EXHIBIT 10.13
AGREEMENT
This Agreement (the "Agreement") is made and entered into this 21st day of March
1996 between Coach USA, Inc. (hereinafter Coach USA) and Exel Motorcoach
Partners LLC (hereinafter Exel) to be effective as of the consummation of the
initial public offering of Coach USA common stock.
WITNESSETH:
Coach USA is in the passenger motorcoach industry and as a means of increasing
revenue and growing its business, Coach USA shall be acquiring additional
passenger motorcoach businesses; and
Exel is a limited liability company whose members have significant business
acumen in the areas of industry consolidation as well as established business
relationships with various owners of existing passenger motorcoach
businesses(such existing businesses as specifically identified in a mutually
agreed upon list (the "List")are referred to herein as "Motorcoach Business" or
"Motorcoach Businesses"); and
Coach USA desires that Exel provide to Coach USA an introduction, and Exel
desires to provide Coach USA such an introduction, and such other consulting
services as outlined herein, to the owners of Motorcoach Businesses for the
purpose of allowing such owners and Coach USA to evaluate each other with a view
towards completing a transaction pursuant to which Coach USA would acquire all,
or a majority of, the outstanding equity interest in one or more of the
Motorcoach Businesses; and
Upon the completion by Exel of its obligations in connection with each
Motorcoach Business and the acquisition by Coach USA of all or a majority
interest in any such Motorcoach Business, Coach USA shall compensate Exel
pursuant to the terms provided herein.
NOW THEREFORE, it is mutually agreed as follows:
ARTICLE 1: MOTORCOACH BUSINESSES
1.1 With respect to the Motorcoach Businesses identified on the List, Exel
shall have the exclusive right to initiate contact with and introduce the
owners and key management to Coach USA. Exel shall provide to Coach USA all
pertinent information in its possession on each of the Motorcoach
Businesses that Exel, in its reasonable business judgment, believes is
material or important to Coach USA in proceeding with discussions with any
or all of such Motorcoach Businesses for the purpose of evaluating an
acquisition transaction.
1.2 Following the initial couple of "rounds" of acquisitions of businesses by
Coach USA, Coach USA may notify Exel that Coach USA would like Exel to
identify additional companies as Motorcoach Businesses pursuant to this
Agreement. Only upon agreement by Coach USA and Exel shall these companies
be added to the list and at that time Exel may contact the new Motorcoach
Businesses.
It is understood by Exel and Coach USA that the number of businesses that
shall be designated "Motorcoach Businesses" pursuant to this Section 1.2
shall be controlled by Coach USA. Coach USA has informed Exel that at the
present time, Coach USA believes it has an adequate number of acquisition
candidates identified by Coach USA, Exel and others for its initial few
rounds of acquisitions. After this period, Coach USA will evaluate its
acquisition candidates, including new acquisition candidates identified
from acquired companies in determining whether additional companies will be
added to the list of Motorcoach Businesses.
ARTICLE 2: OBLIGATIONS OF EXEL
2.1 With respect to each Motorcoach Business identified in the List, Exel
shall, in accordance with the mutually agreed upon timeline established for
each such business, make an initial contact and initially evaluate on
behalf of Coach USA whether the owners of each such business have an
interest in pursuing acquisition discussions with Coach USA.
2.2 For each such Motorcoach Business in which the owners express an interest
in pursuing discussions with Coach USA, Exel shall notify Coach USA of such
an interest and shall coordinate and cooperate with Coach USA in arranging
for such discussions. Upon reasonable advance notice, at the request of
Coach USA, one or more of the partners of Exel, as requested by Coach USA,
shall participate in the initial discussions and any follow-up discussions
with the representatives of each Motorcoach Business.
2.3 Upon Coach USA and the owners of any Motorcoach Business reaching an
agreement in principle upon the terms and conditions under which each will
work towards consummating a transaction, Exel shall be available on a
reasonable basis to advise and provide guidance to Coach USA.
ARTICLE 3: COMPENSATION TO EXEL; CONSIDERATION
3.1 For each acquisition of a Motorcoach Business by Coach USA that is
completed prior to May 15, 1998, or subsequent to such date and before May
15, 1999 (provided that Exel has made initial contact with, and made an
introduction to Coach USA of, the owners of any such subsequently acquired
Motorcoach Business prior to May 15, 1998), Exel shall be compensated on
the date that the acquisition of the Motorcoach Business is consummated in
accordance with the following formula:
Consideration for Mototcoach Business: Compensation to Exel:
----------------------------------------- ---------------------------------------------------
Up to $1,000,000 Five percent (5%) of Consideration
More than $1,000,000 and up to $2,000,000 $50,000 plus 4% of Consid. greater than $1,000,000
More than $2,000,000 and up to $3,000,000 $90,000 plus 3% of Consid. greater than $2,000,000
More than $3,000,000 and up to $4,000,000 $120,000 plus 2% of Consid. greater than $3,000,000
More than $4,000,000 $140,000 plus 1% of Consid. greater than $4,000,000
For purposes of this Agreement "Consideration" shall be the total amount of
common stock, cash and promissory notes paid by Coach USA and shall not include
the assumption by Coach USA of any indebtedness or other obligations.
3.2 Any reasonable and documented out-of-pocket expenses incurred by Exel shall
be reimbursed by Coach USA in connection with the acquisition of a
Motorcoach Business and in addition to the payment to be made to Exel under
Section 3.1 above.
3.3 Other than the compensation payable by Coach USA to Exel under Sections 3.1
and 3.2 each party shall bear its own costs of performing under this
Agreement, including travel, entertainment, and telephone expenses
associated with pursuing discussions with owners of Motorcoach Businesses.
3.4 The consideration payable to Exel by Coach USA under Section 3.1 above
shall either be (i) cash payable in the form of a check drawn upon a Coach
USA United States bank account or (ii) warrants to purchase Coach USA
common stock, with such warrants to be valued and priced in accordance with
the formula outlined in Exhibit A hereto, or (iii) a combination of cash
and warrants, all at the discretion of Coach USA, provided that Coach USA
and Exel have mutually agreed upon the terms and price of the warrants, and
provided further, that, unless otherwise agreed, no less than 25% of the
consideration, in connection with any acquisition, shall be in cash.
ARTICLE 4: TERM
4.1 This Agreement shall remain in effect through May 15, 1998; however, in the
event Coach USA completes the acquisition of any Motorcoach Business after
May 15, 1998 and before May 15, 1999 and which Exel had previously
introduced to Coach USA prior to May 15, 1998, then Coach USA shall pay
Exel upon completion of any such acquisition in accordance with Article 3
above.
ARTICLE 5: INDEPENDENCE
5.1 Exel is an independent contractor and shall not be empowered or authorized
to sign any document on behalf of Coach USA or commit Coach USA to any
agreement with any third party, including any Motorcoach Business. This
limitation shall not preclude Exel from coordinating introductory meetings
or phone calls as appropriate in order for Exel to perform its obligations
under this Agreement.
ARTICLE 6: ARBITRATION
6.1 All disputes arising under this Agreement shall be submitted to and settled
by arbitration. Arbitration shall be by a single arbitrator acceptable to
each party; or if the parties cannot agree on a single arbitrator, by three
(3) arbitrators, one arbitrator being selected by each party, and the third
arbitrator being selected by the two arbitrators so selected. Each party
shall select its arbitrator and give notice of such choice to the other
party within thirty (30) days after the initial notice of a dispute under
the Agreement. If either party shall not have selected an arbitrator and
given notice thereof to the other party within the specified period, then
the single arbitrator selected by the other party shall be the sole
arbitrator. If both arbitrators have been timely selected by the parties,
then the selection of the third arbitrator by the other two shall be made
within fifteen (15) days following the selection of the second of them by
the parties, or if they cannot agree on a third arbitrator within such
fifteen day period, by the American Arbitration Association, Houston,
Texas. The meeting of the arbitrators shall be held in Houston, Texas and
shall be conducted in accordance with the rules existing at the date
thereof of the American Arbitration Association to the extent not
inconsistent with this Agreement. The decision of a majority of the
arbitrators shall be final and binding as to any matters submitted to them
under this Agreement. Each party shall bear is own costs and expenses
incurred in connection with any such arbitration proceeding and any civil
action unless the arbitrator or court, as the case may be, otherwise
specifies in the interest of fairness.
ARTICLE 7: CONFIDENTIALITY
7.1 Other than disclosure of this Agreement and the terms hereunder pursuant to
United States and applicable state securities laws, Coach USA and Exel
shall maintain as confidential all aspects of performing under this
Agreement. Exel shall not, without the prior written consent of Coach USA,
disclose to any other third party the names or identity of any Motorcoach
Business or the status or substance of any discussions or negotiations with
any Motorcoach Business.
ARTICLE 8: MISCELLANEOUS
8.1 This Agreement and any disputes to be resolved hereunder shall be
interpreted in accordance with, and any decisions by arbitrators shall
apply, the law of the state of Delaware.
8.2 This Agreement cannot be assigned by either party without the prior written
consent of the other party.
8.3 This Agreement constitutes the entire agreement between the parties with
respect to the matters referenced herein. Any amendments or revisions
hereto shall only be effective upon each party executing any such amendment
or revision in writing.
8.4 All notices to either party shall be sent via United States mail, prepaid
first class postage, to the following address:
Coach USA, Inc.
Xxx Xxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Exel Motorcoach Partners LLC
00 Xxxxxxxxxxxx Xx.
Xxxxxx, XX 00000
This Agreement is entered into and effective as the date and year first
recited above.
Coach USA, Inc. Exel Motorcoach Partners LLC
By:/s/ XXXXXXX XXXXXXXXX By:/s/ XXXX X. XXXXXXXX
Xxxxxxx Xxxxxxxxx, Xxxx X. Xxxxxxxx
Chief Executive Officer Title: President
