EXHIBIT 10.5
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USED TRUCK SALES AGREEMENT
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THIS USED TRUCK SALES AGREEMENT is entered into as of this 17th day of
October, 1996 between Ryder Truck Rental, Inc., with its principal place of
business at 0000 X.X. 00xx Xxxxxx Xxxxx, Xxxxxxx 00000 ("Ryder") and Ryder TRS,
Inc. (f/k/a RCTR Holdings, Inc.), with its principal place of business at 0000
X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 ("TRS").
WHEREAS, Ryder and TRS are parties to an Asset Purchase Agreement
dated September 19, 1996 (the "Asset Purchase Agreement") under which TRS is
purchasing from Ryder certain assets and businesses of Ryder's Consumer Truck
Rental division ("Division").
WHEREAS, the trucks utilized in the business of TRS are owned by RCTR,
Inc., a wholly owned subsidiary of TRS, and in the future are likely to continue
to be owned by RCTR, Inc. or another third party (in either case, "RCTR").
WHEREAS, Ryder sells its own used trucks at its own Used Truck Centers
and other Ryder locations throughout the country (collectively, "Ryder
Locations");
WHEREAS, RCTR has authorized, and expects, TRS to sell used trucks for
and on behalf of RCTR in the ordinary course of its business and wishes to hire
Ryder as its agent to sell such trucks at the Ryder Locations;
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein, the adequacy of which is hereby acknowledged, the parties agree as
follows:
1. TRS AGREES:
(a) To make available and consign to Ryder at Ryder Locations, for sale by
Ryder as RCTR's agent acting for and on behalf of RCTR, at least such quantity
of RCTR trucks previously used in TRS's truck rental business ("Vehicles") as
provided in Section 1(b) below.
(b) To reasonably agree with Ryder from time to time on the number and
make-up (type, make, model and year) of Vehicles to be consigned to Ryder at
each Ryder Location, considering physical capacity and market characteristics,
among other things. Subject to the provisions of the last sentence of Section
3(a), the total number of Vehicles consigned to Ryder by TRS each year during
the term of this Agreement will not be less than the following
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
percentage of the total number of trucks used in TRS' business which are sold or
traded each such year :
40% 1997
35% 1998
30% 1999
25% 2000
20% 2001
After December 31, 2001, either party may terminate this Agreement
upon at least sixty (60) days prior written notice to the other party.
(c) To be responsible for transferring/delivering Vehicles to the Ryder
Locations. TRS and Ryder may from time to time agree that Ryder will accomplish
the transfer/delivery for TRS, in which case Ryder will charge TRS for the time
of the drivers to get the Vehicle to the new location and return (at the rate
described in the Maintenance Agreement between Ryder and TRS) in addition to
such mileage rate as may be agreed between TRS and management of the applicable
Ryder district from time to time for any other vehicle which is to be used to
accomplish the transfer.
(d) The Vehicles delivered to Ryder Locations shall be in a condition that
meets the * . If any Vehicle is not in such condition, Ryder may, at TRS's
expense, perform such repairs or work Ryder deems necessary to put the Vehicle
into such condition; provided that Ryder will get TRS's prior approval for any
such repairs or work costing in excess of $250 per Vehicle. Any such repairs or
work will be governed by the Maintenance Agreement between Ryder and TRS. Other
than as expressly provided for in this Agreement, Ryder is not authorized to
incur any billable expenses for the sale of any certain Vehicle without TRS's
consent.
(e) To provide Ryder with power(s) of attorney from RCTR allowing Ryder to
execute a sales agreement for Vehicles, endorse titles to Vehicles, and
accomplish such other actions and sign such other documents as are appropriate
to the sale and transfer of title of Vehicles hereunder (the "Power of
Attorney"), and with supplies, forms, instructions and other materials necessary
to sell Vehicles on RCTR's behalf at Ryder Locations. Such items must be
reasonably acceptable to Ryder.
(f) TRS's printed warranty of the Vehicles to have the same terms and
conditions as Ryder's standard printed warranty as it may exist from time to
time, provided, however, that Ryder will advise TRS prior to making any change
in its standard printed warranty and that TRS's warranty will not be required to
be improved even though Ryder may improve Ryder's standard printed warranty
after the date hereof, and further provided that TRS's warranty will not be
called a "Road Ready" warranty or anything
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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confusingly similar thereto. Unless TRS otherwise directs Ryder in writing,
Ryder may sell each Vehicle with the benefit of RCTR's standard printed warranty
described above.
(g) To release and hold Ryder harmless from, and to assume responsibility
for, all losses and damages suffered by RCTR, TRS or anyone due to theft, loss,
or damage to Vehicles or cargo while in Ryder's custody (including when being
test driven by potential purchasers), except however, that Ryder will be
responsible to TRS, and reimburse TRS, for theft, loss, or damage to Vehicles
(but not cargo) caused by the * . TRS shall tender the Vehicles to Ryder, empty
of all cargo, at the Ryder Locations or, if TRS and Ryder agree that Ryder will
transfer the Vehicles to the Ryder Location, then at the point of pick-up. In no
event xxxx Xxxxx have any responsibility to RCTR, TRS or any other Person for
cargo left in the Vehicles.
(h) To maintain the types of insurance, in the coverage limits, listed in
the insurance policy schedule set forth below (each, an "Insurance Policy"):
INSURANCE POLICY SCHEDULE
Type of Insurance Policy Coverage Limits
Standard Automobile Liability * Per Occurrence with an excess
Insurance Policy (the "Auto- layer of at least * aggregate.
mobile Liability Insurance
Policy")
Commercial General Liability *
Insurance Policy with Broad
Form Contractual Liability
Insurance Coverage (the
"CGL Insurance Policy")
In the event that any Insurance Policy provides coverage on a "claims made" form
rather than on an occurrence form, * shall cause the coverage provided by each
such policy to be kept in place for a period of * after the effective date of
termination or expiration of this Agreement.
TRS may *
Each liability Insurance Policy shall:
(i) be written by an insurance company reasonably acceptable to *
(it being understood that an insurance company rated A- or better by A.M.
Best & Company is acceptable);
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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(ii) name * as an insured, and be amended to name * , its
employees, officers, directors, contractors, agents and affiliates (each an
"Additional Insured") as additional insureds as their interests may appear;
(iii) provide that if such insurance is canceled, or any material
change is made in the coverage which affects the interest of any Additional
Insured, such cancellation or change shall not be effective as to the
Additional Insured for ten (10) days after receipt by the Additional
Insured of written notice from such insurers of such cancellation or
change;
(iv) be primary and without right of contribution from any other
insurance which is carried by, or otherwise available to, any Additional
Insured;
(v) provide that in respect of the interests of any Additional
Insured in such policies, the insurance shall not be invalidated by any
action or inaction of * or any other Person and shall insure each
Additional Insured regardless of any breach or violation of any warranty,
declaration or condition contained in such policies by * or any other
Person;
(vi) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each Additional Insured; and
(vii) in accordance with the terms and conditions of the
contractual liability coverage provided by such Insurance Policy, insure
the obligations of * to indemnify the Additional Insureds hereunder.
The first * of automobile liability insurance and general liability insurance
shall each be on an occurrence form. The first * of automobile liability
insurance shall not be subject to any annual aggregate limit of liability.
Each liability Insurance Policy and any all-risks Insurance Policy of * which
covers vehicles shall waive any rights of subrogation against the Additional
Insureds, except to the extent of * obligation to indemnify * pursuant to
Section 2(f) below.
At least once a year, from time to time at * request, and any time a new
policy is to go into effect, * shall provide * with insurance certificates
and other evidence, reasonably satisfactory to * , that the benefits and
coverage required by this Section 1(h) are in full force and effect. The
certificate
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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shall describe the perils covered by each policy of insurance then in force,
identify the insurer or insurers with which such policies of insurance are
carried and maintained, specify the amounts of insurance coverage provided
against each such peril, and describe the provisions contained in such policies
of insurance so as to evidence compliance with the requirements of this Section
1(h). * shall have no duty to examine such insurance certificates or the
Insurance Policies to verify compliance. * shall provide a copy of its insurance
policies to * promptly following a request therefor, if available.
(i) To, notwithstanding anything in this Agreement to the contrary, and in
addition to the insurance requirements listed in Section 1(h) above, release,
indemnify, defend and hold harmless * , its affiliates, directors, officers,
employees, agents, subcontractors and assigns of each (the " * Indemnified
Parties") from and against any and all claims, liabilities, damages, losses,
costs, expenses (including, without limitation, forum costs and reasonable
attorneys' fees), fines and penalties), related to claims of third parties
(including but not limited to claims of * employees and agents) for injury to
or death of any person or loss of or damage to any property or otherwise
(collectively "Third Party Claims"), arising out of: (a) the terms of any *
or other warranty under which Vehicles are sold hereunder, (b) any allegation of
* that a sale of a Vehicle under this agreement was not authorized, (c) the
failure of * to remove any Liens as defined in Section 2(a)4 below, (d) any
failure of * to obtain authorization by * to allow any action or inaction
required or permitted of * hereunder, or * .
(j) TRS shall Ryder of one or more RCTR accounts into which funds received
from purchasers of Vehicles are to be deposited (excepting checks representing
customer deposits, which Ryder may hold until Ryder places into the account, the
rest of the funds due on sale of the Vehicle or until the deposits become
cashable due to the customer's failure to purchase the Vehicle). Ryder will
mail or make such deposits as promptly as practicable and in any event within
three (3) business days of receipt of the funds from the purchasers without
deduction, set off, recoupment or counterclaim.
(k) TRS will contribute each year, as specifically hereinafter provided,
toward advertising which is directly and indirectly for the sale of Vehicles.
Advertising which is specifically for the sale of Vehicles shall be proposed by
TRS and agreed between Ryder and TRS, and TRS shall pay therefor at such time as
payment for such advertising is to be made to a third party. Ryder shall not be
required to advance funds for such advertising. TRS's contribution to general
advertising for the sale of trucks at Ryder Locations ("General Advertising")
shall be * per Vehicle sold hereunder and shall be paid quarterly in
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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arrears, on or before the fifteenth day after the end of each quarter; provided,
however, that in no event shall such payments annually exceed TRS's pro rata
portion (determined by the ratio of Vehicles sold during the year to the total
of Vehicles and Ryder trucks sold during that year) of the aggregate sum spent
by Ryder for General Advertising.
(l) TRS shall obtain and maintain a letter of credit, in favor of Ryder,
in the amount of two and one half million dollars ($2,500,000.00), the issuer or
confirming bank of which will be a bank reasonably acceptable to Ryder and the
terms of which shall be substantially in accordance with the form attached
hereto as Exhibit A (the "Letter of Credit") which may be drawn by Ryder in the
event of Material Breach by TRS under clause (i) of the third paragraph of
Section 3(c) of this Agreement or any of the other agreements between the
parties of even date herewith entitled Vehicle Maintenance Agreement, MIS
Support Agreement, or Administrative Services Agreement, as any of them may be
amended from time to time or as otherwise provided in Schedule 9.6(c) of the
Asset Purchase Agreement. Such Letter of Credit shall be for a term of at least
one year. One master $2.5 million letter of credit which complies with the
terms of this paragraph shall constitute the Letter of Credit under each of the
foregoing listed agreements ("Support Agreements"). TRS shall be obligated to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement.
Notwithstanding the foregoing, TRS may terminate, or not renew, the
Letter of Credit after the first anniversary of the date hereof, if it is not in
default of this Agreement at such time; provided, however, that should TRS,
after such time, either (i) commit a Material Breach of this Agreement due to
failure to pay charges due hereunder or under any Support Agreement (except if
prevented by a force majeure under Section 4(k) below), or (ii) twice within a
twelve month period, fail to timely pay charges due hereunder or under any
Support Agreement (except if prevented by a force majeure under Section 4(k)
below), then TRS shall again be obligated to obtain and maintain the Letter of
Credit pursuant to the first two sentences of the previous paragraph, and to
promptly replace the Letter of Credit or restore it to its full amount,
respectively, should Ryder draw such Letter of Credit in full or in part due to
the occurrence of a Material Breach under this Agreement. If, however, during
the following twelve months TRS timely pays all charges coming due hereunder,
and is not at such time otherwise in default of this Agreement, or in
bankruptcy, then TRS may again terminate, or not renew, the Letter of Credit,
and TRS's obligations hereunder to maintain the Letter of Credit shall cease,
subject to the last stated proviso above.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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(m) TRS agrees to provide Ryder with the following financial statements
and information on a quarterly basis (or upon Ryder's reasonable request from
time to time for the purpose of evaluating the creditworthiness of TRS: (1)
TRS's combined Balance Sheet in the form set forth in Exhibit B; (ii) TRS's
combined Statement of Earnings in the form set forth in Exhibit C; (iii) TRS's
Interest Coverage Ratio; and (iv) TRS's Debt-to-Equity Ratio. Such information
shall be provided to Ryder's credit department and shall not be disseminated
beyond such department, except to the Controller of Ryder and the Chief
Financial Officer of its parent company.
(n) TRS agrees to obtain from RCTR such authorizations as are necessary to
accomplish all of the foregoing matters. Ryder shall have no duty to inquire of
TRS whether such authorizations have been obtained. Ryder may rely upon TRS'
covenant in the first sentence of this clause (n). If, however, Ryder at any
time has reason to doubt that any such necessary authorization has not been
obtained, Ryder shall not be obligated to perform any duty hereunder to which
the authorization relates, until such authorization shall have been obtained and
evidence of such, reasonably satisfactory to Ryder, has been delivered to Ryder.
Failure to obtain such authorization shall not relieve TRS of any duty which it
has to Ryder hereunder.
(o) All charges by Ryder under this Agreement, whether for maintenance or
repair of Vehicles, for sales fees or commissions or otherwise, shall be billed
to TRS, which shall be responsible to pay Ryder therefor in accordance with the
terms of this Agreement.
2. RYDER AGREES:
(a) To devote good faith efforts to sell Vehicles to customers in the
ordinary course of Ryder's business (i) subject to the criteria set forth below,
and (ii) in a manner which, except as otherwise expressly set forth herein, is
consistent with the manner in which Ryder sells its own light commercial
vehicles; and to devote good faith efforts to safeguard the Vehicles in a manner
which is consistent with the manner in which Ryder safeguards its own vehicles
which are being sold at the Ryder locations. The clause in (ii) above
constitutes a statement of general applicability to all aspects of the sale of
vehicles in the aggregate, and shall not be deemed a measurement of any one
instance of performance/nonperformance apart from other
performances/nonperformances of similar aspects of service.
(1) Unless otherwise agreed between Ryder and TRS on a case by case
basis, all sales of Vehicles will be for cash, not credit, and will be paid
by certified funds payable to RCTR or by customer's check if Ryder's
policies would permit
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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the Ryder Location to accept a check in similar amount from such customer
were that customer purchasing a Ryder vehicle. It is not intended that
customers be able to purchase Vehicles with a credit card.
(2) The asking price for each Vehicle ("Asking Price") and an
acceptable sale price for each Vehicle ("Take Price") will be reasonably
determined by TRS, with Ryder's assistance. Ryder may refuse to sell any
Vehicle for which the Asking Price or the Take Price is not reasonable in
Ryder's opinion. Ryder will not sell a Vehicle if the sale price is $500
or more below the Take Price, unless TRS and Ryder approve such a lower
price prior to each such sale.
(3) Unless otherwise indicated in the Vehicle Title Nominee Agreement
between Ryder and RCTR, the title to the Vehicles shall be and remain in
the name of RCTR until sold by Ryder, at which time Ryder, pursuant to the
power of attorney from RCTR, will transfer title to purchaser. Ryder will
not receive title to the Vehicles. TRS will cause RCTR to grant the Power
of Attorney to Ryder prior to the sale of the first Vehicle hereunder, and
to take such other actions and execute such other documents as is necessary
for Ryder to accomplish sale of Vehicles and concomitant transfer of title
to Vehicles to purchasers thereof.
(4) TRS shall be solely responsible, however, and Ryder shall have no
responsibility, for removing liens, interests and encumbrances ("Liens")
from the Vehicles. TRS shall remove all such Liens, or arrange for such
Liens to be removed without further action than is provided for herein upon
sale of each Vehicle to a purchaser, prior to delivery of the Vehicle to a
Ryder Location for sale.
(5) All sales proceeds shall belong to RCTR, provided that Ryder may,
if required by government authorities or permitted by RCTR, submit required
sales tax directly to such authorities as agent of RCTR.
(6) All Vehicle inspections or repairs accomplished by Ryder will be
governed by the Maintenance Agreement of even date herewith between Ryder
and TRS; provided, however that in the event of any conflict between the
terms of that agreement and this Agreement, this Agreement shall control.
(b) To not remove, transfer or otherwise use the Vehicles without TRS's
prior written consent except in connection with the sale of the Vehicles or
otherwise in connection with this Agreement.
(c) To have RCTR's Sale Agreement completely and properly filled out and
signed by the purchaser.
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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(d) That authorized TRS representatives may, after giving at least 48
hours' advance written notice, enter Ryder Locations during regular business
hours to audit, inspect, or copy, at TRS's expense, RCTR-specific business
records maintained by Ryder and/or remove Vehicles.
(e) Ryder shall not make any post-sale Vehicle repairs covered by a TRS
warranty without TRS's prior approval if TRS would be charged in excess of $250
for those repairs.
(f) Ryder shall release indemnify, defend and hold harmless TRS, RCTR and
their respective directors, officers, employees, agents, subcontractors and
assigns from and against any and all Third Party Claims arising out of the gross
negligence or willful misconduct of the Ryder Indemnified Parties in performing
or failing to perform Repairs.
(g) That upon termination of this Agreement, Ryder will tender Vehicles
and materials for pickup by TRS at the Ryder Locations.
(h) To notify TRS within three (3) business days of the sale of any
Vehicle by sending to TRS a signed copy of the Xxxx of Sale for the sold
Vehicle.
3. OTHER AGREEMENTS:
(a) TRS shall pay Ryder * per Vehicle sold plus such sums as shall be
sufficient to pay, and Ryder shall then pay, the Ryder salesperson a per Vehicle
commission as calculated under the Ryder Used Truck Representative Sales
Compensation Plan (which shall give equal treatment to the sale of Ryder and
RCTR vehicles) (the "Plan") in effect at the time of such sale. Ryder shall
have sole discretion to change the Plan from time to time, provided that (i)
Ryder shall give TRS at least ten (10) days prior written notice of the change
and (ii) the Plan shall not discriminate in any material way between Ryder
vehicles and RCTR Vehicles; and provided further that if the percentage of
commission to be paid under the Plan for any certain type of Vehicle increases
by more than 100% from the date hereof, then (1) TRS shall have the option to
refuse the increase in commission, in which case Ryder shall have the option to
terminate this Agreement, or reduce the number of Vehicles it sells under this
Agreement, upon sixty (60) days written notice, or (2) TRS shall be allowed to
reduce the percentage of Vehicles required to be consigned to Ryder under this
Agreement by 50%.
(b) Ryder shall invoice TRS weekly for all commissions and other charges
due hereunder, which invoice shall be accompanied by reasonable documentation or
explanation supporting such
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
9
commissions and charges, and TRS shall pay Ryder, as to time periods within the
first year following the date hereof, no later than thirty (30) days after each
invoice date, and as to all subsequent periods, no later than fifteen (15) days
after each invoice date. All payments hereunder shall be made without deduction
(except for charges billed in error), set off, recoupment or counterclaim. If a
party at any time believes that sums it is charged hereunder are calculated in
error, then it shall timely pay the undisputed portion of the charge, and on or
before the due date for payment of the charge ("Due Date"), shall notify the
other party in writing of the portion it believes to be in error and give to the
other party an explanation, in responsible detail, of the reasons for its
belief. The due date for payment of the disputed sums shall then be extended for
ten (10) days (or such later time as both parties agree in writing) from the Due
Date to give the parties time to negotiate resolution of the dispute, which both
parties will do in good faith.
(c) This Agreement will continue in full force and effect until terminated
by either party in accordance with the terms of this Agreement. If at any time
any party is in Material Breach of this Agreement, then in addition to all other
rights and remedies available under applicable law or in equity, the other party
shall have the right to terminate this Agreement without further notice or
demand. "Material Breach" shall mean (i) as to a failure of payment, that full
payment has not been received within five (5) days, after the owing party's
receipt of written notice that the payment was due, (ii) as to any other type of
failure, a material failure of performance of a party's obligations under this
Agreement, if such failure remains uncured thirty (30) days after receipt of
written notice of the failure and (iii) as to TRS, failure to cause the
replacement or restoration of the Letter of Credit as applicable, within five
(5) days following its complete or partial draw due to the occurrence of a
Material Breach hereunder except, as to (i), (ii) or (iii) above, if prevented
by a force majeure under Section 4(k) below.
In addition, this Agreement shall automatically terminate, without
notice required, upon the occurrence of any of the following events: (i) the
other party voluntarily enters into proceedings in bankruptcy or insolvency;
(ii) the other party shall make an assignment for the benefit of creditors;
(iii) a petition shall be filed against the other party under a bankruptcy law,
a corporate reorganization law, or any other law for the relief of debtors (or
similar law in purpose or effect) and such petition shall not have been
dismissed within sixty (60) days; or (iv) the other party enters into
liquidation or dissolution proceedings.
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
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Subject to the provisions of the next paragraph, in the event of
Material Breach by TRS pursuant to clause (i) of the first paragraph of this
Section 3(c), Ryder may draw from the Letter of Credit, without court
proceeding, order or otherwise such sums to which Ryder is entitled due to TRS's
Material Breach, and Ryder shall apply such sums against such entitlement. If
the application of such sums is sufficient to cure the Material Breach, then the
Material Breach shall be deemed cured and Ryder shall not terminate this
Agreement due to such Material Breach; if the application of such sums is not
sufficient for such purpose, then Ryder may terminate this Agreement due to the
Material Breach pursuant to the first paragraph of this Section 3(c). It is
agreed, however, that if it shall later be determined by a court of competent
jurisdiction or by mutual agreement of the parties that TRS did not in fact owe
Ryder all of the sums drawn from the Letter of Credit, then Ryder shall return
these sums not owed.
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to Section 3(b) above, that Ryder did
not perform a service billed to TRS, then Ryder shall not be entitled to draw
the Letter of Credit with respect to such failure of payment until the later of
(i) such time as Ryder would be entitled to draw the Letter of Credit under the
preceding paragraph, (ii) fifteen business days after the date Ryder notifies
TRS in writing that Ryder has investigated the dispute and that its records or
personnel confirm the service to have been performed and has offered TRS access
to such records or personnel or (iii) such date as Ryder and TRS mutually agree
in writing. It is agreed that the foregoing sentence does not apply to a
dispute over the quality or conformity of the service or to any attempt by TRS
to set off another matter against Ryder's invoice.
(d) Ryder may, at its option, sell for its own account, or permit any
person or business entity to sell, vehicles (including trucks which are not
Vehicles) of any kind on or about Ryder Locations.
(e) The Vehicles will be sold without warranty of any kind, except that
TRS' printed warranty shall apply unless TRS otherwise directs Ryder in writing.
(f) Under no circumstances xxxx Xxxxx, its agents, or employees be deemed
to be TRS' or RCTR's employees.
(g) In the event either party resorts to litigation, arbitration or other
proceeding to enforce its rights under this Agreement, the prevailing party will
be entitled to reasonable attorney's fees, costs and expenses.
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
11
(h) Ryder and TRS agree to keep, and to cause each of its affiliates,
directors, officers, and employees to keep, confi dential any and all
confidential information of the other party that it receives in the course of
performing its obligations hereunder (except that such information may be
shared, on a confidential basis, with the party's attorneys and auditors) and
will not, without the other party's written consent, use any of such
confidential information except as reasonably necessary to perform its duties
under this or another of its agreements with the other party. Upon termination
of this Agreement, each party will return, and will cause its affiliates to
return, to the other party, all original document and copies of the confidential
information which are in its possession.
(i) Notwithstanding anything to the contrary in this Agreement, neither
party shall be liable for, and each party waives and releases the other from
(and as to RCTR's damages, TRS indemnifies and holds harmless the Ryder
Indemnified Parties from), any and all indirect, incidental, special or
consequential damages, including, but not limited to, lost profits, loss of use
or business interruption, even if such damages are foreseeable but not if they
are direct damages.
4. MISCELLANEOUS:
(a) Cumulative and Non-exclusive Rights and Remedies. The parties' rights
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and remedies under this Agreement are non-exclusive and are cumulative with its
rights and remedies at law or in equity.
(b) Counterparts. This Agreement may be executed in one or more
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counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this section,
provided receipt of copies of such counterparts is confirmed.
(c) Governing Law; Jurisdiction and Forum.
-------------------------------------
(1) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without reference to the choice of
law principles thereof, except for matters of Florida corporate law, as to
which such law shall apply.
(2) Ryder and TRS hereby irrevocably submit to the jurisdiction of
any New York State or Federal court sitting in the City of New York in any
action or proceeding arising
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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out of this Agreement or the transactions contemplated hereby. Ryder and
TRS hereby irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding.
(3) By the execution and delivery of this Agreement, TRS (i)
irrevocably designates and appoints Xxx Xxxx & Associates ("JA&A"), 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent upon which
process may be served in any action or proceeding arising out of or
relating to this Agreement so long as JA&A maintains a place of business at
an address in New York City; provided that TRS may at any time designate
and appoint in lieu of JA&A The Corporation Trust Company ("CTC") care of
CT Corporation System, at 0000 Xxxxxxxx, 00xx xxxxx, xx xxx Xxxx xx Xxx
Xxxx, Xxxxxx of New York, State of New York to so serve, (ii) submits to
the personal jurisdiction of any state or federal court in the State of New
York in any such action or proceeding, and (iii) agrees that service of
process upon CTC shall be deemed in every respect effective service of
process upon TRS in any such action or proceeding. TRS further agrees to
take any and all action, including the execution and filing of any and all
such documents and instruments, as may be necessary to continue such
designation and appointment of CTC in full force and effect so long as
this Agreement shall be in effect. The foregoing shall not limit the
rights of any party to serve process in any other manner permitted by law.
(d) Entire Agreement. This Agreement and the Schedules and Exhibits
----------------
hereto contain the entire agreement between the parties with respect to the
subject matter hereof and there are no agreements, understandings,
representations or warranties between the parties other than those set forth or
referred to herein. This Agreement is not intended to confer upon anyone not a
party hereto any rights or remedies hereunder.
(e) Notices. All notices shall be in writing and delivered personally or
-------
sent by nationally recognized overnight delivery service (e.g., Federal Express)
or registered or certified mail, return receipt requested, to the appropriate
address set forth below. Notices to Ryder shall be addressed to:
Ryder Truck Rental, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
with a copy to:
Ryder System, Inc.
0000 X.X. 00xx Xxxxxx
* CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
13
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
or at such other address and to the attention of such other person as Ryder may
designate by written notice to TRS. Notices to TRS shall be addressed to:
Ryder TRS, Inc.
c/o Questor Management Company
0000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
with a copy to:
Ryder TRS, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
or at such other address and to the attention of such other person as TRS may
designate by written notice of Ryder.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns; provided, that neither party may assign this Agreement
without the prior written consent of the other party. Notwithstanding the
foregoing: (1) TRS may assign this Agreement, upon 10 days prior written notice
to and without the consent of Ryder, to a party who purchases or acquires, as a
going concern, the business of TRS or all or substantially all of TRS's assets,
provided, however, that any assignee of this Agreement must (A) agree with
Ryder, in writing, to be bound by the terms and provisions hereof, (B) have a
debt/equity ratio as good as TRS's at the time of execution hereof, (C) be the
assignee of the competition provisions in Section 6.2(d) of the Asset Purchase
Agreement and the following agreements defined in the Asset Purchase Agreement
(to the extent such agreements are still existing at the time of such
assignment): (i) the Copyright License Agreement, (ii) the Software License
Agreement, (iii) the Trademark Agreement, (iv) the Administrative Services
Agreement, (v) the Vehicle Maintenance Agreement, (vi) the Dealer Agreement and
(vii) the Used Truck Sales Agreement, and (D) not be one of the parties set
forth in paragraph number 8 on Schedule 3 of the Trademark Agreement, (2) Ryder
may assign this Agreement upon 10 days prior written notice to and without the
consent of TRS, to a party who purchases or acquires as a going concern, the
business of Ryder or all or substantially all of Ryder's assets, provided,
however, that any assignee of this Agreement must (A) agree with TRS, in
writing, to be bound by the terms and provisions hereof, and (B) have a
debt/equity ratio as good as, Ryder's at the time of
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
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execution hereof. TRS may assign its rights hereunder to any lenders which
provide financing to TRS for the purpose of consummating the transactions
contemplated under the Asset Purchase Agreement, or refinancing any such
financing, including any successors thereto.
(g) Headings; Definitions. The headings contained in this Agreement are
---------------------
inserted for convenience of reference only and will not affect the meaning or
interpretation of this Agreement. All references to Sections or Articles
contained herein mean Sections or Articles of this Agreement unless otherwise
stated. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
(h) Amendments and Waivers. This Agreement may not be modified or amended
----------------------
except by an instrument or instruments in writing signed by the party against
whom enforcement of any such modification or amendment is sought. Either party
hereto may, only by an instrument in writing, waive compliance by the other
party hereto with any term or provision hereof on the part of such other party
hereto to be performed or complied with. The waiver by any party hereto of a
breach of any term or provision hereof shall not be construed as a waiver of any
subsequent breach.
(i) Interpretation; Absence of Presumption. This Agreement shall be
--------------------------------------
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
(j) Severability. Any provision hereof which is invalid or unenforceable
------------
shall be ineffective to the extent of such invalidity or unenforceability,
without affecting in any way the remaining provisions hereof.
(k) Force Majeure. Neither party shall be liable for its failure or delay
-------------
in fulfilling its obligations hereunder, if such failure or delay is caused by
fire, flood, weather conditions or other Acts of God, invasions, insurrections,
riots, closing of the public highways, delays or failures of manufacturer or
distributor in providing parts, strike, lockout or other labor dispute, civil
unrest, war or any other reason beyond the reasonable control of the party. In
the case of strikes, lockouts or other labor disputes, it is understood that
such event is beyond the reasonable control of the party suffering the event
unless and until the party is able to resolve it in a manner which such party
deems reasonable and appropriate.
(CONTINUED ON NEXT PAGE)
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TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
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IN WITNESS WHEREOF, the parties have caused this Used Truck Sales Agreement
to be executed by their duly authorized officers as of the date first written
above.
Ryder TRS, Inc. (f/k/a Ryder Truck Rental, Inc.
RCTR Holdings, Inc. ("TRS") ("Ryder")
BY: /s/ Xxxxxxx X. Xxxxxxx BY:/s/ Xxxxxx X. Xxxxx
----------------------- -------------------
NAME: Xxxxxxx X. Xxxxxxx NAME: Xxxxxx X. Xxxxx
TITLE:Senior Vice President TITLE: Executive V.P.
& Treasurer -Development
* CONFIDENTIAL PORTIONS OMITTED AN FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
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