Exhibit 10.1
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ASSET PURCHASE
AGREEMENT
dated as of October 17, 2001,
by and among
ROADWAY CORPORATION,
EDWARD H. ARNOLD,
AND
ARNOLD LOGISTICS, INC.
LIST OF SCHEDULES
Schedule 1.2(a)(i) Real Property
Schedule 1.2(a)(iii) Freightliner Tractors
Schedule 1.2(a)(iv) Telecommunications, Computer Equipment, Software and
Network Switching Equipment
Schedule 1.2(a)(vi) Assumed Contracts
Schedule 1.2(a)(vii) Intellectual Property
Schedule 1.2(a)(viii) Other Assets
Schedule 1.2.2 Excluded Assets
Schedule 1.3(b) Excluded Liabilities
Schedule 2.1.2 Roadway Consents and Approvals/Conflicts
Schedule 2.2.2 Purchaser Consents and Approvals/Conflicts
Schedule 3.5(h) Non-Logistics Division Employees
Schedule 7.3(b) Purchase Price Allocation
LISTS OF EXHIBITS
Exhibit 1.6.1(a) Shared Services Agreement
Exhibit 1.6.1(b) Assumption Agreement
Exhibit 1.6.2(a) Bill of Sale and Quit Claim Deed
ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT this ("AGREEMENT") is made and entered
into as of the 17th day of October, 2001, by and among Roadway Corporation, a
Delaware corporation ("ROADWAY"), Edward H. Arnold, an individual ("EHA"), and
Arnold Logistics, Inc., a Pennsylvania corporation (the "PURCHASER").
BACKGROUND INFORMATION
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A. Pursuant to the Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated August 21, 2001, by and among Roadway, Lion Corp., a
wholly-owned subsidiary of Roadway ("LION"), and Arnold Industries, Inc., a
Pennsylvania corporation ("ARNOLD"), Lion will be merged with and into Arnold
(the "MERGER"), and Arnold will become a wholly-owned subsidiary of Roadway.
B. Arnold's wholly-owned subsidiary, Arnold Transportation Services,
Inc., a Pennsylvania corporation ("ATS"), operates a logistics business that
provides value-added warehousing services including fulfillment, distribution
center management, contract-packaging, reverse logistics, call center
management, direct mail and integrated print services through Arnold Logistics,
a division of ATS (the "BUSINESS"). Certain real estate assets used in the
Business are owned by Arnold's wholly-owned subsidiary, New Penn Motor Express,
Inc., a Pennsylvania corporation ("NEW PENN"), and are to be included in the
Acquired Assets (as defined below).
C. In connection with the execution of the Merger Agreement, Roadway
and EHA executed a letter agreement, dated August 21, 2001, pursuant to which
the parties agreed that after the consummation of the Merger, Roadway would
sell, assign, or deliver or would cause to be sold, assigned and delivered to
the Purchaser the Acquired Assets.
D. Roadway desires to cause ATS, New Penn and Arnold to transfer to the
Purchaser after the consummation of the Merger and the Purchaser desires to
purchase, accept and assume after the consummation of the Merger the Acquired
Assets and the Assumed Liabilities (as defined below) on the terms and subject
to the conditions of this Agreement.
E. In order to induce Roadway to enter into this Agreement, EHA will
guaranty the obligations of the Purchaser under this Agreement.
STATEMENT OF AGREEMENT
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Now, therefore, the parties hereto agree as follows:
I. PURCHASE AND SALE OF ACQUIRED ASSETS
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1.1 PURCHASE AND SALE. On the terms and subject to the conditions of
this Agreement, at the Closing, Roadway shall cause ATS, New Penn and Arnold to
sell, assign and deliver to the Purchaser, and the Purchaser shall purchase and
accept, the Acquired Assets.
1.2 ACQUIRED ASSETS AND EXCLUDED ASSETS.
1.2.1 ACQUIRED ASSETS.
(a) OF ATS. For purposes of this Agreement, the term "ACQUIRED ASSETS"
means the following properties, assets and rights (other than the Excluded
Assets) owned by ATS as of the Closing used or held for use primarily in the
Business:
(i) The real property, leaseholds and other interests in real
property of ATS that are listed in SCHEDULE 1.2(a)(i), together with
the right, title and interest of ATS in all buildings, improvements,
fixtures and other appurtenances thereto (the "REAL PROPERTY");
(ii) The inventory of ATS on the Closing Date that is used or
held for use primarily in the Business;
(iii) The twenty (20) Freightliner tractors listed on SCHEDULE
1.2(a)(iii);
(iv) The telecommunications, computer equipment, software and
communications switching equipment used by the Business as listed on
SCHEDULE 1.2(a)(iv);
(v) The prepaid expenses of ATS as of the Closing to the
extent relating to the Acquired Assets;
(vi) To the extent legally permissible, the right, title and
interest of ATS as of the Closing in, to and under all contracts,
leases, licenses, employment agreements and all other legally binding
commitments ("CONTRACTS") relating primarily to the Business ("ASSUMED
CONTRACTS"), including, without limitation, those Contracts that are
listed on SCHEDULE 1.2(a)(vi) and any employee promissory notes
associated with the Contracts listed on the Schedule;
(vii) The right, title and interest of ATS as of the Closing
in, to and under the intellectual property listed on SCHEDULE
1.2(A)(VII);
(viii) The non-Business assets listed on SCHEDULE 1.2(a)(viii)
("OTHER ASSETS");
(ix) All telephone and facsimile numbers used primarily in the
Business;
(x) The trade secrets, know how and goodwill owned by ATS as
of the Closing relating primarily to the Business;
(xi) The books of account, general, financial, accounting and
personnel records, files, invoices, customers' and suppliers' lists and
other written information (excluding Tax Returns) owned by ATS as of
the Closing relating primarily to the Business;
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(xii) To the extent assignable or transferable, the permits,
licenses, franchises and other federal, state, local and foreign
governmental approvals and authorizations of ATS in effect as of the
Closing related primarily to the Business;
(xiii) The accounts receivable of the Business as of the
Closing Date; and
(xiv) Cash in an amount of not less than One Million Eight
Hundred Thousand Dollars ($1,800,000) (the "CASH AMOUNT").
(b) OF NEW PENN. The term "ACQUIRED ASSETS" also includes the following
properties, assets and rights (other than the Excluded Assets) owned by New Penn
as of the Closing used or held for use primarily in the Business:
(i) The Real Property of New Penn listed on SCHEDULE
1.2(a)(i).
(c) OTHER TANGIBLE ASSETS. The term "ACQUIRED ASSETS" also includes the
machinery and equipment and other fixed assets used or held for use primarily in
the Business, including, but not limited to, those assets as listed on the
Infinium Asset Register as of Closing, those assets located on or in the real
property and leaseholds listed in SCHEDULE 1.2(a)(i) and those assets located on
or in the real property locations identified in SCHEDULE 1.2(a)(iv).
1.2.2 EXCLUDED ASSETS. Notwithstanding SECTION 1.2.1, for purposes of
this Agreement the term "ACQUIRED ASSETS" will not include any Excluded Assets.
For purposes of this Agreement, the term "EXCLUDED ASSETS" means:
(i) Cash and cash-equivalent assets of ATS in excess of the
Cash Amount;
(ii) The insurance policies or other insuring agreements of
ATS pertaining to the Acquired Assets or the Business, and all rights
of every nature and description under or arising out of such policies
or agreements;
(iii) The rights and other assets to the extent related to any
of the Excluded Assets; and
(iv) The assets identified in SCHEDULE 1.2.2.
1.2.3 As used in this Agreement, the phrases "used" or "held for use
in," "relate to," "related primarily to" or "relating primarily to" the
Business, or the conduct thereof, and similar phrases are intended to exclude
assets of Arnold, New Penn or ATS owned or held (i) in any business other than
the Business, (ii) for use in the respective businesses or activities of Arnold,
New Penn or ATS generally, or (iii) for use by both the Business and any other
business of Arnold so long as such assets or rights do not predominantly relate
to the Business. Nothing in this SECTION 1.2 constitutes a representation or
warranty with respect to the extent of Arnold's, New Penn's or ATS's right,
title and interest in or to any of the Acquired Assets.
1.2.4 Purchaser acknowledges that the Acquired Assets are conveyed "AS
IS," "WHERE IS," and "WITH ALL FAULTS," that all warranties of merchantability
or fitness for a
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particular purpose are disclaimed and that no representations are being made by
Roadway in this Agreement or otherwise in respect of the Acquired Assets or the
Business.
1.2.5 Purchaser acknowledges that EHA, a shareholder, director and
officer of Arnold, is responsible for the operation of the Business prior to the
consummation of the Merger. Purchaser is not relying on Roadway for any
information, projections or estimates regarding the Business or the condition of
the Acquired Assets and Roadway has not provided Purchaser or EHA with any such
information, projections or estimates.
1.3 ASSUMPTION OF LIABILITIES. (a) On the terms and subject to the
conditions of this Agreement, effective as of the Closing and without further
action, the Purchaser shall assume and agree to pay, perform, satisfy and
discharge when due, all obligations and liabilities (other than Excluded
Liabilities) of whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, whether or not accrued,
arising before, on or after the Closing Date, relating to, resulting from or
arising out of the Business or any of the Acquired Assets or any present or
former owner or operator of the Business or any of the Acquired Assets (the
"ASSUMED LIABILITIES"), including, without limitation, the obligations and
liabilities specified below:
(i) The obligations and liabilities of Roadway or ATS under
the Assumed Contracts;
(ii) The accounts payable and accrued expenses in respect of
the Business;
(iii) The obligations and liabilities in respect of the
Business arising at any time, including, without limitation,
obligations and liabilities for refunds, adjustments, allowances,
damages, repairs, exchanges, returns, warranties, property damage and
personal injury;
(iv) The obligations and liabilities relating to the Acquired
Assets;
(v) The obligations and liabilities arising as a result of
being an owner, occupant or operator of any facility or Acquired Assets
used in the conduct of the Business, including, without limitation, all
obligations and liabilities relating to personal injury, property
damage, natural resources, worker's compensation, employee safety and
health and laws and regulations relating to the environment;
(vi) The liabilities and obligations relating to any
litigation, action, suit, claim, investigation or proceeding pending on
the date of this Agreement, or instituted after the date of this
Agreement, based in whole or in part on events or conditions occurring
or existing in connection with, or arising out of, or otherwise
relating to, the Business whether such events or conditions occurred
before, on or after the date of this Agreement; and
(vii) Any and all liabilities or obligations with respect to
any Transferred Employee (as defined in SECTION 7.1(a)) arising prior
to the Closing Date or on or after the Closing Date, including any
compensation, severance, workers compensation or employee benefit
obligations.
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(b) Notwithstanding SECTION 1.3(a), for purposes of this Agreement, the
term "ASSUMED LIABILITIES" will not include any Excluded Liabilities. For
purposes of this Agreement, the term "EXCLUDED LIABILITIES" means the
obligations or liabilities expressly retained by ATS as identified on SCHEDULE
1.3(b).
1.4 PURCHASE PRICE. In addition to assuming the Assumed Liabilities, at
the Closing, the Purchaser shall pay to Roadway (or its designee) U.S.
$105,000,000 in cash (the "PURCHASE PRICE") by wire transfer of immediately
available funds to such account as Roadway has theretofore designated.
1.5 THE CLOSING. Subject to the fulfillment or waiver of the conditions
precedent specified in Sections 4.1, 4.2 and 4.3, the consummation of the
purchase of the Acquired Assets and assumption of the Assumed Liabilities
contemplated hereby (the "CLOSING") will take place at a time and on a date to
be specified by the parties, which is to be no later than the second business
day after satisfaction or waiver of the conditions (excluding conditions that,
by their terms, cannot be satisfied until the Closing, but subject to the waiver
or satisfaction of such conditions) set forth in Article IV; PROVIDED, HOWEVER,
that, if such date is on or before November 30, 2001, the Purchaser, at its
option, may extend the Closing Date to no later than 10:00 a.m. on November 30,
2001 (the "CLOSING DATE"). The Closing will take place at the offices of Rhoads
& Sinon LLP located at One South Market Square, 12th Floor, Harrisburg,
Pennsylvania.
1.6 CLOSING DELIVERIES.
1.6.1 DELIVERIES OF THE PURCHASER. At the Closing, Purchaser (and to
the extent applicable, such entities owned or controlled by EHA or Purchaser as
Purchaser may direct to take title to any of the Acquired Assets) shall deliver
or cause to be delivered to Roadway the following:
(a) A counterpart to the Shared Services Agreement, in substantially
the form attached as EXHIBIT 1.6.1(a) (the "SHARED SERVICES AGREEMENT"), duly
executed by Purchaser;
(b) A counterpart to the Instrument of Assignment and Assumption of
Assumed Liabilities in substantially the form of EXHIBIT 1.6.1(b) (the
"ASSUMPTION AGREEMENT"), duly executed by Purchaser;
(c) A counterpart to a trademark license agreement pursuant to which
Roadway will be granted an exclusive, perpetual, royalty-free, transferable
license to use the names "ATS" and "Arnold Transportation Services" and a
six-month transitional license to use the name "Arnold Industries" (the
"TRADEMARK LICENSE AGREEMENT"), duly executed by Purchaser;
(d) Counterparts to the Easements (as defined in SECTION 4.3.4) and the
Leases (as defined in SECTION 4.3.5), in each case in form and substance
mutually acceptable to the parties, duly executed by Purchaser or its designee;
(e) Consents relating to the assignment of the leases listed on
SCHEDULE 1.2(a)(i), in a form mutually acceptable to the parties, including a
release of ATS by the landlord or sub-landlord, as the case may be;
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(f) A certificate of the Secretary of State of the Commonwealth of
Pennsylvania as to the good standing of the Purchaser dated within 30 days prior
to the Closing Date;
(g) A certificate of the Secretary of the Purchaser certifying as to
the incumbency of the authorized signatories of the Purchaser and the
correctness and completeness of the articles of incorporation and the by-laws of
the Purchaser and the resolutions adopted by the board of directors of the
Purchaser authorizing the transactions contemplated by this Agreement; and
(h) The Purchase Price.
1.6.2 DELIVERIES OF ROADWAY At the Closing, Roadway shall deliver or
cause to be delivered to the Purchaser, or to such entities owned or controlled
by EHA or Purchaser as Purchaser may direct, the following:
(a) Quit claim bills of sale for the transfer of the personal property
included in the Acquired Assets ("BILL OF SALE") and quit claim or other no
warranty deeds for the transfer of the Real Property included in the Acquired
Assets, each substantially in the form attached as EXHIBIT 1.6.2(a);
(b) A counterpart to the Shared Services Agreement, duly executed by
Roadway;
(c) A counterpart to the Assumption Agreement, duly executed by
Roadway;
(d) A counterpart to the Trademark License Agreement, duly executed by
Roadway;
(e) Counterparts to the Easements and the Leases, in each case in form
and substance mutually acceptable to the parties, duly executed by New Penn or
ATS, as applicable;
(f) A certificate of the Secretary of State of the State of Delaware as
to the good standing of Roadway dated within 30 days prior to the Closing Date;
and
(g) Copies of resolutions adopted by the board of directors of Roadway,
authorizing the transactions contemplated by this Agreement certified by the
Secretary of Roadway.
II. REPRESENTATIONS AND WARRANTIES
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2.1 REPRESENTATIONS AND WARRANTIES OF ROADWAY. Subject to SECTION 2.3,
Roadway represents and warrants to the Purchaser as follows:
2.1.1 ORGANIZATION, POWER AND AUTHORITY. Roadway is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power to execute and deliver this
Agreement and to perform the transactions contemplated hereby to be performed by
it. All necessary corporate action required to be taken for the due
authorization of the execution and delivery by Roadway of this Agreement and the
performance by Roadway of the transactions contemplated hereby to be performed
by Roadway has been duly taken by Roadway. This Agreement has been duly executed
and delivered by Roadway and, assuming the due execution and delivery of this
Agreement by the Purchaser, constitutes a valid and binding obligation of
Roadway.
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2.1.2 NO RESTRICTIONS. The execution and delivery of this Agreement by
Roadway does not, and the performance by Roadway of the transactions
contemplated hereby to be performed by it will not, in any respect, conflict
with, or result in any violation of, or constitute a default (with or without
notice or lapse of time or both) under, or give rise to a right of (a)
termination, cancellation or acceleration of any obligation or the loss of a
benefit under, any provision of the certificate of incorporation or bylaws of
Roadway, (b) any domestic, foreign or other statute, law, ordinance, rule,
regulation, judgment, order, injunction, decree or ruling or common law
obligation ("LAW") of any domestic, foreign or other court, government,
governmental agency, authority, entity or instrumentality ("GOVERNMENTAL
ENTITY"), other than any such conflicts, violations or defaults as are listed or
described on SCHEDULE 2.1.2 or any other Schedule or that do not have a material
adverse effect on Roadway's ability to consummate the transactions contemplated
by this Agreement or (c) any contracts filed by Roadway as Exhibits to its most
recent Form 10-K with the Securities and Exchange Commission. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required to be obtained or made by or with
respect to Roadway in connection with the execution and delivery of this
Agreement by Roadway or the performance by Roadway of the transactions
contemplated hereby to be performed by it, except for (i) the filing of a
premerger notification report by or on behalf of Roadway under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), (ii) such of the foregoing as are listed or described on SCHEDULE 2.1.2,
and (iii) such consents, approvals, orders, authorizations of, or registrations,
declarations or filings with, any Governmental Entity, which if not obtained or
made, would not have a material adverse effect on the ability of Roadway to
consummate the transactions contemplated by this Agreement.
2.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to Roadway as follows:
2.2.1 ORGANIZATION, POWER AND AUTHORITY. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and has the requisite corporate power to execute
and deliver this Agreement and to perform the transactions contemplated hereby
to be performed by it. All necessary corporate action required to be taken for
the due authorization of the execution and delivery by the Purchaser of this
Agreement and the performance by the Purchaser of the transactions contemplated
hereby to be performed by the Purchaser has been duly taken by the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and,
assuming the due execution and delivery of this Agreement by Roadway,
constitutes a valid and binding obligation of the Purchaser.
2.2.2 NO RESTRICTIONS. (x) The execution and delivery of this Agreement
by the Purchaser does not, (y) the performance by the Purchaser of the
transactions contemplated hereby to be performed by it will not and (z) the
transfer of the Acquired Assets to the Purchaser will not, conflict with, or
result in any violation of, or constitute a default (with or without notice or
lapse of time or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a benefit under,
(i) any provision of the certificate of incorporation or bylaws or other
comparable governing documents of the Purchaser, (ii) any Law of any
Governmental Entity, or (iii) any material contracts, arrangements or
understandings, whether written or oral to which the Purchaser is a party, other
than any such conflicts, violations
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or defaults as are listed or described on SCHEDULE 2.2.2 or any other Schedule.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity or any other person is required to be
obtained or made by or with respect to the Purchaser in connection with the
execution and delivery of this Agreement by the Purchaser or the performance by
the Purchaser of the transactions contemplated hereby to be performed by it,
except for (x) the filing of a premerger notification report by or on behalf of
the Purchaser under the HSR Act, (y) such of the foregoing as are listed or
described on SCHEDULE 2.2.2, and (z) such consents, approvals, orders,
authorizations of, or registrations, declarations or filings with, any
Governmental Entity, which if not obtained or made, would not have a material
adverse effect on the Purchaser's ability to consummate the transactions
contemplated by this Agreement.
2.2.3 FINANCING. At the Closing the Purchaser will have financing in an
amount sufficient to pay the Purchase Price and consummate the transactions
contemplated by this Agreement (the "FINANCING").
2.3 CERTAIN LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. The
Purchaser is a sophisticated legal entity that was advised by experienced
counsel and, to the extent it deemed necessary, other advisors in connection
with this Agreement. Accordingly, the Purchaser hereby acknowledges that (a) the
Purchaser has not relied and will not rely upon any document or written or oral
information previously furnished or made available to or discovered by it or its
representatives, other than this Agreement (including the Schedules hereto) or
such of the foregoing as are delivered at the Closing, (b) there are no
representations or warranties by or on behalf of Roadway or any of its
respective Affiliates or representatives other than those expressly set forth in
this Agreement, and (c) the Purchaser's respective rights, obligations and
remedies with respect to this Agreement and the events giving rise thereto will
be solely and exclusively as set forth in this Agreement.
III. PRE-CLOSING COVENANTS
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3.1 PRESS RELEASES. Unless otherwise required by applicable Law or
applicable exchange rules (and, in that event, only if time does not permit), at
all times prior to the earlier of the Closing Date or termination of this
Agreement, (a) Roadway and the Purchaser shall consult with each other before
holding any press conferences, analysts calls or other meetings or discussions
and before issuing any press release or other public announcements with respect
to the transactions contemplated by this Agreement, and (b) the parties shall
provide each other the opportunity to review and comment upon any press release
or other public announcement or statement with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
other public announcement or statement prior to such consultation. The parties
shall mutually agree upon the initial press release or releases to be issued
with respect to the transactions contemplated by this Agreement prior to the
issuance thereof.
3.2 REGULATORY FILINGS. (a) Within five business days after the date
hereof, the Purchaser and Roadway shall make such filings as may be required by
the HSR Act with respect to the consummation of the transactions contemplated by
this Agreement. Thereafter, the Purchaser and Roadway shall file or cause to be
filed as promptly as practicable with the United States Federal Trade Commission
and the United States Department of Justice any supplemental information that
may be requested pursuant to the HSR Act. If applicable to the consummation
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of the transactions contemplated by this Agreement, the Purchaser shall make
such filings and use its respective reasonable best efforts to obtain all
permits required by Law. To the extent required by Law, Roadway shall make such
filings and use its reasonable best efforts to obtain the governmental approvals
referred to in SECTION 2.1.2, and shall make such filings and use its reasonable
best efforts to obtain the governmental approvals referred to in SECTION 2.2.2.
All filings referred to in this SECTION 3.2(a) will comply in all material
respects with the requirements of the respective Laws pursuant to which they are
made.
(b) Without limiting the generality or effect of SECTION 3.2(a), each
of the parties shall (i) use their respective reasonable best efforts to comply
as expeditiously as possible with all lawful requests of Governmental Entities
for additional information and documents pursuant to the HSR Act, (ii) not (A)
extend any waiting period under the HSR Act or (B) enter into any agreement with
any Governmental Entity not to consummate the transactions contemplated by this
Agreement, except with the prior consent of Roadway in the case of the
Purchaser, or the Purchaser in the case of Roadway, and (iii) cooperate with
each other and use reasonable best efforts to cause the lifting or removal of
any temporary restraining order, preliminary injunction or other judicial or
administrative order that may be entered into in connection with the
transactions contemplated by this Agreement.
3.3 INJUNCTIONS. Without limiting the generality or effect of any
provision of SECTION 3.2 or Article IV, if any Governmental Entity having
jurisdiction over any party issues or otherwise promulgates any injunction,
decree or similar order prior to the Closing that prohibits the consummation of
the transactions contemplated hereby, the parties shall use their respective
reasonable best efforts to have such injunction dissolved or otherwise
eliminated as promptly as possible and, prior to or after the Closing, to pursue
the underlying litigation diligently and in good faith.
3.4 FINANCING. The Purchaser will use all reasonable best efforts to
obtain the Financing.
3.5 CONDUCT OF BUSINESS. From the date hereof until the earlier of the
Closing Date and the consummation of the Merger, EHA shall cause ATS, New Penn
and Arnold to conduct the Business and operate the Acquired Assets only in the
ordinary and normal course of business consistent with past practice. Without
limiting the foregoing, EHA shall cause ATS, New Penn and Arnold not to:
(a) Make any single new commitment or increase any single previous
commitment for capital expenditures for the Business;
(b) Amend, cancel or terminate or fail to renew any contract, insurance
plan or other agreement that provides benefits to the Business as well as
another business of Arnold;
(c) Discharge or cancel any right with respect to any rights arising
under intellectual property or other assets shared by the Business and another
business of Arnold;
(d) Compromise or settle any litigation, action or suit relating to the
Business requiring payment by the Business or another business of Arnold in an
amount exceeding $50,000;
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(e) Accelerate the payment of any accounts payable or any other
liabilities, or prepay any expenses or other obligation, of the Business;
(f) Transfer any assets owned or used by other businesses of Arnold to
the Business, except for the assets listed on SCHEDULES 1.2(a)(iii), 1.2(a)(iv),
1.2(a)(viii) or the assets referenced in SECTION 1.2.1(c);
(g) Enter into any contract or other agreement for the benefit of the
Business that obligates ATS or any other business of Arnold, other than with
respect to the pending lease described in item 6 on SCHEDULE 1.2(a)(i);
(h) Transfer any employees currently employed by businesses of Arnold
other than the Business to the Business other than the employees listed on
SCHEDULE 3.5(h); or
(i) Make or enter into any agreement or understanding to do any of the
foregoing.
IV. CONDITIONS TO CLOSING
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4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AND ROADWAY.
The obligations of the Purchaser and Roadway under this Agreement to consummate
the transactions contemplated hereby will be subject to the satisfaction, at or
prior to the Closing, of all of the following conditions:
(a) The Merger will have been consummated,
(b) There will not have been entered a preliminary or permanent
injunction, temporary restraining order or other judicial or administrative
order or decree in any jurisdiction, the effect of which prohibits the Closing,
and
(c) The waiting period under the HSR Act will have expired or been
terminated.
4.2 ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.
The obligations of the Purchaser under this Agreement to consummate the
transactions contemplated hereby will be subject to the satisfaction, at or
prior to the Closing, of the following condition, which may be waived at the
option of the Purchaser:
4.2.1 NO MATERIAL MISREPRESENTATION OR BREACH. (a) Roadway will have
performed in all material respects all of the obligations under this Agreement
to be performed by it at or before the Closing, all representations and
warranties of Roadway contained in this Agreement that are qualified by
materiality will be true and correct in all respects on the date of this
Agreement and on the Closing Date subject to such qualification, and all
representations and warranties of Roadway contained in this Agreement that are
not qualified by materiality will be true and correct in all material respects
on the date of this Agreement and on the Closing Date, except, in each case, to
the extent that such representations are made expressly as of an earlier date
which will be true and correct as of such earlier date, and (b) Roadway will
have delivered to the Purchaser a certificate certifying each of the foregoing,
dated the Closing Date and signed by one of its executive officers to the
foregoing effect.
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4.3 ADDITIONAL CONDITIONS PRECEDENT TO OBLIGATIONS OF ROADWAY. The
obligations of Roadway under this Agreement to consummate the transactions
contemplated hereby will be subject to the satisfaction, at or prior to the
Closing, of all the following conditions, any one or more of which may be waived
at the option of Roadway:
4.3.1 NO MATERIAL MISREPRESENTATION OR BREACH. (a) The Purchaser will
have performed in all material respects all of the obligations under this
Agreement to be performed by it at or before the Closing, all representations
and warranties of the Purchaser contained in this Agreement that are qualified
by materiality will be true and correct in all respects on the date of this
Agreement and on the Closing Date subject to such qualification, and all
representations and warranties of the Purchaser contained in this Agreement that
are not qualified by materiality will be true and correct in all material
respects on the date of this Agreement and on the Closing Date, except, in each
case, to the extent that such representations are made expressly as of an
earlier date which will be true and correct as of such earlier date, and (b) the
Purchaser will have delivered to Roadway a certificate certifying each of the
foregoing, dated the Closing Date and signed by one of its executive officers to
the foregoing effect; and
4.3.2 LANDLORD RELEASES. The Purchaser will have obtained consents
relating to the assignment of the leases listed on SCHEDULE 1.2(a)(i), including
a release of ATS by the landlord or sub-landlord, as the case may be.
4.3.3 PURCHASE PRICE. The Purchaser will have delivered to Roadway (or
its designee) the Purchase Price in the manner specified in SECTION 1.4.
4.3.4 EASEMENTS. The Purchaser and Roadway will have reached agreement
on the form and substance of the following agreements (collectively, the
"EASEMENTS") pertaining to the Real Property:
(a) A reciprocal easement agreement for vehicular and pedestrian access
and utility lines over and through those portions of Industrial Park Road and
Freight Street in or around Camp Hill, Pennsylvania that do not constitute a
public road and that are used both by Roadway or any of its Affiliates and by
the Purchaser or any entities owned or controlled by EHA or Purchaser; and
(b) Such other easements or similar agreements as either Roadway or the
Purchaser reasonably may require to maintain the existing operations of the Real
Property or any real property being retained by Roadway or any of its
Affiliates.
4.3.5 LEASES. The Purchaser and Roadway will have reached agreement on
the form and substance of the following agreements (collectively, the "LEASES")
pertaining to the Real Property:
(a) A lease from New Penn to the Purchaser (in which case the
obligations of the Purchaser thereunder shall be guaranteed by EHA) or to the
Purchaser's designee (in which case the obligations of such designee thereunder
shall be guaranteed both by the Purchaser and by EHA), on a "triple net" basis
for a rental of $1.00 per year, covering the real property located at 485
Terminal Street in Camp Hill, Pennsylvania (the "ALLING AND CORY PROPERTY"),
excluding the portions of the Alling and Cory Property which New Penn utilizes
(i) as a parking and
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maneuvering area (as to which area such Lease shall convey no rights) and (ii)
as a detention pond (which area, together with the piping and other related
systems leading thereto, shall be treated as a common area under such Lease), in
each case for the benefit of the adjoining property owned by New Penn (the "NEW
PENN PROPERTY"); PROVIDED, HOWEVER, that if the Alling and Cory Property and New
Penn Property can be made the subject of a condominium division in a manner
satisfactory to the parties prior to the Closing, then, in lieu of such Lease,
both the Alling and Cory Property and the New Penn Property will be submitted by
Roadway (or the applicable owner) to a condominium regime with the Alling and
Cory Property (less the parking and maneuvering area) being one unit ("UNIT 1"),
the New Penn Property (plus the parking and maneuvering area) being a second
unit ("UNIT 2") and the detention pond, related piping and other systems being a
common area (collectively, the "CONDOMINIUM"). At Closing (or thereafter, if
necessary), Unit 1 will be conveyed by Roadway (or the declarant of the
Condominium) to Purchaser or its designee for no additional consideration.
Thereafter, the parties will hold title to Unit 1 and Unit 2, and the detention
pond, related piping and other systems will be held as a common area, subject to
the Condominium documents. The parties hereto agree that the Purchaser shall
prepare all necessary documentation relating to the Condominium (which,
documents shall be mutually acceptable to the parties) with the Purchaser and
Roadway sharing equally in all costs related thereto (PROVIDED, HOWEVER, that
the parties each shall pay the fees of their respective legal counsel in
connection therewith). Any Transfer Taxes (as defined in SECTION 7.3) relating
to the transfer of Unit 1 to Purchaser or its designee, if any, shall be paid
equally by the parties. If the Condominium cannot be established prior to
Closing, the Lease of the Alling and Cory Property shall contemplate that the
parties shall effect such a condominium division and conveyance as soon after
the Closing as is reasonably practicable; and
(b) In the event that the portion of the Real Property located at 381
Freight Street in Camp Hill, Pennsylvania cannot be conveyed to Purchaser as
contemplated hereby without causing the adjoining property located at 451
Freight Street (the "ATS WEST PROPERTY") no longer to be in compliance with any
applicable setback, side yard or other zoning, planning, subdivision or building
code requirements, the ATS West Property also shall be conveyed to the Purchaser
or its designee for no additional consideration and such transferee shall lease
the ATS West Property back to a subsidiary of Roadway to be designated by
Roadway prior to the Closing, on a "triple net" basis for a rental of $1.00 per
year, which Lease shall contemplate that (i) the parties shall effect a lot line
adjustment as soon after the Closing as is reasonably practicable to remedy such
prospective noncompliance with respect to the ATS West Property in a manner
satisfactory to the parties, and (ii) upon the completion of such lot line
adjustment, the transferee of the ATS West Property shall convey the same, as so
adjusted, back to the tenant under such Lease for no additional consideration.
Any Transfer Taxes relating to such transfers of the ATS West Property, if any,
shall be paid equally by the parties. The parties hereto agree that the
Purchaser or its designee will undertake a lot line adjustment, if necessary,
with the Purchaser and Roadway sharing equally in all costs related thereto,
including sharing the cost of reasonable attorney's fees.
V. TERMINATION
-----------
5.1 TERMINATION. (a) Notwithstanding anything contained in this
Agreement, this Agreement may be terminated at any time prior to the Closing:
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(i) By the mutual written consent of the Purchaser and
Roadway;
(ii) By either the Purchaser or Roadway if the Closing has not
occurred on or before 30 days following the Closing Date of the Merger
(as defined in SECTION 1.2 of the Merger Agreement) (the "TERMINATION
DATE"); PROVIDED the failure to consummate the transactions
contemplated hereby on or before such date did not result from the
failure by the party seeking termination of this Agreement to fulfill
any undertaking or commitment provided for herein that is required to
be fulfilled before the Closing;
(iii) By either the Purchaser or Roadway if there has been
entered a final, nonappealable order or injunction of any Governmental
Entity restraining or prohibiting the consummation of the transactions
contemplated hereby or any material part thereof;
(iv) By Roadway (A) if any condition precedent to Roadway's
obligation to effect the Closing as set forth in SECTION 4.3 is not
satisfied, or has become incapable of fulfillment and such condition is
not waived if waivable by Roadway on or prior to the Termination Date
or (B) the Purchaser has breached any representation, warranty or
covenant contained in this Agreement and such breach has not been cured
within 15 days of Roadway's notification of such breach to the
Purchaser; or
(v) By the Purchaser (A) if any condition precedent to the
Purchaser's obligation to effect the Closing as set forth in SECTION
4.2 is not satisfied, or has become incapable of fulfillment and such
condition is not waived if waivable by the Purchaser on or prior to the
Termination Date or (B) Roadway has breached any representation,
warranty or covenant contained in this Agreement and such breach has
not been cured within 15 days of the Purchaser's notification of such
breach to Roadway.
(b) Notwithstanding anything contained in this Agreement, this
Agreement will automatically terminate if the Merger Agreement is terminated
pursuant to SECTION 7.1 thereof.
5.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
SECTION 5.1, written notice of such termination must be given to the other party
and this Agreement will then become void and have no further force and effect
and all further obligations of Roadway and the Purchaser under this Agreement
will terminate without further liability of Roadway or the Purchaser, except
that (a) the Purchaser's obligations to pay the termination fee pursuant to
SECTION 5.3, will survive such termination; (b) each party will return all
documents, workpapers and other material of any other party relating to the
transactions contemplated by this Agreement, whether so obtained before or after
the execution of this Agreement, to the party furnishing the same; (c) the
obligations of Roadway and the Purchaser under Sections 3.1 and Article VIII
will survive such termination; and (d) such termination will not constitute a
waiver by any party of any claim it may have for damages, equitable relief or
other legal remedies caused by reason of, or relieve any party from liability
for, any breach of this Agreement prior to termination under SECTION 5.1.
5.3 TERMINATION FEE. In consideration for the time and expenses
incurred by Roadway in connection with the negotiation of this Agreement and the
transactions contemplated hereby, in the event of the termination of this
Agreement pursuant to Sections 5.1(a)(ii), (iii) or
13
(iv), the Purchaser shall pay Roadway promptly, but in no event later than two
business days after the date of such termination, by wire transfer of same day
funds, cash in the amount of $2,500,000.00 (the "TERMINATION FEE"). The
Termination Fee is in addition to any other remedies to which Roadway is
entitled at law or in equity. The Purchaser acknowledges that the agreements
contained in this SECTION 5.3 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Roadway
would not enter into this Agreement.
VI. SURVIVAL AND INDEMNIFICATION
----------------------------
6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
Purchaser's and Roadway's representations and warranties contained in SECTIONS
2.1 AND 2.2 will survive the Closing and remain in full force and effect
indefinitely. All covenants and agreements contained in this Agreement will
survive in accordance with their terms.
6.2 DEFINITIONS. For purposes of this Agreement, (a) "INDEMNITEE" means
any person entitled to indemnification under this Agreement, (b) "INDEMNIFYING
PARTY" means any Person required to provide indemnification under this
Agreement, and (c) "INDEMNIFIABLE LOSSES" means any and all claims, actions,
suits, demands, assessments, judgments, losses, liabilities, damages, costs and
expenses (including, without limitation, interest, penalties, attorneys' fees,
accounting fees and investigation costs).
6.3 INDEMNIFICATION.
(a) Subject to SECTION 6.1, the Purchaser shall indemnify, defend and
hold harmless Roadway and its Affiliates and their respective directors,
officers, employees, agents and representatives (including, without limitation,
any predecessor or successor to any of the foregoing) from and against any and
all Indemnifiable Losses relating to, resulting from or arising out of:
(i) Any breach by the Purchaser of any of the representations
or warranties of the Purchaser contained in this Agreement;
(ii) Any breach by the Purchaser of any covenant of the
Purchaser contained in this Agreement;
(iii) Any Assumed Liability, including, without limitation,
all liabilities and obligations relating to the conduct of the Business
prior to the Closing Date or any liability or obligation to the extent
resulting therefrom or relating thereto; and
(iv) The conduct of the Business on or after the Closing Date
or any liability or obligation to the extent resulting therefrom or
relating thereto.
(b) Subject to SECTION 6.1, Roadway shall indemnify, defend and hold
harmless the Purchaser and its directors, officers, employees, agents and
representatives (including, without limitation, any predecessor or successor to
any of the foregoing) from and against any and all Indemnifiable Losses relating
to, resulting from or arising out of:
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(i) Any breach by Roadway of any of the representations or
warranties of Roadway contained in this Agreement; and
(ii) Any breach by Roadway of any covenant of Roadway
contained in this Agreement.
(c) The rights of the parties under this SECTION 6.3 are cumulative and
not exclusive.
6.4 NOTICE OF INDEMNIFIABLE LOSSES. As soon as is reasonably
practicable after Roadway or the Purchaser becomes aware of any Indemnifiable
Losses, such party shall give notice thereof (a "CLAIMS NOTICE") to the other
party. A Claims Notice must describe the Indemnifiable Losses in reasonable
detail, and indicate the amount (estimated, if necessary and to the extent
feasible) of the Indemnifiable Loss that has been or may be suffered by the
Indemnitee. No delay in or failure to give a Claims Notice by the Indemnitee to
the Indemnifying Party pursuant to this SECTION 6.4 will adversely affect any of
the other rights or remedies that the Indemnitee has under this Agreement, or
alter or relieve the Indemnifying Party of its obligation to indemnify the
Indemnitee.
6.5 OPPORTUNITY TO DEFEND. The Indemnifying Party has the right,
exercisable by written notice to the Indemnitee within 30 days of receipt of a
Claims Notice from the Indemnitee of the commencement or assertion of any
Indemnifiable Losses in respect of which Indemnitee may be sought hereunder, to
assume and conduct the defense of such Indemnifiable Losses, in accordance with
the limits set forth in this Agreement, with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnitee; PROVIDED,
HOWEVER, that (a) the Indemnifying Party provides the Indemnitee with a written
representation to the effect that the Indemnifying Party has sufficient
financial resources, in the reasonable judgment of the Indemnitee, to satisfy
the amount of any adverse monetary judgment that is reasonably likely to result;
(b) the Indemnitee or relevant third-party claimant solely seeks (and continues
to seek) monetary damages; and (c) the Indemnifying Party expressly agrees in
writing that as between the Indemnifying Party and the Indemnitee, the
Indemnifying Party will be solely obligated to satisfy and discharge the
Indemnifiable Losses in accordance with the limits set forth in this Agreement
(the conditions set forth in clauses (a) through (c) are collectively referred
to as the ("LITIGATION CONDITIONS"). If the Indemnifying Party does not assume
the defense of a Indemnifiable Losses in accordance with this SECTION 6.5, the
Indemnitee may continue to defend the Indemnifiable Losses. If the Indemnifying
Party has assumed the defense of a Indemnifiable Losses as provided in this
SECTION 6.5, the Indemnifying Party will not be liable for any legal expenses
subsequently incurred by the Indemnitee in connection with the defense thereof;
PROVIDED, HOWEVER, that if (i) any of the Litigation Conditions cease to be met,
or (ii) the Indemnifying Party fails to take reasonable steps necessary to
defend diligently such Indemnifiable Losses, the Indemnitee may assume its own
defense, and the Indemnifying Party will be liable for all reasonable costs or
expenses paid or incurred by the Indemnitee in connection therewith if a
Indemnifiable Loss has occurred and the Indemnifying Party is liable for such
Indemnifiable Loss as provided in this Agreement. Notwithstanding the foregoing,
the Indemnitee has the right to employ counsel separate from counsel employed by
the Indemnifying Party in the defense of any Indemnifiable Losses that the
Indemnifying Party is defending and to participate therein, but the fees and
expenses of such counsel will be at the Indemnitee's own expense, unless (A) the
employment thereof has been specifically authorized by the
15
Indemnifying Party or (B) such Indemnitee has been advised by counsel reasonably
satisfactory to the Indemnifying Party that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Indemnifying Party and in the reasonable judgment of such
counsel it is advisable for such Indemnitee to employ separate counsel. The
Indemnifying Party, if it has assumed the defense of any Indemnifiable Losses as
provided in this Agreement, will not, without the prior written consent of the
Indemnitee, consent to a settlement of, or the entry of any judgment arising
from, any such Indemnifiable Losses that (1) does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnitee a complete release from all liability in respect of such
Indemnifiable Losses, or (2) grants any injunctive or equitable relief, or (3)
may reasonably be expected to have a material adverse effect of the Indemnitee.
The Indemnitee will have the right to settle on a commercially reasonable basis
any Indemnifiable Losses the defense of which has not been assumed by the
Indemnifying Party.
VII. OTHER POST-CLOSING COVENANTS
----------------------------
7.1 EMPLOYEE MATTERS.
(a) Purchaser or its assignee shall extend offers of employment to all
employees of the Business and to those other employees identified on SCHEDULE
3.5(h) (collectively, the "TRANSFERRED EMPLOYEES"). Purchaser shall assume any
and all liabilities or obligations of ATS or Arnold with respect to any
Transferred Employee, regardless of whether any such Transferred Employee
accepts employment with Purchaser.
(b) On or before December 31, 2001, Roadway shall amend or cause to be
amended the ATS 401(k) Plan and the New Penn/Arnold Profit Sharing Plan to
provide that all Transferred Employees are 100% vested therein.
(c) On or before December 31, 2001, Roadway shall amend or cause to be
amended the ATS 401(k) Plan to provide that the Transferred Employees are
eligible for matching contributions thereunder for the 2001 Plan Year with
respect to employee salary deferral contributions made to the Plan on or prior
to the Closing Date without regard to the last day rule and the New Penn/Arnold
Profit Sharing Plan to provide that the Transferred Employees are eligible for
profit sharing contributions thereunder for the 2001 Plan Year with respect to
compensation earned on or prior to the Closing Date without regard to the last
day rule. Purchaser shall reimburse Roadway for the matching contribution made
to the ATS 401(k) Plan and for the profit sharing contributions made to the New
Penn/Arnold Profit Sharing Plan for the benefit of the Transferred Employees for
the 2001 Plan Year.
(d) To the extent that Transferred Employees are covered by welfare
benefit plans within the meaning of Section 3(1) of ERISA or workers
compensation insurance sponsored or provided by Roadway or an affiliate of
Roadway (the "ROADWAY PLANS"), claims incurred prior to the Closing Date by
Transferred Employees and their dependents under the Roadway Plans will be
covered by the Roadway Plans. For purposes of this Section, a claim will be
deemed "incurred" on the date that the event that gives rise to the claim occurs
(for purposes of workers compensation insurance, life insurance, severance,
sickness, accident and disability programs) or on the date that treatment or
services are provided (for purposes of health care programs).
16
Notwithstanding the foregoing, Purchaser shall reimburse Roadway for the cost of
all claims submitted to, and paid by, the Roadway Plans on behalf of Transferred
Employees and their dependents.
(e) Roadway shall provide each Transferred Employee with compensation
in the normal course for services performed prior to the Closing Date. Purchaser
shall reimburse Roadway for the cost of such compensation provided to
Transferred Employees for services performed prior to the Closing Date.
7.2 ACCESS. (a) On the Closing Date, or as soon thereafter as
practicable, and in no event later than 90 calendar days after the Closing Date,
Roadway shall deliver or cause to be delivered to the Purchaser all original
agreements, documents, books, records and files primarily relating to the
Business (collectively, "RECORDS") in the possession of Roadway or any Affiliate
of Roadway to the extent not in the possession of the Purchaser, subject to the
following exceptions:
(i) Purchaser recognizes that certain Records may contain only
incidental information relating to the Business or may primarily relate
to Roadway or any of its Affiliates, or the businesses of Roadway or
any of its Affiliates other than the Business, and Roadway and its
Affiliates may retain such Records and Roadway may deliver
appropriately excised, but otherwise true and correct copies of such
Records so long as the effect of such excising is not to omit necessary
information from the Records for the conduct of the Business;
(ii) Roadway and each of its Affiliates may retain any Tax
Returns (as defined below) so long as true and complete copies of the
portions thereof relating to the Business are delivered to the
Purchaser at or before the Closing or made available to the Purchaser
following the Closing; and
(iii) Roadway and each of its Affiliates may retain Records
that contain information that is privileged or similarly protected from
disclosure and Records relating to the Excluded Liabilities or Excluded
Assets.
(b) After the Closing, the Purchaser will retain all Records (except
those Records referred to in SECTIONS 7.2(a)(i), (ii) and (iii)) required to be
retained pursuant to obligations imposed by any applicable Law. Except as
provided in the immediately preceding sentence, the Purchaser will retain all
Records for a period of seven years after the Closing Date. After the end of
such seven-year period, before disposing of any such Records, the Purchaser
shall give notice to such effect to Roadway and give Roadway at its cost and
expense an opportunity to remove and retain all or any part of such Records as
Roadway may elect.
(c) After the Closing, upon reasonable notice, each party hereto shall
give, or cause to be given, to the representatives, employees, counsel and
accountants of the other parties hereto access, during normal business hours, to
Records relating to periods prior to or including the Closing (except those
Records referred to in SECTIONS 7.2(a)(i), (ii) and (iii)), and shall permit
such persons to examine and copy such Records to the extent reasonably requested
by the other party in connection with Tax (as defined below) and financial
reporting matters, audits, legal
17
proceedings, governmental investigations and other business purposes; PROVIDED,
HOWEVER, that nothing herein will obligate any party to take actions that would
unreasonably disrupt the normal course of its business, violate the terms of any
contract to which it is a party or to which it or any of its assets is subject
or grant access to any of its proprietary, confidential or classified
information or information that is privileged or similarly protected from
disclosure. The Purchaser shall provide or make available to Roadway and each of
its Affiliates access to, and assistance from, employees of the Purchaser for
the purposes of, and with the limitations described in, the preceding sentence.
The parties hereto shall, and shall cause their respective Affiliates to,
reasonably cooperate with each other in the conduct of any Tax audit, claim for
refund of Taxes, or similar proceedings involving or otherwise relating to the
Business (or the income therefrom or assets thereof) with respect to any Tax.
7.3 CERTAIN TAX MATTERS. (a) For purposes of this Agreement, "TRANSFER
TAXES" means all sales, use, transfer, gains, stamp, conveyance, value added or
other similar Taxes, duties, excise or governmental charges imposed by any
United States federal, state, local or foreign Governmental Entity, and all
recording or filing fees, notarial fees and other similar costs of Closing with
respect to the transfer of the Acquired Assets or otherwise on account of this
Agreement or the transactions contemplated hereby. Each of Roadway and Purchaser
shall pay one-half of the Transfer Taxes.
(b) The Purchase Price will be allocated among the Acquired Assets in
accordance with their fair market values as set forth in SCHEDULE 7.3(b), which
Schedule will be mutually agreed to at or before Closing. The Purchaser and
Roadway shall jointly prepare Form 8594 pursuant to Section 1060 of the Code, on
a basis consistent with SCHEDULE 7.3(b).
(c) With respect to the owned Real Property, the Business will be
responsible for all real property Taxes that relate to a Tax period (or portion
thereof) ending before the Closing Date (a "PRE-CLOSING TAX PERIOD"), and
Purchaser will continue to be responsible for all such Taxes that related to a
subsequent Tax period. Accordingly, no pro rations of real property Taxes are
necessary; PROVIDED, HOWEVER, that if Roadway or any of its Affiliates have paid
for any real property Taxes but have not yet been reimbursed for such payments
by the Business, then Purchaser shall pay to Roadway at Closing an amount equal
to the sum of all such unreimbursed amounts.
(d) For purposes of this Agreement, (i) "TAX" includes all federal,
state, local, foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental,
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value-added, alternative or add-on minimum,
estimated or other taxes of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not; (ii) "TAX RETURN"
includes all Tax returns, statements, reports and forms (including estimated Tax
or information returns and reports), claim for refund, or any other similar
findings, related to Taxes, including any schedule or attachment thereto, and
including any amendment thereof; and (iv) "CODE" means the Internal Revenue Code
of 1986, as amended.
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7.4 CERTAIN CONTRACTS. (a) Notwithstanding anything to the contrary in
this Agreement, to the extent that (i) any Assumed Contract (other than a Real
Property lease or an Excluded Contract) is not capable of being assigned to the
Purchaser in connection with the Closing without the consent or waiver of a
third person (including without limitation a Governmental Entity) that has not
been obtained on or before the Closing Date, or (ii) any of the transactions
relating to the transactions contemplated by this Agreement constituted or would
constitute a breach of any such Contract, or a violation of any Law, Roadway
will be deemed not to have transferred, and will not be obligated to transfer,
to the Purchaser any direct or indirect right, title or interest in or to any
such Contract without first having obtained all necessary consents and waivers.
None of Roadway or any of its Affiliates will have any liability whatsoever
arising out of or relating to the failure to obtain any consents or waivers that
may have been or may be required in connection with the transactions
contemplated by this Agreement or because of a breach of, default under or
termination of any Assumed Contract as a result thereof.
(b) To the extent that the consents and waivers referred to in the
immediately preceding paragraph are not obtained, or until the breaches or
violations referred to in the immediately preceding paragraph are resolved,
Roadway shall use reasonable efforts, with reasonable costs of Roadway and its
Affiliates related thereto to be promptly reimbursed by the Purchaser, to (i)
provide to the Purchaser, at its request, the benefits of any such Contract,
(ii) cooperate in any reasonable and lawful arrangement designed to provide such
benefits to the Purchaser, without incurring any financial obligation to Roadway
or any of its Affiliates, and (iii) enforce, at the request and for the account
of the Purchaser, any rights of Roadway arising from any such Contract against
the other party or parties to such Contract (including the right to elect to
terminate in accordance with the terms thereof upon the advice of the
Purchaser). Notwithstanding any provision to the contrary contained herein, the
Purchaser shall perform or pay for the benefit of the other party or parties
thereto the obligations of Roadway under or in connection with any such
Contract. The Purchaser shall comply with all reasonable requests of Roadway for
cooperation in connection with the performance of Roadway's obligations under
this SECTION 7.6.
7.5 GUARANTY. In addition to EHA's obligations under this Agreement,
EHA hereby unconditionally and irrevocably guarantees the performance of the
Purchaser's obligations under this Agreement (the "OBLIGATIONS"). The
obligations of EHA hereunder are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against EHA with respect to the
Obligations whether action is brought against the Purchaser or whether the
Purchaser is joined in any such action or actions. EHA waives the benefit of any
statute of limitations affecting his liability hereunder. EHA agrees that,
subject to the rights of a guarantor to raise defenses that would have been
available to such guarantor had it been named as the sole obligor with respect
to the Obligations rather than as a guarantor, EHA's obligations hereunder are
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of this Agreement and, to the fullest extent
permitted by applicable Law, irrespective of any other circumstance whatsoever
(including, without limitation, personal defenses of the Purchaser or any other
obligor) that might otherwise constitute a legal or equitable discharge or
defense of a surety, guarantor or co-obligor. The obligations of EHA under this
guaranty will be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any person in respect of the Obligations
is rescinded or must be
19
otherwise restored by any beneficiary under this Agreement, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and EHA shall
reimburse Roadway on demand for all reasonable out-of-pocket losses,
liabilities, costs and expenses (including, without limitation, fees of counsel)
incurred by Roadway or any of its Affiliates in connection with such rescission
or restoration, including any losses, liabilities, costs and expenses in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
VIII. MISCELLANEOUS PROVISIONS
------------------------
8.1 NOTICES. All notices and other communications required or permitted
hereunder must be in writing and, unless otherwise provided in this Agreement,
will be deemed to have been duly given when delivered in person or when
dispatched by facsimile (confirmed in writing by mail simultaneously dispatched)
or one business day after having been dispatched by a nationally recognized
overnight courier service to the appropriate party at the address specified
below:
(a) If to the Purchaser, to:
Arnold Logistics, Inc.
4410 Industrial Road
Camp Hill, PA 17011
Facsimile No.: (717) 761-6688
Attention: Edward H. Arnold, Chairman
with a copy to:
Rhoads & Sinon LLP
One South Market Square, 12th Floor
P.O. Box 1146
Harrisburg, PA 17108-1146
Facsimile No.: (717) 231-6694
Attention: John P. Manbeck, Esq.
(b) If to Roadway, to:
Roadway Corporation
1077 Gorge Boulevard
P.O. Box 471
Akron, OH 44309-0471
Facsimile No.: (330) 258-6082
Attention: John Gasparovic,
General Counsel
with a copy to:
Jones, Day, Reavis & Pogue
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North Point
901 Lakeside Avenue
Cleveland, OH 44114
Facsimile No.: (216) 579-0212
Attention: Patrick J. Leddy, Esq.
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
8.2 EXPENSES. Except as otherwise expressly provided herein, (a) upon
the Closing, Roadway shall pay or cause to be paid all expenses incurred by
Roadway or any of its Affiliates, and Purchaser shall pay all expenses incurred
by Purchaser or any of its Affiliates, incident to this Agreement and in
preparing to consummate and consummating the transactions provided for herein;
PROVIDED that Purchaser also will be responsible for all third-party expenses
incurred by Arnold or its subsidiaries at EHA's request in connection with the
acquisition of the Business and (b) the Purchaser and Roadway will share equally
all fees and expenses, other than attorneys' fees, incurred in connection with
the preparation and filing required under HSR.
8.3 SUCCESSORS AND ASSIGNS. (a) Subject to Sections 8.3(b) and (c),
this Agreement will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but will not be
assignable or delegatable by any party without the prior written consent of the
other parties hereto.
(b) Nothing in this Agreement is intended to limit the Purchaser's
ability to sell or to transfer the Acquired Assets and the Assumed Liabilities
following the Closing Date; PROVIDED, HOWEVER, that any such sale or transfer
will not result in a termination of any of the Purchaser's covenants, duties,
responsibilities, obligations or liabilities hereunder and PROVIDED FURTHER,
that the person acquiring the Acquired Assets and Assumed Liabilities pursuant
to such sale or transfer will assume all of such covenants, duties,
responsibilities, obligations and liabilities in a written instrument
satisfactory to Roadway.
(c) Notwithstanding anything contained in this Agreement to the
contrary, upon notice to the Purchaser, Roadway may assign or delegate any or
all of their rights under this Agreement to any of its Affiliates, or to any
person that acquires all or substantially all of the assets or voting stock of
Roadway.
8.4 WAIVER. Either the Purchaser or Roadway by written notice to the
other may (a) extend the time for performance of any of the obligations or other
actions of the other under this Agreement, (b) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement, (c)
waive compliance with any of the conditions or covenants of the other contained
in this Agreement, or (d) waive or modify performance of any of the obligations
of the other under this Agreement. Except as provided in the immediately
preceding sentence, no action taken pursuant to this Agreement will be deemed to
constitute a waiver of compliance with any representations, warranties or
covenants contained in this Agreement. Any waiver of any term or condition will
not be construed as a subsequent waiver of the same term or condition, or a
waiver of any other term or condition of this Agreement. No failure or delay of
any party in asserting any of its rights hereunder will constitute a waiver of
any such rights.
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8.5 ENTIRE AGREEMENT. This Agreement (including the Schedules hereto)
supersedes any other agreement, whether written or oral, that may have been made
or entered into by any party or any of their respective Affiliates (or by any
director, officer or representative thereof) prior to the date hereof relating
to the matters contemplated hereby. This Agreement (together with the Schedules
hereto) constitutes the entire agreement by and among the parties hereto and
there are no agreements or commitments by or among such parties or their
Affiliates except as expressly set forth herein and therein.
8.6 AMENDMENTS, SUPPLEMENTS, ETC. This Agreement may be amended or
supplemented at any time by additional written agreements as may mutually be
determined by the Purchaser and Roadway to be necessary, desirable or expedient
to further the purposes of this Agreement, or to clarify the intention of the
parties hereto.
8.7 RIGHTS OF THE PARTIES. Nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or give any person
other than the parties hereto and their respective Affiliates any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby.
8.8 FURTHER ASSURANCES. From time to time, as and when requested by
either the Purchaser or Roadway, the other shall execute and deliver, or cause
to be executed and delivered, all such documents and instruments as may be
reasonably necessary to consummate the transactions contemplated by this
Agreement.
8.9 APPLICABLE LAW; JURISDICTION. (a) This Agreement and the legal
relations among the parties hereto will be governed by and construed in
accordance with the substantive Laws of the State of New York, without giving
effect to the principles of conflict of laws thereof.
(b) Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any federal court located in the States of Ohio or
Pennsylvania or any Ohio or Pennsylvania state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement; (ii) shall not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court, and(iii) shall not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal court sitting
in the States of Ohio or Pennsylvania or an Ohio or Pennsylvania state court.
8.10 TITLES AND HEADINGS. Titles and headings to Sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
8.11 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. (a) Unless the
context otherwise requires, (i) all references to Sections or Schedules are to
Sections or Schedules of or to this Agreement, (ii) each term defined in this
Agreement has the meaning assigned to it, (iii) each accounting term not
otherwise defined in this Agreement has the meaning assigned to it in accordance
with generally accepted accounting principles consistently applied, (iv) "OR" is
disjunctive but not necessarily exclusive, (v) words in the singular include the
plural and vice versa, (vi) the terms "SUBSIDIARY" and "AFFILIATE" have the
meanings given to those terms in Rule
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12b-2 of Regulation 12B under the Securities Exchange Act of 1934, as amended,
(vii) "PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity (including its permitted successors and assigns), (viii) all references
to "$" or dollar amounts will be to lawful currency of the United States of
America and (ix) the term "BUSINESS DAY" means any day except Saturday, Sunday
and any federal holiday.
(b) No provision of this Agreement will be interpreted in favor of, or
against, any of the parties hereto by reason of the extent to which any such
party or its counsel participated in the drafting thereof or by reason of the
extent to which any such provision is inconsistent with any prior draft hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
ROADWAY CORPORATION
By: /s/ John J. Gasparovic
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Name: John J. Gasparovic
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Title: Vice President, General Counsel & Secretary
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/s/ Edward H. Arnold
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Edward H. Arnold
ARNOLD LOGISTICS, INC.
By: /s/ Douglas Enck
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Name: Douglas Enck
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Title: President & CEO
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