Exhibit 10.2

 

LOGO [g6679491.jpg]  

 

Thomas C. Nyhan

Executive Director and General Counsel

January 29, 2014

Mr. Jaimie Pierson

Chief Financial Officer

YRC Worldwide, Inc.

10990 Roe Avenue

Overland Park, KS 66211

RE: Guarantee of Continued Participation

Dear Mr. Pierson:

As reflected in my e-mail to Harry Wilson dated January 21, 2014, the Trustees
of the Central States, Southeast and Southwest Areas Pension Fund (the “Pension
Fund” or the “Fund”) have approved certain revisions to the Amended and Restated
Contribution Deferral Agreement dated July 22, 2011 (“CDA”), subject to the
conditions stated in my e-mail and subject to the Fund’s review and approval of
final documentation reflecting the revised CDA terms. One of the conditions
precedent to the Pension Fund’s agreement to the CDA revisions set forth in my
January 21 e-mail offered two alternative options to the YRC Worldwide, Inc.
(“YRCW”) companies:

The execution of a side letter whereby the company guaranties the continued
participation in the Central States Pension Fund (“CSPF”) for a period of 10
years after the date upon which the CDA balance is repaid in full and there is
no other outstanding indebtedness to the CSPF. In the alternative, YRCW agrees
that for purposes of computing withdrawal liability, the contribution rate used
for purposes of computing the payment schedule will be deemed to be the
published contribution rate under the National Master Freight Agreement for each
year until the CDA is paid in full.

I understand that the YRCW companies who are designated as Primary Obligors
under the CDA prefer the option of providing a side letter - agreement to the
Pension Fund guaranteeing participation in the Pension Fund for ten years after
the CDA balance is repaid to the Pension Fund in full.

 

 

9377 West Higgins Road, Rosemont, Illinois 60018-4938 • (847) 518-9800

www.MyCentralStatesPension.org

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Mr. Jaimie Pierson

January 29, 2014

Page 2

 

The purpose of this correspondence is to serve as the side letter – agreement
(or this “Agreement”) setting forth (1) the obligations under the
above-referenced participation guarantee option of the Primary Obligors who are
listed below and requested to sign this letter, and (2) the obligations of YRCW
and all trades or businesses under common control with YRCW, within the meaning
of 29 U.S.C. sec. 1301(b)(1), to act as guarantors of the obligations and
undertakings of the Primary Obligors set forth in this letter – agreement.

 

  1. PARTICIPATION GUARANTEE

 

  a) The undersigned Primary Obligors, and each of them (jointly and severally),
hereby agree and guarantee that they will continue to participate in and pay
contributions to the Pension Fund pursuant to collective bargaining agreements
for a period of not less than 10 (ten) full years after all balances (including
all principal, interest and any applicable expenses or fees) owed to the Pension
Fund under the CDA (and any amendments or restatements of the CDA hereafter
agreed to) are completely and fully paid and satisfied by all such Primary
Obligors (the “Guarantee Period”).

 

  b) Further, the undersigned Primary Obligors, and each of them (jointly and
severally), agree that the scope and categories of work, job classifications,
periods of employment and other conditions triggering each Primary Obligors’
obligations to pay contributions to the Pension Fund, as each such category of
work, job classification, period of employment and other condition triggering
each Primary Obligor’s obligation to contribute to the Pension Fund is specified
under the Primary Obligors’ current collective bargaining agreement(s) or
participation agreement(s), will not be reduced or lessened under any future
collective bargaining agreements or participation agreements in ways that result
in fewer contribution dollars being paid to the Pension Fund during the
Guarantee Period.

 

  c)

For the sake of clarity and the avoidance of doubt, in the event any of the
Primary Obligors at any time prior to the expiration of the Guarantee Period
ceases to be under common control with any of the other Primary Obligors or with
YRCW (within the meaning of 29 U.S.C.

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Mr. Jaimie Pierson

January 29, 2014

Page 3

 

  1301(b)(1)), the above-described participation guarantee (“Participation
Guarantee”) and all other obligations under this Agreement will continue to
attach to such Primary Obligor, notwithstanding any transaction breaking such
controlled group relationship.

 

  2. REMEDIES AND DAMAGES FOR BREACH OF THE PARTICIPATION GUARANTEE

To the extent that the Primary Obligors, or any of them, are in breach of the
Participation Guarantee, or other obligations and undertakings set forth in
Paragraph 1. above, the Primary Guarantors, and each of them (jointly and
severally), shall be required to pay damages in the following amounts to the
Pension Fund, and subject to the following procedures:

 

  a) In the event of a breach involving a complete failure by one or more of the
Primary Obligors to have a contribution obligation to the Pension Fund during
the Guarantee Period (or any portion thereof), the Primary Obligors, and each of
them, will be required (as an obligation for which they are jointly and
severally liable) to pay to the Pension Fund, in addition to any other
contribution amounts and obligations owed to the Pension Fund, an amount for
each month during the continuation of such breach (payable on or before the 15th
day of the following month) that is equivalent to the greater of (i) the amount
of contributions that would be owed to the Pension Fund based upon current
levels and periods of work and compensation during each month of continuation of
the breach, calculated as if the last collective bargaining agreement (including
the last agreed contribution rate) requiring contributions to the Pension Fund
by the breaching Primary Obligor(s) were still in effect, or (ii) the amount of
contributions that would be owed to the Pension Fund based upon the highest
monthly levels and periods of work and compensation for which pension
contributions were owed measured by CBUs that the breaching Primary Obligor(s)
experienced during the period of July 2009 through and including December 2019,
but calculated as if the last collective bargaining agreement requiring
contributions on the part of the breaching Primary Obligor(s) to the Pension
Fund (including the last contribution rate) were still in effect.

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Mr. Jaimie Pierson

January 29, 2014

Page 4

 

  b) In the event of a breach under Subparagraph 1.b) above involving a
reduction or lessening in the scope or categories of work, job classifications,
periods of employment or other conditions triggering an obligation to contribute
to the Pension Fund of one or more of the Primary Obligors as compared to their
contribution obligations under their current collective bargaining agreement,
the Primary Obligors, and each of them, will be required (as an obligation for
which they are jointly and severally liable) to pay to the Pension Fund an
amount for each month during the continuation of such breach (payable on or
before the 15th day of the following month) that is equivalent to the amount of
contributions, calculated as if the breaching Primary Obligor’s last collective
bargaining agreement (including the contribution rate) requiring contributions
to the Pension Fund prior to such breach by the Primary Obligor was still in
effect, that would have been owed to the Pension Fund if such reduction or
lessening in the scope of work, periods of employment, job classifications or
other conditions triggering Primary Obligor(s)’ obligation to contribute to the
Pension Fund had not occurred.

 

  c) Further, until such time as there has been a complete withdrawal of the
Primary Obligors from the Pension Fund within the meaning of 29 U.S.C. sec.
1383(a), any amounts owed by the Primary Obligors under Subparagraphs 2.a) and
2.b) above shall be treated as contributions owed under a collective bargaining
agreement by the Primary Obligors for purposes of calculating and assessing any
withdrawal liability under the Multiemployer Pension Plan Amendment Act of 1980
owed by the Primary Obligors and all trades or businesses under common control
with them (within the meaning of 29 U.S.C. sec. 1301 (b)(1)). However, the
Primary Obligors’ obligations to make payments specified under this Paragraph 2
shall not be excused by any withdrawal incurred by the Primary Obligors from the
Pension Fund and shall be due in addition to (and not in place of ) any
withdrawal liability payments owed to the Pension Fund.

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Mr. Jaimie Pierson

January 29, 2014

Page 5

 

  d) In addition, in order to ascertain and to verify the Primary Obligors’
obligations to make any payments specified in Subparagraphs 2.a) and 2.b) above,
the Pension Fund shall be entitled to audit the payroll and other operations of
the Primary Obligors with respect those payment obligations to the same extent,
and subject to the same terms, conditions and remedies for to non-compliance
with audit requests, as currently apply to the Pension Fund’s right to audit the
Primary Obligors with respect to their pension contribution obligations arising
under collective bargaining agreements.

 

  e) The remedies, damages and procedures set forth in Subparagraphs 2.a), 2.b),
2.c) and 2.d) above are non-exclusive in nature and do not preclude any other
remedies at law or in equity that may be available to the Pension Fund in the
event of a breach of this letter – agreement.

 

  f) The undersigned parties incorporate by reference as if fully set forth in
this letter - agreement sections 11.05 to 11.14 of the CDA, except that for
purposes of this letter-agreement (i) the references to “New York” in sec. 11.12
(“Governing Law”) of the CDA shall be deleted and replaced in each instance with
the word “Illinois,” and first sentence of the sec. 11.13 of the CDA shall be
deleted and the following sentence inserted in its place:

Each of the parties submits to the nonexclusive jurisdiction of the United
States District Court for the Northern District of Illinois and the Circuit
Court of Cook County, Illinois, in any action or proceeding arising out of or
relating to this letter agreement or the transactions contemplated herein and
agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court.

 

  g) All parties signatory to this letter – agreement acknowledge that it has
been entered for good and valuable consideration and they represent and warrant
that they are authorized to enter into and execute this letter – agreement.
Further, YRCW and each of its affiliates that have executed this
letter-agreement, either as a Primary Obligor or as a Guarantor (collectively,
the “YRCW Companies”), acknowledge that they will receive reasonably equivalent
value for the Participation Guarantee of the Primary Obligors, the Guarantee of
the Guarantors (see Paragraph 3 below) and other undertakings they have given
and made hereunder, in that, among other items of value provided by this
letter-agreement to each of the YRCW Companies, this letter-agreement is a
necessary component and condition of a debt restructuring that, if not
effectuated, would create substantial risks negatively impacting the financial
viability of all the YRCW Companies.

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Mr. Jaimie Pierson

January 29, 2014

Page 6

 

 

  3. OBLIGATIONS OF GUARANTORS

 

  a) YRCW, as Primary Guarantor listed below, and each of the parties listed
below as Additional Guarantors agree, jointly and severally, to fully guarantee
(the “Guarantee”) the Participation Guarantee and other obligations under this
letter-agreement of the Primary Obligors (the “Guaranteed Obligations”). YRCW
also represents and warrants that the Primary and Additional Guarantors listed
below together constitute all the trades or businesses that are under common
control with the Primary Obligors and YRCW within the meaning of 29 USC sec.
1301(b)(1), with the exception of entities that YRCW represents to be special
purpose vehicles or companies incorporated under foreign (non-U.S.) law.

 

  b) The Primary and Additional Guarantors listed below further agree to the
undertakings set forth in Appendix A hereto (“Guarantor Undertakings/Guarantee”)
with respect to the Guaranteed Obligations and the Guarantee.

 

Sincerely, AGREED:  

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND By:  

/s/ Thomas C. Nyhan

  Thomas C. Nyhan   Executive Director   and General Counsel

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Mr. Jaimie Pierson

January 29, 2014

Page 7

 

PRIMARY OBLIGORS

 

AGREED: YRC INC. (AS PRIMARY OBLIGOR) By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      AGREED: USF HOLLAND INC. (AS PRIMARY OBLIGOR) By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      AGREED: NEW PENN MOTOR EXPRESS, INC. (AS PRIMARY OBLIGOR) By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      AGREED: USF REDDAWAY INC. (AS PRIMARY OBLIGOR) By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

     

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Mr. Jaimie Pierson

January 29, 2014

Page 8

 

PRIMARY GUARANTOR

 

AGREED: YRC WORLDWIDE INC. (AS GUARANTOR) By:   

/s/ Jamie Pierson

   Date:    January 31, 2014 Name and title:   

Jamie Pierson, Executive Vice President and

Chief Financial Officer

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Mr. Jaimie Pierson

January 29, 2014

Page 9

 

ADDITIONAL GUARANTORS

 

AGREED (AS GUARANTORS): EXPRESS LANE SERVICE, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      ROADWAY EXPRESS INTERNATIONAL, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      ROADWAY REVERSE LOGISTICS, INC. By:   

/s/ Phil J. Gaines

   Date:    January 31, 2014 Name and title:   

Phil J. Gaines, Sr. Vice President, Finance

      ROADWAY LLC By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      ROADWAY NEXT DAY CORPORATION By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      YRC ASSOCIATION SOLUTIONS, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

     

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Mr. Jaimie Pierson

January 29, 2014

Page 10

 

YRC MORTGAGES, LLC By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      YRC REGIONAL TRANSPORTATION, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      USF BESTWAY INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      USF DUGAN INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      USF GLEN MOORE INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      USF REDSTAR LLC By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

      YRC LOGISTICS SERVICES, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President

     

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Mr. Jaimie Pierson

January 29, 2014

Page 11

 

YRC ENTERPRISE SERVICES, INC. By:   

/s/ Mark D. Boehmer

   Date:    January 31, 2014 Name and title:   

Mark D. Boehmer, Vice President