EXHIBIT 2
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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
DATED AS OF , 2002
BETWEEN
YELLOW CORPORATION
AND
SCS TRANSPORTATION, INC.
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TABLE OF CONTENTS
PAGE
RECITALS.......................................................................1
ARTICLE I
PLAN OF DISTRIBUTION
1.1 The Distribution......................................................2
1.2 Conditions to Distribution............................................2
1.3 Sale of Fractional Shares.............................................4
1.4 Sole Discretion of Yellow.............................................4
1.5 Termination of Obligations............................................5
ARTICLE II
DIVISION OF ASSETS AND LIABILITIES
2.1 Transfer of Assets and Liabilities....................................5
2.2 Allocated Employees...................................................6
2.3 Stock Options and Restricted Stock....................................7
2.4 Third Party Debt......................................................7
2.5 Certain Financial Support Arrangements................................7
2.6 Miscellaneous Obligations and Claims.................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Yellow.............................15
3.2 Representations and Warranties of SCST...............................16
ARTICLE IV
RELATED MATTERS
4.1 Access to Information................................................17
4.2 Confidentiality......................................................17
4.3 Indemnification......................................................18
4.4 Manner of Payments...................................................19
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4.5 Taxes................................................................19
4.6 Expenses.............................................................19
4.7 Non-solicitation.....................................................19
ARTICLE V
DISPUTE RESOLUTION
5.1 Use of Dispute Resolution; Presumptions..............................20
5.2 Negotiation..........................................................20
5.3 Non-binding Mediation................................................20
5.4 Proceedings..........................................................21
5.5 Continuity of Service and Performance................................21
5.6 Further Assurances...................................................21
ARTICLE VI
MISCELLANEOUS
6.1 Survival.............................................................21
6.2 Entire Agreement.....................................................21
6.3 Waiver and Modification..............................................21
6.4 Notices..............................................................22
6.5 Counterparts.........................................................22
6.6 Severability.........................................................22
6.7 Assignment...........................................................23
6.8 Choice of Law........................................................23
6.9 No Third-Party Beneficiaries.........................................23
ARTICLE VII
DEFINED TERMS
7.1 Defined Terms........................................................23
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Table of Exhibits
Exhibit A Form of By-laws
Exhibit B Form of Amended and Restated Certificate of Incorporation
Exhibit C Form of Tax Sharing Agreement
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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
This Master Separation and Distribution Agreement (this "Agreement") is
made and entered into as of the [ ] day of [ ], 2002 by and among Yellow
Corporation, a Delaware corporation ("Yellow"), and SCS Transportation, Inc., a
Delaware corporation and a wholly owned subsidiary of Yellow ("SCST").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in Article VII hereof.
RECITALS
A. WHEREAS, Yellow is the sole stockholder of SCST, and SCST is
the sole stockholder of the operating subsidiaries Xxxx Motor
Freight Line, Inc. ("Saia") and Jevic Transportation, Inc.
("Jevic");
B. WHEREAS, Yellow's Board of Directors has determined pursuant
to an integrated plan to (i) separate SCST, which comprises
Yellow's non-union, regional operations, from Yellow's other
businesses and operations (the "Separation") and (ii)
distribute to Yellow's stockholders on a tax-free basis all of
the outstanding shares of SCST's common stock (the
"Distribution");
C. WHEREAS, Yellow's Board of Directors has determined that it is
in the best interests of its stockholders to consummate the
Separation and the Distribution;
D. WHEREAS, it is appropriate and desirable to set forth the
principal corporate transactions required to effect the
Separation and the Distribution and certain other agreements
that will govern certain matters relating to such transactions
(collectively, the "Transactions") and the relationship of
Yellow and SCST following the consummation of the
Transactions;
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
TERMS AND CONDITIONS
In consideration of the mutual covenants herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
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ARTICLE I
PLAN OF DISTRIBUTION
1.1 The Distribution.
(i) Subject to Section 1.2 hereof, Yellow and SCST shall take
all reasonable steps necessary and appropriate to cause all conditions to the
Distribution to be satisfied and to effect the Distribution. Yellow's Board of
Directors will have the sole discretion to determine the Distribution Date, and
Yellow will consummate the Distribution subject to the satisfaction or waiver by
Yellow's Board of Directors, in its sole discretion, of the conditions set forth
in Section 1.2.
(ii) On or prior to the Distribution Date, Yellow will deliver
to the Distribution Agent for the benefit of the holders of record of Yellow
Common Stock on the Record Date, stock certificates, endorsed by Yellow in
blank, representing all of the outstanding shares of SCST Common Stock, and
shall cause the transfer agent for the Yellow Common Stock to instruct the
Distribution Agent to distribute on the Distribution Date the appropriate number
of such shares of SCST Common Stock to each such holder or designated transferee
or transferees of such holder.
(iii) Subject to Section 1.3 hereof, each holder of record of
Yellow Common Stock (or such holder's designated transferee or transferees) on
the Record Date will be entitled to receive in the Distribution that number of
shares of SCST Common Stock equal to that number of shares of Yellow Common
Stock owned by such holder on the Record Date divided by a number equal to the
Distribution Ratio established by Yellow's Board of Directors.
1.2 Conditions to Distribution.
1.2.1 The obligations of each party hereto to consummate
the Distribution are subject to the satisfaction or
waiver by Yellow in its sole discretion of each of
the following conditions:
(i) the simultaneous execution, delivery, and
performance as required of each of the
following:
(a) this Agreement;
(b) the Tax Sharing Agreement;
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(c) the execution by both Yellow and
SCST of those certain Debt
Agreements listed in paragraph
1.2.1 of the disclosure letter from
Yellow to SCST dated the date
hereof (the "Disclosure Letter") on
or before the Distribution Date, in
form, substance and amount
satisfactory to Yellow, reflecting
the payment by SCST to Yellow on or
before the Distribution Date of a
cash dividend or repayment of
intercompany indebtedness or a
combination of the foregoing
(together, the "Yellow Payment") in
the approximate amount of $115
million;
(ii) the Registration Statement shall have been
filed and declared effective by the
Commission, and there shall be no stop order
in effect with respect thereto, and no
proceeding for that purpose shall have been
instituted or threatened by the Commission;
(iii) the actions and filings with regard to state
securities and blue sky laws of the United
States (and any comparable laws under any
foreign jurisdictions) shall have been taken
and, where applicable, have become effective
or been accepted;
(iv) the SCST Common Stock to be distributed in
the Distribution shall have been admitted
for trading on The Nasdaq National Market,
on official notice of distribution;
(v) no order, injunction or decree issued by any
Government Authority or other legal
restraint or prohibition preventing the
consummation of the Distribution or any of
the other transactions contemplated by this
Agreement or the Tax Sharing Agreement shall
be threatened, pending or in effect;
(vi) the Letter Ruling shall have been issued and
shall not have been revoked;
(vii) any material Consents and Governmental
Approvals necessary to consummate the
Distribution shall have been obtained and be
in full force and effect;
(viii) Yellow's Board of Directors shall be
satisfied that the Distribution will be made
out of surplus within the meaning of Section
170 of the Delaware General Corporation Law;
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(ix) Yellow's Board of Directors shall have
approved the Separation and the Distribution
and shall not have abandoned or deferred the
Distribution at any time prior to the Record
Date;
(x) Yellow's Board of Directors shall be
satisfied that the Distribution does not
constitute the conveyance of all or
substantially all of the properties or
assets of Yellow immediately prior to the
Distribution, as contemplated in Section 271
of the Delaware General Corporation Law;
(xi) the Certificate of Incorporation and By-laws
shall be in effect;
(xii) no other events or developments shall have
occurred that, in the sole judgment of
Yellow, would result in the Distribution
having a material adverse effect on Yellow
or its stockholders;
(xiii) Yellow's Board of Directors shall be
satisfied that each of Yellow and SCST will
be solvent following the Distribution; and
(xiv) SCST shall have made the Yellow Payment.
1.3 Sale of Fractional Shares.
(i) The Distribution Agent shall not distribute any fractional
shares of SCST Common Stock ("Fractional Shares") to any record holder of Yellow
Common Stock in connection with the Distribution. The Distribution Agent shall
be instructed to aggregate all such Fractional Shares and sell them in an
orderly manner promptly after the Distribution Date in the open market at the
then-prevailing prices and, after completion of all such sales, distribute a pro
rata portion of the gross proceeds from such sales, less appropriate deductions
of the amount required to be withheld for federal income tax purposes to each
record holder of Yellow Common Stock who would otherwise have received a
Fractional Share. Yellow shall pay all brokerage charges, commissions and
transfer taxes attributed to such sale.
(ii) In addition, in connection with the Distribution, SCST
shall offer to the record holders of Yellow Common Stock who would otherwise
receive fewer than 100 shares of SCST Common Stock in the Distribution a program
by which such holders may instruct the Distribution Agent to sell such shares of
SCST Common Stock on their behalf. SCST shall cause such program to be conducted
in accordance with the terms and conditions described in the Information
Statement.
1.4 Sole Discretion of Yellow. The conditions set forth in Section 1.2
are for the sole benefit of Yellow and shall not give rise to or create any duty
on the part of Yellow or
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Yellow's Board of Directors to waive or not to waive such conditions or limit in
any way Yellow's right to terminate this Agreement or alter the consequences of
any such termination. Any determination made by Yellow prior to the Distribution
concerning the satisfaction or waiver of any or all of the conditions set forth
in Section 1.2 shall be conclusive. In addition, Yellow shall have the sole and
absolute discretion to determine the date of consummation of the Distribution
(such date, the "Distribution Date"), all terms of the Distribution, including
without limitation the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution or related to the Distribution and the
timing of and conditions to the consummation of the Distribution. In addition,
Yellow may in its sole and absolute discretion at any time and from time to time
until the Distribution Date, modify or change the terms of the Distribution,
including without limitation accelerating or delaying the timing of the
consummation of all or part of the Distribution. SCST shall cooperate with
Yellow in all respects to accomplish the Distribution and shall, at Yellow's
direction, promptly take any and all actions necessary and desirable to effect
the Distribution, including without limitation the registration under the
Exchange Act of the SCST Common Stock on an appropriate registration form.
Yellow shall in its sole and absolute discretion select any investment bank and
managers in connection with the Distribution, as well as any financial printer,
solicitation and/or exchange agent and its own outside counsel.
1.5 Termination of Obligations. The obligations of Yellow and SCST
under this Agreement shall terminate on a determination by Yellow to terminate
the transactions that comprise the Distribution.
ARTICLE II
DIVISION OF ASSETS AND LIABILITIES
2.1 Transfer of Assets and Liabilities.
(a) On the terms and subject to the conditions set forth in
this Agreement and with effect as of the Contribution Date, Yellow hereby
contributes, assigns, transfers, conveys and delivers to SCST, and shall cause
its applicable Subsidiaries to contribute, assign, transfer, convey and deliver
to SCST or a member of the SCST Group all of Yellow's and such applicable
Subsidiaries' respective rights, title and interest in and to the assets set
forth in paragraph 2.1 of the Disclosure Letter (the "Contributed Assets").
SCST, or the appropriate member of the SCST Group, hereby accepts from Yellow
and its Subsidiaries the Contributed Assets.
(b) On the terms and subject to the conditions set forth in
this Agreement and with effect as of the Contribution Date, SCST hereby accepts,
assumes and agrees faithfully to perform, discharge and fulfill all the
liabilities set forth in paragraph 2.1 of the
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Disclosure Letter (the "Contributed Liabilities") in accordance with their
respective terms, and agrees to cause its applicable Subsidiaries to accept,
assume, perform, discharge and fulfill all the Contributed Liabilities to be
held by its Subsidiaries in accordance with their respective terms. SCST shall
thereafter be responsible for all Contributed Liabilities, regardless of (i)
when or where such liabilities arose or arise, (ii) whether the facts on which
they are based occurred prior to or subsequent to the date hereof, (iii) where
or against whom such liabilities are asserted or determined (including without
limitation any liabilities arising out of claims made by Yellow's or SCST's
respective directors, officers, employees, agents, Subsidiaries or Affiliates
against any member of the Yellow Group or the SCST Group), (iv) whether such
liabilities were asserted or determined prior to the date hereof, and (v)
whether such liabilities arise from or are alleged to arise from negligence,
recklessness, violation of law, fraud or misrepresentation by any member of the
Yellow Group or the SCST Group or any of their respective directors, officers,
employees, agents, Subsidiaries or Affiliates.
(c) In the event that at any time or from time to time
(whether prior to or after the Contribution Date), any party hereto (or any
member of such party's respective Group), shall receive or otherwise possess any
asset that is allocated to any other Person pursuant to this Agreement, such
party shall promptly transfer, or cause to be transferred, such asset to the
Person so entitled thereto. Prior to any such transfer, the party possessing
such asset shall hold such asset in trust for any such other party, and upon
such transfer each party shall reimburse the other or make financial or other
adjustments to remedy any liabilities resulting from such transfer or
possession.
2.2 Allocated Employees. As of the Distribution Date, the employees of
Yellow listed in paragraph 2.2 of the Disclosure Letter shall become employees
of SCST (the "Allocated Employees"). Yellow shall not be responsible for
insurance, employee benefits and other related benefits of the Allocated
Employees that accrue from and after the Distribution Date except as may be
provided in an individual agreement between Yellow and any Allocated Employee.
SCST shall be responsible for all costs associated with the Allocated Employees
from and after the Distribution Date. Yellow shall not be responsible for any
Cobra benefit, or unemployment or workers' compensation benefit of an employee
whose employment ends or whose injury or death occurs while an employee of SCST.
SCST shall reimburse Yellow in accordance with the procedures set forth in
Section 4.4 if Yellow determines that it has made any direct or indirect payment
in respect thereof, including without limitation as a result of adjustment to
its insurance rates or government fund payment obligations. SCST's health and
life insurance plans will not exclude pre-existing conditions for the Allocated
Employees (except to the extent such pre-existing conditions were excluded from
the corresponding Yellow plan immediately prior to the Distribution Date), will
waive any waiting period requirements for the Allocated Employees, and will
waive any evidence of insurability provisions for the Allocated Employees. In
addition, SCST's health plans will apply toward any deductible requirements and
out-of-pocket maximum limits for the plan year in
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which the Distribution takes place any amounts paid by an Allocated Employee
toward such requirements and limits under the Yellow health plan in which he or
she participated during such plan year. SCST shall, and shall cause its
Subsidiaries to, grant the Allocated Employees credit for their service with
Yellow and its Subsidiaries prior to the Distribution Date for purposes of
eligibility to participate in and vesting in the benefit plans sponsored by SCST
and its Subsidiaries.
2.3 Stock Options and Restricted Stock. The outstanding stock options
held by Yellow's directors, employees and other parties, including Allocated
Employees, to purchase stock of Yellow shall be adjusted in the manner set forth
in paragraph 2.3 of the Disclosure Letter. Certain senior officers of Yellow and
its Subsidiaries Yellow Transportation, Meridian IQ and Yellow Technologies have
received restricted stock grants. All such senior officers who are actively
employed by Yellow or any such Subsidiary on the Distribution Date will agree to
waive the shares of SCST Common Stock that they would otherwise have received in
exchange for additional restricted shares of Yellow Common Stock commensurate in
value to the impact of the Distribution on the value of their previous
restricted stock grants. The additional grants of restricted stock will be
subject to the same restrictions and vesting dates as the original grants.
2.4 Third Party Debt. SCST and/or its subsidiaries shall make all
future interest and principal payments on and after the Distribution Date on all
Third Party Debt in addition to the Debt Agreements listed in paragraph 1.2.1 of
the Disclosure Letter which resides on the books of SCST or its subsidiaries as
of the Distribution Date, and SCST shall indemnify and hold Yellow harmless for
payment of interest or principal after the Distribution Date in accordance with
Section 4.3. Third Party Debt is listed in paragraph 2.4 of the Disclosure
Letter.
2.5 Certain Financial Support Arrangements.
2.5.1 Guarantees by Yellow of SCST Obligations. As of the
date hereof, Yellow has provided guarantees of
certain obligations of SCST and its subsidiaries, the
holders, amount and duration of which are set forth
in paragraph 2.5.1 of the Disclosure Letter (the
"Guarantees"). As of the Distribution Date, Yellow
shall cancel all Guarantees which it is permitted to
cancel without the consent of any other person in
accordance with the documentation governing such
Guarantee. With respect to any Guarantees the
cancellation of which requires the consent of a third
party, SCST shall, subject to the following sentence,
use its reasonable best efforts following the
Distribution Date to remove such Guarantee by Yellow
of obligations of SCST and its Subsidiaries, and SCST
shall indemnify and hold Yellow harmless from any
damages, claims, monies, or other demands incurred by
or asserted against Yellow which
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arise out of, in connection with or with reference to
any Guarantee in accordance with Section 4.3. SCST
shall not be required to offer monetary compensation
to any holder of a Guarantee to secure its release.
Yellow will not extend any Guarantee beyond the end
of the term of each obligation as in effect on the
date hereof.
2.5.2 Insurance, Collateral and Claims Administration
Obligations.
2.5.2.1 Insurance. Responsibility as between SCST
and Yellow for any self-insurance,
retention, deductible, retrospective
premium, or similar items, including without
limitation associated administrative
expenses and allocated loss adjustment or
similar expenses, arising after the
Distribution Date under any and all former
or current insurance policies maintained by
Yellow and related to liabilities or losses
of SCST or its Subsidiaries prior to the
Distribution Date shall be allocated by
Yellow to SCST or Yellow (each of the
foregoing being a "party") on a ----- basis
not inconsistent with past practices between
Yellow and SCST. To the extent that any
party pays any expenses that were determined
by Yellow to be properly allocable to the
other party, such other party shall
reimburse the paying party in accordance
with the procedures set forth in Section
4.4.
2.5.2.2 Self Insurance Pool and AIT "Bank". As of
the Distribution Date, a calculation shall
be made by Yellow of the total of all
premiums paid since inception by SCST and
its Subsidiaries for coverage under the
self-insurance retention pool which has been
maintained by Yellow to buy down the
self-insurance retentions of Jevic and Saia
(and Action Express, Inc. and WestEx, Inc.,
merged into Saia effective March 4, 2001)
from external retention levels of
third-party insurance providers. To this
amount there shall be added $1,014,783.00,
representing SCST's and its Subsidiaries'
shares of the "bank" that has been
established with AI Transport, Inc. of
Atlanta, Georgia ("AIT") relating to certain
third-party liability claims incurred by
Yellow and --- SCST's Subsidiaries over the
course of Yellow's insurance arrangements
with AIT. All payments made by AIT to Yellow
prior to or after the Distribution Date
shall be retained solely by Yellow.
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From the total derived in the preceding
paragraph, there shall be subtracted a sum
equal to a calculation made by Yellow of the
actual claim payments made by Yellow to
resolve claims involving SCST and its
Subsidiaries within the self-insurance
retention pool from its inception to the
Distribution Date (the sum derived from this
calculation hereinafter being referred to as
the "Net Ultimate Liability of Yellow" and
the calculation being detailed in paragraph
2.5.2.2 of the Disclosure Letter).
After the Distribution Date, claims
determined by Yellow to fall within the
self-insurance pool that arise out of, in
connection with or with reference to
activity of SCST and its Subsidiaries prior
to the Distribution Date (together the "SCST
Excess Liability") shall be paid first by
Yellow after the Distribution Date up to the
Net Ultimate Liability of Yellow. If and
when said Net Ultimate Liability of Yellow
is exhausted, all remaining liability for
SCST Excess Liability shall be paid by SCST
and its Subsidiaries, and SCST shall
indemnify Yellow for any claims asserted
against Yellow for amounts of SCST Excess
Liability in excess of the Net Ultimate
Liability of Yellow in accordance with
Section 4.3. SCST shall reimburse Yellow in
accordance with the procedures set forth in
Section 4.4 if Yellow determines that Yellow
or any of its Subsidiaries has made any
direct or indirect payment in respect of
SCST Excess Liability in excess of the Net
Ultimate Liability of Yellow.
2.5.2.3 Collateral. In order to cover certain
Collateral Requirements (as defined below)
of SCST and its Subsidiaries, Yellow has
provided letters of credit, indemnity bonds
or other collateral to secure certain
obligations of SCST and its subsidiaries for
self insurance retention deductibles,
retrospective premiums and cash payment for
reserves as set forth in paragraph 2.5.2.3
of the Disclosure Letter. With respect to
discussion of this issue, the following
definitions apply:
(i) "Collateral" - Letters of credit,
indemnity bonds, or any other form
of collateral or guaranty which
Yellow has or will provide to cover
certain collateral requirements of
SCST and its Subsidiaries following
the Distribution.
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(ii) "Collateral Requirements" - The
collateral required by SCST's
current or former insurance
carriers, sureties, and all states
where SCST is currently or has been
self-insured for workers'
compensation purposes for policy
periods up to and including the
March 1, 2002 - February 28, 2003
policy period.
(iii) "Collateral Cost" -
(1) Collateral Cost for any fiscal
quarter ending on or prior to
the second anniversary of the
Distribution Date shall equal
the sum of the cost billed by
third parties to Yellow and
its Subsidiaries in connection
with providing Collateral as
determined by Yellow (such
xxxxxxxx in any fiscal
quarter, the "Billed Cost").
(2) Collateral Cost for any fiscal
quarter ending after the
second anniversary of the
Distribution Date and on or
prior to the fourth
anniversary of the
Distribution Date shall equal
the sum of (a) the Billed Cost
for such fiscal quarter plus
(b) 25 basis points multiplied
by the average daily face
amount of the Collateral for
such fiscal quarter as
determined by Yellow.
(3) Collateral Cost for any fiscal
quarter ending after the
fourth anniversary of the
Distribution Date and on or
prior to the fifth anniversary
of the Distribution Date shall
equal the sum of (a) the
Billed Cost for such fiscal
quarter plus (b) 50 basis
points multiplied by the
average daily face amount of
the Collateral for such fiscal
quarter as determined by
Yellow.
(4) Collateral Cost for any fiscal
quarter ending after the fifth
anniversary of the
Distribution Date and on or
prior to the sixth anniversary
of the Distribution Date shall
equal the sum of (a) the
Billed Cost for such fiscal
quarter plus (b) 75 basis
points multiplied by the
average daily face
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amount of the Collateral for
such fiscal quarter as
determined by Yellow.
(5) Collateral Cost for any fiscal
quarter ending after the sixth
anniversary of the
Distribution Date and on or
prior to the seventh
anniversary of the
Distribution Date shall equal
the sum of (a) the Billed Cost
for such fiscal quarter plus
(b) 100 basis points
multiplied by the average
daily face amount of the
Collateral for such fiscal
quarter as determined by
Yellow.
(6) Collateral Cost for any fiscal
quarter ending after the
seventh anniversary of the
Distribution Date shall equal
the sum of (a) the Billed Cost
for such fiscal quarter plus
(b) 125 basis points
multiplied by the average
daily face amount of the
Collateral for such fiscal
quarter as determined by
Yellow.
The Collateral Cost shall be billed on a
quarterly basis in arrears following the
Distribution Date. If Yellow receives a
refund from collateral providers for the
Billed Cost of Collateral that SCST has
replaced following Yellow's payment of the
annual cost of such Collateral, Yellow shall
reimburse SCST the amount of such Billed
Cost and related premium paid by SCST or any
of its Subsidiaries to Yellow or any of its
Subsidiaries within [15] calendar days of
receipt by Yellow of such refund. Payment of
the Collateral Cost by SCST shall be due
within 15 calendar days after receipt by
SCST of the applicable Yellow xxxx or
invoice.
After the Distribution, Yellow shall leave
existing Collateral in place until such
Collateral has been released by its holders,
except that SCST immediately after the
Distribution shall replace $15 million of
the existing Collateral detailed in
paragraph 2.5.2.3 of the Disclosure
Statement with Collateral obtained by SCST.
Notwithstanding the foregoing, in the event
that SCST experiences demands for increased
Collateral from any of the holders of such
Collateral detailed in paragraph 2.5.2.3 of
the Disclosure Statement between the
Distribution Date and February 28, 2003,
Yellow shall either provide such
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increased Collateral or instruct SCST to
provide such increased Collateral with a
credit against SCST's replacement Collateral
obligation described above, at Yellow's
option.
Yellow shall provide no additional
Collateral to SCST or any of SCST's
Subsidiaries for any insurance, or
self-insurance obligations arising after
February 28, 2003.
Notwithstanding the foregoing, in the event
that any holder of any Collateral provided
by Yellow redeems or calls such Collateral,
SCST shall be required to reimburse Yellow
in accordance with the procedures set forth
in Section 4.4 and to indemnify and hold
Yellow harmless in accordance with Section
4.3.
2.5.2.4 Claims Administration Obligations. Yellow
and SCST acknowledge that Yellow currently
receives invoices for claims administration
expenses provided by third party
administrators ("TPAs") that ---- pertain in
whole or in part to the handling and
disposition of claims on behalf of Saia
under SCST's and Xxxx'x insurance programs
for years prior to the year ended March 1,
2000. Yellow shall continue to pay such
invoices by TPAs after the Distribution Date
and SCST and Saia shall be jointly or
severally obligated to reimburse Yellow for
the portion of such invoices which relate to
services performed by TPAs on behalf of
Saia. Yellow shall not pay the portion of
any such invoices as relate to services
performed on behalf of Saia until SCST
and/or Saia has verified in writing the
correctness of the billing, which SCST or
Saia must do within fifteen (15) calendar
days of presentment of the invoice by Yellow
to SCST. If SCST or Saia does not deliver
such written verification on or prior to the
date that is fifteen (15) calendar days
after the presentment of such invoice,
Yellow shall regard SCST as having verified
such invoice. Yellow will use its reasonable
efforts to contest any such billing on
Xxxx'x behalf, and the parties will provide
all reasonable cooperation required to
resolve any billing disputes. If Yellow and
SCST decide not to pay a disputed invoice or
to pay only a portion thereof, SCST will
indemnify Yellow from any damages or costs
incurred by Yellow stemming from such
non-payment or partial payment in accordance
with Section 4.3. SCST or
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Saia, as the case may be, shall reimburse
Yellow within fifteen (15) calendar days of
Yellow's payment of that portion of each TPA
invoice that relates to performance by TPAs
of services on their behalf.
2.6 Miscellaneous Obligations and Claims. Certain miscellaneous
obligations of Yellow and potential claims against third
parties exist which shall be divided between Yellow and SCST
as follows:
2.6.1 Preston Trucking Company, Inc. Claims. Yellow has
incurred certain expenses and has filed a claim in
bankruptcy to recover such expenses stemming from the
bankruptcy of its former subsidiary Preston Trucking
Company, Inc. ("Preston"). Any and all expenses
incurred stemming from the bankruptcy of Preston,
whether ------- already incurred or to be incurred in
the future, shall be the sole responsibility of
Yellow, and Yellow shall be the sole beneficiary of
any payment of the claim in bankruptcy that has been
filed by Yellow against Preston, either for amounts
already claimed or to be claimed in the future,
specifically including any payment or valuation of
the Warrant dated July 15, 1998, to purchase shares
of Preston, that is presently held by Yellow.
Following the Distribution Date, Yellow shall
indemnify and hold SCST harmless in accordance with
Section 4.3 for claims which in any manner relate to
or stem from the bankruptcy of Preston and the former
ownership of Preston by Yellow.
2.6.2 Luciano Transport Litigation. SCST's Subsidiary Saia
is presently engaged in litigation against Luciano
Transport, Inc. ("Luciano") and its owner Xxxx Xxxx,
III relating to unpaid interline receivables that are
owed by Luciano to Saia. SCST and/or Saia shall be
solely responsible for the future prosecution of any
claim against Luciano and/or Xxxx Xxxx, III for these
unpaid interline receivables after the Distribution
and SCST and/or Saia shall be the recipients of any
and all judgment, settlement or other recovery
ultimately achieved as a result of or in connection
with such litigation against Luciano and Xxxx Xxxx,
III, after the payment to Yellow of all expenses,
including without limitation attorneys' fees up to a
maximum of $25,000, that Yellow determines that it or
any of its Subsidiaries (other than SCST or Saia) has
incurred in the prosecution of this claim prior to
the Distribution (together, the "Yellow Luciano
Litigation Expenses"). Amounts received by SCST or
Saia as a result of or in connection with such
litigation shall be paid first to Yellow in full
satisfaction of the Yellow Luciano Litigation
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Expenses, promptly upon receipt thereof by any member
of the SCST Group, and then to SCST or another member
of the SCST Group.
2.6.3 Benesight Litigation. Saia is presently engaged in
litigation against Benesight, Inc. ("Benesight") for
services previously provided by Benesight as the TPA
of Xxxx'x medical plan. SCST and Saia shall solely be
responsible for the future prosecution of any claim
against Benesight and SCST and Saia shall be the
recipients of any and all judgment, settlement or
other recovery ultimately achieved as a result of
such litigation against Benesight, after the payment
to Yellow of all expenses, including without
limitation attorneys' fees up to a maximum of
$20,000, that Yellow determines that it or any of its
Subsidiaries (other than SCST or Saia) has incurred
in the prosecution of this claim prior to the
Distribution (together, the "Yellow Benesight
Litigation Expenses"). Amounts received by SCST or
Saia as a result of or in connection with such
litigation shall be paid first to Yellow in full
satisfaction of the Yellow Benesight Litigation
Expenses, promptly upon receipt thereof by any member
of the SCST Group, and then to SCST or another member
of the SCST Group.
2.6.4 Remaining Action Express Purchase Obligations.
Pursuant to the Purchase Agreement entered into
between Xxx and Xxxxx Xxxxxxxxx and Yellow for the
issued and outstanding shares of Action Express, Inc.
(merged into Saia effective March 4, 2001) on
November 3, 1998, future sums are due both Xxx and
Xxxxx Xxxxxxxxx in the form of payments under the
terms of their non-compete agreements through January
31, 2006 and January 31, 2005, respectively. The
responsibility for all such payments after the
Distribution shall rest with SCST and/or Saia, and
SCST shall indemnify and hold Yellow harmless for all
damages, payments, costs and expenses incurred by
Yellow after the Distribution Date which relate in
any manner to the Action Express acquisition or
claims for damages from the prior owners of Action
Express allegedly arising out of said acquisition in
accordance with Section 4.3.
2.6.5 Jevic Executive Employment and Severance Agreements.
In connection with the acquisition by Yellow of Jevic
on July 9, 1999, Yellow and Jevic entered into
employment agreements (the "Jevic Employment
Agreements") with certain senior officers of Jevic,
which employment agreements incorporated by reference
severance agreements previously entered into between
said senior officers and Jevic. The responsibility
for any payments under the Jevic Employment
Agreements after the
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Distribution Date shall rest with SCST and Jevic, and
SCST shall indemnify and hold Yellow harmless for all
damages, payments, costs and expenses incurred by
Yellow after the Distribution Date which relate in
any manner to claims for damages or payments under
the Jevic Employment Agreements in accordance with
Section 4.3.
2.6.6 Assignment of Rights. Yellow hereby assigns to SCST
any rights or claims which Yellow has or may have
against any third parties which arise out of the
acquisition by Yellow of Jevic, Xxxxxxx
Transportation Company, Xxxxxxx Freight Lines, Inc.,
and Action Express, Inc., together with any rights or
claims arising at any time after any such
acquisition.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Yellow. Yellow represents
and warrants to SCST as follows:
(a) Organization and Standing. Yellow is a corporation
duly organized, validly existing and in good standing
under the laws of the state of Delaware.
(b) Authority and Status. Yellow has full power and
authority to execute and deliver this Agreement and
the Tax Sharing Agreement, to perform its obligations
hereunder and under the Tax Sharing Agreement, and to
consummate the transactions contemplated hereby and
under the Tax Sharing Agreement without the necessity
of any act or consent of any other person. Yellow has
taken all necessary and appropriate corporate action,
including obtaining all necessary board consents,
with respect to the execution, delivery, and
performance of this Agreement and the Tax Sharing
Agreement. This Agreement and the Tax Sharing
Agreement to be executed, delivered and performed by
Yellow in connection herewith constitute or will,
when executed and delivered, constitute the valid and
legally binding obligations of Yellow, enforceable
against it in accordance with their respective terms,
except as enforceability may be limited by applicable
equitable principles or by bankruptcy insolvency,
reorganization, moratorium or similar laws from time
to time affecting the enforcement of creditors'
rights generally.
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(c) Litigation. To the knowledge of Yellow, there is no
claim, litigation, action, suit or proceeding,
administrative or judicial, pending or threatened
against Yellow or related to the business or the
assets transferred pursuant to this Agreement or the
transactions contemplated hereunder, at law or in
equity, before any federal, state, local or foreign
court or regulatory agency, or other governmental
authority, which could result in the institution of
legal proceedings to prohibit or restrain the
consummation or performance of this Agreement or the
transactions contemplated hereby, or claim damages as
a result of this Agreement or the transactions
contemplated hereby.
(d) No Conflict. Neither the execution and delivery of
this Agreement and the Tax Sharing Agreement nor
compliance with the terms and provisions hereof and
thereof, including, without limitation, the
consummation of the transactions contemplated hereby
and thereby, will conflict with or result in the
breach of any term, condition or provisions of
Yellow's Certificate of Incorporation or By-laws or
applicable law, regulation, or court order.
3.2 Representations and Warranties of SCST. SCST represents and
warrants to Yellow as follows:
(a) Organization and Standing. SCST is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Delaware.
(b) Authority and Status. SCST has full power and authority to
execute and deliver this Agreement and the Tax Sharing Agreement, to
perform its obligations hereunder and thereunder and consummate the
transactions contemplated hereby and thereby without the necessity of
any act or consent of any other person. SCST has taken all necessary
and appropriate corporate action, including obtaining all necessary
board and shareholder consents with respect to the execution, delivery
and performance by SCST of this Agreement and of the Tax Sharing
Agreement. This Agreement and the Tax Sharing Agreement constitute or
will when executed and delivered constitute the valid and legally
binding obligation of SCST enforceable against it in accordance with
their respective terms, except as enforceability may be limited by
applicable, equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time affecting
the enforcement of creditors rights generally.
(c) No Conflict. Neither the execution and delivery of this
Agreement and the Tax Sharing Agreement nor the terms and provisions
hereof and thereof including, without limitation, the consummation of
the transactions contemplated hereby and thereby will conflict with or
result in the breach of any term, condition or provisions of
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the Certificate of Incorporation or By-laws, as amended and restated,
or applicable law, regulation or court order.
ARTICLE IV
RELATED MATTERS
4.1 Access to Information.
(a) From and after the Distribution Date, each of Yellow and
SCST, on behalf of its respective Group, agrees to provide or cause to
be provided to the other Group any Information in the possession or
under the control of such Group which the requesting party reasonably
needs
(i) to comply with reporting, disclosure, filing or
other requirements imposed on the requesting party (including
under applicable securities laws) by a Governmental Authority
having jurisdiction over the requesting party;
(ii) for use in any other judicial, regulatory,
administrative or other proceeding or in order to satisfy
audit, accounting, claims, regulatory, litigation or other
similar requirements, in each case other than claims or
allegations that one party to this Agreement has against the
other; or
(iii) subject to the foregoing clause (ii), to comply
with its obligations under this Agreement or the Tax Sharing
Agreement;
provided however, that in the event that any party hereto determines
that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any attorney-client
privilege, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm
or consequence.
(b) Except as otherwise specifically provided for herein, a
party providing Information or witnesses to the other hereunder shall
be entitled to receive from the recipient, upon the presentation of
appropriate invoices therefore, payments for such amounts relating to
supplies, out-of-pocket expenses, and such other costs, employee time
and disbursements, which may be reasonably incurred in providing such
information or witnesses. Invoices shall be due and payable within
fifteen (15) calendar days of receipt. Employee time shall be billed at
the involved employee's hourly rate for hourly employees with a
four-hour minimum, and salary calculated on a per diem basis for
salaried employees with a one calendar day minimum.
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4.2 Confidentiality. Each of Yellow and its Subsidiaries (other
than SCST and its Subsidiaries) and SCST and its Subsidiaries shall hold and
cause each of their respective officers, directors, employees, agents,
consultants and advisors to hold, in strict confidence, all non-public
information concerning the other party, unless compelled to disclose such
information by judicial or administrative process or, in the opinion of counsel,
by the requirements of law (in which case such party shall promptly notify the
other party so that the other party may seek a protective order or other
appropriate remedy). Each party shall not release or disclose such information
to any other person except its auditors, attorneys, financial advisors, bankers,
subcontractors and other consultants and advisors who have a need to know who
shall be bound by the provisions of this Section 4.2. Each party shall be deemed
to have satisfied its obligations hereunder with respect to confidential
information supplied by the other party if it exercises the same care as it does
to preserving the confidentiality of its own similar information.
4.3 Indemnification.
(a) except as otherwise provided in this Agreement, Yellow
shall indemnify SCST, its Subsidiaries and their officers, directors, managers,
members, employees, agents, affiliates and advisors (collectively, the "SCST
Indemnitees") from and against and shall reimburse such SCST Indemnitees in
respect of any and all Losses resulting from or arising out of (i) any Yellow
Liabilities (whether arising prior to or after the Distribution Date), (ii) the
failure of Yellow to perform any of its obligations under this Agreement in any
material respect, and (iii) all Liabilities arising out of the business,
operations and assets of Yellow and Yellow's Subsidiaries after the Distribution
Date.
(b) Except as otherwise provided in this Agreement, SCST shall
indemnify Yellow, its Subsidiaries and their officers, directors, managers,
members, employees, agents, affiliates and advisors (collectively, the "Yellow
Indemnitees") from and against and shall reimburse such Yellow Indemnitees in
respect of any and all Losses resulting from or arising out of (i) any of the
SCST Liabilities (whether arising prior to or after the Distribution Date), (ii)
the failure of SCST to perform any of its obligations under this Agreement in
any material respect, and (iii) all Liabilities arising out of the business,
operations and assets of SCST and SCST's Subsidiaries after the Distribution
Date.
(c) Any Liabilities not allocated to Yellow or its
Subsidiaries or to SCST or its Subsidiaries hereunder shall be allocated to
either Yellow or SCST by the Chief Executive Officer of Yellow in his sole
discretion.
(d) Neither party shall be liable for indemnification with
respect to any claim for which indemnification may result hereunder unless the
party seeking indemnification (the "Indemnitee") notifies the other party (the
"Indemnifying Party") in writing of the nature of the claim in as much detail as
is feasible within a reasonable time after the facts giving
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rise to such claim are known to the Indemnitee. The Indemnifying Party shall be
entitled to participate at its own expense in the defense or, if it so elects by
a writing delivered to the Indemnitee within thirty (30) calendar days after
receipt of such notice, to assume at its own expense the defense of the matter
giving rise to the claim for indemnification or of any suit brought in
connection with it. If the Indemnifying Party elects to assume a defense and is
reasonably creditworthy or carries insurance so as to make it reasonable to
expect it will be able to discharge an adverse judgment, the defense shall be
conducted by counsel chosen by it. Only one counsel will be provided for the
Indemnitee in any one proceeding regardless of the number of entities or
individuals to be indemnified and the Indemnifying Party shall be able to settle
if it obtains an unconditional release without limitations on future conduct. If
the Indemnitee elects to assume the defense of any such claim or suit and
retains such counsel, the Indemnitee shall bear the fees and expenses of its own
counsel arising out of any legal service thereafter performed by that counsel.
In the event the Indemnitee elects to defend against any such claim it will, so
long as the Indemnifying Party is actively engaged in defense of the claim,
refrain from paying or compromising the claim and will extend its cooperation
and assistance to the Indemnifying Party in its defense against the claim. If
the parties hereto or an Indemnitee are unable to agree upon or settle any claim
for indemnity, either party or an Indemnitee may submit the Indemnitee claim to
the dispute resolution procedure provided for herein. Notwithstanding the
foregoing, there shall be no obligation for one party to indemnify the other for
any dispute in which the amount in controversy is less than $5,000.
4.4 Manner of Payments. Except as otherwise provided in this Agreement,
any reimbursements or other payments to be made on and after the Distribution
Date by any party to any other party hereunder shall be due within fifteen (15)
calendar days of the receipt by the owing party of an invoice or other billing
documentation accompanied by reasonably detailed supporting information.
4.5 Taxes. Yellow and SCST have entered into a Tax Sharing Agreement
regarding their respective rights and obligations with respect to taxes of
Yellow and SCST for all periods prior to the (or including) Distribution and
certain other tax related matters. In the event of any conflict between the
terms of the Tax Sharing Agreement and the terms of this Agreement, the terms of
the Tax Sharing Agreement shall prevail.
4.6 Expenses. Except as otherwise provided in this Agreement or the Tax
Sharing Agreement, all out-of-pocket expenses incurred in connection with the
Distribution up to and including the Distribution Date shall be paid by Yellow.
Thereafter, except as otherwise provided in this Agreement or in the Tax Sharing
Agreement, each party shall bear its own expenses in connection with the
Distribution.
4.7 Non-solicitation. For twenty-four (24) months after the date
hereof, Yellow and SCST shall not, directly or indirectly, offer, induce,
recruit, solicit, influence or attempt to
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influence any employee of the other or any of its subsidiaries to terminate his
or her employment for the purpose of working for the other (without the prior
written consent of the other party). This Section 4.7 shall not prohibit one
party from hiring an employee of the other party if such employment is the
result of an employee's soliciting employment by the employing party without any
inducement or attempt by the employing party to encourage said employee, or if
the employment occurs as a result of a general solicitation for employment by
one party not specifically directed at the other party.
ARTICLE V
DISPUTE RESOLUTION
5.1 Use of Dispute Resolution; Presumptions. Except as otherwise set
forth in the Tax Sharing Agreement, resolution of any and all disputes arising
from or in connection with this Agreement or the Tax Sharing Agreement, whether
based on contract, tort or otherwise (collectively, "Disputes") shall be
exclusively governed by and settled in accordance with the provisions of this
Article V, it being understood and agreed by SCST that any calculation or
determination made by Yellow with respect to or in connection with the
Distribution or this Agreement shall be deemed reasonable and binding on SCST
absent manifest error.
5.2 Negotiation. The parties shall make a good faith attempt to resolve
any Dispute through negotiation. Within fifteen (15) calendar days after notice
of a Dispute is given by either party to the other party, each party shall
select a negotiating team comprised of vice president-level employees of such
party and shall meet within fifteen (15) calendar days after the end of the
first fifteen (15) calendar day negotiating period to attempt to resolve the
matter. During the course of negotiations under this Section 5.2, all reasonable
requests made by one party to the other for Information, including requests for
copies of relevant documents, will be honored. The specific format for such
negotiations will be left to the discretion of the designated negotiating teams
and may include the preparation of agreed upon statements of fact or written
statements of position furnished to the other party.
5.3 Non-binding Mediation. In the event that any Dispute arising out of
or related to this Agreement is not settled by the parties within fifteen (15)
calendar days after the first meeting of the vice president-level negotiating
teams under Section 5.2, the parties will attempt in good faith to resolve such
Dispute by non-binding mediation in accordance with the American Arbitration
Association Commercial Mediation Rules as in effect at such time. Mediation
shall be held within thirty (30) calendar days of the end of such fifteen (15)
calendar day negotiation period of the negotiating teams. Except as provided in
Section 5.4, no litigation for the resolution of such Dispute may be commenced
until the parties attempt in good faith to settle the dispute by such mediation
in accordance with such rules and either party has concluded in good faith that
amicable resolution through continued mediation of the
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matter does not appear likely. The costs of mediation shall be shared equally by
the parties to the mediation. Any settlement reached by mediation shall be
recorded in writing, signed by the parties, and shall be binding on them.
5.4 Proceedings. Nothing herein, however, shall prohibit either party
from initiating litigation or other judicial or administrative proceedings if
there is a substantial likelihood that such party would be substantially harmed
by a failure to act during the time that such good faith efforts are being made
to resolve the Dispute through negotiation or mediation. In the event that
litigation is commenced under this Section 5.4, the parties agree to continue to
attempt to resolve any Dispute according to the terms of Section 5.2 and Section
5.3 during the course of such litigation proceedings under this Section 5.4.
5.5 Continuity of Service and Performance. Unless otherwise agreed in
writing, the parties will continue to provide service on all of the commitments
in this Agreement and the Tax Sharing Agreement during the course of dispute
resolution pursuant to the provisions of this Article V with respect to all
matters not subject to the Dispute.
5.6 Further Assurances. In addition to the actions specifically
provided for elsewhere in this Agreement, each of the parties hereto shall use
its reasonable best efforts to (i) execute and deliver such further documents
and take such other actions as any other party may reasonably request in order
to effectuate the purposes of this Agreement and to carry out the terms hereof,
and (ii) take, or cause to be taken, all actions, and to do or cause to be done
all things reasonably necessary, proper or advisable under applicable law,
regulation and agreements or otherwise to consummate and make effective the
transactions contemplated by this Agreement, including without limitation using
its reasonable best efforts to obtain any consents and approvals and make any
filings and applications necessary or desirable in order to consummate the
transactions contemplated by this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Survival. The provisions of this Agreement shall survive the
Distribution Date.
6.2 Entire Agreement. This Agreement supersedes and cancels any and all
previous agreements, written or oral, between the parties relating to the
subject matter hereof. This Agreement and the Tax Sharing Agreement express the
complete and final understanding of the parties with respect to the subject
matter thereto and may not be changed in any way, except as provided in Section
6.3.
6.3 Waiver and Modification. An amendment or modification of this
Agreement will be valid and effective only if it is in writing and signed by
each party to this Agreement.
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In addition, a waiver of any duty, obligation or responsibility of a party under
this Agreement will be valid and effective only if it is evidenced by writing,
signed by or on behalf of the party against whom the waiver or discharge is
sought to be enforced. The waiver by either party of a breach of a provision of
this Agreement will not constitute a waiver of the succeeding breach of the
provision or a waiver of the provision itself.
6.4 Notices. All notices, requests, consents and other communications
hereunder to any parties shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy confirmed receipt,
nationally recognized overnight courier, or first class registered or certified
mail, return receipt requested, postage pre-paid, addressed to such party at the
address set forth below:
If to Yellow to:
00000 Xxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Senior Vice President-Legal and Corporate Secretary
e-mail: [ ]
If to SCST to:
One Main Plaza
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Vice President and Chief Financial Officer
e-mail: [ ]
All notices, request, consents and other communications shall be deemed
to have been duly given: at the time delivered by hand, if personally delivered;
when receipt acknowledged, if telecopied; on the next business day after timely
delivery to the courier, if sent by overnight courier guaranteeing next day
delivery; and five business days after being deposited in the mail, postage
pre-paid, if mailed.
6.5 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
6.6 Severability. In the event any provision of the Agreement or
portion thereof is found to be wholly or partially invalid, illegal or
unenforceable in any judicial proceeding, then such provision shall be deemed to
be modified or restricted to the extent and in the manner
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necessary to render the same valid and enforceable or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law as if such
provision had been originally incorporated herein as so modified or restricted,
or as if such provision had not been originally incorporated herein, as the case
may be.
6.7 Assignment. Neither of the parties shall assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party.
6.8 Choice of Law. This Agreement shall be interpreted under the laws
of the State of Delaware, without giving effect to said state's conflict of laws
principles.
6.9 No Third-Party Beneficiaries. This Agreement is not intended to,
and does not, create any third-party contractual or other rights. No person or
entity shall be deemed to be a third-party beneficiary with respect to this
Agreement.
ARTICLE VII
DEFINED TERMS
7.1 Defined Terms.
-------------
Defined Term Location in Document
------------ --------------------
AIT.......................................... 2.5.2.2
Agreement.................................... Preamble
Allocated Employees......................... 2.2
Benesight................................... 2.6.3
Billed Cost................................. 2.5.2.3
Collateral.................................. 2.5.2.3
Collateral Cost............................. 2.5.2.3
Collateral Requirements..................... 2.5.2.3
Contributed Assets.......................... 2.1
Contributed Liabilities..................... 2.1
Disclosure Letter........................... 1.2.1
Disputes.................................... 5.1
Distribution................................ Recitals
Distribution Date........................... 1.4
Fractional Shares........................... 1.3
Guarantees.................................. 2.5.1
Indemnifying Party.......................... 4.3
Indemnitee.................................. 4.3
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Jevic....................................... Recitals
Luciano..................................... 2.6.2
Net Ultimate Liability of Yellow............ 2.5.2.2
Preston..................................... 2.6.1
Saia........................................ Recitals
SCST........................................ Preamble
SCST Excess Liability....................... 2.5.2.2
SCST Indemnitees............................ 4.3
Separation.................................. Recitals
TPA......................................... 2.5.2.4
Transactions................................ Recitals
Yellow...................................... Preamble
Yellow Benesight Litigation Expenses........ 2.6.3
Yellow Indemnitees.......................... 4.3
Yellow Luciano Litigation Expenses.......... 2.6.2
Yellow Payment.............................. 1.2.1
"Action" means any action, claim, suit, arbitration, subpoena,
discovery request, proceeding or investigation by or before any court or grand
jury, any Governmental Authority or arbitration tribunal.
"By-laws" means the By-laws of SCST, substantially in the form of
Exhibit A.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of SCST, substantially in the form of Exhibit B.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Consents" means any consents, waivers or approvals from, or
notification requirements to, any third parties.
"Contribution Date" means the Distribution Date or such other date
prior to the Distribution Date as the Yellow Board of Directors may determine.
"Debt Agreements" means each of those agreements listed in paragraph
1.2.1 of the Disclosure Letter.
"Distribution Ratio" means the number of shares of Yellow Common Stock
that a stockholder must own at the Record Date that will entitle such
stockholder to receive one share of SCST Common Stock on the Distribution Date.
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"Distribution Time" means [ ] [p.m.], New York City Time, on the
Distribution Date.
"Effective Date" means the date on which the Registration Statement is
declared effective by the Commission.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Governmental Approvals" means any notices, reports or other filings to
be made, or any consents, registrations, approvals, permits or authorizations to
be obtained from, any Governmental Authority.
"Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.
"Group" means the Yellow Group or the SCST Group, as the context
requires.
"Information" means all administrative records, books, contracts and
instruments, and all computer software (excluding any software not owned by
Yellow or SCST, as the case may be) and computer data and other owned data and
information.
"Information Statement" means the information statement included in the
Registration Statement.
"Letter Ruling" means a private letter ruling received from the
Internal Revenue Service to the effect that, among other things, the
Distribution will qualify as a tax-free distribution for federal income tax
purposes under Section 355 of the Code.
"Liabilities" means any and all indebtedness, liabilities or
obligations, whether accrued, fixed or contingent, mature or inchoate, known or
unknown, reflected on a balance sheet or otherwise, including, but not limited
to, those arising under any law, rule, regulation, Action, order, injunction or
consent decree of any Governmental Authority or any judgment of any court of any
kind or any award of any arbitrator of any kind, and those arising under any
contract, commitment or undertaking.
"Losses" means any and all damages, losses, deficiencies, Liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including, without limitation, the costs and
expenses of any and all Actions and demands, assessments, judgments, settlements
and compromises relating thereto and the reasonable costs and expenses of
attorneys', accountants', consultants' and other professionals' fees and
expenses
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incurred in the investigation or defense thereof or the enforcement of rights
hereunder), including direct and consequential damages, but excluding punitive
damages (other than punitive damages awarded to any third party against an
Indemnified Party).
"Person" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
"Record Date" means the close of business on the date to be determined
by Yellow's Board of Directors as the record date for determining stockholders
of Yellow entitled to receive shares of SCST Common Stock in the Distribution.
"Registration Statement" means the Registration Statement (No. ) on
Form 10 filed by SCST with the Commission to effect the registration of the SCST
Common Stock pursuant to the Exchange Act in connection with the Distribution,
as such registration statement may be amended from time to time.
"SCST Common Stock" means the common stock, par value $0.001 per share,
of SCST entitled to one vote per share.
"SCST Group" means SCST, each Subsidiary of SCST and each other Person
that is either controlled directly or indirectly by SCST immediately after the
Distribution Date.
"SCST Liabilities" means any and all Liabilities of SCST or any of its
Subsidiaries of any kind or nature to the extent resulting from or arising out
of the present, past or future operation or conduct of the business, operations
or assets of SCST or of any Subsidiary of SCST, and shall include without
limitation:
(i) Liabilities resulting from or arising out of the Contributed Assets;
(ii) Liabilities resulting from or arising out of the Contributed
Liabilities;
(iii) Liabilities resulting from or arising out of the Allocated Employees;
(iv) Liabilities resulting from or arising out of the Guarantees;
(v) Liabilities allocated to SCST pursuant to Section 2.5.2.1;
(vi) Liabilities resulting from or arising out of the SCST Excess Liability;
(vii) Liabilities resulting from or arising out of the Collateral Costs;
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(viii) Liabilities allocated to SCST pursuant to Section 2.5.2.4;
(ix) Liabilities resulting from or arising out of the litigation described
in Section 2.6.2;
(x) Liabilities resulting from or arising out of the litigation described
in Section 2.6.3;
(xi) Liabilities resulting from or arising out of the litigation described
in Section 2.6.4;
(xii) Liabilities resulting from or arising out of the Jevic Employment
Agreements; and
(xiii) Liabilities resulting from or arising out of the rights and claims
described in Section 2.6.6.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Subsidiary" of any Person means any corporation, partnership, limited
liability entity, joint venture or other organization, whether incorporated or
unincorporated, of which such Person or a Subsidiary of such a Person, or such
Person and one or more of its Subsidiaries (i) directly or indirectly owns or
controls at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation; (ii) has control, whether contractual or otherwise; (iii) is a
general partner, manager or managing member; or (iv) holds a majority of the
equity interests.
"Tax Sharing Agreement" means that certain Tax Indemnification and
Allocation Agreement by and between Yellow and SCST, substantially in the form
of Exhibit C.
"Third Party Debt" means all debt in addition to that evidenced by the
Debt Agreements listed in paragraph 1.2.1 of the Disclosure Letter residing on
the books of SCST or its subsidiaries as of the Distribution Date and
specifically excludes intercompany debt owed by SCST or its subsidiaries
directly to Yellow. Third Party Debt is listed in paragraph 2.4 of the
Disclosure Letter.
"Yellow Common Stock" means the common stock, par value $1.00 per
share, of Yellow.
"Yellow Group" means Yellow, each Subsidiary of Yellow and each Person
(other than any member of the SCST Group) that is either controlled directly or
indirectly by Yellow immediately after the Distribution Date.
-28-
"Yellow Liabilities" means any and all Liabilities of Yellow or any of
its Subsidiaries (other than SCST and its Subsidiaries) of any kind or nature to
the extent resulting from or arising out of the present, past or future
operation or conduct of the business, operations or assets of Yellow or of any
Subsidiary of Yellow (other than SCST and its Subsidiaries), and shall include
Liabilities resulting from or arising out of the claims described in Section
2.6.1.
S-1
IN WITNESS WHEREOF, the parties have executed this Master Separation
and Distribution Agreement as of the date first above written.
Yellow Corporation SCS Transportation, Inc.
By: By:
------------------------ --------------------------
Name: Name:
Title: Title:
