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Exhibit 3
Roadway Corporation
0000 Xxxxx Xxxx.
Xxxxx, Xxxx 00000
August 21, 2001
Xxxxxx X. Xxxxxx
000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxxx:
We are pleased to submit to you this letter agreement for your
consideration. As you know, Roadway Corporation ("ROADWAY") and Xxxxxx
Industries, Inc. ("XXXXXX"), concurrently with the execution of this letter
agreement, are executing a merger agreement relating to Roadway's proposed
acquisition of Xxxxxx (the "MERGER AGREEMENT") pursuant to which a newly formed
subsidiary of Roadway will merge with and into Xxxxxx with Xxxxxx as the
surviving corporation (the "MERGER"). You, through one or more entities formed
by you and certain members of management (the "XXXX ENTITIES"), have expressed
an interest in acquiring from Roadway, if and when the Merger is consummated,
substantially all of the tangible and intangible assets (the "XXXX ASSETS") of
Xxxxxx Logistics, a division of Xxxxxx Transportation Services, Inc. (the "XXXX
DIVISION"), upon the terms described below.
At any time prior to the earlier of (a) the termination of the
Merger Agreement and (b) 45 days following the execution of the Merger Agreement
by Roadway and Xxxxxx (the "EXCLUSIVITY PERIOD"), Roadway agrees to negotiate in
good faith with you and the Xxxx Entities the terms and conditions of a
definitive purchase agreement ("DEFINITIVE AGREEMENT") providing for the
acquisition by the Xxxx Entities of substantially all of the Xxxx Assets. The
specific assets to be included in the Xxxx Assets will be determined by you and
Roadway and reflected in the Definitive Agreement.
The structure and conditions of your proposed purchase include
the following:
1. CONSIDERATION. Upon consummation of the Merger, you will
purchase the Xxxx Assets, subject to all of the liabilities (known or unknown),
for $105,000,000 in cash payable at the closing contemplated by the Definitive
Agreement (the "CLOSING").
2. DEFINITIVE AGREEMENT. The Definitive Agreement will provide
that you will assume any and all liabilities and obligations, known or unknown,
relating to, arising out of or resulting from, the Xxxx Assets or the business
of the Xxxx Division, whether arising before or after the Closing. In addition,
the Definitive Agreement will provide that you and the Xxxx
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August 21, 2001
Entities, jointly and severally, will be obligated to pay Roadway $2.5 million
in cash as liquidated damages if you fail to close the transactions contemplated
by the Definitive Agreement. The Definitive Agreement will not be conditioned
upon you obtaining financing and will not contain any representations,
warranties or indemnities from Roadway relating to the Xxxx Assets or the
business of the Xxxx Division. Roadway's obligation to consummate the
transactions contemplated by the Definitive Agreement will be subject to the
consummation of the Merger. Buckeye's right to terminate the Merger Agreement in
accordance with its terms is not affected in any way by the terms of this letter
agreement.
3. COMPUTER SERVICES AGREEMENT. As part of the proposed
transaction, Roadway and you will enter into a computer services agreement upon
mutually acceptable terms pursuant to which Roadway will provide computer and
other information technology services to you in accordance with its terms. This
agreement will have a three year term renewable automatically for additional one
year terms unless either party provides the other with twelve months' prior
written notice of its intent to terminate. The services provided under this
agreement will be billed at cost plus 10%.
4. EXCLUSIVITY. In consideration of the time and expense that
has been and will be expended in order to complete the transactions contemplated
by this letter agreement, Roadway hereby agrees that during the Exclusivity
Period, neither Roadway nor any of its affiliates, officers, directors, agents,
employees or shareholders will, directly or indirectly, solicit, entertain or
consider proposals or indication of interest from, enter into any discussions or
transactions with, provide information to, or approve a transaction with, any
third party relating to the post-Merger sale or disposition, directly or
indirectly, of any substantial portion of the Xxxx Assets or business of the
Xxxx Division or a merger, consolidation or similar transaction involving the
Xxxx Division.
5. APPLICABLE LAW. This letter agreement is to be governed by
and construed in accordance with the laws of the State of Ohio and any dispute
in respect of this letter is to be brought before competent Ohio courts.
6. LEGAL BINDING EFFECT. This letter sets forth the principal
terms to be incorporated in the Definitive Agreement and the computer services
agreement. The terms of this letter do not purport to cover all of the aspects
or details of the transactions contemplated herein. This letter is not intended
to be a binding or enforceable agreement among the parties to this letter except
as provided in Sections 4 and 5 of this letter, which are binding and
enforceable obligations of the parties to this letter. If, for any reason
whatsoever, the Definitive Agreement is not signed before the expiration of the
Exclusivity Period, neither of the signatories hereto will have any rights or
obligations whatsoever vis a vis the other signatory by reason of this letter or
the negotiations contemplated herein. If the Definitive Agreement is executed by
the parties to this letter, any obligations of the parties to this letter will
terminate except to the extent expressly reaffirmed in the Definitive Agreement.
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If this letter confirms your understanding of the proposed
transaction, please indicate this by executing both copies of the letter and
returning one executed copy to us.
Very truly yours,
ROADWAY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive
Officer
Agreed to and accepted
as of August 21, 2001
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx