Life Insurance. Continued participation in the Split Dollar Life Insurance Program currently provided as an Executive of Jevic. (E) Financial Planning / Tax Preparation. Executive will be entitled to an annual reimbursement of expenses in conjunction with personal financial planning and/or income tax return preparation not to exceed $1,500. (F) Executive Physical. Executive will be reimbursed up to $350 annually for expenses in conjunction with a physical examination. This benefit shall be in addition to any amounts otherwise payable under Jevic's Medical Benefit Plan. EX-99.(C)(5) 16 EMPLOYMENT AGREEMENT - PAUL J. KARVOIS 1 EXHIBIT (c)(5) EMPLOYMENT AGREEMENT THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Paul J. Karvois, (the "Executive"). WHEREAS, Yellow and the Company are currently engaged in the negotiation of an Agreement and Plan of Merger (the "Purchase Agreement") pursuant to which Yellow would, through an indirect wholly owned subsidiary, acquire all the shares of common stock of the Company; and WHEREAS, the Boards of Directors of the Company and Yellow have approved the employment of the Executive on the terms and conditions set forth in this Agreement; and WHEREAS, the Executive is willing, for the considerations provided, to continue in the employment of the Company on the terms and conditions set forth in this Agreement; NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby accepts such continued employment, upon the terms and conditions set forth in this Agreement. On and after the effective date of the merger of the "Purchaser" (as defined in the Purchase Agreement) into the Company contemplated by the Purchase Agreement (the "Merger Date"), Yellow shall cause the "Surviving Corporation" as defined in the Purchase Agreement to satisfy the Company's obligations under this Agreement; provided, however, that Yellow shall have no obligations or liabilities under this Agreement unless and until the Effective Date (as defined below) occurs. On and after the Merger Date, said Surviving Corporation shall be the "Company" for purposes of this Agreement. 2. Term. This Agreement shall become effective on, and the term (the "Term") of the Executive's employment under this Agreement shall commence on, the date on which the Purchaser purchases shares of the Company's stock pursuant to a tender offer (the "Effective Date") and shall continue until the date of termination of the Executive's employment with the Company. 3. Position and Duties. During the Term, the Executive shall serve as President of the Company, and shall have such responsibilities and authority as is commensurate with such office. The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. 2 4. Compensation. During the Term, the Company shall provide the Executive with the following compensation and other benefits: (a) Base Salary. The Company shall pay the Executive base salary at the initial rate of $275,120 per annum, which shall be payable in accordance with the standard payroll practices of the Company. At no time during the Term shall the Executive's base salary be decreased from the rate then in effect except with the written consent of the Executive. (b) Bonus. During the Term, the Executive shall participate in the annual bonus program maintained for the executive officers of the Company. The Executive's target bonus for each fiscal year during the Term shall be no less than 40% of his annual base salary for that year. (c) Other Company, Benefits. During the Term, the Executive shall be entitled to participate in, and to receive benefits under, the benefit plans and programs that are at the applicable time available to executives of the Company generally and on terms and conditions that are no less favorable than those applicable to executives of the Company generally. (d) Stock Options. As of the Effective Date, Yellow shall grant to the Executive an option to purchase 30,000 shares of common stock of Yellow with the following principal terms: (i) an exercise price equal to the closing price of Yellow common stock as reported by NASDAQ on June 4, 1999, (ii) vesting and becoming exercisable at the rate of 25% on the first anniversary of the Effective Date, 25% on the second anniversary, 25% on the third anniversary, and the remaining 25% on the fourth anniversary, and (iii) other terms and conditions substantially similar to stock options granted to executives generally under Yellow's 1996 Stock Option Plan. With respect to calendar years beginning after the Effective Date, the Executive during the Term shall participate in Yellow's stock option plans on terms and conditions substantially similar to those generally applicable to executives of Yellow and its subsidiaries. (e) Perquisites. On and after the Effective Date, Yellow shall cause the Company during the Term to provide to the Executive the perquisites listed in Appendix A hereto. 3 5. Right to Terminate Employment. The Company reserves the right to terminate the Executive's employment hereunder at any time, subject, however, to the termination procedures set forth in Section 7 of the Amended and Restated Severance Agreement dated as of June 4, 1999 between the Company and the Executive (the "Severance Agreement") to the extent such procedures are then applicable pursuant to the terms of the Severance Agreement. The Executive reserves the right to resign from employment with the Company at any time, subject, however, to any limitations on such right that may then be applicable pursuant to the terms of the Severance Agreement. 6. Relationship of this Agreement to Severance Agreement. Nothing in this Agreement shall affect in any way the rights and obligations of the Company and the Executive under the Severance Agreement, except that the Executive hereby agrees to the following modifications of the Severance Agreement, effective as of the Effective Date: (i) an act or failure to act constituting "Good Reason" as described in subsection (i) of Section 15 (M) of the Severance Agreement shall not be deemed to occur on or after the Effective Date so long as the Executive has the title, responsibilities and authority set forth in Section 3 of this Agreement (notwithstanding changes in the Executive's status, responsibilities and authority resulting from the Company's ceasing to be a separate public company), and (ii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the cessation of the Executive's participation in the Company's stock option and other stock-based plans so long as Yellow complies with Section 4 (d) of this Agreement on and after the Effective Date, and (iii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15(M) of the Severance Agreement shall not be deemed to occur by reason of the limitation of the Executive's target bonus to the level provided for in Section 4 (b) of this Agreement, and (iv) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the elimination or modification of any perquisites or fringe benefits enjoyed by the Executive before the Effective Date (other than benefits under any Company "employee benefit plan" as defined in Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended) so long as the Company provides the perquisites set forth in Appendix A hereto, and 4 (v) Yellow's execution of this Agreement shall be deemed to fully satisfy the Company's obligations pursuant to Section 9.1 of the Severance Agreement. 7. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the party against whom such waiver, modification or discharge is sought to be enforced (with such signature, in the case of the Company or Yellow, to be made by a duly authorized officer thereof). No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net of withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. IN WITNESS WHEREOF, this Agreement has been executed, as of the date first written, on behalf of the Company by its duly authorized officer, on behalf of Yellow by its duly authorized officer, and by the Executive. JEVIC TRANSPORTATION, INC /s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel - ------------------------------------- ----------------------------- Secretary YELLOW CORPORATION /s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III - ------------------------------------- ----------------------------- Secretary EXECUTIVE By: /s/ Paul J. Karvois ----------------------------- 5 APPENDIX A Under Section 4 (e) of the Employment Agreement between the Executive, Jevic Transportation, Inc. and Yellow Corporation the following perquisites shall be provided: (A) Car Allowance. Executive will be entitled to continuance of car allowance under Jevic Transportation, Inc. policy dated March 5, 1996. (B) Vacation. Executive will be entitled to annual vacation at least equal to that currently provided as an employee of Jevic Transportation, Inc. under their current policy and practice. (C) Supplemental Retirement Plan. Continued eligibility to participate in Jevic Transportation's Non-Qualified Supplemental Retirement Arrangements through Fidelity Investments. (D) Split Dollar Life Insurance. Continued participation in the Split Dollar Life Insurance Program currently provided as an Executive of Jevic Transportation, Inc. (E) Financial Planning / Tax Preparation. Executive will be entitled to an annual reimbursement of expenses in conjunction with personal financial planning and/or income tax return preparation not to exceed $3,500. (F) Executive Physical. Executive is entitled to an annual physical examination plus travel expenses at the Mayo Clinic Executive Health Program located in Scottsdale, Arizona. (G) Country Club Membership. Executive is entitled to reimbursement of up to $27,500 toward the initiation fee to join a Country Club, plus up to $250 monthly toward such club's dues. EX-99.(C)(6) 17 EMPLOYMENT AGREEMENT - JOSEPH A. LIBRIZZI 1 EXHIBIT (c)(6) EMPLOYMENT AGREEMENT THIS AGREEMENT dated as of this fourth day of June, 1999 is made by and among JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), YELLOW CORPORATION, a Delaware corporation ("Yellow"), and Joseph A. Librizzi, (the "Executive"). WHEREAS, Yellow and the Company are currently engaged in the negotiation of an Agreement and Plan of Merger (the "Purchase Agreement") pursuant to which Yellow would, through an indirect wholly owned subsidiary, acquire all the shares of common stock of the Company; and WHEREAS, the Boards of Directors of the Company and Yellow have approved the employment of the Executive on the terms and conditions set forth in this Agreement; and WHEREAS, the Executive is willing, for the considerations provided, to continue in the employment of the Company on the terms and conditions set forth in this Agreement; NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows: 1. Employment. The Company hereby agrees to continue to employ the Executive, and the Executive hereby accepts such continued employment, upon the terms and conditions set forth in this Agreement. On and after the effective date of the merger of the "Purchaser" (as defined in the Purchase Agreement) into the Company contemplated by the Purchase Agreement (the "Merger Date"), Yellow shall cause the "Surviving Corporation" as defined in the Purchase Agreement to satisfy the Company's obligations under this Agreement; provided, however, that Yellow shall have no obligations or liabilities under this Agreement unless and until the Effective Date (as defined below) occurs. On and after the Merger Date, said Surviving Corporation shall be the "Company" for purposes of this Agreement. 2. Term. This Agreement shall become effective on, and the term (the "Term") of the Executive's employment under this Agreement shall commence on, the date on which the Purchaser purchases shares of the Company's stock pursuant to a tender offer (the "Effective Date") and shall continue until the date of termination of the Executive's employment with the Company. 3. Position and Duties. During the Term, the Executive shall serve as Senior Vice President - Marketing and Sales of the Company, and shall have such responsibilities and authority as is commensurate with such office. The Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company. 2 4. Compensation. During the Term, the Company shall provide the Executive with the following compensation and other benefits: (a) Base Salary. The Company shall pay the Executive base salary at the initial rate of $154,200 per annum, which shall be payable in accordance with the standard payroll practices of the Company. At no time during the Term shall the Executive's base salary be decreased from the rate then in effect except with the written consent of the Executive. (b) Bonus. During the Term, the Executive shall participate in the annual bonus program maintained for the executive officers of the Company. The Executive's target bonus for each fiscal year during the Term shall be no less than 30% of his annual base salary for that year. (c) Other Company, Benefits. During the Term, the Executive shall be entitled to participate in, and to receive benefits under, the benefit plans and programs that are at the applicable time available to executives of the Company generally and on terms and conditions that are no less favorable than those applicable to executives of the Company generally. (d) Stock Options. As of the Effective Date, Yellow shall grant to the Executive an option to purchase 20,000 shares of common stock of Yellow with the following principal terms: (i) an exercise price equal to the closing price of Yellow common stock as reported by NASDAQ on June 4, 1999, (ii) vesting and becoming exercisable at the rate of 25% on the first anniversary of the Effective Date, 25% on the second anniversary, 25% on the third anniversary, and the remaining 25% on the fourth anniversary, and (iii) other terms and conditions substantially similar to stock options granted to executives generally under Yellow's 1996 Stock Option Plan. With respect to calendar years beginning after the Effective Date, the Executive during the Term shall participate in Yellow's stock option plans on terms and conditions substantially similar to those generally applicable to executives of Yellow and its subsidiaries. (e) Perquisites. On and after the Effective Date, Yellow shall cause the Company during the Term to provide to the Executive the perquisites listed in Appendix A hereto. 3 5. Right to Terminate Employment. The Company reserves the right to terminate the Executive's employment hereunder at any time, subject, however, to the termination procedures set forth in Section 7 of the Amended and Restated Severance Agreement dated as of June 4, 1999 between the Company and the Executive (the "Severance Agreement")to the extent such procedures are then applicable pursuant to the terms of the Severance Agreement. The Executive reserves the right to resign from employment with the Company at any time, subject, however, to any limitations on such right that may then be applicable pursuant to the terms of the Severance Agreement. 6. Relationship of this Agreement to Severance Agreement. Nothing in this Agreement shall affect in any way the rights and obligations of the Company and the Executive under the Severance Agreement, except that the Executive hereby agrees to the following modifications of the Severance Agreement, effective as of the Effective Date: (i) an act or failure to act constituting "Good Reason" as described in subsection (i) of Section 15 (M) of the Severance Agreement shall not be deemed to occur on or after the Effective Date so long as the Executive has the title, responsibilities and authority set forth in Section 3 of this Agreement (notwithstanding changes in the Executive's status, responsibilities and authority resulting from the Company's ceasing to be a separate public company), and (ii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the cessation of the Executive's participation in the Company's stock option and other stock-based plans so long as Yellow complies with Section 4 (d) of this Agreement on and after the Effective Date, and (iii) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15(M) of the Severance Agreement shall not be deemed to occur by reason of the limitation of the Executive's target bonus to the level provided for in Section 4 (b) of this Agreement, and (iv) an act or failure to act constituting "Good Reason" as described in subsection (v) or (vi) of Section 15 (M) of the Severance Agreement shall not be deemed to occur by reason of the elimination or modification of any perquisites or fringe benefits enjoyed by the Executive before the Effective Date (other than benefits under any Company "employee benefit plan" as defined in Section 3 (3) of the Employee Retirement Income Security Act of 1974, as amended) so long as the Company provides the perquisites set forth in Appendix A hereto, and 4 (v) Yellow's execution of this Agreement shall be deemed to fully satisfy the Company's obligations pursuant to Section 9.1 of the Severance Agreement. 7. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the party against whom such waiver, modification or discharge is sought to be enforced (with such signature, in the case of the Company or Yellow, to be made by a duly authorized officer thereof). No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net of withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. IN WITNESS WHEREOF, this Agreement has been executed, as of the date first written, on behalf of the Company by its duly authorized officer, on behalf of Yellow by its duly authorized officer, and by the Executive. JEVIC TRANSPORTATION, INC /s/ Karen B. Muhlschlegel By: /s/ Harry J. Muhlschlegel - ----------------------------------- ------------------------------------- Secretary YELLOW CORPORATION /s/ William F. Martin, Jr. By: /s/ H.A. Trucksess III - ----------------------------------- ------------------------------------- Secretary EXECUTIVE By: /s/ Joseph A. Librizzi ------------------------------------- 5 APPENDIX A Under Section 4 (e) of the Employment Agreement between the Executive, Jevic Transportation, Inc. and Yellow Corporation the following perquisites shall be provided: (A) Car Allowance. Executive shall be provided a car or car allowance at least equal to that provided under Jevic Transportation, Inc.'s policy dated March 5, 1996. (B) Vacation. Executive will be entitled to annual vacation at least equal to that currently provided as an employee of Jevic Transportation under their current policy and practice. (C) Supplemental Retirement Plan. Continued eligibility to participate in Jevic Transportation's non-qualified supplemental retirement arrangements through Fidelity Investments. (D) Split Dollar Life Insurance. Continued participation in the Split Dollar Life Insurance Program currently provided as an Executive of Jevic. (E) Financial Planning / Tax Preparation. Executive will be entitled to an annual reimbursement of expenses in conjunction with personal financial planning and/or income tax return preparation not to exceed $1,500. (F) Executive Physical. Executive will be reimbursed up to $350 annually for expenses in conjunction with a physical examination. This benefit shall be in addition to any amounts otherwise payable under Jevic's Medical Benefit Plan. EX-99.(C)(7) 18 AMEND & RESTATED SEV. AGMT. OF RAYMOND M. CONLIN 1 EXHIBIT (c)(7) AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), and RAYMOND M. CONLIN (the "Executive"). WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel; and WHEREAS, the Board of Directors of the Company (the "Board") recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control (as defined in the last Section hereof) exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; and WHEREAS, the Company and Executive entered into a severance agreement relating to the same matters, dated as of April 5, 1999 ("Prior Agreement"); and WHEREAS, the Company and Executive wish to and do hereby amend and restate the Prior Agreement, which is specifically superseded by the terms hereof; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, this Company and the Executive hereby agree as follows: 1. Defined Terms. The definition of capitalized terms used in, this Agreement is provided in the last Section hereof. 2. Term of Agreement. This Agreement shall commence on the date on which shares of common stock of the Company are purchased pursuant to the tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation ("Effective Date"), and shall continue in effect through December 31, 2001; provided, however, that commencing on January 1, 2002 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend this Agreement or a Change in Control shall have occurred prior to such January 1; and further provided, however, if a Change in Control shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period ending on the last day of the twenty-fourth calendar month beginning after the month in which such Change in Control occurred. 2 3. Company's Covenants Summarized. To induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments described in Section 6.1 hereof and the other payments and benefits described herein in the event the Executive's employment with the Company is terminated following a Change in Control and during the term of this Agreement. Except as provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be payable under this Agreement unless there shall have been (or, pursuant to Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company following a Change in Control. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 4. The Executive's Covenants. 4.1. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the term of this Agreement, the Executive will remain in the employ of the Company until the earliest of (i) a date which is three (3) months after the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive's employment for Good Reason (determined by treating the Potential Change in Control as a Change in Control in applying the definition of Good Reason under Section 15(M)(i) through (vii) hereof) or by reason of death, Disability or retirement, or (iv) the termination by the Company of the Executive's employment for any reason. 4.2. While the Executive is employed by the Company and for a period of one year after the effective date of Executive's termination of employment if Executive's employment is terminated following a Change in Control (or before a Change in Control but following a Potential Change in Control under the circumstances set forth in Section 6.1) and Executive receives any payment under Section 6.1 of this Agreement, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company that are or were customers or employees at any time during his employment with the Company. The Executive acknowledges that the Company would be irreparably injured by a violation of this Section 4.2, and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order or other equitable relief restraining the Executive from any actual or threatened breach of this Section 4.2 without any bond or other security being required. -2- 3 5. Compensation Other Than Severance Payments. 5.1. Following a Change in Control and during the term of this Agreement, during any period that the Executive fails to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive's full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. Nothing in this Section 5.1 shall entitle Executive to any Company-provided insured or uninsured disability, sick pay or other similar wage replacement benefits in addition to the Company's payment of salary during the period of illness. 5.2. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's full salary to the Executive through the Date of Termination at the rate in effect at the time the Notice of Termination is given, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period. 5.3. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's normal post-termination compensation and benefits to the Executive and such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, this Company's retirement, insurance and other compensation or benefit plans, programs and arrangements. 5.4. Whether or not the Executive's employment has been terminated, following a Change in Control, the Company (or any successor to the Company in connection with such Change in Control) shall upon the Executive's demand purchase from the Executive any shares of Company or successor company stock then held by the Executive (the "Shares"). The Company and any successor shall not be under any such obligation at any time that there exists an established market for the Shares. The Company also shall not be under any such obligation at any time that the Executive's right to demand the purchase of the Shares, or the exercise of that right, would prohibit pooling of interests accounting in any acquisition of or by the Company. The price of such Shares shall be the greater of their fair market value or the per share consideration paid in connection with such Change in Control, if any. The purchase price for such Shares shall be paid by the Company or any successor in a single sum of cash within seven days following such demand, except as the Executive and Company may agree otherwise. 5.5. Whether or not the Executive's employment is later terminated, upon purchase of shares of common stock of the Company pursuant to the tender offer by Yellow -3- 4 Corporation and/or a subsidiary of Yellow Corporation, the Company shall pay to the Executive a single sum of $55,000, less any required withholding as further set forth in Section 11. 6. Severance Payments. 6.1. The Company shall pay the Executive the payments described in this Section 6.1 (the "Severance Payments") upon the termination of the Executive's employment following a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, unless such termination is (i) by the Company for Cause, (ii) by reason of death or Disability more than six months following the Change in Control, or (iii) by the Executive without Good Reason. The Company shall pay the Executive the Severance Payments upon termination of the Executive's employment following a Potential Change in Control but before a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, if: (i) the termination is initiated, caused or directed by any Person who has initiated a transaction the consummation of which would result in a Change in Control; and (ii) the termination would have been by the Executive for Good Reason or by the Company without Cause if a Change in Control had occurred on the date of the Potential Change in Control. (A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to the Applicable Multiplier times the sum of (i) the highest of the Executive's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based, or such salary in effect immediately prior to the Change in Control, or such salary in effect immediately prior to a Potential Change in Control, and (ii) the higher of (x) the target bonus for the year in which the Notice of Termination is provided or (y) the highest of the actual bonuses paid or payable to the Executive for any of the five years completed immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based. (B) Notwithstanding any provision of any bonus plan, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any bonus amount which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof or otherwise) and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent bonus awards to the Executive for all uncompleted periods calculated as to each such award by assuming the achievement of the target performance level -4- 5 within the performance range established with respect to such award and basing such pro-rata portion upon the portion of the award period that has elapsed as of the Date of Termination; (C) For (i) a twelve (12) month period after the Date of Termination if Executive has one year or less of continuous service as an employee of the Company, (ii) a twenty-four (24) month period after the Date of Termination if Executive has more than one year but not more than two years of continuous service as an employee of the Company, and (iii) a thirty-six (36) month period after the Date of Termination if Executive has more than two years of continuous service as an employee of the Company, the Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits (and specifically including Executive's split-dollar life insurance arrangement now in effect), and all other material benefits or perquisites substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits subsequent to a Change in Control if such reduction constitutes Good Reason); Notwithstanding any other provision of this Agreement, the Company shall continue to fund Executive's split-dollar life insurance arrangement until dividends payable under the policy are sufficient to pay premiums under the policy. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during the above-referenced period. In addition, any such benefits actually received by the Executive shall be reported to the Company by the Executive. 6.2. (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the Total Payments will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 6.2, shall be equal to the excess of the Total Payments over the payment provided for by this Section 6.2. (B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person (the "Total Payments"), shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company's independent auditors and reasonably, acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, in the opinion of such tax counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for -5- 6 services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of actions 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (C) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment (or such other time as is hereinafter described), the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(3) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. If an Executive who remains in the employ of the Company becomes entitled to the payment provided for by this paragraph, such payment shall be made no later than the later of (i) the fifth day following the date on which the Executive notifies the Company that he is subject to the Excise Tax and (ii) twenty days prior to the date on which the Excise Tax is initially due. 6.3. The payments provided for in Section 6.1 hereof (other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made not later than the fifth day following the Date of Termination, unless Executive elects a later date of payment for all or any part thereof; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together -6- 7 with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(9) of the Code). At the time that payments are made under this section, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from outside counsel, auditors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 6.4. The Company also shall pay to the Executive all legal fees and expenses incurred in good faith by the Executive as a result of a termination of the Executive's employment following a Change in Control and during the term of this Agreement (including all such fees and expenses, if any, incurred in disputing in good faith any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). For purposes of this Section 6.4, an Executive shall be deemed to have acted in good faith unless an arbitrator finds that the Executive's action resulting in such legal fees and expenses was excessive. Such payments shall be made within five (5) business days after delivery of the Executive's written request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 7. Termination Procedures and Compensation During Dispute. 7.1. After a Change in Control and during the term of this Agreement, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause issued by the Company is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's Counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive engaged in conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. -7- 8 7.2. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the term of this Agreement, shall mean (i) If the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated by for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days from the date such Notice of Termination is given). 7.3. If within fifteen (15) days after any Notice of Termination is given or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), either party notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute provided by the Executive only if such notice in given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence. 7.4. If a purported termination occurs following a Change in Control and during the term of this Agreement, and such termination is disputed in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given until the Date of Termination, determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 8. No Mitigation. The Company agrees that, if the Executive's employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. -8- 9 9. Successors; Binding Agreement. 9.1. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any such successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 9.2. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 10. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or mailed by United states registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: To the Company: Jevic Transportation, Inc. 700 Creek Road P.O. Box 5157 Delanco, NJ 08075 To the Executive: Name Address City, State ZIP -9- 10 11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall he deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under Sections 5, 6, and 7 which arise during the term of this Agreement shall survive the expiration of the term of this Agreement. 12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Counterparts; Coordination with Employment Agreement. 13.1. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. 13.2. The terms of this Agreement shall be coordinated with and applied in conjunction with the terms of the Executive's employment agreement, if any, with the Company. In general, it is the intent of the parties that, subsequent to a Change in Control and during the term of this Agreement, the provisions of this Agreement shall supersede and substitute for those provisions of the employment agreement relating to the Executive's entitlement to benefits in connection with any termination of the Executive's employment, but shall not supersede for any period the provisions of such employment agreement pertaining to the terms of the Executive's employment. Except for circumstances relating to a termination of employment following a Change in Control during the term of this Agreement, as provided for herein, all terms and conditions of the Executive's employment with the Company shall be governed by the terms of the Executive's employment agreement (including but not limited to any such term granting additional years of service to the Executive for purposes of any of the Company's employee benefit plans). 14. Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific -10- 11 provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Burlington County, New Jersey in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance of the Executive's right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 15. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: (A) "Applicable Multiplier" means two, except as otherwise specifically provided herein with the consent of the Executive. (B) "Base Amount" shall have the meaning defined in section 280G(b)(3) of the Code. (C) "Board" shall mean the Board of Directors of the Company. (D) "Cause" for termination by the Company of the Executive's employment, after any Potential Change in Control or Change in Control, shall mean the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties. For purposes of this definition, no act, or failure to act, on the Executive's part shall be "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act, or failure to act, was in the best interest of the Company. (E) A "Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) The acquisition in one or more transactions by any "Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty -11- 12 percent (50%) or more of the combined voting power of the Company's then outstanding voting securities (the "Voting Securities"); or (ii) Approval by shareholders of the Company of (A) a merger, reorganization or consolidation involving the Company if the shareholders of the Company immediately before such merger, reorganization or consolidation do not or will not own directly or indirectly immediately following such merger, reorganization or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such merger, reorganization or consolidation in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, reorganization or consolidation, or (B) (1) a complete liquidation or dissolution of the Company or (2) an agreement for the sale or other disposition of all or substantially all of the assets of the Company; or (iii) Acceptance by shareholders of the Company of shares in a share exchange if the shareholders of the Company immediately before such share exchange do not or will not own directly or indirectly immediately following such share exchange more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such share exchange in substantially the same proportion as the ownership of the Voting Securities outstanding immediately before such share exchange. Notwithstanding the foregoing, a Change in Control shall not include any event, circumstance or transaction occurring during the six-month period following a Potential Change in Control which Potential Change in Control results from the action of any entity or group which includes the Executive (a "Management Group"). (F) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the code shall include any successors thereto. (G) "Company" shall mean Jevic Transportation, Inc., a New Jersey corporation, and any successor to its business or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise (except in determining, under Section 15(E) hereof, whether or not any Change in Control of the Company has occurred in connection with such succession). (H) "Date of Termination" shall have the meaning stated in Section 7.2 hereof. (I) "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment if the Executive is absent from full-time employment and qualifies for disability benefits under the Company's long-term disability plan -12- 13 (or would so qualify but for any waiting period under that plan). In the absence of any such plan, the determination of Disability shall be made by the Board. (J) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (K) "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code. (L) "Executive" shall mean the individual named in the first paragraph of this Agreement. (M) "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment by the Company to the Executive of any duties inconsistent with the Executive's status as an executive of the Company or a material adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control or Potential Change in Control or any change in Executive's title or status; (ii) any reduction by the Company in the Executive's annual base salary as in affect on the date hereof or as the same may be increased from time to time; (iii) the relocation by the Company of its principal executive offices to a location more than 30 miles from the location of such office immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; (iv) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; (v) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in -13- 14 Control which is material to the Executive's total compensation, including but not limited to any bonus plan and any similar or substitute plan adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the time of the Change in Control; (vi) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company's pension, life insurance, medical, health and accident, disability or other material benefit or perquisite plan in which the Executive was participating at the time of the Change in Control, and specifically including those benefits set forth in Section 6.1(c) hereof, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance, with the Company's normal vacation policy in effect at the time of the Change in Control; or (vii) any purported termination by the Company of the Executive's employment which is not effected for Cause and pursuant to a Notice of Termination satisfying the requirements of Section 7.1; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. (N) "Gross-Up Payment" shall have the meaning given in Section 6.2 hereof. (O) "Notice of Termination" shall have the meaning stated in Section 7.1 hereof. (P) "Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. -14- 15 (Q) "Potential Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (iii) any Person who both (x) is on the date hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing at least 10% or more of the combined voting power of the Company's then outstanding securities and (y) increases his or her beneficial ownership of such securities by 5% or more over the percentage so owned by such Person on the date hereof; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (R) "Severance Payments" shall mean those payments described in Section 6.1 hereof. (S) "Total Payments" shall mean those payments described in Section 6.2 hereof. 16. Prior Agreements Superseded. Effective on the Effective Date, this Agreement supersedes and replaces any previous Agreement between the Company and Executive on the same subject. IN WITNESS WHEREOF, this Agreement has been executed as of the 6th day of June, 1999, on behalf of this Company by its duly authorized officer and by the Executive. ATTEST: JEVIC TRANSPORTATION, INC. /s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL - ---------------------------------- ------------------------------------- Secretary Harry J. Muhlschlegel Chief Executive Officer EXECUTIVE By: /s/ RAYMOND M. CONLIN ------------------------------------- Raymond M. Conlin -15- EX-99.(C)(8) 19 AMEND & RESTATED SEV. AGMT. - BRIAN J. FITZPATRICK 1 EXHIBIT (c)(8) AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), and BRIAN J. FITZPATRICK (the "Executive"). WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel; and WHEREAS, the Board of Directors of the Company (the "Board") recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control (as defined in the last Section hereof) exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; and WHEREAS, the Company and Executive entered into a severance agreement relating to the same matters, dated as of April 5, 1999 ("Prior Agreement"); and WHEREAS, the Company and Executive wish to and do hereby amend and restate the Prior Agreement, which is specifically superseded by the terms hereof; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, this Company and the Executive hereby agree as follows: 1. Defined Terms. The definition of capitalized terms used in, this Agreement is provided in the last Section hereof. 2. Term of Agreement. This Agreement shall commence on the date on which shares of common stock of the Company are purchased pursuant to the tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation ("Effective Date"), and shall continue in effect through December 31, 2001; provided, however, that commencing on January 1, 2002 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend this Agreement or a Change in Control shall have occurred prior to such January 1; and further provided, however, if a Change in Control shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period ending on the last day of the twenty-fourth calendar month beginning after the month in which such Change in Control occurred. 2 3. Company's Covenants Summarized. To induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments described in Section 6.1 hereof and the other payments and benefits described herein in the event the Executive's employment with the Company is terminated following a Change in Control and during the term of this Agreement. Except as provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be payable under this Agreement unless there shall have been (or, pursuant to Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company following a Change in Control. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 4. The Executive's Covenants. 4.1. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the term of this Agreement, the Executive will remain in the employ of the Company until the earliest of (i) a date which is three (3) months after the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive's employment for Good Reason (determined by treating the Potential Change in Control as a Change in Control in applying the definition of Good Reason under Section 15(M)(i) through (vii) hereof) or by reason of death, Disability or retirement, or (iv) the termination by the Company of the Executive's employment for any reason. 4.2. While the Executive is employed by the Company and for a period of one year after the effective date of Executive's termination of employment if Executive's employment is terminated following a Change in Control (or before a Change in Control but following a Potential Change in Control under the circumstances set forth in Section 6.1) and Executive receives any payment under Section 6.1 of this Agreement, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company that are or were customers or employees at any time during his employment with the Company. The Executive acknowledges that the Company would be irreparably injured by a violation of this Section 4.2, and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order or other equitable relief restraining the Executive from any actual or threatened breach of this Section 4.2 without any bond or other security being required. -2- 3 5. Compensation Other Than Severance Payments. 5.1. Following a Change in Control and during the term of this Agreement, during any period that the Executive fails to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive's full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. Nothing in this Section 5.1 shall entitle Executive to any Company-provided insured or uninsured disability, sick pay or other similar wage replacement benefits in addition to the Company's payment of salary during the period of illness. 5.2. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's full salary to the Executive through the Date of Termination at the rate in effect at the time the Notice of Termination is given, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period. 5.3. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's normal post-termination compensation and benefits to the Executive and such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, this Company's retirement, insurance and other compensation or benefit plans, programs and arrangements. 5.4. Whether or not the Executive's employment has been terminated, following a Change in Control, the Company (or any successor to the Company in connection with such Change in Control) shall upon the Executive's demand purchase from the Executive any shares of Company or successor company stock then held by the Executive (the "Shares"). The Company and any successor shall not be under any such obligation at any time that there exists an established market for the Shares. The Company also shall not be under any such obligation at any time that the Executive's right to demand the purchase of the Shares, or the exercise of that right, would prohibit pooling of interests accounting in any acquisition of or by the Company. The price of such Shares shall be the greater of their fair market value or the per share consideration paid in connection with such Change in Control, if any. The purchase price for such Shares shall be paid by the Company or any successor in a single sum of cash within seven days following such demand, except as the Executive and Company may agree otherwise. 5.5. Whether or not the Executive's employment is later terminated, upon purchase of shares of common stock of the Company pursuant to the tender offer by Yellow Corporation and/or a subsidiary of Yellow -3- 4 Corporation, the Company shall pay to the Executive a single sum of $280,000 less any required withholding as further set forth in Section 11. 6. Severance Payments. 6.1. The Company shall pay the Executive the payments described in this Section 6.1 (the "Severance Payments") upon the termination of the Executive's employment following a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, unless such termination is (i) by the Company for Cause, (ii) by reason of death or Disability more than six months following the Change in Control, or (iii) by the Executive without Good Reason. The Company shall pay the Executive the Severance Payments upon termination of the Executive's employment following a Potential Change in Control but before a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, if: (i) the termination is initiated, caused or directed by any Person who has initiated a transaction the consummation of which would result in a Change in Control; and (ii) the termination would have been by the Executive for Good Reason or by the Company without Cause if a Change in Control had occurred on the date of the Potential Change in Control. (A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to the Applicable Multiplier times the sum of (i) the highest of the Executive's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based, or such salary in effect immediately prior to the Change in Control, or such salary in effect immediately prior to a Potential Change in Control, and (ii) the higher of (x) the target bonus for the year in which the Notice of Termination is provided or (y) the highest of the actual bonuses paid or payable to the Executive for any of the five years completed immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based. (B) Notwithstanding any provision of any bonus plan, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any bonus amount which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof or otherwise) and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent bonus awards to the Executive for all uncompleted periods calculated as to each such award by assuming the achievement of the target performance level -4- 5 within the performance range established with respect to such award and basing such pro-rata portion upon the portion of the award period that has elapsed as of the Date of Termination; (C) For (i) a twelve (12) month period after the Date of Termination if Executive has one year or less of continuous service as an employee of the Company, (ii) a twenty-four (24) month period after the Date of Termination if Executive has more than one year but not more than two years of continuous service as an employee of the Company, and (iii) a thirty-six (36) month period after the Date of Termination if Executive has more than two years of continuous service as an employee of the Company, the Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits (and specifically including Executive's split-dollar life insurance arrangement now in effect), and all other material benefits or perquisites substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits subsequent to a Change in Control if such reduction constitutes Good Reason); Notwithstanding any other provision of this Agreement, the Company shall continue to fund Executive's split-dollar life insurance arrangement until dividends payable under the policy are sufficient to pay premiums under the policy. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during the above-referenced period. In addition, any such benefits actually received by the Executive shall be reported to the Company by the Executive. 6.2. (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the Total Payments will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 6.2, shall be equal to the excess of the Total Payments over the payment provided for by this Section 6.2. (B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person (the "Total Payments"), shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company's independent auditors and reasonably, acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, in the opinion of such tax counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for -5- 6 services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of actions 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (C) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment (or such other time as is hereinafter described), the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(3) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. If an Executive who remains in the employ of the Company becomes entitled to the payment provided for by this paragraph, such payment shall be made no later than the later of (i) the fifth day following the date on which the Executive notifies the Company that he is subject to the Excise Tax and (ii) twenty days prior to the date on which the Excise Tax is initially due. 6.3. The payments provided for in Section 6.1 hereof (other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made not later than the fifth day following the Date of Termination, unless Executive elects a later date of payment for all or any part thereof; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together -6- 7 with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(9) of the Code). At the time that payments are made under this section, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from outside counsel, auditors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 6.4. The Company also shall pay to the Executive all legal fees and expenses incurred in good faith by the Executive as a result of a termination of the Executive's employment following a Change in Control and during the term of this Agreement (including all such fees and expenses, if any, incurred in disputing in good faith any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). For purposes of this Section 6.4, an Executive shall be deemed to have acted in good faith unless an arbitrator finds that the Executive's action resulting in such legal fees and expenses was excessive. Such payments shall be made within five (5) business days after delivery of the Executive's written request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 7. Termination Procedures and Compensation During Dispute. 7.1. After a Change in Control and during the term of this Agreement, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause issued by the Company is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's Counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive engaged in conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. -7- 8 7.2. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the term of this Agreement, shall mean (i) If the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated by for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days from the date such Notice of Termination is given). 7.3. If within fifteen (15) days after any Notice of Termination is given or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), either party notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute provided by the Executive only if such notice in given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence. 7.4. If a purported termination occurs following a Change in Control and during the term of this Agreement, and such termination is disputed in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given until the Date of Termination, determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 8. No Mitigation. The Company agrees that, if the Executive's employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. -8- 9 9. Successors; Binding Agreement. 9.1. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any such successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 9.2. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 10. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or mailed by United states registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: To the Company: Jevic Transportation, Inc. 700 Creek Road P.O. Box 5157 Delanco, NJ 08075 To the Executive: Name Address City, State ZIP -9- 10 11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall he deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under Sections 5, 6, and 7 which arise during the term of this Agreement shall survive the expiration of the term of this Agreement. 12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Counterparts; Coordination with Employment Agreement. 13.1. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. 13.2. The terms of this Agreement shall be coordinated with and applied in conjunction with the terms of the Executive's employment agreement, if any, with the Company. In general, it is the intent of the parties that, subsequent to a Change in Control and during the term of this Agreement, the provisions of this Agreement shall supersede and substitute for those provisions of the employment agreement relating to the Executive's entitlement to benefits in connection with any termination of the Executive's employment, but shall not supersede for any period the provisions of such employment agreement pertaining to the terms of the Executive's employment. Except for circumstances relating to a termination of employment following a Change in Control during the term of this Agreement, as provided for herein, all terms and conditions of the Executive's employment with the Company shall be governed by the terms of the Executive's employment agreement (including but not limited to any such term granting additional years of service to the Executive for purposes of any of the Company's employee benefit plans). 14. Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific -10- 11 provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Burlington County, New Jersey in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance of the Executive's right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 15. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: (A) "Applicable Multiplier" means two, except as otherwise specifically provided herein with the consent of the Executive. (B) "Base Amount" shall have the meaning defined in section 280G(b)(3) of the Code. (C) "Board" shall mean the Board of Directors of the Company. (D) "Cause" for termination by the Company of the Executive's employment, after any Potential Change in Control or Change in Control, shall mean the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties. For purposes of this definition, no act, or failure to act, on the Executive's part shall be "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act, or failure to act, was in the best interest of the Company. (E) A "Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) The acquisition in one or more transactions by any "Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty -11- 12 percent (50%) or more of the combined voting power of the Company's then outstanding voting securities (the "Voting Securities"); or (ii) Approval by shareholders of the Company of (A) a merger, reorganization or consolidation involving the Company if the shareholders of the Company immediately before such merger, reorganization or consolidation do not or will not own directly or indirectly immediately following such merger, reorganization or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such merger, reorganization or consolidation in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, reorganization or consolidation, or (B) (1) a complete liquidation or dissolution of the Company or (2) an agreement for the sale or other disposition of all or substantially all of the assets of the Company; or (iii) Acceptance by shareholders of the Company of shares in a share exchange if the shareholders of the Company immediately before such share exchange do not or will not own directly or indirectly immediately following such share exchange more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such share exchange in substantially the same proportion as the ownership of the Voting Securities outstanding immediately before such share exchange. Notwithstanding the foregoing, a Change in Control shall not include any event, circumstance or transaction occurring during the six-month period following a Potential Change in Control which Potential Change in Control results from the action of any entity or group which includes the Executive (a "Management Group"). (F) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the code shall include any successors thereto. (G) "Company" shall mean Jevic Transportation, Inc., a New Jersey corporation, and any successor to its business or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise (except in determining, under Section 15(E) hereof, whether or not any Change in Control of the Company has occurred in connection with such succession). (H) "Date of Termination" shall have the meaning stated in Section 7.2 hereof. (I) "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment if the Executive is absent from full-time employment and qualifies for disability benefits under the Company's long-term disability plan -12- 13 (or would so qualify but for any waiting period under that plan). In the absence of any such plan, the determination of Disability shall be made by the Board. (J) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (K) "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code. (L) "Executive" shall mean the individual named in the first paragraph of this Agreement. (M) "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment by the Company to the Executive of any duties inconsistent with the Executive's status as an executive of the Company or a material adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control or Potential Change in Control or any change in Executive's title or status; (ii) any reduction by the Company in the Executive's annual base salary as in affect on the date hereof or as the same may be increased from time to time; (iii) the relocation by the Company of its principal executive offices to a location more than 30 miles from the location of such office immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; (iv) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; (v) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in -13- 14 Control which is material to the Executive's total compensation, including but not limited to any bonus plan and any similar or substitute plan adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the time of the Change in Control; (vi) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company's pension, life insurance, medical, health and accident, disability or other material benefit or perquisite plan in which the Executive was participating at the time of the Change in Control, and specifically including those benefits set forth in Section 6.1(c) hereof, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance, with the Company's normal vacation policy in effect at the time of the Change in Control; or (vii) any purported termination by the Company of the Executive's employment which is not effected for Cause and pursuant to a Notice of Termination satisfying the requirements of Section 7.1; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. (N) "Gross-Up Payment" shall have the meaning given in Section 6.2 hereof. (O) "Notice of Termination" shall have the meaning stated in Section 7.1 hereof. (P) "Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. -14- 15 (Q) "Potential Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (iii) any Person who both (x) is on the date hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing at least 10% or more of the combined voting power of the Company's then outstanding securities and (y) increases his or her beneficial ownership of such securities by 5% or more over the percentage so owned by such Person on the date hereof; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (R) "Severance Payments" shall mean those payments described in Section 6.1 hereof. (S) "Total Payments" shall mean those payments described in Section 6.2 hereof. 16. Prior Agreements Superseded. Effective on the Effective Date, this Agreement supersedes and replaces any previous Agreement between the Company and Executive on the same subject. IN WITNESS WHEREOF, this Agreement has been executed as of the 4th day of June, 1999, on behalf of this Company by its duly authorized officer and by the Executive. ATTEST: JEVIC TRANSPORTATION, INC. /s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL - ------------------------------- --------------------------------- Secretary Harry J. Muhlschlegel Chief Executive Officer EXECUTIVE By: /s/ BRIAN J. FITZPATRICK --------------------------------- Brian J. Fitzpatrick -15- EX-99.(C)(9) 20 AMEND & RESTATED SEV. AGMT. - PAUL J. KARVOIS 1 EXHIBIT (c)(9) AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), and PAUL J. KARVOIS (the "Executive"). WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel; and WHEREAS, the Board of Directors of the Company (the "Board") recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control (as defined in the last Section hereof) exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; and WHEREAS, the Company and Executive entered into a severance agreement relating to the same matters, dated as of April 5, 1999 ("Prior Agreement"); and WHEREAS, the Company and Executive wish to and do hereby amend and restate the Prior Agreement, which is specifically superseded by the terms hereof; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, this Company and the Executive hereby agree as follows: 1. Defined Terms. The definition of capitalized terms used in, this Agreement is provided in the last Section hereof. 2. Term of Agreement. This Agreement shall commence on the date on which shares of common stock of the Company are purchased pursuant to the tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation ("Effective Date"), and shall continue in effect through December 31, 2001; provided, however, that commencing on January 1, 2002 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend this Agreement or a Change in Control shall have occurred prior to such January 1; and further provided, however, if a Change in Control shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period ending on the last day of the twenty-fourth calendar month beginning after the month in which such Change in Control occurred. 2 3. Company's Covenants Summarized. To induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments described in Section 6.1 hereof and the other payments and benefits described herein in the event the Executive's employment with the Company is terminated following a Change in Control and during the term of this Agreement. Except as provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be payable under this Agreement unless there shall have been (or, pursuant to Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company following a Change in Control. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 4. The Executive's Covenants. 4.1. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the term of this Agreement, the Executive will remain in the employ of the Company until the earliest of (i) a date which is three (3) months after the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive's employment for Good Reason (determined by treating the Potential Change in Control as a Change in Control in applying the definition of Good Reason under Section 15(M)(i) through (vii) hereof) or by reason of death, Disability or retirement, or (iv) the termination by the Company of the Executive's employment for any reason. 4.2. While the Executive is employed by the Company and for a period of one year after the effective date of Executive's termination of employment if Executive's employment is terminated following a Change in Control (or before a Change in Control but following a Potential Change in Control under the circumstances set forth in Section 6.1) and Executive receives any payment under Section 6.1 of this Agreement, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company that are or were customers or employees at any time during his employment with the Company. The Executive acknowledges that the Company would be irreparably injured by a violation of this Section 4.2, and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order or other equitable relief restraining the Executive from any actual or threatened breach of this Section 4.2 without any bond or other security being required. -2- 3 5. Compensation Other Than Severance Payments. 5.1. Following a Change in Control and during the term of this Agreement, during any period that the Executive fails to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive's full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. Nothing in this Section 5.1 shall entitle Executive to any Company-provided insured or uninsured disability, sick pay or other similar wage replacement benefits in addition to the Company's payment of salary during the period of illness. 5.2. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's full salary to the Executive through the Date of Termination at the rate in effect at the time the Notice of Termination is given, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period. 5.3. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's normal post-termination compensation and benefits to the Executive and such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, this Company's retirement, insurance and other compensation or benefit plans, programs and arrangements. 5.4. Whether or not the Executive's employment has been terminated, following a Change in Control, the Company (or any successor to the Company in connection with such Change in Control) shall upon the Executive's demand purchase from the Executive any shares of Company or successor company stock then held by the Executive (the "Shares"). The Company and any successor shall not be under any such obligation at any time that there exists an established market for the Shares. The Company also shall not be under any such obligation at any time that the Executive's right to demand the purchase of the Shares, or the exercise of that right, would prohibit pooling of interests accounting in any acquisition of or by the Company. The price of such Shares shall be the greater of their fair market value or the per share consideration paid in connection with such Change in Control, if any. The purchase price for such Shares shall be paid by the Company or any successor in a single sum of cash within seven days following such demand, except as the Executive and Company may agree otherwise. 5.5. Whether or not the Executive's employment is later terminated, upon purchase of shares of common stock of the Company pursuant to the tender offer by Yellow Corporation and/or a subsidiary of the Yellow Corporation, the Company shall pay to the -3- 4 Executive a single sum of $315,000 less any required withholding as further set forth in Section 11. 6. Severance Payments. 6.1. The Company shall pay the Executive the payments described in this Section 6.1 (the "Severance Payments") upon the termination of the Executive's employment following a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, unless such termination is (i) by the Company for Cause, (ii) by reason of death or Disability more than six months following the Change in Control, or (iii) by the Executive without Good Reason. The Company shall pay the Executive the Severance Payments upon termination of the Executive's employment following a Potential Change in Control but before a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, if: (i) the termination is initiated, caused or directed by any Person who has initiated a transaction the consummation of which would result in a Change in Control; and (ii) the termination would have been by the Executive for Good Reason or by the Company without Cause if a Change in Control had occurred on the date of the Potential Change in Control. (A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to the Applicable Multiplier times the sum of (i) the highest of the Executive's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based, or such salary in effect immediately prior to the Change in Control, or such salary in effect immediately prior to a Potential Change in Control, and (ii) the higher of (x) the target bonus for the year in which the Notice of Termination is provided or (y) the highest of the actual bonuses paid or payable to the Executive for any of the five years completed immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based. (B) Notwithstanding any provision of any bonus plan, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any bonus amount which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof or otherwise) and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent bonus awards to the Executive for all uncompleted periods calculated as to each such award by assuming the achievement of the target performance level -4- 5 within the performance range established with respect to such award and basing such pro-rata portion upon the portion of the award period that has elapsed as of the Date of Termination; (C) For (i) a twelve (12) month period after the Date of Termination if Executive has one year or less of continuous service as an employee of the Company, (ii) a twenty-four (24) month period after the Date of Termination if Executive has more than one year but not more than two years of continuous service as an employee of the Company, and (iii) a thirty-six (36) month period after the Date of Termination if Executive has more than two years of continuous service as an employee of the Company, the Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits (and specifically including Executive's split-dollar life insurance arrangement now in effect), and all other material benefits or perquisites substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits subsequent to a Change in Control if such reduction constitutes Good Reason); Notwithstanding any other provision of this Agreement, the Company shall continue to fund Executive's split-dollar life insurance arrangement until dividends payable under the policy are sufficient to pay premiums under the policy. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during the above-referenced period. In addition, any such benefits actually received by the Executive shall be reported to the Company by the Executive. 6.2. (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the Total Payments will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 6.2, shall be equal to the excess of the Total Payments over the payment provided for by this Section 6.2. (B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person (the "Total Payments"), shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company's independent auditors and reasonably, acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, in the opinion of such tax counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for -5- 6 services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of actions 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (C) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment (or such other time as is hereinafter described), the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(3) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. If an Executive who remains in the employ of the Company becomes entitled to the payment provided for by this paragraph, such payment shall be made no later than the later of (i) the fifth day following the date on which the Executive notifies the Company that he is subject to the Excise Tax and (ii) twenty days prior to the date on which the Excise Tax is initially due. 6.3. The payments provided for in Section 6.1 hereof (other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made not later than the fifth day following the Date of Termination, unless Executive elects a later date of payment for all or any part thereof; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together -6- 7 with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(9) of the Code). At the time that payments are made under this section, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from outside counsel, auditors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 6.4. The Company also shall pay to the Executive all legal fees and expenses incurred in good faith by the Executive as a result of a termination of the Executive's employment following a Change in Control and during the term of this Agreement (including all such fees and expenses, if any, incurred in disputing in good faith any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). For purposes of this Section 6.4, an Executive shall be deemed to have acted in good faith unless an arbitrator finds that the Executive's action resulting in such legal fees and expenses was excessive. Such payments shall be made within five (5) business days after delivery of the Executive's written request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 7. Termination Procedures and Compensation During Dispute. 7.1. After a Change in Control and during the term of this Agreement, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause issued by the Company is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's Counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive engaged in conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. -7- 8 7.2. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the term of this Agreement, shall mean (i) If the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated by for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days from the date such Notice of Termination is given). 7.3. If within fifteen (15) days after any Notice of Termination is given or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), either party notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute provided by the Executive only if such notice in given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence. 7.4. If a purported termination occurs following a Change in Control and during the term of this Agreement, and such termination is disputed in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given until the Date of Termination, determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 8. No Mitigation. The Company agrees that, if the Executive's employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. -8- 9 9. Successors; Binding Agreement. 9.1. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any such successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 9.2. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 10. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or mailed by United states registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: To the Company: Jevic Transportation, Inc. 700 Creek Road P.O. Box 5157 Delanco, NJ 08075 To the Executive: Name Address City, State ZIP -9- 10 11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall he deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under Sections 5, 6, and 7 which arise during the term of this Agreement shall survive the expiration of the term of this Agreement. 12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Counterparts; Coordination with Employment Agreement. 13.1. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. 13.2. The terms of this Agreement shall be coordinated with and applied in conjunction with the terms of the Executive's employment agreement, if any, with the Company. In general, it is the intent of the parties that, subsequent to a Change in Control and during the term of this Agreement, the provisions of this Agreement shall supersede and substitute for those provisions of the employment agreement relating to the Executive's entitlement to benefits in connection with any termination of the Executive's employment, but shall not supersede for any period the provisions of such employment agreement pertaining to the terms of the Executive's employment. Except for circumstances relating to a termination of employment following a Change in Control during the term of this Agreement, as provided for herein, all terms and conditions of the Executive's employment with the Company shall be governed by the terms of the Executive's employment agreement (including but not limited to any such term granting additional years of service to the Executive for purposes of any of the Company's employee benefit plans). 14. Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific -10- 11 provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Burlington County, New Jersey in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance of the Executive's right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 15. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: (A) "Applicable Multiplier" means two, except as otherwise specifically provided herein with the consent of the Executive. (B) "Base Amount" shall have the meaning defined in section 280G(b)(3) of the Code. (C) "Board" shall mean the Board of Directors of the Company. (D) "Cause" for termination by the Company of the Executive's employment, after any Potential Change in Control or Change in Control, shall mean the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties. For purposes of this definition, no act, or failure to act, on the Executive's part shall be "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act, or failure to act, was in the best interest of the Company. (E) A "Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) The acquisition in one or more transactions by any "Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty -11- 12 percent (50%) or more of the combined voting power of the Company's then outstanding voting securities (the "Voting Securities"); or (ii) Approval by shareholders of the Company of (A) a merger, reorganization or consolidation involving the Company if the shareholders of the Company immediately before such merger, reorganization or consolidation do not or will not own directly or indirectly immediately following such merger, reorganization or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such merger, reorganization or consolidation in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, reorganization or consolidation, or (B) (1) a complete liquidation or dissolution of the Company or (2) an agreement for the sale or other disposition of all or substantially all of the assets of the Company; or (iii) Acceptance by shareholders of the Company of shares in a share exchange if the shareholders of the Company immediately before such share exchange do not or will not own directly or indirectly immediately following such share exchange more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such share exchange in substantially the same proportion as the ownership of the Voting Securities outstanding immediately before such share exchange. Notwithstanding the foregoing, a Change in Control shall not include any event, circumstance or transaction occurring during the six-month period following a Potential Change in Control which Potential Change in Control results from the action of any entity or group which includes the Executive (a "Management Group"). (F) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the code shall include any successors thereto. (G) "Company" shall mean Jevic Transportation, Inc., a New Jersey corporation, and any successor to its business or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise (except in determining, under Section 15(E) hereof, whether or not any Change in Control of the Company has occurred in connection with such succession). (H) "Date of Termination" shall have the meaning stated in Section 7.2 hereof. (I) "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment if the Executive is absent from full-time employment and qualifies for disability benefits under the Company's long-term disability plan -12- 13 (or would so qualify but for any waiting period under that plan). In the absence of any such plan, the determination of Disability shall be made by the Board. (J) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (K) "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code. (L) "Executive" shall mean the individual named in the first paragraph of this Agreement. (M) "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment by the Company to the Executive of any duties inconsistent with the Executive's status as an executive of the Company or a material adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control or Potential Change in Control or any change in Executive's title or status; (ii) any reduction by the Company in the Executive's annual base salary as in affect on the date hereof or as the same may be increased from time to time; (iii) the relocation by the Company of its principal executive offices to a location more than 30 miles from the location of such office immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; (iv) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; -13- 14 (v) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive's total compensation, including but not limited to any bonus plan and any similar or substitute plan adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the time of the Change in Control; (vi) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company's pension, life insurance, medical, health and accident, disability or other material benefit or perquisite plan in which the Executive was participating at the time of the Change in Control, and specifically including those benefits set forth in Section 6.1(c) hereof, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance, with the Company's normal vacation policy in effect at the time of the Change in Control; or (vii) any purported termination by the Company of the Executive's employment which is not effected for Cause and pursuant to a Notice of Termination satisfying the requirements of Section 7.1; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. (N) "Gross-Up Payment" shall have the meaning given in Section 6.2 hereof. (O) "Notice of Termination" shall have the meaning stated in Section 7.1 hereof. (P) "Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. -14- 15 (Q) "Potential Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (iii) any Person who both (x) is on the date hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing at least 10% or more of the combined voting power of the Company's then outstanding securities and (y) increases his or her beneficial ownership of such securities by 5% or more over the percentage so owned by such Person on the date hereof; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (R) "Severance Payments" shall mean those payments described in Section 6.1 hereof. (S) "Total Payments" shall mean those payments described in Section 6.2 hereof. 16. Prior Agreements Superseded. Effective on the Effective Date, this Agreement supersedes and replaces any previous Agreement between the Company and Executive on the same subject. IN WITNESS WHEREOF, this Agreement has been executed as of the 4th day of June, 1999, on behalf of this Company by its duly authorized officer and by the Executive. ATTEST: JEVIC TRANSPORTATION, INC. /s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL - ----------------------------- -------------------------------- Secretary Harry J. Muhlschlegel Chief Executive Officer EXECUTIVE By: /s/ PAUL J. KARVOIS -------------------------------- Paul J. Karvois -15- EX-99.(C)(10) 21 AMEND & RESTATED SEV. AGMT. - JOSEPH A. LIBRIZZI 1 EXHIBIT (c)(10) AMENDED AND RESTATED SEVERANCE AGREEMENT THIS AGREEMENT is made by and between JEVIC TRANSPORTATION, INC., a New Jersey corporation (the "Company"), and JOSEPH A. LIBRIZZI (the "Executive"). WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel; and WHEREAS, the Board of Directors of the Company (the "Board") recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control (as defined in the last Section hereof) exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; and WHEREAS, the Company and Executive entered into a severance agreement relating to the same matters, dated as of April 5, 1999 ("Prior Agreement"); and WHEREAS, the Company and Executive wish to and do hereby amend and restate the Prior Agreement, which is specifically superseded by the terms hereof; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, this Company and the Executive hereby agree as follows: 1. Defined Terms. The definition of capitalized terms used in, this Agreement is provided in the last Section hereof. 2. Term of Agreement. This Agreement shall commence on the date on which shares of common stock of the Company are purchased pursuant to the tender offer by Yellow Corporation and/or a subsidiary of Yellow Corporation ("Effective Date"), and shall continue in effect through December 31, 2001; provided, however, that commencing on January 1, 2002 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend this Agreement or a Change in Control shall have occurred prior to such January 1; and further provided, however, if a Change in Control shall have occurred during the term of this Agreement, this Agreement shall continue in effect for a period ending on the last day of the twenty-fourth calendar month beginning after the month in which such Change in Control occurred. 2 3. Company's Covenants Summarized. To induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments described in Section 6.1 hereof and the other payments and benefits described herein in the event the Executive's employment with the Company is terminated following a Change in Control and during the term of this Agreement. Except as provided in Article 5, Section 9.1, or Section 6.2 hereof, no amount or benefit shall be payable under this Agreement unless there shall have been (or, pursuant to Section 6.1 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company following a Change in Control. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 4. The Executive's Covenants. 4.1. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the term of this Agreement, the Executive will remain in the employ of the Company until the earliest of (i) a date which is three (3) months after the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive's employment for Good Reason (determined by treating the Potential Change in Control as a Change in Control in applying the definition of Good Reason under Section 15(M)(i) through (vii) hereof) or by reason of death, Disability or retirement, or (iv) the termination by the Company of the Executive's employment for any reason. 4.2. While the Executive is employed by the Company and for a period of one year after the effective date of Executive's termination of employment if Executive's employment is terminated following a Change in Control (or before a Change in Control but following a Potential Change in Control under the circumstances set forth in Section 6.1) and Executive receives any payment under Section 6.1 of this Agreement, the Executive covenants and agrees that he will not, whether for himself or for any other person, business, partnership, association, firm, company or corporation, directly or indirectly, call upon, solicit, divert or take away or attempt to solicit, divert or take away, any of the customers or employees of the Company that are or were customers or employees at any time during his employment with the Company. The Executive acknowledges that the Company would be irreparably injured by a violation of this Section 4.2, and agrees that the Company, in addition to other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order or other equitable relief restraining the Executive from any actual or threatened breach of this Section 4.2 without any bond or other security being required. -2- 3 5. Compensation Other Than Severance Payments. 5.1. Following a Change in Control and during the term of this Agreement, during any period that the Executive fails to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executive's full salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. Nothing in this Section 5.1 shall entitle Executive to any Company-provided insured or uninsured disability, sick pay or other similar wage replacement benefits in addition to the Company's payment of salary during the period of illness. 5.2. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's full salary to the Executive through the Date of Termination at the rate in effect at the time the Notice of Termination is given, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period. 5.3. If the Executive's employment shall be terminated for any reason following a Change in Control and during the term of this Agreement, the Company shall pay the Executive's normal post-termination compensation and benefits to the Executive and such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, this Company's retirement, insurance and other compensation or benefit plans, programs and arrangements. 5.4. Whether or not the Executive's employment has been terminated, following a Change in Control, the Company (or any successor to the Company in connection with such Change in Control) shall upon the Executive's demand purchase from the Executive any shares of Company or successor company stock then held by the Executive (the "Shares"). The Company and any successor shall not be under any such obligation at any time that there exists an established market for the Shares. The Company also shall not be under any such obligation at any time that the Executive's right to demand the purchase of the Shares, or the exercise of that right, would prohibit pooling of interests accounting in any acquisition of or by the Company. The price of such Shares shall be the greater of their fair market value or the per share consideration paid in connection with such Change in Control, if any. The purchase price for such Shares shall be paid by the Company or any successor in a single sum of cash within seven days following such demand, except as the Executive and Company may agree otherwise. 5.5. Whether or not the Executive's employment is later terminated, upon purchase of shares of common stock of the Company pursuant to the tender offer by Yellow -3- 4 Corporation and/or a subsidiary of Yellow Corporation, the Company shall pay to the Executive a single sum of $225,000 less any required withholding as further set forth in Section 11. 6. Severance Payments. 6.1. The Company shall pay the Executive the payments described in this Section 6.1 (the "Severance Payments") upon the termination of the Executive's employment following a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, unless such termination is (i) by the Company for Cause, (ii) by reason of death or Disability more than six months following the Change in Control, or (iii) by the Executive without Good Reason. The Company shall pay the Executive the Severance Payments upon termination of the Executive's employment following a Potential Change in Control but before a Change in Control and during the term of this Agreement, in addition to the payments and benefits described in Section 5 hereof, if: (i) the termination is initiated, caused or directed by any Person who has initiated a transaction the consummation of which would result in a Change in Control; and (ii) the termination would have been by the Executive for Good Reason or by the Company without Cause if a Change in Control had occurred on the date of the Potential Change in Control. (A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to the Applicable Multiplier times the sum of (i) the highest of the Executive's annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based, or such salary in effect immediately prior to the Change in Control, or such salary in effect immediately prior to a Potential Change in Control, and (ii) the higher of (x) the target bonus for the year in which the Notice of Termination is provided or (y) the highest of the actual bonuses paid or payable to the Executive for any of the five years completed immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based. (B) Notwithstanding any provision of any bonus plan, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any bonus amount which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination but has not yet been paid (pursuant to Section 5.2 hereof or otherwise) and (ii) a pro rata portion to the Date of Termination of the aggregate value of all contingent bonus awards to the Executive for all uncompleted periods calculated as to each such award by assuming the achievement of the target performance level -4- 5 within the performance range established with respect to such award and basing such pro-rata portion upon the portion of the award period that has elapsed as of the Date of Termination; (C) For (i) a twelve (12) month period after the Date of Termination if Executive has one year or less of continuous service as an employee of the Company, (ii) a twenty-four (24) month period after the Date of Termination if Executive has more than one year but not more than two years of continuous service as an employee of the Company, and (iii) a thirty-six (36) month period after the Date of Termination if Executive has more than two years of continuous service as an employee of the Company, the Company shall arrange to provide the Executive with life, disability, accident and health insurance benefits (and specifically including Executive's split-dollar life insurance arrangement now in effect), and all other material benefits or perquisites substantially similar to those which the Executive is receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits subsequent to a Change in Control if such reduction constitutes Good Reason); Notwithstanding any other provision of this Agreement, the Company shall continue to fund Executive's split-dollar life insurance arrangement until dividends payable under the policy are sufficient to pay premiums under the policy. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to the extent comparable benefits are actually received by or made available to the Executive without cost during the above-referenced period. In addition, any such benefits actually received by the Executive shall be reported to the Company by the Executive. 6.2. (A) Whether or not the Executive becomes entitled to the Severance Payments, if any of the Total Payments will be subject to the Excise Tax, the Company shall pay to the Executive an additional amount (the "Gross-Up Payment") such that the net amount retained by the Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income tax and Excise Tax upon the payment provided for by this Section 6.2, shall be equal to the excess of the Total Payments over the payment provided for by this Section 6.2. (B) For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any payments or benefits received or to be received by the Executive in connection with a Change in Control or the Executive's termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person (the "Total Payments"), shall be treated as "parachute payments" (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected by the Company's independent auditors and reasonably, acceptable to the Executive, such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, and all "excess parachute payments" (within the meaning of section 280G(b)(1) of the Code) shall be treated as subject to the Excise Tax unless, in the opinion of such tax counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for -5- 6 services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code), or are otherwise not subject to the Excise Tax, and (ii) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company's independent auditors in accordance with the principles of actions 280G(d)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, FICA taxes at the highest rate applicable with respect to wages in excess of the Social Security taxable wage base in effect for the year of payment, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive's residence on the Date of Termination (or such other time as is hereinafter described), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (C) In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of the Executive's employment (or such other time as is hereinafter described), the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the Gross-Up Payment attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the Excise Tax and federal, state and local income tax imposed on the Gross-Up Payment being repaid by the Executive to the extent that such repayment results in a reduction in Excise Tax or a federal, state or local income tax deduction) plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(3) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of the Executive's employment (or such other time as is hereinafter described) (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or addition payable by the Executive with respect to such excess) at the time that the amount of such excess is finally determined. The Executive and the Company shall each reasonably cooperate with the other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Excise Tax with respect to the Total Payments. If an Executive who remains in the employ of the Company becomes entitled to the payment provided for by this paragraph, such payment shall be made no later than the later of (i) the fifth day following the date on which the Executive notifies the Company that he is subject to the Excise Tax and (ii) twenty days prior to the date on which the Excise Tax is initially due. 6.3. The payments provided for in Section 6.1 hereof (other than Section 6.1(C)), in Section 6.2 hereof, and in Section 5.5 hereof shall be made not later than the fifth day following the Date of Termination, unless Executive elects a later date of payment for all or any part thereof; provided, however, that, if the amounts of such payments cannot be finally determined on or before such day, the Company shall pay to the Executive on such day an estimate, as determined in good faith by the Company of the minimum amount of such payments to which the Executive is clearly entitled and shall pay the remainder of such payments (together -6- 7 with interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth (30th) day after the Date of Termination. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to the Executive, payable on the fifth (5th) business day after demand by the Company (together with interest at the rate provided in section 1274(b)(2)(9) of the Code). At the time that payments are made under this section, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from outside counsel, auditors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 6.4. The Company also shall pay to the Executive all legal fees and expenses incurred in good faith by the Executive as a result of a termination of the Executive's employment following a Change in Control and during the term of this Agreement (including all such fees and expenses, if any, incurred in disputing in good faith any such termination or in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder). For purposes of this Section 6.4, an Executive shall be deemed to have acted in good faith unless an arbitrator finds that the Executive's action resulting in such legal fees and expenses was excessive. Such payments shall be made within five (5) business days after delivery of the Executive's written request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 7. Termination Procedures and Compensation During Dispute. 7.1. After a Change in Control and during the term of this Agreement, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause issued by the Company is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's Counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive engaged in conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. -7- 8 7.2. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the term of this Agreement, shall mean (i) If the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated by for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days from the date such Notice of Termination is given). 7.3. If within fifteen (15) days after any Notice of Termination is given or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), either party notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute provided by the Executive only if such notice in given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence. 7.4. If a purported termination occurs following a Change in Control and during the term of this Agreement, and such termination is disputed in accordance with Section 7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given until the Date of Termination, determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in addition to all other amounts due under this Agreement (other than those due under Section 5.2 hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 8. No Mitigation. The Company agrees that, if the Executive's employment by the Company is terminated during the term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 or Section 7.4 hereof. Further, the amount of any payment or benefit provided for in such Section 6 (other than Section 6.1(C)) or such Section 7.4 shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. -8- 9 9. Successors; Binding Agreement. 9.1. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any such successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. 9.2. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 10. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or mailed by United states registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: To the Company: Jevic Transportation, Inc. 700 Creek Road P.O. Box 5157 Delanco, NJ 08075 To the Executive: Name Address City, State ZIP -9- 10 11. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall he deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The validity, interpretation, and construction of this Agreement shall be governed by the laws of the State of New Jersey. Payments provided for hereunder shall be paid net withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under Sections 5, 6, and 7 which arise during the term of this Agreement shall survive the expiration of the term of this Agreement. 12. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 13. Counterparts; Coordination with Employment Agreement. 13.1. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instruments. 13.2. The terms of this Agreement shall be coordinated with and applied in conjunction with the terms of the Executive's employment agreement, if any, with the Company. In general, it is the intent of the parties that, subsequent to a Change in Control and during the term of this Agreement, the provisions of this Agreement shall supersede and substitute for those provisions of the employment agreement relating to the Executive's entitlement to benefits in connection with any termination of the Executive's employment, but shall not supersede for any period the provisions of such employment agreement pertaining to the terms of the Executive's employment. Except for circumstances relating to a termination of employment following a Change in Control during the term of this Agreement, as provided for herein, all terms and conditions of the Executive's employment with the Company shall be governed by the terms of the Executive's employment agreement (including but not limited to any such term granting additional years of service to the Executive for purposes of any of the Company's employee benefit plans). 14. Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific -10- 11 provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Burlington County, New Jersey in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Executive shall be entitled to seek specific performance of the Executive's right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 15. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: (A) "Applicable Multiplier" means two, except as otherwise specifically provided herein with the consent of the Executive. (B) "Base Amount" shall have the meaning defined in section 280G(b)(3) of the Code. (C) "Board" shall mean the Board of Directors of the Company. (D) "Cause" for termination by the Company of the Executive's employment, after any Potential Change in Control or Change in Control, shall mean the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company (other than any such failure resulting from the Executive's incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties. For purposes of this definition, no act, or failure to act, on the Executive's part shall be "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act, or failure to act, was in the best interest of the Company. (E) A "Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) The acquisition in one or more transactions by any "Person" (as the term person is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial Ownership" (as the term beneficial ownership is used for purposes of Rule 13d-3 promulgated under the 1934 Act) of fifty -11- 12 percent (50%) or more of the combined voting power of the Company's then outstanding voting securities (the "Voting Securities"); or (ii) Approval by shareholders of the Company of (A) a merger, reorganization or consolidation involving the Company if the shareholders of the Company immediately before such merger, reorganization or consolidation do not or will not own directly or indirectly immediately following such merger, reorganization or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such merger, reorganization or consolidation in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, reorganization or consolidation, or (B) (1) a complete liquidation or dissolution of the Company or (2) an agreement for the sale or other disposition of all or substantially all of the assets of the Company; or (iii) Acceptance by shareholders of the Company of shares in a share exchange if the shareholders of the Company immediately before such share exchange do not or will not own directly or indirectly immediately following such share exchange more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from or surviving such share exchange in substantially the same proportion as the ownership of the Voting Securities outstanding immediately before such share exchange. Notwithstanding the foregoing, a Change in Control shall not include any event, circumstance or transaction occurring during the six-month period following a Potential Change in Control which Potential Change in Control results from the action of any entity or group which includes the Executive (a "Management Group"). (F) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. References to specific sections of the code shall include any successors thereto. (G) "Company" shall mean Jevic Transportation, Inc., a New Jersey corporation, and any successor to its business or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise (except in determining, under Section 15(E) hereof, whether or not any Change in Control of the Company has occurred in connection with such succession). (H) "Date of Termination" shall have the meaning stated in Section 7.2 hereof. (I) "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment if the Executive is absent from full-time employment and qualifies for disability benefits under the Company's long-term disability plan -12- 13 (or would so qualify but for any waiting period under that plan). In the absence of any such plan, the determination of Disability shall be made by the Board. (J) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (K) "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code. (L) "Executive" shall mean the individual named in the first paragraph of this Agreement. (M) "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (i), (v), (vi) or (vii) hereof, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment by the Company to the Executive of any duties inconsistent with the Executive's status as an executive of the Company or a material adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control or Potential Change in Control or any change in Executive's title or status; (ii) any reduction by the Company in the Executive's annual base salary as in affect on the date hereof or as the same may be increased from time to time; (iii) the relocation by the Company of its principal executive offices to a location more than 30 miles from the location of such office immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than the Company's principal executive offices except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; (iv) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; (v) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in -13- 14 Control which is material to the Executive's total compensation, including but not limited to any bonus plan and any similar or substitute plan adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive's participation relative to other participants, as existed at the time of the Change in Control; (vi) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company's pension, life insurance, medical, health and accident, disability or other material benefit or perquisite plan in which the Executive was participating at the time of the Change in Control, and specifically including those benefits set forth in Section 6.1(c) hereof, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance, with the Company's normal vacation policy in effect at the time of the Change in Control; or (vii) any purported termination by the Company of the Executive's employment which is not effected for Cause and pursuant to a Notice of Termination satisfying the requirements of Section 7.1; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. (N) "Gross-Up Payment" shall have the meaning given in Section 6.2 hereof. (O) "Notice of Termination" shall have the meaning stated in Section 7.1 hereof. (P) "Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; provided, however, that a Person shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. -14- 15 (Q) "Potential Change in Control" shall be deemed to have occurred if the events set forth in any one of the following paragraphs shall have occurred: (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (ii) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (iii) any Person who both (x) is on the date hereof or subsequently becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing at least 10% or more of the combined voting power of the Company's then outstanding securities and (y) increases his or her beneficial ownership of such securities by 5% or more over the percentage so owned by such Person on the date hereof; or (iv) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. (R) "Severance Payments" shall mean those payments described in Section 6.1 hereof. (S) "Total Payments" shall mean those payments described in Section 6.2 hereof. 16. Prior Agreements Superseded. Effective on the Effective Date, this Agreement supersedes and replaces any previous Agreement between the Company and Executive on the same subject. IN WITNESS WHEREOF, this Agreement has been executed as of the 4th day of June, 1999, on behalf of this Company by its duly authorized officer and by the Executive. ATTEST: JEVIC TRANSPORTATION, INC. /s/ KAREN B. MUHLSCHLEGEL By: /s/ HARRY J. MUHLSCHLEGEL - ----------------------------------- -------------------------------- Secretary Harry J. Muhlschlegel Chief Executive Officer EXECUTIVE By: /s/ JOSEPH A. LIBRIZZI -------------------------------- Joseph A. Librizzi -15- EX-99.(E)(11) 22 CONFIDENTIALITY AGREEMENT 1 EXHIBIT (c)(11) JEVIC TRANSPORTATION, INC. 600 Creek Road P.O. Box 5157 Delanco, NJ 08075 December 22, 1998 Yellow Corporation 10990 Roe Avenue Overland Park, KS 66211-1213 Attn: William F. Martin, Jr. Senior Vice President Dear Sirs: In order to enable you to evaluate a possible transaction between Jevic Transportation, Inc. (together with its subsidiary and affiliated companies, the "Company") and you (the "Possible Transaction"), there will be provided to you certain proprietary, nonpublic, confidential information concerning the Company, its subsidiaries and their properties, operations and finances. 1. All information about the Company furnished by the Company and by its affiliates, directors, officers, employees, agents and financing sources (all such persons are collectively referred to herein as "representatives"), whether furnished to you or to your representatives before or after the date hereof, is referred to in this letter agreement as "Proprietary Information". For purposes of this agreement, Proprietary Information (a) shall include all documents which are prepared by you and your representatives, including all correspondence, memoranda, notes, summaries, analyses, studies, models, extracts of and documents and records reflecting, based on or derived from Proprietary Information as well as all copies and other reproductions thereof, whether in writing or stored or maintained in or by electronic, magnetic or other means, media or devices (all such documents and writings which are prepared by you or your representatives are sometimes referred to herein as "Evaluation Documents"), and (b) shall not include information which (i) is or becomes generally available to the public other than as a result of a disclosure by you or your representatives in violation of this agreement, (ii) was available to you on a nonconfidential basis prior to its disclosure by the Company or its representatives, or (iii) becomes available to you on a nonconfidential basis from a person other than the Company or its representatives who is not known to you to be otherwise bound by a confidentiality agreement with the Company or its representatives or prohibited from transmitting the information to you. As used in this letter, the term "person" shall be broadly interpreted to include, without limitation, any corporation, company, partnership and individual. 2 2. Unless otherwise agreed to in writing by the Company or as permitted by paragraph 3 hereof, you agree that (a) you and your representatives will keep all Proprietary Information confidential and not disclose or reveal any Proprietary Information to any person other than those of your representatives who are actively and directly participating in the evaluation of the Possible Transaction or who otherwise need to know the Proprietary Information for the purpose of evaluating the Possible Transaction, and cause your representatives to observe the terms of this letter agreement, (b) you and your representatives will not use Proprietary Information for any purpose other than in connection with the evaluation of the Possible Transaction and (c) you and your representatives will not disclose to any person (other than to your representatives actively and directly participating in or evaluating the Possible Transaction) any information about the Possible Transaction, or the terms, conditions or other facts relating thereto, including the fact that discussions are taking place with respect thereto or the status thereof, or the fact that the Proprietary Information has been made available to you. You will be responsible for any breach of the terms hereunder by you or your representatives. 3. In the event that you or any of your representatives is requested pursuant to , or required by, applicable law or regulation or by legal process to disclose any Proprietary Information concerning the Company or the Possible Transaction (including any facts or information referred to in paragraph 2(c) above), you agree that you will provide the Company with prompt notice of such request(s) or the receipt(s) of legal process so as to enable the Company to seek an appropriate protective order, to consult with you with respect to the Company or you taking steps to resist or narrow the scope of such request or process, and/or to waive compliance in whole or in part with your agreement to maintain the confidentiality of the Proprietary Information. If and to the extent that after the foregoing notice, in the absence of a protective order or receipt of a waiver under this letter agreement, you or your representatives are, in the opinion of your counsel, compelled to disclose Proprietary Information or other information concerning the Company or the Possible Transaction or risk being liable for contempt or suffer censure or penalty or violate applicable laws or regulations, you and your representatives may disclose such Proprietary Information or other information without liability to the Company under this letter agreement. 4. If you determine that you do not wish to proceed with the Possible Transaction, you will promptly advise us of that decision. In that case, or in any case, you agree that you will, upon the Company's request, promptly deliver to the Company all of the Proprietary Information in your possession or control or in the possession or control of any of your representatives. You may, however, destroy such of the Proprietary Information as constitutes Evaluation Documents in your and your representatives' possession or control, whether prepared by you or your representatives, in which case you will do so promptly and, if requested by the Company, you will provide a written statement by an officer of your organization familiar with your consideration of the Possible Transaction certifying that all such Evaluation Documents, including all copies thereof, have been destroyed. 5. In consideration of your receipt of the Proprietary Information, you hereby agree that for a period of three (3) years from the date hereof neither you, nor your affiliates, as defined in rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange -2- 3 Act"), will (and you and they will not assist or encourage others to), directly or indirectly, unless specifically requested in writing to do so in advance or consented prior thereto in writing by the Company: (a) acquire or agree, offer, seek or propose to acquire, or cause to be acquired, ownership (including, but not limited to, beneficial ownership as defined in Rule 13d-3 under the Exchange Act) of any of the assets or business of the Company or of any of its subsidiaries or any voting securities issued by the Company or any of its subsidiaries, or any rights or options to acquire such ownership (including from a third party); or (b) make, or in any way participate in, any "solicitation" of "proxies" (as such terms are defined under Regulation 14A of the Exchange Act) to vote or seek to advise or influence in any manner whatsoever any person or entity with respect to the voting of any securities of the Company or any of its subsidiaries; or (c) form, join or in any way participate in a "group" (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the Company or any of its subsidiaries; or (d) arrange, or in any way participate in, any financing for the purchase of any voting securities or securities convertible or exchangeable into or exercisable for any voting securities or assets of the Company of any of its subsidiaries; or (e) otherwise act, whether alone or in concert with others, to seek to propose to the Company, any subsidiary of the Company or any of their stockholders any merger, business combination, restructuring, recapitalization or similar transaction to or with the Company or any of its subsidiaries or otherwise seek or propose to influence or control the Company's management or policies; or (f) solicit for employment, or seek to negotiate or influence the terms and conditions of employment of, any employees of the Company or any of its subsidiaries with whom you have direct contact in connection with your evaluation of or our discussions concerning the Possible Transaction; or (g) enter into any discussions, negotiations, arrangements or understandings with or advise, assist or encourage any third party with respect to any of the foregoing. In addition, you also agree during such three (3)-year period not to (a) request the Company directly or indirectly to amend or waive any provision of this paragraph 5 (including this sentence) or (b) take any action designed to or which can reasonably be expected to require -3- 4 the Company to make a public announcement regarding any of the matters referred to in this paragraph 5. 6. Although the Proprietary Information contains information which the Company believes to be relevant for the purpose of your evaluation of the Possible Transaction, neither the Company nor any of its representatives makes hereunder any representation or warranty, express or implied, as to the accuracy or completeness of the Proprietary Information delivered or made available to you. Neither the Company nor its representatives shall have any liability to you or your representatives relating to or arising from the use of the Proprietary Information. Only those representations and warranties that are made in a definitive agreement effecting the Possible Transaction when, as and if one is executed, and subject to such limitations and restrictions as may be specified in such agreement, shall have any legal effect. 7. Without prejudice to the rights and remedies otherwise available to the parties, you agree that the Company shall be entitled to equitable relief by way of injunction if you or any of your representatives breach or threaten to breach any of the provisions of this letter agreement. It is understood that any failure or delay by a party in exercising any right, power or privilege hereunder shall not operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof. 8. This letter agreement constitutes the entire and exclusive agreement between the parties respecting the subject matter hereof, superseding all prior discussions, agreements or arrangements, whether oral or written, with respect to the subject matter hereof. It may not be amended unless in writing and signed by both parties. You acknowledge that the Company and its representatives have no obligations to you of any kind respecting the Possible Transaction, that there is no assurance that the Possible Transaction will be considered, negotiated, agreed to or completed, and that an alternative transaction with a person other than you may be considered, negotiated, agreed to or completed by the Company without notice to you. 9. The Company agrees that it will not disclose to any person (other than to its representatives actively and directly participating in or evaluating the Possible Transaction) any information about the Possible Transaction, or the terms, conditions or other facts relating thereto, including the fact that discussions are taking place with respect thereto or the status thereof, or the fact that the Proprietary Information has been made available to you, unless otherwise agreed in writing by you or required by applicable law or regulation or by legal process. 10. This letter agreement may be executed and delivered by facsimile signature in one or more counterparts, each of which shall constitute an original instrument and all of which, together, shall constitute the same letter agreement. 11. This letter agreement, its interpretation and enforcement, shall be governed by the laws of the State of New Jersey applicable to agreements made and to be performed wholly therein. -4- 5 Please confirm your agreement with the foregoing by signing and returning to the undersigned the duplicate copy of this letter enclosed herewith. Yours truly, JEVIC TRANSPORTATION, INC. By: /s/ Harry J. Muhlschlegel ------------------------------------ Harry J. Muhlschlegel, Chairman and Chief Executive Officer Accepted and Agreed YELLOW CORPORATION By: /s/ William F. Martin, Jr. ------------------------------- William F. Martin, Jr., Senior Vice President -5- -----END PRIVACY-ENHANCED MESSAGE-----