<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1997
REGISTRATION NO. 333-20397
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
----------------
RYDER TRS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
38-331-3542
DELAWARE 7513 (I.R.S. EMPLOYER
IDENTIFICATION NO.)
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
8669 NW 36TH STREET, MIAMI, FLORIDA 33166, (305) 500-4545
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
GERALD R. RIORDAN
PRESIDENT AND CHIEF OPERATING OFFICER
RYDER TRS, INC.
8669 NW 36TH STREET
MIAMI, FLORIDA 33166
(305) 500-4545
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
WITH A COPY TO:
CORNELIUS T. FINNEGAN III, ESQ.
WILLKIE FARR & GALLAGHER
ONE CITICORP CENTER
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022
(212) 821-8000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<C> <S>
3.1** Restated Certificate of Incorporation of the Company.
3.2** Restated and Amended By-Laws of the Company.
3.3** Amended and Restated Certificate of Incorporation of Leasco.
3.4** By-Laws of Leasco.
4.1** Indenture, dated as of November 25, 1996, between the Company and The
Bank of New York, as trustee, relating to $175,000,000 principal
amount of 10% Senior Subordinated Notes due 2006, including forms of
Senior Subordinated Notes.
4.2** Credit Agreement, dated as of October 17, 1996, among the Company, The
Chase Manhattan Bank and other lending institutions.
4.3** Security Agreement, dated October 17, 1996, among the Company, the
Guarantor Subsidiaries, and Citicorp, U.S.A., Inc.
4.4** Guarantee Agreement, dated as of October 17, 1996, among the Guarantor
Subsidiaries and Citicorp, U.S.A., Inc.
4.5** Pledge Agreement, dated as of October 17, 1996, among the Company,
certain of its Subsidiaries and Citicorp, U.S.A., Inc.
4.6** Indemnity, Subrogation and Contribution Agreement, dated as of October
17, 1996, among the Company, the Guarantor Subsidiaries and Citicorp,
U.S.A., Inc.
4.7** Exchange and Registration Rights Agreement, dated November 25, 1996,
between the Company and Chase Securities Inc.
5* Opinion of Willkie Farr & Gallagher.
10.1** Purchase Agreement, dated November 20, 1996, between the Company and
Chase Securities Inc., relating to the Senior Subordinated Notes.
10.2 Asset and Stock Purchase Agreement dated as of September 19, 1996
between Ryder Truck Rental, Inc. and the Company.
10.3+ Dealer Agreement dated October 17, 1996 between Ryder Truck Rental,
Inc. and the Company.
10.4+ Vehicle Maintenance Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.5+ Used Truck Sales Agreement dated as of October 17, 1996 between Ryder
Truck Rental, Inc. and the Company.
10.6+ Administrative Services Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.7+ MIS Support Agreement dated as of October 17, 1996 between Ryder Truck
Rental, Inc. and the Company.
10.8+ Sublease Agreement dated as of October 17, 1996 between Ryder System,
Inc. and the Company.
10.9+ Office License Agreements dated as of October 17, 1996 between Ryder
Truck Rental, Inc. and the Company.
10.10 Trademark License Agreement dated October 17, 1996 between Ryder
System, Inc. and the Company.
10.11 Patent License Agreement dated as of October 17, 1996 between Ryder
Truck Rental, Inc. and the Company.
10.12 Copyright License Agreement dated as of October 17, 1996 between Ryder
Truck Rental, Inc. and the Company.
10.13 Software License Agreement dated as of October 17, 1996 between Ryder
Truck Rental, Inc. and the Company.
10.14** Management and Consulting Agreement dated as of October 17, 1996
between the Company and Questor Management Company.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
10.15+ Letter Agreement dated October 15, 1996 between the Company and Jay
Alix & Associates, Inc.
10.16** Master Motor Vehicle Lease Agreement, dated as of October 17, 1996,
between the Company and Leasco.
10.17** Vehicle Title Nominee Agreement, dated as of October 17, 1996, between
Leasco and RTR.
12** Statement Regarding Computation of Ratio of Earnings to Fixed Charges.
21** Subsidiaries of the Company.
23.1** Consent of Coopers & Lybrand L.L.P.
23.2** Consent of KPMG Peat Marwick LLP.
23.3* Consent of Willkie Farr & Gallagher (included in its opinion to be
filed as Exhibit 5).
24.1** Powers of Attorney (included on signature pages to this Registration
Statement on Form S-4).
25.1** Statement on Form T-1 of Eligibility of Trustee.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of Letter to Clients.
99.4* Form of Letter to Nominees.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for portions of these
agreements.
(b) Financial Statement Schedules:
Schedules have been omitted because they are not applicable or not required
or the required information is included in the financial statements or notes
thereto.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Miami, State of
Florida on the 3rd day of February, 1997.
Ryder TRS, Inc.
/s/ Gerald R. Riordan
By: _________________________________
Gerald R. Riordan President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
/s/ Jay Alix Chairman of the
- ------------------------------------- Board and Chief February 3,
JAY ALIX Executive Officer 1997
(principal
executive officer)
/s/ Lawrence J. Ramaekers Vice Chairman of the
- ------------------------------------- Board of Directors February 3,
LAWRENCE J. RAMAEKERS 1997
/s/ Gerald R. Riordan President and Chief
- ------------------------------------- Operating Officer February 3,
GERALD R. RIORDAN and Director 1997
II-3
<PAGE>
SIGNATURE TITLE DATE
/s/ Larry D. Thogmartin Vice President and
- ------------------------------------- Controller February 3,
LARRY D. THOGMARTIN (principal 1997
financial officer
and controller)
/s/ Christopher G. Mumford Director
- ------------------------------------- February 3,
CHRISTOPHER G. MUMFORD 1997
/s/ Alfred A. Piergallini Director
- ------------------------------------- February 3,
ALFRED A. PIERGALLINI 1997
/s/ Thomas R. Reusche Director
- ------------------------------------- February 3,
THOMAS R. REUSCHE 1997
/s/ Edward L. Scarff Director
- ------------------------------------- February 3,
EDWARD L. SCARFF 1997
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. NO.
------- ----
<C> <S> <C>
3.1** Restated Certificate of Incorporation of the Company.
3.2** Restated and Amended By-Laws of the Company.
3.3** Amended and Restated Certificate of Incorporation of Leasco.
3.4** By-Laws of Leasco.
4.1** Indenture, dated as of November 25, 1996, between the Company
and The Bank of New York, as trustee, relating to $175,000,000
principal amount of 10% Senior Subordinated Notes due 2006,
including forms of Senior Subordinated Notes.
4.2** Credit Agreement, dated as of October 17, 1996, among the
Company, The Chase Manhattan Bank and other lending
institutions.
4.3** Security Agreement, dated October 17, 1996, among the Company,
the Guarantor Subsidiaries, and Citicorp, U.S.A., Inc.
4.4** Guarantee Agreement, dated as of October 17, 1996, among the
Guarantor Subsidiaries and Citicorp, U.S.A., Inc.
4.5** Pledge Agreement, dated as of October 17, 1996, among the
Company, certain of its Subsidiaries and Citicorp, U.S.A.,
Inc.
4.6** Indemnity, Subrogation and Contribution Agreement, dated as of
October 17, 1996, among the Company, the Guarantor
Subsidiaries and Citicorp, U.S.A., Inc.
4.7** Exchange and Registration Rights Agreement, dated November 25,
1996, between the Company and Chase Securities Inc.
5* Opinion of Willkie Farr & Gallagher.
10.1** Purchase Agreement, dated November 20, 1996, between the
Company and Chase Securities Inc., relating to the Senior
Subordinated Notes.
10.2 Asset and Stock Purchase Agreement dated as of September 19,
1996 between Ryder Truck Rental, Inc. and the Company.
10.3+ Dealer Agreement dated October 17, 1996 between Ryder Truck
Rental, Inc. and the Company.
10.4+ Vehicle Maintenance Agreement dated as of October 17, 1996
between Ryder Truck Rental, Inc. and the Company.
10.5+ Used Truck Sales Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.6+ Administrative Services Agreement dated as of October 17, 1996
between Ryder Truck Rental, Inc. and the Company.
10.7+ MIS Support Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.8+ Sublease Agreement dated as of October 17, 1996 between Ryder
System, Inc. and the Company.
10.9+ Office License Agreements dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.10 Trademark License Agreement dated October 17, 1996 between
Ryder System, Inc. and the Company.
10.11 Patent License Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. NO.
------- ----
<C> <S> <C>
10.12 Copyright License Agreement dated as of October 17, 1996
between Ryder Truck Rental, Inc. and the Company.
10.13 Software License Agreement dated as of October 17, 1996 between
Ryder Truck Rental, Inc. and the Company.
10.14** Management and Consulting Agreement dated as of October 17,
1996 between the Company and Questor Management Company.
10.15+ Letter Agreement dated October 15, 1996 between the Company and
Jay Alix & Associates, Inc.
10.16** Master Motor Vehicle Lease Agreement, dated as of October 17,
1996, between the Company and Leasco.
10.17** Vehicle Title Nominee Agreement, dated as of October 17, 1996,
between Leasco and RTR.
12** Statement Regarding Computation of Ratio of Earnings to Fixed
Charges.
21** Subsidiaries of the Company.
23.1** Consent of Coopers & Lybrand L.L.P.
23.2** Consent of KPMG Peat Marwick LLP.
23.3* Consent of Willkie Farr & Gallagher (included in its opinion to
be filed as Exhibit 5).
24.1** Powers of Attorney (included on signature pages to this
Registration Statement on Form S-4).
25.1** Statement on Form T-1 of Eligibility of Trustee.
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of Letter to Clients.
99.4* Form of Letter to Nominees.
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment has been requested for portions of these agreements.
<PAGE>
EXHIBIT 10.2
------------
===================================================
ASSET AND STOCK PURCHASE AGREEMENT
by and between
RYDER TRUCK RENTAL, INC.
and
RCTR HOLDINGS, INC.
dated as of
September 19, 1996
===================================================
<PAGE>
INDEX
Page
Number
------
1.
ARTICLE I
---------
Definitions
-----------
Section 1.1 Definitions 1
ARTICLE II
2.
Sale of Assets; Closing
-----------------------
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
----------------------------------------
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
-2-
<PAGE>
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
---------------------------------------
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
-----------------------------
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
---------------------
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
-3-
<PAGE>
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
-----------------
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
-----------
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
-----------------------------------------
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
-4-
<PAGE>
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
------------------------------------------
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
-------------------------
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
-----------
Section 12.1 Termination 85
Section 12.2 Procedure and Effect of Termination 86
ARTICLE XIII
13.
Miscellaneous
-------------
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
-5-
<PAGE>
EXHIBITS
--------
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 Bill of Sale
Exhibit N Form of Bill of Sale from Axle Limited Partnership
Exhibit O Form of Letter of Credit
-6-
<PAGE>
SCHEDULES
---------
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
-7-
<PAGE>
THIS ASSET AND STOCK PURCHASE AGREEMENT (this "Agreement"), dated as
---------
of September 19, 1996, is by and between Ryder Truck Rental, Inc., ("Seller"), a
------
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
-----
System") and RCTR Holdings, Inc., a corporation organized under the laws of
- ------
Delaware ("Buyer").
-----
WHEREAS, Seller wishes to sell to Buyer the Assets (as herein defined)
and the business of Seller's Consumer Truck Rental division (the "Division")
--------
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
----------
Management") and Ryder Truck Rental One-Way, Inc., a Delaware corporation and
- ----------
wholly owned subsidiary of Seller (the "Phonebook Company"), and Buyer wishes to
-----------------
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
---------
Definitions
-----------
Section 1.1. Definitions. As used in this Agreement the following
-----------
terms shall have the following respective meanings:
"Accessories" shall mean hand trucks, moving dollies and furniture
-----------
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
-------------------
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,
------
arbitration, inquiry, proceeding or investigation by or before any Government
Authority or arbitral tribunal.
-8-
<PAGE>
"Adjusted Closing Date Statement of Net Book Assets" shall have
--------------------------------------------------
the meaning set forth in Section 2.8(c).
"Administrative Services Agreement" shall mean the transition support
---------------------------------
services agreement to be entered into by Seller and Buyer in the form of
Exhibit A.
"Affiliate" (and, with a correlative meaning, "Affiliated") shall
--------- ----------
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
---------
hereof.
"Antitrust Laws" shall mean and include the Sherman Act, as amended,
--------------
the Clayton 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
------------------------
transactions described in Section 2.1.
"Assets" shall have the meaning set forth in Section 2.1.
------
"Assigned Leases" shall mean collectively the leases set forth on
---------------
Schedule 1.1(a).
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
-------------------
"Average Four Quarter Revenue per Truck" shall mean the amount
--------------------------------------
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.
-9-
<PAGE>
"Bank Financing" shall have the meaning set forth in Section 4.5.
--------------
"Business" shall mean the Rental Business, the Phonebook Business, the
--------
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.
------------------
"Business Day" shall mean a Monday, Tuesday, Wednesday, Thursday, or
------------
Friday, but not any such day which is a United States federal holiday.
"Business Employee Benefit Plans" shall have the meaning set
-------------------------------
forth in Section 7.1.
"Business Employees" shall have the meaning set forth in Section 7.1.
------------------
"Buyer" shall have the meaning set forth in the first paragraph
-----
hereof.
"Buyer Indemnified Parties" shall have the meaning set forth
-------------------------
in Section 11.2.
"Buyer NonCompete Period" shall have the meaning set forth in
-----------------------
Section 6.2.
"Claims" shall have the meaning set forth in Section 2.2.
------
"Closing" shall mean the consummation of the Asset and Stock
-------
Purchase.
"Closing Date" shall mean the first Tuesday which is at least three
------------
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
-----------------------------------------
set forth in Section 2.7(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended,
----
and any successor thereto.
"Contracts" shall mean all agreements and contracts to which Seller is
---------
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.
-10-
<PAGE>
"Copyright License Agreement" shall mean the copyright agreement to be
---------------------------
entered into by Seller and Buyer in the form of Exhibit B.
"Covered Liabilities" shall mean any and all debts, losses,
-------------------
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
-------------
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
-------------------------------
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
------
agent for the Rental Business.
"Determination" shall mean a "determination" as defined by Section
-------------
1313(a) of the Code.
"Division" shall have the meaning set forth in the second paragraph
--------
of this Agreement.
"Division Light Commercial Data Base" shall mean the data base of
-----------------------------------
light commercial customers and prospects used and maintained by the Division.
"DOT Number" shall have the meaning set forth in Section 6.6.
----------
"Encumbrances" shall mean mortgages, liens, encumbrances, security
------------
interests, covenants, conditions, restrictions, and any other matters affecting
title.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended, and any successor thereto.
"ERISA Affiliate" shall mean a member of a group of employers which is
---------------
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.
---------------
-11-
<PAGE>
"Fed Ex Contract" shall mean the contract between Federal Express
---------------
Corporation and Seller, dated November 2, 1995.
"Final Purchase Price" shall mean the Net Book Value as reflected on
--------------------
the Adjusted Closing Date Statement of Net Book Assets, plus $60 million.
"GAAP" shall mean generally accepted accounting principles in
----
the United States.
"Government Authority" shall mean any government or state (or any
--------------------
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
------------------------
Territory with a manufacturer's gross vehicle weight rating of 26,000 pounds or
more.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
-------
Act of 1976, as amended.
"Income Taxes" shall mean all taxes based upon or measured by
------------
income.
"Intellectual Property" shall mean the Transferred Intellectual
---------------------
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.
---
"KPMG" shall have the meaning set forth in Section 2.7.
----
"Leasing" shall mean surrendering possession and the right to use a
-------
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
----------------
Section 10.6.
"LIBOR" shall mean as of any date the 1 month London interbank offered
-----
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
-12-
<PAGE>
date, the edition published on the most recent preceding date.
"Licensed Software" shall mean the software licensed to Buyer under
-----------------
the Software License Agreement.
"Licenses" shall have the meaning set forth in Section 3.6.
--------
"Light Commercial Rental Business" shall mean (a) the Rental of Trucks
--------------------------------
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
---------------
Section 7.3(a).
"Local Consumer Rental Business" shall mean (a) the rental of Trucks
------------------------------
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
---------------------
entered into by Seller and Buyer in the form of Exhibit C.
"Marketing Studies" shall mean the marketing studies related to the
-----------------
Business set forth on Schedule 1.1(b).
"MIS Support Agreement" shall mean the MIS support agreement to be
---------------------
entered into by Ryder System and Buyer in the form of Exhibit D.
"Move Management Business" shall mean (a) providing moving management
------------------------
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
-13-
<PAGE>
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
-------------------------
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
------------------------
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.
----------------------------
"Net Book Value" shall mean, as of any given date, the net book value
--------------
as reflected on the applicable Statement of Net Book Assets.
"Network Sales" shall mean Network Sales, Inc., a Tennessee
-------------
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
---------------
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
-----------------------------------
pursuant to which the Business shall for calendar year 1997 (i) purchase truck
cargo bodies and truck chassis
-14-
<PAGE>
and (ii) tender used trucks as partial consideration for some of such purchases.
"Office Sub-lease Agreement" shall mean the sublease agreement with
--------------------------
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.
"1-800-GO-RYDER Phone Number" shall mean 1-800-467-9337 or any other
---------------------------
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
--------------------------------
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
------------------------
be entered into by Seller and Buyer in the form of Exhibit F.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Permitted Liens" shall mean (1) statutory liens for Taxes not yet due
---------------
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
-15-
<PAGE>
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
------
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
-----------------
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
------------------
which consists of purchasing phone book advertising throughout the Territory.
"Phonebook Company" shall have the meaning set forth in the second
-----------------
paragraph of this Agreement.
"Phrases" shall mean certain nonproprietary descriptive slogans or
-------
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.
-----------------
"Pre-Closing Tax Period" shall have the meaning set forth in
----------------------
Section 8.2.
"Price Resolution Period" shall have the meaning set forth in
-----------------------
Section 2.8(b).
"Proration Resolution Period" shall have the meaning set forth in
---------------------------
Section 2.8(b).
"Proration Schedule" shall have the meaning set forth in Section
------------------
2.8(a).
"Protection Products" shall mean the risk assurance arrangements sold
-------------------
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
--------------
Statement of Net Book Assets delivered by Seller to Buyer pursuant to Section
2.5(a), plus $60 million.
-16-
<PAGE>
"Purchasing Arrangements" shall mean vendor contracts or arrangements
-----------------------
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
------ ------
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
---------------
Local Consumer Rental Business, and the Light Commercial Rental Business.
"Rental Deposit" shall mean the cash or credit card deposit made by a
--------------
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
--------------------
Section 2.4.
"Roadway Arrangement" shall mean the oral arrangement between Roadway
-------------------
Package Service and Seller with respect to a national truck rental program.
"Ryder Dealer Agreement" shall mean the Dealer Agreement to be
----------------------
entered into by Seller and Buyer in the form of Exhibit G.
"Ryder Move Management" shall have the meaning set forth in the
---------------------
second paragraph of this Agreement.
"Ryder System" shall have the meaning set forth in the first
------------
paragraph of this Agreement.
"Seller" shall have the meaning set forth in the first paragraph of
------
this Agreement.
"Seller Disclosure Schedule" shall have the meaning set forth in
--------------------------
the introduction in Article III.
-17-
<PAGE>
"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-
<PAGE>
"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-
<PAGE>
"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-
<PAGE>
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 1-800-GO-RYDER 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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
(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;
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(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-
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<PAGE>
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);
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(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 Bill of Sale in substantially the form of
Exhibit M, (B) a duly executed Bill 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-
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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.
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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, Rosen & Katz, 51 West 52nd Street, New York, New York 10019.
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
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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
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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
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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
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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.
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(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).
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<PAGE>
(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
- ----------
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<PAGE>
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.
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<PAGE>
(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
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<PAGE>
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.
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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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<PAGE>
(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 wells, 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
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<PAGE>
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-
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<PAGE>
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
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<PAGE>
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
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<PAGE>
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.
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<PAGE>
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
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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
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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-
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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
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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,
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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;
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(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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<PAGE>
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
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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 mark, 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 mark
which includes "Ryder" and the dealer does not use such mark 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 1-800-GO-RYDER 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 1-800-GO-RYDER Phone Number through the period from Closing until
three (3) years after the termination or expiration of the Trademark License
Agreement, at which time Seller's 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
1-800-GO-RYDER 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% mark-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 bill 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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<PAGE>
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) Jay Alix & Associates ("JA&A"), 575
----
Fifth Avenue, New York, New York 10017, 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 1633
Broadway, 23rd floor, in the City of New York, County 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.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
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<PAGE>
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
4000 Town Center
Suite 530
Southfield, MI 48075
Attention: President
with a copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
Attention: Thomas M. Cerabino, Esq.
and after the Closing Date, with a copy to:
RCTR Holdings, Inc.
8699 N.W. 36th Street
Miami, FL 33166
Attention: Gerald R. Riordan
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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<PAGE>
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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<PAGE>
(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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<PAGE>
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/ Dwight D. Denny
--------------------------
Dwight D. Denny
Executive Vice-President
Develpment
RCTR HOLDINGS, INC.
By: /s/ Robert E. Shields
------------------------------
Robert E. Shields
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<PAGE>
EXHIBITS
--------
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 Bill of Sale
Exhibit N Form of Bill of Sale from Axle Limited Partnership
Exhibit O Form of Letter of Credit
<PAGE>
EXHIBIT A
---------
See Exhibit 10.6 Administrative Services Agreement
<PAGE>
EXHIBIT B
---------
See Exhibit 10.12 Copyright License Agreement
<PAGE>
EXHIBIT C
---------
See Exhibit 10.4 Vehicle Maintenance Agreement
<PAGE>
EXHIBIT D
---------
See Exhibit 10.7 MIS Support Agreement
<PAGE>
EXHIBIT E
---------
See Exhibit 10.8 Sublease Agreement
<PAGE>
EXHIBIT F
---------
See Exhibit 10.11 Patent License Agreement
<PAGE>
EXHIBIT G
---------
See Exhibit 10.3 Dealer Agreement
<PAGE>
EXHIBIT H
---------
See Exhibit 10.9 Office License Agreement
<PAGE>
EXHIBIT I
---------
See Exhibit 10.13 Software License Agreement
<PAGE>
EXHIBIT J
---------
See Exhibit 10.10 Trademark License Agreement
<PAGE>
EXHIBIT K
---------
See Exhibit 10.5 Used Truck Sales Agreement
<PAGE>
SCHEDULES
---------
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
<PAGE>
Exhibit 10.3
------------
DEALER AGREEMENT
This Dealer Agreement ("Agreement"), dated October 17, 1996, is between
RYDER TRS, INC. (f/k/a RCTR HOLDINGS, INC.), with its principal place of
business at 8669 N.W. 36th Street, Miami, Florida 33166 ("TRS") and RYDER TRUCK
RENTAL, INC., with its principal place of business at 3600 N.W. 82nd Avenue,
Miami, Florida 33166 ("Ryder").
RYDER AND TRS AGREE AS FOLLOWS:
TRS appoints Ryder as its commission agent for and in connection with the
rental of TRS vehicles and accessory equipment ("Rental Equipment") from the
Ryder operating locations listed on Schedule "A" (collectively, "Ryder
Locations", and singularly, "Ryder Location") only and Ryder accepts this
appointment.
All money paid by renters to Ryder in connection with these rentals will be
remitted weekly to TRS at the corresponding address listed on Schedule "A". TRS
will remit its check to Ryder monthly for commissions earned by Ryder for
rentals reported to TRS during the preceding month. Such check will be sent to
Ryder's Shared Services Center at Attn.: Group Director - Ryder Shared Services
Center, 6000 Windward Parkway, Alpharetta, Georgia and will be mailed by TRS in
sufficient time so that Ryder should receive it by the 15th of the month. With
such check, TRS will send Ryder a break down by Ryder Location of the commission
attributable to each such Ryder Location. Commissions earned by Ryder will be
computed on gross rental revenues collected by Ryder in accordance with the
Dealer Manual. Gross rental revenues include all revenue from renters, but do
not include money paid by renters designated as sales, use or other tax or
surcharge, deposits, or collection or credit fees.
Ryder's basic commission on Rental Equipment will be 13.50 percent of gross
rental revenues unless the Dealer Manual provides for a higher percentage with
respect to incidental items (e.g. towing equipment hook ups and un-hooking) or a
higher percentage otherwise applies with respect to such items (e.g. extra
commission incentive programs on certain protection products at certain times).
Additionally, TRS agrees to pay Ryder each month a bonus commission of 3.00
percent on all gross rental revenues from each Ryder Location that has strictly
complied with all written programs, procedures, and standards established by TRS
from time to time in accordance with paragraph 2.A. of this Agreement. TRS
reserves the right to pay bonus commission to Ryder in the absence of such
strict compliance. Any payment of the bonus commission will not be an
acknowledgment by TRS that Ryder has strictly complied, and will not be deemed
to be a waiver by TRS of its right to demand strict compliance.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Further, withholding of the bonus commission from Ryder will not be TRS's only
remedy for noncompliance. Starting 12/31/98: (a) Ryder's commission rate will be
adjusted to match the standard commission rate given to all TRS dealers at such
time under TRS's standard dealer agreement, and (b) TRS may deduct, from Ryder's
total commission each month thereafter, a monthly user fee for FIRST at each
Ryder Location, if any. Such FIRST fees will not exceed the same standard FIRST
fees charged to other TRS dealers at such time.
1. TRS AGREES:
A. To make available within the respective Ryder Location's local market
team, Rental Equipment, supplies, forms and instructions reasonably deemed
necessary by TRS to operate a TRS dealership on each Ryder Location. TRS
reserves the right to reasonably determine the amount, type and kind of Rental
Equipment, and supplies required by Ryder under this Agreement. Title to all
Rental Equipment and supplies will remain exclusively with TRS.
B. To pay Ryder the commissions provided for in this Agreement.
C. To assume responsibility for theft, loss, or damage to Rental
Equipment while in Ryder's custody, except however, that Ryder will be
responsible to, and reimburse TRS for theft, loss, or damage to Rental Equipment
caused by (1) the wanton, willful, reckless or intentional acts, or omissions of
Ryder, its agents, or employees, or (2) actions of Ryder, its agents, or
employees which are outside the scope of the limited agency relationship
established by this Agreement.
D. To defend, indemnify and hold Ryder, its affiliates, directors,
officers, employees, agents, subcontractors and the assigns of each harmless
from any and all claims, costs, expenses (including reasonable attorney fees)
and liability for property damage or personal injury to third parties occasioned
by (1) the negligence of TRS, (2) defects in Rental Equipment provided it is
being rented pursuant to a duly executed TRS Rental Agreement, and when a tow
dolly or car carrier is rented as part of the Rental Equipment, that an
appropriate Tow Dolly or Car Carrier Guide and Instructions has also been
furnished to the renter, and (3) the rental of Rental Equipment under this
Agreement, including the negligence of Ryder, provided Ryder was acting
according to TRS programs, procedures and standards and in furtherance of TRS's
business, and provided further that Ryder's acts or omissions are not wanton,
willful, reckless or intentional.
Types of Insurance Provided. During the Term, * will maintain the types
---------------------------
of insurance, in the coverage limits, listed
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
in the insurance policy schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
Type of Insurance Policy Coverage Limits -
Standard Automobile * Per Occurrence with an excess layer of at least
Liability Insurance
Policy (the "Automobile
Liability Insurance
Policy")
Commercial General *
Liability Insurance
Policy with Broad Form
Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy"
Workers Compensation Statutory
Employer's Liability *
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * cause the coverage provided by each such
policy to be kept in place for a period of * after the effective date of
termination or expiration of this Agreement.
TRS may *
Insurance Policy Requirements.
-----------------------------
1. Each liability Insurance Policy shall:
(1) be written by an insurance company reasonably acceptable to * (it
being understood that an insurance company rated A-or better by
A.M. Best & Company is acceptable);
(2) name * as an insured, and be amended to name * , its employees,
officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests
may appear;
(3) provide that if such insurance is cancelled, or any material
change is made in the coverage which affects the interest of any
Additional Insured,
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-3-
<PAGE>
affects the interest of any Additional Insured, such cancellation
or change shall not be effective as to the Additional Insured for
ten (10) days after receipt by the Additional Insured of written
notice from such insurers of such cancellation or change;
(4) be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to,
any Additional Insured;
(5) provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be
invalidated by any action or inaction of * or any other
Person and shall insure each Additional Insured regardless
of any breach or violation of any warranty, declaration or
condition contained in such policies by * or any other
Person;
(6) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each
Additional Insured; and
(7) in accordance with the terms and conditions of the
contractual liability coverage provided by such Insurance
Policy, insure the obligations of * to indemnify the
Additional Insureds hereunder.
The first * of automobile liability insurance and general liability insurance
shall each be on an occurrence form. The first * of automobile liability
insurance shall not be subject to any annual aggregate limit of liability.
Each liability Insurance Policy and any all-risks Insurance Policy of *
which covers vehicles shall waive any rights of subrogation against the
Additional Insureds.
Proof of Insurance. At least once a year, from time to time at *
------------------
request, and any time a new policy is to go into effect, * shall provide *
with insurance certificates and other evidence, reasonably satisfactory to * ,
that the benefits and coverage required by this Section are in full force and
effect. The certificate shall describe the perils covered by each policy of
insurance then in force, identify the insurer or insurers with which such
policies of insurance are carried and maintained, specify the amounts of
insurance coverage provided against each such peril, and describe the provisions
contained in such policies of insurance so as to evidence compliance with the
requirements of this Section. * shall have no duty to examine
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
such insurance certificates or the Insurance Policies to verify compliance. *
shall provide a copy of its insurance policies to * promptly following a request
therefor, if available.
E. To give Ryder the nonexclusive restricted license to use TRS's
registered service marks on signs and rental materials provided by TRS, but only
in the manner authorized by TRS. Ryder will not use any of TRS's registered
service marks in Ryder's business name or in any published manner, including,
but not limited to, telephone listings and advertisements, without TRS's prior
written consent in each such instance, which consent may be withheld in TRS's
discretion. This paragraph shall not in any way apply to any trademarks/service
marks licensed by Ryder to TRS under the trademark license agreement between
Ryder and TRS dated the same date as this Agreement ("Trademark License
Agreement").
F. That it will not enforce against Ryder any provision of this Agreement
which is substantially the same as any provision of TRS's standard dealer
agreement as it exists on the date of this Agreement (including any program,
procedure and/or standard hereunder) to an extent greater than against its other
dealers generally or in a manner not applied against its other dealers
generally; provided that the foregoing limitation shall not apply to the timing
of any payment due from Ryder hereunder.
2. RYDER AGREES:
A. To comply with all programs, procedures, and standards, including, but
not limited to, Dealer Marketing and Operations Manual ("Dealer Manual")
procedures, Dealer Recognition program standards (e.g., TRS President's Cup),
and moving supplies standards in effect as of the date of this Agreement unless
this Agreement expressly provides for a different standard. TRS may, in its
discretion, add, delete, and change programs, procedures, and standards from
time to time, provided (1) TRS gives Ryder at least 30 days prior notice of any
such additions, deletions and/or changes, and (2) such additions, deletions
and/or changes do not conflict with any other provision of this Agreement and do
not adversely affect Ryder Locations generally more than other TRS dealer
locations generally. Notwithstanding the foregoing, if TRS adds, deletes and/or
changes in any material way any of the attached programs, procedures and/or
standards during the term of this Agreement and seeks to apply such additions,
deletions and/or changes against Ryder Locations hereunder, Ryder will have the
right (notwithstanding anything to the contrary in this Agreement) to terminate
this Agreement as to one or more or all Ryder Locations adversely affected by
such addition, deletion and/or change by giving TRS 60 days notice, and Ryder
will not be required to comply with such program, procedure or standard during
such termination notice period at any Ryder Location that
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
terminates because of such addition, deletion and/or change to any program,
procedure or standard.
B. To promote the rental of Rental Equipment (subject however to the
terms of Section 6 of the Asset Purchase Agreement between TRS and Ryder as of
September 19, 1996 ("Asset Purchase Agreement") and paragraph 2.J. of this
Agreement) and to keep both the interior and exterior of all Rental Equipment
neat and clean to the extent required generally of TRS dealers under the Dealer
Manual, but in no event will Ryder be required to wash Rental Equipment under
this Agreement.
C. To have the TRS Rental Agreement completely and properly filled out
and signed by the renter and Ryder, and to collect the prescribed fees prior to
dispatching the Rental Equipment to the extent required generally of TRS dealers
under the Dealer Manual.
D. To pick up Rental Equipment within the respective Ryder Location's
local market team to meet Ryder's rental needs for TRS Rental Equipment at such
Ryder Location at Ryder's sole cost, except that TRS will reimburse Ryder for
the cost of fuel. Notwithstanding the foregoing, TRS acknowledges and agrees
that (1) Ryder will not be obligated to pick up any TRS Rental Equipment unless
Ryder does not have a sufficient quantity of its own rental equipment to rent
under paragraph 2.J. to a TRS rental reservation and (2) that Ryder may not be
able to pick up Rental Equipment at certain locations and at certain times. If
a Ryder Location does not pick up Rental Equipment when required to do so under
this Agreement, TRS may deliver such Rental Equipment to the Ryder Location and
charge Ryder a fee for such service (which fee will not exceed TRS's standard
fee for such service to other dealers) or TRS may move the rental from Ryder to
another dealer in the local market team to effect the rental.
E. To perform repair work on Rental Equipment designated as Minor
Maintenance in the Dealer Manual in accordance with the provisions of the
Maintenance Agreement between TRS and Ryder dated the same date as this
Agreement.
F. To instruct each renter in the safe and proper use and operation of
the Rental Equipment and to furnish renter with copies of all appropriate
instructional materials in accordance with the procedures set forth in the
Dealer Manual.
G. [IF FIS IS SELECTED] To, consistent with practice on the date of this
--------------------
Agreement and in lieu of the Weekly Report requirements set forth in the Dealer
Manual, periodically transmit a Weekly Report(s) to TRS in the same manner and
form as currently transmitted, of Ryder's rental transactions including a
current Rental Equipment inventory list at each Ryder Location.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
OR
--
[IF FIRST IS SELECTED] To mail to TRS at the corresponding address listed
----------------------
on Schedule "A", postmarked no later than Tuesday of every week, a complete,
accurate, and honest report of Ryder's rental transactions by Ryder Location for
the preceding seven days including a current Rental Equipment inventory list at
each Ryder Location irrespective of whether or not any rental transactions have
occurred. This report of rental transactions is the Weekly Report, the format
and preparation of which are detailed in the Dealer Manual. Rental Equipment
not on the Ryder Location when the Weekly Report is mailed to TRS, but which is
to be returned to the Ryder upon the termination of a rental, will be considered
as a part of current inventory. TRS Rental Agreements covering such Rental
Equipment and prepaid fees thereon must be remitted weekly and accounted for in
the Weekly Report during the duration of such rentals even though the Rental
Equipment has not been returned to Ryder.
Ryder will collect sales, use, and other tax, or surcharge applicable to
rentals from the renter and report and remit these monies to TRS as a part of
its Weekly Report(s). With its Weekly Report(s), Ryder will include its check
or money order for all monies collected from renters during said seven days.
H. That all money collected by Ryder in connection with TRS Rental
Equipment under this Agreement is collected in Ryder's capacity as TRS's agent.
The title and ownership of such money is vested at all times in TRS and the
relationship between the parties with respect to such money is one of trust.
I. That authorized TRS representatives may, during normal business hours
and with reasonable advance notice, enter Ryder Locations to audit, inspect, or
copy TRS specific accounting records required to be maintained by Ryder under
the Dealer Manual; and/or to remove Rental Equipment and all other TRS property.
Ryder agrees to retain all TRS specific business records generated by it as a
dealer for at least three years. [IF FIS IS SELECTED - Ryder will store all
completed rental contracts from the location. /[IF FIRST IS SELECTED - TRS will
store all completed rental contracts from the location]
J. That, except as may be restricted in Section 6 of the Asset Purchase
Agreement, Ryder may, at its option, rent or sell or permit any person or,
business entity to rent, provide, or sell any trailer or truck rental equipment
of any kind, including accessory equipment or supplemental programs offered by
TRS such as TRS Protection Plus Plans on or about Ryder Locations. Except as
may be restricted by Section 6 of the Asset Purchase Agreement, Ryder reserves
the right to rent Ryder's own vehicles and accessories and offer Ryder's own
supplemental programs to customers first (including, without limitation, when
the rental
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-7-
<PAGE>
reservation/customer comes from TRS), before renting TRS's Rental Equipment
and/or offering TRS's supplemental programs. However, Ryder will not offer
Ryder's protection products to a renter in TRS Rental Equipment, nor offer TRS's
protection products to a renter in a Ryder vehicle.
K. That Ryder will pay the monthly cost of and charges on the TRS
telephone and telephone line/number which TRS will place at each Ryder Location
(excluding any long distance charges for calls to other TRS locations and any
charges for the telephone book listing therefor, which charges will be credited
to Ryder on each monthly commission payment statement from TRS). TRS will pay
any initial acquisition and installation costs for any TRS telephone and
telephone line/number. Any such telephone and telephone line/number will be the
exclusive property of TRS and be in the name of TRS. Ryder will acquire no
rights or interests in any TRS telephone and telephone line/number and will
comply with all programs, procedures, and standards established by TRS from time
to time in connection with any TRS telephone and telephone line/number in
accordance with paragraph 2.A. of this Agreement. Ryder will cooperate with TRS
in transferring the telephone and telephone line/number at a Ryder Location upon
termination of this Agreement at that Ryder Location.- Ryder acknowledges and
agrees that TRS may, from time to time, anonymously audit Ryder's compliance
with any such programs, procedures, and standards by monitoring telephone calls
to Ryder, its agents or employees.
L. To provide TRS with at least 30 days notice of Ryder's intent to
relocate from a Ryder Location. This Agreement is not a franchise or
distributorship, and Ryder waives the benefit of any franchise, distributorship,
dealership, business opportunity or sales representative law that may be
applicable to this Agreement to the extent such laws are inconsistent with the
terms of this Agreement. Ryder does not have the exclusive right to rent Rental
Equipment in any particular geographic area. TRS may, at any time, including,
but not limited to, during the term of this Agreement, establish one or more of
its own locations or other TRS locations near any Ryder Location, or within or
around the area where the Ryder Location is situated or that the Ryder Location
serves, upon such terms and conditions as TRS deems acceptable.
M. To defend, indemnify, and hold TRS, its affiliates, directors,
officers, employees, agents, subcontractors and the assigns of each harmless
from and against any and all claims, costs, expenses (including reasonable
attorney fees) and liability for personal injury to third parties occasioned by
any unsafe or dangerous condition on any Ryder Location.
N. That upon termination of this Agreement, Ryder will immediately cease
using any TRS registered service marks and will
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-8-
<PAGE>
surrender all TRS Rental Equipment, signs, telephones, equipment, and materials
to TRS. This paragraph shall not in any way apply to any trademarks/service
marks licensed by Ryder to TRS under the Trademark License Agreement.
O. To account for and be responsible to TRS as more fully detailed in the
Dealer Manual for (1) all odometer mileage accumulated on Rental Equipment while
in Ryder's possession, (2) all rental agreement books, and each agreement
therein, issued to Ryder, (3) all unaccounted for fuel, and (4) accessory items
such as hand trucks, furniture pads, dollies, and tow dollies and car carriers.
P. To maintain during the term of this Agreement a policy of garage or
general business liability insurance with limits of not less than $100,000
combined single limits per occurrence, which policy will only cover Ryder's
liability to TRS under paragraph 2.M. of this Agreement.
Q. TRS and Ryder will mutually agree whether to use FIS or FIRST at each
Ryder Location.
[IF FIS IS SELECTED] That Ryder may rent TRS's Rental Equipment using
--------------------
Ryder's computer automation rental system at Ryder Locations ("FIS"). TRS
acknowledges and agrees that: (1) FIS is exclusively Ryder's property and TRS
has no, and will acquire no, rights or interests in FIS under this Agreement,
(2) NEITHER RYDER NOR ANY OF ITS VENDORS MAKES ANY WARRANTY, WHETHER EXPRESS OR
IMPLIED (INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE), WHATSOEVER IN CONNECTION WITH FIS OR ITS USE, AND (3)
NEITHER RYDER NOR ANY OF ITS VENDORS WILL BE RESPONSIBLE FOR ANY DIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST
PROFITS, ARISING OUT OF, OR RELATED TO, FIS OR ITS USE.
OR
--
[IF FIRST IS SELECTED] That TRS will place at each Ryder Location a
----------------------
computer automation system, including, but not limited to, any computer
hardware, software, telephone lines, and materials (collectively "FIRST").
Except as may be set forth otherwise in the Asset Purchase Agreement or any
agreement entered into in connection with the Asset Purchase Agreement, Ryder
acknowledges and agrees that: (1) FIRST is exclusively TRS's property and Ryder
has no rights or interests in FIRST, other than the right to use FIRST in
accordance with this Agreement, (2) FIRST contains copyright protected,
proprietary, and confidential information, and Ryder will only use such
information in an authorized manner and will not permit any such information or
any other aspect of FIRST to be disclosed to, or used by or for the benefit of,
any unauthorized party in any manner, (3) Ryder will make no modifications to
FIRST, and will
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
not disassemble, reverse engineer, tamper with, bypass, or otherwise alter any
aspect of FIRST, (4) FIRST will only be used by Ryder, at Ryder Locations and on
the computer hardware provided by TRS, and Ryder will not transfer FIRST to
another computer or party, (5) Ryder will comply with all programs, procedures,
and standards established by TRS from time to time in connection with FIRST in
accordance with paragraph 2.A. of this Agreement,(6) Ryder will be responsible
for any electricity necessary to operate FIRST, (7) Ryder will treat FIRST with
care and will place it in a safe and suitable place at each Ryder Location, (8)
TRS will assume responsibility for theft, loss, or damage to FIRST, except
however, Ryder will be responsible to and reimburse TRS for theft, loss or
damage to FIRST caused by (a) the negligent or intentional acts or omissions of
Ryder, its agents, or employees, or (b) actions of Ryder, its agents, or
employees which are in violation of this Agreement, (9) NEITHER TRS NOR ANY OF
ITS VENDORS MAKE ANY WARRANTY, WHETHER EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE), WHATSOEVER
IN CONNECTION WITH FIRST OR ITS USE, AND NEITHER TRS NOR ANY OF ITS VENDORS WILL
BE RESPONSIBLE FOR ANY DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING,
BUT NOT LIMITED TO, LOST PROFITS, ARISING OUT OF, OR RELATED TO, FIRST OR ITS
USE, and (10) Ryder will immediately cease using and return FIRST to TRS or
TRS's designee upon any termination of this Agreement.
R. That all items purchased from TRS or any affiliated company are
purchased at bona fide wholesale prices for resale in the ordinary course of
business unless written notice to the contrary is given.
3. THE PARTIES MUTUALLY AGREE:
A. That this Agreement will continue in full force and effect until
terminated by either party in accordance with the terms of this Agreement.
B. That, from the date of this Agreement until December 31, 1996, either
party may terminate this Agreement without cause, as to one or more Ryder
Locations, by giving the other party 60 days prior notice for each such Ryder
Location, but in no event can either party alone terminate more than a total
number of Ryder Locations that accounted for $1,000,000 in total Consumer Truck
Rental ("Division") annual Rental Equipment rental revenue in 1995.
C. That, from January 1, 1997 until December 31, 1997, either party may
terminate this Agreement without cause, as to one or more Ryder Locations, by
giving the other party 60 days prior notice for each such Ryder Location, but in
no event can either party alone terminate more than a total number of Ryder
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
Locations that accounted for $6,000,000 in total Division annual Rental
Equipment rental revenue in 1996.
D. That, each calendar year after December 31, 1997, either party may
terminate this Agreement without cause, as to one or more or all Ryder
Locations, to the extent below the terminating party's * Annual Termination
Limit (as defined below), by giving the other party 60 days prior notice for
each such Ryder Location. The " * Annual Termination Limit" will be equal to
a total number of Ryder Locations that accounted for $12,000,000 in total
Division annual Rental Equipment rental revenue in the calendar year immediately
preceding the calendar year of termination.
E. That, notwithstanding any restrictions in 3.B., 3.C. and 3.D., either
party may terminate this Agreement at any time with respect to any Ryder
Location upon material violation by the other party of any of the Agreement's
terms or conditions at or with respect to such Ryder Location, by giving the
other party 30 days' notice of and opportunity to cure such violation at such
Ryder Location.
F. That all notices, consents 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 Ryder shall be addressed to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to IRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: President
with a copy to:
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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Questor Management Company
4000 Town Center, Suite 530
Southfield, Michigan 48075
Attention: President
and with an additional copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino
or at such other address and to the attention of such other person as TRS may
designate by written notice to Ryder.
G. THAT THIS AGREEMENT (INCLUDING THE SCHEDULES HERETO) WILL, EXCEPT AS
PROVIDED IN THIS AGREEMENT OR THE ASSET PURCHASE AGREEMENT OR ANY AGREEMENT
ENTERED INTO IN CONNECTION WITH THE ASSET PURCHASE AGREEMENT, CONSTITUTE THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES NOTWITHSTANDING ANY
PREVIOUS WRITING OR ORAL UNDERTAKINGS, AND ITS TERMS WILL NOT BE ALTERED BY ANY
ORAL AGREEMENT OR INFORMAL WRITING, NOR BY FAILURE TO INSIST UPON PERFORMANCE,
OR FAILURE TO EXERCISE ANY RIGHT OR PRIVILEGE. FURTHER, THE TERMS OF THIS
AGREEMENT WILL CONTROL OVER ANY CONFLICTING COURSE OF DEALING OR PERFORMANCE,
AND ALTERATIONS, ADDITIONS, OR CHANGES IN THIS AGREEMENT WILL BE ACCOMPLISHED
ONLY BY WRITTEN ENDORSEMENT HEREON, OR AMENDMENT, EXECUTED BY A DULY AUTHORIZED
TRS OFFICIAL AND RYDER OFFICIAL.
H. That, in the event either party is required to resort to litigation to
enforce its rights under this Agreement, the prevailing party will be entitled
to reasonable attorney's fees, costs and expenses.
I. That, other than for the limited purposes specifically set forth in
this Agreement, Ryder is not TRS's agent for any purpose and under no
circumstances will Ryder, its agents, or employees, be deemed to be TRS
employees.
J. That in the event any term or condition of this Agreement is
determined by a Court of competent jurisdiction to be in violation of or
prohibited by any applicable law, such term or condition will be of no force and
effect to the extent of such violation or prohibition without otherwise
invalidating the other terms and conditions of this Agreement.
K. That any dispute arising under or in connection with this Agreement
and any claim affecting its validity,
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
construction, effect, performance or termination may be resolved by the federal
courts in the Southern District of Florida or state courts located in Dade,
Broward or Monroe County, Florida, to the jurisdiction of which the parties
hereby irrevocably submit.
L. That this Agreement will not be binding on TRS until executed by a
duly authorized TRS official and will be deemed made and entered into in the
State of Florida and will be governed and construed under and in accordance with
the laws of the State of Florida without regard to the application of Florida's
conflict of laws rules.
M. Neither party may assign this Agreement without the prior consent of
the other party. Notwithstanding the foregoing: (1) TRS may assign this
Agreement, upon 10 days prior notice to and without the consent of Ryder, to a
party who purchases or acquires, as a going concern, the business of TRS or all
or substantially all of TRS's assets, provided, however, that any assignee of
this Agreement must (a) agree with Ryder, in writing, to be bound by the terms
and provisions hereof, (b) have a debt/equity ratio as good as, TRS's at the
time of execution hereof, (c) be the assignee of the competition provisions in
Section 6.2(d) of the Asset Purchase Agreement and the following agreements
defined in the Asset Purchase Agreement (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 or an affiliate (as that term is defined in the Asset
Purchase Agreement) set forth in paragraph number 8 on Schedule 3 of the
Trademark Agreement. In addition, TRS may assign its rights hereunder to any
lenders which provide financing to TRS for the purpose of consummating the
transactions contemplated under the Asset Purchase Agreement, or refinancing any
such financing, including any successor thereto. (2) Ryder may assign this
Agreement, upon 10 days prior notice to and without the consent of TRS, to a
party who purchases or acquires, as a going concern, the business of Ryder or
all or substantially all of Ryder's assets, provided, however, that any assignee
of this Agreement must (a) agree with TRS, in writing, to be bound by the terms
and provisions hereof, and (b) have a debt/equity ratio as good as, Ryder's at
the time of execution hereof.
(CONTINUED ON NEXT PAGE)
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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IN WITNESS WHEREOF, the parties have caused this Dealer Agreement to be
executed by their duly authorized officers as of the date first written above.
RYDER TRS, INC. (f/k/a RYDER TRUCK RENTAL, INC.
RCTR HOLDINGS, INC.) "RYDER"
"TRS"
By: /s/ Wallace L. Rueckel By: /s/ Dwight D. Denny
---------------------- -------------------
Wallace L. Rueckel Dwight D. Denny
Senior V.P. & Treasurer Executive Vice President
Development
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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EXHIBIT 10.4
------------
VEHICLE MAINTENANCE AGREEMENT
-----------------------------
THIS VEHICLE MAINTENANCE AGREEMENT is entered into as of the 17th day
of October, 1996 between Ryder TRS, Inc. (f/k/a RCTR Holdings, Inc.), with its
principal place of business at 8669 N.W. 36th Street, Miami, Florida 33166
("TRS") and Ryder Truck Rental, Inc., with its principal place of business at
3600 N.W. 82nd Avenue, Miami, Florida 33166 ("Ryder").
WHEREAS, Ryder and TRS are parties to an Asset Purchase Agreement
dated September 19, 1996 (the "Asset Purchase Agreement") under which TRS is
purchasing from Ryder certain assets and businesses of Ryder's Consumer Truck
Rental division and under which RCTR, Inc., a wholly owned subsidiary of TRS, is
purchasing certain motor vehicles, car carriers and tow dollies from Ryder (the
"Purchased Vehicles"); and
WHEREAS, the motor vehicles, car carriers and tow dollies involved in
the business of TRS are owned by RCTR, Inc., a wholly owned subsidiary of TRS,
and in the future are likely to continue to be owned by RCTR, Inc. or another
third party (in either case, "RCTR"); and
WHEREAS, TRS desires to hire Ryder to perform inspections,
maintenance, repairs, and other related services on and to the Purchased
Vehicles in accordance with the terms and condition contained herein; and
WHEREAS, TRS also desires to hire Ryder to perform inspections,
maintenance, repairs, and other related services on and to other motor vehicles
having technology the same as or comparable to the Purchased Vehicles
(excluding, for example, vehicles powered by alternative fuel, such as propane)
which it may from time to time own or lease for use in its truck rental business
("Comparable Vehicles") in accordance with the terms and conditions contained
herein. The Purchased Vehicles and Comparable Vehicles shall be referred to
collectively in this Agreement as the "Vehicles"; and
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein and in the Asset Purchase Agreement, the adequacy of which is
hereby acknowledged, the parties agree as follows:
1. DEFINITIONS; GENERAL EXPECTATIONS OF QUALITY SERVICE
For the purposes of this Agreement, capitalized terms which are not otherwise
defined herein shall have the meanings set forth in Schedule 1 attached hereto
and incorporated by reference herein.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Ryder will apply (a) the same work standards, except as otherwise set
forth herein, to Repairs and other work accomplished under Section 2 hereunder,
as Ryder applies to similar work done on its own light commercial vehicles and
(b) Allocation Standards, as between TRS and its own light commercial vehicles
which treat TRS equitably in the allocation of services required hereunder. The
foregoing sentence is a statement of general applicability to each category of
service in the aggregate, and shall not be deemed a measurement of any one
instance of performance/nonperformance apart from other
performances/nonperformances of similar services.
2. TERM; REPAIRS TO BE PERFORMED; FORECASTING
A. REPAIRS TO BE PERFORMED BY RYDER. Ryder agrees to perform the
--------------------------------
inspections, maintenance and repairs requested by TRS on and to the Vehicles
designated by TRS ("Repair(s)") in accordance with the terms and conditions
contained in this Agreement. Ryder shall have no obligation to inspect, repair
or maintain (or perform any other services under this Agreement with respect to)
any motor vehicle or equipment other than a Vehicle.
TRS covenants that it has all necessary authorized from RCTR to allow
Ryder to perform all Repairs hereunder. Ryder shall have no duty to inquire of
TRS whether such authorizations have been obtained. Ryder may rely upon TRS'
covenant in the first sentence of this paragraph. If, however, Ryder at any
time has reason to doubt that any such necessary authorization has not been
obtained, Ryder shall not be obligated to perform any duty hereunder to which
the authorization relates, until such authorization shall have been obtained and
evidence of such, reasonably satisfactory to Ryder, has been delivered to Ryder.
Failure to obtain such authorization shall not relieve TRS of any duty which it
has to Ryder hereunder.
(i) Mechanics. All Repairs shall be performed by competent
---------
mechanics.
(ii) Parts. Except for tire casings, which will remain TRS's
-----
property, as described in the next paragraph, all parts permanently removed from
the Vehicles during the performance of the Repairs will become Ryder's
property; provided, however, that Ryder shall, consistent with current
-------- -------
practices, attempt to obtain, and shall pass through to TRS: (a) any cost
savings from the Vehicle manufacturer resulting from the delivery of the removed
parts as part of any warranty claim, (b) any monetary discounts to the purchase
price of replacement parts attributable to the salvage value of the removed
parts, and (c) any other salvage value realized by Ryder which is readily
identifiable, and trackable under Ryder's current business practices, to TRS's
parts. Ryder will not give tire casing
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
credits to TRS for tires removed from Vehicles, but upon TRS's request Ryder
will make available at Repair Facilities, for pick-up by Bandag, Inc. or another
designated representative of TRS, the tire casings Ryder removes from Vehicles
due to damage or a condition of being worn beyond limits. It is not Ryder's
intention to store the casings other than temporarily, for pick up no less
frequently than weekly.
TRS will determine whether to recap the tire casings, and shall
arrange and pay for any recapping, with any recapper, it determines to do.
Ryder and TRS shall in good faith develop a program to allow TRS to benefit from
use of those recaps, when appropriate, if Ryder needs to put replacement tires
onto a Vehicle during the course of Repairs.
(iii) Emergency Road Service. TRS shall be responsible for
----------------------
arranging for towing, emergency road service and road side assistance of and for
the Vehicles. If TRS requests and Ryder agrees to perform these services from
time to time, the hours expended in performance shall be considered Repair Hours
hereunder.
(iv) Vehicle Washing. At TRS's request, Ryder will wash the
---------------
exterior, interior cab, and cargo compartment interior, of Vehicles during the
time the Vehicles are at a Repair Facility being serviced under this Agreement,
if the Repair Facility is properly equipped to perform Vehicle washing.
(v) Scheduling and Authorizing Repairs. TRS and Ryder shall
----------------------------------
schedule and authorize Repairs through Shop Management Agreements generated by
Ryder's FIS "Ryder First" computer software, the use of which shall be
exclusively governed by a separate written Software License Agreement between
Ryder and TRS dated of even date herewith, and via telephone communications
between the parties' respective maintenance representatives. TRS and each Ryder
District will determine the Repair Facility where each Repair will be performed.
Within * of receipt of a Vehicle from TRS, Ryder will provide TRS
with the estimated date for completion of the Repairs. If it is later
determined that the repair completion date will not be met, Ryder will advise
TRS as early as reasonably possible. Ryder will use all reasonable efforts,
consistent with its undertaking in the second paragraph of Section 1 above, to
perform the Repairs in compliance with the time standards then-established by
Ryder's Shop Management System. If TRS and Ryder both own the same type of
vehicle, determination of the time standard for the same type of repair of any
one of those vehicles will not vary due to the fact that TRS, not Ryder, owns
the Vehicle.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
If after commencing performance of a Repair, Ryder determines that the
actual labor hours required to complete the Repair exceed the number of labor
hours prescribed by Ryder's Shop Management System or determines that a
different or "follow up" Repair is required, then Ryder shall be authorized to
complete the work without contacting TRS if the labor hour excess is not more
than twenty percent (20%) or the cost of the different or "follow-up" Repair is
not more than $1,000; provided, however, that such latitude shall be reduced to
the extent, if any, that the Repair Facility has less latitude to perform
repairs on Ryder's own trucks without approval of the applicable Ryder district.
If the labor hour excess is more than twenty percent or the cost of the
different or "follow-up" Repair is more than $1,000 or such lower amount as is
established under the above proviso, then Ryder shall provide TRS with a revised
estimate of the labor hours required to complete the Repair and shall obtain
TRS's approval to complete such Repair. In the event that TRS refuses to
authorize completion of the Repair, then Ryder shall terminate performance of
the Repair and shall invoice TRS only for the labor and parts provided by Ryder
prior to such termination. Except in the event of early termination of the
Repair, Ryder will complete all "follow-up" items on the Vehicles before they
are released to TRS, unless TRS advises otherwise.
(vi) Vehicle Delivery and Retrieval. TRS shall be solely and
------------------------------
exclusively responsible for the transportation of all Vehicles to the designated
Repair Facility at the designated time for the performance of the Repairs and
for the retrieval of such Vehicles from that Repair Facility upon completion of
the Repairs. Ryder's obligation to perform the Repairs and to meet its volume
commitments to Repair shall be conditioned on TRS's delivery of the Vehicles to
the designated Repair Facility at the designated time. Upon completion of the
Repairs, Ryder shall advise TRS's designated representative that the Vehicles
are available for retrieval by TRS.
Notwithstanding the previous paragraph, Ryder may from time to time
pick up and deliver Vehicles upon TRS request.
(vii) Ryder will use its Shop Management System to generate
Repair agreements covering each Repair ("shop agreements") at all Ryder
Locations which have that System (the "System"). The terms of those shop
agreements shall be subject to this Agreement; any conflict between any such
agreement and this Agreement will be resolved in favor of this Agreement. The
following provisions of this clause (vii) will apply to use of the System.
Ryder agrees to open a new shop agreement in the System for follow-up
Repair after close out of the agreement covering
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
the preventive maintenance inspection in which the need for the follow-up Repair
was determined.
If the shop agreement has not already been opened prior to receipt of
the Vehicle at the Repair Facility, then Ryder will open the shop agreement no
later than the end of the day the Vehicle arrives at the Repair Facility,
assuming arrival to be at least one hour prior to the end of normal business
hours at that Facility. If the Vehicle is received thereafter, Ryder will open
the shop agreement no later than a reasonable time after start of business at
the Repair Facility the next business day. The shop agreement will be closed
out no later than the end of the day on which the Repair is completed.
(viii) Ryder will use good faith efforts consistent with its
undertaking in the second paragraph of Section 1 above, to advise TRS within *
if Ryder discovers that it will not meet the completion date for a Repair which
is estimated in the shop agreement.
As a part of the forecasting process described in Section 2C. below,
at TRS's request the parties will agree upon targeted average, time-out-of-
service maximums for certain identified Repair processes carried out by the
Ryder district. Ryder will use good faith efforts to meet those targets.
B. TERM OF COMMITMENT TO REPAIR; FLEXIBILITY.
-----------------------------------------
(i) Term; Commitment to Repair. This Agreement shall continue and
--------------------------
remain in full force and effect until terminated by either party in accordance
with the terms hereof (the "Term").
Subject to clauses (ii), (iii) and (iv) below, the parties agree that
during each year after 1996, TRS will order from Ryder, and Ryder will deliver
to TRS, Repairs on Vehicles under this Agreement comprising at least the Minimum
Annual Labor Hours. "Minimum Annual Labor Hours" shall mean * Repair Hours.
In the remainder of 1996 following Closing, TRS will order from Ryder, and
Ryder will deliver to TRS, Repairs on Vehicles under this Agreement comprising
at least * Repair Hours in October (prorated for any portion of such month
preceding the Closing), * Repair Hours in November and * Repair Hours in
December.
(ii) If it is determined by the parties that the number of Repair
Hours incurred by Ryder in a given year to accomplish road calls is less than *
, then the Minimum Annual Labor Hours shall be adjusted to reflect such
reduction.
Ryder agrees to perform the Repairs at the Repair Facilities, subject
to each parties' right to withdraw Repair
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Facilities upon Required Notice to the extent allowable under clause (iii)
below.
(iii) Flexibility. In order to allow management flexibility for
-----------
each party, Ryder and TRS shall each have the unilateral right within each
calendar year to remove Repair Facilities as providers of Repairs, or
substantially reduce the volume of Repairs at Repair Facilities, to an aggregate
annualized effect of the following number of Repair Hours:
1997 - 10% of Minimum Annual Labor Hours
1998 and each
subsequent year - 20% of Minimum Annual Labor
Hours
These numbers are not cumulative. A party may, for example, flex down
by removing, or reducing volume at, Repair Facilities to the extent of * hours
in 1997, another * hours in 1998 and another * hours in 1999 (in each case
assuming no other adjustment to Minimum Labor Hours is applicable pursuant to
clause B(ii) and B(iv) of this Section. The other party may or may not flex
down by removing, or reducing volume at, the same or other Repair Facilities to
the same extent.
The "annualized effect" of removal of a Repair Facility as a provider
of Repairs shall be determined by adding the number of Repair Hours projected
for that Repair Facility pursuant to the latest forecast done under Section 2C
below to the number of Repair Hours actually incurred by that Repair Facility in
such number of previous months as, combined with the months in the forecast,
equals twelve. The parties' rights under this Section are not intended to alter
Required Notice. The calculations described in this Section are not meant to
include temporary monthly changes in volume between Repair Facilities which are
agreed between the parties during the forecasting process described in
Paragraph C below.
(iv) For purposes of this paragraph, a Repair Facility shall be
considered to be an "Unacceptable Facility" if it would be in Material Breach of
this Agreement were such definition under Section 13 A.(ii) hereof applied to it
and its services performed hereunder instead of to Ryder and Ryder's services
performed hereunder. If TRS wishes to remove Unacceptable Facilities as
providers of Repairs hereunder, then Newco shall have the right to remove such
Repair Facilities under the provisions of clause (iii) above upon only ten days
further prior written notice of termination in lieu of Required Notice. If,
however, the aggregate annualized effect of removal of all Unacceptable
Facilities together with any other removals effected under clause (iii) above
would exceed 10% of Minimum Annual Labor Hours in 1997 or 20% of Minimum Annual
Labor Hours in any year thereafter (the "Threshold"), then Newco may
nevertheless remove
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
as providers of Repairs hereunder, upon only ten (10) days further prior written
notice of termination in lieu of Required Notice, those Repair Facilities whose
removal constitutes an aggregate annualized effect of more than the Threshold,
provided that TRS first meets with Seller's Vice President, Maintenance, to
explain its reasons for seeking removal, and gives reasonable consideration to
such improvement program as he may offer that Ryder is willing to undertake to
prevent the removals. If TRS concludes that a Repair Facility either is, or is
imminently about to become, an Unacceptable Facility and intends to notify Ryder
of its election to remove or reduce volume at such Repair Facility, but has not
done so, then in connection with its next request to exercise its unilateral
right to remove Repair Facilities pursuant to clause (iii) above, it will
include in such requested removal any such Repair Facilities.
C. FORECASTING; LABOR HOUR QUOTA. Throughout the Term, TRS's and
-----------------------------
Ryder's respective maintenance representatives shall conduct periodic
discussions and reach written agreement as to the forecasted allocation of the
Minimum Annual Labor Hours amongst the Ryder Districts and Repair Facilities for
each month of the Term. The number of monthly labor hours so allocated to each
individual Ryder District or Repair Facility pursuant to the parties' written
agreement shall be referred to in this Agreement as a "Labor Hour Quota." Ryder
and TRS will each use good faith efforts to meet the Labor Hour Quotas.
3. FUEL
At TRS's request, Ryder will provide fuel for the Vehicles, either
from the Repair Facilities which dispense that type of fuel, or, if the Repair
Facility does not dispense that type of fuel, from offsite. * The charge for
fuel will vary over time and will be billed to TRS in addition to the other
charges provided under this Agreement. If TRS's account becomes past-due, then
Ryder may terminate providing fuel by giving TRS five (5) days written notice,
regardless of whether Ryder places TRS in default of this Agreement pursuant to
Section 13 below. If TRS purchases fuel from sources other than Repair
Facilities, TRS will be responsible for the charges for all such fuel.
4. WARRANTY ADMINISTRATION
TRS will pay Ryder for all Repairs without regard to whether such
Repairs are subject to a manufacturer's or other vendor's warranty. Ryder will,
as TRS's agent, administer and process TRS's warranty claims against original
equipment manufacturers and other providers of rebuilt components (for purposes
of this Section 4, each shall be known as an "OEM") for (i) Repairs to the
Vehicles performed by Ryder, (ii) as may be requested by TRS, repairs and
maintenance to the Vehicles performed by a third party repair facility that is
authorized, certified, and approved
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
by the OEM to perform such repairs and maintenance, and (iii) tires (subject to
clause 2A(ii) above) and warranted rebuilt components Ryder removes from
Vehicles as damaged, malfunctioning or worn beyond limits (collectively,
"Warranty Administration Services"); provided, however, (a) that TRS provides
------- -------
Ryder with all documents, information, and other assistance requested by Ryder
for the performance of the Warranty Administration Services, (b) that Ryder's
obligation to provide service under this Section 4 is subject to continuing
permission from the OEM for Ryder to process such claims for TRS. TRS hereby
appoints Ryder as its agent to perform the Warranty Administration Services and
to collect and receive the associated warranty proceeds during the term of this
Agreement, which appointment shall terminate upon the expiration or termination
of this Agreement as provided in the last paragraph of this Section 4. At
Ryder's request, TRS shall execute and deliver to Ryder a limited power of
attorney in a form mutually satisfactory to Ryder and TRS authorizing Ryder to
perform the Warranty Ad ministration Services. Ryder shall permit TRS access to
the electronic information system which Ryder uses to identify and assimilate
warranty claims, so that TRS can provide electronically some or all of the
information described in (a) above.
All proceeds from warranty claims will initially be remitted to Ryder
as TRS's agent. Each month, Ryder shall subtract from the proceeds an
administrative fee for Ryder's performance of the Warranty Administration
Services in an amount equal to * of the total warranty proceeds actually paid
to Ryder during that month. Ryder shall remit the balance * of the warranty
proceeds actually paid to Ryder during that month) to TRS, provided, however,
-------- -------
that Ryder reserves the right to offset such balance against any unpaid invoiced
charges under this Agreement or any past due charges under any other Service
Agreement. This process of offset and remission shall occur within ten (10)
Business Days (M-F) after the end of the month.
TRS may terminate all of Ryder's services under this Section 4 at any
time upon ninety (90) days prior written notice to Ryder.
5. RECORD KEEPING
TRS shall be solely and exclusively responsible for the Vehicles'
maintenance records and all matters related thereto, including, but not limited
to, the storing, updating, and maintenance thereof, except that Ryder shall have
the liability of a bailee for such records in Ryder's possession.
Ryder will keep such records for seven years unless sooner requested
to turn those records over to TRS. This obligation shall survive the termination
of this Agreement.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
TRS shall have the ability to print replica repair orders. If Ryder
subcontracts repairs to third party maintenance providers, Ryder shall mail or
otherwise deliver to TRS the documentation of repair from the third party.
Ryder shall also mail or otherwise deliver to TRS preventive maintenance check-
offs completed on each Vehicle under the terms of this Agreement. In addition,
at TRS's request, Ryder will assist TRS in locating, retrieving, copying and
organizing warranty and maintenance Vehicle records in Ryder's possession
(collectively, the "Record Keeping Services"). If such requests exceed ordinary
course under Business practices in effect at the time of execution of this
Agreement, Ryder may elect to charge TRS an administrative fee of Eighteen and
no/100 Dollars Per Hour ($18.00/hour), plus copying costs of five cents per page
($.05/page) for performing the Record Keeping Services in excess of ordinary
course.
TRS shall have the right during normal business hours and with at
least 48 hours advance notice to enter Repair Facilities to audit, inspect or
copy maintenance records. TRS representatives may enter the shop area to observe
Repairs, subject to compliance with Ryder shop floor policies and procedures and
to the requirements of law, and in a manner which is not disruptive of work
flow.
6. REPAIR CHARGES; BILLING; PAYMENT TERMS; TAXES; CONFIDENTIALITY
A. REPAIR CHARGES. Ryder will charge TRS for all Repairs on a
--------------
repair-by-repair basis and for exterior vehicle washing at the rates set forth
in the repair rate table set forth below:
REPAIR RATE TABLE
GOOD OR SERVICE RATE
Labor Performed by Ryder * of Ryder's then-prevailing Internal
Charge-Out Rate for labor at the Repair
Facility performing the Repair; provided,
however, that if Ryder changes its present
methodology for calculating the Internal
Charge-Out Rate, the parties shall amend
this provision to adjust the * so that the
effect of the change in methodology is
counteracted.
Parts Provided by Ryder Invoice Cost to Ryder District
(including parts provided
by Network Sales)
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Services and Goods Provided Invoice Cost to Ryder District
and Performed by Third Party
Vendors retained by Ryder
Vehicle Washing *
Ryder will use good faith efforts to acquire Fast Moving Parts through
Network Sales and to make them available for Repairs.
B. BILLING AND PAYMENT TERMS. Ryder shall invoice TRS weekly for
-------------------------
all charges for Repairs performed during that week, according to the number of
Repair Hours associated with each Repair, which invoice shall be accompanied by
reasonable documentation or explanation supporting such charges, and TRS shall
pay Ryder, as to time periods within the first year following the date hereof,
no later than thirty (30) days after each invoice date, and as to all subsequent
periods, no later than fifteen (15) days after each invoice date. All payments
hereunder shall be without deduction (except for charges billed in error), set
off, recoupment or counterclaim. In the case of charges believed to be billed
in error, TRS shall timely pay the undisputed portion of the invoice, and on or
before the due date for payment of the charges ("Due Date"), TRS shall notify
Ryder in writing of the portion believed to be billed in error and give Ryder an
explanation, in reasonable detail, of the reasons for its belief. The due date
for these disputed sums shall then be extended for ten (10) days (or such later
time as both parties agree in writing) from the Due Date to give the parties
time to negotiate resolution of the dispute, which both parties will do in good
faith.
All charges shall conclusively be presumed correct unless Ryder
receives notice within one hundred eighty (180) days of the invoice date.
All overdue amounts shall bear interest at a rate equal to the lower
of: (i) ten percent (10%) per annum or (ii) the highest rate permitted by law
("Past Due Interest").
C. LETTER OF CREDIT. TRS shall obtain and maintain a letter of
----------------
credit, in favor of Ryder, in the amount of two and one-half million dollars
($2,500,000.00), the issuer or confirming bank of which will be a bank
reasonably acceptable to Ryder and the terms of which shall be substantially in
accordance with the form attached hereto as Exhibit B (the "Letter of Credit"),
which may be drawn by Ryder in the event of a Material Breach by TRS under
clause 13.A(i) of this Agreement or any of the other agreements between the
parties of even date herewith entitled Administrative Services Agreement, MIS
Support Agreement or Used Truck Sales Agreement, as any of them may be amended
from
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
time to time, or as otherwise provided in Schedule 9.6(c) of the Asset Purchase
Agreement. Such Letter of Credit shall be for a term of at least one year. One
master $2.5 million letter of credit which complies with the terms of this
paragraph shall constitute the Letter of Credit under each of the foregoing
listed agreements ("Support Agreements"). TRS shall be obligated to promptly
replace the Letter of Credit or restore it to its full amount, respectively,
should Ryder draw such Letter of Credit in full or in part due to the occurrence
of a Material Breach under this Agreement.
Notwithstanding the foregoing, TRS may terminate, or not renew, the
Letter of Credit after the first anniversary of the date hereof, if it is not in
default of this Agreement at such time; provided, however, that should TRS,
after such time either (i) commit a Material Breach of this Agreement due to
failure to pay charges due hereunder or under any Support Agreement (except if
prevented by a force majeure under Section 16.K below) or (ii) twice within a
twelve-month period fail to timely pay charges due hereunder or under any
Support Agreement (except if prevented by a force majeure under Section 16.K
below, then TRS shall again be obligated to obtain and maintain the Letter of
Credit pursuant to the first two sentences of the previous paragraph, and to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement. If, however, during
the following twelve months TRS timely pays all charges coming due hereunder,
and is not at such time otherwise in default of this Agreement, or in
bankruptcy, then TRS may again terminate, or not renew, the Letter of Credit,
and TRS's obligations hereunder to maintain the Letter of Credit shall cease,
subject to the last stated proviso above.
D. FINANCIAL STATEMENTS. TRS agrees to provide Ryder with the
--------------------
following financial statements and information on a quarterly basis (or upon
Ryder's reasonable request from time to time for the purpose of evaluating the
creditworthiness of TRS: (1) TRS's combined Balance Sheet in the form set forth
in Exhibit C; (ii) TRS's Combined Statement of Earnings in the form set forth in
Exhibit D; (iii) TRS's Interest Coverage Ratios; and (iv) TRS's Debt-to-Equity
Ratio. Such information shall be provided to Ryder's credit department and
shall not be disseminated beyond such department except to the Controller of
Ryder and the Chief Financial Officer of its parent company.
E. TAXES. TRS shall be responsible and pay for all fees and taxes
-----
accruing, arising, or imposed on services performed under this Agreement,
including, but not limited to, sales tax, provided, however, that TRS shall not
be responsible for any net income, gross income or similar taxes imposed on
Ryder.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
F. CONFIDENTIALITY. Ryder and TRS agree to keep, and to cause each
---------------
of its affiliates, directors, officers, and employees to keep, confidential any
and all confidential information of the other party that it receives in the
course of performing its obligations hereunder (except that such information
may be shared, on a confidential basis, with the party's attorneys and auditors)
and will not without the other party's written consent, use any of such
confidential information except as reasonably necessary to perform its duties
under this or another of its agreements with the other party. Upon termination
of this Agreement, each party will return, and will cause its affiliates to
return, to the other party, all original documents and copies of the
confidential information which are in its possession.
7. NOTICE OF HAZARDOUS ACTIVITY
TRS shall advise Ryder in writing, each time prior to requesting
Repair of a Vehicle, if TRS uses that Vehicle, for, or knows that since the last
Repair by Ryder it has rented the Vehicle to a customer who is in the business
of, transporting hazardous materials in a quantity which requires placarding by
the United States Department of Transportation or transporting any radioactive,
biological, or medical waste, (in each case, a "Hazardous Activity") and in each
case TRS shall identify the substance. Ryder shall have the right to refuse to
perform Repairs on such Vehicle without penalty hereunder.
8. INSURANCE
A. TYPES OF INSURANCE PROVIDED. During the Term, * will maintain
---------------------------
the types of insurance, in the coverage limits, listed in the insurance policy
schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
TYPE OF INSURANCE POLICY COVERAGE LIMITS
Standard Automobile Liability *
Insurance Policy (the "Auto- Per Occurrence with an excess
mobile Liability Insurance layer of at least *
Policy")
Commercial General Liability *
Insurance Policy with Broad
Form Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy")
Workers Compensation Statutory
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Employer's Liability *
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * shall cause the coverage provided by each
such policy to be kept in place for a period of * after the effective date of
termination or expiration of this Agreement.
TRS may * .
B. INSURANCE POLICY REQUIREMENTS.
-----------------------------
1. Each liability Insurance Policy shall:
(a) be written by an insurance company reasonably acceptable to
* (it being understood that an insurance company rated A- or better by
A.M. Best & Company is acceptable);
(b) name * as an insured, and be amended to name * , its
employees, officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests may appear;
(c) provide that if such insurance is cancelled, or any material
change is made in the coverage which affects the interest of any Additional
Insured, such cancellation or change shall not be effective as to the
Additional Insured for ten (10) days after receipt by the Additional
Insured of written notice from such insurers of such cancellation or
change;
(d) be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to, any Additional
Insured;
(e) provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be invalidated by any
action or inaction of * or any other Person and shall insure each
Additional Insured regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by * or any other
Person;
(f) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each Additional Insured; and
(g) in accordance with the terms and conditions of the
contractual liability coverage provided by such
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Insurance Policy, insure the obligations of * to indemnify the Additional
Insureds hereunder.
The first * of automobile liability insurance and general liability insurance
shall each be on an occurrence form. The first * of automobile liability
insurance shall not be subject to any annual aggregate limit of liability.
2. Each liability Insurance Policy and any all-risks Insurance
Policy of * which covers vehicles shall waive any rights of subrogation
against the Additional Insureds.
C. PROOF OF INSURANCE. At least once a year, from time to time at
------------------
* request, and any time a new policy is to go into effect, * shall provide *
with insurance certificates and other evidence, reasonably satisfactory to * ,
that the benefits and coverage required by this Section 8 are in full force and
effect. The certificate shall describe the perils covered by each policy of
insurance then in force, identify the insurer or insurers with which such
policies of insurance are carried and maintained, specify the amounts of
insurance coverage provided against each such peril, and describe the provisions
contained in such policies of insurance so as to evidence compliance with the
requirements of this Article 8. * shall have no duty to examine such insurance
certificates or the Insurance Policies to verify compliance. * shall provide a
copy of its insurance policies to * promptly following request therefor.
9. INDEMNIFICATION *
Notwithstanding anything in this Agreement to the contrary, and *
shall release, indemnify, defend and hold harmless * , its affiliates,
directors, officers, employees, agents, subcontractors and assigns of each (the
* ) from and against any and all claims, liabilities, damages, losses, costs,
expenses (including, without limitation forum costs and reasonable attorneys'
fees, fines and penalties), related to claims of third parties for (including
but not limited to claims of * employees and agents) injury to or death of any
person or loss of or damage to any property or otherwise (collectively, "Third
Party Claims"), arising out of the ownership, repair, inspection, maintenance,
use or operation of any Vehicle, including any such Third Party Claim which is
caused by the negligence of the * Indemnified Parties in performing or failing
to perform the Repairs but not in any event to the extent of the gross
negligence or willful misconduct of the * Indemnified Parties in performing or
failing to perform Repairs.
* SHALL RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE * FROM AND
AGAINST ANY AND ALL THIRD PARTY CLAIMS ARISING OUT OF THE * .
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
10. NO CONSEQUENTIAL DAMAGES
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE FOR, AND EACH PARTY WAIVES AND RELEASES THE OTHER FROM
(AND AS TO RCTR'S DAMAGES, TRS INDEMNIFIES AND HOLDS HARMLESS THE RYDER
INDEMNIFIED PARTIES FROM), ANY AND ALL INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE
OR BUSINESS INTERRUPTION, WHETHER SUSTAINED BY TRS, RYDER OR ANY OTHER PERSON,
EVEN IF SUCH DAMAGES ARE FORESEEABLE BUT NOT IF THEY ARE DIRECT DAMAGES.
11. NOTICE OF MAJOR INCIDENT
If a Major Incident occurs involving any Vehicle, * agrees to promptly
notify *, provide * with copies of any reports that * has provided to * insurer
or any governmental agency, and to assist * and the insurer in any investigation
of the incident which * or the insurer wishes to undertake.
12. * WARRANTIES
*
* Ryder shall have no liability for any failure or delay in delivery
of any part by any manufacturer or for the breach of any representation or
warranty by the manufacturer of any vehicle or any component part thereof.
13. DEFAULT
A. DEFAULT PROCEDURE. If at any time any party is in Material
-----------------
Breach of this Agreement, then in addition to all other rights and remedies
available under applicable law or in equity, the other party shall have the
right to terminate this Agreement without further notice or demand. "Material
Breach" shall mean (i) as to a failure of payment, that full payment has not
been received within five (5) days after the owing party's receipt of written
notice that the payment was due, (ii) as to any other type of failure, a
material failure or performance of a party's obligations under this Agreement if
such failure remains uncured thirty (30) days after receipt of written notice of
the failure, and (iii) as to TRS, failure to cause the replacement or
restoration of the Letter of Credit, as applicable, within five (5) days
following its complete or partial draw due to the occurrence of a Material
Breach hereunder except, as to (i), (ii) or (iii) above, if prevented by a force
majeure under Section 16.K below.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
B. BANKRUPTCY AND INSOLVENCY. This Agreement shall automatically
-------------------------
terminate, without notice required, upon the occurrence of any of the following
events: (i) the other party voluntarily enters into proceedings in bankruptcy
or insolvency; (ii) the other party shall make an assignment for the benefit of
credits; (iii) a petition shall be filed against the other party under a
bankruptcy law, a corporate reorganization law, or any other law for the relief
of debtors (or similar law in purpose or effect) and such petition shall not
have been dismissed within sixty (60) days; or (iv) the other party enters into
liquidation or dissolution proceedings.
C. DRAWS ON LETTER OF CREDIT. Subject to the provisions of the
-------------------------
next paragraph, in the event of Material Breach by TRS pursuant to clause (i) of
Section 13A, Ryder may draw from the Letter of Credit, without court proceeding,
order or otherwise, such sums to which Ryder is entitled due to TRS's Material
Breach, and Ryder shall apply such sums against such entitlement. If the
application of such sums is sufficient to cure the Material Breach, including
Past Due Interest owed to date of draw, then the Material Breach shall be deemed
cured and Ryder shall not terminate this Agreement due to such Material Breach;
if the application of such sums is not sufficient for such purpose, then Ryder
may terminate this Agreement due to the Material Breach pursuant to Section 13A.
It is agreed, however, that if it shall later be determined by a court of
competent jurisdiction or by mutual agreement of the parties that TRS did not in
fact owe Ryder all of the sums drawn from the Letter of Credit, then Ryder shall
return those sums not owed with interest thereon computed at the same annual
rate of interest as set forth above in the definition of "Past Due Interest."
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to Section 6.B above, that Ryder did
not perform a service billed to TRS, then Ryder shall not be entitled to draw
the Letter of Credit with respect to such failure of payment until the later of
(i) such time as Ryder would be entitled to draw the Letter of Credit under the
preceding paragraph, (ii) fifteen Business Days after the date Ryder notifies
TRS in writing that Ryder has investigated the dispute and that its records or
its personnel confirm the service to have been performed and has offered TRS
access to such records or personnel or (iii) such date as Ryder and TRS mutually
agree in writing. It is agreed that the foregoing sentence does not apply to a
dispute over the quality or conformity of the service or to any attempt by TRS
to set off another matter against Ryder's invoice.
D. ATTORNEY'S FEES. In the event either party resorts to
---------------
litigation, arbitration or other proceeding to enforce its rights under this
Agreement, the prevailing party will be entitled to reasonable attorney's fees,
costs and expenses.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
14. NONSOLICITATION OF EMPLOYEES
During the Term and for a period of six months thereafter, TRS shall
not solicit any employees of Seller who perform services hereunder or who manage
the performance of those services without the prior express written consent of
Ryder's District Manager for the district in which the employee works.
15. RELATIONSHIP OF THE PARTIES
Except as specifically set forth in Paragraph 4 with respect to the
Warranty Administration Services, it is expressly understood and agreed that in
rendering the Services hereunder, Ryder is acting as an independent contractor
and that this Agreement does not constitute either party as an employee,
partner, joint venturer, agent or other representative of the other party for
any purpose whatsoever. Neither party has the right or authority to enter into
any contract, warranty, guarantee or other undertaking in the name of or for
the account of the other party, or to assume or create any obligation or
liability of any kind, express or implied, on behalf of the other party, or to
bind the other party in any manner whatsoever, or hold itself out as having any
right, power or authority to create any such obligation or liability on behalf
of the other or to bind the other party in any manner whatsoever (except as to
any actions taken by either party at the express written request and direction
of the other party).
16. MISCELLANEOUS
A. CUMULATIVE AND NON-EXCLUSIVE RIGHTS AND REMEDIES. The parties'
------------------------------------------------
rights and remedies under this Agreement are non-exclusive and are cumulative
with its rights and remedies at law or in equity.
B. 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.
C. 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, except for
matters of Florida corporate law, as to which such law shall apply.
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
(b) Ryder and TRS herby 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. Ryder and TRS 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, TRS (i)
irrevocably designates and appoints Jay Alix & Associates ("JA&A"), 575 Fifth
Avenue, New York, New York 10017, 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 TRS may at any time designate and appoint in lieu of
JA&A 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 TRS in any such action or proceeding. TRS
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.
D. ENTIRE AGREEMENT. This Agreement 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. This Agreement is not intended to confer upon anyone not a
party hereto any rights or remedies hereunder.
E. NOTICES. All notices shall be in writing and delivered
-------
personally or sent by nationally recognized overnight delivery service (e.g.,
Federal Express) or registered or certified mail, return receipt requested, to
the appropriate address set forth below. Notices to Ryder shall be addressed
to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to TRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
c/o Questor Management Company
4000 Town Center, Suite 530
Southfield, Michigan 48075
Attention: President
with a copy to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: Gerald R. Riordan
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino, Esq.
or at such other address and to the attention of such other person as TRS may
designate by written notice of Ryder.
F. 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 consent of the other party. Notwithstanding the foregoing:
(1) TRS may assign this Agreement, upon 10 days prior notice to and without the
consent of Ryder, to a party who purchases or acquires, as a going concern, the
business of TRS or all or substantially all of TRS's assets, provided, however,
that any assignee of this Agreement must (a) agree with Ryder, in writing, to be
bound by the terms and provisions hereof, (b) have a debt/equity ratio as good
as, TRS's at the time of execution hereof, (c) be the assignee of the
competition provisions in Section 6.2(d) of the Asset Purchase Agreement and the
following agreements defined in the Asset Purchase Agreement (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 Agreement, (iv) the Administrative Services Agreement, (v) the Dealer
Agreement, (vi) the Dealer 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 Agreement, (2) Ryder may assign this Agreement upon 10 days
prior notice to and without the consent of TRS, to a party who purchases or
acquires as a going concern, the business of
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Ryder or all or substantially all of Ryder's assets, provided, however, that any
assignee of this Agreement must (a) agree with TRS, in writing, to be bound by
the terms and provisions hereof, and (b) have a debt/equity ratio as good as,
Ryder's at the time of execution hereof. TRS may assign its rights hereunder to
any lenders which provide financing to TRS for the purpose of con summating the
transactions contemplated under the Asset Purchase Agreement, or refinancing any
such financing, including any successors thereto.
G. HEADINGS; DEFINITIONS. The 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.
H. 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.
I. INTERPRETATION; ABSENCE OF PRESUMPTION. 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.
J. SEVERABILITY. 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.
K. FORCE MAJEURE. Neither party shall be liable for its failure or
-------------
delay in fulfilling its obligations here, if such failure or delay is caused by
fire, flood, weather conditions or other Acts of God, invasions, insurrections,
riots, closing of the public highways, delays or failures of manufacturer or
distributor in providing parts, strike, lockout or other labor dispute, civil
unrest, war or any other reason beyond the reasonable control of the party. In
the case of strikes, lockouts or other labor disputes, it is understood that
such event is beyond the reasonable control of the party suffering the event
unless and until the party is able to resolve it in a manner which such party
deems reasonable and appropriate.
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
(CONTINUED ON NEXT PAGE)
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Maintenance Agreement to
be executed by their duly authorized officers as of the date first written
above.
Ryder Truck Rental, Inc. Ryder TRS, Inc. (f/k/a
("Ryder") RCTR Holdings, Inc.)
("TRS")
BY:/s/ Dwight D. Denny BY: /s/ Wallace L. Rueckel
------------------- ----------------------
Dwight D. Denny Wallace L. Rueckel
Executive V.P.-Development Senior Vice President & Treasurer
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Schedule 1 to
Vehicle Maintenance Agreement
dated as of October 17, 1996
between Ryder TRS, Inc. and
Ryder Truck Rental, Inc.
CLOSING. "Closing" shall mean the Closing as defined in the Asset Purchase
- -------
Agreement.
FAST MOVING PARTS. "Fast Moving Parts" shall mean Vehicle parts and components
- -----------------
which are necessary in order to accomplish an "A", "B" or "C" PM as those
preventive maintenance inspections are currently defined, not including follow-
up repair work which might be discovered to be needed during the inspection
component of such PMs.
HIGH VOLUME LOCATION. A "High Volume Location" shall mean a Repair Facility at
- --------------------
which, during the previous calendar year, the total labor hours for inspections,
maintenance, and repairs performed for TRS or Ryder's Consumer Truck Rental
Division taken in the aggregate comprised at least twenty-five percent (25%) of
the total labor hours performed for all inspection, maintenance, and repairs.
INTERNAL CHARGE-OUT RATE FOR LABOR. "Internal Charge-Out Rate for labor" shall
- ----------------------------------
mean the blended labor rate at a Repair Facility which is identified by such
name in Ryder's inter-district accounting systems, is inclusive of benefits and
is the basis of charges to other Ryder branches for repair of their vehicles.
MAJOR INCIDENT. "Major Incident" shall mean:
- --------------
-- Vehicular incident involving permanent or expected total disability,
loss of limb, or multiple hospitalizations
-- explosion, fire, or accident resulting in physical damage in excess of
$500,000
-- Vehicular accident involving a fatality
-- any event involving Vehicles likely to receive significant media
attention
REPAIR FACILITY(IES). "Repair Facility(ies)" shall mean the repair facilities
- --------------------
listed on Exhibit A attached hereto and incorporated herein, each of which is
located within the Ryder Commercial Leasing Districts (each a "Ryder District")
shown on Exhibit A.
REPAIR HOUR(S). "Repair Hour(s)" shall mean each labor hour actually provided
- --------------
by Ryder or one of Ryder's subcontractors in
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
performing the Repairs as opposed to the number of labor hours for those Repairs
prescribed by the time standards in Ryder's Shop Management System. It does not
include labor provided at Service Centers.
REQUIRED NOTICE. "Required Notice" shall be given for removal of a Repair
- ---------------
Facility as a provider of Repairs, or a reduction in annualized average Repair
Hours at a Repair Facility in excess of Two Thousand (2,000) labor hours that is
reasonably likely to be permanent, and shall mean (i) sixty (60) days prior
written notice (ninety (90) days prior written notice for a High Volume
Location).
Furthermore, the parties shall use reasonable good faith efforts to
notify each other of any lesser reductions in Repair Hours at a Repair Facility
which are not de minimis and are reasonably likely to be permanent.
RYDER. For purposes of Sections 8, 9 and 10 hereof, "Ryder" shall mean
- -----
(individually and collectively) Ryder as defined above, its affiliates,
employees, directors, agents and contractors.
SERVICE CENTERS. "Service Centers" shall mean the following facilities:
- ---------------
INDIANAPOLIS SERVICE CENTER
---------------------------
4709 W. 96th Street
Indianapolis, Indiana
DALLAS SERVICE CENTER
---------------------
5125 Cockerell Hill Road
Dallas, Texas
ATLANTA SERVICE CENTER
----------------------
6802 Buford Highway
Doraville, Georgia
PENNSBURG SERVICE CENTER
------------------------
2703 Geryville Pike
Pennsburg, Pennsylvania
*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
EXHIBIT 10.5
------------
USED TRUCK SALES AGREEMENT
--------------------------
THIS USED TRUCK SALES AGREEMENT is entered into as of this 17th day of
October, 1996 between Ryder Truck Rental, Inc., with its principal place of
business at 3600 N.W. 82nd Avenue Miami, Florida 33166 ("Ryder") and Ryder TRS,
Inc. (f/k/a RCTR Holdings, Inc.), with its principal place of business at 8669
N.W. 36th Street, Miami, Florida 33166 ("TRS").
WHEREAS, Ryder and TRS are parties to an Asset Purchase Agreement
dated September 19, 1996 (the "Asset Purchase Agreement") under which TRS is
purchasing from Ryder certain assets and businesses of Ryder's Consumer Truck
Rental division ("Division").
WHEREAS, the trucks utilized in the business of TRS are owned by RCTR,
Inc., a wholly owned subsidiary of TRS, and in the future are likely to continue
to be owned by RCTR, Inc. or another third party (in either case, "RCTR").
WHEREAS, Ryder sells its own used trucks at its own Used Truck Centers
and other Ryder locations throughout the country (collectively, "Ryder
Locations");
WHEREAS, RCTR has authorized, and expects, TRS to sell used trucks for
and on behalf of RCTR in the ordinary course of its business and wishes to hire
Ryder as its agent to sell such trucks at the Ryder Locations;
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein, the adequacy of which is hereby acknowledged, the parties agree as
follows:
1. TRS AGREES:
(a) To make available and consign to Ryder at Ryder Locations, for sale by
Ryder as RCTR's agent acting for and on behalf of RCTR, at least such quantity
of RCTR trucks previously used in TRS's truck rental business ("Vehicles") as
provided in Section 1(b) below.
(b) To reasonably agree with Ryder from time to time on the number and
make-up (type, make, model and year) of Vehicles to be consigned to Ryder at
each Ryder Location, considering physical capacity and market characteristics,
among other things. Subject to the provisions of the last sentence of Section
3(a), the total number of Vehicles consigned to Ryder by TRS each year during
the term of this Agreement will not be less than the following
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
percentage of the total number of trucks used in TRS' business which are sold or
traded each such year :
<TABLE>
<S> <C>
40% 1997
35% 1998
30% 1999
25% 2000
20% 2001
</TABLE>
After December 31, 2001, either party may terminate this Agreement
upon at least sixty (60) days prior written notice to the other party.
(c) To be responsible for transferring/delivering Vehicles to the Ryder
Locations. TRS and Ryder may from time to time agree that Ryder will accomplish
the transfer/delivery for TRS, in which case Ryder will charge TRS for the time
of the drivers to get the Vehicle to the new location and return (at the rate
described in the Maintenance Agreement between Ryder and TRS) in addition to
such mileage rate as may be agreed between TRS and management of the applicable
Ryder district from time to time for any other vehicle which is to be used to
accomplish the transfer.
(d) The Vehicles delivered to Ryder Locations shall be in a condition that
meets the * . If any Vehicle is not in such condition, Ryder may, at TRS's
expense, perform such repairs or work Ryder deems necessary to put the Vehicle
into such condition; provided that Ryder will get TRS's prior approval for any
such repairs or work costing in excess of $250 per Vehicle. Any such repairs or
work will be governed by the Maintenance Agreement between Ryder and TRS. Other
than as expressly provided for in this Agreement, Ryder is not authorized to
incur any billable expenses for the sale of any certain Vehicle without TRS's
consent.
(e) To provide Ryder with power(s) of attorney from RCTR allowing Ryder to
execute a sales agreement for Vehicles, endorse titles to Vehicles, and
accomplish such other actions and sign such other documents as are appropriate
to the sale and transfer of title of Vehicles hereunder (the "Power of
Attorney"), and with supplies, forms, instructions and other materials necessary
to sell Vehicles on RCTR's behalf at Ryder Locations. Such items must be
reasonably acceptable to Ryder.
(f) TRS's printed warranty of the Vehicles to have the same terms and
conditions as Ryder's standard printed warranty as it may exist from time to
time, provided, however, that Ryder will advise TRS prior to making any change
in its standard printed warranty and that TRS's warranty will not be required to
be improved even though Ryder may improve Ryder's standard printed warranty
after the date hereof, and further provided that TRS's warranty will not be
called a "Road Ready" warranty or anything
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
2
<PAGE>
confusingly similar thereto. Unless TRS otherwise directs Ryder in writing,
Ryder may sell each Vehicle with the benefit of RCTR's standard printed warranty
described above.
(g) To release and hold Ryder harmless from, and to assume responsibility
for, all losses and damages suffered by RCTR, TRS or anyone due to theft, loss,
or damage to Vehicles or cargo while in Ryder's custody (including when being
test driven by potential purchasers), except however, that Ryder will be
responsible to TRS, and reimburse TRS, for theft, loss, or damage to Vehicles
(but not cargo) caused by the * . TRS shall tender the Vehicles to Ryder, empty
of all cargo, at the Ryder Locations or, if TRS and Ryder agree that Ryder will
transfer the Vehicles to the Ryder Location, then at the point of pick-up. In no
event will Ryder have any responsibility to RCTR, TRS or any other Person for
cargo left in the Vehicles.
(h) To maintain the types of insurance, in the coverage limits, listed in
the insurance policy schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
Type of Insurance Policy Coverage Limits
Standard Automobile Liability * Per Occurrence with an excess
Insurance Policy (the "Auto- layer of at least * aggregate.
mobile Liability Insurance
Policy")
Commercial General Liability *
Insurance Policy with Broad
Form Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy")
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * shall cause the coverage provided by each
such policy to be kept in place for a period of * after the effective date of
termination or expiration of this Agreement.
TRS may *
Each liability Insurance Policy shall:
(i) be written by an insurance company reasonably acceptable to *
(it being understood that an insurance company rated A- or better by A.M.
Best & Company is acceptable);
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
3
<PAGE>
(ii) name * as an insured, and be amended to name * , its
employees, officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests may appear;
(iii) provide that if such insurance is canceled, or any material
change is made in the coverage which affects the interest of any Additional
Insured, such cancellation or change shall not be effective as to the
Additional Insured for ten (10) days after receipt by the Additional
Insured of written notice from such insurers of such cancellation or
change;
(iv) be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to, any Additional
Insured;
(v) provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be invalidated by any
action or inaction of * or any other Person and shall insure each
Additional Insured regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by * or any other
Person;
(vi) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each Additional Insured; and
(vii) in accordance with the terms and conditions of the
contractual liability coverage provided by such Insurance Policy, insure
the obligations of * to indemnify the Additional Insureds hereunder.
The first * of automobile liability insurance and general liability insurance
shall each be on an occurrence form. The first * of automobile liability
insurance shall not be subject to any annual aggregate limit of liability.
Each liability Insurance Policy and any all-risks Insurance Policy of * which
covers vehicles shall waive any rights of subrogation against the Additional
Insureds, except to the extent of * obligation to indemnify * pursuant to
Section 2(f) below.
At least once a year, from time to time at * request, and any time a new
policy is to go into effect, * shall provide * with insurance certificates
and other evidence, reasonably satisfactory to * , that the benefits and
coverage required by this Section 1(h) are in full force and effect. The
certificate
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
4
<PAGE>
shall describe the perils covered by each policy of insurance then in force,
identify the insurer or insurers with which such policies of insurance are
carried and maintained, specify the amounts of insurance coverage provided
against each such peril, and describe the provisions contained in such policies
of insurance so as to evidence compliance with the requirements of this Section
1(h). * shall have no duty to examine such insurance certificates or the
Insurance Policies to verify compliance. * shall provide a copy of its insurance
policies to * promptly following a request therefor, if available.
(i) To, notwithstanding anything in this Agreement to the contrary, and in
addition to the insurance requirements listed in Section 1(h) above, release,
indemnify, defend and hold harmless * , its affiliates, directors, officers,
employees, agents, subcontractors and assigns of each (the " * Indemnified
Parties") from and against any and all claims, liabilities, damages, losses,
costs, expenses (including, without limitation, forum costs and reasonable
attorneys' fees), fines and penalties), related to claims of third parties
(including but not limited to claims of * employees and agents) for injury to
or death of any person or loss of or damage to any property or otherwise
(collectively "Third Party Claims"), arising out of: (a) the terms of any *
or other warranty under which Vehicles are sold hereunder, (b) any allegation of
* that a sale of a Vehicle under this agreement was not authorized, (c) the
failure of * to remove any Liens as defined in Section 2(a)4 below, (d) any
failure of * to obtain authorization by * to allow any action or inaction
required or permitted of * hereunder, or * .
(j) TRS shall Ryder of one or more RCTR accounts into which funds received
from purchasers of Vehicles are to be deposited (excepting checks representing
customer deposits, which Ryder may hold until Ryder places into the account, the
rest of the funds due on sale of the Vehicle or until the deposits become
cashable due to the customer's failure to purchase the Vehicle). Ryder will
mail or make such deposits as promptly as practicable and in any event within
three (3) business days of receipt of the funds from the purchasers without
deduction, set off, recoupment or counterclaim.
(k) TRS will contribute each year, as specifically hereinafter provided,
toward advertising which is directly and indirectly for the sale of Vehicles.
Advertising which is specifically for the sale of Vehicles shall be proposed by
TRS and agreed between Ryder and TRS, and TRS shall pay therefor at such time as
payment for such advertising is to be made to a third party. Ryder shall not be
required to advance funds for such advertising. TRS's contribution to general
advertising for the sale of trucks at Ryder Locations ("General Advertising")
shall be * per Vehicle sold hereunder and shall be paid quarterly in
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
5
<PAGE>
arrears, on or before the fifteenth day after the end of each quarter; provided,
however, that in no event shall such payments annually exceed TRS's pro rata
portion (determined by the ratio of Vehicles sold during the year to the total
of Vehicles and Ryder trucks sold during that year) of the aggregate sum spent
by Ryder for General Advertising.
(l) TRS shall obtain and maintain a letter of credit, in favor of Ryder,
in the amount of two and one half million dollars ($2,500,000.00), the issuer or
confirming bank of which will be a bank reasonably acceptable to Ryder and the
terms of which shall be substantially in accordance with the form attached
hereto as Exhibit A (the "Letter of Credit") which may be drawn by Ryder in the
event of Material Breach by TRS under clause (i) of the third paragraph of
Section 3(c) of this Agreement or any of the other agreements between the
parties of even date herewith entitled Vehicle Maintenance Agreement, MIS
Support Agreement, or Administrative Services Agreement, as any of them may be
amended from time to time or as otherwise provided in Schedule 9.6(c) of the
Asset Purchase Agreement. Such Letter of Credit shall be for a term of at least
one year. One master $2.5 million letter of credit which complies with the
terms of this paragraph shall constitute the Letter of Credit under each of the
foregoing listed agreements ("Support Agreements"). TRS shall be obligated to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement.
Notwithstanding the foregoing, TRS may terminate, or not renew, the
Letter of Credit after the first anniversary of the date hereof, if it is not in
default of this Agreement at such time; provided, however, that should TRS,
after such time, either (i) commit a Material Breach of this Agreement due to
failure to pay charges due hereunder or under any Support Agreement (except if
prevented by a force majeure under Section 4(k) below), or (ii) twice within a
twelve month period, fail to timely pay charges due hereunder or under any
Support Agreement (except if prevented by a force majeure under Section 4(k)
below), then TRS shall again be obligated to obtain and maintain the Letter of
Credit pursuant to the first two sentences of the previous paragraph, and to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement. If, however, during
the following twelve months TRS timely pays all charges coming due hereunder,
and is not at such time otherwise in default of this Agreement, or in
bankruptcy, then TRS may again terminate, or not renew, the Letter of Credit,
and TRS's obligations hereunder to maintain the Letter of Credit shall cease,
subject to the last stated proviso above.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
6
<PAGE>
(m) TRS agrees to provide Ryder with the following financial statements
and information on a quarterly basis (or upon Ryder's reasonable request from
time to time for the purpose of evaluating the creditworthiness of TRS: (1)
TRS's combined Balance Sheet in the form set forth in Exhibit B; (ii) TRS's
combined Statement of Earnings in the form set forth in Exhibit C; (iii) TRS's
Interest Coverage Ratio; and (iv) TRS's Debt-to-Equity Ratio. Such information
shall be provided to Ryder's credit department and shall not be disseminated
beyond such department, except to the Controller of Ryder and the Chief
Financial Officer of its parent company.
(n) TRS agrees to obtain from RCTR such authorizations as are necessary to
accomplish all of the foregoing matters. Ryder shall have no duty to inquire of
TRS whether such authorizations have been obtained. Ryder may rely upon TRS'
covenant in the first sentence of this clause (n). If, however, Ryder at any
time has reason to doubt that any such necessary authorization has not been
obtained, Ryder shall not be obligated to perform any duty hereunder to which
the authorization relates, until such authorization shall have been obtained and
evidence of such, reasonably satisfactory to Ryder, has been delivered to Ryder.
Failure to obtain such authorization shall not relieve TRS of any duty which it
has to Ryder hereunder.
(o) All charges by Ryder under this Agreement, whether for maintenance or
repair of Vehicles, for sales fees or commissions or otherwise, shall be billed
to TRS, which shall be responsible to pay Ryder therefor in accordance with the
terms of this Agreement.
2. RYDER AGREES:
(a) To devote good faith efforts to sell Vehicles to customers in the
ordinary course of Ryder's business (i) subject to the criteria set forth below,
and (ii) in a manner which, except as otherwise expressly set forth herein, is
consistent with the manner in which Ryder sells its own light commercial
vehicles; and to devote good faith efforts to safeguard the Vehicles in a manner
which is consistent with the manner in which Ryder safeguards its own vehicles
which are being sold at the Ryder locations. The clause in (ii) above
constitutes a statement of general applicability to all aspects of the sale of
vehicles in the aggregate, and shall not be deemed a measurement of any one
instance of performance/nonperformance apart from other
performances/nonperformances of similar aspects of service.
(1) Unless otherwise agreed between Ryder and TRS on a case by case
basis, all sales of Vehicles will be for cash, not credit, and will be paid
by certified funds payable to RCTR or by customer's check if Ryder's
policies would permit
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
7
<PAGE>
the Ryder Location to accept a check in similar amount from such customer
were that customer purchasing a Ryder vehicle. It is not intended that
customers be able to purchase Vehicles with a credit card.
(2) The asking price for each Vehicle ("Asking Price") and an
acceptable sale price for each Vehicle ("Take Price") will be reasonably
determined by TRS, with Ryder's assistance. Ryder may refuse to sell any
Vehicle for which the Asking Price or the Take Price is not reasonable in
Ryder's opinion. Ryder will not sell a Vehicle if the sale price is $500
or more below the Take Price, unless TRS and Ryder approve such a lower
price prior to each such sale.
(3) Unless otherwise indicated in the Vehicle Title Nominee Agreement
between Ryder and RCTR, the title to the Vehicles shall be and remain in
the name of RCTR until sold by Ryder, at which time Ryder, pursuant to the
power of attorney from RCTR, will transfer title to purchaser. Ryder will
not receive title to the Vehicles. TRS will cause RCTR to grant the Power
of Attorney to Ryder prior to the sale of the first Vehicle hereunder, and
to take such other actions and execute such other documents as is necessary
for Ryder to accomplish sale of Vehicles and concomitant transfer of title
to Vehicles to purchasers thereof.
(4) TRS shall be solely responsible, however, and Ryder shall have no
responsibility, for removing liens, interests and encumbrances ("Liens")
from the Vehicles. TRS shall remove all such Liens, or arrange for such
Liens to be removed without further action than is provided for herein upon
sale of each Vehicle to a purchaser, prior to delivery of the Vehicle to a
Ryder Location for sale.
(5) All sales proceeds shall belong to RCTR, provided that Ryder may,
if required by government authorities or permitted by RCTR, submit required
sales tax directly to such authorities as agent of RCTR.
(6) All Vehicle inspections or repairs accomplished by Ryder will be
governed by the Maintenance Agreement of even date herewith between Ryder
and TRS; provided, however that in the event of any conflict between the
terms of that agreement and this Agreement, this Agreement shall control.
(b) To not remove, transfer or otherwise use the Vehicles without TRS's
prior written consent except in connection with the sale of the Vehicles or
otherwise in connection with this Agreement.
(c) To have RCTR's Sale Agreement completely and properly filled out and
signed by the purchaser.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
8
<PAGE>
(d) That authorized TRS representatives may, after giving at least 48
hours' advance written notice, enter Ryder Locations during regular business
hours to audit, inspect, or copy, at TRS's expense, RCTR-specific business
records maintained by Ryder and/or remove Vehicles.
(e) Ryder shall not make any post-sale Vehicle repairs covered by a TRS
warranty without TRS's prior approval if TRS would be charged in excess of $250
for those repairs.
(f) Ryder shall release indemnify, defend and hold harmless TRS, RCTR and
their respective directors, officers, employees, agents, subcontractors and
assigns from and against any and all Third Party Claims arising out of the gross
negligence or willful misconduct of the Ryder Indemnified Parties in performing
or failing to perform Repairs.
(g) That upon termination of this Agreement, Ryder will tender Vehicles
and materials for pickup by TRS at the Ryder Locations.
(h) To notify TRS within three (3) business days of the sale of any
Vehicle by sending to TRS a signed copy of the Bill of Sale for the sold
Vehicle.
3. OTHER AGREEMENTS:
(a) TRS shall pay Ryder * per Vehicle sold plus such sums as shall be
sufficient to pay, and Ryder shall then pay, the Ryder salesperson a per Vehicle
commission as calculated under the Ryder Used Truck Representative Sales
Compensation Plan (which shall give equal treatment to the sale of Ryder and
RCTR vehicles) (the "Plan") in effect at the time of such sale. Ryder shall
have sole discretion to change the Plan from time to time, provided that (i)
Ryder shall give TRS at least ten (10) days prior written notice of the change
and (ii) the Plan shall not discriminate in any material way between Ryder
vehicles and RCTR Vehicles; and provided further that if the percentage of
commission to be paid under the Plan for any certain type of Vehicle increases
by more than 100% from the date hereof, then (1) TRS shall have the option to
refuse the increase in commission, in which case Ryder shall have the option to
terminate this Agreement, or reduce the number of Vehicles it sells under this
Agreement, upon sixty (60) days written notice, or (2) TRS shall be allowed to
reduce the percentage of Vehicles required to be consigned to Ryder under this
Agreement by 50%.
(b) Ryder shall invoice TRS weekly for all commissions and other charges
due hereunder, which invoice shall be accompanied by reasonable documentation or
explanation supporting such
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
9
<PAGE>
commissions and charges, and TRS shall pay Ryder, as to time periods within the
first year following the date hereof, no later than thirty (30) days after each
invoice date, and as to all subsequent periods, no later than fifteen (15) days
after each invoice date. All payments hereunder shall be made without deduction
(except for charges billed in error), set off, recoupment or counterclaim. If a
party at any time believes that sums it is charged hereunder are calculated in
error, then it shall timely pay the undisputed portion of the charge, and on or
before the due date for payment of the charge ("Due Date"), shall notify the
other party in writing of the portion it believes to be in error and give to the
other party an explanation, in responsible detail, of the reasons for its
belief. The due date for payment of the disputed sums shall then be extended for
ten (10) days (or such later time as both parties agree in writing) from the Due
Date to give the parties time to negotiate resolution of the dispute, which both
parties will do in good faith.
(c) This Agreement will continue in full force and effect until terminated
by either party in accordance with the terms of this Agreement. If at any time
any party is in Material Breach of this Agreement, then in addition to all other
rights and remedies available under applicable law or in equity, the other party
shall have the right to terminate this Agreement without further notice or
demand. "Material Breach" shall mean (i) as to a failure of payment, that full
payment has not been received within five (5) days, after the owing party's
receipt of written notice that the payment was due, (ii) as to any other type of
failure, a material failure of performance of a party's obligations under this
Agreement, if such failure remains uncured thirty (30) days after receipt of
written notice of the failure and (iii) as to TRS, failure to cause the
replacement or restoration of the Letter of Credit as applicable, within five
(5) days following its complete or partial draw due to the occurrence of a
Material Breach hereunder except, as to (i), (ii) or (iii) above, if prevented
by a force majeure under Section 4(k) below.
In addition, this Agreement shall automatically terminate, without
notice required, upon the occurrence of any of the following events: (i) the
other party voluntarily enters into proceedings in bankruptcy or insolvency;
(ii) the other party shall make an assignment for the benefit of creditors;
(iii) a petition shall be filed against the other party under a bankruptcy law,
a corporate reorganization law, or any other law for the relief of debtors (or
similar law in purpose or effect) and such petition shall not have been
dismissed within sixty (60) days; or (iv) the other party enters into
liquidation or dissolution proceedings.
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
10
<PAGE>
Subject to the provisions of the next paragraph, in the event of
Material Breach by TRS pursuant to clause (i) of the first paragraph of this
Section 3(c), Ryder may draw from the Letter of Credit, without court
proceeding, order or otherwise such sums to which Ryder is entitled due to TRS's
Material Breach, and Ryder shall apply such sums against such entitlement. If
the application of such sums is sufficient to cure the Material Breach, then the
Material Breach shall be deemed cured and Ryder shall not terminate this
Agreement due to such Material Breach; if the application of such sums is not
sufficient for such purpose, then Ryder may terminate this Agreement due to the
Material Breach pursuant to the first paragraph of this Section 3(c). It is
agreed, however, that if it shall later be determined by a court of competent
jurisdiction or by mutual agreement of the parties that TRS did not in fact owe
Ryder all of the sums drawn from the Letter of Credit, then Ryder shall return
these sums not owed.
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to Section 3(b) above, that Ryder did
not perform a service billed to TRS, then Ryder shall not be entitled to draw
the Letter of Credit with respect to such failure of payment until the later of
(i) such time as Ryder would be entitled to draw the Letter of Credit under the
preceding paragraph, (ii) fifteen business days after the date Ryder notifies
TRS in writing that Ryder has investigated the dispute and that its records or
personnel confirm the service to have been performed and has offered TRS access
to such records or personnel or (iii) such date as Ryder and TRS mutually agree
in writing. It is agreed that the foregoing sentence does not apply to a
dispute over the quality or conformity of the service or to any attempt by TRS
to set off another matter against Ryder's invoice.
(d) Ryder may, at its option, sell for its own account, or permit any
person or business entity to sell, vehicles (including trucks which are not
Vehicles) of any kind on or about Ryder Locations.
(e) The Vehicles will be sold without warranty of any kind, except that
TRS' printed warranty shall apply unless TRS otherwise directs Ryder in writing.
(f) Under no circumstances will Ryder, its agents, or employees be deemed
to be TRS' or RCTR's employees.
(g) In the event either party resorts to litigation, arbitration or other
proceeding to enforce its rights under this Agreement, the prevailing party will
be entitled to reasonable attorney's fees, costs and expenses.
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
11
<PAGE>
(h) Ryder and TRS agree to keep, and to cause each of its affiliates,
directors, officers, and employees to keep, confi dential any and all
confidential information of the other party that it receives in the course of
performing its obligations hereunder (except that such information may be
shared, on a confidential basis, with the party's attorneys and auditors) and
will not, without the other party's written consent, use any of such
confidential information except as reasonably necessary to perform its duties
under this or another of its agreements with the other party. Upon termination
of this Agreement, each party will return, and will cause its affiliates to
return, to the other party, all original document and copies of the confidential
information which are in its possession.
(i) Notwithstanding anything to the contrary in this Agreement, neither
party shall be liable for, and each party waives and releases the other from
(and as to RCTR's damages, TRS indemnifies and holds harmless the Ryder
Indemnified Parties from), any and all indirect, incidental, special or
consequential damages, including, but not limited to, lost profits, loss of use
or business interruption, even if such damages are foreseeable but not if they
are direct damages.
4. MISCELLANEOUS:
(a) Cumulative and Non-exclusive Rights and Remedies. The parties' rights
------------------------------------------------
and remedies under this Agreement are non-exclusive and are cumulative with its
rights and remedies at law or in equity.
(b) 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.
(c) Governing Law; Jurisdiction and Forum.
-------------------------------------
(1) 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, except for matters of Florida corporate law, as to
which such law shall apply.
(2) Ryder and TRS 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
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
12
<PAGE>
out of this Agreement or the transactions contemplated hereby. Ryder and
TRS hereby irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding.
(3) By the execution and delivery of this Agreement, TRS (i)
irrevocably designates and appoints Jay Alix & Associates ("JA&A"), 575
Fifth Avenue, New York, New York 10017, 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 TRS may at any time designate
and appoint in lieu of JA&A 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 TRS in any such action or proceeding. TRS 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.
(d) Entire Agreement. This Agreement 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. This Agreement is not intended to confer upon anyone not a
party hereto any rights or remedies hereunder.
(e) Notices. All notices shall be in writing and delivered personally or
-------
sent by nationally recognized overnight delivery service (e.g., Federal Express)
or registered or certified mail, return receipt requested, to the appropriate
address set forth below. Notices to Ryder shall be addressed to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
13
<PAGE>
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to TRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
c/o Questor Management Company
4000 Town Center
Southfield, MI 48075
Attention: President
with a copy to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33116
Attention: Gerald R. Riorden
or at such other address and to the attention of such other person as TRS may
designate by written notice of Ryder.
(f) 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) TRS may assign this Agreement, upon 10 days prior written notice
to and without the consent of Ryder, to a party who purchases or acquires, as a
going concern, the business of TRS or all or substantially all of TRS's assets,
provided, however, that any assignee of this Agreement must (A) agree with
Ryder, in writing, to be bound by the terms and provisions hereof, (B) have a
debt/equity ratio as good as TRS's at the time of execution hereof, (C) be the
assignee of the competition provisions in Section 6.2(d) of the Asset Purchase
Agreement and the following agreements defined in the Asset Purchase Agreement
(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 Agreement, (iv) the Administrative Services
Agreement, (v) the Vehicle Maintenance Agreement, (vi) the Dealer 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 Agreement, (2) Ryder
may assign this Agreement upon 10 days prior written notice to and without the
consent of TRS, to a party who purchases or acquires as a going concern, the
business of Ryder or all or substantially all of Ryder's assets, provided,
however, that any assignee of this Agreement must (A) agree with TRS, in
writing, to be bound by the terms and provisions hereof, and (B) have a
debt/equity ratio as good as, Ryder's at the time of
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
14
<PAGE>
execution hereof. TRS may assign its rights hereunder to any lenders which
provide financing to TRS for the purpose of consummating the transactions
contemplated under the Asset Purchase Agreement, or refinancing any such
financing, including any successors thereto.
(g) Headings; Definitions. The 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.
(h) 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.
(i) Interpretation; Absence of Presumption. 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.
(j) Severability. 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.
(k) Force Majeure. Neither party shall be liable for its failure or delay
-------------
in fulfilling its obligations hereunder, if such failure or delay is caused by
fire, flood, weather conditions or other Acts of God, invasions, insurrections,
riots, closing of the public highways, delays or failures of manufacturer or
distributor in providing parts, strike, lockout or other labor dispute, civil
unrest, war or any other reason beyond the reasonable control of the party. In
the case of strikes, lockouts or other labor disputes, it is understood that
such event is beyond the reasonable control of the party suffering the event
unless and until the party is able to resolve it in a manner which such party
deems reasonable and appropriate.
(CONTINUED ON NEXT PAGE)
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
15
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Used Truck Sales Agreement
to be executed by their duly authorized officers as of the date first written
above.
Ryder TRS, Inc. (f/k/a Ryder Truck Rental, Inc.
RCTR Holdings, Inc. ("TRS") ("Ryder")
BY: /s/ Wallace L. Rueckel BY:/s/ Dwight D. Denny
----------------------- -------------------
NAME: Wallace L. Rueckel NAME: Dwight D. Denny
TITLE:Senior Vice President TITLE: Executive V.P.
& Treasurer -Development
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
16
<PAGE>
EXHIBIT 10.6
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ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT is entered into as of this 17th
day of October, 1996 between Ryder Truck Rental, Inc., a Florida corporation
with its principal place of business at 3600 N.W. 82nd Avenue, Miami, Florida
33166 ("Ryder") and Ryder TRS, Inc. (f/k/a RCTR Holdings, Inc.), a Delaware
corporation with its principal place of business at 8669 N.W. 36th Street,
Miami, Florida 33166 ("TRS"), wherein it is agreed:
1. Purposes:
--------
1.1 Ryder and TRS are parties to an Asset Purchase Agreement dated
September 19, 1996 (the "Asset Purchase Agreement") under which TRS is
purchasing from Ryder certain assets and businesses of Ryder's Consumer Truck
Rental division (the "Business").
1.2 TRS wishes that Ryder continue to provide, and Ryder agrees to
continue to provide, certain services in support of the Business from and after
the date hereof, on the terms and conditions set forth herein.
2. Term. Subject to the provisions of Section 5 hereof, this
----
Agreement shall be effective from and after the date hereof and shall continue
until the earlier of (a) two years from the date hereof or (b) the date all
services have been terminated pursuant to Section 5 below.
3. Agreement to Perform Selected Services.
--------------------------------------
Subject to all of the terms and conditions hereof, Ryder shall provide
to TRS those administrative and support services described on Schedule A hereto
(the "Services"), provided, however that Ryder shall not be obligated to take
any action that would constitute preparation of an income tax return or would
otherwise result in Ryder's being deemed to be an income tax return preparer
within the meaning of Section 7701 of the Internal Revenue Code of 1986, as
amended, and within the meaning of similar tax laws under state statutes.
3.1 From time to time, TRS may request that the Services be expanded
to include other services which Ryder provided to the Business just prior to the
date hereof, and Ryder shall in good faith negotiate with TRS to provide the
services if Ryder has the capacity to do so; provided, however, that with
respect to any service not scheduled Ryder shall not be obligated to offer any
professional services, such as legal advice or advice on the setting of
accounting reserves, or any service which Ryder in its sole discretion believes
to be inappropriate due to the competitiveness of the parties, or any service
which Ryder does
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
not possess legal authority to do for a third party. Ryder shall perform the
Services exercising the same skill and in the same manner as it performed the
same or similar services for its own account prior to the date hereof. The
foregoing sentence is a statement of general applicability to all services in
the aggregate, and shall not be deemed a measurement of any one instance of
performance/nonperformance apart from other performances/nonperformances of
similar services.
If TRS desires that a particular Service be performed in a different
way and Ryder is reasonably able to accommodate such desire, then the parties
will agree upon the remuneration Ryder shall receive for performing the Service
that way, and Ryder shall accommodate the request.
From time to time, TRS may request Ryder to perform certain services
for its wholly owned subsidiary, RCTR, Inc. ("RCTR"). TRS agrees to obtain from
RCTR such authorizations as are necessary to accomplish such services. Ryder
shall have no duty to inquire of TRS whether such authorizations have been
obtained. Ryder may rely upon TRS' covenant in the second sentence of this
paragraph. If, however, Ryder at any time has reason to doubt that any such
necessary authorization has not been obtained, Ryder shall not be obligated to
perform any duty to which the authorization relates, until such authorization
shall have been obtained and evidence of such, reasonably satisfactory to
Ryder, has been delivered to Ryder.
3.2 If in Ryder's sole discretion it deems necessary or appropriate,
Ryder may engage the services of third parties to render, or assist in
rendering, certain of the Services. Except for emergencies, Ryder shall discuss
its outsourcing decision with TRS at least ten days prior to implementing the
outsourcing, and Ryder shall only outsource Services (i) as part of a greater
outsourcing of services Ryder provides to itself or its customers or (ii) with
TRS's consent, which shall not be unreasonably withheld. Ryder shall not
utilize outsourcing for the purpose of diminishing the skill or manner with
which Services are performed.
TRS agrees that certain of the Services may require the assistance of
certain former employees of Ryder who are employed by TRS, and that Ryder shall
be entitled to utilize the services of such employees upon reasonable prior
notice provided that such utilization does not unreasonably interfere with the
duties of such employees. The Services to be rendered by such employees shall
be arranged through the Transition Coordinators.
Each of TRS and Ryder shall designate one (1) transition coordinator
(each, a "Transition Coordinator" and collectively, the "Transition
Coordinators") who will provide continuous oversight and coordination of, and
communicate concerning
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
disputes with respect to, the Services who will be available to TRS and Ryder
during normal business hours and who will be responsible for providing for, or
delegating the provision of assistance regarding, the Services. TRS and Ryder
may from time to time substitute the persons serving as Transition Coordinators
with other persons who, in the reasonable judgment of the party appointing the
Transition Coordinator, are qualified to serve in those positions.
3.3 TRS acknowledges that Ryder's ability to provide the Services,
and to do so on a timely basis, may be in whole or in part dependent on receipt
of accurate, timely and sufficient information from TRS.
4. Charges for Services; Payment:
-----------------------------
4.1 The charges for Services shall be the charges listed in Schedule
B hereto.
In addition to the scheduled charges, TRS shall reimburse to Ryder an
amount equal to the sum of: (i) all direct out-of-pocket fees and expenses
incurred by Ryder in rendering the Services to the extent not already included
in the amounts payable in Schedule B hereof, (ii) * (iii) any and all taxes
(other than taxes based on Ryder's net income or gross income) assessed on the
provision of the Services without any offset or deduction of any nature
whatsoever. Such costs, expenditures and taxes will be billed to TRS in the
monthly invoices rendered pursuant to this paragraph. * .
4.2 Ryder shall invoice TRS weekly in arrears for all charges for
Services to TRS, which invoice shall be accompanied by reasonable documentation
or explanation supporting such charges, and TRS shall pay Ryder, as to time
periods within the first year following the date hereof, no later than thirty
(30) days after each invoice date, and as to all subsequent periods, no later
than fifteen (15) days after each invoice date. All payments hereunder shall be
made without deduction (except for charges billed in error), set off, recoupment
or counterclaim. In the case of charges believed to be billed in error, TRS
shall timely pay the undisputed portion of the invoice, and on or before the due
date for payment of the charges ("Due Date"), TRS shall notify Ryder in writing
of the portion believed to be billed in error and give Ryder an explanation, in
reasonable detail, of the reasons for its belief. The due date for payment of
these disputed sums shall then be extended for ten (10) days (or such later time
as both parties agree in writing) from the Due Date to give the parties time to
negotiate resolution of the dispute, which both parties will do in good faith.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
All charges shall conclusively be presumed correct unless Ryder
receives notice within one hundred eighty (180) days of the invoice date.
All overdue amounts shall bear interest at a rate equal to the lower
of: (i) ten percent (10%) per annum or (ii) the highest rate permitted by law
("Past Due Interest").
4.3 TRS shall obtain and maintain a letter of credit, in favor of
Ryder, in the amount of two and one half million dollars ($2,500,000.00), the
issuer or confirming bank of which will be a bank reasonably acceptable to Ryder
and the terms of which shall be substantially in accordance with the form
attached hereto as Exhibit A (the "Letter of Credit") which may be drawn by
Ryder in the event of Material Breach by TRS under clause 10(i) of this
Agreement or any of the other agreements between the parties of even date
herewith entitled Vehicle Maintenance Agreement, MIS Support Agreement, or Used
Truck Sales Agreement, as any of them may be amended from time to time or as
otherwise provided in Schedule 9.6(c) of the Asset Purchase agreement. Such
Letter of Credit shall be for a term of at least one year. One master $2.5
million letter of credit which complies with the terms of this paragraph shall
constitute the Letter of Credit under each of the foregoing listed agreements
("Support Agreements"). TRS shall be obligated to promptly replace the Letter
of Credit or restore it to its full amount, respectively, should Ryder draw such
Letter of Credit in full or in part due to the occurrence of a Material Breach
under this Agreement.
Notwithstanding the foregoing, TRS may terminate, or not renew, the
Letter of Credit after the first anniversary of the date hereof, if it is not in
default of this Agreement at such time; provided, however, that should TRS,
after such time either (i) commit a Material Breach of this Agreement due to
failure to pay charges due hereunder or under any Support Agreement (except, if
prevented by a force majeure under paragraph 12 below) or (ii) twice within a
twelve month period, fail to timely pay charges due hereunder or under any
Support Agreement (except, if prevented by a force majeure under paragraph 12
below), then TRS shall again be obligated to obtain and maintain the Letter of
Credit pursuant to the first two sentences of the previous paragraph, and to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement. If, however, during
the following twelve months TRS timely pays all charges coming due hereunder,
and is not at such time otherwise in default of this Agreement, or in
bankruptcy, then TRS may again terminate, or not renew, the Letter of Credit,
and TRS's obligations hereunder to maintain the Letter of Credit shall cease,
subject to the last stated proviso above.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
4.4 TRS agrees to provide Ryder with the following financial
statements and information on a quarterly basis (or upon Ryder's reasonable
request from time to time for the purpose of evaluating the creditworthiness of
TRS: (i) TRS's Combined Balance Sheet in the form set forth in Exhibit B; (ii)
TRS's Com bined Statement of Earnings in the form set forth in Exhibit C; (iii)
TRS's Interest Coverage Ratios; and (iv) TRS's Debt-To-Equity-Ratio. Such
information shall be provided to Ryder's credit department and shall not be
disseminated beyond such department except to the Controller of Ryder and the
Chief Financial Officer of its parent company.
5. Reductions in Services; Termination. The parties recognize that
-----------------------------------
during the Term hereof TRS's requirements for certain Services will decrease and
that TRS intends to reduce or completely phase out Services as no longer
required. Accordingly, at any time after the Closing, TRS may terminate all or
any part of the Services by giving Ryder not less than sixty (60) days advance
notice in writing of any anticipated termination of any Services and, to the
extent practicable, the parties will agree to an orderly reduction or phase-out
of such Services. Once a Service is discontinued, Ryder shall not again be
obligated to later reinstate such Services.
6. Non-Solicitation. TRS covenants to Ryder that neither it nor its
----------------
affiliates controlled by it shall solicit or induce any employee of Ryder or a
Ryder affiliate who provides Services to accept employment with TRS or any
affiliate of TRS during the term in which such Services are provided or within
one year thereafter, without the prior written consent of Ryder. It is
understood, however, that Ryder will not unreasonably withhold its consent as to
any employee who has been primarily engaged in providing Services during the six
months prior to termination of those Services. Ryder agrees that neither
advertising of employment positions nor post-closing contact of an employee of
Ryder or Ryder's affiliate by a contracted head hunter for TRS who is not told
to target one or more of those employees, nor a contact to TRS or an affiliate
controlled by TRS initiated post-closing by one of those employees regarding
employment shall be considered "solicitation" or "inducement" or an attempt to
do so.
7. Software/Hardware - Not Covered. This Agreement does not pertain
-------------------------------
to software or hardware which Ryder utilizes in performing the Services
("Infoware"). The Software License Agreement and MIS Support Agreement, both
entered into by TRS and Ryder of even date herewith (the "MIS Agreements"),
shall set forth any rights in Infoware which TRS may have. Except as may be
expressly set forth in the MIS Agreements, Ryder may modify or remove from use
any Infoware at any time, so long as Ryder is otherwise able to continue to
provide the Services for which the Infoware was used.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
8. Insurance; Indemnification:
--------------------------
8.1 During the Term of this Services Agreement, * will maintain the
types of insurance in the coverage limits listed in the insurance policy
schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
TYPE OF INSURANCE POLICY COVERAGE LIMITS
Commercial General Liability *
Insurance Policy with Broad
Form Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy")
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * shall cause the coverage provided by each
such policy to be kept in place for a period of * after the effective date of
termination or expiration of this Services Agreement.
TRS may * .
8.2 Each liability Insurance Policy shall:
(i) be written by an insurance company reasonably acceptable to
* (it being understood that an insurance company rated A- or better by
A.M. Best & Company is acceptable);
(ii) name * as an insured, and be amended to name * , its
employees, officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests may appear;
(iii) provide that if such insurance is cancelled, or any
material change is made in the coverage which affects the interest of any
Additional Insured, such cancellation or change shall not be effective as
to the Additional Insured for ten (10) days after receipt by the Additional
Insured of written notice from such insurers of such cancellation or
change;
(iv) be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to, any Additional
Insured;
(v) provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be invalidated by any
action or inaction of * or any
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-6-
<PAGE>
other Person and shall insure each Additional Insured regardless of any
breach or violation of any warranty, declaration or condition contained in
such policies by * or any other Person (other than * );
(vi) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each Additional Insured; and
(vii) in accordance with the terms of the contractual liability
coverage provided by such Insurance Policy, insure the obligations of * .
The first * of general liability insurance shall be on an occurrence form.
8.3 At least once a year, from time to time at * request, and any
time a new policy is to go into effect, * shall provide * with insurance
certificates and other evidence, reasonably satisfactory to * , that the
benefits and coverage required by this paragraph 8 are in full force and effect.
The certificate shall describe the perils covered by each policy of insurance
then in force, identify the insurer or insurers with which such policies of
insurance are carried and maintained, specify the amounts of insurance coverage
provided against each such peril, and describe the provisions contained in such
policies of insurance so as to evidence compliance with the requirements of this
paragraph 8, and that * shall have no duty to examine such insurance
certificates or the Insurance Policies to verify compliance. * shall provide a
copy of its insurance policies to * promptly following a request therefor, if
available.
8.4 Notwithstanding anything to the contrary in this Agreement,
neither party shall be liable for, and each party waives and releases the other
from, (and as to * damages, * indemnifies and holds harmless * from) ANY
AND ALL INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT
NOT LIMITED TO, LOST PROFITS, LOSS OF USE OR BUSINESS INTERRUPTION, EVEN IF SUCH
DAMAGES ARE FORESEEABLE.
9. Confidentiality. Ryder and TRS agree to keep, and to cause each
---------------
of its affiliates, directors, officers, and employees to keep, confidential any
and all confidential information of the other party that it receives in the
course of performing its obligations hereunder (except that such information
may be shared, on a confidential basis, with the party's attorneys and auditors)
and will not, without the other party's written consent, use any of such
confidential information except as reasonably necessary to perform its duties
under this or another of its agreements with the other party. Upon termination
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
of this Agreement, each party will return, and will cause its affiliates to
return, to the other party, all original documents and copies of the
confidential information which are in its possession.
10. Default. If at any time any party is in Material Breach of this
-------
Agreement, then in addition to all other rights and remedies available under
applicable law or in equity, the other party shall have right to terminate this
Agreement without further notice or demand. "Material Breach" shall mean (i) as
to a failure of payment, that full payment has not been received within five (5)
days, after the owing party's receipt of written notice that the payment was
due, (ii) as to any other type of failure, a material failure of performance of
a party's obligations under this Agreement, if such failure remains uncured
thirty (30) days after receipt of written notice of the failure and (iii) as to
TRS, failure to cause the replacement or restoration of the Letter of Credit as
applicable, within five (5) days following its complete or partial draw due to
the occurrence of a Material Breach hereunder except, as to (i), (ii) or (iii)
above, if prevented by a force majeure under paragraph 12 below.
In addition, this Agreement shall automatically terminate, without
notice required, upon the occurrence of any of the following events: (i) the
other party voluntarily enters into proceedings in bankruptcy or insolvency;
(ii) the other party shall make an assignment for the benefit of creditors;
(iii) a petition shall be filed against the other party under a bankruptcy law,
a corporate reorganization law, or any other law for the relief of debtors (or
similar law in purpose or effect) and such petition shall not have been
dismissed within sixty (60) days; or (iv) the other party enters into
liquidation or dissolution proceedings.
Subject to the provisions of the next paragraph, in the event of
Material Breach by TRS pursuant to clause (i) of the first paragraph of this
paragraph 10, Ryder may draw from the Letter of Credit, without court
proceeding, order or otherwise, such sums to which Ryder is entitled due to
TRS's Material Breach, and Ryder shall apply such sums against such entitlement.
If the application of such sums is sufficient to cure the Material Breach,
including Past Due Interest owed to date of draw, then the Material Breach shall
be deemed cured and Ryder shall not terminate this agreement due to such
Material Breach; if the application of such sums is not sufficient for such
purpose, then Ryder may terminate this Agreement due to the Material Breach
pursuant to the first paragraph of this paragraph 10. It is agreed, however,
that if it shall later be determined by a court of competent jurisdiction or by
mutual agreement of the parties that TRS did not in fact owe Ryder all of the
sums drawn from the Letter of Credit, then Ryder shall return the sums
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
not owed, with interest thereon computed at the same annual rate of interest as
set forth above in the definition of "Past Due Interest".
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to paragraph 4.2 above, that Ryder
did not perform a service billed to TRS, then Ryder shall not be entitled to
draw the Letter of Credit with respect to such failure of payment until the
later of (i) such time as Ryder would be entitled to draw the Letter of Credit
under the preceding paragraph, (ii) fifteen business days after the date Ryder
notifies TRS in writing that Ryder has investigated the dispute and that its
records or its personnel confirm the service to have been performed and has
offered TRS access to such records or personnel or (iii) such date as Ryder and
TRS mutually agree in writing. It is agreed that the foregoing sentence does
not apply to a dispute over the quality or conformity of the Service or to any
attempt by TRS to set off another matter against Ryder's invoice.
In the event either party resorts to litigation, arbitration or other
proceeding to enforce its rights under this Agreement, the prevailing party will
be entitled to reasonable attorney's fees, costs and expenses.
11. Relationship of the Parties. It is expressly understood and
---------------------------
agreed that in rendering the Services hereunder, Ryder is acting as an
independent contractor and that this Agreement does not constitute either party
as an employee, partner, joint venturer, agent or other representative of the
other party for any purpose whatsoever. Neither party has the right or authority
to enter into any contract, warranty, guarantee or other undertaking in the name
of or for the account of the other party, or to assume or create any obligation
or liability of any kind, express or implied, on behalf of the other party, or
to bind the other party in any manner whatsoever, or hold itself out as having
any right, power or authority to create any such obligation or liability on
behalf of the other or to bind the other party in any manner whatsoever (except
as to any actions taken by either party at the express written request and
direction of the other party).
12. Force Majeure. Neither party shall be liable for its failure or
-------------
delay in fulfilling its obligations hereunder, if such failure or delay is
caused by fire, flood, weather conditions or other Acts of God, invasions,
insurrections, riots, closing of the public highways, strike, lockout or other
labor dispute, civil unrest, war or any other reason beyond the reasonable
control of the party. In the case of strikes, lockouts or other labor disputes,
it is understood that such event is beyond the reasonable control of the party
suffering the
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
event unless and until the party is able to resolve it in a manner which such
party deems reasonable and appropriate.
13. 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 paragraph
provided receipt of copies of such counterparts is confirmed.
14. Governing Law; Jurisdiction and Forum.
-------------------------------------
14.1 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, except for matters of Florida corporate law, as to which
such law shall apply.
14.2 Ryder and TRS 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. Ryder and TRS hereby irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
14.3 By the execution and delivery of this Agreement, TRS (i)
irrevocably designates and appoints Jay Alix & Associates ("JA&A"), 575 Fifth
Avenue, New York, New York 10017, 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 TRS may at any time designate and appoint in lieu of
JA&A 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 TRS in any such action or proceeding. TRS
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.
15. Entire Agreement. This Agreement and the Schedules and Exhibits
----------------
hereto contain the entire agreement between the
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
parties with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties other that
those set forth or referred to herein. This agreement is not intended to confer
upon anyone not a party hereto any rights or remedies hereunder.
16. Notices. All notices shall be in writing and delivered
-------
personally or sent by nationally recognized overnight delivery service (e.g.,
Federal Express) or registered or certified mail, return receipt requested, to
the appropriate address set forth below. Notices to Ryder shall be addressed
to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to TRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
c/o Questor Management
Company
4000 Town Center
Southfield, MI 48075
Attention: President
with a copy to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, FL 33166
Attention: Gerald R. Riordan
or at such other address and to the attention of such other person as TRS may
designate by written notice to Ryder.
17. 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: (i) TRS may assign this Agreement, upon 10 days prior written notice
to and without the consent of Ryder, to a party who purchases or
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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acquires, as a going concern, the business of TRS or all or substantially all of
TRS's assets, provided, however, that any assignee of this Agreement must (a)
agree with Ryder, in writing, to be bound by the terms and provisions hereof,
(b) have a debt/equity ratio as good as, TRS's at the time of execution hereof,
(c) be the assignee of the competition provisions in Section 6.2(d) of the Asset
Purchase Agreement and the following agreements defined in the Asset Purchase
Agreement (to the extent such agreements are still existing at the time of such
assignment): (1) the Copyright License Agreement, (2) the Software License
Agreement, (3) the Trademark Agreement, (4) the Dealer Agreement, (5) the
Vehicle Maintenance Agreement, (6) the MIS Support Agreement, and (7) 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 Agreement, (ii) Ryder may assign this
Agreement, upon 10 days prior written notice to and without the consent of TRS,
to a party who purchases or acquires, as a going concern, the business of Ryder
or all or substantially all of Ryder's assets, provided, however, that any
assignee of this Agreement must (a) agree with TRS, in writing, to be bound by
the terms and provisions hereof, and (b) have a debt/equity ratio as good as,
Ryder's at the time of execution hereof. TRS may assign its rights hereunder to
any lenders which provide financing to TRS for the purpose of consummating the
transactions contemplated under the Asset Purchase Agreement, or refinancing any
such financing, including any successors thereto.
18. Headings; Definitions. The 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 paragraphs contained
herein mean paragraphs of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
19. 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.
20. Interpretation; Absence of Presumption. 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.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-12-
<PAGE>
21. Severability. 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.
(CONTINUED ON NEXT PAGE)
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-13-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Administrative
Services Agreement to be executed by their duly authorized officers as of the
date first written above.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC. (f/k/a
"Ryder" RCTR HOLDINGS, INC.)
"TRS"
By:/s/ Dwight D. Denny By: /s/ Wallace L. Rueckel
------------------- -----------------------
Dwight D. Denny Wallace L. Rueckel
Executive V.P.-Development Senior Vice President &
Treasurer
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-14-
<PAGE>
SCHEDULE A
ADMINISTRATIVE SERVICES FOR TRS,/1/ AS MAY BE REQUESTED
A. Financial Reporting Activities:
1. Production of daily revenue report.
2. Posting of journal entries.
3. Preparation of monthly income statements and balance sheets.
4. General Ledger reconciliation.
5. General Ledger and location database maintenance.
B. Credit Card and Check Accounting Activities:
1. All reconciliations currently being performed at the corporate
level.
2. Provide Atlanta and Denver area offices necessary information
regarding chargebacks.
3. Maintain vendor interfaces with credit card companies,
Telecredit and Buypass.
C. Fixed Asset Accounting:
1. Initial set up, transfers and deletions of assets on fixed asset
run.
2. Reconciliations.
D. Accounts Payable Services:
1. Check production and distribution to vendors.
2. Reconciliations.
3. Form 1099 administration for vendors and dealers.
4. Vendor set up and deletion.
5. Keypunching of invoices.
E. Vehicle Licensing and Sales Accounting:
1. Applying for all necessary license and permits required for
trucks and auto carriers.
2. Distribution of license plates and permits.
3. Processing of vehicle sales.
F. Vehicle Purchasing Accounting:
1. Processing Invoices.
___________________
/1/ With the exception of the services in Sections E, F, L and Q which will be
provided to RCTR, Inc. at the direction and request of TRS, these services are
being provided to TRS only, any services requested for affiliates or
subsidiaries will need to be agreed upon on an as requested basis if the
provision of such services involves an additional internal cost to Ryder.
<PAGE>
2. New vehicle capitalization and depreciation accounting.
3. Depreciation and new vehicle capitalization reconciliations.
G. Payroll Administration:
1. Process and distribute payroll checks, commissions, and other
incentive pay.
2. All pre and post tax deductions.
3. Direct deposit administration.
4. Employment tax deductions and tax returns.
5. W2's.
6. Garnishment deductions and administration to courts.
7. New hire reporting.
H. Sales Tax:
1. Assist in filing all necessary state and local tax reports with
required payments from TRS's funds.
2. Assist in coordinating tax audits.
3. Assist in reconciling tax reserves as required.
I. Ad Valorem Tax:
1. Assist in filing renditions in all requested jurisdictions.
2. Assist with audit and pay all assessments with TRS's funds.
3. Assist in reconciling tax reserves as required.
J. Fuel and Use Tax:
1. Assist in applying for fuel permits as requested.
2. Assist in filing tax returns and submit payments.
3. Assist in coordinating all tax audits.
K. State and Federal Income Tax as follows:
1. Assist in filing state and federal tax returns and submit
required payments.
2. Assist in coordinating all tax audits.
L. BIPD Claims Administration:
1. Investigate and establish required reserves for BIPD claims.
2. Negotiate claim settlements.
2
<PAGE>
3. Submit claim payments on settled claims.
4. Provide necessary claim data.
M. HR Administration:
1. Processing of new hires and profile changes to set up on payroll
system.
2. Produce headcount reports.
N. Reimbursement Accounting Administration:
1. Health Care (closeout).
2. Dependent Day Care (closeout).
O. Benefits Accounting:
1. Health care provider billing and payments.
2. General Ledger billing and reports of employers and employee
charges.
P. National Rental Accounting Billing Services:
1. Invoice national rental accounts regarding central billing.
Q. Vehicle Purchasing Administration:/2/
1. Select unit numbers to process all TRS purchases annually.
2. Maintain all Newco Sample Purchase Orders in Purchasing J512
System.
3. Issue purchase orders (manual) for all car carrier and towing
equipment.
4. Process all vendor invoices for TRS equipment purchased.
5. Provide all required Vehicle Administration (VA) data transfer
unique to TRS.
______________________
/2/ Vehicle Purchasing Services Not Provided:
---
1. Vehicle specifications assistance.
2. Vehicle pricing assistance.
3. Purchase package participation or assistance.
4. Purchasing negotiations involvement.
5. Quality assurance.
6. Pilot model inspection assistance.
7. Vendor performance measurements.
8. Delivery management to final destination.
3
<PAGE>
6. Provide status on all chassis equipment ordered until chassis
reaches designated body company.
7. Network Sales -- Parts Distribution.
R. Employee and Dealer Training:/3/
1. Facilitation of the Dealer Process Change Team Project,
development of project recommendation and implementation plan.
Assist business unit in implementing new standards, new roles and
responsibilities, and new dealer compensation strategies.
2. Design and develop CRCS new system training program. This
includes providing a Train the Trainer Program in conjunction
with EDS, and TSR development team.
3. Development of training process and program roll out for the DDM
technology platform.
4. New hire training in the Atlanta and Denver centers.
5. Update and roll out of DDM new hire program including
development of self study guide and associated job tools.
6. Documentation and packaging of all training materials,
equipment, video tapes and prepurchased training programs which
are used to support the CTR/RMM business.
7. Part-time consulting from the Director of CFC will be required
from time to time. His dedicated support is required to complete
the Dealer Process Change Team Project.
8. Development of 1997 CTR/RMM Training Plan which includes
identification of business training requirements and alternative
solutions.
9. In conjunction with the CTR Finance department, develop necessary
training and communication materials for managers to build
understanding of new financial standards (EVA).
10. Support functional process improvement efforts with tools,
facilitation, and analysis as needed.
________________________
/3/ Ryder's Customer Focus Center (CFC) agrees to provide training and
consulting services through December 31, 1996 as agreed in the 1996 business
plan. Notwithstanding anything in the Agreement to the contrary, Ryder shall not
be obligated to provide any Employee and Dealer Training to TRS in 1997 or
subsequent calendar years. The following individuals are a primary resource to
TRS. * -Training Consultant; * -Training Consultant; * -Trainer. These employees
will continue to support TRS in all aspects of TRS's training requirements. The
listed services describe the key projects in the 1996 business plan. It is
understood that not all of these projects will be fully completed; however, a
monthly status will be furnished indicating accomplishments and costs incurred.
Payment will be made based on monthly expenses incurred and cannot exceed
$100,000 in total without both parties agreeing.
4
<PAGE>
11. PKS - develop and deliver implementation training for all RMM
users of product knowledge system.
12. Design and deliver follow-up to strategic selling at fall RMM
sales meeting.
5
<PAGE>
EXHIBIT 10.7
------------
MIS SUPPORT AGREEMENT
THIS MIS SUPPORT AGREEMENT ("Agreement") is made as of this 17th day
of October, 1996 (the "Effective Date"), by and between Ryder Truck Rental,
Inc., a Florida corporation with its principal place of business at 3600 N.W.
82nd Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc. (f/k/a RCTR
Holdings, Inc.), a Delaware corporation with its principal place of business at
8669 N.W. 36th Street, Miami, Florida 33166 ("TRS"). Ryder and TRS are at times
referred to herein individually as a "Party" and collectively as the "Parties".
WHEREAS, Ryder and TRS are parties to an Asset and Stock Purchase
Agreement dated September 19, 1996 (the "Asset Purchase Agreement"), under which
TRS is purchasing from Ryder certain assets and businesses of Ryder's Consumer
Truck Rental division ("Division") and, in order to facilitate the orderly
transfer of certain assets of the Division to TRS and at TRS's request, Ryder
agrees to provide certain MIS support services for the Division on a
transitional basis and for a limited period after the Closing in accordance with
the terms of this Agreement.
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein and in the Asset Purchase Agreement, the adequacy of which is
hereby acknowledged, the Parties agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
-----------
have the meanings set forth in the Asset Purchase Agreement.
2. Services to be Provided.
-----------------------
(a) Transition Services. Ryder hereby agrees to provide, or cause
-------------------
its Affiliates (as defined hereinbelow) or a third party to provide, to TRS from
and after the Closing, the administrative and support services described on
Schedules A through K hereto (each, a "Transition Service" and collectively, the
"Transition Services") for such period of time as TRS may determine to be
desirable for the conduct of the Business, but not to exceed the maximum period
for each such Transition Service as may be set forth in the applicable Schedule
hereto (the "Maximum Service Period"). Unless Ryder otherwise agrees (in its
sole discretion), and unless otherwise expressly set forth in the Schedules
hereto, Ryder shall not be required to provide any Transition Service for more
than twenty-four (24) months after the Closing.
From time to time, TRS may request Ryder to perform certain services
for its wholly owned subsidiary, RCTR, Inc.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
("RCTR"). TRS agrees to obtain from RCTR such authorizations as are necessary to
accomplish such services. Ryder shall have no duty to inquire of TRS whether
such authorizations have been obtained. Ryder may rely upon TRS' covenant in the
second sentence of this paragraph. If, however, Ryder at any time has reason to
doubt that any such necessary authorization has not been obtained, Ryder shall
not be obligated to perform any duty to which the authorization relates, until
such authorization shall have been obtained and evidence of such, reasonably
satisfactory to Ryder, has been delivered to Ryder.
(b) Level of Transition Services. The specific service levels and
----------------------------
limitations applicable to each Transition Service shall be set forth in the
relevant Schedule therefor. Nothing in this Agreement shall oblige Ryder to act
in breach of the requirements of any law, rule or regulation applicable to it or
violate any rights of, or any agreements with, any third party.
(c) Third Party Providers. Ryder, in its sole discretion, may (i)
---------------------
outsource all or any part of the Transition Services; and (ii) retain the
services of third parties (including, without limitation, Affiliates, agents,
consultants and subcontractors) to render all or any part of the Transition
Services. Any and all such parties referred to in (i) and (ii) above are
hereinafter referred to as "Third Party Providers." Ryder shall provide TRS at
least thirty (30) days prior notice in the event Ryder elects to outsource
Transition Services under any of Schedules A, B, C, F, J or K which include in
excess of * in monthly billings with respect to any such Schedule, provided,
however, that such notice shall not be required in the event of termination of
any employee (other than for purposes of outsourcing) providing services
hereunder. Ryder shall not utilize outsourcing for the purpose of diminishing
the skill or manner with which Transition Services are performed.
(d) Former Employees. Ryder shall be entitled to use, in the
----------------
provision of the Transition Services, a reasonable amount of the services of
those former employees of Ryder who are employed by TRS as a result of the
acquisition of certain assets relating to the Business by TRS, which employees
shall be made available by TRS to Ryder for this purpose upon reasonable prior
notice. The Scheduling of Services to be rendered by such employees by TRS
shall be mutually agreed upon by the Transition Coordinators from time to time.
(e) New Equipment. Ryder shall obtain on behalf of TRS any
-------------
additional hardware or software required by Ryder to provide a Transition
Service ("New Equipment"); provided, however, that no such purchase shall be
-------- -------
made on behalf of TRS in excess of $5,000 on any one (1) purchase order without
the prior written consent of TRS's Transition Coordinator. Ryder shall not be
liable for any delays in performing any Transition Service
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
resulting from TRS's failure to give timely approval of any required acquisition
of New Equipment. Further, the parties agree that Ryder shall not be obligated
to perform any Transition Service in the event any necessary New Equipment that
is not approved by TRS pursuant to this section. Ryder shall (i) make
commercially reasonable efforts to identify suppliers with the most favorable
terms for any New Equipment, and (ii) act as TRS's agent in acquiring the New
Equipment on behalf of TRS. TRS shall pay to Ryder, the supplier or a third
party lessor, as applicable, the purchase, license or lease fees in respect of
the New Equipment. Except as otherwise agreed in writing by the Parties or as
otherwise provided in this Agreement, all rights in and title to any New
Equipment purchased by Ryder on behalf of TRS and paid for by TRS shall belong
to TRS.
(f) TRS Software. Solely for purposes of the Transition Services
------------
and without limiting any of Ryder's rights under the Software License Agreement
of even date herewith between Ryder and TRS, TRS hereby grants to Ryder the
right to use, copy, modify and prepare derivative works of any software owned
by, licensed by or used by TRS that is required by Ryder to provide a Transition
Service, which license shall terminate effective upon the termination of the
applicable Transition Service. TRS shall grant a similar license to any Third
Party Provider that may be retained by Ryder to the extent necessary to render
any Transition Service. TRS, at its expense, shall obtain all consents or
approvals necessary to allow Ryder and Third Party Providers to exercise such
rights as necessary to provide the Transition Services.
(g) Ryder's Access. To the extent reasonably required for Ryder's
--------------
personnel to perform the Transition Services, TRS shall provide Ryder's
personnel and Third Party Providers with reasonable access to TRS's facilities,
including, without limitation, office space and dealer locations, and
telecommunications and computer equipment, systems and software. As a condition
to providing any Transition Service, Ryder may restrict or prohibit any changes
in the location of, certain telecommunications and computer equipment and
systems being transferred to TRS pursuant to the Asset Purchase Agreement to the
extent set forth in the applicable Schedules, and TRS shall be bound by all such
requirements and restrictions.
(h) Software Provided by Ryder. From time to time in connection with
--------------------------
Ryder's rendering the Transition Services to TRS, Ryder may provide or make
software available to TRS. Unless otherwise agreed to in writing by the Parties
pursuant to a separate agreement, TRS shall not license, sublicense, lease,
sublease, transfer, copy, modify, adapt, reverse engineer, de compile,
disassemble, disclose or provide any such software, nor create derivative works
therefrom or use the software to provide any services to third parties. Further,
in no event shall such
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-3-
<PAGE>
software be transferred to any machine other than the one (1) machine upon which
the software is installed, or to any location other than the location at which
the software has been installed, without the express prior written consent of
Ryder.
(i) Transition Coordinators. Each of TRS and Ryder shall designate
-----------------------
one (1) transition coordinator (each, a "Transition Coordinator" and
collectively, the "Transition Coordinators") who will provide continuous
oversight and coordination of, and communicate concerning disputes with respect
to, the Transition Services who will be available to TRS and Ryder during normal
business hours and who will be responsible for providing for, or delegating the
provision of assistance regarding, the Transition Services. TRS and Ryder may
from time to time substitute the persons serving as Transition Coordinators with
other persons who, in the reasonable judgment of the Party ap pointing the
Transition Coordinator, are qualified to serve in those positions.
(j) As used herein the term "Year 2000 Issues" shall mean issues with
respect to computer hardware and software systems arising out of the change
from calendar year 1999 to calendar year 2000. Ryder currently plans to retain
one or more Third Party Providers to ascertain the scope of services which may
be required by Ryder as a result of Year 2000 Issues. The Parties agree that
Ryder shall have no obligation whatsoever to (i) include any of TRS's hardware
or software in said study, nor consult with TRS pertaining thereto or (ii) make
any modifications to Ryder's or TRS's hardware or software as a result of any
Year 2000 Issue, provided, that since a portion of Ryder's hardware and software
--------
will be utilized by TRS pursuant to the Asset Purchase Agreement, this Agreement
and the Software License Agreement between the Parties of even date herewith,
Ryder, at its sole expense, shall make said studies available to TRS. At the
request of TRS and subject to (x) TRS's agreement to reimburse Ryder for any
related increased costs and (y) Ryder's rights under its agreements with third
party software developers who may be retained by Ryder, Ryder shall also make
available to TRS any modifications to software shared by Ryder and TRS and which
is being licensed to TRS by Ryder under the Software License Agreement, of even
date, provided however that Ryder shall have no obligation to install any such
modifications and disclaims all representations and warranties with respect
thereto including without limitation the warranties of merchantability, fitness
for a particular purpose and non-infringement.
3. Terms and Termination.
---------------------
(a) Early Termination. Any specific Transition Service may be
-----------------
terminated at TRS's election upon ninety (90) days, prior written notice to
Ryder at any time prior to the expiration of the Maximum Service Period for such
Transition Service
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-4-
<PAGE>
provided, however, that all Transition Services described on the same Schedule
- -------- -------
(other than those Transition Services contained on Schedules A and K) must be
terminated simultaneously. Any termination of any Transition Service shall not
terminate this Agreement with respect to any other Transition Service then being
provided subject to this Agreement. If any Transition Service is terminated by
TRS, TRS may not elect to reinstitute such Transition Service.
(b) Term. Unless earlier terminated by mutual agree ment of the
----
Parties or pursuant to the terms hereof, this Agreement will expire with
respect to each Transition Service at the end of the Maximum Service Period for
such Transition Service. TRS specifically acknowledges and agrees that all
obligations of Ryder to provide each Transition Service shall immediately cease
upon the expiration of the Maximum Service Period for such Transition Service
(or any extension thereof which may be mutually agreed to by the Parties), and
Ryder's obligations to provide all of the Transition Services shall immediately
cease upon the termination of this Agreement. Upon the cessation of Ryder's
obligation to provide any Transition Service, TRS shall immediately cease
using, directly or indirectly, such Transition Ser vice (including, without
limitation, any and all Ryder software or third party software and all computer
and telecommunications services and equipment used in connection with Ryder's
provision of such Transition Service, unless the same has been provided to TRS
pursuant to a separate agreement).
4. Compensation; Taxes.
-------------------
(a) Price of Services. The Transition Services shall be provided to
-----------------
TRS at the rates set forth on the applicable Schedules hereto.
(b) Billing. Ryder shall invoice TRS weekly in arrears for all
-------
charges for Transition Services to TRS, which invoice shall be accompanied by
reasonable documentation or explanation supporting such charges, and TRS shall
pay Ryder, as to time periods within the first year following the date hereof,
no later than thirty (30) days after each invoice date, and as to all subsequent
periods, no later than fifteen (15) days after each invoice date. All payments
hereunder shall be made without deduction (except for charges billed in error),
set off, recoupment or counterclaim. In the case of charges believed to be
billed in error, TRS shall timely pay the undisputed portion of the invoice, and
on or before the due date for payment of the charges ("Due Date"), TRS shall
notify Ryder in writing of the portion believed to be billed in error and give
Ryder an explanation, in reasonable detail, of the reasons for its belief. The
due date for these disputed sums shall then be extended for ten (10) days (or
such later time as both parties may agree in writing) from the Due Date to give
the parties time to negotiate
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-5-
<PAGE>
resolution of the dispute, which both parties will do in good faith.
All charges shall conclusively be presumed correct unless Ryder
receives notice within one hundred eighty (180) days of the invoice date.
All overdue amounts shall bear interest at a rate equal to the lower
of: (i) ten percent (10%) per annum or (ii) the highest rate permitted by law
("Past Due Interest").
At Ryder's request, TRS shall pay directly any and all fees payable to
subcontractors that provide Transition Services to TRS.
(c) Additional Fees and Taxes Payable. In addition to the payments
---------------------------------
described in Sections 2(e) and 4(a) hereof, TRS shall reimburse to Ryder an
amount equal to the sum of: (i) subject to and without duplication of the
provisions of Sections 2(e) and 4(a) hereof, all direct out-of-pocket fees and
expenses (e.g. reasonable travel and lodging) incurred by Ryder in rendering
the Transition Services, (ii) * (iii) any and all taxes (other than taxes
based on Ryder's net income or gross income) assessed on the provision of the
Transition Services (including, without limitation, personal property taxes
which may be payable by Ryder or software licensed to or acquired by Ryder in
order to render the Transition Services hereunder) without any offset or
deduction of any nature whatsoever. Such costs, expenditures and taxes will be
billed to TRS in the monthly invoices rendered pursuant to Section 4(a) hereof.
* .
(d) Letter of Credit. TRS shall obtain and maintain a letter of
----------------
credit, in favor of Ryder, in the amount of two and one half million dollars
($2,500,000.00), the issuer or confirming bank of which will be a bank
reasonably acceptable to Ryder and the terms of which shall be substantially in
accordance with the form attached hereto as Exhibit A (the "Letter of Credit")
which may be drawn by Ryder in the event of Material Breach by TRS under clause
9(a)(i) of this Agreement or any of the other agreements between the parties of
even date herewith entitled Vehicle Maintenance Agreement, Used Truck Sales
Agreement, or Administrative Services Agreement as any of them may be amended
from time to time or as otherwise provided in Schedule 9.6(c) of the Asset
Purchase Agreement. Such Letter of Credit shall be for a term of at least one
year. One master $2.5 million letter of credit which complies with the terms of
this paragraph shall constitute the Letter of Credit under each of the foregoing
listed agreements ("Support Agreements"). TRS shall be obligated to promptly
replace the Letter of Credit or restore it to its full amount, respectively,
should Ryder draw such Letter of Credit in full or in part due to the occurrence
of a Material Breach under this Agreement.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-6-
<PAGE>
Notwithstanding the foregoing, TRS may terminate, or not renew, the
Letter of Credit after the first anniversary of the date hereof, if it is not in
default of this Agreement at such time; provided, however, that should TRS,
after such time either (i) commit a Material Breach of this Agreement due to
failure to pay charges due hereunder or under any Support Agreement (except, if
prevented by a force majeure under Section 11(c) below or (ii) twice within a
twelve month period, fail to timely pay charges due hereunder or under any
Support Agreement (except, if prevented by a force majeure under Section 11(c)
below), then TRS shall again be obligated to obtain and maintain the Letter of
Credit pursuant to the first two sentences of the previous paragraph, and to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement. If, however, during
the following twelve months TRS timely pays all charges coming due hereunder,
and is not at such time otherwise in default of this Agreement, or in
bankruptcy, then TRS may again terminate, or not renew, the Letter of Credit,
and TRS's obligations hereunder to maintain the Letter of Credit shall cease,
subject to the last stated proviso above.
(e) Financial Statements. TRS agrees to provide Ryder with the
--------------------
following financial statements and information on a quarterly basis (or upon
Ryder's reasonable request from time to time) for the purpose of evaluating the
creditworthiness of TRS: (i) TRS's Combined Balance Sheet in the form set forth
in Exhibit B; (ii) TRS's Combined Statement of Earnings in the form set forth in
Exhibit C; (iii) TRS's Interest Coverage Ratios; and (iv) TRS's Debt-to-Equity
Ratio. Such information shall be provided to Ryder's credit department and
shall not be disseminated beyond such department except to the Controller of
Ryder and the Chief Financial Officer of its parent company.
5. Confidential Information. Each Party will keep, and will cause
------------------------
its Affiliates to keep, confidential any and all Confidential Information of the
other Party that it receives in the course of performing its obligations under
this Agreement and will not, without the other Party's written consent, use any
of such Confidential Information except in connection with per forming its
obligations hereunder. Access to Confidential Information by officers,
directors, employees and agents of each Party will be restricted on a "need-to-
know" basis. In connection with the implementation of each Transition Service,
the Transition Coordinators will mutually agree upon what methods are necessary,
including, but not limited to, access controls, passwords and other security
measures, to effect the purposes of this Section 5. Notwithstanding the
foregoing, to the extent that a Party may become legally compelled, such Party
may disclose such information if such Party shall first have afforded
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-7-
<PAGE>
the other Party reasonable opportunity to obtain an appropriate protective order
or other assurance of confidential treatment for the information required to be
disclosed. Upon termination of this Agreement, each Party will return, and will
cause its Affiliates to return, to the other Party all tangible embodiments (in
both written and electronic form, including all copies thereof) of the
Confidential Information which are in its respective possession. Ryder and TRS
agree that they will, if requested by the other Party, cause any employees or
agents of it or its Affiliates who are engaged in providing Transition Services
hereunder to agree in writing to be bound by the provisions of this Section 5.
6. Insurance; Indemnities.
----------------------
(a) During the term of this Agreement, * will maintain the types
of insurance in the coverage limits listed in the insurance policy schedule set
forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
TYPE OF INSURANCE POLICY COVERAGE LIMITS
Commercial General Liability *
Insurance Policy with Broad
Form Contractual Liability
Insurance Coverage (the "CGL
Insurance Policy")
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * shall cause the coverage provided by each
such policy to be kept in place for a period of * after the effective date of
termination or expiration of this Agreement.
TRS may * .
(b) Each liability Insurance Policy shall:
(i) be written by an insurance company reasonably acceptable
to * (it being understood that an insurance company rated A or better by
A.M. Best & Company is acceptable);
(ii) name * as an insured, and be amended to name * , its
employees, officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests may appear;
(iii) provide that if such insurance is cancelled, or any
material change is made in the coverage which affects the interest of any
Additional Insured, such cancellation or
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-8-
<PAGE>
change shall not be effective as to the Additional Insured for ten (10) days
after receipt by the Additional Insured of written notice from such insurers of
such cancellation or change;
(iv) be primary and without right of contribution from any
other insurance which is carried by, or otherwise available to, any
Additional Insured;
(v) provide that in respect of the interests of any
Additional Insured in such policies, the insurance shall not be
invalidated by any action or inaction of * or any other Person (other
than * ) and shall insure each Additional Insured regardless of any
breach or violation of any warranty, declaration or condition
contained in such policies by * or any other Person (other than * );
(vi) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each Additional
Insured; and
(vii) in accordance with the terms and conditions of the
contractual liability coverage provided by such Insurance Policy,
insure the obligations of * to indemnify the Additional Insureds
hereunder.
The first * of general liability insurance shall be on an occurrence form.
(c) At least once a year, from time to time at * request, and any
time a new policy is to go into effect, * shall provide * with insurance
certificates and other evidence, reasonably satisfactory to * , that the
benefits and coverage required by this Section 6 are in full force and effect.
The certificate shall describe the perils covered by each policy of insurance
then in force, identify the insurer or insurers with which such policies of
insurance are carried and maintained, specify the amounts of insurance coverage
provided against each such peril, and describe the provisions contained in such
policies of insurance so as to evidence compliance with the requirements of this
Article 6. * shall have no duty to examine such insurance certificates or the
Insurance Policies to verify compliance. * shall provide a copy of its
insurance policies to * promptly following a request therefor, if available.
(d) Notwithstanding anything to the contrary in this Agreement,
neither party shall be liable for, and each party waives and releases the other
party from (and as to * damages, * indemnifies and holds harmless * from),
ANY AND ALL INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES,
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-9-
<PAGE>
INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE, OR BUSINESS
INTERRUPTION, EVEN IF SUCH DAMAGES ARE FORESEEABLE.
7. TRS's Exclusive Remedy.
----------------------
(a) Corrective Remedy. TRS agrees that the remedy available to it in
-----------------
the event of a material failure of Ryder to provide any Transition Service
(other than any failure due to the gross negligence or willful misconduct of
Ryder) should be addressed to correcting said failure, rather than to penalizing
Ryder. In recognition of this aim, TRS's sole and exclusive remedy for such a
failure shall be that Ryder shall use com mercially reasonable efforts to
complete performance of the applicable Transition Service within a commercially
reasonable time.
(b) Limitation of Remedy.
--------------------
(i) The corrective remedy set forth in Section 7(a) hereof shall
not apply if Ryder's failure to meet any of its obligations hereunder is
due to a failure by TRS or any third party retained by TRS to provide
services, data or materials that Ryder requires to perform the Transition
Services;
(ii) Ryder shall be excused from the corrective remedy set forth
in Section 7(a) if and to the extent that: (i) Ryder's failure to meet its
obligations as to the Transition Service at issue is a direct or indirect
result of TRS's failure to timely and accurately perform its
responsibilities as set forth in this Agreement and (ii) TRS fails to
provide reasonable cooperation in completing performance and correcting the
problems that led to the failure at issue.
(c) Adequacy of Remedy. TRS ACKNOWLEDGES AND AGREES THAT THE
------------------
EXCLUSIVE REMEDY SET FORTH HEREIN SHALL NOT BE DEEMED OR ALLEGED BY TRS TO HAVE
FAILED OF ITS ESSENTIAL PURPOSE.
8. Disclaimer of Warranties.
------------------------
(a) EXCEPT AS PROVIDED IN SECTION 6(e) ABOVE AND AS PROVIDED IN
SCHEDULE A HEREOF OR AS OTHERWISE EXPRESSLY SET FORTH HEREIN OR IN THE ASSET
PURCHASE AGREEMENT, RYDER MAKES NO WARRANTIES, EXPRESS OR IMPLIED (INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT) REGARDING THE TRANSITION SERVICES OR ANY GOODS
(INCLUDING, WITHOUT LIMITATION, COMPUTER AND TELECOMMUNICATIONS HARDWARE AND
SOFTWARE) WHICH MAY BE PROVIDED OR MADE AVAILABLE TO TRS IN CONNECTION WITH THE
PROVISION OF THE TRANSITION SERVICES HEREUNDER.
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-10-
<PAGE>
9. Default.
-------
(a) Material Breach. If at any time any party is in Material Breach
---------------
of this Agreement, then in addition to all other rights and remedies available
under applicable law or in equity, the other party shall have the right to
terminate this Agreement without further notice or demand. "Material Breach"
shall mean (i) as to a failure of payment, that full payment has not been
received within five (5) days, after the owing party's receipt of written notice
that the payment was due, and (ii) as to any other type of failure, a material
failure of performance of such party's obligations under this Agreement, if such
failure remains uncured thirty (30) days after receipt of written notice of the
failure and (iii) as to TRS, failure to cause the replacement or restoration of
the Letter of Credit, as applicable within five (5) days following its complete
or partial draw due to the occurrence of a Material Breach hereunder except as
to (i), (ii) or (iii) above, if prevented by a force majeure under Section 11(c)
below.
(b) Bankruptcy; Insolvency. This Agreement shall automatically
----------------------
terminate, without notice required upon the occurrence of any of the following
events:
(i) the other Party voluntarily enters into proceedings in
bankruptcy or insolvency;
(ii) the other Party shall make an assignment for the benefit
of creditors;
(iii) a petition shall be filed against the other Party under
a bankruptcy law, a corporate reorganization law, or any other law
for the relief of debtors (or similar law in purpose or effect) and
such petition shall not have been dismissed within sixty (60) days; or
(iv) the other Party enters into liquidation or dissolution
proceedings.
(c) Draws on Letter of Credit. Subject to the provisions of the
-------------------------
next paragraph, in the event of Material Breach by TRS pursuant to clause (i) of
Section 9(a), Ryder may draw from the Letter of Credit, without court
proceeding, order or otherwise, such sums to which Ryder is entitled due to
TRS's Material Breach, and Ryder shall apply such sums against such entitlement.
If the application of such sums is sufficient to cure the Material Breach,
including Past Due Interest owed to date of draw, then the Material Breach shall
be deemed cured and Ryder shall not terminate this Agreement due to such
Material Breach; if the application of such sums is not sufficient for such
purpose, then Ryder may terminate this Agreement due to the Material
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-11-
<PAGE>
Breach pursuant to Section 9(a). It is agreed, however, that if it shall later
be determined by a court of competent jurisdiction or by mutual agreement of the
parties that TRS did not in fact owe Ryder all of the sums drawn from the Letter
of Credit, then Ryder shall return those sums not owed with interest thereon
computed at the same annual rate of interest as set forth above in the
definition of "Past Due Interest."
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to Section 9(a), that Ryder did not
perform a service billed to TRS, then Ryder shall not be entitled to draw the
Letter of Credit with respect to such failure of payment until the later of (i)
such time as Ryder would be entitled to draw the Letter of Credit under the
preceding paragraph, (ii) fifteen business days after the date Ryder notifies
TRS in writing that Ryder has investigated the dispute and that its records or
its personnel confirm the service to have been performed and has offered TRS
access to such records or personnel or (iii) such date as Ryder and TRS mutually
agree in writing. It is agreed that the foregoing sentence does not apply to a
dispute over the quality or conformity of the service or to any attempt by TRS
to set off another matter against Ryder's invoice.
(d) Collection Costs; Attorneys' Fees. In the event either Party
---------------------------------
resorts to litigation, arbitration or other proceeding to enforce its rights
under this Agreement, the prevailing party will be entitled to reasonable
attorney's fees, costs and expenses.
10. No Hiring or Solicitation. TRS covenants to Ryder that neither
-------------------------
it nor its affiliates controlled by it shall solicit or induce any employee of
Ryder or a Ryder Affiliate who provides services to accept employment with TRS
or any Affiliate of TRS hereunder during the term in which such services are
provided or within one year thereafter, without the prior written consent of
Ryder. It is understood, however, that Ryder will not unreasonably withhold its
consent as to any employee who has been primarily engaged in providing services
to TRS hereunder during the six months prior to termination of those services.
Ryder agrees that neither advertising of employment positions nor post-closing
contact of an employee of Ryder by a contracted head hunter for TRS who is not
told to target one or more of those employees nor a contact to TRS or an
Affiliate controlled by TRS initiated post-closing by one of those employees
regarding employment shall be considered "solicitation" or "inducement" or an
attempt to do so.
11. Miscellaneous.
-------------
(a) Relationship of the Parties. It is expressly understood and
---------------------------
agreed that in rendering the Transition Services
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-12-
<PAGE>
hereunder, Ryder is acting as an independent contractor and that this Agreement
does not constitute either Party as an employee, partner, joint venturer, agent
or other representative of the other Party for any purpose whatsoever. Neither
Party has the right or authority to enter into any contract, warranty,
guarantee or other undertaking in the name of or for the account of the other
Party, or to assume or create any obligation or liability of any kind, express
or implied, on behalf of the other Party, or to bind the other Party in any
manner whatsoever, or hold itself out as having any right, power or authority to
create any such obligation or liability on behalf of the other or to bind the
other Party in any manner whatsoever (except as to any actions taken by either
Party at the express written request and direction of the other Party).
(b) Dispute Resolution. In the event of any dispute or disagreement
------------------
between the Parties with respect to the interpretation of any provision of this
Agreement, or with respect to the performance of either Party hereunder, the
Parties' respective Transition Coordinators will meet for the purpose of
resolving the dispute. If the Transition Coordinators are unable to resolve the
dispute within five (5) working days, or as otherwise agreed, the dispute will
be submitted to an executive officer of each party (the "Representatives") who
will meet as often as the parties reasonably deem necessary in order to gather
and furnish to each other all essential, non-privileged information that the
parties believe germane to resolution of the matter at issue. During the course
of these non-judicial dispute resolution procedures, documents used to resolve
the dispute shall be limited to essential, non-privileged information. All
requests shall be made in good faith and be reasonable in light of the economics
and time efficiencies intended by the dispute resolution procedures. The
Representatives may mutually agree to appoint a neutral advisor to facilitate
negotiations and, if requested by both parties, to render non-binding opinions.
No formal proceedings for the resolution of any dispute may be commenced until
thirty (30) days following initiation of negotiations under this Section 11(b)
or for such shorter period as the parties may mutually agree to in writing. The
provisions of this Section 11(b) will not apply (a) to an action to seek
injunctive relief to stay a breach of this Agreement or otherwise, (b) in the
event of TRS's failure to pay Ryder in accordance with the terms set forth in
Section 4 hereof or (c) to an action to seek specific performance of Ryder's
willful failure to perform its obligations under this Agreement.
(c) Force Majeure. Neither party shall be liable for its failure or
-------------
delay in fulfilling its obligations hereunder, if such failure or delay is
caused by fire, flood, weather conditions or other Acts of God, invasions,
insurrections, riots, closing of the public highways, strike, lockout or other
labor dispute, civil unrest, war or any other reason beyond the rea-
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-13-
<PAGE>
sonable control of the party. In the case of strikes, lockouts or other labor
disputes, it is understood that such event is beyond the reasonable control of
the party suffering the event unless and until the party is able to resolve it
in a manner which such party deems reasonable and appropriate.
(d) 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.
(e) Governing Law; Jurisdiction and Forum.
-------------------------------------
(i) 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, except for matters of Florida corporate law, as to which
such law shall apply.
(ii) Ryder and TRS 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. Ryder and TRS hereby irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or proceeding.
(iii) By the execution and delivery of this Agreement, TRS (i)
irrevocably designates and appoints Jay Alix & Associates ("JA&A"), 575 Fifth
Avenue, New York, New York 10017, 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 TRS may at any time designate and appoint in lieu of
JA&A 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 TRS in any such action or proceeding. TRS
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.
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-14-
<PAGE>
(f) Entire Agreement. This Agreement 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. This Agreement is not intended to confer upon anyone not a
party hereto any rights or remedies hereunder.
(g) Notices. All notices shall be in writing and delivered
-------
personally or sent by nationally recognized overnight delivery service (e.g.,
Federal Express) or registered or certified mail, return receipt requested, to
the appropriate address set forth below. Notices to Ryder shall be addressed
to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to TRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
c/o Questor Management Company
4000 Town Center Suite 530
Southfield, MI 48075
Attention: President
with a copy to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, FL 33166
Attention: Gerald R. Riordan
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
Attention: Thomas M. Cerabino, Esq.
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-15-
<PAGE>
or at such other address and to the attention of such other person as TRS may
designate by written notice to Ryder.
(h) 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) TRS may assign this Agreement, upon 10 days' prior written
notice to and without the consent of Ryder, to a party who purchases or
acquires, as a going concern, the business of TRS or all or substantially all of
TRS's assets, provided, however, that any assignee of this Agreement must (A)
agree with Ryder, in writing, to be bound by the terms and provisions hereof,
(B) have a debt/equity ratio as good as, TRS's at the time of execution hereof,
(C) be the assignee of the competition provisions in Section 6.2(d) of the Asset
Purchase Agreement and the following agreements defined in the Asset Purchase
Agreement (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 Agreement, (iv) the Administrative Services
Agreement, (v) the Vehicle Maintenance Agreement, (vi) the Dealer 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 Agreement, (2) Ryder
may assign this Agreement upon 10 days' prior written notice to and without the
consent of TRS, to a party who purchases or acquires as a going concern, the
business of Ryder or all or substantially all of Ryder's assets, provided,
however, that any assignee of this Agreement must (A) agree with TRS, in
writing, to be bound by the terms and provisions hereof, and (B) have a
debt/equity ratio as good as, Ryder's at the time of execution hereof. TRS may
assign its rights hereunder to any lenders which provide financing to TRS for
the purpose of consummating the transactions contemplated under the Asset
Purchase Agreement, or refinancing any such financing, including any successors
thereto.
(i) Headings; Definitions. The 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.
(j) 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
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-16-
<PAGE>
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.
(k) Interpretation; Absence of Presumption. 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.
(l) Severability. 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.
(CONTINUED ON NEXT PAGE)
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-17-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this MIS Support Agreement
to be executed by their duly authorized officers as of the date first written
above.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC. (F/K/A
"RYDER" RCTR HOLDINGS, INC.)
"TRS"
By:/s/ Dwight D. Denny By: /s/Wallace L. Rueckel
------------------- ---------------------
Dwight D. Denny Wallace L. Rueckel
Executive V.P.-Development Senior Vice President
& Treasurer
* CONFIDENTIAL PORTIONS OMMITED AND FILED SEPERATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-18-
<PAGE>
EXHIBIT 10.8
------------
SUBLEASE
Between
RYDER SYSTEM, INC.
as Sublessor
and
RYDER TRS, INC.,
as Sublessee
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. DEMISED PREMISES...................................................... 1
2. TERM.................................................................. 2
3. RENT.................................................................. 3
4. USE................................................................... 4
5. MASTER LEASE.......................................................... 4
6. SERVICES.............................................................. 6
7. ALTERATIONS; SIGNAGE.................................................. 8
8. INSURANCE............................................................. 8
9. ASSIGNMENT, SUBLETTING AND ENCUMBRANCES............................... 9
10. DEFAULT............................................................... 10
11. INDEMNIFICATION....................................................... 10
12. HAZARDOUS MATERIALS................................................... 12
13. REMEDIES CUMULATIVE................................................... 12
14. QUIET ENJOYMENT....................................................... 12
15. RENEWAL OPTION........................................................ 12
16. SURRENDER OF DEMISED PREMISES......................................... 13
17. NOTICES............................................................... 13
18. LANDLORD CONSENTS DURING TERM......................................... 14
19. SUBLESSOR'S INABILITY TO PERFORM...................................... 14
20. LIMITATIONS ON LIABILITY.............................................. 14
21. PRESERVATION OF SUBLESSEE'S INTEREST.................................. 15
22. DELIVERY OF NOTICE.................................................... 15
23. FURTHER ACTS.......................................................... 15
24. BROKER................................................................ 15
25. RIGHT OF FIRST OFFER.................................................. 15
26. MISCELLANEOUS......................................................... 16
</TABLE>
Schedule A - Description of Master Lease and the Property
Schedule B - Demised Premises
Schedule C - Rent
Exhibit A - Sublessor's Work
Exhibit B - Master Lease
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
SUBLEASE
SUBLEASE, dated as of October 17, 1996, between RYDER SYSTEM, INC., a
Florida corporation having an office at 3600 NW 82 Avenue, Miami, FL 33166
("Sublessor") and Ryder TRS, Inc., a Delaware corporation having an office at
- -----------
8669 N.W. 36th Street, Miami, Florida 33166 ("Sublessee").
---------
W I T N E S S E T H :
---------------------
WHEREAS, the landlord under the Master Lease described on Schedule A
----------
hereto ("Landlord") is the owner of the real property (including improvements)
--------
described on such Schedule A (collectively, the "Property") and under the Master
---------- --------
Lease Landlord has leased the Property to Sublessor; and
WHEREAS, Sublessor desires to sublet to Sublessee, and Sublessee
desires to hire from Sublessor, a portion of the premises demised under the
Master Lease, as more particularly described in Schedule B hereto, (the "Demised
---------- -------
Premises") upon the terms and conditions hereinafter set forth;
- --------
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
provided, Sublessor and Sublessee hereby agree as follows:
1. DEMISED PREMISES.
1.1. Sublessor hereby sublets to Sublessee, and Sublessee hereby
sublets and hires from Sublessor, the Demised Premises, together with the non-
exclusive right to use the common areas of the Property and such other rights as
are necessary or desirable to provide Sublessee with substantially the same
rights and benefits as have been generally afforded to and enjoyed by Sublessor
prior to the date hereof (including, without limitation, rights of ingress and
egress, parking consistent with past practice, and access to public and private
utilities) for the sublease term hereinafter stated and for the Rent (as
hereinafter defined) set forth herein, upon and subject to all of the terms and
provisions hereinafter provided or incorporated in this Sublease by reference.
1.2. Sublessor shall deliver the Demised Premises on the Commencement
Date free of debris and broom clean and Sublessee agrees to accept the Demised
Premises on the Commencement Date (as hereinafter defined). Notwithstanding the
foregoing, Sublessor shall use its continuous and diligent effort to complete
the Sublessor's work as described on Exhibit A attached hereto (the "Sublessor's
-----------
Work"). Sublessor shall be responsible for curing any violation that results
- ----
from or arises out of Sublessor's Work within a reasonable time of notice of
such violation. Within 30 days after completion of the
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Sublessor's Work and delivery of a certificate of occupancy to Sublessee,
Sublessor shall submit to Sublessee a detailed invoice and proof of payment
therefor for the cost of Sublessor's Work; provided, that Sublessor, Sublessee
and the architect (and/or contractor) shall meet on a periodic basis or at such
times as Sublessee may request to review the progress and the cost of
Sublessor's Work, with the intent to monitor and limit the cost of the
Sublessor's Work not to exceed $42,000. Thereafter, in addition to the monthly
installments of Rent due hereunder, Sublessee shall pay to Sublessor, in equal
monthly installments, at the same time and in the same manner that Rent is due
hereunder, an amount sufficient to fully amortize the cost of the Sublessor's
Work over a five year period together with interest at a rate of 7% per annum on
the outstanding balance of the cost of Sublessor's Work. Sublessee acknowledges
and agrees that upon the termination of this Sublease as a result of its default
hereunder or its election to terminate, Sublessee shall be obligated to pay in
full the then outstanding principal balance and accrued and unpaid interest for
the cost of the Sublessor's Work.
2. TERM.
2.1. (a) The term of this Sublease shall commence on the date hereof
(the "Commencement Date") and, unless earlier terminated or extended as herein
-----------------
provided, shall expire on the Expiration Date. As used in this Sublease, (i)
"Term" shall mean the term of this Sublease, and (ii) "Expiration Date" shall
mean, subject to Article 15 below, the second anniversary of the Commencement
Date; provided, that if the Commencement Date is not the first day of a month,
the Expiration Date shall be the last day of the month which contains the
Commencement Date.
(b) References in this Sublease to the "termination" of this Sublease
shall mean the stated expiration of the Term or any early termination of this
Sublease resulting from the termination of the Master Lease without the fault of
Sublessor. Except as otherwise expressly provided in this Sublease with respect
to those obligations of Sublessee which by their nature or under the
circumstances can only be, or under the provisions of this Sublease may be,
performed after the termination of this Sublease, the Term and estate granted
hereby shall end at 11:59 p.m. on the date of termination of this Sublease as if
such date were the Expiration Date, and neither party shall have any further
obligation or liability to the other after such termination. Notwithstanding
the foregoing, any liability of Sublessor or Sublessee to make any payment under
this Sublease, including, without limitation, amounts payable by Sublessee as
Rent hereunder, which shall have accrued prior to the termination of this
Sublease shall survive the termination of this Sublease.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
3. RENT.
3.1. The rent ("Rent") payable during the Term under this Sublease
----
shall be as set forth on Schedule C hereto.
----------
3.2. Upon the execution of this Sublease, Sublessee shall pay to
Sublessor the sum of * as Rent for the month of October. Thereafter all payments
-------
of Rent shall be in equal monthly installments and shall be made, in advance on
the twenty fifth (25th) day of each month during the Term (except for the first
and last month of the Term). The Rent and all other payments, if any, due and
payable hereunder by Sublessee shall be made by check payable to the order of
"Ryder System, Inc." and addressed to Ryder Truck Rental, Inc., 3600 NW 82
Avenue, Miami, FL 33166 , Attention: Ryder System Inc., Comptroller or to such
other person or at such other place as Sublessor may from time to time designate
in writing within thirty (30) days after receipt by Sublessee of request
therefor.
3.3. In the event that Sublessee shall dispute any calculation of
Rent charged to Sublessee by Sublessor, then Sublessee shall send to Sublessor a
written notice, within 30 days of receipt by Sublessee of such charge, setting
forth the basis for Sublessee's dispute. Sublessor and Sublessee shall thereupon
use reasonable and good faith efforts to resolve such dispute. If the parties
are unable to resolve such dispute within 30 days after submission by Sublessee
of its dispute notice, then the parties shall designate an independent certified
public accountant mutually acceptable to both parties (the "Independent
-----------
Accountant") to resolve such dispute, and the fees and charges of the
- ----------
Independent Accountant shall be shared equally by the parties. Both parties
shall provide the Independent Accountant with all information reasonably
requested by the Independent Accountant in connection with its review of such
dispute, and both parties shall request that the Independent Accountant complete
its work expeditiously and issue a written report to both parties setting forth
its determination. The written determination of the Independent Accountant shall
be final and shall be binding upon both Sublessor and Sublessee. All disputes to
be resolved pursuant to this Section 3.3 shall be so resolved in accordance with
the principles and standards set forth in Section 3.5 below.
3.4. Sublessor shall furnish to Sublessee copies of any material
statements and other material documents and information which are provided to
Sublessor by Landlord pursuant to the Master Lease. Without limiting any other
obligations of Sublessor hereunder, Sublessor agrees it will, upon reasonable
request from Sublessee, exercise on Sublessee's behalf, and at Sublessee's sole
cost, any rights of Sublessor under the Master Lease to review and inspect
records and otherwise obtain information from Landlord.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
3.5. All calculations by Sublessor of Rent and any other amounts that
are payable by Sublessee hereunder shall be made in accordance with Landlord's
past practices with respect to Sublessor, and all charges and allocations
relating to the Demised Premises and all accounting practices utilized by
Sublessor with respect to amounts charged to Sublessee under this Sublease
(including the capitalization, amortization and expensing of costs incurred and
funds expended) shall also be made in such manner.
4. USE.
4.1. Sublessee shall occupy and use the Demised Premises only for the
uses permitted under the Master Lease and in all respects only as permitted
under the terms and provisions of this Sublease and the Master Lease.
5. MASTER LEASE.
5.1. Subject to Section 5.3 below, this Sublease and all of
Sublessee's rights hereunder are and shall remain in all respects subject and
subordinate to all of the terms and provisions of the Master Lease, a true and
complete copy of which is attached hereto as Exhibit B. Sublessee shall in no
case have any rights under this Sublease greater than Sublessor's rights as
tenant under the Master Lease. The foregoing provisions shall be self-operative
and no further instrument of subordination shall be necessary to effectuate such
provisions unless required by Landlord or Sublessor, in which event Sublessee
shall, upon demand by Landlord or Sublessor at any time and from time to time,
execute, acknowledge and deliver to Sublessor and Landlord any and all
instruments that Sublessor or Landlord, in the reasonable discretion of either
of them, may deem necessary or proper to confirm such subordination of this
Sublease and the rights of Sublessee hereunder, subject to Section 5.3 hereof.
Notwithstanding the foregoing or anything contained herein to the contrary,
Sublessor shall use its best efforts to obtain Landlord's, and any future
mortgagee's agreement, not to disturb Sublessee's tenancy under this Sublease.
5.2. Sublessee agrees that it shall neither act, nor omit to act, in
such a manner as to result in a default under the Master Lease, provided that in
no event shall Sublessee be responsible for acts and omissions of Sublessor or
Sublessor's agents, employees or contractors. To the extent not otherwise
inconsistent with the agreements and understandings expressed in this Sublease
or applicable to the original parties to the Master Lease, all of the terms,
covenants and conditions of the Master Lease (excluding , however, Articles 1,
2, 3, 5, 6, 9, 11, 14, 26, 29, 31, 41, 42, 43, 49, 51, 50, 52, 53 and 54 and
Exhibits B, C, E and F) are hereby incorporated herein by reference on the
following understandings:
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
(a) The term "Landlord" as used therein shall refer to Sublessor, its
--------
successors and permitted assigns, the term "Tenant" as used therein shall refer
------
to Sublessee, its successors and permitted assigns, the term "Premises" as used
--------
therein shall refer to the Demised Premises and the term "Rent" as used therein
----
shall refer to Rent herein.
(b) In Article 13, the second sentence of paragraph (d) and the words
"or Additional Rent" in the first sentence of the last paragraph are hereby
deleted.
(c) In Article 16, the second sentence of the first paragraph and the
words "collectible as Additional Rent" in the last sentence of the first
paragraph are hereby deleted.
(d) In Article 19, paragraph (d) and the words "as Additional Rent"
in paragraph (f) are hereby deleted.
(e) In Article 20, the words "Base Rent and Additional Rent" in
paragraph (a) are hereby deleted and replaced with the word "Rent".
(f) In Article 28, the third, fourth, fifth, sixth, seventh, eighth,
ninth and tenth sentences are hereby deleted.
(g) In Article 30, the last sentence is hereby deleted and replaced
with the following: "Landlord, however, shall be responsible for curing any
violation that results from or arises out of (i) Landlord's construction of the
Building Improvements or Landlord's failure to construct Tenant's Improvements
in accordance with Tenant's Final Plans and (ii) Sublessor's Work".
(h) In Article 33, the words "Base Rent and Additional Rent" in the
last sentence of the paragraph are hereby deleted and replaced with the word
"Rent".
(i) In Article 55, the definitions "Landlord's Additional Access,"
"Parking," "Premises," "Rent," "Rentable Area," "Substantially Completed,"
"Supplemental Agreement," and "Tenant Allowance" are hereby deleted.
(j) In any case where Landlord reserves the right to enter the
Demised Premises such right shall inure to the benefit of Landlord as well as
Sublessor.
(k) With respect to any work, services or repairs, or the performance
of other obligations required of Landlord under the Master Lease, Sublessor's
sole obligation shall be to request the same from Landlord. Sublessee at its
option may, in its own name, conduct such proceedings as may be required to
obtain from Landlord any such work, services, repairs or other obligations, and
Sublessor shall cooperate with Sublessee in connection
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
therewith, including execution of such documents as may be required.
Notwithstanding the foregoing, the terms and conditions that, by their
terms, are inapplicable to, or inconsistent with this Sublease, shall not be
incorporated by reference herein and any inconsistencies between the terms of
the Master Lease incorporated by reference hereunder and the other terms of this
Sublease or any of the Transaction Documents (as hereinafter defined) shall be
resolved in favor of such other terms of this Sublease or the terms of the
Transaction Documents.
5.3. Sublessor agrees that it shall neither act, nor omit to act, in
such a manner as to result in a default under the Master Lease, provided that in
no event shall Sublessor be responsible for acts and omissions of Sublessee or
Sublessee's agents, employees or contractors. Provided that Sublessee is not
then in default under the terms of this Sublease beyond applicable grace
periods, Sublessor agrees that, during the Term hereof, without the prior
written consent of Sublessee, which consent shall not be unreasonably withheld
or delayed, Sublessor will not (a) consent to a termination of the Master Lease
with respect to the Demised Premises (to the extent that Sublessor's consent is
required pursuant to the Master Lease), exercise any early termination rights
with respect to the Demised Premises or amend or modify the Master Lease in any
way which would reduce, interfere with or otherwise impair any rights, powers or
remedies of Sublessee, decrease in any respect the obligations of Landlord or
Sublessor which, under the terms of this Sublease, run to the benefit of
Sublessee or increase the monetary obligations of Sublessee or increase in any
material respect any other obligations of Sublessor for which Sublessee is
responsible hereunder, or (b) consent (in the event that Sublessor's consent is
required pursuant to the Master Lease) to the subordination of the Master Lease
to any mortgage, underlying lease or similar instrument.
5.4. Notwithstanding anything to the contrary contained herein, in
the event of a conflict between the terms of this Sublease and the terms of the
Asset Purchase Agreement, the terms of the Asset Purchase Agreement shall
govern. As used herein, (a) the term "Asset Purchase Agreement" shall mean the
------------------------
Asset and Stock Purchase Agreement , dated as of September 19, 1996, between
Ryder Truck Rental, Inc. and Sublessee, as amended from time to time, and (b)
the term "Transaction Documents" shall mean all agreements between Ryder Truck
---------------------
Rental, Inc. and Sublessee executed pursuant to other than this Sublease or in
connection with, the Asset Purchase Agreement.
6. SERVICES.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
6.1. Except as otherwise specifically provided in this Sublease,
Sublessee shall be entitled during the Term to receive all services, utilities,
repairs and facilities which Landlord is required to provide pursuant to the
Master Lease, insofar as such services, utilities, repairs and facilities
pertain to the Demised Premises and the common areas.
6.2. If Landlord shall default in any of its ob ligations to
Sublessor with respect to the Demised Premises or shall breach any of its
representations or warranties affecting the Demised Premises, Sublessor, at
Sublessee's request and at Sublessee's cost and expense, shall use all
reasonable efforts to endeavor to cause Landlord to perform Landlord's
obligations under the Master Lease and, in addition, Sublessee shall be entitled
to participate, in a manner mutually agreed upon by the parties (each in the
exercise of its reasonable discretion) with Sublessor in the enforcement of
Sublessor's rights against Landlord. If, after Sublessee shall have made a
reasonable request in writing to Sublessor, Sublessor shall fail or refuse to
take appropriate action for the enforcement of Sublessor's rights against
Landlord in respect of the Demised Premises within a reasonable period of time
considering the nature of Landlord's default, Sublessee shall have the right to
take such action in its own name, and for that purpose and only to such extent,
all of the rights of Sublessor under the Master Lease are hereby conferred upon
and assigned to Sublessee and Sublessee is hereby subrogated to such rights to
the extent that the same shall apply to the Demised Premises and the common
areas. If any such action against Landlord in Sublessee's name shall be barred
by reason of lack of privity, nonassignability or otherwise, Sublessee may take
such action in Sublessor's name, provided Sublessee has notified Sublessor of
Sublessee's intent to take such action at least five (5) days prior to taking
such action and has given Sublessor a reasonable period of time to commence an
action against Landlord to enforce Sublessor's rights against Landlord.
Sublessor agrees to cooperate with Sublessee in any reasonable manner requested
by Sublessee in connection with an action or proceeding by Sublessee against
Landlord to enforce Sublessor's rights under the Master Lease in respect of the
Demised Premises and the common areas.
6.3. In the event that telephone switching equipment or other
telecommunications equipment utilized by Sublessor or Sublessee is located
within the premises occupied by the other party, then the party occupying such
premises shall grant the other party reasonable access to such telephone
switching equipment or other telecommunications equipment and other areas
reasonably required for such telecommunication use, subject in each case to the
reasonable requirements of the party granting such access.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
6.4. The provisions of this Section shall survive the expiration
or earlier termination of this Sublease.
7. ALTERATIONS; SIGNAGE.
7.1. Subject to the terms and conditions of the Master Lease,
Sublessee shall have the right to install reasonable and appropriate signage,
both at the entrance to the Demised Premises and in the common areas of the
Property, indicating Sublessee's occupancy of the Demised Premises, provided
that the location, size and design of any such signage shall be subject to the
prior written consent of Sublessor and Landlord, which consent shall not be
unreasonably withheld or delayed.
7.2. Sublessee shall indemnify and hold harmless Sublessor and
Landlord from all costs, expenses, liabilities and obligations arising out of
the filing of any mechanic's or materialman's lien against the Property or the
Demised Premises by reason of any act or omission of Sublessee in connection
with any Alteration.
8. INSURANCE.
8.1. Sublessee, at Sublessee's sole expense, shall maintain for the
benefit of Sublessor and Landlord such policies of insurance (and in such form)
as are required by the Master Lease with respect to the Demised Premises which
shall be reasonably satisfactory to Sublessor as to coverage and insurer (who
shall be licensed to do business in the State in which the Demised Premises are
located) provided that such insurance shall at a minimum include comprehensive
general liability insurance protecting and indemnifying Sublessor, Landlord and
Sublessee against any and all claims and liabilities for injury or damage to
persons or property occurring upon, in or about the Demised Premises, and the
public portions of the Property, caused by or resulting from or in connection
with any act or omission of Sublessee or Sublessee's employees, agents or
invitees. Sublessor and Landlord shall each be named as an additional insured
under any such policies of insurance obtained by Sublessee, and no such policy
shall be subject to termination or modification unless at least thirty (30)
days, prior written notice (or ten (10) days' prior written notice, if such
termination results from Sublessee's failure to pay the premiums for such
insurance) shall have been given by the applicable insurance company to
Sublessor and Landlord. Nothing contained herein shall limit, or prohibit
Sublessee from providing such coverage through "blanket" policies of insurance
and/or self insuring therefor in a manner that is consistent with the general
corporate practices of Sublessee.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-8-
<PAGE>
8.2. Nothing contained in this Sublease shall relieve Sublessee from
any liability as a result of damage from fire or other casualty, but each party
shall look first to any insurance in its favor before making any claim against
the other party for recovery for loss or damage resulting from fire or other
casualty. To the extent that such insurance is in force and collectible and to
the extent permitted by law, Sublessor and Sublessee each hereby releases and
waives all right to recovery against the other or anyone claiming through or
under the other by way of subrogation or otherwise. The foregoing release and
waiver shall be in force only if the insurance policies of Sublessor and
Sublessee provide that such release or waiver does not invalidate the insurance;
each party agrees to use reasonable efforts to include such a provision in its
applicable insurance policies. If the inclusion of said provision would involve
an additional expense, either party, at its sole expense, may require such
provision to be inserted in the other's policy.
9. ASSIGNMENT, SUBLETTING AND ENCUMBRANCES.
9.1. Sublessee shall not sublease or mortgage, pledge or otherwise
encumber all or any part of the Demised Premises, assign or mortgage this
Sublease (by operation of law or otherwise) or permit the Demised Premises to be
used or occupied by anyone other than Sublessee, Sublessee's divisions and other
Affiliates and Sublessee's licensees, invitees, customers and vendors without
the prior written consent of Sublessor and Landlord in each instance, which
consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that Sublessee upon at least 30 days prior written notice to Sublessor
and upon Sublessee's obtaining any required consent of Landlord under the Master
Lease, may assign this Sublease or sublet all or part of the Demised Premises to
(a) an Affiliate of Sublessee, (b) an entity into which Sublessee is merged or
consolidated or (c) an entity which acquires all or substantially all of any
division of the business or operations of Sublessee. Sublessor hereby consents
to that certain Sub-sublease dated as of even date herewith between Sublessee
and RCTR, Inc. Any consent by Sublessor and/or Landlord as hereinabove required
shall not excuse Sublessee from its obligation to obtain the express written
consent of Sublessor and/or Landlord to any further action or matter with
respect to which the consent of Sublessor and Landlord is hereinabove required.
The term "Affiliate", as used in this Section 9.1, shall have the same meaning
as is set forth in the Asset Purchase Agreement. Sublessee expressly
acknowledges and agrees that Sublessor's refusal to consent to an assignment or
sublease to a competitor of Sublessor shall be deemed a reasonable withholding
of consent.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
10. DEFAULT.
10.1. (a) Each of the following shall constitute an Event of Default
hereunder:
(i) if Sublessee shall fail to pay when due any Rent and Sublessee
shall fail to remedy such default within five (5) business days after written
notice thereof has been given to Sublessee by Sublessor or if Sublessee shall
fail to pay when due any other amount Sublessee may be required to pay hereunder
and Sublessee shall fail to remedy such default within thirty (30) days after
written notice thereof has been given to Sublessee by Sublessor; or
(ii) if Sublessee shall default in the observance or performance of
any term, covenant or condition of this Sublease on Sublessee's part to be
observed, performed or complied with (other than the payment of Rent and other
amounts payable hereunder) and Sublessee shall fail to remedy such default
within thirty (30) days after written notice to cure, or, if such default is of
such a nature that for reasons beyond Sublessee's control it cannot be
completely remedied within said period of thirty (30) days, then if Sublessee
(A) shall not promptly institute and thereafter diligently prosecute to
completion all steps necessary to remedy the same and (B) shall not remedy the
same within a reasonable time after the date of default.
(b) Upon the occurrence of any such Event of Default, Sublessor may,
in addition to exercising any other available rights or remedies, give to
Sublessee notice of its intention to end the Term at the expiration of three (3)
days from the date of the giving of such notice, and, in the event such notice
is given, this Sublease and the Term and estate hereby granted shall terminate
upon the expiration of said three (3) days with the same force and effect as if
that day were the Expiration Date, provided, however, that Sublessor and
Sublessee shall remain liable for the performance of their respective
obligations hereunder which survive the termination of this Sublease and for
damages as provided in this Sublease.
10.2. In no event shall Sublessor or Sublessee be entitled to special
or consequential damages with respect to any matter arising hereunder or
relating hereto.
11. INDEMNIFICATION.
11.1. Sublessee shall indemnify and hold harmless Sublessor and its
officers, directors, shareholders and employees from and against any and all
loss, cost, liability, claims, damage and expenses, including, without limiting
the generality of the foregoing, reasonable attorneys, fees and expenses and
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
court costs, penalties and fines, whether or not due to third party claims,
suits or proceedings, incurred in connection with or arising from (a) any
default by Sublessee in the observance or performance of, or compliance with,
any of the terms, covenants or conditions of this Sublease or the terms of the
Master Lease incorporated herein on Sublessee's part to be observed, performed
or complied with, or (b) the negligence or willful misconduct of Sublessee or
any of its agents, employees or contractors, in or about the Demised Premises or
the Property either prior to, during, or after the termination of this Sublease.
If any action or proceeding shall be brought against Sublessor by reason of any
such claim, Sublessee shall be given prompt notice thereof and, upon notice from
Sublessor, shall resist and defend such action or proceeding at Sublessee's sole
expense and employ counsel therefor reasonably satisfactory to Sublessor.
Sublessee shall pay to Sublessor on demand all sums which may be owing to
Sublessor by reason of the provisions of this subsection. Sublessee's
obligations under this subsection shall survive the Expiration Date or earlier
termination of this Sublease.
11.2. Sublessor shall indemnify and hold harmless Sublessee and
Sublessee's officers, directors, shareholders and employees from and against any
and all loss, cost, liability, claims, damage and expenses, including, without
limiting the generality of the foregoing, reasonable attorneys, fees and
expenses and court costs, penalty and fines, whether or not due to third party
claims, suits or proceedings, incurred in connection with or arising from (a)
any default by Sublessor in the observance or performance of, or compliance
with, any of the terms, covenants or conditions of this Sublease or the Master
Lease on Sublessor's part to be observed, performed or complied with, or (b) the
negligence or willful misconduct of Sublessor (in its capacity as sublessor
hereunder) or any of its agents, employees or contractors (retained by Sublessor
in its capacity as sublessor hereunder), in or about the Demised Premises or the
Property either prior to, during, or after the termination of this Sublease. If
any action or proceeding shall be brought against Sublessee by reason of any
such claim, Sublessor shall be given prompt notice thereof and, upon notice from
Sublessee, shall resist and defend such action or proceeding at Sublessor's sole
expense and employ counsel therefor reasonably satisfactory to Sublessee.
Sublessor shall pay to Sublessee on demand all sums which may be owed to
Sublessee by reason of the provisions of this subsection. Sublessor's
obligations under this subsection shall survive the Expiration Date or earlier
termination of this Sublease.
11.3. Notwithstanding anything in this Section 11 to the contrary,
neither party shall be required to indemnify the other party (an "indemnitee")
----------
against the indemnitee's own negligence or willful misconduct.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
12. HAZARDOUS MATERIALS.
12.1. Sublessor and Sublessee acknowledge and agree that the Asset
Purchase Agreement shall govern all matters relating to the presence of
Hazardous Materials in, on, under and about the Demised Premises prior to the
execution and delivery hereof.
13. REMEDIES CUMULATIVE.
13.1. Each right and remedy of Sublessor under this Sublease shall be
cumulative and be in addition to every other right and remedy of Sublessor under
this Sublease and now or hereafter existing at law or in equity, by statute or
otherwise.
14. QUIET ENJOYMENT.
14.1. Sublessor covenants that, as long as Sublessee shall pay the
Rent and all other amounts Sublessee shall be required to pay hereunder and
shall duly observe, perform and comply with all of the terms, covenants and
conditions of this Sublease on its part to be observed, performed or complied
with, Sublessee shall, subject to all of the terms of the Master Lease and this
Sublease, peaceably have, hold and enjoy the Demised Premises during the Term
without molestation or hindrance by Sublessor.
15. RENEWAL OPTION.
15.1. Sublessee shall have the option to renew this Sublease,
provided that Sublessee is not in default at the time of such exercise of the
option, i) for three successive one (1) year terms, if Sublessee desires to
renew this Sublease for the entire Demised Premises or ii) for one two (2) year
term and thereafter for an additional one (1) year term, if Sublessee desires to
renew this Sublease for only one floor of the Demised Premises. Each renewal
term shall commence immediately following the previous term, provided that
Sublessor is given at least sixty (60) days prior written notice before the
expiration of the term of this Sublease.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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<PAGE>
16. SURRENDER OF DEMISED PREMISES.
16.1. Sublessee shall, no later than the termination of this Sublease
and in accordance with all of the terms of this Sublease and the Master Lease,
vacate and surrender to Sublessor the Demised Premises, together with all
Alterations, in similar order, condition and repair as the same were in as of
the Commencement Date, and broom clean, reasonable wear and tear, damages
resulting from a casualty for which Sublessee is not responsible and other items
the repair or remediation of which is the responsibility of Sublessor or
Landlord excepted. Tenant's obligation to observe or perform this covenant shall
survive the termination of this Sublease.
16.2. In the event that Sublessee remains beyond the Expiration Date,
it is the intention of the parties and it is hereby agreed that a tenancy at
sufferance shall arise at a monthly rent equal to 150% of the monthly Rent in
effect at the expiration of the Term.
17. NOTICES.
17.1. All notices, consents, approvals or other communications
(collectively, a "Notice") required to be given under this Sublease or pursuant
------
to law shall be in writing and, unless otherwise required by law, shall be
delivered personally or by overnight courier service or given by registered or
certified mail, return receipt requested, postage prepaid, to the parties at the
following addresses (unless such address shall be changed by Notice from one
party to the other):
To Sublessor:
------------
RYDER SYSTEM, INC.
P.O. Box 020816
Miami, Florida 33102-0816
Attention: Properties and Construction
or, for air or courier purposes 3600 NW 82 Avenue Miami, FL 33166
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-13-
<PAGE>
To Sublessee:
------------
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: President
with a copy to:
Ryder TRS, Inc.
c/o Questor Management Company
4000 Town Center
Suite 530
Southfield, MI 48075
Attention: President
Any Notice given pursuant hereto shall be deemed to have been given and shall be
effective when received, or when delivered and refused.
18. LANDLORD CONSENTS DURING TERM.
18.1. Wherever in this Sublease the consent or approval of Sublessor
is required for any act or thing, Sublessor agrees that it shall not
unreasonably withhold, condition or delay such consent or approval. If the
consent or approval of Landlord is required under the Master Lease for the same
act or thing, if Sublessor is required or willing to give its consent or
approval to Sublessee when such consent or approval is required hereunder,
Sublessor agrees that it will promptly forward Sublessee's request for such a
consent or approval to Landlord. If Sublessor is required or has determined to
give its consent or approval, Sublessor shall cooperate reasonably with
Sublessee in endeavoring to obtain Landlord's consent or approval. Whenever
either party to this Sublease expressly agrees not to unreasonably withhold its
consent, such consent shall also not be unreasonably delayed or conditioned.
19. SUBLESSOR'S INABILITY TO PERFORM.
19.1. Notwithstanding anything contained herein to the contrary, in
the event Services are interrupted by no fault of Sublessor, Sublessor shall use
its best efforts to cure or cause Landlord to cure any such interruption. If
such interruption remains uncured for 10 days, Sublessee shall have the right to
terminate this Sublease.
20. LIMITATIONS ON LIABILITY.
20.1. Nothing in this Sublease is intended to limit or affect any
obligations of Sublessor or any affiliate of Sublessor which are contained in
any separate agreement.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-14-
<PAGE>
21. PRESERVATION OF SUBLESSEE'S INTEREST.
Sublessee shall have the right, but not the obligation, if it deems
necessary to preserve its interest in the Demised Premises, to cure any default
under the Master Lease on behalf of any of the parties thereto and to deduct the
cost thereof from the next installment of rent due under this Sublease.
22. DELIVERY OF NOTICE.
Sublessor shall deliver to Sublessee copies of any notice or invoice
(including, without limitation, any notice of default) given by or to any party
under the Master Lease immediately upon delivery or receipt of such notice or
invoice, as the case may be, and failure to so deliver such notices or invoices
shall release Sublessee from any obligation to reimburse Sublessor for any sums
expended by Sublessor as a result of the contents of such notice or invoice.
23. FURTHER ACTS.
Sublessor promptly shall give such notices and consents and exercise
such rights under the Master Lease as Sublessee may reasonably request from time
to time.
24. BROKER.
Each party hereby represents that it has not dealt with any broker in
connection with this Sublease and each party shall indemnify the other from and
against any claims for any commission, fee or other compensation by any third
party claiming to have dealt with the other party in connection with this
Sublease.
25. RIGHT OF FIRST OFFER
In the event that Sublessor shall desire to assign its interest in or
surrender the Master Lease, then before Sublessor shall offer such assignment or
surrender of the Master Lease to a third party or shall accept an offer for the
same, Sublessor shall give to Sublessee written notice of the terms of such
offer ("Sublessor's Offer"). Sublessee may, within twenty (20) days of receipt
-----------------
of Sublessor's Offer, accept the same and succeed to Sublessor's position as
tenant under the Master Lease. If Sublessee does not accept Sublessor's Offer
within said twenty (20) day period, Sublessor shall be free to assign or
surrender its interest in the Master Lease, subject to the terms and conditions
of this Sublease, on substantially the same terms as set forth in Sublessor's
Offer. In the event Sublessor shall not consummate the transaction described in
Sublessor's Offer within ninety (90) days of the date thereof, Sublessor shall
again
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-15-
<PAGE>
comply with the terms of this Section before assigning its rights as tenant
under the Master Lease.
26. MISCELLANEOUS.
26.1. This Sublease shall be governed by and construed in accordance
with the internal laws of the State in which the Demised Premises are located,
without regard to the conflicts of law principles thereof.
26.2. The section headings in this Sublease and the table of contents
are inserted only as a matter of convenience for reference and are not to be
given any effect in construing this Sublease.
26.3. If any of the provisions of this Sublease or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Sublease, or the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected thereby, and
every provision of this Sublease shall be valid and enforceable to the fullest
extent permitted by law.
26.4. All of the terms and provisions of this Sublease shall be
binding upon and inure to the benefit of the parties hereto and, subject to the
provisions of Section 9 hereof, their respective successors and assigns.
26.5. Sublessor has made no representations, warranties or covenants
to or with Sublessee with respect to the subject matter of this Sublease except
as expressly provided herein or in the Transaction Documents and all prior
negotiations and agreements relating thereto are merged into this Sublease. This
Sublease may not be amended or terminated, in whole or in part, nor may any of
the provisions be waived, except by a written instrument executed by the party
against whom enforcement of such amendment, termination or waiver is sought and
unless the same is permitted under the terms and provisions of the Master Lease.
26.6. If either party named herein brings an action to enforce the
terms hereof or to declare rights hereunder, the prevailing party in such
action, at trial and on appeal, shall be entitled to receive its reasonable
attorneys' fees from the non-prevailing party.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-16-
<PAGE>
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this
Sublease as of the day and year first above written.
RYDER SYSTEM, INC.
as Sublessor
By:/s/ Dwight D. Denny
--------------------------------------
Title: Executive Vice President
Development
RYDER TRS, INC.
as Sublessee
By:/s/ Dean Anderson
--------------------------------------
Title: Vice President and
Assistant Secretary
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-17-
<PAGE>
EXHIBIT 10.9
------------
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Macon, Georgia (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Rochester, New York (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
* , prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee in the event of a breach of any covenant or agreement of Licensee
contained in this Agreement which is not cured within such thirty (30) day
period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Portland, Maine (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at King of Prussia,
Pennsylvania (the "Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Richmond, Virginia (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Hartford, Connecticut (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Charleston, South Carolina
(the "Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Harrisburg, Pennsylvania
(the "Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's Great Lakes facility (the "Premises") which is
currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Dunmore, Pennsylvania (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Burr Ridge, Illinois (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Des Moines, Iowa (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Davenport, Iowa (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of *
, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Irving, Texas (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Tulsa, Oklahoma (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Houston, Texas (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at San Diego, California (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at 250 Prairie Center Drive,
Eden Prairie, Minnesota 55344 (the "Premises") which is currently being occupied
by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
OFFICE LICENSE AGREEMENT
------------------------
THIS AGREEMENT is entered into as of the 17th day of October, 1996, by and
between RYDER TRUCK RENTAL, INC., c/o Properties and Construction, 3600 NW 82nd
Avenue, Miami, Florida 33166 ("Ryder") and Ryder TRS, Inc., whose address is
8669 NW 36th Street, Miami, Florida ("Licensee").
IN CONSIDERATION of the covenants and conditions contained herein, Ryder and
Licensee agree as follows:
1. Ryder hereby grants to Licensee a license to access and utilize that
portion of Ryder Truck Rental's facility located at Knoxville, Tennessee (the
"Premises") which is currently being occupied by * .
2. Licensee agrees to pay to Ryder, monthly in advance, on the first day of
each month during the term of this Agreement, a license fee in the amount of
*, prorated for portions of a month.
3. Licensee shall use the Premises for office purposes only. Licensee shall
not bring or permit any hazardous or toxic materials, substances or wastes upon
the Premises. Licensee's use of the Premises shall be in compliance with all
applicable laws, ordinances and governmental rules and regulations and any
reasonable rules and regulations which Ryder may establish from time to time
after reasonable advance written notice to Licensee. Licensee shall not alter
the Premises in any manner. Licensee has inspected the Premises, is satisfied
with the condition thereof, and accepts the Premises in their present "AS IS"
condition.
4. The term of this Agreement and the license granted hereby shall commence
upon the execution of this Agreement by both parties and shall continue from
month to month until terminated by either party upon sixty (60) days prior
written notice to the other party.
5. Licensee agrees to maintain during the term of this Agreement a policy of
general liability insurance for claims and liabilities arising out of Licensee's
use or occupancy of the Premises. Such policies shall have limits of not less
than $1,000,000. Prior to Licensee's use or occupancy of the Premises, Licensee
shall provide Ryder with a certificate evidencing the coverage required by this
paragraph and naming Ryder as an additional insured.
6. Ryder shall have the right to terminate this Agreement and the license
granted hereby upon thirty (30) days prior notice to Licensee in the event of a
breach of any covenant or agreement of
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Licensee contained in this Agreement which is not cured within such thirty (30)
day period.
7. Ryder shall incur no liability to Licensee for failure or inability of
Licensee to use the Premises due to any cause beyond Ryder's control, whether
existing now or hereafter, however Ryder will use reasonable efforts to minimize
any interruption in Licensee's use of the Premises.
8. Notices given hereunder shall be in writing, shall be given at the
addresses set forth below each parties' signature hereon and shall be deemed
effective when actually received by the addressee by personal delivery,
certified mail or recognized overnight delivery service.
9. This Agreement and the license granted hereby are personal to Licensee and
are not assignable by Licensee. No waivers, alterations or modifications of
this Agreement shall be valid unless in writing and duly executed by both
parties. This Agreement, including the Exhibit, and that certain Asset and
Stock Purchase Agreement dated as of September 19, 1996 between Ryder and
Licensee constitute the entire agreement of the parties regarding the Premises
and supersede all previous negotiations and commitments, whether written or
oral.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties by
their duly authorized representatives.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC.
By: /s/ Dwight D. Denny By: /s/ Dean Anderson
------------------- -----------------
Executive Vice President Vice President &
- Development Asst. Secretary
October 17, 1996 October 17, 1996
Address for notice: Address for notice:
3600 NW 82nd Avenue 8669 NW 36th Street
Miami, Florida 33166 Miami, Florida 33166
Attn: Properties & Construction (4B) Attention: President
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
-2-
<PAGE>
EXHIBIT 10.10
-------------
TRADEMARK LICENSE AGREEMENT
BETWEEN
RYDER SYSTEM, INC.
AND
RYDER TRS, INC.
OCTOBER 17, 1996
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions............................................................ 1
2. Grant of Rights........................................................ 5
3. Term................................................................... 7
4. Descriptors; New Trademarks; Trade Names............................... 7
5. Quality Control........................................................ 9
6. Mark Ownership and Protection.......................................... 11
7. Approvals.............................................................. 12
8. Infringement and Defense............................................... 13
9. Independent Contractor................................................. 14
10. Indemnification........................................................ 15
11. Insurance.............................................................. 16
12. Default and Termination................................................ 18
13. Obligations Upon Termination or Expiration............................. 20
14. Amendments and Waivers / Attorney Fees................................. 22
15. Assignment............................................................. 22
16. Confidentiality........................................................ 23
17. Entire Agreement....................................................... 23
18. Survival............................................................... 23
19. Counterparts: Facsimile Signatures..................................... 23
20. Notices................................................................ 23
21. Dispute Resolutione Governing Law and Jurisdiction..................... 24
22. Severability........................................................... 25
23. Interpretations Absence of Presumption................................. 25
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TRADEMARK LICENSE AGREEMENT
This Agreement is entered into and effective on this 17th day of October,
1996 by and between Ryder System, Inc., a Florida corporation with its principal
place of business at 3600 N.W. 82nd Avenue, Miami, Florida, 33166 (hereinafter
"Licensor") and Ryder TRS, Inc. (f/k/a RCTR Holdings, Inc.), a Delaware
corporation with its principal place of business at 8669 N.W. 36th Street,
Miami, Florida 33166 (hereinafter "Licensee").
WHEREAS, Licensor's wholly owned subsidiary Ryder Truck Rental, Inc. and
Licensee are parties to an Asset Purchase Agreement dated September 19, 1996
(the "Asset Purchase Agreement") under which Licensee has purchased certain
assets and businesses from Ryder Truck Rental, Inc. and under which the parties
have agreed that Licensee will be granted a license to use certain service marks
and trademarks in connection with certain services offered by Licensee.
NOW, THEREFORE, in consideration of the rights and obligations set forth
herein and in the Asset Purchase Agreement, the adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Definitions. The following terms, when used in this Agreement, shall have
-----------
the respective meanings set forth in this Section 1.
1.1 Accessories. The term "Accessories" shall mean hand trucks, moving
-----------
dollies, furniture pads and similar accessory items owned by Licensee and used
for the Rental Business.
1.2 Agreement. The term "Agreement" shall have the meaning set forth in
---------
the first paragraph hereof.
1.3 Asset Purchase Agreement. The term "Asset Purchase Agreement" shall
------------------------
have the meaning set forth in the second paragraph hereof.
1.4 Business. The term "Business" shall mean the Rental Business and
--------
the Move Management Business.
1.5 Dealer. The term "Dealer" shall mean any Person (as that term is
------
defined in the Asset Purchase Agreement) that serves as Licensee's commissioned
sales agent for the Rental Business.
1.6 Division. The term "Division" shall mean Ryder Truck Rental, Inc.'s
--------
Consumer Truck Rental Division, which includes Ryder Move Management, Inc. and
Ryder Move Management, Inc.'s subsidiaries.
1.7 Heavy Duty Rentals. The term "Heavy Duty Rentals" shall mean rental
------------------
of trucks or other vehicles with a
<PAGE>
manufacturer's gross vehicle weight rating of 26,000 pounds or more.
1.8 Leasing. The term "Leasing" shall mean surrendering possession and
-------
the right to use a vehicle, for a period in excess of ninety days for
consideration, except under circumstances which satisfy the requirements of (a),
(b) and (c) of 1.19 below. Furnishing a vehicle 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 1.19 below shall be considered
Leasing.
1.9 Licensed Services. The term "Licensed Services" shall mean Services
-----------------
and New Services offered or sold by Licensee under the Marks.
1.10 Licensor's New Mark. The term "Licensor's New Mark" shall mean the
-------------------
modified form and manner of the RYDER mark, the color scheme, the slogan and the
logo (each element and the composite thereof) adopted by Licensor on or about
August 1, 1996, a copy of which is attached as Schedule 1.
1.11 Light Commercial Rental Business. The term "Light Commercial Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty Trucks 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 (e.g., rope, tape, bubble wrap, locks and similar moving supplies).
The term "One-Way Light Commercial Rental Business" shall mean Light Commercial
Rental Business where the Light Duty 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 Light Duty Truck was picked up. The term "Local Light Commercial
Rental Business" shall mean Light Commercial Rental Business where the Light
Duty Truck is picked up and dropped off at the same rental office or another
rental location within 35 miles.
1.12 Light Duty Trucks. The term "Light Duty Trucks" shall mean trucks
-----------------
(excluding refrigerated trucks and stake trucks) owned by Licensee (or leased by
Licensee from affiliates of Licensee) with a manufacturer's gross vehicle weight
rating of less than 26,000 pounds.
1.13 Local Consumer Rental Business. The term "Local Consumer Rental
------------------------------
Business" shall mean (a) the rental of Light Duty Trucks within the Territory to
individuals for the transport of goods within the Territory for a non-business
purpose, which Light Duty 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 (e.g., rope, tape, bubble wrap, locks and similar moving
supplies).
2
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1.14 Marks. The term "Marks" shall mean only those trademarks and
-----
service marks (registered or unregistered) identified in Schedule 2, and any
other marks that Licensor may specifically designate in writing from time to
time.
1.15 Move Management Business. The term "Move Management Business" shall
------------------------
mean (a) providing moving management 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 are relocating to take a position (or a different position) with the
customer or (ii) rental of a Light Duty 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, 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, spousal job assistance, and
locating dependent care. In no event shall a Person (as that term is defined in
the Asset Purchase Agreement) be deemed to be engaging in the Move Management
Business due to performance of activities which constitute or are included in
the Light Commercial Rental Business or Local Consumer Rental Business. Move
Management Business shall not include Leasing or Heavy Duty Rentals.
1.16 New Services. The term "New Services" shall mean services that are
------------
not offered by the Division under the Marks on the date of execution of this
Agreement provided such services (a) are complementary and related to the Rental
Business or Move Management Business, (b) shall in no event in any way involve
driver rental or leasing, integrated logistics services, dedicated contract
carriage, cartage, common or contract carriage, truck maintenance to third
parties, car rental, Leasing or Heavy Duty Rentals, and (c) do not otherwise
violate this Agreement. It is understood that New Services shall include: (a)
public self storage facilities in connection with the Rental Business or Move
Management Business at locations operated by Licensee or a Dealer offering the
Rental Business or the Move Management Business, (b) any services constituting
the moving and management of moving of individuals' personal household goods
from one location to another within the Territory, and (c) services within the
Business not offered by the Division under the Marks on the date of execution of
this Agreement.
1.17 One-Way Consumer Rental Business. The term "One-Way Consumer Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty
3
<PAGE>
Trucks within the Territory to individuals for the transport of goods within the
Territory for a non-business purpose, which Light Duty 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 (e.g., rope, tape, bubble wrap,
locks and similar moving supplies).
1.18 Protection Products. The term "Protection Product" shall mean the
-------------------
risk assurances sold to customers of the Rental Business under the following
names: TowGuard Protection, Personal Accident and Cargo Protection,
Supplemental Liability Protection, Physical Damage Waiver and Limited Damage
Waiver, and any successor or other similar risk assurance arrangements made
available to such customers.
1.19 Rental. The term "rental," when used independently of any other
------
defined term, shall mean a surrender of possession and right to use a vehicle,
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 do not
exceed one year, (b) there is no significant penalty or vehicle purchase
obligation for failure to extend or renew, and (c) the vehicle is not identified
with the customer's name, color or logo (other than any legally required placard
indicating the identity of the customer).
1.20 Rental Business. The term "Rental Business" shall mean the Light
---------------
Commercial Rental Business, the Local Consumer Rental Business and the One-Way
Consumer Rental Business.
1.21 Services. The term "Services" shall mean Used Truck Sales and those
--------
services offered by the Division within the Business under the Marks on the date
of execution of this Agreement.
1.22 Territory. The term "Territory" shall mean the contiguous forty-
---------
eight states of the United States of America and the State of Alaska.
1.23 Towing Equipment. The term "Towing Equipment" shall mean tow
----------------
dollies, car carriers and similar towing equipment owned by Licensee and used
for the Rental Business.
1.24 Trade Name. The term "trade name" shall mean any trade, business,
----------
corporate or domain name.
1.25 Used Truck Sales. The term "Used Truck Sales" shall mean sales of
----------------
Light Duty Trucks formerly used by Licensee in connection with the Business and
the Household Goods Moving
4
<PAGE>
Business, provided any Marks thereon have been removed prior to or at the time
of sale.
2. Grant of Rights.
---------------
2.1 Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee the right and license, during the term of this
Agreement, to use in the Territory:
(a) the Marks only in connection with the marketing and sale of
Services and New Services, and
(b) the Mark RYDER as part of a trade name for the Licensed
Services.
2.2 Licensee shall only have the right to grant non-exclusive restricted
sublicenses of its Section 2.1(a) rights to Dealers, provided, however, that
(a) Without Licensor's prior consent, Licensee will not grant any
Dealer the right to use any of the Marks on vehicles or in any
manner not permitted of Dealers on the date of execution
hereof,
(b) the rights granted shall not be inconsistent with or more
extensive in scope or manner than Licensee's rights under this
Agreement or in violation of any other restriction imposed on
Licensee under any other agreements with Licensor,
(c) all Dealer uses of the Marks must be approved by Licensor to
the extent required by the provisions of this Agreement,
(d) all goodwill generated by use of the Marks by Dealers shall
automatically inure to the benefit of Licensor and/or is
hereby assigned by Licensee to Licensor,
(e) Licensee will be directly liable for any acts of Dealers which
violate the terms of this Agreement,
(f) Licensee will not grant any Dealer the right to use any of the
Marks as part of a Dealer trade name or in any phone book
advertising,
(g) each sublicense granted shall be personal to the Dealer (with
no right to assign or sublicense) and shall terminate
immediately
5
<PAGE>
upon termination of the respective Dealer agreement or upon
request by Licensee,
(h) Licensee will not appoint as a Dealer (i) any party listed in
or covered by Schedule 3, Paragraph 8, or (ii) any Affiliate
(as that term is defined in the Asset Purchase Agreement) of
such party (provided Licensee has actual knowledge of such
affiliation and such Affiliate shares such party's name and
engages in Leasing, Heavy Duty Rentals and/or integrated
logistics services), and
(i) Within a reasonable period following execution hereof,
Licensee will incorporate the obligations of this Section in a
written instrument approved by Licensor, which instrument
Licensee will require all Dealers appointed following
execution hereof to sign (except Licensor).
2.3 Licensor will not itself use or grant to any other party the right
to use the Marks for One-Way Consumer Rental Business (except Licensor may use
the Marks as a Dealer in accordance with the Dealer Agreement between Ryder
Truck Rental, Inc. and Licensee dated October 17, 1996 ("Dealer Agreement")),
One-Way Light Commercial Rental Business (except Licensor may use the Marks as a
Dealer in accordance with the Dealer Agreement) or Move Management Business.
For purposes of this Section 2.3 only, it is understood and agreed that a rental
that is covered by the definition of One-Way Consumer Rental Business which is
picked up by a customer at one office and dropped off at another office which is
within thirty-five miles of the pickup office is not One-Way Consumer Rental
Business.
2.4 Licensor will not grant to any party who is not affiliated with
Licensor the right to use the Marks for Local Light Commercial Rental Business.
For the purposes of this Section 2.4, "affiliated" shall mean, for the duration
of the Term hereof, any other party in which Licensor has at least a fifty
percent (50%) economic interest and which Licensor directly, or through one or
more intermediaries, controls or is under common control with, and, if such a
party 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 party who is controlled by any such member or trust. As used in this
definition, "control" (including, with a correlative meaning "under common
control with") shall mean possession, directly or indirectly, or power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interest, by contract or
otherwise).
6
<PAGE>
2.5 Licensor will not grant to any other party the right to use the
Marks for Local Consumer Rental Business.
2.6 Nothing herein shall prohibit Licensor from using or licensing
another party to use the Marks in any way which does not violate Sections 2.3,
2.4 and 2.5 hereof or Section 6.2(a) of the Asset Purchase Agreement.
2.7 Licensor and Licensee acknowledge that all rights, licenses and
privileges not specifically granted to Licensee under this Agreement are
excluded from this Agreement.
3. Term.
----
3.1 This Agreement shall extend for a period of ten (10) years from the
date of this Agreement ("Term"), unless sooner terminated pursuant to Section
12.
3.2 At the expiration or upon termination of this Agreement, Licensor
will grant Licensee a non-exclusive, royalty-free right and license in
perpetuity to use in the Territory for the Light Commercial Rental Business,
One-Way Consumer Rental Business and Local Consumer Rental Business the
trademark consisting of the color yellow as applied to trucks and moving vans
and red stripes as applied to trucks and moving vans (United States Trademark
Application No. 74/735715) on the terms and conditions in the agreement attached
as Exhibit A.
4. Descriptors; New Trademarks; Trade Names.
----------------------------------------
4.1 Licensor acknowledges that Licensee may, at any time during the term
of this Agreement, use in connection with the marketing and sale of Licensed
Services terms that describe (or that Licensee purports describe) the nature of
the Licensed Services (e.g., moving services) (hereinafter "Descriptors") and/or
new trademarks or service marks (i.e., distinctive words, letters, numerals,
symbols, designs, shapes, color schemes and/or combinations thereof, hereinafter
"New Trademarks") in addition to or in lieu of the Marks.
All Descriptors and New Trademarks (including the Successor Mark) must
conform to the selection requirements set forth in Schedule 3 and be approved by
Licensor in advance, which approval shall not be unreasonably withheld.
Licensor will designate an employee of Licensor to be a member of and reasonably
participate (without prejudice to any of Licensor's rights under this Agreement
or otherwise, including without limitation, the requirement that such Successor
Mark be approved in accordance with Section 7.3 of this Agreement) in Licensee's
committee to select a Successor Mark.
7
<PAGE>
4.2 Licensee will adopt and begin use of a Descriptor:
(a) on all vehicles acquired or re-decalled following execution of
this Agreement (except vehicles purchased up to the time
Licensor completes the 1997 Vehicle Trade and Body Package (as
that term is defined in the Asset Purchase Agreement) and "in
serviced" by August 31, 1997, provided the vehicle decalling
is substantially similar to the decalling on the vehicles
purchased in the 1996 Vehicle Trade and Body Package),
(b) in connection with all New Services introduced following
execution of this Agreement, and
(c) in all advertising, promotional and other materials produced
or used following execution of this Agreement (except that
Licensee may continue to use for up to six months certain
mutually agreed upon materials which use the Marks but not a
Descriptor and that are in existence on the date of execution
of this Agreement).
4.3 Notwithstanding the provisions of Section 4.2, (a) vehicles with
decalling substantially similar to the decalling on the 1992, 1993, 1994, 1995
or 1996 model vehicles which are purchased by Licensee under the Asset Purchase
Agreement, and (b) permanent signs with the Descriptor "Truck Rental" and which
are in existence on the date of execution hereof shall be deemed approved on
such vehicles and permanent signs (regardless of whether such vehicles or signs
are used in connection with New Services) until the fifth anniversary of
execution hereof.
4.4 Licensee will select and adopt a New Trademark intended to be a
successor trademark to the Marks (hereinafter "Successor Mark") and begin use of
the Successor Mark:
(a) on all vehicles acquired or re-decalled on the fifth
anniversary of the date of execution of this Agreement or
thereafter,
(b) in connection with all New Services introduced on the fifth
anniversary of the date of execution of this Agreement or
thereafter, and
(c) in all advertising, promotional and other materials produced
or used on the fifth anniversary of the date of execution of
this Agreement or thereafter.
8
<PAGE>
4.5 Licensee's initial and continued compliance with Section 4.4 prior
to the fifth anniversary of execution of this Agreement shall be deemed
compliance with Section 4.2.
4.6 If Licensee wishes to use a trade name which includes the mark
RYDER, that trade name must conform to the selection requirements of Schedule 3
and be approved by Licensor in advance, which approval shall not be unreasonably
withheld.
5. Quality Control.
---------------
5.1 It is acknowledged that the Marks indicate to the public that
services offered for sale or sold by Licensor and Licensee under the Marks are
of a commercially consistent quality and standard.
5.2 Licensee will provide Licensed Services under quality standards
which are substantially equivalent to or stricter than those standards used by
Licensor in connection with Licensor's services at the time of execution of this
Agreement.
5.3 Licensee agrees that all activities relating to the Licensed
Services, including without limitation, all advertising, marketing and
promotional activities shall be conducted in a dignified and professional
manner. More specifically, but without limiting the generality of the
foregoing, Licensee will not associate the Marks with the use of alcohol or
illegal drugs. Licensee will not associate the Marks with any materials that
are sexually provocative or otherwise offensive or scandalous. Licensee will
not associate the Marks with any materials which employ racist, sexist or
religious themes. Licensee will not associate the Marks with any of the names
or trademarks in paragraph 8, Schedule 3 at the time in question. For purposes
of the preceding sentence, "associate" shall include, without limitation, doing
business through a common location, common employee, common telephone or data
line, a common name or mark, or common marketing.
5.4 Licensee will provide Services only in accordance with the written
specifications set forth on Schedule 4. Licensee will provide New Services only
in accordance with specifications that have been or may from time to time during
the Term hereof be issued or approved by Licensor, such approval not to be
unreasonably withheld.
5.5 Licensee will use the Marks, the New Trademarks and the Descriptors
only in accordance with the form and manner as set forth on Schedule 5.
Licensee will not make any changes to the graphic representation of the Marks or
the font or type face in which the Marks are portrayed without Licensor's prior
written consent. Licensee acknowledges and agrees that it has no right to and
shall not use Licensor's New Mark. Moreover, Licensee agrees not to use white
as the predominant color for revenue-producing vehicles used in connection with
the Licensed Services.
9
<PAGE>
5.6 All new labels, signs, advertising (except certain outdoor signage),
promotional and other materials bearing the Marks produced or used after
execution of this Agreement shall include the following statement (or a modified
statement as reasonably required by Licensor from time to time):
RYDER(R) is a registered trademark of Ryder System, Inc. and is used
under license.
Licensee may continue to use for up to six months certain mutually
agreed upon materials which use the Marks and that are in existence on the date
of execution of this Agreement, but that do not include the above statement.
Licensor and Licensee may agree from time to time on certain materials on which
it is not practical to include the statement above. Vehicles purchased by
Licensee under the Asset Purchase Agreement (or vehicles referenced in the
parenthetical in Section 4.2(a)) and permanent signs which are in existence on
the date of execution of this Agreement must include the statement on the fifth
anniversary of execution of this Agreement and thereafter.
5.7 Licensee covenants and agrees that the Licensed Services shall be
offered and provided in conformance with all applicable laws and regulations
(including applicable self-regulatory advertising guidelines) of all
jurisdictions into which the Licensed Services may be directed by, or with the
authority of Licensee, provided, however, that failure to comply with this
Section shall not constitute a breach of this Agreement so long as Licensee's
level of compliance is in accordance with generally accepted Licensed Services'
industry standards.
5.8 Licensee acknowledges that Licensor has an overriding interest in
protecting the reputation of the Marks. Accordingly, if Licensee, at any time,
has a reasonable basis to believe that any act or occurrence related to
Licensee's trucks bearing the Marks or any of the Licensed Services offered or
provided presents or has presented any threat to public health or safety or
otherwise are likely to draw negative attention from any governmental agency,
consumer or environmental group, media or other organization or any individual
(any of such occurrences being an "Event"), Licensee will immediately notify
Licensor of the facts giving rise to such belief or suspicion. In all such
cases, Licensee will closely coordinate with Licensor with respect to any
actions Licensee might take or permit and in respect to all public statements
Licensee might make regarding the Event, and shall, after consultation with
Licensor, follow all reasonable advice and instructions of Licensor with respect
thereto.
5.9 For purposes of this Agreement, Licensee agrees to maintain all
records relating to specifications, consumer complaints and litigation relating
to the Licensed Services and shall make such records available to Licensor for
inspection upon Licensor's reasonable request. Such records (other than records
10
<PAGE>
relating to consumer complaints) shall be maintained for at least two (2) years
after the matter to which they pertain is closed or for the period required by
Licensee's document retention policy therefor, whichever is longer. Records
relating to consumer complaints shall be maintained for at least one (1) year
after the complaint is received or for the period required by Licensee's
document retention policy therefor, whichever is longer. All records provided
under this Section shall be considered to be confidential information subject to
the provisions of Section 16.
5.10 Licensee will permit Licensor or its authorized representatives to
inspect, at any time during regular business hours, Licensee's facilities and
records to determine whether Licensee is maintaining the quality standards set
forth herein and complying with the terms and conditions of this Agreement and
with all applicable laws and regulations.
5.11 Licensee will give notice to Licensor sixty (60) days in advance of
the introduction of any New Services.
6. Mark Ownership and Protection.
-----------------------------
6.1 Licensor warrants and represents that to the best of its knowledge
it is the owner of all right, title and interest in the registered Marks with
full power to license the registered Marks hereunder.
6.2 Licensor warrants and represents that to the best of its knowledge
Licensee's use of the registered Marks in connection with Licensed Services does
not infringe the rights of any third party.
6.3 The warranties and representations set forth in Sections 6.1 and 6.2
are limited in scope to the goods and services recited in the trademark
registrations for the Marks set forth on Schedule 2.
6.4 Licensor will take all reasonable steps to prosecute the
applications and maintain the registrations set forth on Schedule 2 during the
Term hereof, provided use of the Marks subject to those applications and
registrations is made throughout the Term.
6.5 Licensee acknowledges and agrees that Licensor is, and Licensor or
its successors or assigns shall remain, the owner of the Marks. Licensee shall
acquire no ownership interest in the Marks throughout this Agreement or
otherwise. All goodwill generated by the use of the Marks by Licensee shall
inure to the benefit of Licensor.
6.6 Licensee will fully cooperate with Licensor, at Licensor's expense,
in efforts to obtain, perfect and enforce Licensor's rights in the Marks.
11
<PAGE>
6.7 Licensee will not on its behalf or on behalf of any other party, in
any country or jurisdiction, register or attempt to register any of the Marks or
Licensor's New Mark. Licensee further will not, in any country or jurisdiction,
use, register or attempt to register any other trademark or trade name which is
confusingly similar to any of the Marks or Licensor's New Mark.
6.8 Licensee will not do or permit to be done any action or thing which
will in any way impair Licensor's rights in and to the Marks or Licensor's New
Mark.
6.9 Licensee will not contest or assist any other party in contesting
the validity of Licensor's ownership of the Marks or Licensor's New Mark.
7. Approvals.
---------
7.1 Licensee will submit to a designated representative of Licensor
samples of all proposed uses of the Marks (including, without limitation, any
proposed uses of the Marks by Dealers in accordance with this Agreement),
including, without limitation, labels, signs and advertising and promotional
materials bearing the Marks (which includes television and radio advertising,
print advertising, on-line advertising (including home pages), and truck
decalling) prior to their intended first use. Licensor will approve or
disapprove Licensee's use of such materials no later than three (3) business
days after receipt of the proposed materials from Licensee. Failure to respond
within that time shall be deemed to constitute approval by Licensor under this
Section 7.1.
Licensor and Licensee agree that commercial circumstances may require
longer or shorter approval periods than those set forth herein and agree to work
together in good faith to accommodate those circumstances, if possible.
Any materials which have been approved by Licensor (and any materials
substantially similar thereto) may be reused in the same medium by Licensee,
without need to resubmit such reuses to Licensor for approval.
7.2 Approval by Licensor of Licensee's presentation of the Marks shall
not, in any manner, waive or limit Licensee's responsibility to comply with all
relevant terms and conditions of this Agreement and all laws and regulations
(including self-regulatory advertising guidelines) governing such uses, labels,
signs and advertising and promotional materials.
7.3 Licensee will submit requests for the approvals required under
Section 4 (Descriptors, New Trademarks and trade names) to the President of
Licensor in writing, referencing the particular Section under which approval is
sought, and setting forth all information reasonably required by Licensor to
determine its approval or disapproval.
12
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7.4 Approval by Licensor of Licensee's selection of Descriptors, New
Trademarks and trade names shall not, in any manner, waive or limit Licensee's
responsibility to comply with all relevant terms and conditions of this
Agreement and all laws and regulations governing use of descriptive terms,
trademarks and trade names.
8. Infringement and Defense.
------------------------
8.1 Licensor shall have the sole right to control the prosecution and
settlement of any action, suit, opposition or other proceeding (collectively,
"Prosecution") respecting any infringement, dilution, tarnishment, unfair
competition or passing off by a third party of, or with respect to, the Marks
(collectively, "Infringement") including, without limitation, the decision
whether to initiate a Prosecution.
8.2 Licensor shall have the right to control the defense and settlement
(collectively "Defense") of any allegation or claim by a third party of
infringement, dilution, tarnishment, unfair competition or passing off of rights
of such third party arising from Licensee's use of the Marks (collectively,
"Claim") including, without limitation, the decision whether to undertake a
Defense, provided, however, that in the event Licensor undertakes any Defense,
Licensor shall promptly:
(a) notify Licensee of any material developments with respect to
such Defense,
(b) deliver to Licensee a copy of all pleadings, correspondence
and other material documents respecting such Defense, and
(c) notify Licensee of any offers of settlement related to such
Defense which it receives or which it proposes to make.
Licensor shall not offer, or accept any offer of a settlement
that contains any material term or condition (other than the
receipt or payment of money by Licensor) which would have a
material adverse impact on Licensee's use of the Marks without
the prior written consent of Licensee, which consent shall not
be unreasonably withheld or delayed.
8.3 Licensee will promptly notify Licensor of any Claim or any
Infringement that comes to its attention. Licensor will within thirty (30) days
from the date it receives notice from Licensee of a Claim or Infringement notify
Licensee of its decision as to whether it will undertake the Defense or
Prosecution respecting such Claim or Infringement. If Licensor elects not to
undertake the Defense or Prosecution or does not give timely notice to Licensee
of its decision with regard thereto, Licensee shall be authorized to undertake
the Defense of
13
<PAGE>
such Claim (at Licensor's cost and expense to the extent the Claim arises out of
Licensee's right to use the registered Marks in connection with the goods and
services recited in the trademark registrations for the Marks, and otherwise at
Licensee's sole cost and expense) or Prosecution of such Infringement (provided
Licensee's Prosecution will not, in Licensor's reasonable opinion, adversely
effect Licensor's ownership or use of the Marks) at its sole cost and expense;
provided however, that Licensee will promptly:
(a) notify Licensor of any material developments with respect to
such Defense or Prosecution,
(b) deliver to Licensor a copy of all pleadings, correspondence
and other material documents respecting such Defense or
Prosecution, and
(c) notify Licensor of any offers of settlement related to such
Claim or Infringement which it receives or which it proposes
to make. Licensee shall not offer, or accept any offer of, a
settlement that contains any material term or condition other
than the receipt or payment of money by Licensee without the
prior written consent of Licensor, which consent shall not be
unreasonably withheld or delayed.
8.4 In the event Licensee undertakes any Defense or Prosecution,
Licensor reserves the right at any time to assume said Defense or Prosecution at
its own expense.
If any Prosecution results in a monetary judgment in favor of Licensor
or Licensee, the parties will negotiate in good faith an appropriate allocation
of those proceeds, after reimbursement of all attorneys' fees and costs incurred
in connection with said Prosecution has been made to the party bearing such fees
and costs.
9. Independent Contractor.
----------------------
9.1 This Agreement does not create a fiduciary relationship between
Licensor and Licensee. Licensee shall be an independent contractor. Nothing in
this Agreement is intended to constitute either party an agent, legal
representative, subsidiary, joint venturer, partner, employee, franchisee, or
servant of the other for any purpose.
9.2 Nothing in this Agreement authorizes Licensee to make any contract,
agreement, warranty, or representation on Licensor's behalf, or to incur any
debt or other obligation in Licensor's name. Licensor shall in no event assume
liability for, or be deemed liable to or for Licensee as a result of any such
action or by reason of any act or omission of Licensee in its conduct of the
Licensed Services.
14
<PAGE>
10. Indemnification.
---------------
10.1 Licensee shall indemnify and hold harmless Licensor, its successors
and assigns and each of their affiliates, officers, directors and employees from
any and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including reasonable attorneys' fees and
expenses) actually suffered or incurred by it, actually arising out of or
resulting from:
(a) the failure by Licensee to meet any Licensee or Dealers'
obligations hereunder, or
(b) any actual or alleged destruction of property, injury, death,
loss or damage arising out of the offer or provision of
Licensed Services.
At its sole option, Licensor may require Licensee to defend Licensor
against any claim under Section 10.1(a) or (b), using Licensee's own counsel
that meets Licensor's reasonable approval.
10.2 Licensor shall indemnify and hold harmless Licensee, its successors
and permitted assigns and each of their affiliates, officers, directors and
employees from any and all liabilities, losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including reasonable
attorneys fees and expenses) actually suffered or incurred by it, actually
arising out of or resulting from:
(a) the failure by Licensor to meet any of its obligations
hereunder, including breach of the warranty in Section 6.1,
6.2 and 6.3,
(b) any actual or alleged destruction of property, injury, death,
loss or damage arising out of the offer or provision of
Licensor's services under the Marks, or
(c) Claims to the extent arising out of Licensee's right to use
the registered Marks in connection with those goods and
services recited in the trademark registrations for the Marks.
10.3 Licensor shall not be liable or responsible in any manner to
Licensee, whether for indemnification or otherwise, except for indemnity as
expressly provided in this Section. Licensee acknowledges that Licensor is not
making, has not made and disclaims any representations or warranties including,
without limitation, any implied warranties except as set forth in Sections 2.3,
2.4, 2.5, 6.1, 6.2 and 6.3 of this Agreement.
15
<PAGE>
11. Insurance.
---------
11.1 Types of Insurance Provided. During the Term, Licensee will
---------------------------
maintain the types of insurance, in the coverage limits, listed in the insurance
policy schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
Type of Insurance Policy Coverage Limits -
Standard Automobile Twenty-Five Million and no/100 Dollars
Liability Insurance ($25,000,000.00) Per Occurrence with an excess
Policy (the "Automobile layer of at least Fifty Million and no/100 Dollars
Liability Insurance ($50,000,000.00) aggregate
Policy")
Commercial General Seventy-Five Million and no/100 Dollars
Liability Insurance ($75,000,000.00)
Policy with Broad Form
Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy")
Workers Compensation Statutory
Employer's Liability Five Million and no/100 Dollars ($5,000,000.00)
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, Licensee shall cause the coverage provided by
each such policy to be kept in place for a period of one (1) year after the
effective date of termination or expiration of this Agreement.
Licensee may self insure up to One Million Dollars ($1,000,000) as a
deductible.
11.2 Insurance Policy Requirements.
-----------------------------
1. Each liability Insurance Policy shall:
a. be written by an insurance company reasonably acceptable to
Licensor (it being understood that an insurance company
rated A- or better by A.M. Best & Company is acceptable);
b. name Licensee as an insured, and be amended to name
Licensor, its employees, officers, directors, contractors,
agents and affiliates (each an "Additional Insured") as
additional insureds as their interests may appear;
16
<PAGE>
c. provide that if such insurance is canceled, or any material
change is made in the coverage which affects the interest of
any Additional Insured, such cancellation or change shall
not be effective as to the Additional Insured for ten (10)
days after receipt by the Additional Insured of written
notice from such insurers of such cancellation or change;
d. be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to,
any Additional Insured;
e. provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be
invalidated by any action or inaction of Licensee or any
other Person and shall insure each Additional Insured
regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by
Licensee or any other Person;
f. shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each
Additional Insured; and
g. in accordance with the terms and conditions of the
contractual liability coverage provided by such Insurance
Policy, insure the obligations of Licensee to indemnify the
Additional Insureds hereunder.
The first Twenty-Five Million Dollars ($25,000,000) of automobile liability
insurance and general liability insurance shall each be on an occurrence form.
The first Twenty-Five Million Dollars of automobile liability insurance shall
not be subject to any annual aggregate limit of liability.
11.3 Each liability Insurance Policy and any all-risks Insurance Policy
of Licensee which covers vehicles shall waive any rights of subrogation against
the Additional Insureds.
11.4 Proof of Insurance. At least once a year, from time to time at
------------------
Licensor's request, and any time a new policy is to go into effect, Licensee
shall provide Licensor with insurance certificates and other evidence,
reasonably satisfactory to Licensor, that the benefits and coverage required by
this Section 11 are in full force and effect. The certificate shall describe
the perils covered by each policy of insurance then in force,
17
<PAGE>
identify the insurer or insurers with which such policies of insurance are
carried and maintained, specify the amounts of insurance coverage provided
against each such peril, and describe the provisions contained in such policies
of insurance so as to evidence compliance with the requirements of this Section
11. Licensor shall have no duty to examine such insurance certificates or the
Insurance Policies to verify compliance. Licensee shall provide a copy of its
insurance policies to Licensor promptly following a request therefor, if
available.
12. Default and Termination.
-----------------------
12.1 Licensee shall be deemed to be in default under this Agreement, and
this Agreement and all rights granted hereunder will automatically terminate
without notice to Licensee, if any of the following events occur:
(a) if Licensee commences a voluntary case or other proceeding
seeking liquidation, rehabilitation, reorganization,
conservatorship or other relief for itself or its assets under
bankruptcy, insolvency or other similar laws, or seeking the
appointment of a trustee, receiver or other similar official
for itself or any substantial part of its property, or
consents to any such relief in an involuntary case or
proceeding commenced against it, or makes a general assignment
for the benefit of creditors, or takes any corporate action to
authorize any of the foregoing.
12.2 Licensee shall be deemed to be in default under this Agreement, and
Licensor may, at its option, immediately terminate this Agreement and all rights
granted hereunder upon notice to Licensee, if any of the following events occur:
(a) if there is any attempted assignment or sublicense of this
Agreement or any interest therein by Licensee, contrary to the
terms hereof,
(b) if Licensee is convicted of a felony or any other crime that
is reasonably likely, in the opinion of Licensor, to affect
adversely the Marks, the goodwill associated therewith, or
Licensor's interest herein, or
(c) If Licensee knowingly disseminates any materials required to
be approved by Licensor when approval has been specifically
refused by Licensor.
12.3 Licensee shall be deemed to be in default and Licensor may, at its
option, upon thirty (30) days written notice
18
<PAGE>
to Licensee terminate this Agreement and all rights granted hereunder if
Licensee fails to maintain insurance coverage as required under Section 11 and
Licensee fails to cure the default within the thirty (30) day notice period.
12.4 Licensee shall be deemed to be in default and Licensor may, at its
option, upon sixty (60) days written notice to Licensee terminate this Agreement
and all rights granted hereunder if any of the following events occur and
Licensee fails to cure the default within the sixty (60) day notice period:
(a) if any involuntary case or other proceeding is commenced
against Licensee seeking liquidation, rehabilitation,
reorganization, conservatorship or other relief with respect
to it or to its assets under any bankruptcy, insolvency or
other similar law, or seeking the appointment of a trustee,
receiver or other similar official with respect to it or any
substantial part of its property,
(b) if Licensee breaches any of the covenants hereunder not
specified in 12.1 and/or 12.2,
(c) if Licensee violates the competition provisions (Section 6.2)
of the Asset Purchase Agreement (which provisions are
incorporated by reference into this Agreement),
(d) if Licensee fails, refuses or neglects to promptly pay any
monies owing to Licensor when due, or to submit the
information required by Licensor under this Agreement, or
(e) if Licensee fails to maintain the quality standards specified
by this Agreement (provided Licensee must immediately upon
such notice commence reasonable efforts to remedy such quality
standards matter, otherwise the sixty (60) days notice and
cure period provided in this Section 12.4 shall only be thirty
(30) days).
12.5 Licensor shall be deemed to be in default under this Agreement, and
this Agreement will automatically terminate without notice to Licensor, in the
event:
(a) Licensor commences a voluntary case or other proceeding
seeking liquidation, rehabilitation, reorganization,
conservatorship or other relief for itself or its assets under
bankruptcy, insolvency or other similar laws, or seeking the
appointment of a trustee, receiver or other similar official
for itself or any substantial
19
<PAGE>
part of its property, or consents to any such relief in an
involuntary case or proceeding commenced against it, or makes
a general assignment for the benefit of creditors, or takes
any corporate action to authorize any of the foregoing.
12.6 Licensor shall be deemed to be in default and Licensee may, at its
option, upon sixty (60) days written notice to Licensor terminate this Agreement
and all rights granted hereunder if any of the following events occur and
Licensor fails to cure the default within the sixty (60) day notice period:
(a) if any involuntary case or other proceeding is commenced
against Licensor seeking liquidation, rehabilitation,
reorganization, conservatorship or other relief with respect
to it or to its assets under any bankruptcy, insolvency or
other similar law, or seeking the appointment of a trustee,
receiver or other similar official with respect to it or any
substantial part of its property,
(b) Licensor breaches any of its representations or covenants
hereunder, or
(c) Licensor fails to maintain the registrations for the Marks in
accordance with Section 6.4 of this Agreement.
If Licensee terminates this Agreement on account of Licensor's default,
Licensee may seek monetary relief, specific performance or injunctive relief.
If a court should order specific performance in the form of a license to use the
Marks, Licensor and Licensee agree that they will execute such an agreement on
terms no less favorable to Licensor than those set forth herein.
12.7 If Licensee fails to use any of the Marks in a bona fide commercial
manner within a period of three (3) years from the date of execution hereof, or
if Licensee discontinues use of any of the Marks for a period of three (3)
years, Licensor may, at its option, terminate this Agreement and all rights
granted hereunder upon notice to Licensee but only with respect to the Marks
which Licensee has ceased using for such period of time.
13. Obligations Upon Termination or Expiration.
------------------------------------------
13.1 Upon termination or expiration of this Agreement, all rights granted
hereunder to Licensee shall terminate. In addition, upon termination or
expiration, Licensee will and, when applicable, require each Dealer to:
(a) cease all use of the Marks in any form,
20
<PAGE>
(b) refrain from holding itself out to the public as a present or
former Licensee,
(c) promptly make such modifications or alterations to its
premises and the premises of its Dealers as may be necessary
to prevent the operation of any business thereon by itself or
others in derogation of this Section,
(d) promptly remove and/or destroy all materials using any of the
Marks including, but not limited to, signs, advertising and
promotional materials, and all copies thereof,
(e) take such action as shall be necessary to cancel any assumed
name, trade name or equivalent registration which contains any
of the Marks, and
(f) promptly pay all sums owing to Licensor, including all
damages, costs and expenses, including reasonable attorneys'
fees incurred by Licensor as result of any default.
13.2 Licensee shall furnish Licensor with evidence satisfactory to
Licensor of compliance with the obligation of this section within sixty (60)
days after termination or expiration of this Agreement.
13.3 In the event Licensee continues to operate any business, Licensee
agrees not to use any reproduction, counterfeit, copy or colorable imitation of
the Marks, either in connection with such other business or in the promotion
thereof, which is likely to cause confusion, mistake or deception, or which is
likely to dilute Licensor's rights in and to the Marks; and Licensee further
agrees not to utilize any designation of origin or description or representation
which falsely suggests or represents an association or connection with Licensor
so as to constitute unfair competition.
21
<PAGE>
14. Amendments and Waivers/Attorney Fees.
------------------------------------
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.
The prevailing party in any action to enforce this Agreement shall recover from
the other party all costs and expenses, including reasonable attorneys' fees,
incurred therein.
15. Assignment.
----------
15.1 Licensee may assign this Agreement, upon l0 days prior notice to and
without the consent of Licensor, only to a party who purchases or acquires, as a
going concern, the business of Licensee or all or substantially all of
Licensee's assets, provided, however, that any assignee of this Agreement must
(a) agree with Licensor, in writing, to be bound by the terms and provisions
hereof, (b) have a debt/equity ratio as good as Licensee's at the time of
execution hereof, (c) be the assignee of the competition provisions in Section
6.2(d) of the Asset Purchase Agreement and the following agreements defined in
the Asset Purchase Agreement (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 Dealer 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 or an affiliate (as that term is defined in the Asset Purchase
Agreement) of any of the parties set forth in paragraph number 8 on Schedule 3
of this Agreement. In addition, Licensee may assign its rights hereunder to any
lenders which provide financing to Licensee for the purpose of consummating the
transactions contemplated under the Asset Purchase Agreement, or refinancing any
such financing, including any successors thereto. Except as expressly set forth
in this Section 15.1, Licensee may not assign its rights in this Agreement.
15.2 This Agreement may be assigned, transferred, sublicensed or
otherwise delegated by Licensor following notice to but without the prior
written consent of Licensee.
15.3 This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of, and be enforceable by, only the parties hereto
and their respective successors and permitted assigns. This Agreement is not
intended to confer upon anyone not a party hereto any rights or remedies
hereunder.
22
<PAGE>
16. Confidentiality.
---------------
Any confidential information disclosed by either party to the other
pursuant to this Agreement, except as set forth, below shall be considered
confidential to the disclosing party. The obligation of confidentiality set
forth in the preceding sentence shall not apply to information which (a) was
publicly available at the time of the disclosure to the receiving party; (b)
subsequently becomes publicly available through no fault of the receiving party;
(c) is rightfully acquired by the receiving party, subsequent to disclosure by
the other party from a third party who is not in breach of a confidential
relationship with regard to such information; (d) is independently developed by
the receiving party solely through the efforts of individuals who did not have
access to the confidential information, as evidenced by the receiving party's
written records; or (e) is required to be made public by law or regulation.
17. 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 therein.
18. Survival.
--------
The rights and obligations set forth in Sections 3.2, 5.9, 6.5, 6.7, 6.8,
6.9, 10, 13 and 16 shall survive termination of this Agreement.
19. Counterparts; Facsimile Signatures.
----------------------------------
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.
20. 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
Licensor shall be addressed to:
Ryder System, Inc.
23
<PAGE>
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other party as Licensor
may designate by written notice to Licensee.
Notices to Licensee shall be addressed to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: President
with a copy to:
Questor Management Company
4000 Town Center, Suite 530
Southfield, Michigan 48075
Attention: President
and with an additional copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino
or at such other address and to the attention of such other party as Licensee
may designate by written notice to Licensor.
21. Dispute Resolution; Governing Law and Jurisdiction.
--------------------------------------------------
21.1 The parties agree that if any disputes arise under Sections 2, 4, 5
and 7, senior management of the parties will meet (or designate other
representatives to meet) and negotiate in good faith in an attempt to resolve
the dispute. In the event that the parties are unable to resolve the dispute
within thirty (30) days from the date of written notice of disagreement, either
party may submit and the other party may agree to refer the dispute to mediation
which shall be conducted under the then applicable rules of the CPR/INTA
Alternative Dispute Resolution Program, or such other mediation process which
shall be agreed to by the parties. None of the remaining provisions of this
Agreement, including without limitation, the provisions of Section 12 (Default
and Termination) shall be subject to this dispute resolution provision.
Notwithstanding anything in this
24
<PAGE>
Section 21.1, this section shall not prohibit either party from immediately
seeking equitable relief in court if it so desires.
21.2 Except as set forth in Section 2l.l, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York U.S.A. without regard to its provisions concerning conflicts
or choice of law. The parties consent to the jurisdiction of the courts
situated in New York for the resolution of any disputes as to the construction
of this Agreement.
21.3 Notwithstanding the foregoing, Licensee acknowledges that its
failure to comply with its obligations under this Agreement could cause
immediate and irreparable harm to Licensor for which money damages would be
inadequate. Accordingly, in the event of Licensee's breach of this Agreement,
Licensor may seek equitable relief, including specific performance of Licensee's
obligations and injunctive relief to prevent Licensee's continued use of the
Marks. Such remedy shall not be deemed to be the exclusive remedy for breach
but shall be in addition to all other remedies available at law or in equity.
22. Severability.
------------
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.
23. Interpretation; Absence of Presumption.
--------------------------------------
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.
(CONTINUED ON NEXT PAGE)
25
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Trademark License
Agreement to be executed by their duly authorized officers as of the date first
written above.
RYDER SYSTEM, INC. RYDER TRS, INC. (f/k/a
"Licensor" RCTR HOLDINGS, INC.)
"Licensee"
By:/s/ Dwight D. Denny By:/s/ Wallace Rueckel
------------------------- ---------------------------
Dwight D. Denny Wallace Rueckel
Executive Vice President Senior Vice President &
Development Treasurer
26
<PAGE>
SCHEDULE 1
(ATTACHED)
<PAGE>
RYDER/(R)/
TOGETHER, WE'RE GOING PLACES
2
<PAGE>
SCHEDULE 2
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MARK REGISTRATION/APPLICATION GOODS/SERVICES
- --------------------------------------------------------------------------------
<S> <C> <C>
RYDER 1123006; Reg. July 24, 1979 Leasing and renting
vehicles, namely
truck vehicles
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
RYDER 1575603; Reg. January 2, 1990 Moving van
services; including
packing, loading,
and unloading
services; packaging
articles for
transportation; and
freight
transportation
services by van and
trucks (Int'l Cl.
39).
- --------------------------------------------------------------------------------
RYDER CONSUMER 1931103; Reg. October 31, Truck rental and
TRUCK RENTAL 1995 leasing services
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
RYDER FIRST 1737775; Reg. December 1, Computerized truck
1992 rental services
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
RYDER TRUCK DELIVERY & 1946483; Reg. January 9, 1996 Truck rental and
DESIGN leasing services
and related pick up
and delivery
services of trucks
and moving
supplies, namely
boxes, tape and
rope (Int'l Cl. 39).
- --------------------------------------------------------------------------------
1-800-GO-RYDER 75/037440; App. December 26, Leasing and renting
1995 of truck vehicles
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
YELLOW TRUCK & RYDER & 74/735714; App. September Truck rental and
DESIGN 29, 1995 leasing services
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
YELLOW TRUCK & DESIGN 74/735715; App. September Truck rental and
29, 1995 leasing services
(Int'l Cl. 39).
- --------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
SCHEDULE 5
Page 1 of 2
Use of Marks
------------
When used as a trademark, the RYDER mark must appear in the logotype
attached hereto. The logotype may appear only in white (if printing is limited
to one color) or in those colors approved by Licensor. The logotype should
never be used in a "readthru" fashion, i.e., appear within the body of a
sentence, nor should it ever appear smaller than 3/32" in height (positive) or
1/8" in height (reversed). When reproducing the logotype, care should be taken
to ensure that sharpness of detail is maintained. The logotype should not be
screened or textured or presented in an outline version.
Use of Descriptors
------------------
Descriptors shall be used in sufficient proximity to the Marks such
that a reasonable observer would normally view the Marks and the Descriptors in
a single visual impression.
Descriptors shall be sufficiently prominent that a reasonable observer
could normally be able to pick out the Descriptor from surrounding text and
design features at least as easily as such observer could pick out the Marks.
Descriptors used in radio or television advertising must be used at
least once in at least the same volume or intensity as the Marks and immediately
following use of the Marks.
Use of a New Trademark
----------------------
A New Trademark must appear in a manner visually distinct from the
Marks.
A New Trademark must create a separate commercial impression such that
it does not make (or appear to make) the New Trademark part of the Mark.
When a New Trademark is used in close connection with the Ryder Mark,
the Ryder Mark must appear in a type size no greater than three-quarters (3/4)
the size of the New Trademark.
New Trademarks will not be used in such a manner as to physically or
visually touch the Marks or otherwise be combined, connected or integrated with
the Marks so as to form a composite mark.
6
<PAGE>
SCHEDULE 5
Page 2 of 2
- --------------------------------------------------------------------------------
Positive
RYDER
- --------------------------------------------------------------------------------
Negative
RYDER
- --------------------------------------------------------------------------------
7
<PAGE>
EXHIBIT 10.11
Patent License Agreement
between
Ryder TRS, Inc.
and
Ryder Truck Rental, Inc.
October 17, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
1. Definitions.......................................... 1
2. Grant of Rights...................................... 4
3. Term................................................. 4
4. Patent Ownership and Protection...................... 5
5. Infringement and Defense............................. 5
6. Independent Contractor............................... 7
7. Indemnification...................................... 7
8. Default and Termination.............................. 8
9. Obligation Upon Termination or Expiration............ 9
10. Amendments and Waivers.............................. 10
11. Assignment.......................................... 10
12. Entire Agreement.................................... 10
13. Survival............................................ 11
14. Counterparts; Facsimile Signatures.................. 11
15. Notices............................................. 11
16. Dispute Resolution; Governing Law and Jurisdiction.. 12
17. Bankruptcy.......................................... 13
18. Severability........................................ 13
19. Interpretation; Absence of Presumption.............. 13
<PAGE>
PATENT LICENSE AGREEMENT
This Agreement is entered into and effective on this 17th day of
October, 1996 by and between Ryder TRS, Inc. (f/k/a RCTR Holdings,, Inc.), a
Delaware corporation with its principal place of business at 8669 N.W. 36th
Street, Miami, Florida 33166 (hereinafter "Licensor") and Ryder Truck Rental,
Inc., a Florida corporation with its principal place of business at 3600 N.W.
82nd Avenue, Miami, Florida, 33166 (hereinafter "Licensee").
WHEREAS, Licensor and Licensee are parties to an Asset Purchase Agreement dated
September 19, 1996 (the "Asset Purchase Agreement") under which Licensor has
purchased certain assets and businesses from Licensee and under which the
parties have agreed that Licensee will be granted a license to use certain
patents.
NOW, THEREFORE, in consideration of the rights and obligations set forth herein
and in the Asset Purchase Agreement, the adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Definitions.
-----------
The following terms, when used in this Agreement, shall have the
respective meanings set forth in this Section 1.
1.1 Accessories. The term "Accessories" shall mean hand trucks, moving
-----------
dollies, furniture pads and similar accessory items owned by Licensee and used
for the Rental Business.
1.2 Agreement. The term "Agreement" shall have the meaning set forth in
---------
the first paragraph hereof.
1.3 Asset Purchase Agreement. The term "Asset Purchase Agreement" shall
------------------------
have the meaning set forth in the second paragraph hereof.
1.4 Business. The term "Business" shall mean the Rental Business and
--------
the Move Management Business.
1.5 Division. The term "Division" shall mean Ryder Truck Rental, Inc.'s
--------
Consumer Truck Rental Division.
1.6 Heavy Duty Rentals. The term "Heavy Duty Rentals" shall mean rental
------------------
of trucks or other vehicles with a manufacturer's gross vehicle weight rating of
26,000 pounds or more.
1.7 Leasing. The term "Leasing" shall mean surrendering possession and
-------
the right to use a vehicle, for a period in excess of ninety days for
consideration, except
1
<PAGE>
under circumstances which satisfy the requirements of (a), (b) and (c) of
1.20 below. Furnishing a vehicle 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 1.20 below shall be considered Leasing.
1.8 Licensed Field of Use. The term "Licensed Field of Use" shall mean any
---------------------
business other than One-Way Consumer Rental Business, One-Way Light Commercial
Rental Business and Move Management Business.
1.9 Licensed Products. The term "Licensed Products" shall mean any product
-----------------
covered by one or more claims of the Patents.
1.10 Light Commercial Rental Business. The term "Light Commercial Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty Trucks 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 (e.g., rope, tape, bubble wrap, locks and similar moving supplies).
The term "One-Way Light Commercial Rental Business" shall mean Light Commercial
Rental Business where the Light Duty 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 Light Duty Truck was picked up. The term "Local Light Commercial
Rental Business" shall mean Light Commercial Rental Business where the Light
Duty Truck is picked up and dropped off at the same rental office or another
rental office within 35 miles.
1.11 Light Duty Trucks. The term "Light Duty Trucks" shall mean trucks
-----------------
(excluding refrigerated trucks and stake trucks) owned by Licensee (or leased by
Licensee from affiliates of Licensee) with a manufacturer's gross vehicle weight
rating of less than 26,000 pounds.
1.12 Local Consumer Rental Business. The term "Local Consumer Rental Business"
------------------------------
shall mean (a) the rental of Light Duty Trucks within the Territory to
individuals for the transport of goods within the Territory for a non-business
purpose, which Light Duty 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 (e.g., rope, tape, bubble wrap, locks and similar moving
supplies).
1.13 Move Management Business. The term "Move Management Business" shall mean
------------------------
(a) providing moving management 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 are relocating to take a position (or a different position) with the
customer or (ii) rental of a Light Duty 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
2
<PAGE>
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, mortgage brokerage, and (ii) through referral to third parties, home
finding, home buy out and equity funding, home purchase assistance, home
marketing, property resale and closing services, home inspections, interim
housing, spousal job assistance, and locating dependent care. In no event shall
a Person (as that term is defined in the Asset Purchase Agreement) be deemed to
be engaging in the Move Management Business due to performance of activities
which constitute or are included in the Light Commercial Rental Business or
Local Consumer Rental Business. Move Management Business shall not include
Leasing or Heavy Duty Rentals.
1.17 One-Way Consumer Rental Business. The term "One-Way Consumer Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty Trucks within the Territory to
individuals for the transport of goods within the Territory for a non-business
purpose, which Light Duty 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 (e.g., rope, tape, bubble wrap, locks and similar moving
supplies).
1.18 Patents. The term "Patents" shall mean the following U.S. patents and any
-------
reissues, extensions or reexaminations thereof: U.S. Patent No. 5,112,082, U.S.
Patent No. 5,069,497, U.S. Patent No. 5,076,639 and any patents that issue from
the United States Patent Application covering a LOW PROFILE LOADING RAMP (which
has been recorded in the United States Patent and Trademark Office at Reel 7841,
Frame 0495) and any continuations, continuations-in-part or divisions thereof.
1.19 Protection Products. The term "Protection Product" shall mean the risk
-------------------
assurances sold to customers of the Rental Business under the following names:
TowGuard Protection, Personal Accident and Cargo Protection, Supplemental
Liability Protection, Physical Damage Waiver and Limited Damage Waiver, and any
successor or other similar risk assurance arrangements made available to such
customers.
1.20 Rental. The term "rental," when used independently of any other defined
------
term, shall mean a surrender of possession and right to use a vehicle, 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 do not
exceed one year, (b) there is no significant penalty or vehicle purchase
obligation for failure to extend or renew, and (c) the vehicle is not identified
with the customer's name, color or logo (other than any legally required placard
indicating the identity of the customer).
3
<PAGE>
1.21 Territory. The term "Territory" shall mean the United States of America,
---------
its territories and possessions.
2. Grant of Rights.
---------------
2.1 Subject to the terms and conditions of this Agreement, Licensor hereby
grants to Licensee and its related or affiliated companies the non-exclusive
right and license, during the term of this Agreement, to make, have made, use,
offer for sale, sell and import Licensed Products in the Territory in the
Licensed Field of Use.
2.2 Licensee shall have the right to grant non-exclusive restricted sublicenses
of its Section 2.1 rights, provided, however, that the rights granted shall not
be inconsistent with or more extensive in scope or manner than Licensee's rights
under this Agreement or in violation of any other restriction imposed on
Licensee under any other agreements with Licensor.
2.3 Subject to the provisions of Section 2.2, Licensee will not sublicense or
grant any consents to use any of its rights or licenses hereunder. Licensee
will be directly liable to Licensor for any acts of sublicensees which violate
the terms of this Agreement and, within a reasonable period following execution
hereof, Licensee will incorporate the obligations of this Section in a written
instrument approved by Licensor, which instrument Licensee will require all
sublicensees following execution hereof to sign.
2.4 Licensor will not itself use or grant to any other party the right to use
the Patents in the Territory in connection with driver rental or leasing,
integrated logistics services, dedicated contract carriage, cartage, common or
contract carriage, Leasing or Heavy Duty Rentals.
2.5 Nothing herein shall prohibit Licensor from using or licensing another
party to use the Patents in any way which does not violate Section 2.4 hereof or
the Asset Purchase Agreement.
2.6 Licensor and Licensee acknowledge that all rights, licenses and privileges
not specifically granted herein are excluded from this Agreement.
3. Term.
----
This Agreement shall continue in full force and effect for the life of the last
to expire of the Patents ("Term"), unless sooner terminated pursuant to Section
8.
4
<PAGE>
4. Patent Ownership and Protection.
-------------------------------
4.1 Licensee acknowledges and agrees that Licensor is, and Licensor or its
successors or assigns shall remain, the owner of the Patents. Licensee shall
acquire no ownership interest in the Patents through this Agreement or
otherwise.
4.2 Licensee will fully cooperate with Licensor, at Licensor's expense, in
efforts to obtain, perfect and enforce Licensor's rights in the Patents.
4.3 Licensee will not do or permit to be done any action or thing which will in
any way impair Licensor's rights in and to the Patents.
4.4 Licensee will not contest or assist any other party in contesting the
validity of, enforceability of or Licensor's ownership of the Patents.
4.5 Upon Licensor's written request, Licensee shall mark all Licensed Products
manufactured or sold by or on behalf of Licensee after the date of this
Agreement with the patent numbers of the Patents claiming the inventions
embodied by such Licensed Products and that such patents are owned by Licensor.
4.6 Licensor shall be responsible for paying all maintenance fees associated
with the Patents. In the event Licensor elects not to pay any such maintenance
fees, it shall provide Licensee with prompt written notice of such election, in
no event later than ten (10) days before such maintenance fee is due. Licensee
shall have the right to pay any such maintenance fees not paid by Licensor.
4.7 Licensor shall have the option, at its expense, to prosecute the patent
application for the LOW PROFILE LOADING RAMP and any and all continuations,
continuations-in-part and divisions thereof.
5. Infringement and Defense.
------------------------
5.1 Licensor shall have the sole right to control the prosecution and
settlement of any action, suit or other proceeding (collectively, "Prosecution")
respecting any infringement of the Patents (hereinafter "Infringement"),
including, without limitation, the decision whether to initiate a Prosecution.
5.2 Licensor shall have the right to control the defense and settlement
(collectively "Defense") of any allegation or claim by a third party of
infringement of rights of such third party arising from Licensee's use of the
Patents or a claim by a third party of invalidity or unenforceability of any of
the Patents (collectively, "Claim") including, without limitation, the decision
whether to undertake a Defense, provided, however, that in the event Licensor
undertakes any Defense, Licensor shall promptly:
5
<PAGE>
(a) notify Licensee of any material developments with respect to such Defense;
(b) deliver to Licensee a copy of all pleadings, correspondence and other
material documents respecting such Defense; and
(c) notify Licensee of any offers of settlement related to such Defense which
it receives or which it proposes to make. Licensor shall not offer, or
accept any offer of a settlement that contains any material term or
condition (other than the receipt or payment of money by Licensor) which
would have a material adverse impact on Licensee's use of the Patents
without the prior written consent of Licensee, which consent shall be not
unreasonably withheld or delayed.
5.3 Licensee will promptly notify Licensor of any Claim or any Infringement
that comes to its attention. Licensor shall within thirty (30) days from the
date it receives notice from Licensee of a Claim or Infringement to notify
Licensee of its decision as to whether it will undertake the Defense or
Prosecution respecting such Claim or Infringement. If Licensor elects not to
undertake the Defense or does not give timely notice to Licensee of its decision
with regard thereto, Licensee shall be authorized to undertake the Defense of
such Claim or Prosecution of such Infringement (provided Licensee's Prosecution
will not, in Licensor's reasonable opinion, adversely effect Licensor's
ownership or use of the Patents); provided however, that Licensee will promptly:
(a) notify Licensor of any material developments with respect to such Defense
or Prosecution;
(b) deliver to Licensor a copy of all pleadings, correspondence and other
material documents respecting such Defense or Prosecution; and
(c) notify Licensor of any offers of settlement related to such Claim or
Infringement which it receives or which it proposes to make. Licensee
shall not offer, or accept any offer of, a settlement that contains any
material term or condition other than the receipt or payment of money by
Licensee without the prior written consent of Licensor, which consent shall
not be unreasonably withheld or delayed.
5.4 In the event Licensee undertakes any Defense or Prosecution, Licensor
reserves the right at any time to assume said Defense or Prosecution at its own
expense.
6
<PAGE>
If any Prosecution results in a monetary judgment in favor of Licensor or
Licensee, the parties will negotiate in good faith an appropriate allocation of
those proceeds, after reimbursement of all attorneys' fees and costs incurred in
connection with said Prosecution has been made to the party bearing such fees
and costs.
6. Independent Contractor.
----------------------
6.1 This Agreement does not create a fiduciary relationship between Licensor
and Licensee. Licensee shall be an independent contractor. Nothing in this
Agreement is intended to constitute either party an agent, legal representative,
subsidiary, joint venturer, partner, employee, franchisee, or servant of the
other for any purpose.
6.2 Nothing in this Agreement authorizes Licensee to make any contract,
agreement, warranty, or representation on Licensor's behalf, or to incur any
debt or other obligation in Licensor's name.
7. Indemnification.
---------------
7.1 Licensee shall indemnify and hold harmless Licensor, its successors and
assigns and each of their affiliates, officers, directors and employees from any
and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including reasonable attorneys' fees and
expenses) actually suffered or incurred by it, actually arising out of or
resulting from Licensee's failure to meet any of its obligations hereunder, or
any actual or alleged destruction of property, injury or death caused by
Licensee's use of the Patents in Licensed Products pursuant to this Agreement.
At its sole option, Licensor may require Licensee to defend Licensor against any
claim, using Licensee's own counsel that meets Licensor's approval.
7.2 Licensor shall indemnify and hold harmless Licensee, its successors and
permitted assigns and each of their affiliates, officers, directors and
employees from any and all liabilities, losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including reasonable
attorneys fees and expenses) actually suffered or incurred by it, actually
arising out of or resulting from Licensor's failure to meet any of its
obligations hereunder.
7.3 Licensor shall not be liable or responsible in any manner to Licensee,
whether for indemnification or otherwise, except for indemnity as expressly
provided in this Section. Licensee acknowledges that Licensor is not making,
has not made and disclaims any representations or warranties including, without
limitation, any implied warranties whatsoever.
7
<PAGE>
8. Default and Termination.
-----------------------
8.1 Licensee shall be deemed to be in default under this Agreement, and this
Agreement and all rights granted hereunder will automatically terminate without
notice to Licensee, if any of the following events occur:
(a) If Licensee commences a voluntary case or other proceeding seeking
liquidation, rehabilitation, reorganization, conservatorship or other
relief for itself or its assets under bankruptcy, insolvency or other
similar laws, or seeking the appointment of a trustee, receiver or other
similar official for itself or any substantial part of its property, or
consents to any such relief in an involuntary case or proceeding commenced
against it, or makes a general assignment for the benefit of creditors, or
takes any corporate action to authorize any of the foregoing;
8.2 Licensee shall be deemed to be in default under this Agreement, and
Licensor may, at its option, immediately terminate this Agreement and all rights
granted hereunder upon notice to Licensee, if any of the following events occur:
(a) If there is any attempted assignment or sublicense of this Agreement or any
interest therein by Licensee, contrary to the terms hereof.
8.3 Licensee shall be deemed to be in default and Licensor may, at its option,
upon sixty (60) days written notice to Licensee terminate this Agreement and all
rights granted hereunder if any of the following events occur and Licensee fails
to cure the default within the sixty (60) day notice period:
(a) If Licensee breaches any of the covenants set forth herein; or
(b) If Licensee violates the competition provisions (Section 6.2) of the Asset
Purchase Agreement; or
(c) If any involuntary case or other proceeding is commenced against Licensee
seeking liquidation, rehabilitation, reorganization, conservatorship or
other relief with respect to it or to its assets under any bankruptcy,
insolvency or other similar law, or seeking the appointment of a trustee,
receiver or other similar official with respect to it or any substantial
part of its property.
8.4 Licensor shall be deemed to be in default under this Agreement, and this
Agreement will automatically terminate without notice to Licensor, in the event:
8
<PAGE>
(a) Licensor commences a voluntary case or other proceeding seeking
liquidation, rehabilitation, reorganization, conservatorship or other
relief for itself or its assets under bankruptcy, insolvency or other
similar laws, or seeking the appointment of a trustee, receiver or other
similar official for itself or any substantial part of its property, or
consents to any such relief in an involuntary case or proceeding commenced
against it, or makes a general assignment for the benefit of creditors, or
takes any corporate action to authorize any of the foregoing,
8.5 Licensor shall be deemed to be in default and Licensee may, at its option,
upon sixty (60) days written notice to Licensor terminate this Agreement and all
rights granted hereunder if any of the following events occur and Licensor fails
to cure the default within the sixty (60) day notice period:
(a) if any involuntary case or other proceeding is commenced against Licensor
seeking liquidation, rehabilitation, reorganization, conservatorship or
other relief with respect to it or to its assets under any bankruptcy,
insolvency or other similar law, or seeking the appointment of a trustee,
receiver or other similar official with respect to it or any substantial
part of its property, or
(b) Licensor breaches any of its representations or covenants hereunder.
If Licensee terminates this Agreement on account of Licensor's default, Licensee
may seek monetary relief, specific performance or injunctive relief. If a court
should order specific performance in the form of a license to use the Marks,
Licensor and Licensee agree that they will execute such an agreement on terms no
less favorable to Licensor than those set forth herein.
9. Obligation Upon Termination or Expiration.
-----------------------------------------
9.1 Upon termination or expiration of this Agreement, all rights granted
hereunder to Licensee shall terminate. In addition, upon termination or
expiration, Licensee shall:
(a) cease using, making, having made, offering for sale, selling and importing
Licensed Products in the Territory;
(b) refrain from holding itself out to the public as a present or former
Licensee; and
9
<PAGE>
(c) promptly pay all sums owing to Licensor, including all damages, costs and
expenses, including reasonable attorneys' fees incurred by Licensor as
result of any default.
10. Amendments and Waivers/Attorney Fees.
------------------------------------
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.
The prevailing party in any action to enforce this Agreement shall recover from
the other party all costs and expenses, including reasonable attorneys' fees,
incurred therein.
11. Assignment.
----------
11.1 This Agreement may be assigned by Licensee with reasonable notice to but
without the prior written consent of Licensor to a party who purchases or
acquires, as a going concern, the business of Licensee in which the Patents are
used, provided, however, that any assignee of this Agreement must (a) agree, in
writing, to be bound by the terms and provisions hereof, (b) have a debt/equity
ratio as good as Licensee's at the time of execution hereof, and (c) be the
assignee of the competition provisions in Section 6.2(d) of the Asset Purchase
Agreement.
11.2 This Agreement may be assigned, transferred, sublicensed or otherwise
delegated by Licensor following notice to but without the prior written consent
of Licensee.
11.3 This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. This Agreement is not intended to
confer upon anyone not a party hereto any rights or remedies hereunder.
12. Entire Agreement.
----------------
This Agreement and the Schedules and Exhibits hereto and the Asset Purchase
Agreement 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.
10
<PAGE>
13. Survival.
--------
The rights and obligations set forth in Sections 4.1, 4.3, 4.4, 7 and 9 shall
survive termination of this Agreement.
14. Counterparts; Facsimile Signatures.
----------------------------------
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.
15. 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
Licensee shall be addressed to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other party as Licensee
may designate by written notice to Licensor.
Notices to Licensor shall be addressed to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: President
with a copy to:
11
<PAGE>
Questor Management Company
4000 Town Center, Suite 530
Southfield, Michigan 48075
Attention: President
with an additional copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino
or at such other address and to the attention of such other party as Licensor
may designate by written notice to Licensee.
16. Dispute Resolution; Governing Law and Jurisdiction.
--------------------------------------------------
16.1 The parties agree that if any disputes arise under Section 2, senior
management of the parties will meet (or designate other representatives to meet)
and negotiate in good faith in an attempt to resolve the dispute. In the event
that the parties are unable to resolve the dispute within thirty (30) days from
the date of written notice of disagreement, either party may submit and the
other party may agree to refer the dispute to binding mediation which shall be
conducted under the then applicable rules of the CPR/INTA Alternative Dispute
Resolution Program, or such other mediation process which shall be agreed to by
the parties. None of the remaining provisions of this Agreement, including
without limitation, the provisions of Section 8 (Default and Termination) shall
be subject to this dispute resolution provision. Notwithstanding anything in
this Section 16.1, this section shall not prohibit either party from immediately
seeking equitable relief in court if it so desires.
16.2 Except as set forth in Section 16.1, this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New York
U.S.A. without regard to its provisions concerning conflicts or choice of law.
The parties consent to the jurisdiction of the courts situated in New York for
the resolution of any disputes as to the construction of this Agreement.
16.3 Notwithstanding the foregoing, Licensee acknowledges that its failure to
comply with its obligations under this Agreement could cause immediate and
irreparable harm to Licensor for which money damages would be inadequate.
Accordingly, in the event of Licensee's breach of this Agreement, Licensor may
seek equitable relief, including specific performance of Licensee's obligations
and injunctive relief to prevent Licensee's continued use of the Patents. Such
remedy shall not be deemed to be the exclusive remedy for breach but shall be in
addition to all other remedies available at law or in equity.
12
<PAGE>
17. Bankruptcy.
----------
All rights and licenses granted under or pursuant to this Agreement by Licensor
are, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code.
18. Severability.
------------
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.
19. Interpretation; Absence of Presumption.
--------------------------------------
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.
(CONTINUED ON NEXT PAGE)
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Patent License Agreement to be
executed by their duly authorized officers as of the date first written above.
RYDER TRS, INC. (f/k/a RYDER TRUCK RENTAL, INC.
RCTR HOLDINGS, INC.) "Licensee"
"Licensor"
By:/s/ Wallace Rueckel By:/s/ Dwight D. Denny
--------------------------- ---------------------------
Name: Wallace Rueckel Name: Dwight D. Denny
------------------------- ---------------------------
Title: Senior Vice President Title: Executive Vice President
and Treasurer Development
------------------------ --------------------------
14
<PAGE>
EXHIBIT 10.12
Copyright License Agreement
between
Ryder Truck Rental, Inc.
and
Ryder TRS, Inc.
October 17, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
1. Definitions.......................................... 1
2. Grant of Rights...................................... 5
3. Term................................................. 7
4. Ownership and Protection............................. 7
5. Infringement and Defense............................. 7
6. Independent Contractor............................... 9
7. Indemnification...................................... 9
8. Default and Termination.............................. 10
9. Obligations Upon Termination or Expiration........... 11
10. Amendments and Waivers/Attorney Fees................ 12
11. Assignment.......................................... 12
12. Entire Agreement.................................... 13
13. Survival............................................ 13
14. Counterparts; Facsimile Signatures.................. 13
15. Notices............................................. 13
16. Dispute Resolution; Governing Law and Jurisdiction.. 14
17. Bankruptcy.......................................... 15
18. Severability........................................ 15
19. Interpretation; Absence of Presumption.............. 15
i
<PAGE>
COPYRIGHT LICENSE AGREEMENT
This Agreement is entered into and effective on this 17th day of October,
1996 by and between Ryder Truck Rental, Inc., a Florida corporation with its
principal place of business at 3600 N.W. 82nd Avenue, Miami, Florida, 33166
(hereinafter "Licensor") and Ryder TRS, Inc. (f/k/a RCTR Holdings, Inc.), a
Delaware corporation with its principal place of business at 8669 N.W. 36th
Street, Miami, Florida 33166 (hereinafter "Licensee").
WHEREAS, Licensor and Licensee are parties to an Asset Purchase Agreement
dated September 19, 1996 (the "Asset Purchase Agreement") under which Licensee
has purchased certain assets and businesses from Licensor and under which the
parties have agreed that Licensee will be granted a license to use certain
copyrighted works in connection with certain services offered by Licensee.
NOW, THEREFORE, in consideration of the rights and obligations set forth
herein and in the Asset Purchase Agreement, the adequacy of which is hereby
acknowledged, the parties agree as follows:
1. Definitions.
-----------
The following terms, when used in this Agreement, shall have the respective
meanings set forth in this Section 1.
1.1 Accessories. The term "Accessories" shall mean hand trucks, moving
-----------
dollies, furniture pads and similar accessory items owned by Licensee and used
for the Rental Business.
1.2 Agreement. The term "Agreement" shall have the meaning set forth in
---------
the first paragraph hereof.
1.3 Asset Purchase Agreement. The term "Asset Purchase Agreement" shall
------------------------
have the meaning set forth in the second paragraph hereof.
1.4 Business. The term "Business" shall mean the Rental Business and the
--------
Move Management Business.
1.5 Copyrights. The term "Copyrights" shall mean the copyright rights in
----------
and to the Copyrighted Works and all derivative works thereof.
1.6 Copyrighted Works. The term "Copyrighted Works" shall mean those
-----------------
brochures, pamphlets and printed promotional materials used by the Division on
the Effective Date of the Asset Purchase Agreement in connection with the
Business, and to which Licensor owns or has the right to use all copyright
rights.
1
<PAGE>
1.7 Dealer. The term "Dealer" shall mean any Person (as that term is
------
defined in the Asset Purchase Agreement) that serves as Licensee's commissioned
sales agent for the Rental Business.
1.8 Division. The term "Division" shall mean Ryder Truck Rental, Inc.'s
--------
Consumer Truck Rental Division, which includes Ryder Move Management, Inc. and
Ryder Move Management, Inc.'s subsidiaries.
1.9 Heavy Duty Rentals. The term "Heavy Duty Rentals" shall mean rental
------------------
of trucks or other vehicles with a manufacturer's gross vehicle weight rating of
26,000 pounds or more.
1.10 Leasing. The term "Leasing" shall mean surrendering possession and
-------
the right to use a vehicle, for a period in excess of ninety days for
consideration, except under circumstances which satisfy the requirements of (a),
(b) and (c) of 1.19 below. Furnishing a vehicle 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 1.19 below shall be considered
Leasing.
1.11 Light Commercial Rental Business. The term "Light Commercial Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty Trucks 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 (e.g., rope, tape, bubble wrap, locks and similar moving supplies).
The term "One-Way Light Commercial Rental Business" shall mean Light Commercial
Rental Business" where the Light Duty 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 Light Duty Truck was picked up. The term "Local Light
Commercial Rental Business" shall mean Light Commercial Rental Business where
the Light Duty Truck is picked up and dropped off at the same rental office or
another rental office within 35 miles.
1.12 Light Duty Trucks. The term "Light Duty Trucks" shall mean trucks
-----------------
(excluding refrigerated trucks and stake trucks) owned by Licensee (or leased by
Licensee from affiliates of Licensee) with a manufacturer's gross vehicle weight
rating of less than 26,000 pounds.
1.13 Local Consumer Rental Business. The term "Local Consumer Rental
------------------------------
Business" shall mean (a) the rental of Light Duty Trucks within the Territory to
individuals for the transport of goods within the Territory for a non-business
purpose, which Light Duty 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 (e.g., rope, wazzu tape, bubble wrap, locks and similar
moving supplies).
2
<PAGE>
1.14 Marks. The term "Marks" shall have the meaning set forth in the
-----
Trademark License Agreement.
1.15 Move Management Business. The term "Move Management Business" shall
------------------------
mean (a) providing moving management 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 are relocating to take a position (or a different position) with the
customer or (ii) rental of a Light Duty 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, mortgage brokerage, and
(ii) through referral to third parties, home finding, home buy out and equity
funding, home purchase assistance, home marketing, property resale and closing
services, home inspections, interim housing, spousal job assistance, and
locating dependent care. In no event shall a Person (as that term is defined in
the Asset Purchase Agreement) be deemed to be engaging in the Move Management
Business due to performance of activities which constitute or are included in
the Light Commercial Rental Business or Local Consumer Rental Business. Move
Management Business shall not include Leasing or Heavy Duty Rentals.
1.16 New Services. The term "New Services" shall mean services that are
------------
not offered by the Division under the Marks on the date of execution of this
Agreement provided such services (a) are complementary and related to the Rental
Business or Move Management Business, (b) shall in no event in any way involve
driver rental or leasing, integrated logistics services, dedicated contract
carriage, cartage, common or contract carriage, truck maintenance to third
parties, car rental, Leasing or Heavy Duty Rentals, and (c) do not otherwise
violate this Agreement. It is understood that New Services shall include: (a)
public self storage facilities in connection with the Rental Business or Move
Management Business at locations operated by Licensee or a Dealer offering the
Rental Business or the Move Management Business, (b) any services constituting
the moving and management of moving of individuals' personal household goods
from one location to another within the Territory, and (c) services within the
Business not offered by the Division under the Marks on the date of execution of
this Agreement.
1.17 One-Way Consumer Rental Business. The term "One-Way Consumer Rental
--------------------------------
Business" shall mean (a) the rental of Light Duty Trucks within the Territory to
individuals for the transport of goods within the Territory for a non-business
purpose, which Light Duty 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
3
<PAGE>
Protection Products, and (iii) any sale of boxes or
other moving supplies (e.g., rope, tape, bubble wrap, locks and similar moving
supplies).
1.18 Protection Products. The term "Protection Product" shall mean the
-------------------
risk assurances sold to customers of the Rental Business under the following
names: TowGuard Protection, Personal Accident and Cargo Protection,
Supplemental Liability Protection, Physical Damage Waiver and Limited Damage
Waiver, and any successor or other similar risk assurance arrangements made
available to such customers.
1.19 Rental. The term "rental," when used independently of any other
------
defined term, shall mean a surrender of possession and right to use a vehicle,
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 do not
exceed one year, (b) there is no significant penalty or vehicle purchase
obligation for failure to extend or renew, and (c) the vehicle is not identified
with the customer's name, color or logo (other than any legally required placard
indicating the identity of the customer).
1.20 Rental Business. The term "Rental Business" shall mean the Light
---------------
Commercial Rental Business, the Local Consumer Rental Business and the One-Way
Consumer Rental Business.
1.21 Services. The term "Services" shall mean Used Truck Sales and those
--------
services offered by the Division within the Business under the Marks on the date
of execution of this Agreement.
1.22 Territory. The term "Territory" shall mean the contiguous forty-eight
---------
states of the United States of America and the State of Alaska.
1.23 Towing Equipment. The term "Towing Equipment" shall mean tow dollies,
----------------
car carriers and similar towing equipment owned by Licensee and used for the
Rental Business.
1.24 Trademark License Agreement. The term "Trademark License Agreement"
---------------------------
shall mean the Trademark License Agreement of even date herewith by and between
Ryder System, Inc. and Licensee.
1.25 Used Truck Sales. The term "Used Truck Sales" shall mean sales of
----------------
Light Duty Trucks formerly used by Licensee in connection with the Business and
the Household Goods Moving Business, provided any Marks thereon have been
removed prior to or at the time of sale.
4
<PAGE>
2. Grant of Rights .
----------------
2.1 Subject to the terms and conditions of this Agreement, Licensor hereby
grants to Licensee the right and license, during the term of this Agreement, to:
(a) prepare derivative works based upon the Copyrighted Works; and
(b) reproduce, distribute, display and transmit the Copyrighted Works and
any derivative works thereof,
but only in the Territory and only in connection with the marketing and sale of
Services and New Services; except that, nothing in this Agreement shall give
-----------
Licensee any right to use the Copyrighted Works in any manner that would violate
the provisions of the Trademark License Agreement or any other agreement by and
between Licensor and Licensee.
2.2 Licensee shall only have the right to grant non-exclusive restricted
sublicenses of its Section 2.1(a) rights to Dealers, provided, however, that
(A) the rights granted shall not be inconsistent with or more extensive in
scope or manner than Licensee's rights under this Agreement or in
violation of any other restriction imposed on Licensee under any other
agreements with Licensor,
(B) Licensee will be directly liable for any acts of Dealers which violate
the terms of this Agreement,
(C) each sublicense granted shall be personal to the Dealer (with no right
to assign or sublicense) and shall terminate immediately upon
termination of the respective Dealer agreement or upon request by
Licensee,
(D) Licensee will not appoint as a Dealer (i) any party listed in or
covered by Schedule 3, Paragraph 8, or (ii) any Affiliate (as that
term is defined in the Asset Purchase Agreement) of such party
(provided Licensee has actual knowledge of such affiliation and such
Affiliate shares such party's name and engages in Leasing, Heavy Duty
Rentals and/or integrated logistics services), and
(E) Within a reasonable period following execution hereof, Licensee will
incorporate the obligations of this Section in a written instrument
approved by Licensor, which instrument Licensee will require all
Dealers appointed following execution hereof to sign (except
Licensor).
5
<PAGE>
2.3 Licensor will not itself use or grant to any other party the right to
use the Copyrighted Works for One-Way Consumer Rental Business (except Licensor
may use the Marks as a Dealer in accordance with the Dealer Agreement between
Licensor and Licensee dated October 17, 1996 ("Dealer Agreement")), One-Way
Light Commercial Rental Business (except Licensor may use the Marks as a Dealer
in accordance with the Dealer Agreement) or Move Management Business. For
purposes of this Section 2.3 only, it is understood and agreed that a rental
that is covered by the definition of One-Way Consumer Rental Business 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 is not One-Way Consumer Rental
Business.
2.4 Licensor will not grant to any party who is not affiliated with
Licensor the right to use the Copyrighted Works for Local Light Commercial
Rental Business. For the purposes of this Section 2.4, "affiliated" shall mean,
for the duration of the Term hereof, any other party in which Licensor has at
least a fifty percent (50%) economic interest and which Licensor directly, or
through one or more intermediaries, controls or is under common control with,
and, if such a party 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 party who is controlled by any such member or trust.
As used in this definition, "control" (including, with a correlative meaning
"under common control with") shall mean possession, directly or indirectly, or
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interest, by
contract or otherwise).
2.5 Licensor will not grant to any other party the right to use the
Copyrighted Works for Local Consumer Rental Business.
2.6 Nothing herein shall prohibit Licensor from using or licensing another
party to use the Copyrights in any way which does not violate Section 2.3, 2.4
or 2.5 hereof or the Asset Purchase Agreement.
2.7 Licensor and Licensee acknowledge that all rights, licenses and
privileges not specifically granted herein are excluded from this Agreement.
3. Term.
----
This Agreement shall extend for a period of ten (10) years from the date of
this Agreement ("Term"), unless sooner terminated pursuant to Section 8.
6
<PAGE>
4. Ownership and Protection.
------------------------
4.1 Licensee acknowledges and agrees that Licensor is, and Licensor or its
successors or assigns shall remain, the owner of the Copyrights. Licensee shall
acquire no ownership interest in the Copyrights through this Agreement or
otherwise.
4.2 Licensor represents and warrants that, except as would not be
reasonably expected to have any material adverse effect on the Business, to the
best of Licensor's knowledge, none of the Copyrighted Works: (i) infringes or
otherwise violates the rights of others; (ii) is being infringed by others;
(iii) is subject to any outstanding order, decree, judgment, stipulation or
charge; or (iv) is subject to any license, sublicense or other encumbrance.
4.3 Licensee will fully cooperate with Licensor, at Licensor's expense, in
efforts to obtain, perfect and enforce Licensor's rights in the Copyrights.
4.4 Licensee will not do or permit to be done any action or thing which
will in any way impair Licensor's rights in and to the Copyrights.
4.5 Licensee will not contest or assist any other party in contesting the
validity or Licensor's ownership of the Copyrights.
5. Infringement and Defense
------------------------
5.1 Licensor shall have the sole right to control the prosecution and
settlement of any action, suit or other proceeding (collectively, "Prosecution")
respecting any infringement of the Copyrights (hereinafter "Infringement"),
including, without limitation, the decision whether to initiate a Prosecution.
5.2 Licensor shall have the right to control the defense and settlement
(collectively "Defense") of any allegation or claim by a third party of
infringement of rights of such third party arising from Licensee's use of the
Copyrights (collectively, "Claim") including, without limitation, the decision
whether to undertake a Defense, provided, however, that in the event Licensor
undertakes any Defense, Licensor shall promptly:
(a) notify Licensee of any material developments with respect to such
Defense;
(b) deliver to Licensee a copy of all pleadings, correspondence and other
material documents respecting such Defense; and
(c) notify Licensee of any offers of settlement related to such Defense
which it receives or which it proposes to make. Licensor shall not
offer, or accept any offer of a settlement that contains any material
8
<PAGE>
term or condition (other than the receipt or payment of money by
Licensor) which would have a material adverse impact on Licensee's use
of the Patents without the prior written consent of Licensee, which
consent shall be not unreasonably withheld or delayed.
5.3 Licensee will promptly notify Licensor of any Claim or any
Infringement that comes to its attention. Licensor will within thirty (30) days
from the date it receives notice from Licensee of a Claim or Infringement notify
Licensee of its decision as to whether it will undertake the Defense or
Prosecution respecting such Claim or Infringement. If Licensor elects not to
undertake the Defense or Prosecution or does not give timely notice to Licensee
of its decision with regard thereto, Licensee shall be authorized to undertake
the Defense of such Claim (at Licensor's cost and expense to the extent the
Claim arises out of Licensee's right to use the Copyrighted Works in connection
with the Business, and otherwise at Licensee's sole cost and expense) or
Prosecution of such Infringement (provided Licensee's Prosecution will not, in
Licensor's reasonable opinion, adversely effect Licensor's ownership or use of
the Copyrighted Works) at its sole cost and expense; provided however, that
Licensee will promptly:
(a) notify Licensor of any material developments with respect to such
Defense or Prosecution;
(b) deliver to Licensor a copy of all pleadings, correspondence and other
material documents respecting such Defense or Prosecution; and
(c) notify Licensor of any offers of settlement related to such Claim or
Infringement which it receives or which it proposes to make. Licensee
shall not offer, or accept any offer of, a settlement that contains
any material term or condition other than the receipt or payment of
money by Licensee without the prior written consent of Licensor, which
consent shall not be unreasonably withheld or delayed.
5.4 In the event Licensee undertakes any Defense or Prosecution, Licensor
reserves the right at any time to assume said Defense or Prosecution at its own
expense.
If any Prosecution results in a monetary judgment in favor of Licensor
or Licensee, the parties will negotiate in good faith an appropriate allocation
of those proceeds, after reimbursement of all attorneys' fees and costs incurred
in connection with said Prosecution has been made to the party bearing such fees
and costs.
8
<PAGE>
6. Independent Contractor.
----------------------
6.1 This Agreement does not create a fiduciary relationship between
Licensor and Licensee. Licensee shall be an independent contractor. Nothing in
this Agreement is intended to constitute either party an agent, legal
representative, subsidiary, joint venturer, partner, employee, franchisee, or
servant of the other for any purpose.
6.2 Nothing in this Agreement authorizes Licensee to make any contract,
agreement, warranty, or representation on Licensor's behalf, or to incur any
debt or other obligation in Licensor's name.
7. Indemnification.
---------------
7.1 Licensee shall indemnify and hold harmless Licensor, its successors
and assigns and each of their affiliates, officers, directors and employees from
any and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including reasonable attorneys' fees and
expenses) actually suffered or incurred by it, actually arising out of or
resulting from the Licensee's failure to meet any of its obligations hereunder
or from the addition of any material to the Copyrighted Works by or on behalf of
Licensee. At its sole option, Licensor may require Licensee to defend Licensor
against any claim set forth in this Section 7.1, using Licensee's own counsel
that meets Licensors approval.
7.2 Licensor shall indemnify and hold harmless Licensee, its successors
and permitted assigns and each of their affiliates, officers, directors and
employees from any and all liabilities, losses, damages, claims, costs and
expenses, interest, awards, judgments and penalties (including reasonable
attorneys fees and expenses) actually suffered or incurred by it, actually
arising out of or resulting from Licensor's failure to meet any of its
obligations hereunder.
7.3 Licensor shall not be liable or responsible in any manner to Licensee,
whether for indemnification or otherwise, except for indemnity as expressly
provided in this Section. Licensee acknowledges that Licensor is not making,
has not made and disclaims any representations or warranties including, without
limitation, any implied warranties except as set forth in Sections 2.3, 2.4,
2.5, 4.1 and 4.2.
8. Default and Termination.
-----------------------
8.1 Licensee shall be deemed to be in default under this Agreement, and
this Agreement and all rights granted hereunder will automatically terminate
without notice to Licensee, if any of the following events occur:
(a) if Licensee commences a voluntary case or other proceeding seeking
liquidation, rehabilitation, reorganization, conservatorship or other
relief for itself or its assets under bankruptcy, insolvency or other
similar laws, or seeking the appointment of a trustee, receiver or
9
<PAGE>
other similar official for itself or any substantial part of its
property, or consents to any such relief in an involuntary case or
proceeding commenced against it, or makes a general assignment for the
benefit of creditors, or takes any corporate action to authorize any
of the foregoing;
8.2 Licensee shall be deemed to be in default under this Agreement, and
Licensor may, at its option, immediately terminate this Agreement and all rights
granted hereunder upon notice to Licensee, if any of the following events occur:
(a) if there is any attempted assignment or sublicense of this Agreement
or any interest therein by Licensee, contrary to the terms hereof.
8.3 Licensee shall be deemed to be in default and Licensor may, at its
option, upon sixty (60) days written notice to Licensee terminate this Agreement
and all rights granted hereunder if any of the following events occur and
Licensee fails to cure the default within the sixty (60) day notice period:
(a) if Licensee breaches any of the covenants set forth herein, not
specified in Section 8.1 or 8.2; or
(b) if Licensee violates the competition provisions (Section 6.2) of the
Asset Purchase Agreement; or
(c) if any involuntary case or other proceeding is commenced against
Licensee seeking liquidation, rehabilitation, reorganization,
conservatorship or other relief with respect to it or to its assets
under any bankruptcy, insolvency or other similar law, or seeking the
appointment of a trustee, receiver or other similar official with
respect to it or any substantial part of its property.
8.4 Licensor shall be deemed to be in default under this Agreement, and
this Agreement will automatically terminate without notice to Licensor, in the
event:
(a) Licensor commences a voluntary case or other proceeding seeking
liquidation, rehabilitation, reorganization, conservatorship or other
relief for itself or its assets under bankruptcy, insolvency or other
similar laws, or seeking the appointment of a trustee, receiver or
other similar official for itself or any substantial part of its
property, or consents to any such relief in an involuntary case or
proceeding commenced against it, or makes a general assignment for the
benefit of creditors, or takes any corporate action to authorize any
of the foregoing.
10
<PAGE>
8.5 Licensor shall be deemed to be in default and Licensee may, at its
option, upon sixty (60) days written notice to Licensor terminate this Agreement
and all rights granted hereunder if any of the following events occur and
Licensor fails to cure the default within the sixty (60) day notice period:
(a) if any involuntary case or other proceeding is commenced against
Licensor seeking liquidation, rehabilitation, reorganization,
conservatorship or other relief with respect to it or to its assets
under any bankruptcy, insolvency or other similar law, or seeking the
appointment of a trustee, receiver or other similar official with
respect to it or any substantial part of its property, or
(b) Licensor breaches any of its representations or covenants hereunder.
If Licensee terminates this Agreement on account of Licensor's default,
Licensee may seek monetary relief, specific performance or injunctive relief.
If a court should order specific performance in the form of a license to use the
Marks, Licensor and Licensee agree that they will execute such an agreement on
terms no less favorable to Licensor than those set forth herein.
8.6 If the Trademark License Agreement terminates for any reason, this
Agreement shall terminate immediately.
9. Obligations Upon Termination or Expiration.
------------------------------------------
9.1 Upon termination or expiration of this Agreement, all rights granted
hereunder to Licensee shall terminate. In addition, upon termination or
expiration, Licensee shall:
(a) cease reproducing, distributing and displaying all Copyrighted Works
and cease preparing any derivative works thereof;
(b) promptly return to Licensor and/or destroy all Copyrighted Works.
Licensee shall retain no copy or record of any of the foregoing,
excepting only Licensee's copy of this Agreement and of any
correspondence between the parties, and any other documents which
Licensee reasonably needs for archival purposes or compliance with any
provision of law; and
(c) promptly pay all sums owing to Licensor, including all damages, costs
and expenses, including reasonable attorneys' fees incurred by
Licensor as result of any default.
11
<PAGE>
10. Amendments and Waivers/Attorney Fees.
------------------------------------
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.
The prevailing party in any action to enforce this Agreement shall recover from
the other party all costs and expenses, including reasonable attorneys' fees,
incurred therein.
11. Assignment.
----------
11.1 Licensee may assign this Agreement, upon 10 days prior notice to and
without the consent of Licensor, only to a party who purchases or acquires, as a
going concern, the business of Licensee or all or substantially all of
Licensee's assets, provided, however, that any assignee of this Agreement must
(a) agree with Licensor, in writing, to be bound by the terms and provisions
hereof, (b) have a debt/equity ratio as good as Licensee's at the time of
execution hereof, (c) be the assignee of the competition provisions in Section
6.2(d) of the Asset Purchase Agreement and the following agreements defined in
the Asset Purchase Agreement (to the extent such agreements are still existing
at the time of such assignment): (i) the Trademark License Agreement, (ii) the
Software License Agreement, (iii) the Dealer 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 or an affiliate (as that term is defined in the Asset Purchase
Agreement) of any of any of the parties set forth in paragraph number 8 on
Schedule 3 of the Trademark License Agreement. In addition, Licensee may assign
its rights hereunder to any lenders which provide financing to Licensee for the
purpose of consummating the transactions contemplated under the Asset Purchase
Agreement, or refinancing any such financing, including any successors thereto.
Except as expressly set forth in this Section 11.1, Licensee may not assign its
rights in this Agreement.
11.2 This Agreement may be assigned, transferred, sublicensed or otherwise
delegated by Licensor following notice to but without the prior written consent
of Licensee.
11.3 This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of, and be enforceable by, only the parties hereto and
their respective successors and permitted assigns. This Agreement is not
intended to confer upon anyone not a party hereto any rights or remedies
hereunder.
12
<PAGE>
12. Entire Agreement.
----------------
This Agreement and the Schedules and Exhibits hereto and the Asset Purchase
Agreement 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.
13. Survival.
--------
The rights and obligations set forth in Sections 4.1, 4.4, 7 and 9 shall
survive termination of this Agreement.
14. Counterparts; Facsimile Signatures.
----------------------------------
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.
15. 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
Licensor shall be addressed to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
or at such other address and to the attention of such other party as Licensor
may designate by written notice to Licensee.
Notices to Licensee shall be addressed to:
13
<PAGE>
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, Florida 33166
Attention: President
with a copy to:
Questor Management Company
4000 Town Center, Suite 530
Southfield, Michigan 48075
Attention: President
and with an additional copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino
or at such other address and to the attention of such other party as Licensee
may designate by written notice to Licensor.
16. Dispute Resolution; Governing Law and Jurisdiction.
--------------------------------------------------
16.1 The parties agree that if any disputes arise under Section 2, senior
management of the parties will meet (or designate other representatives to meet)
and negotiate in good faith in an attempt to resolve the dispute. In the event
that the parties are unable to resolve the dispute within thirty (30) days from
the date of written notice of disagreement, either party may submit and the
other party may agree to refer the dispute to binding mediation which shall be
conducted under the then applicable rules of the CPR/INTA Alternative Dispute
Resolution Program, or such other mediation process which shall be agreed to by
the parties. None of the remaining provisions of this Agreement, including
without limitation, the provisions of Section 8 (Default and Termination) shall
be subject to this dispute resolution provision. Notwithstanding anything in
this Section 16.1, this section shall not prohibit either party from immediately
seeking equitable relief in court if it so desires.
16.2 Except as set forth in Section 16.1, this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of New
York U.S.A. without regard to its provisions concerning conflicts or choice of
law. The parties consent to the jurisdiction of the courts situated in New York
for the resolution of any disputes as to the construction of this Agreement.
16.3 Notwithstanding the foregoing, Licensee acknowledges that its failure
to comply with its obligations under this Agreement could cause immediate and
14
<PAGE>
irreparable harm to Licensor for which money damages would be inadequate.
Accordingly, in the event of Licensee's breach of this Agreement, Licensor may
seek equitable relief, including specific performance of Licensee's obligations
and injunctive relief to prevent Licensee's continued use of the Marks. Such
remedy shall not be deemed to be the exclusive remedy for breach but shall be in
addition to all other remedies available at law or in equity.
17. Bankruptcy.
----------
All rights and licenses granted under or pursuant to this Agreement by
Licensor are, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to "intellectual property" as defined under Section 101 of
the U.S. Bankruptcy Code.
18. Severability.
------------
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.
19. Interpretation; Absence of Presumption.
--------------------------------------
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.
(CONTINUED ON NEXT PAGE)
15
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Copyright License
Agreement to be executed by their duly authorized officers as of the date first
written above.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC. (f/k/a
"Licensor" RCTR HOLDINGS, INC.)
"Licensee"
By:/s/ Dwight D. Denny By:/s/ Wallace Rueckel
------------------- -------------------
Name: Dwight D. Denny Name: Wallace Rueckel
Title: Executive Vice Title: Senior V.P. & Treasurer
President Development
<PAGE>
EXHIBIT 10.13
-------------
SOFTWARE LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT ("Agreement") is entered into as of
this 17th day of October, 1996 (the "Effective Date") between Ryder Truck
Rental, Inc., a Florida corporation with its principal place of business at 3600
N.W. 82nd Avenue, Miami, Florida 33166 (hereinafter "Ryder") and Ryder TRS, Inc.
(f/k/a RCTR Holdings, Inc.), a Delaware corporation with its principal place of
business at 8669 N.W. 36th Street, Miami, Florida 33166 (hereinafter "TRS").
TRS and Ryder are at times referred to herein individually as a "Party" and
collectively, as the "Parties".
WHEREAS, Ryder and TRS are parties to an Asset and Stock Purchase
Agreement dated September 19, 1996 (the "Asset Purchase Agreement") under which
TRS is purchasing from Ryder certain assets and businesses of Ryder's Consumer
Truck Rental division ("Division") and under which the Parties have agreed
that: (i) TRS will be granted a license to use, pursuant to the terms and
conditions set forth herein, certain computer software and related documentation
currently used by Ryder, and (ii) Ryder will be granted a license to use,
pursuant to the terms and conditions set forth herein, certain computer software
and related documentation transferred from Ryder to TRS under the Asset Purchase
Agreement.
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein and in the Asset Purchase Agreement, the adequacy of which is
hereby acknowledged, the Parties agree as follows:
1 Definitions. The following terms, when used in this Agreement with initial
-----------
capital letters, shall have the respective meanings set forth in this
Section 1. Capitalized terms not defined in this Section 1 shall have the
meanings given in the Asset Purchase Agreement.
1.1 TRS Software. The term "TRS Software" means those software programs
------------
set forth on Exhibit A to this Agreement and Related Documentation
---------
pertaining thereto.
1.2 Related Documentation. The term "Related Documentation" as used
---------------------
herein shall mean human-readable source code with comments,
user/operator/programmer documentation, manuals, data/file
structures, or any other related materials, but only to the extent
such materials are in existence and presently available for use in
the normal course as of the Effective Date of this Agreement.
<PAGE>
1.3 Ryder Software. The term "Ryder Software" means those software
--------------
programs set forth on Exhibit B to this Agreement and Related
---------
Documentation pertaining thereto.
2 Ryder's License to TRS. Subject to the terms and conditions set forth
----------------------
herein and Section 6.2(d) of the Asset Purchase Agreement, Ryder hereby grants
to TRS and its Affiliates a worldwide, perpetual, royalty-free, nontransferable
(subject to the provisions set forth herein), non-exclusive license to use, copy
and modify the Ryder Software and make derivative works therefrom at any site
and on any computer central processing unit(s). The Software may be utilized by
employees and agents of TRS, provided, however, that any agents who utilize the
-------- -------
Ryder Software agree to be bound by the restrictions contained in Sections 7 and
10.7 herein.
3 TRS's License to Ryder. Subject to the terms and conditions of this
----------------------
Agreement, TRS grants to Ryder and its Affiliates a worldwide, perpetual,
royalty-free, nontransferable (subject to the provisions set forth herein),
nonexclusive license, to use, copy and modify the TRS Software and make
derivative works therefrom at any site and on any computer central processing
unit to use in Ryder's business operations provided, however, that Ryder shall
-------- -------
not use the TRS Software in contravention of the non-compete provisions of the
Asset Purchase Agreement. The Software may be utilized by employees and agents
of Ryder, provided, however, that any agents who utilize the TRS Software agree
-------- -------
to be bound by the restrictions contained in Sections 7 and 10.7 herein.
4 Royalties and Fees.
------------------
Neither party shall be entitled to royalties or license fees in
consideration of the licenses granted under this Agreement.
5 Termination.
-----------
5.1 Termination for Breach.
----------------------
(a) If either Party (hereinafter called the "Breaching Party") shall
breach any of its material obligations under this Agreement, the other
Party (hereinafter called the "Non-Breaching Party") may give written
notice to the Breaching Party specifying the nature of such breach and
stating that the Non-Breaching Party intends to terminate the license it
granted to the other Party hereunder if such default is not cured within
forty-five (45) days of such written notice. If any breach so specified
is not cured within such period, the Non-Breaching Party may elect to
immediately terminate the license it granted to the other Party hereunder.
Such termination shall be effective upon giving a written notice of
termination from the Non-
-2-
<PAGE>
Breaching Party to the Breaching Party and shall be without prejudice to
any other remedy which may be available to the Non-Breaching Party against
the Breaching Party .
5.2 Termination for Insolvency.
--------------------------
Either Party may immediately terminate the license it granted to the
other Party hereunder by a written notice to the other without any prior
written notice upon the occurrence of any of the following events: (i)
the other Party voluntarily enters into proceedings in bankruptcy or
insolvency; (ii) the other Party shall make an assignment for the benefit
of creditors; (iii) a petition shall be filed against the other Party
under a bankruptcy law, a corporate reorganization law, or any other law
for the relief of debtors (or similar law in purpose or effect) and such
petition shall not have been dismissed within sixty (60) days; or (iv) the
other Party enters into liquidation or dissolution proceedings.
5.3 Effects of Termination.
----------------------
5.3.1 Termination of Ryder Software License. Upon termination of
-------------------------------------
the license of the Ryder Software for any reason, TRS shall immediately
cease using the Ryder Software and shall return all copies of the Ryder
Software in its possession to Ryder.
5.3.2 Termination of TRS Software License. Upon termination of the
-----------------------------------
license of the TRS Software for any reason, Ryder shall immediately cease
using the TRS Software and shall return all copies of the TRS Software in
its possession to TRS.
6 Warranty Disclaimer and Limitation of Damages. THE RYDER SOFTWARE AND THE
---------------------------------------------
TRS SOFTWARE ARE PROVIDED "AS IS" AND "WITH ALL FAULTS." NEITHER PARTY
SHALL HAVE ANY OBLIGATION UNDER THIS AGREEMENT TO PROVIDE TO THE OTHER
PARTY ANY MAINTENANCE OR SUPPORT SERVICES WHATSOEVER WITH RESPECT TO THE
SOFTWARE IT IS LICENSING TO THE OTHER PARTY HEREUNDER (INCLUDING, WITHOUT
LIMITATION, ANY SERVICES TO CORRECT MALFUNCTIONS, MODIFY OR ENHANCE THE
SOFTWARE), PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT BE DEEMED TO
RELIEVE RYDER FROM ANY OF ITS OBLIGATIONS SET FORTH IN THE MIS SUPPORT
AGREEMENT OF EVEN DATE. RYDER AND TRS EXPRESSLY DISCLAIM ALL WARRANTIES
WITH RESPECT TO THE RYDER SOFTWARE AND THE TRS SOFTWARE, RESPECTIVELY,
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY USAGE OF TRADE
OR COURSE OF DEALING, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (EXCEPT AS
EXPRESSLY SET FORTH IN THE ASSET PURCHASE AGREEMENT), NO MISAPPROPRIATION
(EXCEPT AS EXPRESSLY SET FORTH IN THE ASSET PURCHASE AGREEMENT) AND
NONINFRINGEMENT (EXCEPT AS EXPRESSLY SET FORTH IN THE ASSET PURCHASE
AGREEMENT). NEITHER PARTY
-3-
<PAGE>
SHALL IN ANY EVENT BE LIABLE FOR PUNITIVE, SPECIAL, DIRECT, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES
FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR ANY OTHER LOSS)
ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR
REGARDING THE LICENSES GRANTED HEREUNDER, WHETHER CLAIMED UNDER CONTRACT,
TORT OR ANY OTHER LEGAL THEORY OR FOR LOSS OR DAMAGE TO THE OTHER PARTY'S
DATA OR PROGRAMMING; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT
PRECLUDE EITHER PARTY FROM EXERCISING ANY OF ITS RIGHTS UNDER THE ASSET
PURCHASE AGREEMENT IN ACCORDANCE WITH THE TERMS THEREOF. EXCEPT AS SET
FORTH IN SECTION 9, RYDER'S AND TRS'S SOLE LIABILITY TO EACH OTHER AND
THEIR SOLE REMEDY AVAILABLE UNDER THIS AGREEMENT SHALL BE REASONABLE
COOPERATION IN OBTAINING FOR THE ACCOUNT OF THE USER REPAIR OR REPLACEMENT
OF THE FUNCTIONALITY OF ANY SOFTWARE THAT FAILS TO CONTINUE TO PERFORM AT
THE LEVEL AT WHICH IT PERFORMS AS OF THE CLOSING.
7 Confidential Information. Each Party shall use reasonable efforts, and at
------------------------
least the same care that it uses to protect its own proprietary information
of like importance, to prevent unauthorized dissemination or disclosure of
the software owned by the other Party both during and after the term of
this Agreement.
8 Software Ownership.
------------------
8.1 Ryder Software. The Ryder Software and Related Documentation are the
--------------
property of Ryder and remain so even after delivery to TRS.
8.2 TRS Software. The TRS Software and Related Documentation are the
------------
property of TRS and remain so even after delivery to Ryder.
9 Remedies. Each Party acknowledges that its breach of Article 2 (in the
--------
case of TRS), Article 3 (in the case of Ryder), Article 7 (in the case of
each Party) or Section 10.7 (in the case of each Party) would cause
immediate and irreparable harm to the other Party for which money damages
would be inadequate. Therefore, each Party shall be entitled to injunctive
relief for the other Party's breach of said Articles without proof of
actual damages and without the posting of bond or other security. Such
remedy shall not be deemed to be the exclusive remedy for breach of said
Articles but shall be in addition to all other remedies available at law or
in equity.
10 General.
-------
10.1 Relationship of the Parties. It is expressly understood and agreed
---------------------------
that this Agreement does not constitute either Party as an employee,
partner, joint venturer, agent or other representative of the other
-4-
<PAGE>
Party for any purpose whatsoever. Neither Party has the right or
authority to enter into any contract, warranty, guarantee or other
undertaking in the name of or for the account of the other Party, or
to assume or create any obligation or liability of any kind, express
or implied, on behalf of the other Party, or to bind the other Party
in any manner whatsoever, or hold itself out as having any right,
power or authority to create any such obligation or liability on
behalf of the other or to bind the other Party in any manner
whatsoever (except as to any actions taken by either Party at the
express written request and direction of the other Party).
10.2 Force Majeure. Neither Party shall be liable for its failure or
-------------
delay in fulfilling its obligations hereunder, if such failure or delay is
caused by fire, flood, weather conditions or other Acts of God, invasions,
insurrections, riots, closing of the public highways, strike, lockout or
other labor dispute, civil unrest, war or any other reason beyond the
reasonable control of the Party. In the case of strikes, lockouts or
other labor disputes, it is understood that such event is beyond the
reasonable control of the party suffering the event unless and until the
Party is able to resolve it in a manner which such Party deems reasonable
and appropriate.
10.3 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.
10.4 Governing Law; Jurisdiction and Forum.
-------------------------------------
10.4.1 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, except for matters of Florida corporate
law, as to which such law shall apply.
10.4.2 Ryder and TRS 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. Ryder and TRS hereby irrevocably waive the defense of
an inconvenient forum to the maintenance of any such action or proceeding.
-5-
<PAGE>
10.4.3 By the execution and delivery of this Agreement, TRS (i)
irrevocably designates and appoints Jay Alix & Associates ("JA&A"), 575
Fifth Avenue, New York, New York 10017, 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 TRS may at any time designate
and appoint in lieu of JA&A 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 TRS in any such action or proceeding. TRS 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.
10.5 Entire Agreement. This Agreement 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. This Agreement is not intended to confer
upon anyone not a party hereto any rights or remedies hereunder.
10.6 Notices. All notices shall be in writing and delivered personally or
-------
sent by nationally recognized overnight delivery service (e.g., Federal
Express) or registered or certified mail, return receipt requested, to the
appropriate address set forth below. Notices to Ryder shall be addressed
to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
with a copy to:
Ryder System, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: General Counsel
-6-
<PAGE>
or at such other address and to the attention of such other person as
Ryder may designate by written notice to TRS. Notices to TRS shall be
addressed to:
Ryder TRS, Inc.
c/o Questor Management Company
4000 Town Center, Suite 530
Southfield, MI 48075
Attention: President
with a copy to:
Ryder TRS, Inc.
8669 N.W. 36th Street
Miami, FL 33166
Attention: Gerald R. Riorden
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
Attention: Thomas M. Cerabino, Esq.
or at such other address and to the attention of such other person as
TRS may designate by written notice to Ryder.
10.7 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: (i) TRS may assign this Agreement, upon 10
days prior written notice to and without the consent of Ryder, to a party
who purchases or acquires, as a going concern, the business of TRS or all
or substantially all of TRS's assets, provided, however, that any assignee
of this Agreement must (a) agree with Ryder, in writing, to be bound by
the terms and provisions hereof, (b) have a debt/equity ratio as good as
TRS's at the time of execution hereof, (c) be the assignee of the
competition provisions in Section 6.2(d) of the Asset Purchase Agreement
and the following agreements defined in the Asset Purchase Agreement (to
the extent such agreements are still existing at the time of such
assignment): (1) the Copyright License Agreement, (2) the Administrative
Services Agreement, (3) the Trademark Agreement, (4) the Dealer Agreement,
(5) the Vehicle Maintenance Agreement, (6) the MIS Support Agreement, and
(7) 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 Agreement, (ii)
Ryder may assign this Agreement, upon 10 days prior written notice to and
without the consent of TRS, to a party who purchases or acquires, as a
going concern, the business of Ryder or all or substantially all of
Ryder's assets, provided, however, that any assignee of
-7-
<PAGE>
this Agreement must (a) agree with TRS, in writing, to be bound by the
terms and provisions hereof, and (b) have a debt/equity ratio a good as
Ryder's at the time of execution hereof. TRS may assign its rights
hereunder to any lenders which provide financing to TRS for the purpose of
consummating the transactions contemplated under the Asset Purchase
Agreement, or refinancing any such financing, including any successors
thereto.
10.8 Headings; Definitions. The headings contained in this Agreement are
---------------------
inserted for convenience of reference only and will not affect the meaning
or interpretation of the 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.
10.9 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.
10.10 Interpretation; Absence of Presumption. 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.
10.11 Severability. 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.
10.12 Survival. The provisions contained in Sections 5.3, 6, 7, 9 and
--------
this Section 10 shall survive the termination of this Agreement for any
reason whatsoever.
(CONTINUED ON NEXT PAGE)
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Software License
Agreement to be executed by their duly authorized officers as of the date first
written above.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC. (f/k/a
"RYDER" RCTR HOLDINGS, INC.)
"TRS"
By: /s/Dwight D. Denny By:/s/ Wallace L. Rueckel
------------------ ----------------------
Dwight D. Denny Wallace L. Rueckel
Executive V.P.-Development Senior Vice President &
Treasurer
-9-
<PAGE>
EXHIBIT 10.15
-------------
[Letterhead of Jay Alix & Associates, Inc.]
October 15, 1996
Mr. Wallace L. Rueckel
Ryder TRS, Inc.
4000 Town Center, Suite 530
Southfield, Michigan 48075
Re: Advisory, Restructuring and Turnaround Services
Dear Mr. Rueckel:
This letter outlines the understanding between Jay Alix & Associates, a Michigan
corporation ("JA&A") and Ryder TRS, Inc. (the "Company") of the objective,
tasks, work product and fees for the engagement of JA&A to provide advisory,
restructuring and turnaround services to the Company.
OBJECTIVE
Assist the Company and its management and new owners to achieve the business
plan and objectives that have been set out in the deal syndication book prepared
by Questor Management Company. Such plan reflects realization of financial
benefits from initiatives that will be focused on improving the Company's income
statement, balance sheet, organization structure and corporate processes.
TASKS
Conduct a comprehensive review of the Company through meetings with key
employees, on-site operations review and analysis of financial and other
information to gain a working knowledge of the Company and identify areas of
opportunity.
. Assess and develop a plan to realign the Company's organization structure
appropriate to meeting the Company's objective.
. Develop the goals, measurements, structure and composition of Profit
Improvement Teams that will be made up of Company employees.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 2
. Assist in selecting members for the Steering Committee and Profit Improvement
Teams, and assist in structuring their organization.
. Develop and provide training for Profit Improvement Team leaders.
. Organize and lead the Profit Improvement Team kick-off meeting.
. Assist the Company in developing a communications program for Profit
Improvement Teams, including key messages and communications vehicles
targeted at employees, shareholders, customers, vendors and others.
. Actively participate as facilitators to Profit Improvement Teams and assist
in monitoring and reporting on their progress.
. Provide oversight assistance during the implementation process for
initiatives that are identified by Profit Improvement Teams and approved by
the Steering Committee.
. Assist in measuring financial and other benefits derived from the Profit
Improvement Team process.
. Assist in developing a cash flow forecasting model.
. Assist in challenging capital spending plans to help assure that such
expenditures are necessary, appropriately timed and effective as proposed.
. Assist in evaluating proposed contracts to make recommendation to the Board
of Directors as to the terms proposed and necessity of the contract.
. Assist in other matters as may be mutually agreed upon.
WORK PRODUCT
. Our work product will be in the form of:
. Information to be discussed with you and others, as you may direct.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 3
. Written reports and analysis worksheets to support our suggestions as we deem
necessary or as you may request.
STAFFING
Lawrence J. Ramaekers will be the principal responsible for the overall
engagement. He will be assisted by a staff of consultants at various levels,
all of whom have a wide range of skills and abilities related to this type of
assignment.
PROFESSIONAL FEES
We charge a combination of hourly and success fees, as follows:
ESTIMATED HOURLY FEES
Based on our current understanding of the situation, we estimate the total
hourly fees will be $2.6 million; however, the actual hourly fees may be
higher or lower depending on a number of factors that cannot be precisely
estimated. This estimate includes out of pocket cash expenses, such as
travel and lodging that we estimate will approximate 10% of hourly fees.
We will require a retainer of $250,000. Invoices for hourly fees and out
of pocket cash expenses will be rendered semi-monthly and are due upon
receipt.
Hourly rates are based upon the following schedule:
<TABLE>
<CAPTION>
----------------------------------------------------------------
Staff Classification Rate Range
----------------------------------------------------------------
<S> <C>
Principals *
----------------------------------------------------------------
Senior Associates *
----------------------------------------------------------------
Associates and Consultants *
----------------------------------------------------------------
</TABLE>
For purposes of planning, we estimate that hourly fees will be incurred as
follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------
Time Period Per Month Cumulative
----------------------------------------------------------------
<S> <C> <C>
Months 1 to 6 $300,000 $1,800,000
----------------------------------------------------------------
Months 7 and 8 $200,000 $2,200,000
----------------------------------------------------------------
Months 9 through 12 $100,000 $2,600,000
----------------------------------------------------------------
</TABLE>
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 4
CONTINGENT SUCCESS FEES
In addition to hourly fees, the Company has agreed to pay a contingent
success fee based upon achieving the Company's business plan of EBITDA
equal to * for 1997 and * for 1998 (unless such business plan is
reduced in negotiation between management and Questor in which case the
lower amount shall be the threshold). Further, in determining the EBITDA
results achieved, there shall not be deducted as an expense, restructuring
charges or other start-up costs. This formula will also be adjusted up or
down for changes, errors or omissions in plan activities and unusual or
unplanned items not related to turnaround activities, such as an
acquisition or similar event.
<TABLE>
<CAPTION>
----------------------------------------------------------
Success Fee Level 1997 Plan 1998 Plan
----------------------------------------------------------
<S> <C> <C>
Achieve Plan * *
----------------------------------------------------------
First $10 Million Over Plan * *
----------------------------------------------------------
Next $10 Million Over Plan * *
----------------------------------------------------------
Next $10 Million Over Plan * *
----------------------------------------------------------
Next $10 Million Over Plan * *
----------------------------------------------------------
More Than $40 Million Over Plan * *
-------------------------------------------------------
</TABLE>
PAYMENT OF CONTINGENT SUCCESS FEE
The amount of contingent success fee earned will be payable in cash.
SEMI-MONTHLY BILLINGS
As noted, we will require a retainer of $250,000 to be applied against the time
charges, excluding expenses, specific to the engagement. We will submit semi-
monthly invoices for services rendered and expenses incurred as described above,
and we will offset such invoices against the retainer. Payment will be due upon
receipt of the invoices to replenish the retainer to the agreed upon amount.
Any unearned portion of the retainer will be returned to you at the termination
of the engagement.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 5
RELATIONSHIP OF THE PARTIES
The parties intend that an independent contractor relationship will be created
by this agreement. JA&A is not to be considered an employee or agent of the
Company and the employees of JA&A are not entitled to any of the benefits that
the Company provides for the Company's employees.
The Company also agrees not to solicit or recruit any employees or agents of
JA&A for a period of two years subsequent to the completion and/or termination
of this agreement.
CONFIDENTIALITY
JA&A agrees to keep confidential all information obtained from the Company.
JA&A agrees that neither it nor its directors, officers, principals, employees,
agents or attorneys will disclose to any other person or entity, or use for any
purpose other than specified herein, any information pertaining to the Company
or any affiliate thereof which is either non-public, confidential or proprietary
in nature ("Information") which it obtains or is given access to during the
performance of the services provided hereunder. JA&A also agrees that only
those of its directors, officers, principals, employees, agents and attorneys
who have a need-to-know to perform the services contracted herein and are under
an obligation to maintain the confidentiality of the Information will be given
access to the Information. JA&A may make reasonable disclosures of Information
to third parties in connection with their performance of their obligations and
assignments hereunder. In addition, JA&A will have the right to disclose to
others in the normal course of business its involvement with the Company.
Information includes data, plans, reports, schedules, drawings, accounts,
records, calculations, specifications, flow sheets, computer programs, source or
object codes, results, models, or any work product relating to the business of
the Company, its subsidiaries, distributors, affiliates, vendors, customers,
employees, contractors and consultants.
The Company acknowledges that all advice (written or oral) given by JA&A to the
Company in connection with JA&A's engagement is intended solely for the benefit
and use of the Company (limited to its management, shareholders and others, such
as lenders, who have a need for access to it) in considering the transactions to
which it relates. The Company agrees that no such advice shall be used for any
other purpose or reproduced, disseminated, quoted or referred to at any time in
any manner or for any purpose other than
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 6
accomplishing the tasks and programs referred to herein or in discussions with
the Company's lenders or debt holders, without JA&A's prior approval (which
shall not be unreasonably withheld) except as required by law. This agreement
will survive the termination of the engagement.
FRAMEWORK OF THE ENGAGEMENT
The Company acknowledges that it is not hiring JA&A because of its CPA
credentials, but purely to assist and advise the Company in business planning
and restructuring. JA&A's engagement shall not constitute an audit, review or
compilation, or any other type of financial statement reporting engagement that
is subject to the rules of the AICPA or other such state and national
professional bodies.
INDEMNIFICATION
In engagements of this nature, it is our practice to receive indemnification.
Accordingly, in consideration of our agreement to act on your behalf in
connection with this engagement, you agree to indemnify, hold harmless, and
defend us (including our principals, employees and agents) from and against all
claims, liabilities, losses, damages and reasonable expenses as they are
incurred, including reasonable legal fees and disbursements of counsel, and the
costs of our professional time (our professional time will be reimbursed at our
rates in effect when such future time is required), relating to or arising out
of the engagement, including any legal proceeding in which we may be required or
agree to participate but in which we are not a party. We, our principals,
employees and agents may, but are not required to, engage a single firm of
separate counsel of our choice in connection with any of the matters to which
this indemnification agreement relates. This indemnification agreement does not
apply to actions taken or omitted to be taken by us in bad faith or from our
gross negligence. This agreement will survive the termination of the
engagement.
TERMINATION AND SURVIVAL
The agreement may be terminated at any time by written notice by one party to
the other; provided, however, that notwithstanding such termination JA&A will be
entitled to any fees and expenses due under the provisions of the agreement.
Such payment obligation shall inure to the benefit of any successor or assignee
of JA&A.
The obligations of the parties under the Indemnification and Confidentiality
sections of this agreement shall survive the termination of the agreement as
well as the other sections
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 7
of this agreement which expressly provide that they shall survive termination of
this agreement.
GOVERNING LAW
This letter agreement is governed by and construed in accordance with the laws
of the State of Michigan with respect to contracts made and to be performed
entirely therein and without regard to choice of law or principles thereof.
CONFLICTS
We know of no fact or situation which would represent a conflict of interest for
us with regard to the Company. We do wish to disclose the following
information:
. All of the Principals of JA&A, including Jay Alix, the Managing General
Partner of Questor Partners Fund, L.P. own general and/or limited partnership
interests in Questor Partners Fund, L.P. or Questor Side-by-Side Partners,
L.P., a related entity.
. Chase Bank, a lender to the Company and one of the equity investors in the
new entity, is also a limited partner of Questor.
. Ryder System, Inc., the seller of the Company's assets, is presently a client
of JA&A. Work on that engagement is currently on-going.
SEVERABILITY
If any portion of the letter agreement shall be determined to be invalid or
unenforceable, we each agree that the remainder shall be valid and enforceable
to the maximum extent possible.
ENTIRE AGREEMENT
All of the above contains the entire understanding of the parties relating to
the services to be rendered by JA&A and may not be amended or modified in any
respect except in writing signed by the parties.
NOTICES
All notices required or permitted to be delivered under this letter agreement
shall be sent, if to us, to the address set forth at the head of this letter, to
the attention of Mr.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Mr. Wallace L. Rueckel
January 19, 1997
Page 8
Melvin R. Christiansen, and if to you, to the address for you set forth above,
to the attention of your General Counsel, or to such other name or address as
may be given in writing to the other party. All notices under the agreement
shall be sufficient if delivered by facsimile or overnight mail. Any notice
shall be deemed to be given only upon actual receipt.
If these terms meet with your approval, please sign and return the enclosed copy
of this proposal and return it with the amount required to establish the
retainer.
We look forward to working with you.
Sincerely yours,
JAY ALIX & ASSOCIATES
Lawrence J. Ramaekers
Principal
Acknowledged and Agreed to:
By: /s/ Wallace L. Rueckel
Its: Chairman
Dated: October 15, 1996
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
