SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 19, 1996
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Florida 1-4364 59-0739250
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3600 N.W. 82nd Avenue, Miami, Florida 33166
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (305) 593-3276 <PAGE>
Item 5. Other Events.
On September 19, 1996, Ryder System, Inc. (the "Com-
pany") announced that it had entered into a definitive agree-
ment to sell its Ryder Consumer Truck Rental business unit to a
consortium of investors led by Questor Partners Fund, L.P.
("Questor") for approximately $575 million. The transaction is
expected to close in October of 1996.<PAGE>
Item 7. Financial Statements and Exhibits.
The following are filed as exhibits to this Report:
10.1. Press release issued by the Company on
September 19, 1996.
10.2. Asset and Stock Purchase Agreement, dated
as of September 19, 1996, between Ryder
Truck Rental Inc. (a wholly-owned
subsidiary of the Company), and RCTR
Holdings, Inc. (an affiliate of Questor).<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: September 19, 1996
RYDER SYSTEM, INC.
By: /s/ Edward R. Henderson
Name: Edward R. Henderson
Title: Associate General Counsel
and Assistant Secretary<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
10.1. Press release issued by the Company on
September 19, 1996
10.2. Asset and Stock Purchase Agreement, dated as of
September 19, 1996, between Ryder Truck Rental,
Inc. (a wholly-owned subsidiary of the
Company), and RCTR Holdings, Inc. (an affiliate
of Questor).
EXHIBIT 10.1.
[RYDER LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: Art Stone
(305) 500-3180
RYDER AGREES TO SELL CONSUMER TRUCK RENTAL BUSINESS UNIT
MIAMI, FLORIDA, September 19, 1996 -- Ryder System, Inc. (NYSE:R)
has signed a definitive purchase agreement to sell its Ryder Consumer
Truck Rental business unit for approximately $575 million to a consortium
of investors led by Questor Partners Fund, L.P., it was announced here
today by Ryder Chairman, President and Chief Executive Officer M. Anthony
Burns. The agreement is subject to U.S. Government approval and certain
other customary conditions. Neither Ryder's commercial truck rental bus-
iness nor its Canadian consumer truck rental business is included in the
sale.
The sale, at a gain, will be for cash, Burns said. "We may use the
proceeds of this sale to pay down debt, to invest in global Integrated
Logistics and our other contractual businesses, or to buy back Ryder
stock," he added.
Continuing, Burns said, "The sale of Consumer Truck Rental is con-
sistent with our ongoing strategy to focus the majority of our resources
and energy on the businesses in which we have long-term relationships
with our customers -- integrated logistics on a global basis, full
service truck leasing and public transportation services."
- o -
Note to Editor
Ryder provides high-quality logistics and transportation solu-
tions throughout the United States and in Canada, the United Kingdom,
Germany, Poland, Mexico, Brazil and Argentina. Revenue in the 12 months
ended June 30, 1996 was $5.36 billion. Assets at June 30, 1996 were
$6.01 billion.
Ryder's stock is a component of the Dow Jones Transportation
Average and the Standard & Poor's 500 Index.
RYDER SYSTEM, INC.
3600 NW 82 Avenue, Miami, FL 33166
EXHIBIT 10.2.
EXECUTION COPY
===================================================
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
ARTICLE I
Definitions
Section 1.1 Definitions 1
ARTICLE II
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
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
-i-<PAGE>
Page
Number
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
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
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
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
Additional Agreements
Section 6.1 Collection of Payments 54
Section 6.2 Competition 55
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Page
Number
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
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
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
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
-iii-<PAGE>
Page
Number
ARTICLE IX
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
Section 9.5 Financing 79
Section 9.6 Material Approvals 80
Section 9.7 Audited Financials 80
ARTICLE X
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
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
Termination
Section 12.1 Termination 85
Section 12.2 Procedure and Effect of Termination 86
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Page
Number
ARTICLE XIII
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
-v-<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 Part-
nership
Exhibit O Form of Letter of Credit
-vi-<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: Calcula-
tion 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
-vii-<PAGE>
THIS ASSET AND STOCK PURCHASE AGREEMENT (this
"Agreement"), dated as of September 19, 1996, is by and be-
tween Ryder Truck Rental, Inc., ("Seller"), a corporation
organized under the laws of Florida and a wholly owned sub-
sidiary 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 sub-
sidiary 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 consider-
ation, the receipt and sufficiency of which is hereby ac-
knowledged, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. As used in this Agree-
ment the following terms shall have the following respective
meanings:
"Accessories" shall mean hand trucks, moving dol-
lies 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. <PAGE>
"Action" shall mean any actual or threatened ac-
tion, suit, arbitration, inquiry, proceeding or investigation
by or before any Government Authority or arbitral tribunal.
"Adjusted Closing Date Statement of Net Book As-
sets" 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, "Af-
filiated") 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 princi-
pal 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 securi-
ties or partnership or other ownership interests, by contract
or otherwise).
"Agreement" shall have the meaning set forth in the
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, de-
crees, administrative and judicial doctrines, and other laws
that are designed or intended to prohibit, restrict or regu-
late actions having the purpose or effect of monopolization
or restraint of trade.
"Asset and Stock Purchase" shall mean the consumma-
tion of the transactions described in Section 2.1.
"Assets" shall have the meaning set forth in Sec-
tion 2.1.
"Assigned Leases" shall mean collectively the
leases set forth on Schedule 1.1(a).
-2-<PAGE>
"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 re-
ceived 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.
"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 pur-
suant to this Agreement.
"Business Condition" shall have the meaning set
forth in Section 3.1.
"Business Day" shall mean a Monday, Tuesday, Wed-
nesday, 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 Sec-
tion 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 sat-
isfied or duly waived.
-3-<PAGE>
"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 agree-
ment or understanding between Buyer and Seller with respect
to the Shared Facilities.
"Copyright License Agreement" shall mean the copy-
right 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 rea-
sonable attorneys' fees and expenses incurred in defending
any Action).
"CRCS Contract" shall mean the Customer Reserva-
tion/Customer Service Software Development Contract dated as
of April 17, 1995, between EDS and Seller, as amended, pursu-
ant 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 com-
missioned sales agent for the Rental Business.
"Determination" shall mean a "determination" as de-
fined 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.
-4-<PAGE>
"DOT Number" shall have the meaning set forth in
Section 6.6.
"Encumbrances" shall mean mortgages, liens, encum-
brances, security interests, covenants, conditions, restric-
tions, 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.
"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 instrumen-
tality 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 Anti-
trust 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 Agree-
ment.
-5-<PAGE>
"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 cir-
cumstances which satisfy the requirements of (a), (b) and (c)
of the definition of Rental below. Furnishing a truck, trac-
tor 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 defini-
tion 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 Lon-
don 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 date, the
edition published on the most recent preceding date.
"Licensed Software" shall mean the software li-
censed to Buyer under the Software License Agreement.
"Licenses" shall have the meaning set forth in Sec-
tion 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 sup-
plies. 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).
-6-<PAGE>
"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 house-
hold goods), which Trucks are returned to the original rent-
ing office, and (b) in connection therewith, (i) any rental
of Accessories or Towing Equipment, (ii) any sale of Protec-
tion 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 stud-
ies 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, load-
ing, and/or movement of the household goods of their
employees/members (or future employees/members) who are relo-
cating 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) of-
fering to individuals for whom such moves or rentals are ar-
ranged, real estate brokerage referrals and/or certain as-
sistance 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 find-
ing, home buyout and equity funding, home purchase as-
sistance, home marketing, property resale and closing ser-
vices, home inspections, interim housing, school match, mort-
gage brokerage, finding rental housing, spousal job as-
sistance, and locating dependent care. In no event shall a
Person be deemed to be engaging in the Move Management Busi-
ness due to the performance of activities which constitute or
-7-<PAGE>
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 Ten-
nessee corporation which is an Affiliate of Seller and which
acts as a wholesale distributor of truck parts and compo-
nents.
"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
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 re-
spect 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 re-
spect to the space sub-leased by Buyer to Seller but rather
these costs shall be capitalized and amortized, and paid rat-
ably by Buyer to Seller over a five year period (provided
that Buyer shall be required to pay to Seller any amortized
-8-<PAGE>
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 rent-
ing office, and (b) in connection therewith, (i) any rental
of Accessories or Towing Equipment, (ii) any sale of Protec-
tion Products and (iii) any sale of boxes or other moving
supplies.
"Patent License Agreement" shall mean the patent li-
cense agreement to be entered into by Seller and Buyer in the
form of Exhibit F.
"PBGC" shall mean the Pension Benefit Guaranty Cor-
poration, 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 simi-
lar liens arising in the ordinary course of business with
respect to any Asset, in each case, that do not have a mate-
rial adverse effect on the value or use of such Asset, (3)
mechanics liens for work performed on any Asset for which
payment therefor is not in default and (4) those Encumbrances
disclosed in the Seller Disclosure Schedule.
"Person" shall mean any individual, corporation, part-
nership, joint venture, trust, unincorporated organization,
other form of business or legal entity or Government Author-
ity.
"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.
-9-<PAGE>
"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 com-
mercial 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.
"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
-10-<PAGE>
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 ob-
ligation 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 le-
gally required placard indicating the identity of the cus-
tomer).
"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 Agree-
ment 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.
"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.
-11-<PAGE>
"Service Agreements" shall mean the Maintenance Agree-
ment, Administrative Services Agreement, MIS Support Agree-
ment, 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 Busi-
ness 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 Account-
ing Standard, except for matters and amounts specifically de-
scribed 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 be-
tween Seller and certain Transferred Employees to encourage
such employees to remain with the Business through the Clos-
ing 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.
"subsidiary" of any Person shall mean any corporation
of which at least a majority of the outstanding capital stock
-12-<PAGE>
having voting power under ordinary circumstances to elect
directors of such corporation shall at the time be held, di-
rectly or indirectly, by such Person, by such Person and one
or more subsidiaries of such Person or by one or more subsid-
iaries 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 of-
ficial 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 re-
sult 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, li-
cense, social security, workers' compensation, unemployment
compensation, utility, severance, production, excise, stamp,
occupation, premium or transfer taxes and customs duties, to-
gether with any interest, additions to tax or penalties im-
posed with respect thereto and (ii) any obligations under any
agreements or arrangements with respect to any taxes de-
scribed in clause (i) above.
"Taxing Authority" shall mean any Government Authority
having jurisdiction over the assessment, determination, col-
lection, 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.
-13-<PAGE>
"Transferred Employee" shall mean a Listed Employee who
is offered employment in the Business by Buyer and who ac-
cepts such employment prior to the Closing Date and who be-
comes an employee of Buyer as of the Closing.
"Transferred Intellectual Property" shall mean Trans-
ferred Patents, Transferred Software and Transferred Trade-
marks.
"Transferred Patents" shall mean the United States pat-
ents 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, collec-
tively, 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 be-
tween United Parcel Service and Seller with respect to a na-
tional 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 fran-
chisee 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 mean-
ing set forth in Section 6.17.
-14-<PAGE>
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-
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 (col-
lectively, 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 manu-
facturers 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 Ve-
hicle Trade and Body Package;
(l) the Division Light Commercial Data Base;
-15-<PAGE>
(m) (i) all accounting and other books and
records, cost information, sales and pricing data, mainte-
nance, 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 main-
tained 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, re-
ports, plans and documents if reasonably necessary for the
performance of services under agreements 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 ex-
traction 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 Li-
abilities), (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 ac-
counting and other books and records, reports, plans or docu-
ments relate to the Business, Assets and/or Assumed Li-
abilities and Seller keeps or retains the original thereof or
a copy thereof, Seller shall not transfer the portion per-
taining to the Business to any third party, other than as
necessary in connection with any of the services to be per-
formed 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 ap-
plicable exclusively to the Trucks or utilized exclusively in
the Business, including without limitation unamortized li-
cense, permit or authorization fees (except as to licenses,
permits, or authorizations related to the Division which are
-16-<PAGE>
not conveyable or assignable to Buyer or with respect to
which Buyer cannot receive value therefrom), phonebook adver-
tising, fuel tax, general advertising, and accessory prod-
ucts; 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 ac-
cident report has been filed with respect thereto with Seller
prior to the Closing Date, or any Truck which has been dam-
aged in an accident prior to Closing Date which accident oc-
curred 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 manu-
facturers' 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 head-
quarters (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, in-
spection and repair records and reports, and other books,
records, reports, plans and documents which in each case do
-17-<PAGE>
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 Affili-
ates relating to employee benefits, employment or compensa-
tion;
(d) any rights of Seller which are contingent on
the satisfaction of liabilities that are Retained Liabili-
ties;
(e) all reserves (other than depreciation reserves
or other reserves which relate to any Assets to be trans-
ferred to Buyer pursuant to clause 2.1(p) related to the As-
sets, including reserves which relate to the accounts re-
ceivable of the Subsidiaries, arising from the operation 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 equiva-
lents, 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 in-
surance policies which were made prior to the Closing (other
than pending claims for physical damage made under any insur-
ance 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 re-
spect 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 Li-
abilities;
(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
-18-<PAGE>
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 Trade-
marks), software (other than the Transferred Software), pat-
ents (other than the Transferred Patents), and copyrights, in
each case, used in the Business or owned or licensed by Sell-
er, Ryder System or any Affiliate thereof, and other intel-
lectual property rights of Seller, Ryder System or any Af-
filiate 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 Subsid-
iaries 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:
(a) except as otherwise provided in this Agree-
ment, all liabilities and obligations arising out of the con-
duct 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 lia-
bility so arising, notwithstanding that after Closing an in-
surance 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 con-
dition 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 ex-
penses) is alleged to have occurred prior to the Closing and
also excepting as to (i) and (ii) above environmental li-
ability 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;
-19-<PAGE>
(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 environ-
mental matters covered in (d) above), all liabilities and
obligations arising in connection with the Business as a re-
sult of any act or failure to act, in each case whether be-
fore, 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, when-
ever arising (whether before, on or after the Closing), which
relate to or arise out of the CRCS Contract;
(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 cur-
rent 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 prod-
ucts or services related thereto, or (ii) accepted quota-
tions, 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;
-20-<PAGE>
(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 Clos-
ing 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 de-
fense costs or expenses) is alleged to have occurred prior to
the Closing (and including, without limitation, any li-
abilities and obligations arising out of any lawsuit, action,
administrative or other proceeding or governmental investiga-
tion pending against Seller prior to the Closing) or which
constitutes environmental liability retained by Seller pursu-
ant to Section 2.4(d) below;
(c) with respect to contracts related to the Busi-
ness (other than the CRCS Contract), all liabilities or obli-
gations 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
-21-<PAGE>
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 environ-
mental matters covered in (d) above), all liabilities and
obligations arising in connection with the Business as a re-
sult 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 transac-
tions" within the meaning of Treasury Regulations Section
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
Section 1.1502-6 or any analogous provision of state or local
law by virtue of having been a member of any affiliated, con-
solidated, 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 rev-
enues which are for the account of Seller pursuant to Section
2.8(a);
(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
-22-<PAGE>
hereof, under the Accounting Standard except for matters and
amounts specifically described in Schedule 1.1(f);
(i) except as to liabilities and obligations re-
flected 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 Agree-
ment").
(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 ben-
eficial 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 behalf 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 di-
rectors 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 trans-
actions contemplated by this Agreement by Seller, and a cer-
tificate 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 re-
quired pursuant to Section 9.2, and (F) stock certificates
representing the Subsidiaries' Shares duly endorsed in blank
-23-<PAGE>
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 ex-
ecute the Trademark License Agreement, Software License
Agreement, Maintenance Agreement, Administrative Services
Agreement, Copyright License Agreement, Patent License Agree-
ment, 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 Agree-
ment by Buyer, and a certificate of its secretary or assis-
tant secretary, dated as of the Closing Date, that such reso-
lutions 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.
Section 2.6. Time and Place of Closing. The Clos-
ing 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 effec-
tive as of 12:01 A.M. New York City time on the Closing Date.
-24-<PAGE>
Section 2.7. Purchase Price Adjustment. (a) No
later than 45 days after the Closing Date Seller shall pre-
pare 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 prepara-
tion of such Statement of Net Book Assets and shall grant
Seller and Seller's accountants and representatives such ac-
cess as may be reasonably requested to the books, records or
other information related to the Business in Buyer's posses-
sion 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 re-
ceipt 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 ob-
jection 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
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 per-
centage which the portion of the contested amount not awarded
-25-<PAGE>
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 dis-
pute. 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 Audi-
tor's determination shall be made within 45 Business Days of
submission thereto of the dispute, whether or not any presen-
tation 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 Pur-
chase Price, Seller shall refund to Buyer the difference be-
tween such amounts; if the Purchase Price is less than the
Final Purchase Price, Buyer shall pay to Seller the differ-
ence between such amounts. Such refund or payment shall be
made no later than the third Business Day following the de-
termination 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 trans-
actions for Trucks which were under contract as of the Clos-
ing 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
-26-<PAGE>
Closing Date in connection with the One-Way Rental Busi-
ness shall be for the account of Buyer in an amount de-
termined 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 con-
tract 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 deter-
mined 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 reve-
nues 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 pur-
suant 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").
-27-<PAGE>
(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 re-
ceipt 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
such schedule and specifying in reasonable detail all dis-
puted 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 Resolu-
tion 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 Audi-
tor shall act as an arbitrator to determine, based on presen-
tations by Buyer and Seller, and not by independent review,
only those issues still in dispute. The accounting princi-
ples which shall prevail for the purpose of resolving any
dispute pursuant to this Section 2.8(c) shall be the Account-
ing 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 pur-
suant 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
-28-<PAGE>
Proration Amount, Buyer shall pay Seller the difference be-
tween such amounts. If the Final Buyer Proration Amount dif-
fers 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 Amount in accordance with Section 2.8(b) and/or Section
2.8(c), by wire transfer in immediately available funds, to-
gether 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 re-
fund 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 sub-
ject to any holdbacks, escrows or other reductions or re-
strictions.
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 in-
corporation. 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 ju-
risdiction in which the nature of property owned or leased by
it or the conduct of its business requires it to be so quali-
fied, except where the failure to be in good standing or to
be duly qualified to transact business would not, individu-
ally or in the aggregate, have a material adverse effect on
the business, assets, results of operations or financial con-
dition of the Business taken as a whole (the "Business Condi-
tion").
(b) Except as set forth in Section 3.1(b) of the
Seller Disclosure Schedule, each of the Subsidiaries is (i)
-29-<PAGE>
duly incorporated and validly existing under the laws of the
jurisdiction of its incorporation and has all requisite cor-
porate 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 aggre-
gate, 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 receiv-
ables. All such jurisdictions are set forth in Section
3.1(b) of the Seller Disclosure Schedule.
(c) Seller has full corporate power and authority
to execute and deliver this Agreement and the other agree-
ments and instruments delivered by Seller pursuant to this
Agreement and to perform its obligations hereunder and there-
under. 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 autho-
rized 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 incorpora-
tion or by-laws, (ii) violate any provision of any Subsid-
iary's certificate of incorporation or by-laws or similar
organizational instrument, (iii) except as disclosed in Sec-
tion 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 ac-
celeration of or entitle any party to accelerate (whether
after the giving of notice or lapse of time or both) any ob-
ligation 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 Subsidiar-
ies is a party or by which any of them is bound, or (iv) ex-
cept 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 Subsid-
iaries or any of their properties or assets or any other ma-
terial restriction of any kind or character to which Seller
-30-<PAGE>
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 abil-
ity to consummate the Asset and Stock Purchase. This Agree-
ment 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 de-
livery hereof by Buyer, this Agreement and the other agree-
ments 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, reorga-
nization, 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).
(d) Upon consummation of the Asset and Stock Pur-
chase 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 au-
thorized 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 out-
standing stock and equity interests of each of the subsidiar-
ies 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. Ex-
cept 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
-31-<PAGE>
legal or equitable encumbrances. Except as disclosed in Sec-
tion 3.2 of the Seller Disclosure Schedule, there are no out-
standing 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 Sub-
sidiaries.
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 Fi-
nancial 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 pe-
riod 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 Un-
audited Balance Sheet" and, together with the Unaudited Fi-
nancial Statements and the 1996 Unaudited Financial State-
ments, the "Business Unaudited Financial Statements"). Ex-
cept as set forth in Section 3.3(a) of the Seller Disclosure
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 com-
plete, 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 in-
dividually accounted for on the Business Unaudited Financial
Statements consistent with past practice and in accordance
with the Accounting Standard. Those Ryder policies and pro-
cedures comprising the Accounting Standard, and the applica-
tions of GAAP which they represent, will prevail in any mat-
ter 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 divi-
sional 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
-32-<PAGE>
and cash flows for the six month period ending June 30, 1996,
together with the notes and schedules thereto (the "1996 Au-
dited 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 Account-
ing Standard and shall be accompanied by a report of KPMG to
the effect that such statements fairly present in all mate-
rial 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 pre-
vail in any matter concerning a Business Audited Financial
Statement so long as they are consistent with GAAP.
(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 Au-
gust 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 con-
trolled 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 Un-
audited 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 Subsid-
iaries has a leasehold interest and which are used in connec-
tion with the Business. Except for any of the following that
-33-<PAGE>
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 oth-
erwise 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 ac-
cordance 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 As-
signed Lease is past due; (iv) Seller, and to Seller's knowl-
edge 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 en-
cumbered its interest in any premises covered by the Assigned
Leases, nor has it assigned its interest under any 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 Intel-
lectual Property, Section 3.5 of the Seller Disclosure Sched-
ule includes each item of Personal Property as of July 31,
-34-<PAGE>
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, administra-
tive 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, ad-
ministrative or arbitration or other proceedings or govern-
mental investigations pending or, to Seller's knowledge,
threatened against Seller or any of the Subsidiaries or any
of their respective officers, directors, employees, or Af-
filiates involving, affecting or relating to the Business,
the Assets or the transactions contemplated by this Agree-
ment, 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, ac-
tions, 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 dis-
closed 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 Sched-
ule, as of the date hereof, there are no judgments or out-
standing 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 busi-
nesses that would reasonably be expected to, individually or
in the aggregate, have a material adverse effect on the Busi-
ness Condition or that would have a material adverse effect
on Seller's ability to consummate the Asset and Stock Pur-
chase.
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 Intel-
lectual 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;
-35-<PAGE>
(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 in-
fringed upon by others, and none is subject to any outstand-
ing order, decree, judgment, stipulation or charge;
(d) no licenses, sublicenses or agreements grant-
ing 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 inter-
ference or infringement of any of the Transferred Intellec-
tual 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 Authoriza-
tions, Consents, Reports, etc. (a) Section 3.8(a) of the
Seller Disclosure Schedule includes all material licenses,
permits, franchises and other authorizations of any Govern-
ment Authority possessed by or granted to Seller or any of
the Subsidiaries in connection with the Business (the "Li-
censes"). Except as disclosed in Section 3.8(a) of the
Seller Disclosure Schedule, all such Licenses have been val-
idly 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 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 Sched-
ule lists all registrations, filings, applications, notices,
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consents, approvals, orders, qualifications and waivers re-
quired 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 asso-
ciations 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 involv-
ing 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 actuar-
ial reports, (iv) material written communications to employ-
ees 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
from any plan described in Section 3(37) of ERISA (a "Multi-
employer Plan") prior to the date hereof, nor have any of
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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 contribu-
tion 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 con-
tributions and employee salary reduction contributions) re-
quired to have been made with respect to the Business Employ-
ees 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 ex-
pects 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 end-
ing on the date hereof, and the date of each such termina-
tion, 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 Ad-
justment and Retraining Notification Act ("WARN") could occur
based on subsequent terminations; provided, that this sen-
tence shall not apply with respect to any site of employment
at which sufficient employees have not been employed at any
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time in such 90-day period for terminations of employment at
such site to be subject to WARN.
(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, judg-
ments, 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 mate-
rial adverse effect on the Business Condition.
(b) Section 3.11 of the Seller Disclosure Schedule
sets forth information as to any violation or alleged vio-
lation, with respect to any real property leased by the Busi-
ness, 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 pollut-
ants, poisoned waste wells, or the storage, treatment or dis-
posal of solid or hazardous or toxic substances (collec-
tively, "Environmental Law") of which the Business has re-
ceived 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 cur-
rently, 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 ex-
penditures for purposes of compliance therewith, except for
such violations, expenditures, or non-compliance, as would
not, individually or in the aggregate, have a material ad-
verse 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.
-39-<PAGE>
(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
property to be used for the maintenance and servicing of ve-
hicles.
(d) Except as disclosed in Section 3.11 of the
Seller Disclosure Schedule, to Seller's knowledge, no asbes-
tos 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 haz-
ardous substance, pollutant or contaminant, as defined in any
Environmental Law, and no oil, as defined in the Oil Pollu-
tion Act of 1990, 33 U.S.C. Section 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 pres-
ence 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 in-
surance 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 ter-
mination 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 regula-
tions.
(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
-40-<PAGE>
that, if after the date hereof Seller becomes aware of a Con-
tract that was not, but should have been, set forth in Sec-
tion 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 Sched-
ule, no Contract contains any provision which creates, or
purports to create, or subjects Seller or any of its Affili-
ates to, any restriction on any business activity that may be
conducted by Seller or any of its Affiliates through non-
competes, exclusive dealing arrangements or minimum or "re-
quirements" purchase arrangements (collectively, the "Re-
strictive Provisions"), other than any Contract to which sub-
clause (i) of the first sentence of this Section 3.13 per-
tains 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 Con-
tracts 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 bank-
ruptcy, 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 de-
fault 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, de-
faults 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 Busi-
ness 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, con-
sistent 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
-41-<PAGE>
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 interme-
diary 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
been any material adverse change in the business, assets,
financial condition, or results of operations of the Busi-
ness, 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; Suffi-
ciency 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 Affili-
ates 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 Agree-
ment, 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 soft-
ware) or the effect on the Business of any Purchasing Ar-
rangement 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 mater-
ial to the Business.
-42-<PAGE>
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 mater-
ial to the Business, other than any trademark which is or
includes "Ryder".
The copyrights licensed to Buyer under the Copy-
right 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 com-
plete and correct lists of (a) all customers of the Business
who have made aggregate purchases in excess of 1% of aggre-
gate total Division revenue in 1995, setting forth the ag-
gregate dollar volume of purchases with respect to such fis-
cal 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 (bro-
ken 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 dur-
ing 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 Decem-
ber 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 refer-
enced 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,
-43-<PAGE>
be deemed to be disclosed with respect to that other para-
graph 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 EX-
PRESSLY GIVEN IN THIS AGREEMENT, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION,
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PUR-
POSE AS TO ANY OF THE ASSETS AND IT IS UNDERSTOOD THAT, EX-
CEPT 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 PRO-
VIDED TO BUYER OR ANY OF ITS AFFILIATES, AGENTS OR REPRESEN-
TATIVES ARE NOT AND SHALL NOT BE DEEMED TO BE REPRESENTATIONS
OR WARRANTIES OF SELLER.
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 con-
tained 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 accor-
dance 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.
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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 ac-
celerate (whether 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 ad-
verse 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,
-45-<PAGE>
reorganization, moratorium or other laws relating to or af-
fecting 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 bro-
ker, 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 Authoriza-
tions, Consents, Reports, etc. Schedule 4.3 contains a list
of all registrations, filings, applications, notices, con-
sents, 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 sta-
tus of Seller or (ii) the failure to make, file, give or ob-
tain which would not, individually or in the aggregate, ei-
ther have a material adverse effect on the assets or finan-
cial 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 con-
firms that Seller has made available to Buyer the opportunity
to ask questions of the officers and management of Seller and
to acquire information about the business and financial con-
dition of the Business.
Section 4.5. Financial Capability. Buyer has de-
livered to Seller complete and correct copies of (i) a com-
mitment letter addressed to Buyer from each of The Chase Man-
hattan 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
-46-<PAGE>
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 ex-
pects will prevent the availability at the Closing of the
requisite financing to consummate the transactions contem-
plated by this Agreement on the terms set forth herein, as
provided in the Financing Commitments. The equity contrib-
uted 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 representa-
tion not made in this Agreement, the schedules, the exhibits,
the Seller Disclosure Schedule, the Trademark License Agree-
ment, Software License Agreement, Maintenance Agreement, Ad-
ministrative Services Agreement, Copyright License Agreement,
Used Truck Sales Agreement, Ryder Dealer Agreement, MIS Sup-
port Agreement, Office Sublease Agreement, Patent License
Agreement, Vehicle Nominee Title Agreement or any Shared Fa-
cility 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.
ARTICLE V
Covenants of Seller and Buyer
Section 5.1. Investigation of Business. After the
date hereof, Seller shall, and shall cause the Subsidiaries
to, afford to representatives (including Buyer's financing
sources for the transactions contemplated by this Agreement)
of Buyer reasonable access to their respective offices, prop-
erties, 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 Busi-
ness; 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 Sub-
sidiaries 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 representa-
tives of Seller as Seller shall designate, who shall be
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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 em-
ployees, customers, bankers, contractors, suppliers, joint
venture partners, dealers, or Affiliates of Seller, in con-
nection with the transactions contemplated hereby, whether in
person or by telephone, mail or other means of communication,
without the specific prior authorization of such representa-
tives 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 rep-
resentation 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; Anti-
trust 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 advis-
able to consummate and make effective as promptly as practi-
cable, 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 pay-
ment, 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 re-
straining order or other order adversely affecting the abil-
ity of the parties hereto to consummate the transactions con-
templated hereby, (iv) to effect all necessary registrations
and filings including, but not limited to, filings under the
HSR Act and submissions of information requested by any Gov-
ernment 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
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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 forego-
ing, 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 there-
of receives a request for additional information or documen-
tary 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 trans-
actions 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 in-
tents 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,
or contemplated by, this Agreement, and, except with the
written consent of Buyer, which consent (other than with re-
spect to subclause (c) of this Section 5.4) shall not be un-
reasonably 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
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the ordinary course of business consistent with past prac-
tice;
(b) except in the ordinary course of business con-
sistent 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 con-
sistent with past practice, or as required by law or contrac-
tual obligations or other understandings or arrangements ex-
isting on the date hereof, (i) increase in any manner the
base compensation of, or enter into any new bonus or incen-
tive 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 com-
pensation 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 insur-
ance, 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 Em-
ployee; 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 con-
sistent with past practice, or as required by law or contrac-
tual 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 bal-
ance of the planned capital expenditures under the Business's
1996 capital expenditure budget;
(g) fail to keep in full force and effect insur-
ance (including casualty and public liability policies) com-
parable in amount, scope and coverage maintained in respect
of the Business as of the date hereof;
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(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 ter-
minate any Contract listed in Section 3.13 of the Seller Dis-
closure Schedule, or make or enter into any new Contract, bid
or expenditure with respect to the Business where such Con-
tract, bid or expenditure is for (A) a Contract which at ex-
ecution requires committed, certain future payments by the
Business in excess of $100,000 in the aggregate or (B) a Con-
tract which is not terminable within 100 days;
(k) make, enter into, modify or amend in any mate-
rial respect any Assigned Leases;
(l) settle, release or forgive any claim or liti-
gation or waive any right thereto which relates to the Assets
(other than any claim or litigation which is a Retained Lia-
bility); 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 de-
posit 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 busi-
ness of the Business intact, to keep available to the Busi-
ness the services of the employees and dealers of the Busi-
ness and to preserve the good will of customers and others
having business relations with the Business;
(b) continue to maintain, in all material re-
spects, 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 Govern-
mental Authority in connection with the transactions contem-
plated by this Agreement and the other agreements entered
into by Seller in connection with the transactions contem-
plated 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 state-
ments 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 Sell-
er's facility located at Royal Palm Executive Center to per-
mit 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
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and hold Buyer harmless from any Claims relating to the fail-
ure to comply with such laws.
Section 5.9. Insurance. If so requested by Buyer,
Seller shall, prior to the Closing Date, use Seller's reason-
able efforts to assist Buyer, at Buyer's expense pursuant to
the next sentence, in securing insurance coverage and Protec-
tion Products with respect to the Business from Seller's in-
surance carriers. Buyer shall reimburse Seller for Seller's
out-of-pocket expenses incurred in connection with so assist-
ing Buyer, promptly after invoicing thereof.
Section 5.10. Non-Solicitation. (a) For a period
commencing on the date hereof and ending on the second anni-
versary 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 po-
sitions 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 "so-
licitation" 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 acqui-
sition 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 other-
wise material to, the Business or the Assets or enter into
any agreement with respect to the foregoing, or (b) partici-
pate 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 en-
courage, 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
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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 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 op-
portunity, 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.
ARTICLE VI
Additional Agreements
Section 6.1. Collection of Payments. Following
the Closing Date, except as otherwise provided in this Agree-
ment 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; pro-
vided 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 re-
ceivable; provided further that Buyer shall have no obliga-
tion 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 for-
ward 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 com-
munications 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.
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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 Commer-
cial 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 other-
wise, in Leasing or in Heavy Duty Truck Rentals, then through
a further period ending no more than two (2) years following
the end of the term of the Trademark License Agreement) (the
"Seller NonCompete Period"), without the prior written con-
sent 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 out-
door 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 fran-
chisees or other third party dealers or agents or otherwise
than through locations operated by Seller or Affiliates con-
trolled by Seller. Nothing in the preceding sentence or oth-
erwise 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, di-
rectly or indirectly in any such business (whether as a
stockholder (other than an investment of up to 5% of the out-
standing 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 Busi-
ness 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
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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 fol-
lowing 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
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 loca-
tions 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 manu-
facturer'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 under-
stood, 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 quar-
ters 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
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conduct of its Business (and if, except through (e) below,
Seller does not engage, through a Seller Affiliate or other-
wise, in the One-Way Consumer Rental Business or One-Way
Light Commercial Rental Business, then through a further pe-
riod 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 Busi-
nesses (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 Per-
son (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 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 un-
dertaken between Buyer and its Controlled Entities or among
Controlled Entities of the Buyer.
If (A) Buyer at any time during the Buyer NonCom-
pete 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 con-
trolled 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 Affili-
ate")), (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
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written notice any or all of the Service Agreements shall
terminate; provided, however, that (A) Buyer shall be af-
forded 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 com-
mitment not to further engage in the activity, directly or
indirectly, or resume the affiliation, then Seller shall re-
scind 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 ef-
fect 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 operate such
businesses under a name that includes the name Ryder and (2)
divests or liquidates such businesses within 12 months fol-
lowing 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 in-
valid 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 Com-
pany 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 ver-
sion of a phonebook, then at Seller's option the Percentage
with respect to such phonebook shall be deemed to be 30%.
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The price Seller shall pay for such space shall equal the
Percentage multiplied times the price Buyer pays for the com-
bined 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 advertis-
ing 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 Con-
sumer 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. Fol-
lowing 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 geo-
graphic 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
(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
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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 Agree-
ment, 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 num-
ber as "1-800-GO-RYDER" in any truck Rental or Leasing busi-
ness 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.
Section 6.5. Referral. For the purposes of this
Section 6.5 the defined terms One-Way Consumer Rental Busi-
ness, 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
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(c) in the case of both Seller and Buyer, for a
period of 2 years following the Closing Date, any Rental be-
ing 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 con-
tract to which Seller is a party, thereby ending the appli-
cable 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 Informa-
tion. (a) At any time and from time to time following the
Closing Date, Buyer or Seller shall provide Seller or Buyer,
as the case may be, their respective accountants and counsel,
during normal business hours, upon reasonable request, rea-
sonable access to such books, records and other data and to
the employees engaged in the Business or any successor there-
to to the extent that such access may be requested (i) with
respect to information relating to periods prior to the Clos-
ing Date, for any reasonable business purpose related to op-
eration of the Business and (ii) with respect to information
relating to the Closing Date and periods prior to or follow-
ing the Closing Date, information and data required by Sell-
er'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
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file with respect to the operations and business of the Busi-
ness through or following the Closing Date or to respond to
audits by any Taxing Authorities with respect to such opera-
tions and to otherwise enable Seller or Buyer, as the case
may be, to satisfy its internal accounting and tax require-
ments, provided that the requesting party pays for the rea-
sonable 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 inves-
tigation 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 determina-
tions by any Taxing Authority and records concerning the own-
ership 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 pur-
suant 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 infor-
mation 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 in-
formation to a "needs to know" basis.
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
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regular business hours with respect to Buyer's planned fi-
nancing 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 re-
spect 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 state-
ments for the Business for the nine months ended Septem-
ber 30, 1996 and the year ended December 31, 1995); provided
however that such assistance and cooperation shall be pro-
vided 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 activi-
ties 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 Clos-
ing Date or such longer period as may be required by law,
Buyer or Seller, as the case may be, shall retain, and nei-
ther 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 activi-
ties 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 Infor-
mation 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 Affili-
ates 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
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
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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 ex-
pense, to control any audit or examination by any Taxing Au-
thority ("Tax Audit"), initiate any claim for refund, con-
test, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relat-
ing to any and all Taxes other than Taxes, if any, that con-
stitute 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 set-
tling any such issue or filing an amended return relating to
any such issue. Buyer shall have the right, at its own ex-
pense, 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 end-
ing 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 fil-
ing an amended return relating to any such issue. Each party
shall furnish the other party with its cooperation in a man-
ner 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 proxi-
mate 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 purchases by
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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 of-
fered to Dealers shall be determined by the same pricing
methodology reflected in the pricing of Parts offered by Net-
work 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 Af-
filiates to be substituted in all respects for Seller or Ry-
der System, effective as of the Closing, in respect of all
obligations of Seller or Ryder System under each of the guar-
anties, 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 Busi-
ness, which guaranties, letters of credit, letters of com-
fort, bid bonds and performance bonds are set forth in Sec-
tion 6.10 of the Seller Disclosure Schedule (the "Guaran-
ties"). 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 re-
spect to the obligations covered by each of the Guaranties
for which Buyer does not effect such substitution. As a re-
sult of the substitution contemplated by the first sentence
of this Section and/or the letter or letters of credit con-
templated by the second sentence hereof, Seller and Ryder
System shall from and after the Closing cease to have any ob-
ligation 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 let-
ter of credit obtained by Buyer and satisfactory to Seller.
Section 6.11. Precision Response Corporation; Na-
tional Rental. Buyer shall assume the responsibility for
managing the ongoing relationship with Precision Response
Corporation ("PRC") which it now manages for itself and Sell-
er's Commercial Leasing and Services Division ("CLS") on the
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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 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 satisfy-
ing 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 al-
locating 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 considera-
tion, 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 pur-
suant to Section 6.5 above.
Seller and Buyer shall work in good faith to estab-
lish a mutually agreeable joint marketing and joint truck
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rental program to Federal Express Corporation, UPS and Road-
way Package Service, to be implemented as promptly as practi-
cable 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 mutu-
ally agreeable terms and conditions.
Section 6.12. License Transfers. Prior to Clos-
ing, (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 accom-
plished 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 Man-
agement on the date hereof.
Section 6.13. Financing. Buyer shall use all rea-
sonable efforts to (a) cause the execution and delivery on or
prior to Closing Date, of true and correct copies of defini-
tive agreements between Buyer and the Banks to provide, sub-
ject 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 (ex-
cluding 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 Fi-
nancing") 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 unavail-
able, Buyer will use all commercially reasonable efforts to
obtain necessary financing from another source, on and sub-
ject to substantially the same terms and conditions as the
portion of the Bank Financing or the Equity Financing that
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has become unavailable, in order to consummate the trans-
actions 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 bal-
ance 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 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) manage-
ment'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 stan-
dards 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; Insur-
ance 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 Clos-
ing Date and with respect to which accident an internal ac-
cident 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 re-
port 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 col-
lect on Seller's behalf any proceeds payable to Seller under
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any insurance policies with respect to collision damage re-
pairs 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 vehicle
nominee title agreement with respect to the Trucks (the "Ve-
hicle 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) in-
demnification 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 poli-
cies.
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 Li-
censing Expense"), Buyer shall have the right, exercisable
upon written notice to Seller given not later than 10 Busi-
ness 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
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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.
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, con-
tracts 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 de-
ferred compensation, severance pay and medical and life in-
surance plans (other than the Stay-on Arrangements) in which
any current or former employees of the Business or their re-
spective dependents (collectively, "Business Employees") par-
ticipate 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.
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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 Em-
ployees"). Buyer may offer employment to as many Listed Em-
ployees as is consistent with, and subject to, Buyer's re-
quirements 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 Busi-
ness 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 determi-
nation 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.
(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 aggre-
gate amount Buyer is obligated to pay for severance that has
been incurred by Buyer between the Closing Date and such an-
niversary (the "Transition Period") for severance calculated
under Buyer's severance policies and paid to Transferred Em-
ployees 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 Clos-
ing Date. To the extent consistent with applicable law and
regulations, Seller agrees to treat the Asset and Stock Pur-
chase as an event described in Section 401(k)(10) of the
Code.
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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 ter-
minations required in Section 3.10(f) of the Seller Disclo-
sure 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 "Ben-
efit Period"), Buyer agrees to provide all Transferred Em-
ployees 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 Clos-
ing 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 Transferred
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 busi-
ness practices.
(b) Buyer shall indemnify and shall hold Seller
and its Affiliates harmless from and against all Covered Li-
abilities 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 Sec-
tion 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.
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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.
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 in-
demnify Buyer, its affiliates (including the Subsidiaries)
and each of their respective officers, directors and employ-
ees and hold them harmless from all Pre-Closing Taxes. For
purposes of this Agreement, "Pre-Closing Taxes" shall mean
(a) all liability for Taxes that constitute Retained Liabil-
ities; (b) all liability attributable to any misrepresen-
tations 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 rea-
sonable legal fees and expenses incurred with respect to any
item indemnified pursuant to clause (a) through (c) above.
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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 begin-
ning before the Closing Date and ending after the Closing
Date (a "Straddle Period") shall be apportioned between Sell-
er and Buyer based on the actual operations of the Subsidiar-
ies during the portion of such period ending on the Closing
Date and the portion of such period beginning on the day fol-
lowing 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 not it is
in fact a taxable period). All Taxes other than Income Taxes
("Other Taxes") relating to a Straddle Period shall be ap-
portioned between Buyer and Seller based on the number of
days during the portion of such period occurring on and be-
fore 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
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due, Seller's share of such Taxes as described in this Sec-
tion 8.4.
Section 8.5. Filing Responsibility. Seller shall
prepare and file all Tax Returns with the appropriate fed-
eral, 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 reim-
burse 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 pro-
posed 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 li-
ability 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 pre-
pare 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 completely and ac-
curately 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 prac-
tices of the Business.
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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 pur-
suant 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 con-
trary within 30 days after Seller's receipt of Buyer's Ap-
praisal. 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 in-
form 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 Sec-
tion 338(g) Election (as hereinafter defined) in connection
with the Section 338(h)(10) Election in accordance with ap-
plicable laws and under any comparable provision of state,
local or foreign law for which a separate election is permis-
sible. 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 mak-
ing of such an election, including the exchange of informa-
tion and the joint preparation and filing of Form 8023 and
related schedules. Buyer and Seller agree to report the
transfers under this Agreement consistent with such elections
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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 pre-
pare 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 pro-
vided therein.
(d) "Section 338 Forms" means all returns, docu-
ments, 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 in-
clude, 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 Section 1.338-1 or Treasury Regulations Section
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 consoli-
dated 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
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group, provided, however, that within 10 days following re-
ceipt of written notice of Seller's payment thereof, Buyer
shall reimburse and shall fully indemnify Seller for any Sec-
tion 338 Taxes, but only to the extent such Taxes exceed 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 Sec-
tion 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 cor-
responding 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 elec-
tion 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 permis-
sible with respect to Buyer's acquisition of the Subsidiar-
ies' 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
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 Cove-
nants 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
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Business Condition which may be set forth in any representa-
tion and warranty (other than the representations and warran-
ties 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 time), except for
inaccuracies that in the aggregate do not constitute a mate-
rial adverse effect on the Business Condition, and (ii) the
covenants and agreements of Seller to be performed on or be-
fore 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 Sec-
tion 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 con-
dition 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 Agree-
ments, Trademark License Agreement, Software License Agree-
ment 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 op-
erations of the Business, taken as a whole, taking into ac-
count 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 condi-
tion 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.
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Section 9.6. Material Approvals. (a) Any con-
sents 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 modifi-
cation of the economic terms thereof or any material modifi-
cation 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.
(c) The provisions set forth on Schedule 9.6(c)
with respect to the Assigned Leases shall have been satis-
fied.
(d) Consent of the landlord of the Royal Palm Ex-
ecutive Center to the Office Sublease Agreement shall have
been obtained, or Buyer shall have negotiated, and the land-
lord 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 Of-
fice 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
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 follow-
ing conditions:
Section 10.1. Representations, Warranties and Cov-
enants 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 cov-
enants and agreements of Buyer to be performed on or before
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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
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 ob-
tained all of the insurance coverages required by the Service
Agreements. Buyer shall have provided Seller with an insur-
ance 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 cer-
tificate, 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 car-
ried, specify the amounts of insurance coverage provided
against each such peril, and describe the provisions con-
tained 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 Ex-
hibit 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.
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ARTICLE XI
Survival; Indemnification
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, how-
ever, 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 Agree-
ment, unless written notice thereof, setting forth in reason-
able detail the claimed misrepresentation or breach of war-
ranty shall have been delivered to the party alleged to have
breached such representation or warranty prior to the expira-
tion of the survival terms set forth for such representation
or warranty in the 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 (exclu-
sive 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 ag-
gregate the amount of $4,000,000, and, if such amount is ex-
ceeded, Seller shall be required to pay only the amount by
which such aggregate loss to Buyer for all such breaches ex-
ceeds $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
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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 Par-
ties") (i) subject to the notification and timing require-
ments 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
and all Covered Liabilities arising out of the failure of
Buyer to pay, discharge or perform any of the Assumed Li-
abilities.
(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 In-
demnified Parties") (i) subject to the notification and tim-
ing 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 Soft-
ware 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
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continue using the software which is the subject of the claim
or possible claim (the "Affected Software"), modify the Af-
fected 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 indem-
nity obligations set forth in this Section 11.2(b) with re-
spect 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 hard-
ware 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,
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 re-
spect 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 re-
lieve 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 un-
dertake, through counsel of its own choosing and at its own
expense, the settlement or defense thereof, and the indemni-
fied 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
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counsel of its own choosing and at its own expense, the set-
tlement 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 indem-
nified party, provided that the fees and expenses of such
counsel shall be borne by such indemnified party. The indem-
nified party shall not pay or settle any claim which the in-
demnifying party is contesting. Notwithstanding the fore-
going, 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 indem-
nified party within thirty days after the receipt of the in-
demnified party's notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the indemni-
fied party shall have the right to contest, settle or compro-
mise the claim but shall not thereby waive any right to in-
demnity therefor pursuant to this Agreement.
Section 11.4. Materiality. For purposes of Ar-
ticle 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
Termination
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 Agree-
ments 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
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(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 con-
summate the Asset and Stock Purchase on or before such date
did not result from the failure by the party seeking termina-
tion of this Agreement to fulfill any undertaking or commit-
ment 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 con-
templated 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; pro-
vided, however, that such termination shall not relieve any
party hereto of any liability for any breach of this Agree-
ment. If this Agreement is terminated as provided herein all
filings, applications and other submissions made in ac-
cordance 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
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, commit-
ment, 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 thereof or would in
any way affect the rights of Seller thereunder. To the ex-
tent 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.
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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 ef-
fective 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 Fo-
rum. (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 sit-
ting in the City of New York in any action or proceeding
arising out of this Agreement or the transactions contem-
plated 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 Agree-
ment, 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 busi-
ness at an address in New York City; provided that Buyer may
at any time designate and appoint The Corporation Trust Com-
pany ("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 con-
tinue 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) By the execution and delivery of this Agree-
ment, 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,
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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 pro-
cess upon CTC shall be deemed in every respect effective ser-
vice 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 warran-
ties between the parties other than those set forth or re-
ferred 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 in-
curred 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 com-
munications 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 ad-
dressed to:
Ryder Truck Rental, Inc.
3600 N.W. 82nd Avenue
Miami, Florida 33166
Attention: President
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or at such other address and to the attention of such other
Person as Seller may designate by written notice to Buyer.
Notices to Buyer shall be addressed to:
RCTR Holdings, Inc.
c/o Questor Management Company
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 Agree-
ment 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 Agree-
ment 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 substan-
tially 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 Li-
cense 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
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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
substantially 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 re-
financing 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 af-
fect the meaning or interpretation of this Agreement. All
references to Sections or Articles contained herein mean Sec-
tions 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 Agree-
ment 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 con-
strued as a waiver of any subsequent breach.
Section 13.10. Interpretation; Absence of Presump-
tion. (a) For the purposes hereof, (i) "to Seller's knowl-
edge" 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 plu-
ral 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
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Schedule references are to the Articles, Sections, para-
graphs, Exhibits and Schedules to this Agreement unless oth-
erwise specified, (iv) the word "including" and words of sim-
ilar import when used in this Agreement shall mean "includ-
ing, 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.
(b) This Agreement shall be construed without re-
gard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any in-
strument to be drafted.
Section 13.11. Severability. Other than as pro-
vided in Section 6.2(f) which controls with respect to Sec-
tion 6.2, any provision hereof which is invalid or unenforce-
able 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 per-
formed 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 en-
force specifically the terms and provisions thereof, in addi-
tion to any other remedy or relief available at law or eq-
uity.
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IN WITNESS WHEREOF, this Agreement has been signed
by or on behalf of each of the parties as of the day first
above written.
RYDER TRUCK RENTAL, INC.
By: /s/ Dwight D. Denny
Name: Dwight D. Denny
Title: Executive Vice
President -
Development
RCTR HOLDINGS, INC.
By: /s/ Robert E. Shields
Name: Robert E. Shields
Title:
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