EXHIBIT 10.2
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ASSET AND STOCK PURCHASE AGREEMENT
by and between
RYDER TRUCK RENTAL, INC.
and
RCTR HOLDINGS, INC.
dated as of
September 19, 1996
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INDEX
Page
Number
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1.
ARTICLE I
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Definitions
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Section 1.1 Definitions 1
ARTICLE II
2.
Sale of Assets; Closing
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Section 2.1 Assets and Stock to Be Acquired 15
Section 2.2 Excluded Assets 17
Section 2.3 Assumption of Liabilities 19
Section 2.4 Retained Liabilities 21
Section 2.5 Consideration 23
Section 2.6 Time and Place of Closing 24
Section 2.7 Purchase Price Adjustment 25
Section 2.8 Proration of Revenue 26
ARTICLE III
3.
Representations and Warranties of Seller
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Section 3.1 Incorporation; Authorization; etc. 29
Section 3.2 Capitalization; Structure 31
Section 3.3 Financial Statements 32
Section 3.4 Properties; Leases 33
Section 3.5 Personal Property 34
Section 3.6 Litigation; Orders 35
Section 3.7 Transferred Intellectual Property 35
Section 3.8 Licenses, Approvals, Other Author-
izations, Consents, Reports, etc. 36
Section 3.9 Labor Matters 37
Section 3.10 Employee Benefit Plans 37
Section 3.11 Compliance with Laws; Environmental Matters 39
Section 3.12 Insurance; Protection Products 40
Section 3.13 Contracts 40
Section 3.14 Undisclosed Liabilities 41
Section 3.15 Brokers, Finders, etc. 42
Section 3.16 Absence of Certain Changes or Events 42
Section 3.17 Operation of the Business;
Sufficiency of Assets 42
Section 3.18 Customers, Suppliers and Dealers 43
Section 3.19 Transfer of Assets 43
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Section 3.20 Schedules and Exhibits 43
Section 3.21 NO IMPLIED REPRESENTATION 44
Section 3.22 Construction of Certain Provisions 44
Section 3.23 Quantity and Maintenance of Trucks 44
Section 3.24 Knowledge Regarding Representations 44
ARTICLE IV
4.
Representations and Warranties of Buyer
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Section 4.1 Incorporation; Authorization; etc. 45
Section 4.2 Brokers, Finders, etc. 46
Section 4.3 Licenses, Approvals, Other Author-
izations, Consents, Reports, etc. 46
Section 4.4 Opportunity to Investigate 46
Section 4.5 Financial Capability 46
Section 4.6 No Outside Reliance 47
Section 4.7 Knowledge Regarding Representations 47
ARTICLE V
5.
Covenants of Seller and Buyer
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Section 5.1 Investigation of Business 47
Section 5.2 Efforts; Obtaining Consents; Antitrust Laws 48
Section 5.3 Further Assurances 49
Section 5.4 Conduct of Business 49
Section 5.5 Preservation of Business 51
Section 5.6 Public Announcements 52
Section 5.7 Sublease 52
Section 5.8 Bulk Sales Laws 52
Section 5.9 Insurance 53
Section 5.10 Non-Solicitation 53
Section 5.11 Inter- and Intra-company Accounts 53
Section 5.12 Sale of Certain Trucks 54
ARTICLE VI
6.
Additional Agreements
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Section 6.1 Collection of Payments 54
Section 6.2 Competition 55
Section 6.3 Phonebook Advertising 58
Section 6.4 1-800-GO-RYDER Calls 59
Section 6.5 Referral 60
Section 6.6 DOT Number 61
Section 6.7 New Rental Contract 61
Section 6.8 Cooperation and Exchange of Information 61
Section 6.9 Network Sales 64
Section 6.10 Guaranties 65
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Section 6.11 Precision Response Corporation;
National Rental 65
Section 6.12 License Transfers 67
Section 6.13 Financing 67
Section 6.14 Additional Financials and MD&A 68
Section 6.15 Certain Repair Obligations;
Insurance Claims 68
Section 6.16 Covenant Not to Hire 69
Section 6.17 Vehicle Nominee Title Agreement 69
Section 6.18 Third Party Software 69
Section 6.19 Insurance Policies 69
Section 6.20 Certain Prepaid Expenses 69
ARTICLE VII
7.
Employee Benefits
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Section 7.1 Employee Benefit Plans 70
Section 7.2 Termination of Participation 70
Section 7.3 Employees 71
Section 7.4 Employee Benefits Transition 71
Section 7.5 Defined Contribution Plans 71
Section 7.6 Defined Benefit Plan 72
Section 7.7 WARN Disclosure Bringdown 72
Section 7.8 Welfare Benefits 72
Section 7.9 Stay-on Arrangements 73
ARTICLE VIII
8.
Tax Matters
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Section 8.1 Tax Returns 73
Section 8.2 Tax Indemnification and Covenant
by Seller 73
Section 8.3 Tax Indemnity and Covenant by Buyer 74
Section 8.4 Allocation of Certain Taxes 74
Section 8.5 Filing Responsibility 75
Section 8.6 Refunds 75
Section 8.7 Tax Work Papers 75
Section 8.8 Allocation of Consideration 76
Section 8.9 Section 338(h)(10) Election 76
ARTICLE IX
9.
Conditions of Buyer's Obligation to Close
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Section 9.1 Representations, Warranties and
Covenants of Seller 78
Section 9.2 Filings; Consents; Waiting Periods 78
Section 9.3 No Injunction 79
Section 9.4 No Material Adverse Change 79
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Section 9.5 Financing 79
Section 9.6 Material Approvals 80
Section 9.7 Audited Financials 80
ARTICLE X
10.
Conditions to Seller's Obligation to Close
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Section 10.1 Representations, Warranties and
Covenants of Buyer 80
Section 10.2 Filings; Consents; Waiting Periods 81
Section 10.3 No Injunction 81
Section 10.4 Insurance 81
Section 10.5 DOT Number 81
Section 10.6 Standby Letter of Credit 81
ARTICLE XI
11.
Survival; Indemnification
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Section 11.1 Survival 82
Section 11.2 Indemnification by Buyer or Seller 83
Section 11.3 Third Party Claims 84
Section 11.4 Materiality 85
ARTICLE XII
12.
Termination
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Section 12.1 Termination 85
Section 12.2 Procedure and Effect of Termination 86
ARTICLE XIII
13.
Miscellaneous
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Section 13.1 Non-Assignable Undertakings and Rights 86
Section 13.2 Counterparts 87
Section 13.3 Governing Law; Jurisdiction and Forum 87
Section 13.4 Entire Agreement 88
Section 13.5 Expenses 88
Section 13.6 Notices 88
Section 13.7 Successors and Assigns 89
Section 13.8 Headings; Definitions 90
Section 13.9 Amendments and Waivers 90
Section 13.10 Interpretation; Absence of Presumption 90
Section 13.11 Severability 91
Section 13.12 Specific Performance 91
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EXHIBITS
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Exhibit A Form of Administrative Services Agreement
Exhibit B Form of Copyright License Agreement
Exhibit C Form of Maintenance Agreement
Exhibit D Form of MIS Support Agreement
Exhibit E Form of Office Sublease Agreement (to be added prior to Closing)
Exhibit F Form of Patent License Agreement
Exhibit G Form of Ryder Dealer Agreement
Exhibit H Form of Shared Facility License
Exhibit I Form of Software License Agreement
Exhibit J Form of Trademark License Agreement
Exhibit K Form of Used Truck Sales Agreement
Exhibit L Form of Assumption Agreement
Exhibit M Form of ▇▇▇▇ of Sale
Exhibit N Form of ▇▇▇▇ of Sale from Axle Limited Partnership
Exhibit O Form of Letter of Credit
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SCHEDULES
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Schedule 1.1(a) Assigned Leases
Schedule 1.1(b) Marketing Studies
Schedule 1.1(c) Personal Property, June 30, 1996
Schedule 1.1(d) Phrases
Schedule 1.1(e) Offices to be subject to Shared Facility Licenses
Schedule 1.1(f) Statement of Net Book Assets: Calculation of certain items
Schedule 1.1(g) Towing Equipment, June 30, 1996
Schedule 1.1(h) Transferred Patents
Schedule 1.1(i) Transferred Software
Schedule 1.1(j) Transferred Trademarks
Schedule 1.1(k) Trucks, June 30, 1996
Schedule 5.12 Sale of Certain Trucks
Schedule 6.2(d) Certain Competitors
Schedule 7.8(a) Welfare Benefits Plans
Schedule 9.6(a) Material Approvals
Schedule 9.6(b) Software Agreement
Schedule 9.6(c) Condition regarding Assigned Leases
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THIS ASSET AND STOCK PURCHASE AGREEMENT (this "Agreement"), dated as
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of September 19, 1996, is by and between Ryder Truck Rental, Inc., ("Seller"), a
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corporation organized under the laws of Florida and a wholly owned subsidiary of
Ryder System, Inc., a corporation organized under the laws of Florida ("Ryder
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System") and RCTR Holdings, Inc., a corporation organized under the laws of
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Delaware ("Buyer").
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WHEREAS, Seller wishes to sell to Buyer the Assets (as herein defined)
and the business of Seller's Consumer Truck Rental division (the "Division")
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located and operated in the Territory (as herein defined), which includes
without limitation, all the outstanding shares of stock of Ryder Move Management
Inc., an Oregon corporation and wholly owned subsidiary of Seller ("Ryder Move
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Management") and Ryder Truck Rental One-Way, Inc., a Delaware corporation and
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wholly owned subsidiary of Seller (the "Phonebook Company"), and Buyer wishes to
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purchase the Assets and such business and such shares, all upon the terms and
subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
1.
ARTICLE I
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Definitions
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Section 1.1. Definitions. As used in this Agreement the following
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terms shall have the following respective meanings:
"Accessories" shall mean hand trucks, moving dollies and furniture
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pads used in connection with the Rental Business. On and after the Closing Date
Seller shall have no rights to use any Accessories except to the extent
permitted under the Ryder Dealer Agreement.
"Accounting Standard" shall mean the accounting policies and
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procedures of Ryder System as described in Ryder System's 1995 Annual Report.
Seller represents that such accounting policies and procedures comply with GAAP.
"Action" shall mean any actual or threatened action, suit,
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arbitration, inquiry, proceeding or investigation by or before any Government
Authority or arbitral tribunal.
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"Adjusted Closing Date Statement of Net Book Assets" shall have
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the meaning set forth in Section 2.8(c).
"Administrative Services Agreement" shall mean the transition support
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services agreement to be entered into by Seller and Buyer in the form of
Exhibit A.
"Affiliate" (and, with a correlative meaning, "Affiliated") shall
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mean, with respect to any Person, any other Person that directly, or through one
or more intermediaries, controls or is controlled by or is under common control
with such first Person, and, if such a Person is an individual, any member of
the immediate family (including parents, spouse and children) of such individual
and any trust whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is controlled by any such
member or trust. As used in this definition, "control" (including, with
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"Agreement" shall have the meaning set forth inthe first paragraph
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hereof.
"Antitrust Laws" shall mean and include the ▇▇▇▇▇▇▇ Act, as amended,
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the ▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, and all other federal and state statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade.
"Asset and Stock Purchase" shall mean the consummation of the
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transactions described in Section 2.1.
"Assets" shall have the meaning set forth in Section 2.1.
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"Assigned Leases" shall mean collectively the leases set forth on
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Schedule 1.1(a).
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
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"Average Four Quarter Revenue per Truck" shall mean the amount
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determined by dividing (i) the total revenue received by Buyer in the applicable
four calendar quarters with respect to the applicable trucks by (ii) the Daily
Average Number of those trucks for that period.
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"Bank Financing" shall have the meaning set forth in Section 4.5.
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"Business" shall mean the Rental Business, the Phonebook Business, the
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Move Management Business and the Value Added Business, taken as a whole,
including the assets, liabilities and operations thereof, to be sold to Buyer
pursuant to this Agreement.
"Business Condition" shall have the meaning set forth in Section 3.1.
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"Business Day" shall mean a Monday, Tuesday, Wednesday, Thursday, or
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Friday, but not any such day which is a United States federal holiday.
"Business Employee Benefit Plans" shall have the meaning set
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forth in Section 7.1.
"Business Employees" shall have the meaning set forth in Section 7.1.
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"Buyer" shall have the meaning set forth in the first paragraph
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hereof.
"Buyer Indemnified Parties" shall have the meaning set forth
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in Section 11.2.
"Buyer NonCompete Period" shall have the meaning set forth in
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Section 6.2.
"Claims" shall have the meaning set forth in Section 2.2.
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"Closing" shall mean the consummation of the Asset and Stock
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Purchase.
"Closing Date" shall mean the first Tuesday which is at least three
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Business Days following the date on which the conditions set forth in Articles
IX and X have been satisfied or duly waived.
"Closing Date Statement of Net Book Assets" shall have the meaning
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set forth in Section 2.7(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended,
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and any successor thereto.
"Contracts" shall mean all agreements and contracts to which Seller is
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a party which relate exclusively to the Business, other than (i) Assigned
Leases, (ii) any agreement or contract constituting or relating to Intellectual
Property and (iii) except for the Shared Facility Licenses, any agreement or
understanding between Buyer and Seller with respect to the Shared Facilities.
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"Copyright License Agreement" shall mean the copyright agreement to be
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entered into by Seller and Buyer in the form of Exhibit B.
"Covered Liabilities" shall mean any and all debts, losses,
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liabilities, claims, damages, obligations (including those arising out of any
Action, such as any settlement or compromise thereof or judgment or award
therein), and any reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and expenses incurred in defending any Action).
"CRCS Contract" shall mean the Customer Reservation/Customer Service
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Software Development Contract dated as of April 17, 1995, between EDS and
Seller, as amended, pursuant to which EDS is developing a software system known
as "Customer Reservation/Customer Service" for the Division.
"Daily Average Number" of trucks shall mean with respect to applicable
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trucks in any period the sum of the number of such trucks on each day in that
period divided by the total number of days in that period.
"Dealer" shall mean any Person who serves as a commissioned sales
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agent for the Rental Business.
"Determination" shall mean a "determination" as defined by Section
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1313(a) of the Code.
"Division" shall have the meaning set forth in the second paragraph
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of this Agreement.
"Division Light Commercial Data Base" shall mean the data base of
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light commercial customers and prospects used and maintained by the Division.
"DOT Number" shall have the meaning set forth in Section 6.6.
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"Encumbrances" shall mean mortgages, liens, encumbrances, security
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interests, covenants, conditions, restrictions, and any other matters affecting
title.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended, and any successor thereto.
"ERISA Affiliate" shall mean a member of a group of employers which is
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treated as a single employer under Section 414(b), (c), (m), or (o) of the Code.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
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"Fed Ex Contract" shall mean the contract between Federal Express
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Corporation and Seller, dated November 2, 1995.
"Final Purchase Price" shall mean the Net Book Value as reflected on
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the Adjusted Closing Date Statement of Net Book Assets, plus $60 million.
"GAAP" shall mean generally accepted accounting principles in
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the United States.
"Government Authority" shall mean any government or state (or any
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subunit thereof), or any agency, authority, bureau, commission, department or
similar body or instrumentality thereof, or any governmental court, arbitral
tribunal or other body administering alternative dispute resolution.
"Heavy Duty Truck Rentals" shall mean rental of vehicles in the
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Territory with a manufacturer's gross vehicle weight rating of 26,000 pounds or
more.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
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Act of 1976, as amended.
"Income Taxes" shall mean all taxes based upon or measured by
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income.
"Intellectual Property" shall mean the Transferred Intellectual
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Property together with the intellectual property licensed to Buyer under the
Copyright License Agreement, Software License Agreement and the Trademark
License Agreement.
"IRS" shall mean the Internal Revenue Service.
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"KPMG" shall have the meaning set forth in Section 2.7.
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"Leasing" shall mean surrendering possession and the right to use a
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truck, tractor or trailer, for a period in excess of ninety days, for
consideration, except under circumstances which satisfy the requirements of (a),
(b) and (c) of the definition of Rental below. Furnishing a truck, tractor or
trailer pursuant to a contract with a stated term of ninety days or less which
is extended or renewed and does not satisfy the requirements of (a), (b) and (c)
of the definition of Rental below shall be considered Leasing.
"Letter of Credit" shall mean the letter of credit described in
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Section 10.6.
"LIBOR" shall mean as of any date the 1 month London interbank offered
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rate as set forth in the edition of The Wall Street Journal published on such
date, or if no edition of The Wall Street Journal is published on such
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date, the edition published on the most recent preceding date.
"Licensed Software" shall mean the software licensed to Buyer under
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the Software License Agreement.
"Licenses" shall have the meaning set forth in Section 3.6.
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"Light Commercial Rental Business" shall mean (a) the Rental of Trucks
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with a manufacturer's gross vehicle weight rating under 26,000 pounds, within
the Territory, for the transport of goods within the Territory for a business
purpose, and (b) in connection therewith, (i) any rental of Accessories or
Towing Equipment, (ii) any sale of Protection Products and (iii) any sale of
boxes or other moving supplies. The term "One-Way Light Commercial Rental
Business" shall mean Light Commercial Rental Business where the Truck is picked
up at one rental office and dropped off at another rental office more than 35
miles from the rental office where such Truck was picked-up. The term "Local
Light Commercial Rental Business" shall mean Light Commercial Rental Business
where the Truck is picked up and dropped off at the same rental office or
another rental office within 35 miles.
"Listed Employee" shall have the meaning set forth in
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Section 7.3(a).
"Local Consumer Rental Business" shall mean (a) the rental of Trucks
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within the Territory to individuals for the transport of goods with the
Territory, for a non-business purpose (including without limitation moving
personal household goods), which Trucks are returned to the original renting
office, and (b) in connection therewith, (i) any rental of Accessories or Towing
Equipment, (ii) any sale of Protection Products and (iii) any sale of boxes or
other moving supplies.
"Maintenance Agreement" shall mean the maintenance agreement to be
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entered into by Seller and Buyer in the form of Exhibit C.
"Marketing Studies" shall mean the marketing studies related to the
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Business set forth on Schedule 1.1(b).
"MIS Support Agreement" shall mean the MIS support agreement to be
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entered into by Ryder System and Buyer in the form of Exhibit D.
"Move Management Business" shall mean (a) providing moving management
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services to corporate and other business customers for the purpose of arranging
the (i) packing, loading, and/or movement of the household goods of their
employees/members (or future employees/members) who
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are relocating to take a position (or a different position) with the customer or
(ii) rental of a Truck to such employee/member so that he/she can transport
his/her own household goods, (b) arranging such services directly for
individuals, (c) offering to individuals for whom such moves or rentals are
arranged, real estate brokerage referrals and/or certain assistance as a
mortgage broker and (d) providing the following employee-member relocation
services for corporate and other business customers;
(i) offering tax gross-up services to reflect the impact of the
individuals' move, and corporate relocation and relocation policy consulting
services and mortgage brokerage; and
(ii) through referral to third parties, home finding, home buyout and
equity funding, home purchase assistance, home marketing, property resale and
closing services, home inspections, interim housing, school match, mortgage
brokerage, finding rental housing, spousal job assistance, and locating
dependent care. In no event shall a Person be deemed to be engaging in the Move
Management Business due to the performance of activities which constitute or are
included in the Light Commercial Rental Business or Local Consumer Rental
Business.
"National Rental Contracts" shall mean, as of any given date, each of
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the contracts between Seller and any National Rental Customer providing for the
rental of a truck to that National Rental Customer which is arranged through use
of the National Rental Phone Number.
"National Rental Customer" shall mean a customer of Seller who, as of
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any given date, is or has been assigned a national rental customer number by
Seller.
"National Rental Phone Number" shall mean 1-800-345-9282.
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"Net Book Value" shall mean, as of any given date, the net book value
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as reflected on the applicable Statement of Net Book Assets.
"Network Sales" shall mean Network Sales, Inc., a Tennessee
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corporation which is an Affiliate of Seller and which acts as a wholesale
distributor of truck parts and components.
"Neutral Auditor" shall mean Price Waterhouse LLP, or in the event
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Price Waterhouse LLP is unable or unwilling to serve as the Neutral Auditor,
Deloitte & Touche.
"1997 Vehicle Trade and Body Package" shall mean the contracts
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pursuant to which the Business shall for calendar year 1997 (i) purchase truck
cargo bodies and truck chassis
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and (ii) tender used trucks as partial consideration for some of such purchases.
"Office Sub-lease Agreement" shall mean the sublease agreement with
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respect to the second and fifth floor of the Royal Palm Executive Center which
Ryder System leases and which will be subleased to Buyer by Ryder System
following the Closing (unless Buyer and the landlord of the Royal Palm Executive
Center determine to enter a direct lease with respect to such floors), and when
it is negotiated and agreed to, shall be attached hereto as Exhibit E. The
Office Sub-lease Agreement will provide, among other terms (i) for a 2 year
term, with 3 one year options exercisable by Buyer, (ii) that Buyer will not
advance agreed build-out costs with respect to the space sub-leased by Buyer to
Seller but rather these costs shall be capitalized and amortized, and paid
ratably by Buyer to Seller over a five year period (provided that Buyer shall be
required to pay to Seller any amortized build-out costs which have then not yet
been paid by Buyer upon any termination by the Buyer of such sub-lease) and
(iii) for a periodic rental payment which is payable 5 days prior to the rental
payment due under the Ryder System master lease with respect to the Royal Palm
Executive Center, in an amount equal to the portion of the rent under the master
lease which is attributable to the sub-leased space.
"▇-▇▇▇-▇▇-▇▇▇▇▇ Phone Number" shall mean ▇-▇▇▇-▇▇▇-▇▇▇▇ or any other
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national phone number put in place exclusively or primarily with respect to the
Business by Seller after the date hereof and prior to the Closing.
"One-Way Consumer Rental Business" shall mean (a) the rental of Trucks
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within the Territory to individuals for the transport of goods within the
Territory for a non-business purpose, which Trucks are not returned to the
original renting office, and (b) in connection therewith, (i) any rental of
Accessories or Towing Equipment, (ii) any sale of Protection Products and (iii)
any sale of boxes or other moving supplies.
"Patent License Agreement" shall mean the patent license agreement to
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be entered into by Seller and Buyer in the form of Exhibit F.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
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successor thereto.
"Permitted Liens" shall mean (1) statutory liens for Taxes not yet due
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and payable, (2) imperfections of title with respect to any Asset, and statutory
liens or other similar liens arising in the ordinary course of business with
respect to any Asset, in each case, that do not have a material adverse effect
on the value or use of such Asset, (3) mechanics liens for work performed on any
Asset for
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which payment therefor is not in default and (4) those Encumbrances disclosed in
the Seller Disclosure Schedule.
"Person" shall mean any individual, corporation, partnership, joint
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venture, trust, unincorporated organization, other form of business or legal
entity or Government Authority.
"Personal Property" shall mean, as of any given date, all personal
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property, other than Intellectual Property, of the Business, including without
limitation the fuel in the Trucks and, as of June 30, 1996, the personal
property set forth on Schedule 1.1(c). Personal Property does not include
Phrases.
"Phonebook Business" shall mean the business of the Phonebook Company
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which consists of purchasing phone book advertising throughout the Territory.
"Phonebook Company" shall have the meaning set forth in the second
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paragraph of this Agreement.
"Phrases" shall mean certain nonproprietary descriptive slogans or
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phrases which (a) among Seller and its Affiliates are used as of the date hereof
exclusively by the Division and which are set forth on Schedule 1.1(d) and (b)
Seller covenants that it will cease, at Closing, to use for commercial purposes.
"Pre-Closing Taxes" shall have the meaning set forth in Section 8.2.
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"Pre-Closing Tax Period" shall have the meaning set forth in
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Section 8.2.
"Price Resolution Period" shall have the meaning set forth in
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Section 2.8(b).
"Proration Resolution Period" shall have the meaning set forth in
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Section 2.8(b).
"Proration Schedule" shall have the meaning set forth in Section
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2.8(a).
"Protection Products" shall mean the risk assurance arrangements sold
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to customers of the Rental Business under the following names: Tow Guard
Protection, Personal Accident and Cargo Protection, Supplemental Liability
Protection, Physical Damage Waiver, Limited Damage Waiver and Additional Driver
Option.
"Purchase Price" shall mean the Net Book Value based on the projected
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Statement of Net Book Assets delivered by Seller to Buyer pursuant to Section
2.5(a), plus $60 million.
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"Purchasing Arrangements" shall mean vendor contracts or arrangements
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with Ryder System or Seller by which goods, services or supplies are purchased
for Ryder System or for multiple of its divisions.
"Rental" or "Rented", when used independently of any other defined
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term, shall mean a surrender of possession and right to use a truck, tractor, or
trailer for a period of ninety days or less, for consideration. Such initial
period of ninety days or less may be extended/renewed for successive periods of
ninety days or less and still be considered a rental only if (a) the total
period of possession and use under such initial period and all
extensions/renewals does not exceed one year, (b) there is no significant
penalty or truck, tractor, or trailer, as the case may be, purchase obligation
for failure to extend or renew, and (c) the truck, tractor or trailer, as the
case may be, is not identified with the customer's name, color or logo (other
than any legally required placard indicating the identity of the customer).
"Rental Business" shall mean the One-Way Consumer Rental Business, the
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Local Consumer Rental Business, and the Light Commercial Rental Business.
"Rental Deposit" shall mean the cash or credit card deposit made by a
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Person in connection with the rental of a Truck; provided that any deposit made
by credit card shall not for purposes of this Agreement be a Rental Deposit
unless and until a charge is made against the related credit card.
"Retained Liabilities" shall have the meaning set forth in
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Section 2.4.
"Roadway Arrangement" shall mean the oral arrangement between Roadway
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Package Service and Seller with respect to a national truck rental program.
"Ryder Dealer Agreement" shall mean the Dealer Agreement to be
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entered into by Seller and Buyer in the form of Exhibit G.
"Ryder Move Management" shall have the meaning set forth in the
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second paragraph of this Agreement.
"Ryder System" shall have the meaning set forth in the first
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paragraph of this Agreement.
"Seller" shall have the meaning set forth in the first paragraph of
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this Agreement.
"Seller Disclosure Schedule" shall have the meaning set forth in
--------------------------
the introduction in Article III.
-17-
"Seller Indemnified Parties" shall have the meaning set forth in
--------------------------
Section 11.2.
"Seller NonCompete Period" shall have the meaning set forth in
------------------------
Section 6.2.
"Service Agreements" shall mean the Maintenance Agreement,
------------------
Administrative Services Agreement, MIS Support Agreement, Ryder Dealer Agreement
and Used Truck Sales Agreement.
"Shared Facilities" shall mean the locations set forth on Schedule
-----------------
1.1(e).
"Shared Facility Licenses" shall mean the licenses to be entered into
------------------------
by Seller and Buyer in the form of Exhibit H pursuant to which the space
currently occupied by the Business in each of the Shared Facilities is licensed
to Buyer at the monthly rental set forth on Schedule 1.1(e).
"Software License Agreement" shall mean the license agreement to be
--------------------------
entered into by Seller and Buyer in the form of Exhibit I.
"Statement of Net Book Assets" shall mean, as of the Closing Date, a
----------------------------
statement with respect to the Assets and the Assumed Liabilities prepared in
accordance with the Accounting Standard, except for matters and amounts
specifically described in Schedule 1.1(f). Except as set forth on Schedule
1.1(f), (i) it is agreed that Ryder's accounting policies and procedures and the
applications of GAAP which they represent will prevail in all matters concerning
any Statement of Net Book Assets so long as they are consistent with GAAP and
(ii) the Statement of Net Book Assets will include the net book assets of each
of Ryder Move Management as extracted from the consolidated balance sheet of
Ryder Move Management attached thereto and made a part thereof, of even date
therewith. No value shall be recorded on any Statement of Net Book Assets with
respect to any Assets which have been fully expensed, amortized or depreciated,
as applicable.
"Stay-on Arrangements" shall mean the arrangements between Seller and
--------------------
certain Transferred Employees to encourage such employees to remain with the
Business through the Closing Date.
"Straddle Period" shall have the meaning set forth in Section
---------------
8.4(b).
"Subsidiaries" shall mean Ryder Move Management and the Phonebook
------------
Company.
"Subsidiaries' Shares" shall mean all of the issued and outstanding
--------------------
shares of stock of each of the Subsidiaries.
-18-
"subsidiary" of any Person shall mean any corporation of which at
----------
least a majority of the outstanding capital stock having voting power under
ordinary circumstances to elect directors of such corporation shall at the time
be held, directly or indirectly, by such Person, by such Person and one or more
subsidiaries of such Person or by one or more subsidiaries of such Person.
"Tax Audit" shall have the meaning set forth in Section 6.8(d).
---------
"Tax Laws" shall mean the Code, federal, state, county, or local, laws
--------
relating to Taxes and any regulations or official administrative pronouncements
released thereunder.
"Tax Returns" shall mean returns, reports, information statements and
-----------
other documentation filed or maintained, or required to be filed or maintained,
in connection with the calculation, determination, assessment or collection of
any Tax and shall include any amended returns required as a result of
examination adjustments made by the Internal Revenue Service or other Taxing
Authority.
"Taxes" shall mean (i) all taxes (whether federal, state, local or
-----
foreign) including, without limitation, taxes based upon or measured by income,
gross receipts, profits, sales, use, occupation, value added, ad valorem,
franchise, withholding, payroll, employment, excise, capital stock, license,
social security, workers' compensation, unemployment compensation, utility,
severance, production, excise, stamp, occupation, premium or transfer taxes and
customs duties, together with any interest, additions to tax or penalties
imposed with respect thereto and (ii) any obligations under any agreements or
arrangements with respect to any taxes described in clause (i) above.
"Taxing Authority" shall mean any Government Authority having
----------------
jurisdiction over the assessment, determination, collection, or other imposition
of Tax.
"Territory" shall mean the contiguous forty-eight states of the
---------
United States of America and the state of Alaska.
"Towing Equipment" shall mean, as of any given date, the car carriers
----------------
and tow dollies owned by Seller and used in connection with the Business, and as
of June 30, 1996 the towing equipment set forth on Schedule 1.1(g).
"Trademark License Agreement" shall mean the trademark license
---------------------------
agreement to be entered into by Ryder System and Buyer in the form of Exhibit J.
-19-
"Transferred Employee" shall mean a Listed Employee who is offered
--------------------
employment in the Business by Buyer and who accepts such employment prior to the
Closing Date and who becomes an employee of Buyer as of the Closing.
"Transferred Intellectual Property" shall mean Transferred Patents,
---------------------------------
Transferred Software and Transferred Trademarks.
"Transferred Patents" shall mean the United States patents set
-------------------
forth on Schedule 1.1(h).
"Transferred Software" shall mean the software set forth on
--------------------
Schedule 1.1(i).
"Transferred Trademarks" shall mean the trademarks set forth on
----------------------
Schedule 1.1(j).
"Trucks" shall mean, as of any given date, collectively, each of the
------
trucks owned by Seller (the beneficial ownership of which is held by an entity
which is controlled by Seller) and accounted for on Seller's books as an asset
of the Division other than any truck reported stolen as of such date or any
damaged truck that is beyond economic repair, and which as of the Closing
comprises the vehicle fleet to be sold to Buyer by Seller pursuant to this
Agreement, and as of June 30, 1996 the trucks set forth on Schedule 1.1(k).
"UPS Arrangement" shall mean the oral arrangement between United
---------------
Parcel Service and Seller with respect to a national truck rental program.
"Used Truck Sales Agreement" shall mean the agreement to be entered
--------------------------
into by Seller and Buyer in the form of Exhibit K.
"Value Added Business" shall mean (a) being a franchisee of The
--------------------
Packaging Store, Inc., (b) being a dealer of Cruise America for the rental of
mobile homes, (c) being a dealer of The Rug Doctor for the rental of carpet
cleaners, and (d) the sale (independent of a vehicle rental) of boxes and other
moving supplies.
"Vehicle Nominee Title Agreement" shall have the meaning set forth
-------------------------------
in Section 6.17.
2.
ARTICLE II
----------
Sale of Assets; Closing
-----------------------
Section 2.1. Assets and Stock to Be Acquired. Subject to the
-------------------------------
satisfaction or waiver of the conditions set forth herein and to the other
terms, conditions and provi-
-20-
sions hereof, at the Closing, Buyer will purchase, acquire, accept and pay for,
and Seller will sell, assign, and convey and Seller will transfer, and deliver
to Buyer or any of its designated controlled entities, all of Seller's right,
title and interest in and to, the assets and properties of the Business and the
Subsidiaries' Shares described below, as such assets, properties and shares
exist and are owned, leased or possessed by Seller as of the Closing Date
(collectively, the "Assets"):
(a) the Trucks;
(b) Seller's rights to use ▇-▇▇▇-▇▇-▇▇▇▇▇ Phone Number subject to
Sections 6.4(b) and 6.4(c);
(c) the Assigned Leases;
(d) the Contracts, including but not limited to the National Rental
Contracts which are for the rental of Trucks;
(e) the Transferred Software;
(f) the Transferred Trademarks;
(g) the Transferred Patents;
(h) the Subsidiaries' Shares;
(i) the Towing Equipment;
(j) the Personal Property and Accessories;
(k) any accounts receivable from new vehicle manufacturers in
connection with the trade-in of used trucks of the Division to those
manufacturers in partial consideration for the acquisition of new vehicles
pursuant to the 1997 Vehicle Trade and Body Package;
(l) the Division Light Commercial Data Base;
(m) (i) all accounting and other books and records, cost information,
sales and pricing data, maintenance, inspection and repair records and reports,
personnel records related to Transferred Employees, Marketing Studies, and other
reports, plans and documents, which in each case relate exclusively to the
Business, Assets and/or Assumed Liabilities (other than books and records which
(A) are maintained by Seller primarily for Tax purposes or (B) relate primarily
to the Retained Liabilities or Excluded Assets, or (C) relate primarily to
current or former employees who are not Transferred Employees), it being
understood that (x) Seller may keep copies of any such books and records,
reports, plans and documents if reasonably necessary for the performance of
services under agreements
-21-
between Seller and Buyer and (y) as to such books and records, reports, plans
and documents which cannot be reasonably extracted from Seller's existing
records that Seller shall keep same if Buyer so agrees, or pending Seller's
completion of the extraction process pursuant to the agreements between Seller
and Buyer or otherwise to be undertaken in good faith, but Buyer shall have the
right to a copy of the portions thereof which relate to the Business, Assets
and/or Assumed Liabilities), (ii) with respect to accounting and other books and
records, reports, plans and documents which in each case relate (but not
exclusively) to the Business, Assets and/or Assumed Liabilities, Seller shall
retain ownership of same but Buyer shall have a right to a copy of the portions
thereof which relate to the Business, Assets and/or Assumed Liabilities and
(iii) in each case other than with respect to (A), (B), and (C) of (i) above, if
and to the extent any accounting and other books and records, reports, plans or
documents relate to the Business, Assets and/or Assumed Liabilities and Seller
keeps or retains the original thereof or a copy thereof, Seller shall not
transfer the portion pertaining to the Business to any third party, other than
as necessary in connection with any of the services to be performed by such
third party pursuant to any of the Service Agreements, without Buyer's consent;
(n) to the extent applicable exclusively to the Trucks or utilized
exclusively by the Business and permitted to be conveyed or assigned, all
licenses, permits, approvals and authorizations relating to the Business or any
of the Assets which have been issued by any Government Authority;
(o) all other prepaid expenses to the extent applicable exclusively to
the Trucks or utilized exclusively in the Business, including without limitation
unamortized license, permit or authorization fees (except as to licenses,
permits, or authorizations related to the Division which are not conveyable or
assignable to Buyer or with respect to which Buyer cannot receive value
therefrom), phonebook advertising, fuel tax, general advertising, and accessory
products; provided, that, with respect to the prepaid expense of Seller relating
to vehicle licensing fees attributable to the Trucks or any other vehicles
included in the Assets, such prepaid expense shall be transferred to the extent
provided in Schedule 1.1(f) and Section 6.20 hereto; and
(p) all pending claims for physical damage made under any insurance
policies (other than (i) any such claims with respect to repairs which are
completed prior to the Closing Date, (ii) any such claims with respect to
repairs for collision damage to any Truck for which an internal accident report
has been filed with respect thereto with Seller prior to the Closing Date, or
any Truck which has been damaged in an accident prior to Closing Date which
-22-
accident occurred so close to the Closing Date that such accident report has not
been filed as of the Closing Date, and (iii) any such claims which relate to any
Excluded Assets or any Retained Liabilities) with respect to any property
included within the definition of Assets, and all assignable rights to any
manufacturers' warranties and indemnities with respect to the Assets (other than
any such warranties and indemnities with respect to repairs which are described
in (i) or (ii) above and any such warranties or indemnities which relate to any
Excluded Assets or any Retained Liabilities) and, in each case, all proceeds
thereof.
Section 2.2. Excluded Assets. Notwithstanding anything to the
---------------
contrary herein, all of Seller's right, title and interest in all of the
following properties, assets and other rights of the Business (the "Excluded
--------
Assets") shall be excluded from the Assets:
------
(a) (1) the right to use, subject to Section 6.11, the National
Rental Phone Number, (2) the database of National Rental Customers on the
mainframe at Seller's headquarters (although Buyer shall be entitled to receive
a copy of that database), and (3) all National Rental Contracts which are not
for the rental of a Truck;
(b) (i) all accounting and other books and records which (A) are
maintained by Seller primarily for Tax purposes, (B) relate primarily to current
or former employees who are not Transferred Employees, or (C) relate primarily
to any Retained Liabilities or any Excluded Assets and (ii) all cost
information, sales and pricing data, maintenance, inspection and repair records
and reports, and other books, records, reports, plans and documents which in
each case do not relate exclusively to the Business, Assets and/or Assumed
Liabilities (although Buyer shall have the right to copies of such portions of
any of the foregoing that relate to the Business, Assets and/or Assumed
Liabilities);
(c) all assets of any employee benefit plan of Seller or any of its
Affiliates and any rights and assets under any plan or agreement of Seller or
any of its Affiliates relating to employee benefits, employment or compensation;
(d) any rights of Seller which are contingent on the satisfaction of
liabilities that are Retained Liabilities;
(e) all reserves (other than depreciation reserves or other reserves
which relate to any Assets to be transferred to Buyer pursuant to clause 2.1(p)
related to the Assets, including reserves which relate to the accounts
receivable of the Subsidiaries, arising from the operation
-23-
of or related to the Business or the Assets prior to the Closing Date or which
are related to any Retained Liabilities or any Excluded Assets;
(f) cash, certificates of deposit, cash equivalents, and prepaid
expenses which relate to licenses, permits or authorizations not assignable to
Buyer;
(g) accounts receivable (including the accounts receivable of Ryder
Move Management) of the Business as of the Closing Date except as set forth in
Section 2.1(k);
(h) (i) all insurance policies of Seller or its Affiliates, and all
claims thereunder or under any other insurance policies which were made prior to
the Closing (other than pending claims for physical damage made under any
insurance policies with respect to repairs to Assets which are included in the
Assets pursuant to clause 2.1(p)) or which relate to Retained Liabilities or
Excluded Assets and, in each case, proceeds thereof, (ii) all binders owned or
held by Seller, the Division or any Subsidiary and (iii) any rights to
manufacturers' warranties and indemnities with respect to repairs to Assets
which are described in (i) or (ii) of clause 2.1(p) above and any such
warranties or indemnities which relate to any Excluded Assets or any Retained
Liabilities;
(i) all rights, demands, claims, actions and causes of action which
Seller may have, on or after the date hereof, against any Government Authority
for refund or credit of any type with respect to Seller's or Ryder System's
Taxes other than any Taxes that constitute Assumed Liabilities;
(j) trademarks (other than the Transferred Trademarks), software
(other than the Transferred Software), patents (other than the Transferred
Patents), and copyrights, in each case, used in the Business or owned or
licensed by Seller, Ryder System or any Affiliate thereof, and other
intellectual property rights of Seller, Ryder System or any Affiliate thereof;
and
(k) all rights, demands, claims, actions and causes of action (whether
for personal injuries or property, consequential or other damages of any kind)
(collectively, "Claims") which Seller, the Division, or any of the Subsidiaries
------
may have against any Person with respect to, or which are related to, any
Retained Liabilities or Excluded Assets.
Section 2.3. Assumption of Liabilities. At the Closing Buyer shall
-------------------------
assume as of the Closing and shall agree to pay, perform and discharge, and
shall indemnify and hold Seller and the Seller Indemnified Parties harmless
against, the "Assumed Liabilities", which term shall mean:
-------------------
-24-
(a) except as otherwise provided in this Agreement, all liabilities
and obligations arising out of the conduct of the Business by Buyer on and after
the Closing;
(b) except as otherwise provided in this Section 2.3, all liabilities
and obligations arising (i) from the Business as a result of any act or failure
to act, in each case, whether before, at or after the Closing, by any Person,
which results in harm to any third party on or after the Closing (including
without limitation any general tort liability so arising, notwithstanding that
after Closing an insurance card or certificate purporting to show that Seller's
insurance covers any Truck is still in such Truck, that Seller's DOT Number is
still on any Truck, or that title is still in the name of Seller) or (ii) as a
result of the condition of any Asset, excepting as to (i) and (ii) above such
liabilities and obligations for harm to third parties which occurs or (for
purposes of allocating defense costs or expenses) is alleged to have occurred
prior to the Closing and also excepting as to (i) and (ii) above environmental
liability retained by Seller pursuant to Section 2.4(d) below;
(c) with respect to contracts (other than the CRCS Contract) which are
included in the Assets, all liabilities or obligations which are to be performed
on or after the Closing;
(d) with respect to statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees addressing harm to, or protection of, the
environment from hazardous, toxic or regulated substances (other than those with
respect to vehicle emission control), all liabilities and obligations arising
from any condition of any Asset or any real property leased pursuant to the
Assigned Leases, or any real property which underlies spaces licensed to Buyer
pursuant to the Shared Facilities Licenses, which condition did not exist as of
the Closing;
(e) with respect to compliance with any applicable statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees (excepting those
which relate to environmental matters covered in (d) above), all liabilities and
obligations arising in connection with the Business as a result of any act or
failure to act, in each case whether before, on or after the Closing, by any
Person which results in an Action by a Government Authority before, on or after
the Closing, but only to the extent the fine, penalty or other enforcement
remedy is assessed with respect to a time on or after the Closing;
(f) all of the liabilities and obligations, whenever arising (whether
before, on or after the Closing), which relate to or arise out of the CRCS
Contract;
-25-
(g) to the extent recorded as a liability on the Closing Date
Statement of Net Book Assets, as may be adjusted in the Adjusted Closing Date
Statement of Net Book Assets, any Rental Deposits for rental transactions in
process as of the Closing;
(h) to the extent recorded as a liability on the Closing Date
Statement of Net Book Assets, as may be adjusted in the Adjusted Closing Date
Statement of Net Book Assets, any obligation or liability relating to vacation
pay for current year, vested or carried forward vacation accrued and not taken
as of the Closing Date by Transferred Employees;
(i) all liabilities and obligations arising from (i) commitments (in
the form of accepted purchase orders, or otherwise), to sell or rent Trucks or
provide accessory products or services related thereto, or (ii) accepted
quotations, proposals or bids, in each case made in the ordinary course of
business consistent with past practice and arising from or related to the Assets
or the Business, whether made before, on or after the Closing;
(j) all liabilities and obligations which arise from or relate to
commitments (in the form of issued purchase orders or otherwise), or quotations,
proposals or bids, in each case made in the ordinary course of business
consistent with past practice and whether made before, on or after the Closing,
and in each case to purchase or acquire Trucks or supplies or services related
to the Assets or the Business including, without limitation, the 1997 Vehicle
Trade and Body Package;
(k) all liabilities and obligations which arise from or relate to
employee and Tax matters to be assumed by Buyer pursuant to Articles VII and
VIII.
Section 2.4. Retained Liabilities. Seller shall retain, and shall
--------------------
continue to be responsible after the Closing Date for, and shall indemnify and
hold Buyer and the Buyer Indemnified Parties harmless against, the "Retained
--------
Liabilities", which term shall mean:
-----------
(a) all liabilities and obligations which arise, whether before, on or
after the Closing, out of the Excluded Assets;
(b) except as otherwise provided in this Section 2.4, all liabilities
and obligations arising (i) from the Business as a result of any act or failure
to act, by any Person or (ii) as a result of the condition of any Asset, in each
case of (i) or (ii) above, which results in harm to any third party which
occurs, or (for purposes of allocating defense costs or expenses) is alleged to
have occurred prior to the Closing (and including, without limitation, any
li-
-26-
abilities and obligations arising out of any lawsuit, action, administrative
or other proceeding or governmental investigation pending against Seller prior
to the Closing) or which constitutes environmental liability retained by Seller
pursuant to Section 2.4(d) below;
(c) with respect to contracts related to the Business (other than the
CRCS Contract), all liabilities or obligations which are or were to be performed
before the Closing;
(d) with respect to statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees addressing harm to, or protection of, the
environment from hazardous, toxic or regulated substances (other than those with
respect to vehicle emission control), all liabilities and obligations arising
from any condition of any Asset or any real property leased pursuant to the
Assigned Leases, or any real property which underlies spaces licensed to Buyer
pursuant to the Shared Facilities Licenses, which condition existed before or on
the Closing;
(e) with respect to compliance with any applicable statutes, law,
regulations, ordinances, rules, judgments, orders or decrees (other than same
which relate to environmental matters covered in (d) above), all liabilities and
obligations arising in connection with the Business as a result of any act or
failure to act by any Person on or before Closing which results in an Action by
a Government Authority before, on or after the Closing, but only to the extent
the fine, penalty or other enforcement remedy is assessed with respect to a time
prior to the Closing;
(f) the liabilities and obligations for (i) Income Taxes (including
deferred Taxes) of the Seller; (ii) Taxes of the Subsidiaries attributable to
any Pre-Closing Tax Period, including any Taxes attributable to "intercompany
transactions" within the meaning of Treasury Regulations (S)1.1502-13 or any
analogous provision of state or local law, to the extent such taxes are
attributable to Pre-Closing Tax Periods; (iii) Taxes attributable to the
transfer of the Assets pursuant to this Agreement; (iv) Taxes for which any of
the Subsidiaries may be liable under Treasury Regulation (S) 1.1502-6 or any
analogous provision of state or local law by virtue of having been a member of
any affiliated, consolidated, combined or unitary group at any time on or prior
to the Closing Date; (v) Taxes attributable to any settlement of intercompany
accounts pursuant to Section 5.11 hereof; (vi) any tax sharing agreement,
whether written or unwritten, to which Seller or any of the Subsidiaries is a
party for any Pre-Closing Tax Period; and (vii) Taxes attributable to revenues
which are for the account of Seller pursuant to Section 2.8(a);
-27-
(g) all liabilities and obligations (i) under the Business Employee
Benefit Plans or any other similar plans, contracts or arrangements maintained
by Seller (other than any amount payable by Buyer pursuant to Article VII), (ii)
related to any employee of the Division who does not become a Transferred
Employee or (iii) under any Stay-on Arrangement;
(h) all liabilities and obligations, if any, of the Business (or any
of the Subsidiaries or any subsidiary thereof) which (i) should have been, but
were not, reflected, reserved against or otherwise disclosed in the Closing Date
Statement of Net Book Assets (or the balance sheet of any of the Subsidiaries or
any subsidiary thereof attached as an Exhibit to the Closing Date Statement of
Net Book Assets) as same may be changed pursuant to the provisions of Section
2.7 hereof, under the Accounting Standard except for matters and amounts
specifically described in Schedule 1.1(f);
(i) except as to liabilities and obligations reflected on the balance
sheet of either of the Subsidiaries attached as an exhibit to the Closing Date
Statement of Net Book Assets as same may be changed pursuant to the provisions
of Section 2.7, all liabilities and obligations, if any, of any of the
Subsidiaries or any subsidiary thereof which fall within any category of
Retained Liabilities referred to in this Section 2.4; and
(j) the liabilities and obligations which arise from or relate to
employee and Tax matters which Seller has specifically agreed to retain pursuant
to Articles VII and VIII.
Section 2.5. Consideration. (a) Seller shall deliver to Buyer five
-------------
Business Days prior to the Closing Date a projected Statement of Net Book Assets
as of the Closing Date.
(b) Subject to the terms and conditions hereof, at the Closing, Buyer
shall (i) pay to Seller the Purchase Price by wire transfer to the account
specified by Seller, and (ii) assume the Assumed Liabilities pursuant to an
Assumption Agreement in the form of Exhibit L (the "Assumption Agreement").
(c) In addition to the other things required to be done hereby, at the
Closing, (i) Seller shall deliver, or cause to be delivered, to Buyer the
following: (A) a duly executed ▇▇▇▇ of Sale in substantially the form of
Exhibit M, (B) a duly executed ▇▇▇▇ of Sale in substantially the form of Exhibit
N from Axle Limited Partnership to transfer the beneficial interest in the
Trucks, together with certificates of title with respect to the Trucks, (C) a
certificate dated the Closing Date and validly executed on be-
-28-
half of Seller to the effect that the condition set forth in Section 9.1 has
been satisfied, (D) a copy of the resolutions of the board of directors of
Seller, or similar enabling document, authorizing the execution, delivery and
performance hereof and of each other agreement to be executed in connection with
the transactions contemplated by this Agreement by Seller, and a certificate of
its secretary or assistant secretary, dated as of the Closing Date, that such
resolutions were duly adopted and are in full force and effect, (E) evidence or
copies of any consents, approvals, orders, qualifications or waivers required
pursuant to Section 9.2, and (F) stock certificates representing the
Subsidiaries' Shares duly endorsed in blank or accompanied by stock powers duly
executed in blank and sufficient to transfer the Subsidiaries' Shares on the
books of the Subsidiaries, (ii) if not previously delivered to Buyer, all other
certificates, documents, instruments and writings required pursuant hereto to be
delivered by or on behalf of Seller at or before the Closing, (iii) Seller or
Ryder System, as applicable, and Buyer shall each duly execute the Trademark
License Agreement, Software License Agreement, Maintenance Agreement,
Administrative Services Agreement, Copyright License Agreement, Patent License
Agreement, Used Truck Sales Agreement, Ryder Dealer Agreement, MIS Support
Agreement, Shared Facility Licenses, Vehicle Nominee Title Agreement, and Office
Sublease Agreement, (iv) Seller and/or Ryder System, as applicable, shall duly
execute the General Assignment Agreement, the Patent Assignment and the
Trademark Assignment and (v) Buyer shall duly execute the Assumption Agreement.
(d) In addition to the payment of the Purchase Price and the other
things required to be done hereby, at the Closing, Buyer shall deliver, or cause
to be delivered, to Seller the following: (i) a certificate dated the Closing
Date and validly executed on behalf of Buyer to the effect that the condition
set forth in Section 10.1 shall have been satisfied, (ii) a copy of the
resolutions of the board of directors of Buyer authorizing the execution,
delivery and performance hereof and each other agreement to be executed in
connection with the transactions contemplated by this Agreement by Buyer, and a
certificate of its secretary or assistant secretary, dated as of the Closing
Date, that such resolutions were duly adopted and are in full force and effect,
(iii) evidence or copies of any consents, approvals, orders, qualifications or
waivers required pursuant to Section 10.2, (iv) the certificate of insurance,
and, if available, copies of the related policy or policies, required pursuant
to 10.4, (v) the letter of credit required pursuant to Section 10.6; and (vi) if
not previously delivered to Seller, all other certificates, documents,
instruments and writings required pursuant hereto to be delivered by or on
behalf of Buyer at or before the Closing.
-29-
Section 2.6. Time and Place of Closing. The Closing shall take place
-------------------------
on the Closing Date at 10:00 A.M., New York City time, at the offices of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The parties hereby agree that the Closing shall be deemed effective as of 12:01
A.M. New York City time on the Closing Date.
Section 2.7. Purchase Price Adjustment. (a) No later than 45 days
-------------------------
after the Closing Date Seller shall prepare and deliver to Buyer a Statement of
Net Book Assets as of the Closing Date (the "Closing Date Statement of Net Book
----------------------------------
Assets") which statement shall set forth the Net Book Value as of such date
------
together with an opinion of KPMG Peat Marwick LLP ("KPMG") that such Statement
of Net Book Assets presents fairly the balance sheet assets sold and liabilities
assumed at the Closing Date. KPMG's opinion as to fairness will be based upon
the terms of this Agreement which require that the Statement of Net Book Assets
be prepared on the basis set forth in the definition of such term.
Seller shall pay the audit costs, expenses and fees associated with
auditing the Closing Date Statement of Net Book Assets. Buyer shall assist and
cooperate with Seller and Seller's accountants and representatives in the
preparation of such Statement of Net Book Assets and shall grant Seller and
Seller's accountants and representatives such access as may be reasonably
requested to the books, records or other information related to the Business in
Buyer's possession that may be used or useful in preparing such Statement of Net
Book Assets.
(b) Buyer shall have 15 Business Days to review the Closing Date
Statement of Net Book Assets after the receipt thereof. Unless Buyer delivers
written notice to Seller on or prior to the 16th Business Day after its receipt
of the Closing Date Statement of Net Book Assets of its objection to such
statement and specifying in reasonable detail all disputed items, Buyer shall be
deemed to have accepted and agreed to the Closing Date Statement of Net Book
Assets. If Buyer so notifies Seller of its objection to the Closing Date
Statement of Net Book Assets, Seller and Buyer shall, within 15 Business Days
following receipt of such notice by Seller (the "Price Resolution Period"), use
-----------------------
their good faith effort to resolve their differences and any resolution by them
as to any disputed amounts shall be final, binding and conclusive.
(c) If at the conclusion of the Price Resolution Period any amounts
remain in dispute, such amounts shall be submitted for resolution to the Neutral
Auditor. Each of Seller and Buyer agree to execute, if so requested by the
Neutral Auditor, a reasonable engagement letter. The costs, expenses and fees
of the Neutral Auditor, as well as any
-30-
other costs, expenses or fees which arise, in connection with the dispute
resolution process set forth in this Section 2.7(c) shall be borne by Buyer and
Seller based upon the percentage which the portion of the contested amount not
awarded to each party bears to the amount actually contested by Buyer. The
Neutral Auditor shall act as an arbitrator to determine, based on presentations
by Buyer and Seller, and not by independent review, only these issues still in
dispute. The accounting principles which shall prevail for the purpose of
resolving any dispute pursuant to this Section 2.7(c) shall be the Accounting
Standard. The Neutral Auditor's determination shall be made within 45 Business
Days of submission thereto of the dispute, whether or not any presentation by
Seller or Buyer has been made within such period, and shall be set forth in a
written statement delivered to Seller and Buyer, and such determination shall be
final, binding and conclusive. The term "Adjusted Closing Date Statement of Net
--------------------------------------
Book Assets" shall mean the Closing Date Statement of Net Book Assets agreed to
-----------
by Seller and Buyer in accordance with Section 2.7(b) or the Closing Date
Statement of Net Book Assets resulting from the determinations made by the
Neutral Auditor in accordance with this Section 2.7(c) (in addition to those
differences theretofore agreed to by Seller and Buyer in accordance with Section
2.7(b)).
(d) If the Final Purchase Price differs from the Purchase Price, then
a payment shall be made in the following manner: if the Purchase Price is
greater than the Final Purchase Price, Seller shall refund to Buyer the
difference between such amounts; if the Purchase Price is less than the Final
Purchase Price, Buyer shall pay to Seller the difference between such amounts.
Such refund or payment shall be made no later than the third Business Day
following the determination of the Adjusted Closing Date Statement of Net Book
Assets, by wire transfer in immediately available funds, together with interest
thereon for the number of days from and including the Closing Date to but
excluding such payment date, at a rate equal to LIBOR plus 2%, computed on the
basis of actual days elapsed over a 365-day year. The adjustment pursuant to
this Section 2.7 shall not be subject to any hold-backs, escrows or other
reductions or restrictions.
Section 2.8. Proration of Revenue.
--------------------
(a) (i) No later than 30 days after the Closing Date Buyer shall
prepare and deliver to Seller a schedule which sets forth the proration of
revenues for rental transactions for Trucks which were under contract as of the
Closing Date (the "Proration Schedule") which schedule shall be prepared in
------------------
accordance with the following:
(A) that portion of the revenue arising from the rental of any Trucks
which are under contract as of the
-31-
Closing Date in connection with the One-Way Rental Business shall be for
the account of Buyer in an amount determined by multiplying the total
amount of revenue for the entire rental period times a fraction, the
numerator of which equals the number of days of the applicable rental
period which occur on and after the Closing Date and the denominator of
which equals the total number of days in the applicable rental period, the
balance of any revenues related to One-Way Rental business under contract
as of the Closing Date shall be for the account of Seller; and
(B) that portion of the revenue arising from the rental of any Trucks
which are under contract as of the Closing Date in connection with the
Local Consumer Rental Business or the Light Commercial Rental Business
shall be for the account of Seller in an amount determined by multiplying
the total amount of revenue for the entire rental period times a fraction,
the numerator of which equals the number of days of the applicable rental
period which occur prior to the Closing Date and the denominator of which
equals the total number of days in the applicable rental period; the
balance of any revenues related to the Local Consumer Rental Business or
the Light Commercial Rental Business under contract as of the Closing Date
shall be for the account of Buyer; and
(C) the Dealer's commission associated with each item of rental
revenues described in (A) and (B) above shall be prorated as of the
Closing Date in the manner described in (A) and (B) above, and as to
commissions related to revenues described in (A) and (B) which are for the
account of the party which does not pay the Dealer's commission, such
commissions shall be for the account of the other party;
(ii) Within 5 Business Days following delivery of the Proration
Schedule to Seller by Buyer, Seller or Buyer, as applicable, shall pay to the
other in immediately available funds an amount equal to the net difference of
(x) the sum of all amounts which are for the account of Buyer and Seller
pursuant to section 2.8(a)(i)(A) and (y) the sum of all amounts which are for
the account of Seller and Buyer pursuant to Section 2.8(a)(i)(B) (any such
amount paid to Seller as referred to herein as the "Seller Proration Amount",
-----------------------
and any such amount paid to Buyer is referred to herein as the "Buyer Proration
---------------
Amount").
------
(b) Notwithstanding payment of the Proration Amount pursuant to
Section 2.8(a)(ii), Seller shall have 15 Business Days to review the Proration
Schedule after the receipt thereof from Buyer. Unless Seller delivers written
notice to Buyer on or prior to the 15th Business Day after its receipt of the
Proration Schedule of its objection to
-32-
such schedule and specifying in reasonable detail all disputed items, Seller
shall be deemed to have accepted and agreed to the Proration Schedule. If Seller
so notifies Buyer of its objection to the Proration Schedule, Seller and Buyer
shall, within 15 Business Days following receipt of such notice by Buyer (the
"Proration Resolution Period"), use their good faith effort to resolve their
---------------------------
difference and any resolution by them as any disputed amounts shall be final,
binding and conclusive.
(c) If at the conclusion of the Proration Resolution Period any
amounts remain in dispute, such amounts shall be submitted for resolution to the
Neutral Auditor. Each of Seller and Buyer agree to execute, if so requested by
the Neutral Auditor, a reasonable engagement letter. Seller and Buyer shall
each pay 50% of the costs, expenses and fees of the Neutral Auditor, as well as
any other costs, expenses or fees which arise, in connection with the dispute
resolution process set forth in this Section 2.8(c). The Neutral Auditor shall
act as an arbitrator to determine, based on presentations by Buyer and Seller,
and not by independent review, only those issues still in dispute. The
accounting principles which shall prevail for the purpose of resolving any
dispute pursuant to this Section 2.8(c) shall be the Accounting Standard. The
Neutral Auditor's determination shall be made within 45 Business Days of
submission thereto of the dispute, whether or not any presentation by Seller or
Buyer has been made within such period, and shall be set forth in a written
statement delivered to Seller and Buyer, and such determination shall be final,
binding and conclusive. "Final Seller Proration Amount" shall mean the amount,
if any, to be paid to Seller as determined pursuant to Section 2.8(b) and/or
pursuant to Section 2.8(c), as applicable. "Final Buyer Proration Amount" shall
mean the amount, if any, to be paid to Buyer as determined pursuant to Section
2.8(b) and/or pursuant to Section 2.8(c), as applicable.
(d) If the Final Seller Proration Amount differs from the Seller
Proration Amount, then a payment shall be made in the following manner: if the
Seller Proration Amount is greater than the Final Seller Proration Amount,
Seller shall refund to Buyer the difference between such amounts; if the Seller
Proration Amount is less than the Final Seller Proration Amount, Buyer shall pay
Seller the difference between such amounts. If the Final Buyer Proration Amount
differs from the Buyer Proration Amount, then a payment shall be made in the
following manner: if the Buyer Proration Amount is greater than the Final Buyer
Proration Amount, Buyer shall refund to Seller the difference between such
amounts; if the Buyer Proration Amount is less than the Final Buyer Proration
Amount, Seller shall pay Buyer the difference between such amount. Such refund
or payment shall be made no later than the third Business Day following the
determination of either such
-33-
Amount in accordance with Section 2.8(b) and/or Section 2.8(c), by wire transfer
in immediately available funds, together with interest thereon for the number of
days from and including the date on which the applicable party received the
payment of the Seller Proration Amount or Buyer Proration Amount, as applicable,
to but excluding the date of such refund or payment, at a rate equal to LIBOR
plus 1%, computed on the basis of actual days elapsed over a 365 day year. The
adjustment pursuant to this Section 2.8(d) shall not be subject to any
holdbacks, escrows or other reductions or restrictions.
3.
ARTICLE III
-----------
Representations and Warranties of Seller
----------------------------------------
Seller hereby represents and warrants to Buyer that except as set
forth in the disclosure schedule delivered by Seller to Buyer prior to the
execution of this Agreement (the "Seller Disclosure Schedule"):
--------------------------
Section 3.1. Incorporation; Authorization; etc. (a) Seller is duly
----------------------------------
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Seller (i) has all requisite corporate power
to own its properties and assets and to carry on its business as it is now being
conducted, and (ii) is in good standing and is duly qualified to transact
business in each domestic jurisdiction in which the nature of property owned or
leased by it or the conduct of its business requires it to be so qualified,
except where the failure to be in good standing or to be duly qualified to
transact business would not, individually or in the aggregate, have a material
adverse effect on the business, assets, results of operations or financial
condition of the Business taken as a whole (the "Business Condition").
------------------
(b) Except as set forth in Section 3.1(b) of the Seller Disclosure
Schedule, each of the Subsidiaries is (i) duly incorporated and validly existing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power to own the properties and assets and to carry on its business as
it is now being conducted and (ii) is in good standing and is duly qualified to
transact business in each jurisdiction in which the nature of property owned or
leased by it or the conduct of its business requires it to be so qualified,
except where the failure to be duly qualified to transact business would not,
individually or in the aggregate, have material adverse effect on the business,
assets, results of operation or financial condition of the applicable Subsidiary
other than with respect to pre-Closing receivables. All such jurisdictions are
set forth in Section 3.1(b) of the Seller Disclosure Schedule.
-34-
(c) Seller has full corporate power and authority to execute and
deliver this Agreement and the other agreements and instruments delivered by
Seller pursuant to this Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the other
agreements and instruments delivered by Seller pursuant to this Agreement and
the performance of Seller's obligations hereunder and thereunder have been duly
and validly authorized by all necessary corporate proceedings on the part of
Seller and no other corporate proceedings on the part of Seller, its board of
directors or stockholders are necessary therefor. The execution, delivery and
performance by Seller of this Agreement and the other agreements and instruments
delivered by Seller pursuant to this Agreement will not (i) violate any
provision of Seller's certificate of incorporation or by-laws, (ii) violate any
provision of any Subsidiary's certificate of incorporation or by-laws or similar
organizational instrument, (iii) except as disclosed in Section 3.1(c) of the
Seller Disclosure Schedule, violate any provision of, or be an event that is (or
with the passage of time will result in) a violation of, or result in the
acceleration of or entitle any party to accelerate (whether after the giving of
notice or lapse of time or both) any obligation the Business is to assume under,
or result in the imposition of any lien upon or the creation of a security
interest in any of the Assets or any of the Subsidiaries' assets or properties
pursuant to, any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment, injunction or decree to which Seller or any of the
Subsidiaries is a party or by which any of them is bound, or (iv) except as
disclosed in Section 3.6(a) or 3.6(b) of the Seller Disclosure Schedule, violate
or conflict with any statute, rule or regulation applicable to Seller or any of
the Subsidiaries or any of their properties or assets or any other material
restriction of any kind or character to which Seller or any of the Subsidiaries
is subject, that, in the case of any of clauses (iii) and (iv), would,
individually or in the aggregate, have a material adverse effect on the Business
Condition or have a material adverse effect on Seller's ability to consummate
the Asset and Stock Purchase. This Agreement and the other agreements and
instruments delivered by Seller pursuant to this Agreement have been duly
executed and delivered by Seller, and, assuming the due execution and delivery
hereof by Buyer, this Agreement and the other agreements and instruments
delivered by Seller pursuant to this Agreement constitutes the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting the rights and remedies of creditors
generally and to general principles of equity (regardless of whether in equity
or at law).
-35-
(d) Upon consummation of the Asset and Stock Purchase at the Closing,
as contemplated by this Agreement, Seller will deliver to Buyer good title to
the Assets (except for Transferred Intellectual Property) and the Subsidiaries'
Shares free and clear of any liens, claims, charges, security interests, options
or other legal or equitable encumbrances, except for Permitted Liens and liens
resulting from actions of Buyer.
Section 3.2. Capitalization; Structure. The authorized and
-------------------------
outstanding capital stock and equity interests of each of the Subsidiaries
consists of the following: (i) Ryder Move Management has 10,000 shares of
common stock, without par value, authorized, all of which is issued and
outstanding and (ii) the Phonebook Company has 100 shares of common stock, par
value $10 per share, authorized, all of which is issued and outstanding. The
authorized and outstanding stock and equity interests of each of the
subsidiaries of Ryder Move Management consists of the following: (i) Ryder
Relocation Services, Inc. has 7,500 shares of common stock, par value $1.00 per
share, authorized, 1,000 shares of which are issued and outstanding and (ii) The
Move Shop, Inc. has 7,500 shares of common stock, par value $1.00 per share,
authorized, 1,000 of which are issued and outstanding. Except as disclosed in
Section 3.2 of the Seller Disclosure Schedule, all of the outstanding shares of
capital stock or other equity interests of each of the Subsidiaries and the
subsidiaries thereof have been validly issued and are fully paid and non-
assessable and are owned by Seller and/or one or more of its subsidiaries free
and clear of all material liens, claims, charges, security interests, options or
other legal or equitable encumbrances. Except as disclosed in Section 3.2 of the
Seller Disclosure Schedule, there are no outstanding options, warrants or other
rights of any kind to acquire, or obligations to issue, shares of capital stock
of any class of, or other equity interests in, any of the Subsidiaries.
Section 3.3. Financial Statements. (a) Attached as Section 3.3(a)
--------------------
of the Seller Disclosure Schedule are true and complete copies of (i) the
unaudited combined balance sheet of the Business as at December 31, 1995, and
unaudited combined statements of income of the Business for the fiscal years
ended 1994 and 1995 (collectively, the "Unaudited Financial Statements") and
------------------------------
(ii) the unaudited combined balance sheet of the Business as at June 30, 1996,
and the related unaudited combined statement of income for the six-month period
ended June 30, 1996 (the "1996 Unaudited Financial Statements"). Within 7
-----------------------------------
Business Days after the date hereof, Seller shall deliver to Buyer the unaudited
combined balance sheet of the Business as at December 31, 1994 (the "1994
----
Unaudited Balance Sheet" and, together with the Unaudited Financial Statements
-----------------------
and the 1996 Unaudited Financial Statements, the "Business Unaudited Financial
----------------------------
Statements"). Except as set forth in Section 3.3(a) of the Seller Disclosure
----------
-36-
Schedule, the Business Unaudited Financial Statements (i) were prepared in
accordance with the Accounting Standard, (ii) present fairly in all material
respects the combined financial position and results of operations of the
Business in accordance with the Accounting Standard, (iii) are complete, correct
and in accordance with the books of account and records of the Business and (iv)
reflect accurately all costs and expenses of the Business, allocating items not
individually accounted for on the Business Unaudited Financial Statements
consistent with past practice and in accordance with the Accounting Standard.
Those Ryder policies and procedures comprising the Accounting Standard, and the
applications of GAAP which they represent, will prevail in any matter concerning
a Business Unaudited Financial Statement so long as they are consistent with
GAAP.
(b) At least 7 days prior to the Closing, Seller shall deliver to
Buyer (i) the audited combined balance sheets of the Business as at December 31,
1994 and 1995, and audited combined statements of income and cash flows for the
years then ended, together with the notes and schedules thereto (collectively,
the "Audited Financial Statements") which shall include among other items a
----------------------------
statement of divisional equity for each of the years then ended, and (ii) the
audited combined balance sheet of the Business as at June 30, 1996, and the
related audited combined statements of income and cash flows for the six month
period ending June 30, 1996, together with the notes and schedules thereto (the
"1996 Audited Financial Statements", which shall include among other items a
---------------------------------
statement of divisional equity for the six months then ended. The Audited
Financial Statements, together with the 1996 Audited Financial Statements, are
referred to herein as the "Business Audited Financial Statements"). Each of the
-------------------------------------
Audited Financial Statements and the 1996 Audited Financial Statements shall be
prepared in accordance with the Accounting Standard and shall be accompanied by
a report of KPMG to the effect that such statements fairly present in all
material respects the financial position and results of operation of the
Business at and for the periods stated therein. Seller shall pay for the audit
fee for the Business Audited Financial Statements.
Except as set forth in Section 3.3(b) of the Seller Disclosure
Schedule, each of the statements of cash flow in the Business Audited Financial
Statements (i) were prepared in accordance with the Accounting Standard, (ii)
present fairly in all material respects the combined cash flows of the Business
in accordance with the Accounting Standard, and (iii) are complete, correct and
in accordance with the books of account and records of the Business. Ryder's
accounting policies and procedures comprising the Accounting Standard and the
applications of GAAP which they represent, will prevail in any matter concerning
a Business Audited Financial Statement so long as they are consistent with
GAAP.
-37-
(c) As promptly as practicable after the date hereof, Seller shall
deliver to Buyer the unaudited combined statement of income of the Business for
the month ended August 31, 1996.
Section 3.4. Properties; Leases. (a) Except as disclosed in Section
------------------
3.4 of the Seller Disclosure Schedule and except for Permitted Liens, Seller or
an entity controlled by Seller has good and marketable title to the Trucks and
the other Assets (other than Intellectual Property and Phrases) free and clear
of all Encumbrances, and holds by valid and existing lease or license each piece
of real or personal property capitalized on or included in the 1996 Unaudited
Financial Statements.
(b) Neither the Seller nor any of the Subsidiaries owns any real
property which relates to the Business. The Assigned Leases and the Shared
Facilities Licenses constitute all real property in which the Seller or any of
the Subsidiaries has a leasehold interest and which are used in connection with
the Business. Except for any of the following that would not reasonably be
expected to have a material adverse effect on the Business Condition, (i) to
Seller's knowledge, neither the whole nor any portion of any property subject to
the Assigned Leases has been condemned, requisitioned or otherwise taken by any
public authority, and no notice of any such condemnation, requisition or taking
has been received or is threatened; (ii) the Assigned Leases are (and as
assigned to Buyer at the Closing, will be) in full force and effect (to Seller's
knowledge) and are (and as assigned to Buyer at the Closing, will be) valid,
binding and enforceable in accordance with their respective terms against
Seller, and to Seller's knowledge, against the other parties thereto, except to
the extent such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting creditors'
rights generally or by general equitable principles; (iii) no amount payable
under any Assigned Lease is past due; (iv) Seller, and to Seller's knowledge
each other party thereto, has complied with all material commitments and
obligations on its part to be performed or observed under each Assigned Lease;
and (v) Seller has not received any notice of a default (which has not been
cured), offset or counterclaim under any Assigned Lease, or to Seller's
knowledge any other communication calling upon Seller to comply with any
provision of any Assigned Lease or asserting non-compliance (which has not been
cured), and to Seller's knowledge, no event or condition has happened or
presently exists which constitutes a default or, after notice or lapse of time
or both, would constitute a default under any Assigned Lease.
Seller has not mortgaged, pledged or otherwise encumbered its interest
in any premises covered by the Assigned Leases, nor has it assigned its interest
under any
-38-
Assigned Lease or sublet all or any portion of any real property which it leases
nor has it granted to any Person any rights to any of the premises covered by
any Assigned Lease or in and to any Assigned Lease, other than the right of any
dealer to occupy any part of the premises covered by the Assigned Leases for the
purpose of operating a store for the Business. Section 3.4 of the Seller
Disclosure Schedule sets forth a complete and correct list of all Assigned
Leases. Except as set forth in Section 3.4 of the Seller Disclosure Schedule,
Seller has (x) delivered to Buyer or its representatives true and complete
originals or copies of all Assigned Leases and (y) a valid leasehold interest in
the Assigned Leases.
Section 3.5. Personal Property. Other than Intellectual Property,
-----------------
Section 3.5 of the Seller Disclosure Schedule includes each item of Personal
Property as of July 31, 1996 having an original purchase cost or aggregate lease
cost exceeding $25,000.
Section 3.6. Litigation; Orders. Except as set forth in Section 3.6
------------------
of the Seller Disclosure Schedule, as of the date hereof there are no lawsuits,
actions, administrative or arbitration or other proceedings pending with respect
to this Agreement and the transactions contemplated hereby. Section 3.6 of the
Seller Disclosure Schedule sets forth a summary as of July 25, 1996 (i) all
lawsuits, actions, administrative or arbitration or other proceedings or
governmental investigations pending or, to Seller's knowledge, threatened
against Seller or any of the Subsidiaries or any of their respective officers,
directors, employees, or Affiliates involving, affecting or relating to the
Business, the Assets or the transactions contemplated by this Agreement, and
(ii) to Seller's knowledge, all lawsuits, actions, administrative or arbitration
or other proceedings against any agent of Seller or any of the Subsidiaries
arising from the Business; provided that, Seller may update Section 3.6 of the
Seller Disclosure Schedule to disclose any lawsuits, actions, administrative or
arbitration or other proceedings or governmental investigations that were
pending or threatened as of July 25, 1996 of which Seller becomes aware after
the date hereof, which are similar to the types initially disclosed in Section
3.6 of the Seller Disclosure Schedule or which occur in the ordinary course of
the Business. Except as disclosed in Section 3.6 of the Seller Disclosure
Schedule, as of the date hereof, there are no judgments or outstanding orders,
injunctions, decrees, stipulations or awards (whether rendered by a court or
administrative agency, or by arbitration) against Seller or any of its
properties or businesses that would reasonably be expected to, individually or
in the aggregate, have a material adverse effect on the Business Condition or
that would have a material adverse effect on Seller's ability to consummate the
Asset and Stock Purchase.
-39-
Section 3.7. Transferred Intellectual Property. Except for any of
---------------------------------
the following that would not reasonably be expected to have a material adverse
effect on the Business Condition, and except as set forth on Section 3.7 of the
Seller Disclosure Schedule, with respect to the Transferred Intellectual
Property and the Licensed Software:
(a) Seller is the owner of the Transferred Intellectual Property and
the Licensed Software free and clear of any Liens or rights of other persons or
has the right to use the same in the conduct of the Business;
(b) to Seller's knowledge no proceedings have been instituted, are
pending or are threatened which challenge any rights in respect of validity of
the Transferred Intellectual Property or the Licensed Software;
(c) to Seller's knowledge none of the Transferred Intellectual
Property or the Licensed Software infringes upon or otherwise violates the
rights of others or is being infringed upon by others, and none is subject to
any outstanding order, decree, judgment, stipulation or charge;
(d) no licenses, sublicenses or agreements granting rights in any of
the Transferred Intellectual Property or the Licensed Software have been granted
or entered into by Seller, which in each case remain in effect, or will be
granted or entered into by Seller other than to Buyer or its designee; and
(e) Seller has not received any notice of interference or infringement
of any of the Transferred Intellectual Property or the Licensed Software.
Neither Seller nor any of the Subsidiaries is obligated to pay any royalties or
make similar payments in respect of the Transferred Intellectual Property or the
Licensed Software.
Section 3.8. Licenses, Approvals, Other Authorizations, Consents,
----------------------------------------------------
Reports, etc. (a) Section 3.8(a) of the Seller Disclosure Schedule includes
-------------
all material licenses, permits, franchises and other authorizations of any
Government Authority possessed by or granted to Seller or any of the
Subsidiaries in connection with the Business (the "Licenses"). Except as
--------
disclosed in Section 3.8(a) of the Seller Disclosure Schedule, all such Licenses
have been validly obtained and are in full force and effect except for those
whose failure to be in full force and effect would not reasonably be expected
to, individually or in the aggregate, have a material adverse effect on the
Business Condition. As of the date hereof, except as disclosed in Section
3.8(a) of the Seller Disclosure Schedule, no proceeding is pending or, to
Seller's knowledge, threatened seeking the revocation or limitation of any such
License that, individually or in the aggregate, would reasonably be expected to
have a
-40-
material adverse effect on the Business Condition. The Business is presently
being conducted in a manner that does not violate in any material respect any of
the terms or conditions under which any License was granted.
(b) Section 3.8(b) of the Seller Disclosure Schedule lists all
registrations, filings, applications, notices, consents, approvals, orders,
qualifications and waivers required to be made, filed, given or obtained by
Seller or any of the Subsidiaries with, to or from any Person in order to
consummate the Asset and Stock Purchase ("Approvals") except for those (i) that
---------
become applicable solely as a result of the specific regulatory status of Buyer
or its Affiliates, or (ii) the failure to make, file, give or obtain which would
not, individually or in the aggregate, either have a material adverse effect on
the Business Condition or have a material adverse effect on Seller's ability to
consummate the Asset and Stock Purchase.
Section 3.9. Labor Matters. Section 3.9 of the Seller Disclosure
-------------
Schedule lists, as of the date hereof, all collective bargaining agreements with
labor unions or associations representing employees of the Division or any of
the Subsidiaries. Except as set forth in Section 3.9 of the Seller Disclosure
Schedule, since September 30, 1994 there has been no material work stoppage
against the Division or any of the Subsidiaries by any Business Employees nor,
to Seller's knowledge, is any such stoppage threatened. Neither the Division
nor any of the Subsidiaries has been involved in or, to Seller's knowledge,
threatened with any collective bargaining dispute, arbitration, lawsuit or
administrative proceeding relating to a collective bargaining matter involving
the employees of the Division or any of the Subsidiaries (excluding routine
workers' compensation claims) that would reasonably be expected to have a
material adverse effect on the Business Condition.
Section 3.10. Employee Benefit Plans. (a) True, correct and
----------------------
complete copies of the following documents with respect to each of the Business
Employee Benefit Plans, to the extent applicable, have been delivered to Buyer
by Seller: (i) the plan and its related trust document or other funding
arrangement, including all amendments thereto, (ii) summary plan descriptions,
(iii) the most recent Forms 5500 filed with the IRS, including all schedules and
actuarial reports, (iv) material written communications to employees and (v)
insurance contracts. Seller does not have any formal plan or commitment which
is legally binding to create any additional plan or modify or change any
Business Employee Benefit Plan, other than changes to comply with applicable
law, that would affect any Business Employee.
(b) None of Seller or any ERISA Affiliate of Seller has incurred any
liability due to the withdrawal of any Business Employee in a complete or
partial withdrawal
-41-
from any plan described in Section 3(37) of ERISA (a "Multiemployer Plan") prior
------------------
to the date hereof, nor have any of them incurred any liability involving the
Business Employees due to the termination or reorganization of a Multiemployer
Plan, in either case which remains unsatisfied as of the date hereof. Buyer will
not have with respect to the Business or any Business Employee or Transferred
Employee, immediately following the Closing, any obligation to make any
contribution to any Multiemployer Plan, or any withdrawal liability from any
Multiemployer Plan, under Section 4201 of ERISA.
(c) The Business Employee Benefit Plans intended to qualify under
Section 401 of the Code are so qualified, and the trusts maintained pursuant
thereto are exempt from federal income taxation under Section 501 of the Code.
(d) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made with respect
to the Business Employees under any of the Business Employee Benefit Plans
(without regard to any waivers granted under Section 412 of the Code) to any
funds or trust established thereunder or in connection therewith have been made
by the date thereof (including any valid extension), and all such contributions
for any period ending on or before the Closing Date which are not yet due will
have been paid or accrued on or prior to the Closing Date. No accumulated
funding deficiencies exist in any of the Business Employee Benefit Plans subject
to Section 412 of the Code.
(e) Except for insurance premiums, neither the Seller nor any ERISA
Affiliate thereof has or reasonably expects to incur any material liability with
respect to the Ryder System, Inc. Retirement Plan prior to the Closing Date to
the PBGC, or any trustee appointed under Section 4042 of ERISA. Neither Seller
nor any ERISA Affiliate thereof has been involved in any transaction that could
reasonably result in Seller or any such ERISA Affiliate being subject to any
material liability with respect to the Ryder System, Inc. Retirement Plan under
Section 4069 of ERISA.
(f) Section 3.10(f) of the Seller Disclosure Schedule lists the
number of employees terminated from each site of employment of the Business in
the 90-day period ending on the date hereof, and the date of each such
termination, with respect to each such termination which would be required to be
taken into account in determining whether a "plant closing" or "mass layoff"
subject to the Worker Adjustment and Retraining Notification Act ("WARN") could
occur based on subsequent terminations; provided, that this sentence shall not
apply with respect to any site of employment at which sufficient employees have
not been employed at any time in such 90-day period for terminations of
employment at such site to be subject to WARN.
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(g) Seller is in substantial compliance with the requirements of
Section 601 et seq. of ERISA, commonly known as "COBRA", with respect to the
------
Business Employees.
Section 3.11. Compliance with Laws; Environmental Matters. (a)
-------------------------------------------
Except for such non-compliance as would not, individually or in the aggregate,
have a material adverse effect on the Business Condition and, except as
disclosed to Buyer by Seller prior to the date hereof, the conduct of the
Business complies in all material respects with all statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto, except for
violations or failures so to comply, if any, that are consistent with the
relevant industry standard. No action or proceeding relating to any such
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees is
pending or, to the knowledge of Seller, threatened, except for such actions and
proceedings as would not, individually or in the aggregate, have a material
adverse effect on the Business Condition.
(b) Section 3.11 of the Seller Disclosure Schedule sets forth
information as to any violation or alleged violation, with respect to any real
property leased by the Business, of any existing federal, state, local or
foreign law or regulation (or order, permit, plan or compliance schedule)
pertaining to environmental protection, including without limitation the
discharge or disposal of air or water pollutants, poisoned waste ▇▇▇▇▇, or the
storage, treatment or disposal of solid or hazardous or toxic substances
(collectively, "Environmental Law") of which the Business has received notice
which would have a material adverse effect on the Business Condition. Except as
disclosed in Section 3.11 of the Seller Disclosure Schedule, the Business is not
currently, and to Seller's knowledge has not been, in material violation of any
such Environmental Law, and, except as set forth in Section 3.11 of the Seller
Disclosure Schedule, the Business is not currently required to incur any
material expenditures for purposes of compliance therewith, except for such
violations, expenditures, or non-compliance, as would not, individually or in
the aggregate, have a material adverse effect on the Business Condition. Seller
has furnished Buyer with copies of all internally prepared or commissioned
environmental studies, assessments or reports in Seller's possession or control
which are specific to the property which is subject to the Assigned Leases.
(c) Except as disclosed in Section 3.11 of the Seller Disclosure
Schedule, to Seller's knowledge, there are no underground storage tanks or above
ground storage tanks located at any real property subject to the Assigned
Leases, nor has Seller used any such property or permitted any such
-43-
property to be used for the maintenance and servicing of vehicles.
(d) Except as disclosed in Section 3.11 of the Seller Disclosure
Schedule, to Seller's knowledge, no asbestos or asbestos containing material is
present at any real property subject to the Assigned Leases.
(e) Except as disclosed in Section 3.11 of Seller's Disclosure
Schedule, to Seller's knowledge, no hazardous substance, pollutant or
contaminant, as defined in any Environmental Law, and no oil, as defined in the
Oil Pollution Act of 1990, 33 U.S.C. (S)2730, was released at any real property
subject to the Assigned Leases at any time when Seller used or occupied such
Property except for such presence which would not now or with the passage of
time require any remediation, removal, corrective action, investigation or
monitoring under any Environmental Law.
Section 3.12. Insurance; Protection Products. (a) Section 3.12(a)
------------------------------
of the Seller Disclosure Schedule lists insurance policies owned or held by
Seller or any Subsidiary on the date hereof, which may cover the Business or any
of the Assets. As of the date hereof, all such policies are in full force and
effect, all premiums with respect thereto covering all periods up to and
including the date hereof have been paid to the extent due, and no notice of
cancellation or termination has been received with respect to any such policy.
The insurance maintained by the Seller and the Subsidiaries in connection with
the Business is adequate in accordance with industry standards and applicable
governmental regulations.
(b) Section 3.12(b) of the Seller Disclosure Schedule lists all
protection products offered as of the date hereof by the Division in connection
with the rental of Trucks by the Division.
Section 3.13. Contracts. Section 3.13 of the Seller Disclosure
---------
Schedule sets forth a complete and correct list of all Contracts, other than
those Contracts that either (i) are terminable within 100 days without penalty
or (ii) do not require certain future payment of an aggregate amount during the
term thereof which is more than $100,000; provided that, if after the date
hereof Seller becomes aware of a Contract that was not, but should have been,
set forth in Section 3.13 of the Seller Disclosure Schedule, Seller may add such
Contract thereto, provided however, Buyer shall have no obligation to accept
assignment of any such Contract. Except as set forth in Section 3.13 of the
Seller Disclosure Schedule, no Contract contains any provision which creates, or
purports to create, or subjects Seller or any of its Affiliates to, any
restriction on any business activity that may be conducted by Seller or any of
its Affiliates through non-competes, exclusive dealing ar-
-44-
rangements or minimum or "requirements" purchase arrangements (collectively, the
"Restrictive Provisions"), other than any Contract to which subclause (i) of the
----------------------
first sentence of this Section 3.13 pertains if the Restrictive Provision does
not survive the term thereof, and other than contracts disclosed in Section 3.13
of the Seller Disclosure Schedule. Seller has delivered to the Buyer or its
representatives true and complete originals or copies of all written Contracts
set forth in Section 3.13 of the Seller Disclosure Schedule. Except as disclosed
in Section 3.13 of the Seller Disclosure Schedule, such Contracts are valid and
binding and enforceable against Seller, and to Seller's knowledge against the
other parties thereto, except to the extent such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting creditor's rights generally or by general equitable principles and
Seller is not, and to Seller's knowledge the other parties thereto are not, as
of the date hereof, in material breach thereof or material default thereunder
and there does not exist under any provision thereof, to Seller's knowledge, as
of the date hereof, any event that, with the giving of notice or the lapse of
time or both, would constitute such a breach or default, except for such
failures to be valid and binding and such breaches, defaults and events as to
which requisite waivers or consents have been or are obtained or which would
not, individually or in the aggregate, have a material adverse effect on the
Business Condition.
Section 3.14. Undisclosed Liabilities. Except (a) as disclosed in
-----------------------
the Seller Disclosure Schedule, (b) for Retained Liabilities, (c) as reflected,
reserved against or otherwise disclosed in the 1996 Audited Financial Statements
(including the notes thereto) at June 30, 1996, and (d) as incurred or accrued
in the ordinary course of business, consistent with past practice, subsequent to
June 30, 1996 and prior to the Closing Date, the Business does not have any
liabilities or obligations that (i) would be required to be reflected on a
combined statement of net assets (or required to be disclosed in the notes
thereto) prepared in accordance with the Accounting Standard, and (ii) would
have a material adverse effect on the Business Condition. Ryder's policies and
procedures comprising the Accounting Standard, and the applications of GAAP
which they represent, will prevail so long as they are consistent with GAAP.
Section 3.15. Brokers, Finders, etc. Seller has not employed any
----------------------
broker, finder, consultant or other intermediary in connection with the Asset
and Stock Purchase who would have a valid claim for a fee or commission from
Buyer in connection with such transactions.
Section 3.16. Absence of Certain Changes or Events. Except as set
------------------------------------
forth in Section 3.16 of the Seller Disclosure Schedule, since June 30, 1996 (i)
there has not
-45-
been any material adverse change in the business, assets, financial condition,
or results of operations of the Business, taking into account the seasonality of
the Business; and (ii) the Seller and its Subsidiaries have operated the
Business in the ordinary course of business consistent with past practices.
Section 3.17. Operation of the Business; Sufficiency of Assets.
------------------------------------------------
Except as set forth in Section 3.17 of the Seller Disclosure Schedule, the
Seller during the 24 months prior to the date hereof has conducted the Business
only through the Division and the Subsidiaries and not through any other
divisions or direct or indirect subsidiaries or Affiliates of the Seller, and no
part of the Business is operated by the Seller through any Person other than the
Seller and the Subsidiaries and the Dealers. The Assets, together with the
services and arrangements to be entered into pursuant to the Ryder Dealer
Agreement, the Used Truck Sales Agreement, the Administrative Services
Agreement, the Maintenance Agreement, the MIS Support Agreement, Trademark
License Agreement, Copyright License Agreement, Patent License Agreement, the
Office Sublease Agreement, the Shared Facility Licenses, the Assigned Contracts
and the Assigned Leases, are sufficient for the operation of the Business as it
is currently being conducted in all material respects; provided however that
nothing in this sentence shall constitute a representation as to the sufficiency
of any intellectual property (except software) or the effect on the Business of
any Purchasing Arrangement not being available to the Buyer.
The patents assigned to Buyer pursuant to the Patent Assignment are
all patents which (a) Seller or any of its Affiliates owns or has a license to
use, (b) which Seller uses in the Business and (c) in each case whose use is
material to the Business.
The trademarks licensed under the Trademark License Agreement and the
trademarks assigned to Buyer pursuant to the Trademark Assignment constitute all
registered Trademarks which (a) Seller or any of its Affiliates owns, (b) Seller
uses in the Business and (c) in each case whose use is material to the Business,
other than any trademark which is or includes "Ryder".
The copyrights licensed to Buyer under the Copyright License Agreement
constitute all of the copyrights for printed promotional materials which (a)
Seller or any of its Affiliates uses in the Business and (b) in each case whose
use is material to the Business.
Section 3.18. Customers, Suppliers and Dealers. Section 3.18 of the
--------------------------------
Seller Disclosure Schedule includes complete and correct lists of (a) all
customers of the Business
-46-
who have made aggregate purchases in excess of 1% of aggregate total Division
revenue in 1995, setting forth the aggregate dollar volume of purchases with
respect to such fiscal year, (b) all suppliers from whom the Business purchased
in excess of $1,000,000 of its equipment or supplies in 1995, setting forth the
aggregate dollar volume of purchases (broken down by principal categories) by
the Business from such suppliers for such fiscal year and (c) the top ten
Dealers setting forth the aggregate dollar volume of sales made during such
fiscal years. Except as set forth in Section 3.18 of the Seller Disclosure
Schedule, as of the date hereof, none of such customers, suppliers or dealers
has since December 31, 1995 terminated or changed significantly, or, to Seller's
knowledge without inquiry, intends to terminate or change significantly, its
relationship with the Business.
Section 3.19. Transfer of Assets. Except as set forth in Section
------------------
3.19 of the Seller Disclosure Schedule, Seller has not (i) since June 30, 1996
transferred any assets of the Division to any other division, or Affiliate, of
Seller, which assets would be Personal Property, Trucks, or Towing Equipment if
not so transferred or (ii) entered into, or established, any contract or
arrangement with any other such division or such Affiliate which restricts the
transfer, or usage, of any Assets.
Section 3.20. Schedules and Exhibits. Disclosure of any fact or item
----------------------
in any Schedule or Exhibit hereto referenced by a particular paragraph or
section in this Agreement shall, if it is reasonably apparent that the fact or
item or its content is applicable to any other paragraph or section, be deemed
to be disclosed with respect to that other paragraph or section whether or not
an explicit cross-reference appears.
SECTION 3.21. NO IMPLIED REPRESENTATION. SUBJECT TO THE PROVISIONS
-------------------------
OF ARTICLE II, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT SELLER IS
MAKING NO REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND
THOSE EXPRESSLY GIVEN IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY
IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY, SUITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE AS TO ANY OF THE ASSETS AND IT IS UNDERSTOOD
THAT, EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY GIVEN, AND
LIABILITIES ALLOCATED AS RETAINED LIABILITIES, IN THIS AGREEMENT, BUYER TAKES
ALL ASSETS ON AN "AS IS" AND "WHERE IS" BASIS. IT IS UNDERSTOOD THAT ANY COST
ESTIMATES, PROJECTIONS OR OTHER PREDICTIONS CONTAINED OR REFERRED TO IN THE
SCHEDULES HERETO AND ANY COST ESTIMATES, PROJECTIONS OR PREDICTIONS OR ANY OTHER
INFORMATION CONTAINED OR REFERRED TO IN OTHER MATERIALS THAT HAVE BEEN OR SHALL
HEREAFTER BE PROVIDED TO BUYER OR ANY OF ITS AFFILIATES, AGENTS OR
REPRESENTATIVES ARE NOT AND SHALL NOT BE DEEMED TO BE REPRESENTATIONS OR
WARRANTIES OF SELLER.
-47-
Section 3.22. Construction of Certain Provisions. It is understood
----------------------------------
and agreed that neither the specification of any dollar amount in the
representations and warranties contained in this Agreement nor the inclusion of
any specific item in the schedules, the Seller Disclosure Schedule or the
Exhibits is intended to imply that such amounts or higher or lower amounts, or
the items so included or other items, are or are not material, and neither party
shall use the fact of the setting of such amounts or the fact of the inclusion
of any such item in the Schedules or Exhibits in any dispute or controversy
between the parties as to whether any obligation, item or matter is or is not
material for purposes hereof.
Section 3.23. Quantity and Maintenance of Trucks. As of June 30,
----------------------------------
1996, Seller owned at least 33,000 Trucks. Since such date, Seller has
maintained the Trucks in accordance with its ordinary course of business
consistent with past practice, unless and until sold to third parties in the
ordinary course of business.
Section 3.24. Knowledge Regarding Representations. Seller does not
-----------------------------------
know of any inaccuracy or misstatement in, or material breach of, any
representation or warranty of Buyer contained herein.
4.
ARTICLE IV
----------
Representations and Warranties of Buyer
---------------------------------------
Buyer hereby represents and warrants to Seller as follows:
Section 4.1. Incorporation; Authorization; etc. Buyer is a
----------------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation. Buyer has full corporate power to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance of Buyer's obligations hereunder and the
consummation of the transactions contemplated hereby by Buyer have been duly and
validly authorized by the board of directors of Buyer and no other corporate
proceedings on the part of Buyer, its board of directors or stockholders are
necessary therefor. The execution, delivery and performance of this Agreement
and the other agreements and instruments delivered by Buyer pursuant to this
Agreement will not (i) violate any provision of the charter or by-laws or
similar organizational instrument of Buyer, (ii) violate any provision of, or be
an event that is (or with the passage of time will result in) a violation of, or
result in the acceleration of or entitle any party to accelerate (whether
-48-
after the giving of notice or lapse of time or both) any obligation under, or
result in the imposition of any lien upon or the creation of a security interest
in any of Buyer's assets or properties pursuant to, any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment, injunction or decree
to which Buyer is a party or by which Buyer is bound, or (iii) violate or
conflict with any statute, rule or regulation applicable to Buyer, or any of its
properties or assets or any other material restriction of any kind or character
to which Buyer is subject, that, in the case of clauses (ii) and (iii), would,
individually or in the aggregate, have a material adverse effect on the assets
or financial condition of Buyer or would have a material adverse effect on
Buyer's ability to consummate the Asset and Stock Purchase. This Agreement and
the other agreements and instruments delivered by Buyer pursuant to this
Agreement have been duly executed and delivered by Buyer, and, assuming the due
execution hereof by Seller, this Agreement and the other agreements and
instruments delivered by Buyer pursuant to this Agreement constitute the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the rights and remedies of
creditors generally and to general principles of equity (regardless of whether
in equity or at law).
Section 4.2. Brokers, Finders, etc. Buyer has not employed, and is
----------------------
not subject to the valid claim of, any broker, finder, consultant or other
intermediary in connection with the transactions contemplated hereby who would
have a valid claim for a fee or commission from Seller in connection with such
transactions.
Section 4.3. Licenses, Approvals, Other Authorizations, Consents,
----------------------------------------------------
Reports, etc. Schedule 4.3 contains a list of all registrations, filings,
-------------
applications, notices, consents, approvals, orders, qualifications or waivers
required to be made, filed, given or obtained by Buyer with, to or from any
Person in connection with the consummation of the Asset and Stock Purchase
except for those (i) that become applicable solely as a result of the specific
regulatory status of Seller or (ii) the failure to make, file, give or obtain
which would not, individually or in the aggregate, either have a material
adverse effect on the assets or financial condition of Buyer or have a material
adverse effect on Buyer's ability to consummate the Asset and Stock Purchase.
Section 4.4. Opportunity to Investigate. Buyer has such knowledge
--------------------------
and experience in financial and business matters that it is capable of
evaluating the merits and risks of its purchase of the Business and the Assets.
Buyer confirms that Seller has made available to Buyer the
-49-
opportunity to ask questions of the officers and management of Seller and to
acquire information about the business and financial condition of the Business.
Section 4.5. Financial Capability. Buyer has delivered to Seller
--------------------
complete and correct copies of (i) a commitment letter addressed to Buyer from
each of The Chase Manhattan Bank ("Chase") and Citicorp, U.S.A., Inc. (together
-----
with Chase, the "Banks") for the aggregate amount of up to $500 million in
-----
senior bank financing and a commitment letter addressed to Buyer from Chase and
one of its Affiliates for $100 million in senior subordinated financing (the
financings to be provided pursuant to commitments delivered pursuant to this
subclause (i) being referred to herein as, the "Bank Financing"), (ii) a
--------------
commitment letter addressed to Seller from Questor Partners Fund, L.P.
("Questor") and Madison Dearborn Capital Partners, L.P. ("Madison" and, together
------- -------
with Questor and any other equity investors, the "Funds") for up to $125 million
-----
of equity financing (the "Equity Financing Commitment" and together with the
---------------------------
Bank Financing Commitments, the "Financing Commitments"). Buyer, based on
---------------------
conditions that are now prevailing and that have been brought to Buyer's
attention, knows of no circumstance or condition that it expects will prevent
the availability at the Closing of the requisite financing to consummate the
transactions contemplated by this Agreement on the terms set forth herein, as
provided in the Financing Commitments. The equity contributed to Buyer by the
Funds at Closing will be not less than $125 million (except as permitted by the
Banks).
Section 4.6. No Outside Reliance. Buyer has not relied and is not
-------------------
relying upon any statement or representation not made in this Agreement, the
schedules, the exhibits, the Seller Disclosure Schedule, the Trademark License
Agreement, Software License Agreement, Maintenance Agreement, Administrative
Services Agreement, Copyright License Agreement, Used Truck Sales Agreement,
Ryder Dealer Agreement, MIS Support Agreement, Office Sublease Agreement, Patent
License Agreement, Vehicle Nominee Title Agreement or any Shared Facility
License or any certificate to be delivered to Buyer at the Closing.
Section 4.7. Knowledge Regarding Representations. Buyer does not
-----------------------------------
know of any inaccuracy or misstatement in, or material breach of, any
representation or warranty of Seller contained herein.
5.
ARTICLE V
---------
Covenants of Seller and Buyer
-----------------------------
Section 5.1. Investigation of Business. After the date hereof,
-------------------------
Seller shall, and shall cause the Sub-
-50-
sidiaries to, afford to representatives (including Buyer's financing sources for
the transactions contemplated by this Agreement) of Buyer reasonable access to
their respective offices, properties, books, records and the Trucks during
normal business hours, in order that Buyer may have full opportunity to make
such investigations as it desires of the affairs of the Business; provided,
--------
however, that such investigation shall be upon reasonable notice and shall not
-------
unreasonably disrupt the personnel and operations of Seller or the Subsidiaries
or the Business and such investigation shall not include access to any item
relating to the business of the Seller or the Subsidiaries other than the
Business. All requests for access to the offices, plants, properties, books,
records and Trucks relating to the Business shall be made to such
representatives of Seller as Seller shall designate, who shall be solely
responsible for coordinating all such requests and all access permitted
hereunder.
It is further understood and agreed that neither Buyer nor its
representatives shall contact any of the employees, customers, bankers,
contractors, suppliers, joint venture partners, dealers, or Affiliates of
Seller, in connection with the transactions contemplated hereby, whether in
person or by telephone, mail or other means of communication, without the
specific prior authorization of such representatives of Seller as Seller may
designate. If, as of the date hereof or at any time hereafter Buyer or Seller
learns of or discovers any material breach of the other party of any
representation or warranty contained in this Agreement or any circumstance or
condition that upon Closing would constitute such a breach, such party covenants
that it will promptly so inform the other party in writing.
Section 5.2. Efforts; Obtaining Consents; Antitrust Laws. (a)
-------------------------------------------
Subject to the terms and conditions herein provided, Seller and Buyer each agree
to use all reasonable efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable, the transactions contemplated
hereby, and to cooperate with the other in connection with the foregoing,
including using all reasonable efforts (i) to obtain all necessary waivers,
consents and approvals from other parties to the Assigned Leases and other
agreements described in Section 9.6 below and, at the request of Buyer (but not
requiring payment, other than de minimus processing fees, for waivers, consents
or approvals), any other Contract, (ii) to obtain all consents, approvals and
authorizations that are required to be obtained under any federal, state, local
or foreign law or regulation, (iii) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
hereto to consummate the transactions contemplated hereby, (iv) to effect all
necessary registrations and filings including, but not
-51-
limited to, filings under the HSR Act and submissions of information requested
by any Government Authority, and (v) to fulfill all conditions to this
Agreement; provided that obtaining any such consent (other than with respect to
the Assigned Leases, software agreements and contracts listed in Schedules
9.6(a) and (b) hereto) shall not be a condition to Closing. Seller and Buyer
further covenant and agree, with respect to any threatened or pending
preliminary or permanent injunction or other order, decree or ruling or statute,
rule, regulation or executive order that would adversely affect the ability of
the parties hereto to consummate the transactions contemplated hereby, to
respectively use all reasonable efforts to prevent the entry, enactment or
promulgation thereof, as the case may be.
In furtherance and not in limitation of the foregoing, Buyer shall use
all reasonable efforts to resolve such objections, if any, as may be asserted
with respect to the transactions contemplated hereby under any Antitrust Law.
(b) Each party hereto shall promptly inform the other of any material
communication from the Federal Trade Commission, the United States Department of
Justice or any other Government Authority regarding any of the transactions
contemplated hereby. If either party or any Affiliate thereof receives a
request for additional information or documentary material from any such
Government Authority with respect to the transactions contemplated hereby, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request. Buyer will advise Seller
promptly in respect of any understandings, undertakings or agreements (oral or
written) which Buyer proposes to make or enter into with the Federal Trade
Commission, the United States Department of Justice or any other Government
Authority in connection with the transactions contemplated hereby.
Section 5.3. Further Assurances. Seller and Buyer agree that, from
------------------
time to time, whether before, at or after the Closing Date, each of them will,
and will cause their respective Affiliates to, execute and deliver such further
assignments, bills of sale, certificates of title and other instruments of
conveyance and transfer and take such other action as may be necessary to carry
out the purposes and intents hereof or as may be reasonably required for
assigning, transferring, granting, conveying and confirming to Buyer or its
successors and assigns any or all of the Assets.
Section 5.4. Conduct of Business. From the date hereof to the
-------------------
Closing, except as disclosed in Section 5.4 of the Seller Disclosure Schedule or
otherwise provided for in,
-52-
or contemplated by, this Agreement, and, except with the written consent of
Buyer, which consent (other than with respect to subclause (c) of this Section
5.4) shall not be unreasonably withheld, Seller covenants and agrees (in each
case with respect to the Business) that it shall not, and shall cause the
Subsidiaries not to:
(a) make any material change in the conduct of the Business or enter
into any material transaction other than in the ordinary course of business
consistent with past practice;
(b) except in the ordinary course of business consistent with past
practice, make any material loans, advances or capital contributions to or
investments in, any Person (except for customary loans or advances to
employees);
(c) except in the ordinary course of business consistent with past
practice, or as required by law or contractual obligations or other
understandings or arrangements existing on the date hereof, (i) increase in any
manner the base compensation of, or enter into any new bonus or incentive
agreement or arrangement with, any Listed Employees, (ii) pay or agree to pay
any pension, retirement allowance or similar employee benefit to any Listed
Employee, (iii) enter into any new employment, severance, consulting, or other
compensation agreement with any Listed Employee, or (iv) commit the Business or
Seller or any part thereof to any additional pension, profit-sharing, deferred
compensation, group insurance, severance pay, retirement or other employee
benefit plan, fund or similar arrangement or amend or commit itself to amend any
of such plans, funds or similar arrangements in existence on the date hereof
with respect to any Listed Employee; provided, however, that the provisions set
forth in this Section 5.4(c) shall not apply to any person who is not a
Transferred Employee or to any of the Stay-on Arrangements;
(d) except in the ordinary course of business consistent with past
practice, or as required by law or contractual obligations existing on the date
hereof, (i) sell, transfer or otherwise dispose of any of Assets, (ii) enter
into any joint venture or partnership or (iii) purchase any assets or securities
of any Person;
(e) subject any of the Assets to any lien, pledge, security interest
or other encumbrance (a "Lien"), or suffer such to exist, other than a Permitted
----
Lien;
(f) make or commit to make any capital expenditure with respect to the
Business in excess of the remaining balance of the planned capital expenditures
under the Business's 1996 capital expenditure budget;
-53-
(g) fail to keep in full force and effect insurance (including
casualty and public liability policies) comparable in amount, scope and coverage
maintained in respect of the Business as of the date hereof;
(h) knowingly take any action that would cause any of the
representations and warranties made by Seller in this Agreement not to remain
true and correct;
(i) make any change in any method of accounting or accounting
principle, method, estimate or practice except for any such change required by
reason of a concurrent change in GAAP which Seller has disclosed to Buyer;
(j) modify, amend in any material respect or terminate any Contract
listed in Section 3.13 of the Seller Disclosure Schedule, or make or enter into
any new Contract, bid or expenditure with respect to the Business where such
Contract, bid or expenditure is for (A) a Contract which at execution requires
committed, certain future payments by the Business in excess of $100,000 in the
aggregate or (B) a Contract which is not terminable within 100 days;
(k) make, enter into, modify or amend in any material respect any
Assigned Leases;
(l) settle, release or forgive any claim or litigation or waive any
right thereto which relates to the Assets (other than any claim or litigation
which is a Retained Liability); or
(m) agree to take any action prohibited by this Section.
Notwithstanding the provisions of this Section, nothing in this
Agreement shall be construed or interpreted to prevent the Business from (i)
paying or making regular or special dividends or other distributions consisting
of cash or marketable securities or any combination thereof, (ii) making or
accepting inter- or intra-company advances to or from Seller or any Affiliate of
Seller on an unsecured basis, or (iii) engaging in any transaction incident to
the normal cash management procedures of Ryder System, Seller or the Business,
including short-term investments in bank deposits, money market instruments,
time deposits, certificates of deposit and bankers' acceptances and borrowings
on an unsecured basis for working capital purposes and purposes of providing
additional funds to the Business in the ordinary course of business.
Section 5.5. Preservation of Business. Subject to the terms and
------------------------
conditions hereof, Seller shall, and shall cause the Subsidiaries to:
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(a) use reasonable efforts to preserve the business of the Business
intact, to keep available to the Business the services of the employees and
dealers of the Business and to preserve the good will of customers and others
having business relations with the Business;
(b) continue to maintain, in all material respects, the Assets in
accordance with present practice in a condition suitable for their current use;
(c) file, when due or required, national, state and other Tax Returns
required to be filed and pay when due all Taxes, unless the validity thereof is
contested in good faith and by appropriate proceedings diligently conducted;
(d) maintain all files and records with respect to the Business
in the ordinary course consistent with past practice;
(e) notify Buyer promptly following the date of any notice or other
communication received from any Governmental Authority in connection with the
transactions contemplated by this Agreement and the other agreements entered
into by Seller in connection with the transactions contemplated by this
Agreement; and
(f) consult with Buyer regarding, and afford Buyer the opportunity to
participate in, negotiations of the 1997 Vehicle Trade and Body Package which
occur after the date hereof.
Section 5.6. Public Announcements. From the date hereof until the
--------------------
Closing Date, Seller and Buyer will consult with each other before issuing, or
permitting any agent or Affiliate to issue, any press releases or otherwise
making or permitting any agent or Affiliate to make, any public statements with
respect to this Agreement and the transactions contemplated hereby.
Section 5.7. Sublease. Seller shall make a good faith effort to
--------
obtain a consent from the landlord of Seller's facility located at Royal Palm
Executive Center to permit Seller to enter into the Office Sub-lease Agreement.
If Seller is able to obtain such consent, Seller and Buyer shall negotiate in
good faith the Office Sub-lease Agreement.
Section 5.8. Bulk Sales Laws. Buyer hereby waives compliance by
---------------
Seller, in connection with the transactions contemplated hereby, with the
provisions of any applicable bulk sales or bulk transfer law. Seller agrees to
indemnify and hold Buyer harmless from any Claims relating to the failure to
comply with such laws.
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Section 5.9. Insurance. If so requested by Buyer, Seller shall,
---------
prior to the Closing Date, use Seller's reasonable efforts to assist Buyer, at
Buyer's expense pursuant to the next sentence, in securing insurance coverage
and Protection Products with respect to the Business from Seller's insurance
carriers. Buyer shall reimburse Seller for Seller's out-of-pocket expenses
incurred in connection with so assisting Buyer, promptly after invoicing
thereof.
Section 5.10. Non-Solicitation. (a) For a period commencing on the
----------------
date hereof and ending on the second anniversary of the Closing Date, Seller
covenants that Seller shall not solicit or induce or attempt to solicit or
induce any Listed Employee (other than those Listed Employees set forth in the
Employee Notices to be delivered to Seller by Buyer pursuant to Section 7.3) to
continue employment with Seller or accept employment with any Affiliate of
Seller; provided, however that neither advertising of employment positions nor
post-closing contact of a Listed Employee by a contracted head hunter who is not
told to target one or more Listed Employees, nor a contact initiated post-
closing by a Listed Employee regarding employment shall be considered
"solicitation" or "inducement" or an attempt to do so.
(b) Seller agrees that from the date hereof until any date on which
this Agreement is terminated in accordance with Section 12.1, Seller shall not,
directly or indirectly, through any officer, director, agent, financial advisor
or otherwise, (a) solicit, initiate or encourage the submission of proposals or
offers from any Person relating to any acquisition or purchase of any equity
interest in, or all or a substantial portion of the properties or assets held
for use in connection with, necessary for the conduct of, or otherwise material
to, the Business or the Assets or enter into any agreement with respect to the
foregoing, or (b) participate in any negotiations or discussions regarding, or
furnish or cause to be furnished to any other Person any non-public information
with respect to, or otherwise cooperate in any way with, or assist or
participate in, or facilitate or encourage, any effort or attempt by any other
Person to do or seek any of the foregoing.
Section 5.11. Inter- and Intra-company Accounts. Effective as of the
---------------------------------
time immediately prior to the Closing, all intra-company receivables, payables,
amounts accrued with respect to repairs in process and loans then existing
between Seller, on the one hand, and the Business, on the other hand, shall be
settled.
Section 5.12. Sale of Certain Trucks. Buyer shall not sell any of
----------------------
the Trucks set forth on Schedule 5.12 (which Schedule may be updated to add
Trucks from time to time by Seller any time prior to or after Closing to add
thereto Trucks which may be required to be produced as
-56-
evidence in connection with any Action or litigation; provided that the total
number of Trucks set forth on Schedule 5.12 shall not exceed 50 Trucks) unless
Buyer notifies Seller of Buyer's intention to sell any such Truck and provides
Seller the opportunity, which Buyer shall hold available for at least ten
Business Days, to purchase such Truck at its then fair market value. Nothing
herein shall limit Buyer's right to use any Truck listed on Schedule 5.12.
6.
ARTICLE VI
----------
Additional Agreements
---------------------
Section 6.1. Collection of Payments. Following the Closing Date,
----------------------
except as otherwise provided in this Agreement or the Service Agreements, (a)
Buyer shall employ all reasonable good faith efforts to timely collect the
accounts receivable for the Business, which are Excluded Assets; provided that
Seller indemnifies and holds Buyer harmless with respect to any liabilities and
obligations arising out of Buyer's good faith efforts to so collect such
accounts receivable; provided further that Buyer shall have no obligation to
commence any Action or litigation with respect to such collections; provided
further that Buyer shall have no obligations to use its own funds to so collect
such accounts receivable and Seller shall reimburse Buyer for any out-of-pocket
expenses incurred by Buyer with respect to any such collections of such accounts
receivable, (b) Buyer shall forward to Seller any payments received by Buyer
that Seller is entitled to pursuant to the terms of this Agreement and Seller
shall forward to Buyer any payments received by Seller that Buyer is entitled to
pursuant to the terms of this Agreement, in each case within one week of receipt
of any such payment by Buyer or Seller, as the case may be, and (c) Buyer shall
promptly deliver to Seller any mail or other communications received by Buyer
relating to the Excluded Assets and Retained Liabilities and Seller shall
promptly deliver to Buyer any mail or other communications received by Seller
relating to the Assets or the Assumed Liabilities.
Section 6.2. Competition. For the purposes of this Section 6.2 the
-----------
defined terms One-Way Consumer Rental Business, Local Consumer Rental Business,
and Light Commercial Rental Business shall be deemed to not be restricted to
Trucks but rather shall be applicable to the utilization of any trucks to
conduct such activities.
(a) Seller covenants that for a period of ten years from Closing (and
if, except pursuant to (b) below, Buyer does not engage, through a Buyer
Affiliate or otherwise, in Leasing or in Heavy Duty Truck Rentals, then through
a further period ending no more than two (2) years
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following the end of the term of the Trademark License Agreement) (the "Seller
------
NonCompete Period"), without the prior written consent of Buyer, Seller shall
-----------------
not (i) except as a dealer under the Ryder Dealer Agreement, engage, through an
Affiliate or otherwise, in the One-Way Consumer Rental Business or the One-Way
Light Commercial Rental Business, (ii) advertise in any distribution medium,
including but not limited to, the yellow pages, television, radio, internet or
its equivalent or periodical or post office brochure, by mailer or by outdoor
signage, whether on billboards or on trucks, expressly with respect to the Local
Consumer Rental Business or (iii) engage in the Local Consumer Rental Business
through franchisees or other third party dealers or agents or otherwise than
through locations operated by Seller or Affiliates controlled by Seller. Nothing
in the preceding sentence or otherwise shall preclude Seller or any of its
Affiliates from (i) engaging in the Local Light Commercial Rental Business, or
(ii) engaging in the Local Consumer Rental Business except as restricted by the
preceding sentence. As used in this Section 6.2(a), the term "engage" shall mean
to engage, directly or indirectly in any such business (whether as a stockholder
(other than an investment of up to 5% of the outstanding publicly traded shares
of any company), partner, joint venturer, financing source (other than financing
of trucks, tractors or towing equipment) or consultant or in any other capacity
whatsoever). For purposes of this Section 6.2(a) it is understood and agreed
that a rental which is picked up by a customer at one office and dropped off at
another office which is within thirty-five miles of the pick-up office
constitutes Local Consumer Rental Business, rather than One-Way Consumer Rental
Business.
(b) In the event that during the Seller NonCompete Period Seller
purchases or otherwise combines with any entity which participates in (i) the
One-Way Consumer Rental Business or One-Way Light Commercial Rental Business or
(ii) the Local Consumer Rental Business (as to (i) and (ii) combined, producing
revenue in the prior calendar year of not more than thirty percent (30%) of the
total revenues of such entity) and Seller is the controlling entity following
such purchase or combination, Seller shall not be deemed in breach of its
covenant set forth in Section 6.2(a) if Seller operates such businesses provided
that Seller (1) does not operate such businesses under a name that includes the
name Ryder and (2) divests or liquidates such businesses within 12 months
following the consummation of such purchase or combination. Seller will advise
Buyer if Seller offers any such business for sale.
(c) Seller covenants that if and so long as Buyer (i) furnishes to
branches of Seller such number of Trucks that there is a daily average
(calculated on a rolling four calendar quarters in arrears basis) of 2,600
ready-to-rent trucks of the Business at all branches of Seller who act as
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Dealers (and the daily average measured on a month by month basis does not vary
more than twenty percent (20%) from one month to another); provided that if any
Dealer locations are terminated, the parties hereto will reduce such number of
ready-to-rent trucks to take into account the Dealer locations that are
terminated, and (ii) Buyer does not open any new Dealers within a two-mile
radius of any branch of Seller, then Seller agrees that its fleet of trucks
having a manufacturer's gross vehicle weight rating of 16,000 pounds or less
will not exceed 6,500 in 1997 or 7,500 in 1998. If Buyer has a current Dealer
or Dealers located within the two-mile radius as referred in (ii) above and such
Dealer or Dealers are closed for any reason, Buyer may replace such pre-existing
dealer within the prescribed radius with a new dealer, without affecting this
contract term. It is understood, however, that if as to any given quarter the
Average Four Quarter Revenue per Truck calculated with respect to Buyer's trucks
rented during the previous four calendar quarters at all Ryder branches acting
as dealers for Buyer ("Branch RPU") is less than the Average Four Quarter
Revenue per Truck in Buyer's fleet during the same previous four quarters
("Buyer RPU"), then the Daily Average Number of ready-to-rent trucks to be
furnished by Buyer pursuant to (i) above in that quarter shall be reduced by
such number of trucks as would be mathematically necessary to cause such Branch
RPU to equal such Buyer RPU assuming the aggregate dollars of revenue in the
calculation of Branch RPU is held constant.
(d) Buyer covenants that until the earlier of (i) the date on which
the Trademark License Agreement terminates for any reason or (ii) the date by
which Buyer shall have both irrevocably renounced all rights to use trademarks
which include the "Ryder" name and ceased using such name in the conduct of its
Business (and if, except through (e) below, Seller does not engage, through a
Seller Affiliate or otherwise, in the One-Way Consumer Rental Business or One-
Way Light Commercial Rental Business, then through a further period ending no
more than one (1) year thereafter (the "Buyer Non Compete Period")), without the
prior written consent of Seller, Buyer shall not conduct any of the Specified
Businesses (as defined below), (i) directly, or (ii) through any Person which
Buyer (A) can control in any manner the election of a majority of the directors
or, with respect to non-corporate entities, persons performing similar
governance functions, or (B) owns equity interests representing 50% or more of
the total outstanding economic interests in such Person (each, a "Controlled
Entity"), or (iii) through a Person which controls Buyer or through an Affiliate
other than a Controlled Entity or a Person which controls Buyer, provided that,
in the case of this clause (iii), Buyer shall not be considered to be conducting
a Specified Business, if such Person or Affiliate does not conduct the Specified
Business through a common location, common employee, common telephone or data
line, a common
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name or ▇▇▇▇, or common marketing with Buyer. As used herein the term "Specified
Business" shall mean Leasing or providing Heavy Duty Truck Rentals; provided,
that Leasing shall not include (1) Leasing trucks (under 26,000 GVW) to dealers
for use by such dealers in a Rental business if the truck does not bear a ▇▇▇▇
which includes "Ryder" and the dealer does not use such ▇▇▇▇ when conducting
business with respect to the truck, or (2) any Leasing undertaken between Buyer
and its Controlled Entities or among Controlled Entities of the Buyer.
If (A) Buyer at any time during the Buyer NonCompete Period commits a
willful and material breach of its agreement set forth in the previous
paragraph, or (B) during the term of any Service Agreement (i) Buyer becomes a
controlled person of any of the Persons set forth on Schedule 6.2(d) hereto,
(ii) Buyer becomes a dealer of any such Person or any Affiliate thereof
(provided Buyer has actual knowledge of such affiliation and such Affiliate
shares such Person's name and engages in Leasing, providing Heavy Duty Truck
Rental or integrated logistics services (a "Named Affiliate")), (iii) any Person
set forth on Schedule 6.2(d) hereto or any Named Affiliate thereof becomes a
controlled person of Buyer, (iv) any such Person or any Named Affiliate thereof
becomes a Dealer, or (v) Buyer and such Person or any Named Affiliate thereof
become co-venturers or joint venturers with respect to Leasing, providing Heavy
Duty Truck Rentals or integrated logistics services, then, in addition to any
other remedy which Seller may have hereunder, at law or in equity, at Seller's
option exercisable upon sixty (60) days' prior written notice any or all of the
Service Agreements shall terminate; provided, however, that (A) Buyer shall be
afforded a cure period of the first forty-five days of the sixty-day notice
period, such that if Buyer ceases all such activity, or dissolves its
affiliation, within those forty-five days and advises Seller of such fact and of
Buyer's commitment not to further engage in the activity, directly or
indirectly, or resume the affiliation, then Seller shall rescind its election to
terminate such agreements and all agreements otherwise to have been terminated
pursuant to this clause shall continue in full force and (B) during such cure
period, such agreements shall continue in full force and effect subject to the
terms thereof;
(e) In the event that during the Buyer NonCompete Period Buyer
purchases or otherwise combines with any entity which conducts the business of
(i) Leasing or (ii) providing of Heavy Duty Truck Rentals (as to (i) and (ii)
combined, producing revenue in the prior calendar year of not more than thirty
percent (30%) of the total revenues of such entity) and Buyer is the controlling
entity following such purchase or combination, Buyer shall not be deemed in
breach of its covenant set forth in Section 6.2(d) if Buyer operates such
businesses provided that Buyer (1) does not
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operate such businesses under a name that includes the name Ryder and (2)
divests or liquidates such businesses within 12 months following the
consummation of such purchase or combination. Buyer will advise Seller if Buyer
offers any such business for sale.
(f) If any provision of this Section 6.2 is invalid in part, it shall
be curtailed, both as to time and location, to the minimum extent required for
its validity under applicable laws and shall be binding and enforceable with
respect to Seller and Buyer as so curtailed.
Section 6.3. Phonebook Advertising. For so long as the Trademark
---------------------
License Agreement continues in effect, Buyer shall allocate to Seller in a
cooperative advertising venture the right to use such percentage of space in
each page of phonebook advertising, at Seller's option, as is represented by the
portion of the last printed version in the phonebook for the same city, of an ad
purchased by the Phonebook Company for both the Division and Seller's other
Rental business and/or Leasing business, as was used to advertise that other
Rental business and/or Leasing business (the "Percentage"). If Buyer places an
----------
ad in a different company's phonebook, a phonebook for a new city, or an
additional and different version of a phonebook, then at Seller's option the
Percentage with respect to such phonebook shall be deemed to be 30%. The price
Seller shall pay for such space shall equal the Percentage multiplied times the
price Buyer pays for the combined space. Buyer and Seller hereby agree that
following the Closing Date they will use good faith efforts to further structure
a joint marketing program with respect to advertising in phonebooks. Neither
Buyer nor Seller will disparage the other in any phonebook advertising placed
pursuant to this Section 6.3.
Section 6.4. 1-800-GO-RYDER Calls. (a) For the purposes of this
--------------------
Section 6.4 the defined terms One-Way Consumer Rental Business, Local Consumer
Rental Business, and Light Commercial Rental Business shall be deemed to not be
restricted to Trucks but rather shall be applicable to the utilization of any
trucks to conduct such activities. Following the Closing, calls to the 1-800-
GO-RYDER Phone Number with respect to truck Rentals shall be routed as follows:
(i) In those areas in which Buyer utilizes geographic call routing,
calls for the Rental Business will be directed to the Dealer that is
closest to the geographic location of the phone number from which the call
is being made, whether that location is a branch of Seller acting as a
Dealer or is another Dealer of Buyer which is not a Seller location,
provided that the closest Dealer is open for business at the time of the
call; or
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(ii) If the area from which the call for the Rental Business
originates is not one in which Buyer utilizes geographic call routing or
such routing is temporarily unavailable, calls shall be (A) evenly
distributed among the dealers in the zip code designed by the caller who
are open for business at the time of the call or (B) allocated among those
dealers in accordance with a call management scheme that may be announced
from time to time to the dealer base, which affords preferential allocation
to dealers who meet the announced criteria of good dealer performance;
provided, however that such criteria must allow Seller locations, by
performing well within their then current operating practices, an equal
chance of preferential allocation; and further provided that Buyer may
require that a dealer forfeit preferential listing for any call incoming
during hours the dealer is closed.
If a call for the Rental Business is taken by a reservation service in lieu of
being forwarded or referred to a dealer under the previous provisions of this
Section 6.4(a), then the reservation service shall apply one of the same
allocation techniques described in (i) or (ii) above in booking the reservation.
With respect to any ▇-▇▇▇-▇▇-▇▇▇▇▇ call for the Rental Business
directed to Seller, Seller shall rent, as a Dealer, Buyer's truck rather than
its own, except that with respect to the Local Consumer Rental Business and the
Local Light Commercial Rental Business, Seller shall be permitted to use its own
trucks to rent to the caller for Seller's own account before it rents Buyer's
truck, as a Dealer of Buyer, as a result of the call. The parties agree that
the rules set forth in this Section 6.4(a) shall be operative only as between
Buyer and Seller and shall create no rights in third party dealers or others.
(b) Except as set forth in (a) above, Buyer shall possess all rights
to use the ▇-▇▇▇-▇▇-▇▇▇▇▇ Phone Number through the period from Closing until
three (3) years after the termination or expiration of the Trademark License
Agreement, at which ▇▇▇▇ ▇▇▇▇▇▇'▇ assignment to Buyer with respect to that
telephone number shall lapse and all rights in such number which Buyer possesses
shall be transferred to Seller. Seller covenants, however, that for a period of
three (3) years thereafter, Seller shall not market the telephone number as "1-
800-GO-RYDER" in any truck Rental or Leasing business without Buyer's prior
written consent.
(c) Buyer shall comply with all applicable tariffs with respect to the
▇-▇▇▇-▇▇-▇▇▇▇▇ Phone Number during any period prior to the time Buyer transfers
its rights in the number back to Seller pursuant to Section 6.4 above.
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Section 6.5. Referral. For the purposes of this Section 6.5 the
--------
defined terms One-Way Consumer Rental Business, Local Consumer Rental Business,
and Light Commercial Rental Business shall be deemed to not be restricted to
Trucks but rather shall be applicable to the utilization of any trucks to
conduct such activities. Each of Seller and Buyer shall use good faith efforts
to refer exclusively to the other as described below:
(a) in the case of Seller, for a period of 2 years following the
Closing Date, any and all Rentals in the One-Way Consumer Rental Business and
One-Way Light Commercial Rental Business to Buyer;
(b) in the case of Buyer, for a period of 2 years following the
Closing Date, any and all Leasing or Heavy Duty Truck Rentals to Seller; and
(c) in the case of both Seller and Buyer, for a period of 2 years
following the Closing Date, any Rental being requested by a customer in the
Local Consumer Rental Business or the Light Commercial Rental Business (other
than the One-Way Light Commercial Rental Business), if and to the extent the
party receiving the request from the customer is unable, in its sole discretion,
to provide a truck to satisfy the request, to the other; provided that if the
other party advises the referring party that it is not able to provide the
Rental being requested, the referring party may refer such business to any third
party.
Section 6.6. DOT Number. Buyer shall promptly following the Closing,
----------
obtain an appropriate truck rental company number from the U.S. Department of
Transportation (a "DOT Number"), and within 90 days after receipt of the DOT
----------
Number shall remove Seller's DOT Number from each Truck, and paint/decal Buyer's
DOT Number in the required place on at least 80% of the Trucks and within the
next following 90 days (except to the extent prevented by force majeure, in
which case such longer period of time until the force majeure passes) remove
Seller's DOT Number from the remaining Trucks, and paint/decal Buyer's DOT
Number in the required place on such Trucks.
Section 6.7. New Rental Contract. If any rental of a Truck which was
-------------------
in effect at Closing continues to be in effect thirty days after Closing, Seller
shall promptly cause the customer renting the Truck to close out the rental
contract to which Seller is a party, thereby ending the applicable rental period
for that contract, and open a new rental contract on the same terms as the
closed out rental contract to which Seller is not a party.
Section 6.8. Cooperation and Exchange of Information. (a) At any
---------------------------------------
time and from time to time following the Closing Date, Buyer or Seller shall
provide Seller or Buyer,
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as the case may be, their respective accountants and counsel, during normal
business hours, upon reasonable request, reasonable access to such books,
records and other data and to the employees engaged in the Business or any
successor thereto to the extent that such access may be requested (i) with
respect to information relating to periods prior to the Closing Date, for any
reasonable business purpose related to operation of the Business and (ii) with
respect to information relating to the Closing Date and periods prior to or
following the Closing Date, information and data required by Seller's or Buyer's
customary tax and accounting questionnaires, in order to enable Seller or Buyer,
as the case may be, to complete and file all Tax Returns which it may be
required to file with respect to the operations and business of the Business
through or following the Closing Date or to respond to audits by any Taxing
Authorities with respect to such operations and to otherwise enable Seller or
Buyer, as the case may be, to satisfy its internal accounting and tax
requirements, provided that the requesting party pays for the reasonable out-of-
pocket expenses of the other party which arise in connection with any such
request, provided, however, that such investigation shall be upon reasonable
-------- -------
notice and shall not unreasonably disrupt the personnel and operations of Seller
or the Subsidiaries or the Business and such investigation shall not include
access to any item relating to the business of the Seller or any of Seller's
Affiliates or the Subsidiaries or Buyer, as the case may be, other than the
Business. Such cooperation and information shall include promptly forwarding
copies of appropriate notices and forms or other communications received from or
sent to any Taxing Authority which relate to the operations of the Business
through the Closing, and providing copies of all relevant Tax Returns, documents
relating to rulings or other determinations by any Taxing Authority and records
concerning the ownership and tax basis of property, which Buyer or Seller may
possess. Buyer or Seller, as the case may be, shall make its employees and
facilities available on a mutually convenient basis to provide explanation of
any documents or information provided hereunder.
Information which is obtained by either party pursuant to this
subsection (a) shall be kept confidential by such party; provided, however that
in the event the party or any of its representatives is requested or required
pursuant to applicable law by any government authority or court of competent
jurisdiction to disclose any such information, the party may do so after
providing the other party with notice of the request or requirement so that the
other party may attempt, at its own expense, to obtain a protective order. Each
party shall use reasonable efforts to retain the information in their respective
departments (such as, the tax, credit, and accounting departments, etc.) in
which any such information is to be used and will limit access to such
information to a "needs to know" basis.
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Neither party may use information obtained from the other party
pursuant to this subsection to compete with the other party.
(b) For a period commencing on the Closing Date and ending nine
months following the Closing Date, Seller shall provide assistance and
cooperation to Buyer during regular business hours with respect to Buyer's
planned financing activities, including without limitation, providing
information with respect to sales transaction records for trucks that were
carried on the Division's books prior to Closing and providing assistance in
preparing any pro formas required to be included in any materials prepared with
respect to any such financing (including without limitation, if so requested by
Buyer, a pro forma balance sheet for the Business as at September 30, 1996 and
pro forma income statements for the Business for the nine months ended September
30, 1996 and the year ended December 31, 1995); provided however that such
assistance and cooperation shall be provided only upon reasonable notice by
Buyer to Seller and shall not unreasonably disrupt the personnel and operations
of Seller; provided further that Buyer shall not be required to provide any
information to Seller relating to any business of Seller or any Affiliates of
Seller or the Subsidiaries other than the Business; and provided further that
Buyer shall reimburse Seller's reasonable out-of-pocket costs in providing the
cooperation, and Seller shall not be entitled to any further compensation for
providing such assistance and cooperation, except that if Seller's personnel
devote more than 200 hours of working time to such activities, then all working
hours in excess of 200 hours devoted to such activities shall be charged
pursuant to the Administrative Services Agreement (but without any 10% ▇▇▇▇-up).
(c) For a period of ten (10) years after the Closing Date or such
longer period as may be required by law, Buyer or Seller, as the case may be,
shall retain, and neither destroy nor dispose of, all books and records included
in the Assets; all Tax Returns, and all books and records (including computer
files) of, or with respect to the activities of, the Business for all taxable
periods ending on or prior to the Closing Date (collectively, "Information").
-----------
Thereafter, Buyer shall not destroy or dispose of any Information unless it
first offers such Information to Seller in writing and Seller fails to accept
such offer within sixty (60) days of its being made.
(d) Buyer and Seller and their respective Affiliates shall cooperate
in the preparation of all Tax Returns relating in whole or in part to taxable
periods ending on or before or including the Closing Date that are required to
be filed after such date. Such cooperation shall include, but not be limited
to, furnishing prior years' Tax Returns or
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return preparation packages illustrating previous reporting practices or
containing historical information relevant to the preparation of such Tax
Returns, and furnishing such other information within such party's possession
requested by the party filing such Tax Returns as is relevant to their
preparation. In the case of any state, local or foreign joint, consolidated,
combined, unitary or group relief system Tax Returns, such cooperation shall
also relate to any other taxable periods in which one party could reasonably
require the assistance of the other party in obtaining any necessary
information.
(e) Seller shall have the right, at its own expense, to control any
audit or examination by any Taxing Authority ("Tax Audit"), initiate any claim
---------
for refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all
Taxes other than Taxes, if any, that constitute Assumed Liabilities, provided,
however, that Seller shall consult in good faith with Buyer with respect to the
resolution of any issue that would affect Buyer prior to settling any such issue
or filing an amended return relating to any such issue. Buyer shall have the
right, at its own expense, to control any other Tax Audit, initiate any other
claim for refund, and contest, resolve and defend against any other assessment,
notice of deficiency, or other adjustment or proposed adjustment relating to
Taxes with respect to the Business after the Closing Date provided that, with
respect to any state and local Income Taxes of the Subsidiaries for any taxable
period beginning before the Closing Date and ending after the Closing Date,
Buyer shall consult in good faith with Seller with respect to the resolution of
any issue that would affect Seller prior to settling any such issue or filing an
amended return relating to any such issue. Each party shall furnish the other
party with its cooperation in a manner comparable to that described in paragraph
(a) of this Section to effect the purposes of this Section.
(f) If a party fails to provide any information requested by the
other party in the time specified herein, or if no time is specified pursuant to
this Section, within a reasonable period, or otherwise fails to do any act
required of it under this Section, then such party shall be obligated,
notwithstanding any other provision hereof, to indemnify the other party and
hold the other party harmless from and against any and all costs, claims or
damages, including all Taxes or deficiencies thereof, payable as a direct and
proximate result of such failure.
Section 6.9. Network Sales. So long as Network Sales is a
-------------
distributor of parts and components for the repair of trucks ("Parts"), Seller
shall cause Network Sales, unless instructed otherwise by Buyer, to offer Parts
for sale to Buyer's Dealers, and to ▇▇▇▇ Buyer for such
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purchases by Buyer's Dealers. Buyer shall pay therefor within 30 days of receipt
of Network Sales' invoice, via wire transfer without regard to whether Buyer has
been paid by its Dealers for such purchases. Although Seller agrees that for the
first 12 months following the Closing, the price of any Parts so offered to
Dealers shall be determined by the same pricing methodology reflected in the
pricing of Parts offered by Network Sales to Dealers of the Business on the date
hereof, such price shall always exceed the price which Network Sales charges
Seller's Commercial Leasing and Services Division districts ("Districts"). In
return for guaranteeing payment and remitting to Network Sales, on or before the
due date of the Network Sales invoice, all sums due from the Dealers less
Buyer's commission, Buyer shall receive a commission from Network Sales in such
amount as to each sale that the sums Buyer remits to Network Sales (exclusive of
sales taxes) equals the price Network Sales would charge Districts for the same
parts.
Section 6.10. Guaranties. Buyer shall use all reasonable efforts to
----------
cause itself or one or more of its Affiliates to be substituted in all respects
for Seller or Ryder System, effective as of the Closing, in respect of all
obligations of Seller or Ryder System under each of the guaranties, letters of
credit, letters of comfort, bid bonds and performance bonds obtained by Seller
or Ryder System or any of their respective Affiliates for the benefit of the
Business, which guaranties, letters of credit, letters of comfort, bid bonds and
performance bonds are set forth in Section 6.10 of the Seller Disclosure
Schedule (the "Guaranties"). If Buyer is unable to effect such a substitution
----------
with respect to any Guaranty after using its best efforts to do so, Buyer shall
obtain letters of credit, on terms and from financial institutions satisfactory
to Seller, with respect to the obligations covered by each of the Guaranties for
which Buyer does not effect such substitution. As a result of the substitution
contemplated by the first sentence of this Section and/or the letter or letters
of credit contemplated by the second sentence hereof, Seller and Ryder System
shall from and after the Closing cease to have any obligation whatsoever arising
from or in connection with the Guaranties except for obligations, if any, for
which Seller and Ryder System will be fully indemnified pursuant to a letter of
credit obtained by Buyer and satisfactory to Seller.
Section 6.11. Precision Response Corporation; National Rental. Buyer
-----------------------------------------------
shall assume the responsibility for managing the ongoing relationship with
Precision Response Corporation ("PRC") which it now manages for itself and
Seller's Commercial Leasing and Services Division ("CLS") on the date hereof,
governing PRC's duties to answer the National Rental Phone Number, to determine
the caller's needs for a truck and to make a reservation for the rental of the
truck, and shall assume any obligations arising under the
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existing relationship with PRC from and after the Closing. Buyer shall require
PRC or any other telecommunications service provider for the National Rental
Phone Number to fairly and in good faith determine what type of truck the caller
needs and make a reservation for the truck to be rented (i) at the nearest CLS
location if the truck is one which CLS offers for rental or lease but Buyer does
not (ii) at the nearest Buyer dealer location (which could be a CLS branch
acting as a dealer of Buyer) if the truck is one which Buyer offers for rent but
CLS does not, or (iii) at the nearest CLS or Buyer dealer location if the truck
is one which both CLS and Buyer offer for rent. Buyer shall monitor the
performance of PRC or such other telecommunications service provider in
satisfying those requirements and shall use all reasonable efforts, exercising
such rights as it may have, to accomplish the call distribution described in
this paragraph.
For a period of one year following the Closing Date, Seller shall pay
Buyer upon invoice one-half of all amounts billed by PRC with respect to the
services provided by PRC to Buyer and Seller in connection with the National
Rental Phone Number. No later than 60 days prior to the first anniversary of
the Closing Date, Buyer and Seller shall commence good faith negotiations to
devise a formula for allocating between Buyer and Seller the charges billed by
PRC after the first anniversary of the Closing Date with respect to such
services. Such formula shall take into consideration, among other things: (i)
the number of calls made to the National Rental Phone Number, (ii) the amount of
time spent on each such call, and (iii) the sophistication of the person
handling each such call.
Either Seller or Buyer may at any time, upon at least ninety (90) days
prior written notice to the other party, elect to stop participating in the
National Rental Phone Number program described above, in which case calls for
trucks described in clause (ii) above shall be referred to one Buyer telephone
number, with interface to accomplish that transfer accomplished at the expense
of Buyer, so long as Buyer shall be entitled to receive referrals from Seller
pursuant to Section 6.5 above.
Seller and Buyer shall work in good faith to establish a mutually
agreeable joint marketing and joint truck rental program to Federal Express
Corporation, UPS and Roadway Package Service, to be implemented as promptly as
practicable after the Closing Date to replace the Fed Ex Contract and the UPS
Arrangement and the Roadway Arrangement, it being the parties' intention to
implement such program within one week after the Closing Date. This program
would not require joint liability of the parties to such companies, but rather
contemplates rental of trucks on a several basis, under mutually agreeable terms
and conditions.
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Section 6.12. License Transfers. Prior to Closing, (A) Buyer or any
-----------------
Affiliate of Buyer who takes title to Trucks shall (i) qualify to do business in
the jurisdictions where such qualification is required to operate the Business
after the Closing Date, (ii) apply for sales tax permits in each of the states
in the Territory (other than Alaska) or any locality thereof, and (iii) take
whatever other action the parties reasonably agree to be appropriate, if it has
the effect of minimizing any such sales or use Tax if accomplished prior to
Closing, and (B) Buyer shall have applied jointly with Seller, at Buyer's cost,
to the Federal Highway Administration for permission to transfer the Motor
Carrier Broker's License for Household Goods held by Ryder Move Management on
the date hereof.
Section 6.13. Financing. Buyer shall use all reasonable efforts to
---------
(a) cause the execution and delivery on or prior to Closing Date, of true and
correct copies of definitive agreements between Buyer and the Banks to provide,
subject only to customary conditions in transactions of this type, the Bank
Financing on the Closing Date (the "Definitive Financing Agreements"), and (b)
-------------------------------
satisfy on or before the Closing Date all requirements of the Definitive
Financing Agreements which are conditions to closing thereunder (excluding
closing conditions to be satisfied by Seller under this Agreement). Buyer shall
periodically brief Seller on the status of negotiations to obtain the Bank
Financing and the financing to be provided by the Funds (the "Equity Financing")
----------------
and shall advise Seller promptly of the occurrence of any event, circumstance or
condition that it expects may prevent the availability to Buyer of the Bank
Financing or the Equity Financing at the Closing. Buyer shall deliver to Seller
true and correct copies of the Definitive Financing Agreements as soon as they
are available. If any portion of the Bank Financing or the Equity Financing
becomes unavailable, Buyer will use all commercially reasonable efforts to
obtain necessary financing from another source, on and subject to substantially
the same terms and conditions as the portion of the Bank Financing or the Equity
Financing that has become unavailable, in order to consummate the transactions
contemplated hereby on the terms set forth herein.
Section 6.14. Additional Financials and MD&A. Within 30 days after
------------------------------
the Closing Date, at Seller's expense, Seller shall deliver to Buyer (i) the
unaudited combined balance sheets of the Business as at December 31, 1992 and
1993, and unaudited combined statements of income of the Business for each of
the years then ended (collectively, the "1992/1993 Financials"), (ii) the
--------------------
unaudited combined balance sheet of the Business as at June 30, 1995 and
unaudited combined statement of income of the Business for the six months ended
June 30, 1995, (iii) the unaudited combined balance sheets of the Business as at
September 30, 1995 and
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1996 and unaudited combined statements of income and cash flow of the Business
for the nine months ended September 30, 1995 and 1996, (iv) an audited combined
balance sheet of the Business as of the Closing Date and audited combined
statement of income and cash flows of the Business for the period from and
including January 1, 1996 through the Closing Date, and (v) management's
discussion and analysis of financial condition and results of operations of the
Business with respect to the fiscal 1995 versus fiscal 1994, fiscal 1994 versus
fiscal 1993, and nine months ended September 30, 1996 versus nine months ended
September 30, 1995. In the case of (i), (ii) and (iii) above, Seller will engage
KPMG at Seller's expense to perform a limited review in accordance with AICPA
standards and to issue confirmation that the review was performed and they are
able to provide a customary comfort letter to Buyer's underwriter, if so engaged
by Buyer.
Section 6.15. Certain Repair Obligations; Insurance Claims. After
--------------------------------------------
the date hereof, Seller shall complete, in accordance with its current repair
practices, repairs for collision damage to any Truck (i) which has been damaged
in an accident, or is damaged in an accident, prior to the Closing Date and with
respect to which accident an internal accident report has been, or is, filed
with Seller prior to the Closing Date (other than with respect to any such
Trucks for which repairs have been completed in accordance with Seller's current
repair practices and returned to service prior to the Closing Date) or (ii)
which is damaged in an accident prior to the Closing Date which accident
occurred so close to the Closing Date that such accident report has not been
filed as of the Closing Date (collectively, "Damaged Trucks"). Seller
represents that its current policies require an accident report to be filed with
respect to any such accident damage. Seller will not charge Buyer for
completing any such repairs to Damaged Trucks. Buyer shall use good faith
effort to collect on Seller's behalf any proceeds payable to Seller under any
insurance policies with respect to collision damage repairs to Trucks. Buyer
shall remit any such proceeds to Seller promptly after the receipt thereof by
Buyer.
Section 6.16. Covenant Not to Hire. On or after the Closing, Buyer
--------------------
may deliver to Seller a list of up to fifty Transferred Employees which Buyer
identifies as "Key Employees" and as being delivered pursuant to this Section
6.16. Upon receipt of the list, and until the earlier of (i) six months after
closing or (ii) as to each Person on the list, the date the Person is terminated
or laid off by Buyer for any reason, Seller covenants that, notwithstanding any
other provision of this Agreement, neither Seller nor its Affiliates will hire
such Person.
Section 6.17. Vehicle Nominee Title Agreement. Prior to Closing,
-------------------------------
Seller and Buyer shall enter into a
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vehicle nominee title agreement with respect to the Trucks (the "Vehicle Nominee
---------------
Title Agreement") which will provide, among other things, for (i) Seller to be
---------------
appointed nominee title holder of the vehicles, with Seller giving an
irrevocable power of attorney to permit retitling to occur without Seller's
involvement, (ii) a term of six months and (iii) indemnification by each of the
parties.
Section 6.18. Third Party Software. Seller agrees to pay for any
--------------------
consent of third parties in order to effectuate the transfer of such Third Party
Software (as such term is defined in Section 3.4 of the Seller Disclosure
Schedule) from Seller to Buyer pursuant to this Agreement.
Section 6.19. Insurance Policies. In the event that copies of any of
------------------
the insurance policies referred to in Section 10.4 are not available for
delivery to Seller at the Closing, Buyer shall deliver copies thereof to Seller
promptly after receipt by Buyer of any such insurance policies.
Section 6.20. Certain Prepaid Expenses. Seller and Buyer agree that,
------------------------
with respect to any prepaid expense of Seller relating to vehicle licensing fees
attributable to the Trucks or any other vehicles included in the Assets, which
prepaid expense is not transferred to Buyer on the Closing Date pursuant to
Section 2.1(o) (the "Retained Prepaid Licensing Expense"), Buyer shall have the
right, exercisable upon written notice to Seller given not later than 10
Business Days prior to the expiration of the 90-day period commencing on the
Closing Date, to purchase an additional 30 days of Retained Prepaid Licensing
Expense from Seller for an amount equal to the dollar value of such 30 days of
Retained Prepaid Licensing Expense, payable in cash on the 90th day after the
Closing Date. Buyer shall have the right to purchase up to two additional 30-
day periods of Retained Prepaid Licensing Expense, exercisable upon written
notice to Seller given not later than 10 Business Days prior to the expiration
of the applicable 30-day period then expiring, for an amount equal to the dollar
value of such 30 days of Retained Prepaid Licensing Expense. Buyer agrees that
it may not exercise any such option if, at the time of exercise, the Vehicle
Nominee Title Agreement is not in full force and effect. Following the
expiration or termination of the Vehicle Nominee Title Agreement, Buyer may
notify Seller of the amount by which the purchase price paid by Buyer for any
prepaid vehicle licensing fee expense purchased by Buyer under this Agreement
(whether at the Closing or pursuant to this Section 6.20) exceeded the benefit
actually received by Buyer from such purchase. Seller shall, within 5 Business
Days thereafter, repay such difference to Buyer. Buyer shall provide reasonable
details with respect to such calculation. If Seller does not agree with the
calculation, such dispute shall be settled by using the procedures set forth in
Section 2.7.
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7.
ARTICLE VII
-----------
Employee Benefits
-----------------
Section 7.1. Employee Benefit Plans. Section 7.1 of the Seller
----------------------
Disclosure Schedule lists formal written plans and all other material
compensation and benefit plans, contracts and arrangements (other than routine
administrative procedures or government-required programs) in effect as of the
date hereof including but not limited to all pension, profit sharing, savings
and thrift, bonus, incentive or deferred compensation, severance pay and medical
and life insurance plans (other than the Stay-on Arrangements) in which any
current or former employees of the Business or their respective dependents
(collectively, "Business Employees") participate or may become entitled to
------------------
benefits (collectively, "Business Employee Benefit Plans").
-------------------------------
Section 7.2. Termination of Participation. Except as otherwise
----------------------------
provided in this Article or by applicable law, the active participation of all
Transferred Employees in each Business Employee Benefit Plan shall cease as of
the Closing Date and no additional benefits shall be accrued thereunder for such
employees.
Section 7.3. Employees. (a) Within five Business Days after the
---------
date of this Agreement, Seller shall deliver to Buyer a true and complete list
of all the employees of the Business as of the date hereof and certain other
employees who as of the date hereof primarily serve the Business but who are not
on the payroll of the Business (the "Listed Employees"). Buyer may offer
----------------
employment to as many Listed Employees as is consistent with, and subject to,
Buyer's requirements and employment policies. Buyer shall as promptly as
practicable after receipt of such list determine which of the Listed Employees
will be offered positions with the Business following the Closing and shall,
until two weeks after Closing, notify (an "Employee Notice") Seller in writing
---------------
on Tuesday and Friday of each week, with respect to any determination made
during the preceding unreported period of (i) any Listed Employee who will not
be offered a position with the Business following the Closing and (ii) any
Listed Employee with whom discussions regarding employment with the Business
have been terminated for any reason.
Section 7.4. Employee Benefits Transition. (a) Seller shall assist
----------------------------
Buyer, at Buyer's request and expense (for Seller's reasonable out-of-pocket
expenses only), to set up employee benefit plans similar to those of Seller
through Seller's providers. Seller's assistance shall consist of arranging
contact between Buyer and Seller's providers and explaining Seller's benefit
plans.
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(b) On or before the six-month anniversary of the Closing Date,
Seller shall pay to Buyer the lesser of (i) five hundred thousand dollars
($500,000) or (ii) the aggregate amount Buyer is obligated to pay for severance
that has been incurred by Buyer between the Closing Date and such anniversary
(the "Transition Period") for severance calculated under Buyer's severance
policies and paid to Transferred Employees who were below the level of MS 11
when last in the employ of Seller and who are terminated by Buyer during the
Transition Period. For this purpose, "severance" refers to sums paid in lieu of
salary; not to any other perquisites or other compensation/benefit components
which may be in Buyer's severance policies.
Section 7.5. Defined Contribution Plans. (a) All of the accounts of
--------------------------
the Transferred Employees in the Ryder System, Inc. Employee Savings Plans A and
B ("Savings Plans") shall become fully vested and nonforfeitable as of the
Closing Date. To the extent consistent with applicable law and regulations,
Seller agrees to treat the Asset and Stock Purchase as an event described in
Section 401(k)(10) of the Code.
Section 7.6. Defined Benefit Plan. The accrued benefit of each
--------------------
Transferred Employee under the Ryder System, Inc. Retirement Plan (the "Seller
------
DB Plan") shall become fully vested and nonforfeitable as of the Closing Date.
-------
Each Transferred Employee shall be treated as having incurred a severance of
employment under the Seller DB Plan on account of the transactions contemplated
by this Agreement.
Section 7.7. WARN Disclosure Bringdown. Seller shall provide to
-------------------------
Buyer at the Closing an updated list of terminations required in Section 3.10(f)
of the Seller Disclosure Schedule with respect to the 90-day period ending on
the Closing Date.
Section 7.8. Welfare Benefits. (a) For at least the one-year period
----------------
beginning on the Closing Date (the "Benefit Period"), Buyer agrees to provide
--------------
all Transferred Employees with benefits substantially similar in aggregate to
the Savings Plans and those welfare plans listed on Schedule 7.8(a) provided by
Seller to Business Employees on the Closing Date. Buyer may, at its option,
provide such other employee benefit plans as Buyer may adopt. Buyer's welfare
benefit plans listed shall, with respect to Transferred Employees, waive any
limitations regarding pre-existing conditions (other than such conditions for
which coverage was precluded under Seller's welfare benefit plans on the Closing
Date) and give credit for vesting purposes for years of service with Seller or
any Affiliate thereof. In addition, for a period of at least 24 months
following the Closing Date, Buyer agrees to maintain in effect, for Trans-
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ferred Employees who were below the level of MS 11 when last in the employ of
Seller, severance policies substantially similar to Seller's severance
guidelines (other than any individually negotiated agreements) in effect
immediately prior to the Closing Date, in amounts consistent with Seller's past
business practices.
(b) Buyer shall indemnify and shall hold Seller and its Affiliates
harmless from and against all Covered Liabilities with respect to all
Transferred Employees that arise for periods commencing on or after the Closing
Date, including any Covered Liabilities with respect to Transferred Employees
arising out of the transactions contemplated by this Agreement, but excluding
the amount of any severance for which Seller has agreed to reimburse Buyer
pursuant to Section 7.4(b). Seller shall indemnify and hold Buyer and its
Affiliates harmless from and against Covered Liabilities with respect to all
employees that arise for periods ending prior to the Closing Date.
Section 7.9 Stay-on Arrangements. Seller will pay to each Transferred
--------------------
Employee who as of the date hereof is at or above the level of MS 11, whether
pursuant to a Stay-on Arrangement or otherwise in connection with the
transactions contemplated by this Agreement, in one or more payments, an
aggregate amount substantially equal to the salary component amount which would
be payable to such Transferred Employee under Seller's current severance
policies.
8.
ARTICLE VIII
------------
Tax Matters
-----------
Section 8.1. Tax Returns. Seller represents and warrants that all
-----------
material Tax Returns required to be filed for taxable periods ending on or prior
to the Closing Date by, or with respect to any activities of, the Subsidiaries
have been or will be filed in accordance with all applicable laws, and all Taxes
shown to be due on such Returns have been or will be paid; (ii) all Taxes
relating to periods ending on or before the Closing Date owed by any of the
Subsidiaries (whether or not shown on any Tax Return) on or prior to the Closing
Date, if required to have been paid, have been paid (except for Taxes which are
being contested in good faith); and (iii) any liability of any of the
Subsidiaries for Taxes not yet due and payable, or which are being contested in
good faith, has been provided for on the financial statements of the Seller in
accordance with GAAP.
Section 8.2. Tax Indemnification and Covenant by Seller. Pre-Closing
------------------------------------------ -----------
Taxes. Seller shall timely pay and indemnify Buyer, its affiliates (including
-----
the Subsidiaries) and each of their respective officers, directors and employees
and hold them harmless from all Pre-Closing Taxes. For
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purposes of this Agreement, "Pre-Closing Taxes" shall mean (a) all liability for
Taxes that constitute Retained Liabilities; (b) all liability attributable to
any misrepresentations or breach of warranty made by Seller under Section 8.1
hereof; (c) any sales or use Tax of any state or local Taxing Authority and
vehicle titling (but not licensing) fees or similar charges attributable to the
transfer of title from Seller to Buyer (including fees that may be payable after
the Closing for any vehicle titles transferred after Closing to effectuate the
Asset and Stock Purchase), whether levied on Buyer, Seller or any of their
respective Affiliates on or after the Closing Date, resulting, directly or
indirectly, from the Asset and Stock Purchase; (d) all liability for reasonable
legal fees and expenses incurred with respect to any item indemnified pursuant
to clause (a) through (c) above. For purposes of this Agreement "Pre-Closing Tax
Period" shall mean any taxable period ending on the Closing Date at 12:01 A.M.
or before the Closing Date and the portion of any Straddle Period ending at
12:01 A.M. on the Closing Date including the Closing Date.
Section 8.3. Tax Indemnity and Covenant by Buyer. Buyer shall, and
-----------------------------------
shall cause each of the Subsidiaries to timely pay and indemnify Seller, its
Affiliates and each of their respective officers, directors and employees and
hold them harmless from (a) all liability for Taxes attributable to any Post-
Closing Tax Period, except to the extent such Taxes constitute Pre-Closing
Taxes; and (b) all liability for reasonable legal fees and expenses incurred
with respect to any item indemnified pursuant to clause (a) above. For purposes
of this Agreement, "Post-Closing Tax Period" shall mean any taxable period
beginning on the Closing Date after 12:01 A.M. or after the Closing Date and the
portion of any Straddle Period beginning after 12:01 A.M. on the Closing Date.
For purposes of this Agreement, a "taxable period" with respect to any ad
valorem tax shall be deemed to be the 12-month period beginning on any
assessment date.
Section 8.4. Allocation of Certain Taxes. (a) Buyer and Seller
---------------------------
agree that if the Subsidiaries are permitted but not required under applicable
state or local Tax laws to treat the day before the Closing Date or the Closing
Date as the last day of a taxable period, Buyer and Seller shall treat such day
as the last day of a taxable period.
(b) Any Income Taxes for a taxable period beginning before the
Closing Date and ending after the Closing Date (a "Straddle Period") shall be
apportioned between Seller and Buyer based on the actual operations of the
Subsidiaries during the portion of such period ending on the Closing Date and
the portion of such period beginning on the day following the Closing Date, and
for purposes of the provisions of Sections 8.2, 8.3 and 8.6, each portion of
such period shall be deemed to be a taxable period (whether or
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not it is in fact a taxable period). All Taxes other than Income Taxes ("Other
Taxes") relating to a Straddle Period shall be apportioned between Buyer and
Seller based on the number of days during the portion of such period occurring
on and before the Closing Date, and the number of days during such period
occurring after the Closing Date and for purposes of Sections 8.2, 8.3 and 8.6
each portion of such period shall be deemed to be a taxable period (whether or
not it is in fact a taxable period). Upon timely notice from Buyer, Seller shall
pay to Buyer at least 10 days prior to the date any payment for Taxes as
described in this Section 8.4 is due, Seller's share of such Taxes as described
in this Section 8.4.
Section 8.5. Filing Responsibility. Seller shall prepare and file
---------------------
all Tax Returns with the appropriate federal, state, local and foreign
governmental agencies relating to the Subsidiaries for periods ending on or
prior to the Closing Date and shall pay all Taxes due with respect to such Tax
Returns. Buyer shall prepare and file, or cause to be prepared and filed, all
Tax Returns required to be filed by the Subsidiaries with respect to any
Straddle Period and shall cause the Subsidiaries to pay the Taxes shown to be
due thereon, provided, however, that Seller shall promptly reimburse Buyer for
the portion of such Tax that relates to a Pre-Closing Tax Period.
(a) With respect to any state or local Income Tax Return for taxable
periods beginning before the Closing Date and ending after the Closing Date,
Buyer shall allow Seller to review, comment upon and reasonably approve without
undue delay any such Tax Return at any time during the forty-five (45) day
period immediately preceding the filing thereof. Buyer shall provide Seller a
copy of the Subsidiaries proposed Tax Returns at least 15 days prior to the
filing of such Tax Returns, and Seller may provide comments to Buyer, which
comments shall be delivered to Buyer within 7 days of receiving such copies from
Buyer.
Section 8.6. Refunds. The party bearing the liability or obligation
-------
to indemnify for any Taxes described under this Article VIII shall be entitled
to any refunds or credits of such Taxes. Buyer shall promptly forward to
Seller, or after Buyer's receipt reimburse Seller, for any refunds or credits
due Seller (pursuant to the terms of this Article) and Seller shall promptly
forward to Buyer, or after Seller's receipt reimburse Buyer, for any refunds or
credits due Buyer (pursuant to the terms of this Article).
Section 8.7. Tax Work Papers. Seller shall prepare and submit to
---------------
Buyer no later than three months after the Closing Date, blank tax return
workpaper packages relating to the Subsidiaries for Straddle Periods and for
taxable periods ending on the Closing Date. Buyer shall, and shall cause each
of the Subsidiaries to, prepare
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completely and accurately and submit to Seller within three months of receipt,
all information as Seller shall reasonably request in such tax return workpaper
packages consistent with the prior practices of the Business.
Section 8.8. Allocation of Consideration. Buyer and Seller agree
---------------------------
that they shall negotiate in good faith to enter into an agreement (the
"Allocation Agreement"), as soon as practicable after the Closing concerning the
allocation of the Final Purchase Price (including Assumed Liabilities) among the
Assets as of the Closing Date (the "Allocation"). Buyer and Seller agree that
the Allocation shall be made pursuant to the following procedure: Buyer shall
deliver to Seller an allocation of the Final Purchase Price and Assumed
Liabilities among the Assets ("Buyer's Appraisal"). Seller shall be deemed to
have accepted and agreed to the allocation based upon Buyer's Appraisal in the
Allocation Agreement, unless Seller delivers written notice to Buyer to the
contrary within 30 days after Seller's receipt of Buyer's Appraisal. If (i)
Seller so objects to the allocation based upon Buyer's Appraisal, and Buyer and
the Seller are unable to resolve all their differences within 15 days, or (ii)
Buyer fails to deliver Buyer's Appraisal, Seller and Buyer shall prepare
separate allocations. Buyer and Seller agree to act in accordance with the
Allocation contained in the Allocation Agreement, if any, in any relevant Tax
Returns or similar filings. All fees and expenses relating to the Buyer's
Appraisal shall be borne by Buyer. In the event any taxing authority questions
the allocation agreed to by the Seller and Buyer, if any, Seller or Buyer, as
appropriate, shall promptly notify the other of such event and shall inform and
consult with the other as to any such inquiry as it progresses.
Section 8.9. Section 338(h)(10) Election.
---------------------------
(a) With respect to the sale of the Subsidiaries' Shares, if so
requested by Buyer upon notice to Seller on or before 30 days after the Closing
Date, Seller and Buyer shall jointly make a Section 338(h)(10) Election (as
hereinafter defined) in accordance with applicable laws and under any comparable
provision of state, local or foreign law for which a separate election is
permissible and as set forth herein. Buyer shall take all necessary steps to
properly make a Section 338(g) Election (as hereinafter defined) in connection
with the Section 338(h)(10) Election in accordance with applicable laws and
under any comparable provision of state, local or foreign law for which a
separate election is permissible. Buyer and Seller agree to cooperate in good
faith with each other in the preparation and timely filing of any Tax Returns
required to be filed in connection with the making of such an election,
including the exchange of information and the joint preparation and filing of
Form 8023 and related schedules. Buyer and Seller agree to report the transfers
under this Agreement
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consistent with such elections and shall take no position contrary thereto
unless required to do so by applicable tax law pursuant to a determination as
defined in Section 1313(a) of the Code.
(b) Buyer shall be responsible for the preparation and filing of all
Section 338 Forms (as hereinafter defined) in accordance with applicable tax
laws and the terms of this Agreement and shall deliver such Section 338 Forms to
Seller at least 45 days prior to the date such Section 338 Forms are required to
be Filed. Seller shall execute and deliver to Buyer such documents or forms
(including executed Section 338 Forms) as are requested and are required by any
laws in order to properly complete the Section 338 Forms at least 20 days prior
to the date such Section 338 Forms are required to be filed. Seller shall
provide Buyer with such information as Buyer reasonably requests in order to
prepare the Section 338 Forms by the later of 30 days after Buyer's request for
such information or 30 days prior to the date on which Buyer is required to
deliver such forms to Seller.
(c) The portion of the Purchase Price and Assumed Liabilities properly
allocable to the Subsidiaries' Shares shall be allocated among the properties of
the Subsidiaries in accordance with Section 338(b)(5) of the Code and the
Treasury Regulations thereunder. Buyer and Seller shall prepare such allocation
in accordance with the principles and procedures set forth under Section 8.8
hereof and shall act in accordance with such allocation to the same extent
provided therein.
(d) "Section 338 Forms" means all returns, documents, statements, and
other forms that are required to be submitted to any federal, state, county or
other local taxing authority in connection with a Section 338(g) Election or a
Section 338(h)(10) Election. Section 338 Forms shall include, without
limitation, any "statement of section 338 election" and IRS Form 8023 (together
with any schedules or attachments thereto) that are required pursuant to
Treasury Regulations (S)1.338-1 or Treasury Regulations (S)1.338(h)(10)-1 or any
successor provisions.
(e) Notwithstanding any other provision of this Agreement to the
contrary, Seller agrees that any income and gain recognized as a result of, and
in accordance with, the making of the Section 338 Elections will be included in
the consolidated federal income tax return of Seller's consolidated group and
any liability for Taxes resulting from such Section 338 Elections ("Section 338
Taxes") will be paid by Ryder System, as the common parent of Seller's
consolidated group, provided, however, that within 10 days following receipt of
written notice of Seller's payment thereof, Buyer shall reimburse and shall
fully indemnify Seller for any Section 338 Taxes, but only to the extent such
Taxes exceed
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the Taxes otherwise payable by Seller or Ryder System upon the sale of the
Subsidiaries' Shares, assuming that the parties did not make any Section
338(h)(10) Election under this Section 8.9 with respect to such sale, and
provided that such reimbursement shall be in an amount sufficient such that,
after payment of any Section 338 Taxes and any Taxes imposed as a result of such
reimbursement, Seller will be in no less favorable a position on an after-Tax
basis than if no Section 338 Elections had been made.
(f) "Section 338(g) Election" means an election described in Section
338(g) of the Code in connection with an election under Section 338(h)(10) of
the Code with respect to the acquisition of the Subsidiaries' Shares pursuant to
this Agreement. Section 338(g) Election shall include any corresponding
election under any other relevant tax laws (e.g., state laws) for which a
separate election is permissible with respect to Buyer's acquisition of the
Subsidiaries' Shares pursuant to this Agreement.
(g) "Section 338(h)(10) Election" means an election described in
Section 338(h)(10) of the Code with respect to Buyer's acquisition of the
Subsidiaries' Shares pursuant to this Agreement. Section 338(h)(10) Election
shall include any corresponding election under any other relevant tax laws
(e.g., state laws) for which a separate election is permissible with respect to
Buyer's acquisition of the Subsidiaries' Shares pursuant to this Agreement.
(h) "Section 338 Elections" means the Section 338(g) Election and the
Section 338(h)(10) Election.
ARTICLE IX
----------
Conditions of Buyer's Obligation to Close
-----------------------------------------
9.
Buyer's obligation to consummate the Asset and Stock Purchase shall be
subject to the satisfaction on or prior to the Closing Date, or waiver by Buyer,
of all of the following conditions:
Section 9.1. Representations, Warranties and Covenants of Seller.
---------------------------------------------------
(i) The representations and warranties of Seller contained in this Agreement,
when read without regard to the qualification as to material adverse effect on
the Business Condition which may be set forth in any representation and warranty
(other than the representations and warranties set forth in Section 3.16) shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date except for representations and warranties that speak as of a
specific date or time other than the Closing Date (which need only be true and
correct in all material respects as of such date or
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time), except for inaccuracies that in the aggregate do not constitute a
material adverse effect on the Business Condition, and (ii) the covenants and
agreements of Seller to be performed on or before the Closing Date in accordance
with this Agreement shall have been duly performed in all material respects;
provided, however, that in the event Buyer notifies Seller that Seller has not
-------- -------
performed any covenant or agreement set forth in Section 5.4 or 5.5 and Seller
cures such nonperformance within 10 days of such notice, such covenant or
agreement shall be deemed duly performed for purposes of this Section 9.1.
Section 9.2. Filings; Consents; Waiting Periods. All registrations,
----------------------------------
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.8(b) or 4.3 and indicated therein as being a
condition to the Closing for Buyer shall have been filed, made or obtained, and
all waiting periods applicable under the HSR Act shall have expired or been
terminated.
Section 9.3. No Injunction. At the Closing Date, there shall be no
-------------
injunction, restraining order or decree of any nature of any court or Government
Authority of competent jurisdiction that is in effect that restrains or
prohibits the consummation of this Agreement, any of the Service Agreements,
Trademark License Agreement, Software License Agreement or Copyright License
Agreement.
Section 9.4. No Material Adverse Change. During the period from the
--------------------------
date hereof through the Closing Date, there shall not have been any material
adverse change in the business, operations, financial condition or results of
operations of the Business, taken as a whole, taking into account the
seasonality of the Business.
Section 9.5. Financing. Buyer shall have obtained pursuant to the
---------
Financing Commitments or otherwise, the funds necessary to consummate the
transactions contemplated by this Agreement on the terms set forth herein,
except this condition shall not be applicable if the Funds shall be in breach of
their respective commitments with respect to the Equity Financing that the Funds
shall have committed to provide.
Section 9.6. Material Approvals. (a) Any consents required with
------------------
respect to assignment by Seller to Buyer of any of the contracts listed on
Schedule 9.6(a) shall have been obtained at no cost to the Buyer and without any
modification of the economic terms thereof or any material modification of the
other terms thereof.
(b) Approval to transfer from Seller to Buyer the software listed
on Schedule 9.6(b) shall have been obtained.
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(c) The provisions set forth on Schedule 9.6(c) with respect to
the Assigned Leases shall have been satisfied.
(d) Consent of the landlord of the Royal Palm Executive Center to the
Office Sublease Agreement shall have been obtained, or Buyer shall have
negotiated, and the landlord stands ready to execute, a lease on substantially
the same terms as would have been contained in the Office Sub-lease Agreement
directly to Buyer of the Royal Palm Executive Center floors otherwise to have
been subleased under the Office Sublease Agreement.
Section 9.7. Audited Financials. Buyer shall have received the
------------------
Audited Financial Statements; provided that in no event shall Buyer be required
to consummate the Asset and Stock Purchase within less than 7 days following
receipt of the Audited Financial Statements.
ARTICLE X
---------
Conditions to Seller's Obligation to Close
------------------------------------------
10.
Seller's obligation to consummate the Asset and Stock Purchase is
subject to the satisfaction on or prior to the Closing Date, or waiver by
Seller, of all of the following conditions:
Section 10.1. Representations, Warranties and Covenants of Buyer.
--------------------------------------------------
The representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date except for representations and warranties that speak as of a
specific date or time other than the Closing Date (which need only be true and
correct in all material respects as of such date or time) and the covenants and
agreements of Buyer to be performed on or before the Closing Date in accordance
with this Agreement shall have been duly performed in all material respects.
Section 10.2. Filings; Consents; Waiting Periods. All registrations,
----------------------------------
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedules 3.8(b) and 4.3 and indicated therein as being a
condition to the Closing for Seller shall have been filed, made or obtained, and
all applicable waiting periods under the HSR Act shall have expired or been
terminated.
Section 10.3. No Injunction. At the Closing Date, there shall be no
-------------
injunction, restraining order or decree of any nature of any court or Government
Authority of competent jurisdiction that is in effect that restrains or
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prohibits the consummation this Agreement, any of the Service Agreements,
Trademark License Agreement, Software License Agreement or Copyright License
Agreement.
Section 10.4. Insurance. Buyer shall have obtained all of the
---------
insurance coverages required by the Service Agreements. Buyer shall have
provided Seller with an insurance certificate reasonably satisfactory to Seller,
and, if available, copies of the related policy or policies, which reflects that
those insurance coverages are in full force and effect for a stated period of at
least one year. The certificate, and related policy or policies, shall describe
the perils covered by each such policy of insurance, identify the insurer(s)
with which each such policy of insurance is carried, specify the amounts of
insurance coverage provided against each such peril, and describe the provisions
contained in each such policy of insurance so as to evidence compliance with the
requirements of the Service Agreements.
Section 10.5. DOT Number. Buyer shall provide satisfactory
----------
evidence to Seller that Buyer has applied for a DOT Number.
Section 10.6. Standby Letter of Credit. Buyer shall present to
------------------------
Seller an irrevocable standby letter of credit, in favor of Seller,
substantially in the form of Exhibit O, in the amount of two and one half
million dollars ($2,500,000), the issuer or confirming bank of which will be a
bank reasonably acceptable to Seller. This letter of credit shall be for a term
of at least one year.
ARTICLE XI
----------
Survival; Indemnification
-------------------------
11.
Section 11.1. Survival. (a) All representations and warranties of
--------
the parties contained in this Agreement or in any Schedule hereto, shall survive
the Closing only until the twelve month anniversary of the Closing; provided,
--------
however, the representations and warranties set forth in Section 3.1(d), 3.2,
-------
3.4(a), 3.7(a), 3.7(d), 3.11(b), 3.11(c), 3.11(d), 3.11(e), 3.15 and Article
VIII (and the relevant Sections of the Seller Disclosure Schedule corresponding
thereto) shall survive the Closing until the expiration of the applicable
statute of limitations with respect thereto. No action or proceeding may be
brought with respect to any of the representations or warranties set forth in
this Agreement, unless written notice thereof, setting forth in reasonable
detail the claimed misrepresentation or breach of warranty shall have been
delivered to the party alleged to have breached such representation or warranty
prior to the expiration of the survival terms set forth for such representation
or warranty in the
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preceding sentence. In calculating any amount of loss payable to Seller pursuant
to Section 11.2(a) or payable to Buyer pursuant to Section 11.2(b), the amount
of any such loss shall be reduced by (i) any reduction in tax liability as a
result of the facts giving rise to the claim for indemnification and (ii) any
insurance recoveries (exclusive of self insurance) offsetting the amount of
loss, and no amount shall be included for special or consequential damages for
the party seeking indemnification. Notwithstanding any provision to the contrary
contained in this Agreement, Buyer shall not make any claim against Seller for
any breach of representation or warranty under this Agreement until the dollar
amount of all loss (which individually or as a result of a series of related
breaches shall be at least $50,000) to Buyer for such breaches, after the
reductions described in the immediately preceding sentence, shall exceed in the
aggregate the amount of $4,000,000, and, if such amount is exceeded, Seller
shall be required to pay only the amount by which such aggregate loss to Buyer
for all such breaches exceeds $4,000,000; provided, however, that Seller's
-------- -------
obligation and liability for any and all breaches of the representations and
warranties set forth in this Agreement shall not exceed in the aggregate the
amount of $50 million.
(b) The covenants and agreements in Sections 5.1, 5.2, 5.6, 5.7 and
5.9 shall not survive the Closing. The covenants and agreements in Sections 5.4
and 5.5, and, to the extent of any violations of Section 5.10 prior to Closing,
Section 5.10, shall survive the Closing only until the twelve month anniversary
of the Closing for a period of one year following the Closing. The remaining
covenants or agreements (including but not limited to the indemnities) contained
in this Agreement shall survive the execution and delivery hereof and the
completion of the transactions contemplated herein.
(c) Other than with respect to the covenants and agreements set forth
in Sections 6.2 through 6.9, 6.11, 6.14 and 6.16 indemnification pursuant to
this Article shall be the exclusive remedy for any breach of representations and
warranties or of any covenant or agreement in this Agreement by either party.
Section 11.2. Indemnification by Buyer or Seller. (a) From and
----------------------------------
after the Closing Date, Buyer shall indemnify and hold harmless Seller, Seller's
Affiliates, each of their respective directors, officers, employees and agents,
and each of the heirs, executors, successors and assigns of any of the foregoing
(collectively, the "Seller Indemnified Parties") (i) subject to the notification
--------------------------
and timing requirements and limitations provided in Section 11.1, from and
against any and all Covered Liabilities arising out of any breach of any
representation or warranty or of any covenant or agreement which survives the
Closing made by or on behalf of Buyer under this Agreement, and (ii) from and
against any
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and all Covered Liabilities arising out of the failure of Buyer to pay,
discharge or perform any of the Assumed Liabilities.
(b) From and after the Closing Date, Seller shall indemnify and hold
harmless Buyer, Buyer's Affiliates, each of their respective partners,
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing (collectively, the "Buyer
-----
Indemnified Parties") (i) subject to the notification and timing requirements
-------------------
and limitations provided in Section 11.1, from and against any and all Covered
Liabilities arising out of any breach of any representation or warranty or of
any covenant or agreement which survives the Closing made by or on behalf of
Seller under this Agreement, and (ii) from and against any and all Covered
Liabilities arising out of the failure of Seller to pay, discharge or perform
any of the Retained Liabilities. With respect to claims made by Buyer hereunder
based on a claim that any of the Transferred Software or Licensed Software, or
any portion of the foregoing, infringes upon or otherwise violates the rights of
others, or if Seller believes that a likelihood of such claim exists, Seller
shall at Seller's sole expense have the option, in its sole discretion, to
either procure for Buyer the right to continue using the software which is the
subject of the claim or possible claim (the "Affected Software"), modify the
Affected Software to make it non-infringing, or replace the Affected Software
with other software reasonably sufficient to fulfill the operations of the
Affected Software as they existed as of the Closing; provided that Seller's
selection to take any such action shall not eliminate Seller's indemnity
obligations set forth in this Section 11.2(b) with respect to any delays in
implementing any option chosen by Seller under this sentence or Seller's
indemnity obligations for the third party claims set forth in Section 11.3.
Seller shall have no liability to Buyer for any such claim, however, to the
extent such claim is based on: (i) the combination of the Affected Software
with other software, firmware or hardware not used by Seller in combination with
the Affected Software as of the Closing; (ii) modifications made by Buyer or at
Buyer's discretion to the Affected Software; or (iii) uses of the Affected
Software which are different from the uses to which it had been put by Seller
prior to the Closing.
(c) Any payment made pursuant to this Section shall be treated by
Seller and Buyer as an adjustment to the purchase price provided for herein, and
Seller and Buyer agree, and Buyer agrees to cause its Affiliates, not to take
any position inconsistent therewith for any purpose. Each subsidiary of Buyer
shall be jointly and severally liable with Buyer for Buyer's indemnification
obligations pursuant to this Agreement, including pursuant to this Section and
Section 11.3, and Buyer shall, if so requested by Seller,
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cause each subsidiary to sign such instruments evidencing the foregoing
obligations as Seller may reasonably request.
Section 11.3. Third Party Claims. If a claim by a third party is
------------------
made against an indemnified party (i.e., a Seller Indemnified Party or a Buyer
Indemnified Party), and if such indemnified party intends to seek indemnity with
respect thereto under this Article, such indemnified party shall promptly notify
the indemnifying party in writing of such claims setting forth such claims in
reasonable detail, provided that the failure to give such notice shall not
relieve the indemnifying party of its obligation to indemnify except to the
extent the indemnifying party is materially prejudiced by such failure to give
notice. The indemnifying party shall have 20 days after receipt of such notice
to undertake, through counsel of its own choosing and at its own expense, the
settlement or defense thereof, and the indemnified party shall cooperate with it
in connection therewith; provided that with respect to Buyer's indemnification
--------
of Seller, if Seller so requests, Buyer shall undertake, through counsel of its
own choosing and at its own expense, the settlement or defense of Claims against
Seller or any other Seller Indemnified Party arising from accidents involving
vehicles owned or leased by Buyer, or other Claims by Dealers or employees
arising in the ordinary course of the Business as conducted by Buyer, for which
Buyer is obligated pursuant to the terms of this Agreement to indemnify Seller;
provided, however, that the indemnified party may participate in such settlement
-------- -------
or defense through counsel chosen by such indemnified party, provided that the
fees and expenses of such counsel shall be borne by such indemnified party. The
indemnified party shall not pay or settle any claim which the indemnifying party
is contesting. Notwithstanding the foregoing, the indemnified party shall have
the right to pay or settle any such claim, provided that in such event it shall
waive any right to indemnity therefor by the indemnifying party. If the
indemnifying party does not notify the indemnified party within thirty days
after the receipt of the indemnified party's notice of a claim of indemnity
hereunder that it elects to undertake the defense thereof, the indemnified party
shall have the right to contest, settle or compromise the claim but shall not
thereby waive any right to indemnity therefor pursuant to this Agreement.
Section 11.4. Materiality. For purposes of Article XI of this
-----------
Agreement, the existence of, and dollar amount of, any breach of any
representation or warranty (other than the representations and warranties set
forth in Section 3.16) shall be determined without regard to any qualification
in such individual representation or warranty as to material adverse effect on
the Business Condition.
ARTICLE XII
-----------
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Termination
-----------
12.
Section 12.1. Termination. This Agreement may be terminated
--------------------------
at any time prior to the Closing by:
(a) the mutual consent of Seller and Buyer;
(b) by Seller, if the Definitive Financing Agreements have not been
executed by the later of (i) 45 days after the date hereof and (ii) 7 days after
date on which the conditions set forth in Sections 9.2, 9.4, 9.6 and 9.7 have
been satisfied and there is no reason to believe that the conditions set forth
in Sections 9.1 and 9.3 may not be satisfied as of the Closing Date; or
(c) either Seller, on the one hand, or Buyer, on the other hand, if
the Closing has not occurred by the close of business on January 1, 1997 and if
the failure to consummate the Asset and Stock Purchase 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 prior to Closing.
Section 12.2. Procedure and Effect of Termination. In the event of
-----------------------------------
termination of this Agreement by either or both of Seller, on the one hand, and
Buyer, on the other hand, pursuant to Section 12.1, written notice thereof shall
forthwith be given by the terminating party to the other party hereto, and this
Agreement shall thereupon terminate and become void and have no effect, and the
transactions contemplated hereby shall be abandoned without further action by
the parties hereto, except that the provisions of Section 13.5 shall survive the
termination of this Agreement; provided, however, that such termination shall
-------- --------
not relieve any party hereto of any liability for any breach of this Agreement.
If this Agreement is terminated as provided herein all filings, applications and
other submissions made in accordance with Sections 3.8(b) and 4.3 shall, to the
extent practicable, be withdrawn from the Persons to which they were made.
ARTICLE XIII
------------
Miscellaneous
-------------
13.
Section 13.1. Non-Assignable Undertakings and Rights.
--------------------------------------
Notwithstanding anything in this Agreement to the contrary, this Agreement shall
not constitute an agreement to assign any claim, contract, license, permit,
lease, commitment, sales order, warranty or purchase order which would otherwise
be assigned hereunder if any attempted assignment thereof without the consent of
the other party thereto or the grantor thereof would constitute a breach
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thereof or would in any way affect the rights of Seller thereunder. To the
extent that consents or waivers are not obtained by Seller prior to Closing,
Seller and Buyer shall continue to seek such consents or waivers and to
cooperate with each other to establish, to the extent practicable, arrangements
that are reasonable and lawful as to both Seller and Buyer, and which result in
the benefits and obligations under such assumed contracts, leases and permits
being apportioned in a manner that is in accordance with the purpose and
intention of this Agreement .
Section 13.2. Counterparts. This Agreement may be executed in one or
------------
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section, provided receipt of copies of such counterparts is confirmed.
Section 13.3. Governing Law; Jurisdiction and Forum. (a) This
-------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without reference to the choice of law principles thereof.
(b) Seller and Buyer hereby irrevocably submit to the jurisdiction of
any New York State or Federal court sitting in the City of New York in any
action or proceeding arising out of this Agreement or the transactions
contemplated hereby. Seller and Buyer hereby irrevocably waive the defense of
an inconvenient forum to the maintenance of any such action or proceeding.
(c) By the execution and delivery of this Agreement, Buyer (i)
irrevocably designates and appoints (a) ▇▇▇ ▇▇▇▇ & Associates ("JA&A"), 575
----
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent upon which
process may be served in any action or proceeding arising out of or relating to
this Agreement so long as JA&A maintains a place of business at an address in
New York City; provided that Buyer may at any time designate and appoint The
Corporation Trust Company ("CTC") care of CT Corporation System, at 1633
---
Broadway, 23rd floor, in the City of New York, County of New York, State of New
York to so serve, (ii) submits to the personal jurisdiction of any state or
federal court in the State of New York in any such action or proceeding, and
(iii) agrees that service of process upon CTC shall be deemed in every respect
effective service of process upon Buyer in any such action or proceeding. Buyer
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments, as may be necessary to continue such
designation and appointment of CTC in full force and effect so long as this
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Agreement shall be in effect. The foregoing shall not limit the rights of any
party to serve process in any other manner permitted by law.
(d) By the execution and delivery of this Agreement, Seller (i)
irrevocably designates and appoints CTC care of CT Corporation System, at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ of New York, State of New
York, as its authorized agent upon which process may be served in any action or
proceeding arising out of or relating to this Agreement, (ii) submits to the
personal jurisdiction of any state or federal court in the State of New York in
any such action or proceeding, and (iii) agrees that service of process upon CTC
shall be deemed in every respect effective service of process upon Seller in any
such action or proceeding. Seller further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
CTC in full force and effect so long as this Agreement shall be in effect. The
foregoing shall not limit the rights of any party to serve process in any other
manner permitted by law.
Section 13.4. Entire Agreement. This Agreement (including agreements
----------------
incorporated herein) and the Schedules and Exhibits hereto contain the entire
agreement between the parties with respect to the subject matter hereof and
there are no agreements, understandings, representations or warranties between
the parties other than those set forth or referred to herein. Except for
Sections 11.2 and 11.3, which are intended to benefit, and to be enforceable by,
any of the Seller Indemnified Parties and the Buyer Indemnified Parties, as the
case may be, this Agreement is not intended to confer upon any Person not a
party hereto any rights or remedies hereunder.
Section 13.5. Expenses. Except as set forth in this Agreement,
--------
whether or not the Asset and Stock Purchase is consummated, all legal and other
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
Section 13.6. Notices. All notices and other communications
-------
hereunder shall be sufficiently given for all purposes hereunder if in writing
and delivered personally, sent by documented overnight delivery service or
registered or certified mail return receipt requested to the appropriate address
set forth below. Notices to Seller shall be addressed to:
Ryder Truck Rental, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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or at such other address and to the attention of such other Person as Seller may
designate by written notice to Buyer. Notices to Buyer shall be addressed to:
RCTR Holdings, Inc.
c/o Questor Management Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
and after the Closing Date, with a copy to:
RCTR Holdings, Inc.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or at such other address and to the attention of such other Person as Buyer may
designate by written notice to Seller.
Section 13.7. Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, that neither party may assign this
--------
Agreement without the prior written consent of the other party. Notwithstanding
the foregoing: (1) Buyer may assign this Agreement upon at least 10 days' prior
notice to and without the consent of Seller, to a party who purchases or
acquires, as a going concern, the business of Buyer or all or substantially all
of Buyer's assets; provided, however, that any assignee of this Agreement must
(a) agree with Seller, in writing, to be bound by the terms and provisions
hereof, (b) have a debt/equity ratio no higher than Buyer's as of the Closing
Date, (c) be the assignee of the following agreements (to the extent such
agreements are still existing at the time of such assignment): (i) the
Copyright License Agreement, (ii) the Software License Agreement, (iii) the
Trademark License Agreement, (iv) the Administrative Services Agreement, (v) the
Maintenance Agreement, (vi) the MIS Support Agreement and (vii) the Used Truck
Sales Agreement and (d) not be one of the parties set forth in paragraph number
8 on Schedule 3 of the Trademark License Agreement, (2) Seller may assign this
Agreement, upon 30 days prior written notice to, and without the consent of,
Buyer, to a party who purchases or acquires as a going concern, the business of
Seller or all or substan-
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tially all or Seller assets, provided, however, that any assignee of this
Agreement must (a) agree with Buyer in writing, to be bound by the terms and
provisions hereof, and (b) have a debt/equity ratio no higher than Seller's as
of the Closing Date. Buyer may assign its rights hereunder to any lenders which
provide financing to Buyer for the purpose of consummating the transactions
contemplated hereby, or refinancing any such financing, including any successors
thereto.
Section 13.8. Headings; Definitions. The Section, Article and other
---------------------
headings contained in this Agreement are inserted for convenience of reference
only and will not affect the meaning or interpretation of this Agreement. All
references to Sections or Articles contained herein mean Sections or Articles of
this Agreement unless otherwise stated. All capitalized terms defined herein
are equally applicable to both the singular and plural forms of such terms.
Section 13.9. Amendments and Waivers. This Agreement may not be
----------------------
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Either party hereto may, only by an instrument in writing, waive
compliance by the other party hereto with any term or provision hereof on the
part of such other party hereto to be performed or complied with. The waiver by
any party hereto of a breach of any term or provision hereof shall not be
construed as a waiver of any subsequent breach.
Section 13.10. Interpretation; Absence of Presumption. (a) For the
--------------------------------------
purposes hereof, (i) "to Seller's knowledge" shall mean the actual knowledge of
Seller's executive officers after due inquiry, which shall include consultation
with the Business's President and/or Chief Financial Officer (ii) words in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other genders as the context requires, (iii)
the terms "hereof", "herein", and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole
(including all of the Schedules and Exhibits hereto) and not to any particular
provision of this Agreement, and Article, Section, paragraph, Exhibit and
Schedule references are to the Articles, Sections, paragraphs, Exhibits and
Schedules to this Agreement unless otherwise specified, (iv) the word
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified, (v) the word "or"
--
shall not be exclusive, and (vi) provisions shall apply, when appropriate, to
successive events and transactions.
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(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
Section 13.11. Severability. Other than as provided in Section
------------
6.2(f) which controls with respect to Section 6.2, any provision hereof which is
invalid or unenforceable shall be ineffective to the extent of such invalidity
or unenforceability, without affecting in any way the remaining provisions
hereof.
Section 13.12. Specific Performance. Each party acknowledges that
--------------------
the other would not have an adequate remedy at law in the event that provisions
of Sections 6.2, 6.3, 6.4, 6.8(b), 6.14, and 6.16 of this Agreement were not
performed in accordance with the terms hereof or were otherwise breached. In
such event each party agrees that each shall be entitled to specific performance
and injunctive relief with respect to such provisions to prevent any violation
or to cure breaches of the provisions of such Sections and to enforce
specifically the terms and provisions thereof, in addition to any other remedy
or relief available at law or equity.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties as of the day first above written.
RYDER TRUCK RENTAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice-President
Develpment
RCTR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBITS
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Exhibit A Form of Administrative Services Agreement
Exhibit B Form of Copyright License Agreement
Exhibit C Form of Maintenance Agreement
Exhibit D Form of MIS Support Agreement
Exhibit E Form of Office Sublease Agreement (to be added prior to Closing)
Exhibit F Form of Patent License Agreement
Exhibit G Form of Ryder Dealer Agreement
Exhibit H Form of Shared Facility License
Exhibit I Form of Software License Agreement
Exhibit J Form of Trademark License Agreement
Exhibit K Form of Used Truck Sales Agreement
Exhibit L Form of Assumption Agreement
Exhibit M Form of ▇▇▇▇ of Sale
Exhibit N Form of ▇▇▇▇ of Sale from Axle Limited Partnership
Exhibit O Form of Letter of Credit
EXHIBIT A
---------
See Exhibit 10.6 Administrative Services Agreement
EXHIBIT B
---------
See Exhibit 10.12 Copyright License Agreement
EXHIBIT C
---------
See Exhibit 10.4 Vehicle Maintenance Agreement
EXHIBIT D
---------
See Exhibit 10.7 MIS Support Agreement
EXHIBIT E
---------
See Exhibit 10.8 Sublease Agreement
EXHIBIT F
---------
See Exhibit 10.11 Patent License Agreement
EXHIBIT G
---------
See Exhibit 10.3 Dealer Agreement
EXHIBIT H
---------
See Exhibit 10.9 Office License Agreement
EXHIBIT I
---------
See Exhibit 10.13 Software License Agreement
EXHIBIT J
---------
See Exhibit 10.10 Trademark License Agreement
EXHIBIT K
---------
See Exhibit 10.5 Used Truck Sales Agreement
SCHEDULES
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Schedule 1.1(a) Assigned Leases
Schedule 1.1(b) Marketing Studies
Schedule 1.1(c) Personal Property, June 30, 1996
Schedule 1.1(d) Phrases
Schedule 1.1(e) Offices to be subject to Shared Facility Licenses
Schedule 1.1(f) Statement of Net Book Assets: Calculation of certain items
Schedule 1.1(g) Towing Equipment, June 30, 1996
Schedule 1.1(h) Transferred Patents
Schedule 1.1(i) Transferred Software
Schedule 1.1(j) Transferred Trademarks
Schedule 1.1(k) Trucks, June 30, 1996
Schedule 5.12 Sale of Certain Trucks
Schedule 6.2(d) Certain Competitors
Schedule 7.8(a) Welfare Benefits Plans
Schedule 9.6(a) Material Approvals
Schedule 9.6(b) Software Agreement
Schedule 9.6(c) Condition regarding Assigned Leases