EXHIBIT 99.1
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (this
"Amendment"), dated as of December 17, 2004, among United Parcel Service of
America, Inc., a Delaware corporation (the "Purchaser"), United Parcel
Service, Inc., a Delaware corporation ("Parent"), CNF Inc., a Delaware
corporation (the "Shareholder"), Menlo Worldwide, LLC, a Delaware limited
liability company and a wholly owned subsidiary of the Shareholder
("Worldwide" and together with the Shareholder, the "Sellers"), is made with
reference to that certain Stock Purchase Agreement, dated as of October 5,
2004 (the "Agreement"), by and among the Sellers, the Purchaser and Parent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Agreement.
WITNESSETH
WHEREAS, the Sellers, Parent and the Purchaser desire to amend
certain provisions contained in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS
Section 0.0.Xxxx.
(a) Section 1.2 of the Agreement is amended to delete the
definition of "Closing Date Cash Balance" and replace such definition with
the following (deleted language in strikethrough and added language in bold):
""Closing Date Cash Balance" means the cash and cash equivalents as
set forth on the consolidated general ledger of the Company and each
Company Subsidiary (which includes a reconciliation for issued and
outstanding checks and deposits in transit) as of the close of business
on December 31, 2004 minus (i) the "Drafts Payable" (such amount being
calculated consistent with past practice and, for reference purposes,
which amount as of June 30, 2004 is reflected on Exhibit 3.4(a) as
$16,329,594), minus (ii) all duties, fees, taxes, interest or similar
amounts held by the Company or any Company Subsidiary (whether in
dedicated accounts or otherwise) for the benefit of a Third Person
(which for these purposes shall include the Company or a Company
Subsidiary when it acts as an "importer of record" as the term is
defined in 19 U.S.C. Section 1484) for remittance to a Governmental
Entity for customs matters (e.g., amounts held for remittance to
Customs) that have not yet been remitted to such Governmental Entity,
minus (iii) all cash contributed on or after the Closing Date and on or
before December 31, 2004 by the Purchaser, Parent or their respective
Affiliates (other than the Company or any direct or indirect subsidiary
thereof) to any account of the Company or any account or sub-account of
the Shareholder held exclusively for the Company, plus (iv) any cash
removed on or after the Closing Date and on or before December 31, 2004
by the Purchaser, Parent or their respective Affiliates from any account
of the Company, plus (v) any payroll payments for the pay period ending
December 25, 2004 that otherwise would have been made in the ordinary
course of business on January 4, 2005 that are paid by the Sellers to
Transferred Employees on or prior to December 31, 2004 plus (vi) all
duties, fees, taxes, interest or similar amounts paid by the Company or
any Company Subsidiary (whether in dedicated accounts or otherwise) for
the benefit of a Third Person to a Governmental Entity for customs
matters (e.g., amounts paid to Customs) that have not yet been collected
from such Third Person."
(b) Section 3.3 of the Agreement is amended to delete such
section and replace such section with the following (deleted language in
strikethrough and added language in bold):
"Section 3.3Cash. By January 31, 2005, the Purchaser shall prepare
and deliver to the Shareholder a certificate executed by an officer or
authorized representative of the Purchaser which sets forth the Closing
Date Cash Balance, together with reasonable supporting documentation.
Upon receipt of the Closing Date Cash Balance, the Shareholder and its
independent certified public accountants or other advisors shall have
the right during the succeeding thirty (30) day period to audit, at the
Shareholder's expense, the Closing Date Cash Balance and to examine and
review all records and work papers and other supporting documents used
to prepare such Closing Date Cash Balance. During the thirty (30) day
period, the Purchaser and Parent shall and shall cause its Subsidiaries,
officers, employees, agents and representatives to cooperate fully with
the Shareholder and its representatives in its audit, examination and
review of the Closing Date Cash Balance. The Shareholder shall have
thirty (30) days after delivery of the Closing Date Cash Balance during
which to notify the Purchaser in writing of any dispute of any item
contained in the Closing Date Cash Balance, which notice shall set forth
in reasonable detail the basis for such dispute. The Purchaser and the
Shareholder shall cooperate in good faith to resolve any such dispute as
promptly as possible, and upon such resolution, the Purchaser shall pay
the Shareholder the Closing Date Cash Balance, as adjusted pursuant to
the mutual agreement of the Purchaser and the Shareholder. In the event
the Shareholder disputes the Closing Date Cash Balance and the Parties
do not resolve such dispute within fifteen (15) Business Days after the
delivery by the Shareholder of such dispute (or such time as mutually
extended by the Parties), such dispute shall be resolved in accordance
with the dispute resolution procedures set forth in Section 3.4(c). In
the event the Shareholder does not notify the Purchaser of any such
dispute in writing within the thirty (30) Business Day period following
receipt of the Closing Date Cash Balance, or if the Shareholder agrees
with the items contained in the Closing Date Cash Balance, the Closing
Date Cash Balance shall be final and binding on all parties and the
Purchaser shall make a payment in cash to the Shareholder in an amount
equal to the Closing Date Cash Balance."
Section 1.2.Working Capital.
(a) Section 1.2 of the Agreement is amended to delete the
definition of "Working Capital" and replace such definition with the
following (deleted language in strikethrough and added language in bold):
""Working Capital" means the working capital of the Company and the
Company Subsidiaries as of December 31, 2004 calculated in accordance
with the methodologies and principles set forth on Exhibit 3.4(a).
Working Capital shall not include any amounts for which the Purchaser is
entitled to indemnification pursuant to Article XI."
(b) Section 3.4 of the Agreement is amended to delete the
first sentence of paragraph (a) and replace such sentence with the following
(deleted language in strikethrough and added language in bold):
"(a) As promptly as practicable following December 31, 2004 (but in
any event by January 31, 2005 ), the Purchaser shall prepare and deliver
to the Shareholder a statement (the "Preliminary Working Capital
Statement") setting forth the Working Capital as of the close of
business on December 31, 2004; provided, however, that the methodology
and principles set forth on Exhibit 3.4(a) hereto shall govern the
preparation of the Preliminary Working Capital Statement."
Section 1.3.Post-Retirement Medical Liability. Section 7.8 of the
Agreement is amended to delete the fourth sentence of paragraph (i) and
replace such sentence with the following (deleted language in strikethrough
and added language in bold):
"As soon as practicable but in no event more than eighty-one (81)
days after the Closing Date, the Shareholder's actuary shall present to
the Purchaser and the Purchaser's actuary its proposed Post-Retirement
Medical Liability and such proposal shall set forth in reasonable detail
the assumptions underlying such proposal and the retiree, dependent and
plan data and such other information upon which the proposal is based
("Shareholder's Proposal")."
Section 1.4Vacation Days. Section 7.8 of the Agreement is amended
to delete the last sentence of paragraph (g) and replace such sentence with
the following:
"The Sellers shall update all information requested in this Section
7.8(g) as of the Closing; provided, however, that the vacation day
information requested in clauses (a) and (b) of this Section 7.8(g)
shall not be updated until January 9, 2005."
Section 1.5Division of International Plan. Section 7.8 of the
Agreement is amended by amending the third sentence of Section 7.8(d) to read
as follows:
"With respect to any Current Company Benefit Plan that would be a
Company International Benefit Plan but for the fact that such plan
covers individuals other than the individuals permitted to be covered by
the definition of Company International Benefit Plan, the Parties will
cooperate and work together to separate the assets and liabilities of
such plan into two plans as soon as practicable after the Closing, one
attributable to individuals who are not permitted to be covered under a
Company International Benefit Plan and one attributable to individuals
who are permitted to be covered under a Company International Benefit
Plan and the Sellers shall bear all fees, costs and expenses incurred
for any period after the Closing with respect to those persons who
otherwise were not permitted to be covered under a Company International
Benefit Plan."
Section 1.6Payment of Disability Benefits. Section 7.8 of the
Agreement is amended by adding the following sentence to the end of Section
7.8(d) which reads as follows:
"The Sellers shall cause the disability benefits payable for the
month of December 2004 under a Seller sponsored long term disability
program to those disabled Transferred Employees whose primary employment
location is in the United States and who are covered by the terms of a
collective bargaining agreement to be paid on Friday, December 17,
2004."
Section 1.7Excluded Employees. Section 1.2 of the Agreement is
amended to delete the definition of "Excluded Employees" and replace such
definition with the following (deleted language in strikethrough and added
language in bold):
""Excluded Employees" means all employees set forth on Exhibit
1.2(i) and any employee of the Company or any Company Subsidiary that is
each of (A) on long term disability leave as of the Closing Date and (B)
an employee with a primary employment location in the United States and
(C) not covered by the terms of a collective bargaining agreement."
ARTICLE II
ADDITIONAL AGREEMENTS
Section 2.1Post-Closing Cash Management. From and after the
Closing, the Shareholder shall notify the Purchaser on a daily basis of the
amount necessary to fund all checks, drafts or other obligations presented on
any account or sub-account of the Shareholder held exclusively for the
Company. Upon receipt, the Shareholder shall, or shall cause the Company to,
deliver via wire transfer immediately available funds in the full amount
necessary to fund such checks and drafts.
Section 2.2Quicksource Xxxx. Notwithstanding anything to the
contrary in the Agreement, the Purchaser and Parent acknowledge and agree
that (1) the Sellers have various contracts, agreement forms, and related
collateral, that use the "Quicksource" xxxx; (2) the Sellers shall be
entitled to continue (x) to perform under any contracts that use the
"Quicksource" xxxx and use the "Quicksource" name in connection with such
performance until the expiration or termination of such contracts and (y) to
use any existing supplies of such forms, and other collateral, in a manner
substantially consistent with its use prior to the Closing Date, until such
supplies are exhausted; and (3) the Sellers shall be entitled to fulfill any
obligations under, or make reference in correspondence to, any such
agreements.
Section 2.3Title to Marks and Domain Names. Notwithstanding
anything to the contrary in the Agreement, the Purchaser and Parent
acknowledge and agree that the marks and domain names listed in Item 2 of
Schedule 4.7 set forth in the Second Supplement to the Disclosure Schedules
to the Agreement, as well as any other marks labeled "ABANDONED" or
"CANCELLED," which comprise part of the Conveyed Assets, are provided on and
"as is" basis, without any representation or warranty of any kind, including
without limitation with respect to title, validity, enforceability or
otherwise.
Section 2.4Closing. The parties hereto agree that the Closing Date
shall be 12:01 a.m. Portland, Oregon time on December 19, 2004. Simultaneous
with the signing of this Amendment, the parties shall execute an Escrow
Agreement in the form of Annex A hereto and the Purchaser shall deposit with
the Escrow Agent (as defined therein) the Cash Purchase Price, in the manner
contemplated thereby. The parties hereto agree that each of the conditions
set forth in Sections 8.1, 8.2 and 8.3 of the Agreement have been satisfied
or are hereby waived.
Section 2.5Exhibits. The parties hereto agree to amend and restate
Exhibit 1.2(a) (ACMI Leases), Exhibit 1.2(e) (Collective Bargaining
Agreements), Exhibit 1.2(g) (Conveyed Assets), Exhibit 1.2(h) (Excluded
Assets), Exhibit 1.2(i) (Excluded Employees), Exhibit 1.2(k) (Identified
Litigation), Exhibit 1.2(l) (Key Employees), Exhibit 7.8(a) (Transferred
Employees), Exhibit 7.8(d) (Company Retained Plans), Exhibit 7.8(g) (Employee
Information), Exhibit 7.8(l) (Logistics Contract Employees), Exhibit 7.14(c)
(Other Third Party Consents), Exhibit 7.17 (Custom Air Amendment),
Exhibit 7.19 (Transition Services Agreement) and Exhibit 7.22 (Shared Usage
Licenses) to the Agreement as set forth in the attachments to this Amendment.
ARTICLE III
MISCELLANEOUS
Section 3.1. Full Force and Effect. Except as specifically
provided by this Amendment, the Agreement shall remain in full force and
effect. The execution, delivery and performance of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision of,
or operate as a waiver of any right, power or remedy of the Sellers, Parent
or the Purchaser under the Agreement.
Section 3.2. Governing Law. This Amendment shall be governed by
and construed and enforced in accordance with the internal Laws of the State
of New York without reference to its choice of law rules (other than Section
5-1401 of the New York General Obligations Law).
Section 3.3. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall be deemed to be an original by the
parties executing such counterpart, but all of which shall be considered one
and the same instrument.
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IN WITNESS WHEREOF, each of the undersigned has executed this Amendment
as of this 17th day of December 2004:
UNITED PARCEL SERVICE OF AMERICA, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
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Name: Xxxxxxx X. X'Xxxxxxx
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Title: Authorized Representative
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UNITED PARCEL SERVICE, INC.
By: /s/ Xxxxxxx X. X'Xxxxxxx
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Name: Xxxxxxx X. X'Xxxxxxx
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Title: Authorized Representative
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CNF INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
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Title: Vice President and Treasurer
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MENLO WORLDWIDE, LLC
By: CNF Inc., its managing member
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
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Title: Assistant Treasurer
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