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EXHIBIT 2.8
BUDGET STOCK PURCHASE AGREEMENT
DATED AS OF JANUARY 13, 1997
BETWEEN
BUDGET RENT A CAR CORPORATION
AND
TEAM RENTAL GROUP, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
SALE OF STOCK................................2
SECTION 1.1 Sale and Purchase...........................................2
SECTION 1.2 Purchase Price..............................................2
ARTICLE II
THE CLOSING.................................2
SECTION 2.1 Closing.....................................................2
SECTION 2.2 Delivery of Shares by the Company to
Buyer....................................................3
SECTION 2.3 Delivery of Purchase Price by Buyer to
the Company..............................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES........................3
SECTION 3.1 Representations and Warranties of the
Company..................................................3
SECTION 3.2 Representations and Warranties of Buyer................... 21
SECTION 3.3 Representations and Warranties of the
Company and Buyer...................................... 24
SECTION 3.4 Disclosure on Schedules................................... 25
ARTICLE IV
COVENANTS OF THE PARTIES......................... 25
SECTION 4.1 Access to Information Concerning
Properties and Records;
Confidentiality........................................ 25
SECTION 4.2 Conduct of the Company Business........................... 26
SECTION 4.3 Further Assurances........................................ 29
SECTION 4.4 No Solicitation by Company................................ 31
SECTION 4.5 Repayment of Buyer Designator
Indebtedness........................................... 32
SECTION 4.6 Net Income Adjustment..................................... 33
SECTION 4.7 Special Bonus Program..................................... 34
ARTICLE V
CLOSING CONDITIONS............................ 35
SECTION 5.1 Conditions to Each Party's Obligations.................... 35
SECTION 5.2 Conditions to the Obligations of Buyer.................... 36
SECTION 5.3 Conditions to the Obligations of the
Company................................................ 37
SECTION 5.4 No Closing Unless All Transactions
Occur.................................................. 38
ARTICLE VI
TERMINATION............................... 39
SECTION 6.1 Termination............................................... 39
SECTION 6.2 Effect of Termination..................................... 39
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Page
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
LIMITATION OF REMEDIES..................... 39
SECTION 7.1 Survival of Representations and
Warranties........................................ 39
SECTION 7.2 Limitation of Remedies............................... 41
ARTICLE VIII
MISCELLANEOUS......................... 41
SECTION 8.1 Notices.............................................. 41
SECTION 8.2 Publicity............................................ 43
SECTION 8.3 Costs and Expenses................................... 43
SECTION 8.4 Amendment and Modification........................... 43
SECTION 8.5 Waivers and Extensions............................... 44
SECTION 8.6 Interpretation....................................... 44
SECTION 8.7 Entire Agreement; Third Party
Beneficiaries; Assignment......................... 45
SECTION 8.8 Severability......................................... 46
SECTION 8.9 Governing Law........................................ 47
SECTION 8.10 Specific Performance................................. 47
SECTION 8.11 Resolution of Disputes............................... 47
SECTION 8.12 Consent to Jurisdiction; Waiver of Jury
Trial............................................. 47
SECTION 8.13 Counterparts......................................... 49
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INDEX OF DEFINED TERMS
Term Page
Agreement ....................................................1
Benefit Arrangement..................................................15
Business day ....................................................3
Buyer ....................................................1
Buyer Designator ....................................................1
Closing ....................................................2
Closing Date ....................................................3
Code ...................................................17
Common Stock ....................................................1
Common Stock Purchase Agreement.......................................2
Common Stockholder....................................................2
Company ....................................................1
Company Agreement ....................................................9
Company Entities ....................................................4
Company Material Adverse Effect.......................................4
Confidentiality Agreement............................................26
Consistent with past practice........................................45
Debt Instruments ....................................................9
DGCL ....................................................5
Employee Benefit Programs............................................15
Environmental Law ...................................................19
ERISA ...................................................14
Facilities ...................................................32
Financial Statements.................................................10
First Quarter Income Statement.......................................33
FMCC ....................................................1
Foreign Employees ...................................................15
Foreign Plan ...................................................15
Governmental Entity...................................................9
Hazardous Substance..................................................19
HSR Act ....................................................8
Include ...................................................45
Includes ...................................................45
Including ...................................................45
Liens ....................................................8
Losses ...................................................41
Material Company Agreement...........................................12
Material Licensed Intellectual Property..............................20
Material Owned Intellectual Property.................................19
Other Arrangements...................................................33
Other Indebtedness...................................................32
Permitted Liens ...................................................12
Person ...................................................45
Plan ...................................................15
Preferred Stock ....................................................6
Preferred Stock Purchase Agreement....................................1
Properties ...................................................18
Purchase Price .................................................1, 2
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Term Page
Required Payments ...................................................23
Securities Act.......................................................23
Series X Preferred Stock..............................................1
Share Increase Amendment..............................................5
Shares ...............................................................1
Special Bonus Program................................................34
Subsidiaries .........................................................3
Tax Return ..........................................................17
Taxes................................................................17
To the Company's knowledge...........................................45
Transactions .........................................................4
U.S. Corporation......................................................4
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated as of
January 13, 1997 between BUDGET RENT A CAR CORPORATION, a Delaware corporation
(the "Company"), and TEAM RENTAL GROUP, INC., a Delaware corporation ("Buyer").
RECITALS
A. Subject to the terms and conditions hereof, Buyer wishes to
purchase from the Company, and the Company wishes to issue and sell to Buyer,
2,740,000 shares (the "Shares") of common stock, par value $.01 per share
("Common Stock"), of the Company, for an aggregate purchase price equal to $274
million, payable in cash (the "Purchase Price").
B. Concurrently with the Closing (as defined in Section 2.1),
pursuant to a separate stock purchase agreement dated as of the date hereof (the
"Preferred Stock Purchase Agreement") between Ford Motor Company ("Buyer
Designator") and Buyer, Buyer has agreed, among other things, (i) to purchase
the Series X Cumulative Preferred Stock, par value $.01 per share, with a stated
value of $1,000 per share (the "Series X Preferred Stock"), of the Company owned
by Buyer Designator, (ii) to purchase certain indebtedness of the Company to
Buyer Designator and/or its affiliates, including Ford Motor Credit Company
("FMCC"), as further described herein and in the Preferred Stock Purchase
Agreement, (iii) to cause the Company to use the proceeds from the sale of the
Shares to Buyer, first, to redeem the Series X Preferred Stock and, second, to
repay a portion of the indebtedness of the Company to Buyer Designator and/or
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affiliates, including FMCC, and (iv) otherwise to pay or cause the Company to
repay certain other indebtedness of the Company, as further described herein and
in the Preferred Stock Purchase Agreement.
C. Concurrently with the Closing, pursuant to a separate stock
purchase agreement dated as of the date hereof (the "Common Stock Purchase
Agreement") between Xxxx X. Xxxxx (the "Common Stockholder") and Buyer, Buyer
has agreed, among other things, to purchase the 10,000 shares of Common Stock
owned by the Common Stockholder.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
SALE OF STOCK
SECTION 1.1 Sale and Purchase. On the Closing Date, the
Company shall issue and sell to Buyer the Shares.
SECTION 1.2 Purchase Price. The purchase price to be paid by
Buyer to the Company for the Shares shall be $274 million (the "Purchase
Price"), which shall be payable in cash and in immediately available funds at
the Closing.
ARTICLE II
THE CLOSING
SECTION 2.1 Closing. Subject to the conditions set forth in
Article V, the closing of the sale and purchase of the Shares (the "Closing")
shall take place at 10:00 a.m., Eastern
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time, at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx March 31, 1997, or at such other time or on such other date,
or at such other place, as the parties shall agree in writing (the date of the
Closing, the "Closing Date").
SECTION 2.2 Delivery of Shares by the Company to Buyer. At the
Closing, the Company will deliver to Buyer a certificate or certificates
representing the Shares.
SECTION 2.3 Delivery of Purchase Price by Buyer to the
Company. At the Closing, Buyer will deliver to the Company the Purchase Price,
by intra-bank transfer at Xxxxxx Guaranty Trust Company of New York of cash in
U.S. dollars and in immediately available (federal) funds to an account
specified to Buyer by the Company in writing no later than the business day
prior to the Closing Date. For purposes of this Agreement, "business day" means
any day other than a Saturday, Sunday or other day on which commercial banks in
New York, New York or Dearborn, Michigan are authorized or required by law to be
closed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Company. The
Company represents and warrants to Buyer as follows:
(a) Due Organization of the Company and Subsidiaries. Each of
the Company and each corporation, partnership or business entity 50% or more of
the equity interests of which are owned by the Company (its "Subsidiaries" and,
together with the Company,
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the "Company Entities") is a business entity duly organized, validly existing,
and, with respect to those Subsidiaries of the Company organized under the laws
of one of the states of the United States of America or the District of Columbia
(a "U.S. Corporation"), is in good standing as a domestic business entity under
the laws of the state of its organization with all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted. Each Company Entity which is a U.S. Corporation is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, except where the
failure to be so qualified as required would not have a Company Material Adverse
Effect (as defined below). Schedule 3.1(a) lists each Subsidiary and each other
corporation, partnership or business entity in which the Company has any equity
interest.
For purposes of this Agreement, "Company Material Adverse
Effect" means a material adverse effect on the business, results of operations
or financial condition of the Company Entities taken as a whole, excluding any
effect resulting from (i) general economic conditions, (ii) any occurrence or
condition affecting the vehicle rental industry generally or (iii) any
occurrence or condition arising out of the execution, delivery or performance of
this Agreement and the consummation of the Transactions (as defined below) or
the public announcement of any thereof. For purposes of this Agreement,
"Transactions" means the transactions contemplated by this Agreement, the
Preferred
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Stock Purchase Agreement, the Common Stock Purchase Agreement, the Consent
Agreement (as defined in the Preferred Stock Purchase Agreement), the Supply
Agreement (as defined in the Preferred Stock Purchase Agreement) and the
Advertising Agreement (as defined in the Preferred Stock Purchase Agreement).
(b) Validity of Agreement. The Company has all necessary
corporate power and authority to enter into this Agreement and, subject to the
filing of a Certificate of Amendment to the Certificate of Incorporation to
increase the number of authorized shares of Common Stock from 10,000 to
3,500,000 shares (the "Share Increase Amendment") with the Secretary of State of
the State of Delaware pursuant to the General Corporation Law of the State of
Delaware (the "DGCL"), to perform its obligations hereunder and to consummate
the Transactions. Subject to the filing of the Share Increase Amendment with the
Secretary of State of the State of Delaware pursuant to the DGCL, the execution,
delivery and performance of this Agreement by the Company, the consummation by
the Company of the Transactions and the redemption of the shares of Series X
Preferred Stock owned by Commerzbank Aktiengesellschaft (the "Bank") have been
duly authorized by all necessary corporate action on the part of the Company.
This Agreement has been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by Buyer, constitutes a legal, valid
and binding obligation of the Company enforceable against it in accordance with
its terms, except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization,
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moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law).
(c) Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 10,000 shares of Common Stock and
750,000 shares of preferred stock, par value $.01 per share (the "Preferred
Stock"), and, as of the Closing Date, the authorized capital stock of the
Company will consist of 3,500,000 shares of Common Stock and 750,000 shares of
Preferred Stock. As of the date hereof, (i) 10,000 shares of Common Stock are
issued and outstanding, (ii) no shares of Common Stock are held in the treasury
of the Company, (iii) no options to acquire shares of Common Stock have been
issued by the Company and are outstanding, (iv) 5,006.46 shares of Series X
Preferred Stock are issued and outstanding, (v) no shares of Preferred Stock are
held in the treasury of the Company and (vi) no options to acquire shares of
Preferred Stock have been issued by the Company and are outstanding. Immediately
prior to the Closing, (i) 10,000 shares of Common Stock will be issued and
outstanding, (ii) no shares of Common Stock will be held in the treasury of the
Company, (iii) no options to acquire shares of Common Stock will have been
issued by the Company and be outstanding, (iv) 5,006.46 shares of Series X
Preferred Stock will be issued and outstanding, (v) no shares of Preferred Stock
will be held in the treasury of the Company and (vi) no options to acquire
shares of Preferred Stock will have been issued by the Company and be
outstanding. All the outstanding shares of the Company's capital stock are duly
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authorized, validly issued, fully paid and non-assessable. When issued and paid
for by Buyer as provided in this Agreement, the Shares will be duly authorized,
validly issued, fully paid and non-assessable. Except as set forth above, there
are no shares of capital stock of the Company authorized, issued or outstanding.
Except for rights and obligations of the parties to the Stockholders Agreement
or as set forth on Schedule 3.1(c), there are no existing options, warrants,
calls, preemptive rights, subscriptions or other rights, convertible securities,
agreements, arrangements or commitments of any character, relating to the issued
or unissued capital stock of the Company obligating any Company Entity to issue,
transfer or sell or cause to be issued, transferred or sold any shares of
capital stock of, or other equity interest in, any Company Entity or securities
convertible into or exchangeable for such shares or equity interests or
obligations of any Company Entity to grant, extend or enter into any such
option, warrant, call, subscription or other right, convertible security,
agreement, arrangement or commitment. Except for the Stockholders Agreement or
as set forth on Schedule 3.1(c), there are no agreements or arrangements
regarding the voting or transfer of any capital stock of any Company Entity.
Except as set forth on Schedule 3.1(c), all of the outstanding shares of capital
stock of each of the Company's Subsidiaries are beneficially owned by the
Company, directly or indirectly, and all such shares have been duly authorized,
validly issued and are fully paid and nonassessable and are owned by a Company
Entity free and clear of all liens, charges,
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security interests, options, claims or encumbrances of any nature
whatsoever (collectively, "Liens").
The Shares will, upon issuance, represent all of the issued
and outstanding shares of capital stock of the Company except for (i) the 10,000
shares of Common Stock to be purchased from the Common Stockholder pursuant to
the Common Stock Purchase Agreement, (ii) the 2.31 shares of Series X Preferred
Stock to be purchased from the Buyer Designator pursuant to the Preferred Stock
Purchase Agreement and (iii) the 5004.15 shares of Series X Preferred Stock
owned by the Bank, all which 5006.46 shares of Series X Preferred Stock will be
redeemed immediately after the Closing with a portion of the proceeds from the
sale of the Shares.
(d) Consents and Approvals; No Violations. Except as set forth
on Schedule 3.1(d) and except for the filing of the Share Increase Amendment
with the Secretary of State of the State of Delaware pursuant to the DGCL and
for all filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), state and
foreign competition, antitrust and takeover laws, including applicable laws of
Australia, Brazil, Canada, Ireland, Mexico, New Zealand and Portugal and
applicable regulations of the European Union, none of the execution, delivery or
performance of this Agreement by the Company, the consummation by the Company of
the Transactions or the redemption of the shares of Series X Preferred Stock
owned by the Bank will (i) conflict
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with or result in any breach of any provision of the certificate of
incorporation or by-laws or similar organizational documents of any Company
Entity, (ii) require any Company Entity to make any filing with, or any Company
Entity to obtain any permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission or other governmental or
other regulatory authority, commission or agency (a "Governmental Entity"),
(iii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness (collectively, the "Debt Instruments"), lease,
airport concession agreement, franchise agreement, license, contract, agreement
or other instrument or obligation to which any of the Company Entities is a
party or by which any of them or any of their properties or assets may be bound
(a "Company Agreement") or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to any of the Company Entities or any of
their properties or assets, except, in the case of clauses (ii), (iii) and (iv),
for failures to make filings, or to obtain permits, authorizations, consents or
approvals, or violations, breaches, defaults, or rights of termination,
amendment, cancellation or acceleration, which would not have a Company Material
Adverse Effect.
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(e) Financial Statements. The Company has heretofore delivered
to Buyer audited consolidated financial statements of the Company and its
Subsidiaries at and for the fiscal year ended December 31, 1995 and unaudited
consolidated financial statements of the Company and its Subsidiaries at and for
the ten month period ended October 31, 1996 (the "Financial Statements"). The
Financial Statements, together with the notes thereto, present fairly in all
material respects the financial position of the Company as of the dates thereof
and the results of operations for the periods indicated in accordance with
United States generally accepted accounting principles consistent with past
practice, except as disclosed in the Financial Statements or in the notes
thereto, subject, in the case of the unaudited consolidated financial statements
of the Company and its Subsidiaries, to normal year-end adjustments.
(f) Absence of Changes. Since October 31, 1996, except as may
be disclosed in this Agreement or in Schedules hereto, there has not occurred
any material adverse change in the business, financial condition or results of
operations of the Company Entities taken as a whole, excluding any effect
resulting from (i) general economic conditions, (ii) any occurrence or condition
affecting the vehicle rental industry generally or (iii) any occurrence or
condition arising out of the execution, delivery or performance of this
Agreement and the consummation of the Transactions or the public announcement of
any thereof.
(g) Litigation. Except as set forth on Schedule
3.1(g) (which shall be deemed to include a list, if any, of false
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imprisonment litigation and claims, furnished to Buyer no later than January 20,
1997) and except for litigation and claims arising in the ordinary course of
conducting the vehicle rental business such as claims for personal injury,
property damage and workers' compensation (but excluding litigation and claims
for sexual harassment, unlawful employment practices, racial or other
discrimination involving employment or business practices and extraordinary and
non-ordinary course litigation and claims), as of the date hereof, there is no
action, suit or proceeding before or by any Governmental Entity, domestic or
foreign, now pending or, to the Company's knowledge, threatened against any
Company Entity or with respect to any properties or assets of any Company Entity
which, if adversely determined, would have a Company Material Adverse Effect.
(h) Title to Properties; Liens and Encumbrances. Except for
assets disposed of since October 31, 1996 in the ordinary course of business,
one of the Company Entities has marketable title to or a valid leasehold
interest in all of the tangible assets (i) capitalized on or included in the
consolidated balance sheet of the Company and its Subsidiaries at October 31,
1996 included in the Financial Statements, and (ii) acquired by a Company Entity
after October 31, 1996 and which would be capitalized on or included in such a
balance sheet prepared as of the date hereof, subject only to (A) statutory
Liens arising or incurred in the ordinary course of the Company's and its
Subsidiaries' businesses, (B) Liens disclosed or reflected in the Financial
Statements, (C) Liens for Taxes (as
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defined in Section 3.1(l)) not yet delinquent or the validity of which is being
contested in good faith by appropriate proceedings, (D) Liens which constitute
valid leases or subleases from a Company Entity to a third party, (E) Liens and
defects of title set forth in Schedule 3.1(h) and (F) Liens and defects of title
that do not have a Company Material Adverse Effect (Liens of the types
identified in clauses (A) through (F) above being referred to as "Permitted
Liens").
(i) Material Contracts. Schedule 3.1(i) sets forth, as of the
date hereof, each written Company Agreement which is material to the business or
operations of the Company Entities taken as a whole, including any agreement
limiting the ability of the Company to engage in business in any geographical
area (each, a "Material Company Agreement"). Each Material Company Agreement is
valid and binding (except to the extent that the invalidity or nonbinding nature
of any Material Company Agreement would not have a Company Material Adverse
Effect), and no Company Entity is in default in the performance of its
obligations under any such Material Company Agreement, except for defaults which
would not have a Company Material Adverse Effect. The Company Entities have no
material unwritten agreements.
Material Company Agreements include the following contracts
and other agreements to which a Company Entity is a party or by or to which a
Company Entity or any of their respective assets or properties is bound or
subject as of the date hereof:
(i) the ten agreements between a Company Entity
and a Franchisee, or other agreements relating to the
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franchise business operations, providing for the
greatest payments to or by the Company Entities per
agreement per calendar year;
(ii) advertising, market research and other marketing
agreements providing for payments by any Company Entity of more than
$1,500,000 per agreement per calendar year;
(iii) employment, severance, consulting or other
agreements with any current stockholder, director, officer or employee
which provide for the continuing obligation on the part of the Company
Entities to pay compensation in excess of $100,000 per calendar year;
(iv) agreements outside the ordinary course of business
relating to (x) the sale or lease (as lessor) by a Company Entity of
any assets or properties in excess of $1,500,000 per agreement per
calendar year, (y) the acquisition or lease (as lessee) by the Company
Entity of any assets or properties in excess of $1,500,000 per
agreement per calendar year or (z) any airport concession;
(v) agreements restricting the ability of the
Company Entities to incur indebtedness
("Indebtedness");
(vi) agreements relating to any guarantee of
Indebtedness by the Company Entities (other than indemnities made in
the ordinary course of business which are not material to the Company
Entities taken as a whole);
(vii) agreements relating to the making of any loan or
advance by a Company Entity other than (x) intercompany loans among the
Company Entities and (y) those made in the ordinary course of business
consistent with past practice;
(viii) agreements relating to Indebtedness, factoring
arrangements, sale and leaseback transactions and other similar
financing transactions providing for payments of more than $1,500,000
per agreement;
(ix) agreements providing for the indemnification by a
Company Entity thereof of any person, except those entered into in the
ordinary course of business and those which are not material to the
Company Entities taken as a whole;
(x) agreements with any Government Entity except
those entered into in the ordinary course of business
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and those which are not material to the Company
Entities taken as a whole;
(xi) joint venture, partnership or similar
documents or agreements which are material to the
Company Entities taken as a whole; and
(xii) other agreements, contracts or commitments not made
in the ordinary course of business which are material to the Company
Entities taken as a whole.
(j) Labor Matters. Except as set forth on Schedule 3.1(j), no
labor dispute with employees of any Company Entity exists or, to the Company's
knowledge, is threatened, which would have a Company Material Adverse Effect.
Except as set forth on Schedule 3.1(j), (i) no material
charges with respect to or relating to any Company Entity are pending before the
Equal Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices, which, if adversely determined
against any Company Entity, would have a Company Material Adverse Effect; and
(ii) the Company has not received written notice of the intent of any federal,
state, local or foreign agency responsible for the enforcement of labor or
employment laws to conduct an investigation with respect to or relating to any
Company Entity and, to the Company's knowledge, no such investigation is in
progress.
(k) Employee Programs. Schedule 3.1(k) sets forth, as
of the date of this Agreement:
(i) Each "employee benefit plan" as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), that is covered by ERISA and that is
maintained or otherwise contributed to
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by the Company Entities for the benefit of the employees of the Company
Entities (each a "Plan"), copies or descriptions of which have been
furnished or made available to Buyer (together with the most recent
Annual Report on Form 5500 required to be filed by the Company Entities
in connection with any Plan);
(ii) Each material plan or arrangement not subject to
ERISA maintained, or otherwise contributed to, by the Company Entities
for the benefit of its U.S. employees and providing for deferred
compensation, bonuses, stock options, employee insurance coverage or
any similar compensation or welfare benefit plan (each a "Benefit
Arrangement"), copies or descriptions of which have been furnished or
made available to Buyer;
(iii) Each material plan or arrangement not subject to
ERISA maintained, or otherwise contributed to, by the Company Entities
for the benefit of non-U.S. employees ("Foreign Employees"), other than
plans or arrangements required to be maintained, or otherwise
contributed to, pursuant to applicable laws or regulations of non-U.S.
jurisdictions, that provides for retirement benefits, termination
benefits, deferred compensation, bonuses, stock options, employee
insurance coverage or any similar compensation or welfare benefit plan
(each a "Foreign Plan" and, together with the Plans and Benefit
Arrangements, the "Employee Benefit Programs"), copies or descriptions
of which have been furnished or made available to Buyer;
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(iv) Each "multiemployer plan" (as such term is defined
in Section 3(37) of ERISA) that is contributed to by the Company
Entities, copies or descriptions of which have been furnished or made
available to Buyer; and
(v) Each written agreement with any employee of any Company
Entity involving an amount which in the aggregate involves in excess of
$100,000 and each collective bargaining agreement to which any Company
Entity is a party.
(l) Taxes. Except as set forth on Schedule 3.1(l), each
Company Entity and any consolidated, combined or unitary group for Tax (as
defined below) purposes of which the Company or any of its Subsidiaries is or
has been a member has timely filed all Tax Returns required to be filed by it,
has paid all Taxes due, has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid to employees, independent
contractors or other third parties, or has provided adequate reserves in its
Financial Statements for (or otherwise has adequately provided for) any Taxes
that have not been paid except where the failure to make such filings, pay such
Taxes or provide for such reserves or Taxes would not have a Company Material
Adverse Effect. Except as set forth on Schedule 3.1(l), (i) there is no claim
concerning any liability of any Company Entity for Taxes made by any Taxing
authority in writing which has not been fully resolved, (ii) the Company is not
under audit for any Tax year, (iii) no Company Entity has in effect a waiver of
any statute of limitations with respect to Taxes, and (iv) no Company Entity is
obligated to make any payments for which a
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deduction will be disallowed under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"). To the extent any discharge of indebtedness by
FMCC on or before the Closing Date is not excluded from income, the Company will
have available net operating loss carryforwards (taking into account the
limitations under Section 382 of the Code) at least equal to the amount of any
such nonexcluded income.
As used herein, "Taxes" shall mean any taxes of any kind,
including but not limited to those on or measured by or referred to as income,
gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. As used herein, "Tax Return" shall
mean any return, report or statement required to be filed with any governmental
authority with respect to Taxes.
(m) Government Licenses, Permits and Related Approvals. Except
as set forth in Schedule 3.1(m), the Company Entities have each license, permit,
consent, approval, authorization, qualification and order of any Governmental
Entity necessary to enable the Company Entities to conduct their respective
businesses as presently conducted and are in compliance with the requirements
thereunder, except where the failure to have any such license, permit, consent,
approval,
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authorization, qualification or order, or to be in compliance therewith, does
not have a Company Material Adverse Effect.
(n) Compliance. Except as set forth in Schedule 3.1(n), no
Company Entity is in violation of any law, rule, regulation, order, judgment or
decree applicable to any of the Company Entities or by which any of their
respective properties are bound or affected, except for any such violations
which do not have a Company Material Adverse Effect.
(o) Environmental Liability. Except as disclosed (i) in the
Financial Statements or the notes thereto, (ii) in the environmental reports
listed on Schedule 3.1(o) or (iii) on Schedule 3.1(o), and except for such
matters that, alone or in the aggregate, do not have a Company Material Adverse
Effect, to the Company's knowledge, (i) the Company Entities are in compliance
with all applicable Environmental Laws (as defined below); (ii) the properties
owned or operated by the Company Entities (including soil, groundwater or
surface features) (the "Properties") do not contain any Hazardous Substances (as
defined below) at a level which requires remedial activity under applicable
Environmental Law where the Hazardous Substance resulted from activity of the
Company Entities; (iii) no Company Entity has received written notice of any
claims or written demands alleging that the Company is in violation of, or
liable under, any Environmental Law; and (iv) the Company Entities are not
subject to liability for any off-site disposal or contamination.
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For purposes of this Agreement, "Environmental Law" means any
current law, regulation, order or decree relating to pollution, contamination,
wastes, Hazardous Substances or the environment, including any regulation
pertaining to underground storage tanks and cleanup of releases from such tanks;
and "Hazardous Substance" means any substance, chemical or material that is
listed, classified under or regulated as hazardous or toxic or as a pollutant by
any Governmental Entity pursuant to any Environmental Law, including petroleum
and petroleum products.
Buyer acknowledges and agrees that the representation and
warranty contained in this Section 3.1(o) is the only representation and
warranty made by the Company or any other person to Buyer with respect to the
subject matter of this Section 3.1(o), no other representation or warranty
contained in this Agreement shall apply to such subject matter and no other
representation or warranty, express or implied, is being made by the Company or
any other person with respect to such subject matter.
(p) Intellectual Property. Schedule 3.1(p) sets forth a true
and correct list of (i) each patent, trademark, trade name and registered
copyright owned by any Company Entity and which is material to the business or
operations of the Company Entities taken as a whole ("Material Owned
Intellectual Property") and (ii) each patent, trademark, trade name, registered
copyright, technology and process used by any Company Entity which is used
pursuant to a license or other right granted by a third party and
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which is material to the business or operations of the Company Entities taken as
a whole ("Material Licensed Intellectual Property"). The Company Entities own or
have the right to use pursuant to valid and effective agreements all Material
Owned Intellectual Property and Material Licensed Intellectual Property, except
to the extent that the failure to own or have the right to use such Material
Owned Intellectual Property or Material Licensed Intellectual Property would not
have a Company Material Adverse Effect. No claims are pending against any
Company Entity with respect to the use of any Material Owned Intellectual
Property or Material Licensed Intellectual Property or challenging or
questioning the validity or effectiveness of any license agreement relating to
the same, and the use by the Company Entities of the Material Owned Intellectual
Property and Material Licensed Intellectual Property does not infringe upon the
rights of any third party, except to the extent that any such claim or
infringement would not have a Company Material Adverse Effect.
(q) Other Transactions. Except (i) as disclosed in the
Schedules to this Agreement or (ii) as are not material to the Company Entities
taken as a whole, there are no transactions between a Company Entity, on the one
hand, and the Buyer Designator and/or its subsidiaries, on the other hand,
including all contracts, agreements, arrangements, understandings or loans.
(r) Finders' Fees. The Company has not retained, and
is not subject to the valid claim of, any finder, broker,
consultant or financial advisor in connection with the
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Transactions who might be entitled to a fee or commission from Buyer in
connection with the Transactions.
SECTION 3.2 Representations and Warranties of Buyer. Buyer
represents and warrants to the Company as follows:
(a) Due Organization of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing as a domestic corporation under
the laws of the state of its organization with all requisite corporate power and
authority to execute, deliver and perform this Agreement and to consummate the
Transactions.
(b) Validity of Agreement. Buyer has all necessary corporate
power and authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the Transactions. The execution, delivery and
performance of this Agreement by Buyer and the consummation by Buyer of the
Transactions have been duly authorized by all necessary corporate action on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer and,
assuming due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of Buyer enforceable against it in
accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(c) Consents and Approvals; No Violations. Except as
set forth on Schedule 3.2(c) and for all filings, permits,
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authorizations, consents and approvals as may be required under, and other
applicable requirements of, the HSR Act, state and foreign competition,
antitrust and takeover laws, including applicable laws of Australia, Brazil,
Canada, Ireland, Mexico, New Zealand and Portugal and applicable regulations of
the European Union, neither the execution, delivery or performance of this
Agreement by Buyer nor the consummation by Buyer of the Transactions will (i)
conflict with or result in any breach of any provision of the certificate of
incorporation or by-laws of Buyer, (ii) require Buyer to make any filing with,
or Buyer to obtain any permit, authorization, consent or approval of, any
Governmental Entity, (iii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract, agreement
or other instrument or obligation to which Buyer or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Buyer, any of its subsidiaries or any of their properties or
assets, except, in the case of clauses (ii), (iii) and (iv), for failures to
make filings, or to obtain permits, authorizations, consents or approvals, or
violations, breaches, defaults, or rights of termination, amendment,
cancellation or acceleration, which would not prevent or materially hinder or
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delay the ability of Buyer to perform its obligations under this Agreement and
to consummate the Transactions.
(d) Litigation. There is no action, suit or proceeding before
or by any Governmental Entity, domestic or foreign, now pending or, to Buyer's
knowledge, threatened against Buyer which, if adversely determined, would
prevent or materially hinder or delay the ability of Buyer to perform its
obligations under this Agreement or to consummate the Transactions.
(e) Available Funds. At the Closing, Buyer will have
sufficient funds to pay the following (collectively, the "Required Payments"):
(i) the Purchase Price, (ii) the Share Purchase Price (as defined in the
Preferred Stock Purchase Agreement), (iii) the Purchase Price (as defined in the
Common Stock Purchase Agreement), and (iv) the amount of Other Indebtedness (as
defined in Section 4.5) and all accrued but unpaid interest through the Closing
Date to be repaid pursuant to Section 4.5, which funds will be available at the
Closing to make the Required Payments. Buyer has obtained a binding written
commitment from Credit Suisse First Boston Corporation to obtain $225 million
pursuant to the commitment letter attached as Exhibit E to the Preferred Stock
Purchase Agreement.
(f) No Registration. Buyer is aware that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), or under any state securities laws. Buyer is not an underwriter (within
the meaning of such term under the Securities Act) with respect to the Shares
and is purchasing the Shares solely for investment, with no present
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intention to distribute any such Shares to any person, and Buyer will not sell
or otherwise dispose of such Shares except in compliance with the registration
requirements under the Securities Act and the rules and regulations promulgated
thereunder, and other applicable securities laws, or pursuant to exemptions
therefrom.
(g) Finders' Fees. Buyer has not retained, and is not subject
to the valid claim of, any finder, broker, consultant or financial advisor in
connection with the Transactions who might be entitled to a fee or commission
from the Company in connection with the Transactions, other than Credit Suisse
First Boston Corporation. Buyer will be solely responsible for paying all fees
and expenses that become due and payable to Credit Suisse First Boston
Corporation in connection with the Transactions.
SECTION 3.3 Representations and Warranties of the Company and
Buyer. Each of the Company and Buyer represents and warrants to the other that
it is the explicit intent of each party hereto that the Company is making no
representation or warranty whatsoever, express or implied, including any implied
warranty as to condition, merchantability or suitability, as to the properties,
assets or future prospects or performance of the Company Entities or such
properties or assets and that Buyer is taking the Company Entities "as is" and
"where is," except for the express representations and warranties of the Company
in this Agreement or in any Schedule or Exhibit, or in any certificate, document
or other instrument contemplated hereby and delivered in connection with
herewith.
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SECTION 3.4 Disclosure on Schedules. Disclosure of any fact or
item in any Schedule or Exhibit referenced by a particular Section of this
Agreement shall, should the existence of the fact or item be relevant to any
other Section of this Agreement, be deemed to be disclosed with respect to such
other Section whether or not a specific cross reference appears. Disclosure of
any fact or item in any Schedule or Exhibit shall not necessarily mean that such
fact or item, individually, is material to the Company Entities taken as a whole
or to the business or financial condition of the Company Entities taken as a
whole.
ARTICLE IV
COVENANTS OF THE PARTIES
SECTION 4.1 Access to Information Concerning Properties and
Records; Confidentiality. (a) During the period commencing on the date hereof
and ending on the Closing Date, the Company shall, and shall cause the other
Company Entities to, upon reasonable request, afford to Buyer, its counsel,
accountants and other authorized representatives reasonable access during normal
business hours to the properties, books and records of the Company Entities, in
order that Buyer may have the opportunity to make such reasonable investigations
as it shall desire to make of the business and affairs of the Company Entities.
The Company will, and will cause the other Company Entities and their respective
officers, employees, accountants and other agents to, furnish to Buyer such
additional financial and operating data and information as Buyer may from time
to time
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reasonably request. Buyer will hold any such information which is nonpublic in
confidence in accordance with the provisions of the existing confidentiality
agreement among the Company, Buyer Designator and Buyer (the "Confidentiality
Agreement").
SECTION 4.2 Conduct of the Company Business. Except as
contemplated by this Agreement and in connection with the Transactions, except
with the prior written consent of Buyer (which consent shall not be unreasonably
withheld or delayed) and except as set forth on Schedule 4.2, the Company
agrees, during the period from the date hereof until the Closing Date, that:
(a) the businesses of the Company Entities shall be conducted
in the ordinary and usual course consistent with past practice and each
Company Entity shall use reasonable efforts to preserve its business
organization intact and maintain its existing relations with material
customers, employees, creditors and business partners, and with all
persons or entities with which the Company has entered into franchise
agreements, airport concession agreements and material leases;
(b) the Company shall not, directly or indirectly,
split, combine or reclassify the outstanding Common Stock or
Preferred Stock;
(c) no Company Entity shall: (i) amend its certificate of
incorporation or by-laws or similar organizational documents; (ii)
declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to its capital stock other than
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dividends declared and paid by the Company's Subsidiaries to the
Company or its Subsidiaries; (iii) issue, sell, transfer, pledge,
dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital
stock of any class of the Company or its Subsidiaries; (iv) transfer,
lease, license, sell, mortgage, pledge, dispose of or encumber any
assets that are material to the Company Entities taken as a whole,
other than (A) in the ordinary course of business consistent with past
practice, (B) pursuant to agreements in effect on the date hereof, (C)
when such assets become worn out, unserviceable or no longer useful to
the businesses of the Company Entities taken as a whole or (D) pursuant
to Permitted Liens; or (v) redeem, purchase or otherwise acquire
directly or indirectly any of its capital stock, other than shares of
Series X Preferred Stock in accordance with the terms thereof;
(d) no Company Entity shall: (i) grant any increase in the
compensation payable or to become payable by any Company Entity to any
executive officer other than scheduled annual increases in the ordinary
course of business consistent with past practice; or (ii) except to the
extent currently required under applicable law or the terms of the
applicable agreement or arrangement, adopt or enter into any new (or
amend or otherwise increase, or accelerate the payment or vesting of
the amounts payable or to become
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payable under any existing) bonus, incentive compensation, deferred
compensation, severance, profit sharing, stock option, stock purchase,
insurance, pension, retirement or other employee benefit plan,
agreement or arrangement, other than the Special Bonus Program (as
defined in Section 4.7);
(e) no Company Entity shall: (i) incur or assume any debt
except for borrowings under existing credit facilities in the ordinary
course of business consistent with past practice; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
person, except in the ordinary course of business consistent with past
practice; (iii) make any loans, advances or capital contributions to,
or investments in, any other person, other than to wholly owned
Subsidiaries of the Company or in the ordinary course of business
consistent with past practice; or (iv) make any material capital
expenditure other than in the ordinary course of business consistent
with past practice;
(f) no Company Entity shall enter into any agreement,
contract, commitment or arrangement which would be a Material Company
Agreement, other than in the ordinary course of business consistent
with past practice, or amend any existing loan agreement or credit
facility;
(g) no Company Entity shall adopt a plan of complete
or partial liquidation, dissolution, merger, consolidation,
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restructuring, recapitalization or other material
reorganization of the Company or any of its Subsidiaries;
(h) no Company Entity shall pay, discharge or satisfy any
claim, liability or obligation (including contingent claims,
liabilities and obligations), other than in the ordinary course of
business consistent with past practice or as required by applicable law
or regulation or by any Governmental Entity; and
(i) no Company Entity shall enter into an agreement, contract,
commitment or arrangement to do any of the foregoing, or authorize any
of the foregoing.
SECTION 4.3 Further Assurances. (a) Subject to Section 4.3(b),
each of the Company and Buyer shall use reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the Transactions on the Closing Date. Without limiting the generality
of the foregoing, the Company shall, upon request, provide reasonable
cooperation to Buyer in Buyer's efforts to obtain any necessary consents of
third parties to the consummation of the Transactions (provided, however, that
in no event shall the Company be required to make any expenditure to any third
party from whom a consent is required in connection with obtaining any such
consent) and in connection with the Buyer's financing for the consummation of
the Transactions, including, upon reasonable request, providing financial
information to Buyer and attending meetings with potential
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financing sources of Buyer. In addition, in connection with Buyer's preparation
of any Information Statement or Proxy Statement (each as defined in the
Preferred Stock Purchase Agreement), the Company shall cooperate with Buyer in
the preparation thereof and shall furnish all information concerning it required
to be included therein.
(b) Notwithstanding anything to the contrary herein, Buyer
shall, and shall cause its affiliates to, (i) promptly effect all necessary
registrations and filings, including, but not limited to, filings under the HSR
Act and submissions of information requested by any Governmental Entity,
domestic or foreign, to secure antitrust clearance for the consummation of the
Transactions and (ii) promptly take all steps (including executing agreements
and submitting to judicial or administrative orders) required by the Federal
Trade Commission or its staff, the Assistant Attorney General in charge of the
Antitrust Division of the Department of Justice or such person's staff, any
state attorney general or its staff, or any similar foreign Governmental Entity,
to secure antitrust clearance for the consummation of the Transactions
(including by avoiding or setting aside any injunction or other order of any
court of competent jurisdiction or other Governmental Entity), including all
steps to make arrangements for, or to effect the sale or other disposition of,
particular assets or categories of assets or businesses of Buyer or any of its
affiliates, or assets or businesses of the Company Entities, and to hold
separate (including pursuant to arrangements which restrict, limit or
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prohibit access to) the assets or businesses of the Company Entities pending any
such sale or other disposition. All the actions to be taken by Buyer or its
affiliates pursuant to this Section 4.3(b) will be consistent with their
respective obligations under applicable law or any agreement to which any of
such persons is a party. Each party agrees promptly to inform the other party of
any communication received by such party from the Federal Trade Commission, the
Antitrust Division of Department of Justice or any other Governmental Entity
regarding any of the Transactions.
(c) If at any time after the Closing Date any further action
is reasonably necessary to carry out the purposes of this Agreement, the parties
hereto shall take or cause to be taken such action, including the execution and
delivery of such further instruments and documents as may be reasonably
requested by the other party for such purposes or otherwise to consummate and
give effect to the Transactions.
(d) The Company hereby consents to the issuance by Buyer of
(i) the Series A Preferred Stock and the underlying Class A Common Stock and
(ii) additional shares of capital stock or securities convertible into capital
stock in connection with the consummation and financing of the Transactions.
SECTION 4.4 No Solicitation by Company. None of the Company
Entities will solicit, initiate or encourage the submission of any proposal or
offer from any person or engage in discussions with any person or enter into any
agreement with any person relating to the acquisition of capital stock or a
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substantial portion of the assets of the Company Entities taken as a whole or
any merger, consolidation, share exchange or other similar transaction involving
any Company Entity. The Company will notify Buyer promptly if any person makes
any proposal, offer or inquiry with respect to any of the foregoing.
SECTION 4.5 Repayment of Buyer Designator
Indebtedness. At the Closing, the Company shall:
(a) immediately upon its receipt of the Purchase Price, use
the entire proceeds thereof, first, to redeem the Series X Preferred
Stock held by the Bank and, second, to repay to Buyer Designator and/or
its affiliates, respectively, including FMCC, a portion of the
outstanding principal amount of indebtedness of the Company to such
persons under the credit facilities set forth on Schedule 4.6 to the
Preferred Stock Purchase Agreement, as such persons shall direct;
(b) repay all indebtedness owed to Buyer Designator or any
affiliate or affiliates of Buyer Designator, including FMCC (as
specified in written notice delivered by the Buyer Designator to the
Company at least two days prior to the Closing) under the credit
facilities set forth on Schedule 4.6 to the Preferred Stock Purchase
Agreement (collectively, the "Facilities"), except for an amount of
such indebtedness equal to the Cancellation Amount (as defined in
Section 5.2(d) of the Preferred Stock Purchase Agreement) (the "Other
Indebtedness") and all accrued but unpaid interest through the Closing
Date;
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(c) cause the obligations of Buyer Designator and/or its
affiliates, respectively, including FMCC, to make further extensions of
credit under each of the Facilities to be terminated; and
(d) cause the other obligations of Buyer Designator and/or its
affiliates, respectively, including FMCC, in respect of the Facilities,
including all obligations pursuant to each letter of credit, support
agreement and other agreement or arrangement referred to on Schedule
4.6 to the Preferred Stock Purchase Agreement (collectively, the "Other
Arrangements"), to be terminated and replaced by a substitute
arrangement, except for the $25 million letter of credit issued in
support of the Budget Fleet Finance asset- backed medium term note
program, which shall be fully collateralized by a letter of credit, in
form satisfactory to FMCC, issued for the benefit of FMCC by Credit
Suisse or another financial institution acceptable to Seller in its
sole discretion.
SECTION 4.6 Net Income Adjustment. (a) No later than May 15,
1997, the Company shall prepare and deliver to each of Buyer Designator and
Buyer an income statement of the Company for the period from and including
January 1, 1997 through the close of business on March 31, 1997 prepared in
accordance with United States generally accepted accounting principles (the
"First Quarter Income Statement"). The First Quarter Income Statement shall be
prepared by the Company, prior to the Closing Date, in consultation with Coopers
& Xxxxxxx LLP, Buyer Designator's
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independent accountants, or, after the Closing Date, in consultation with Xxxxxx
Xxxxxxxx LLP, Buyer's independent accountants. Thereafter, the Company shall
cooperate with each of Buyer Designator and Buyer in providing responses to
information requests from each of them in connection with their review of the
First Quarter Income Statement. In addition, the Company shall cooperate with
the Neutral Auditors (as defined in the Preferred Stock Purchase Agreement) in
providing responses to information requests from the Neutral Auditors.
(b) If the Adjustment Payment Date (as defined in the
Preferred Stock Purchase Agreement) is the Closing Date, then each of the
Company and Buyer shall enter into an amendment to this Agreement, on terms to
be negotiated in good faith among the Company, Buyer and Buyer Designator,
providing for (i) if there is a Buyer Adjustment Amount (as defined in the
Preferred Stock Purchase Agreement), an increase in the amount of the Purchase
Price by the Buyer Adjustment Amount or (B) if there is a Seller Adjustment
Amount (as defined in the Preferred Stock Purchase Agreement), a reduction in
the amount of the Purchase Price by the Seller Adjustment Amount, as the case
may be, and, unless the parties otherwise agree (with the consent of Buyer
Designator), in each case, as appropriate, an adjustment in the number of
Shares.
SECTION 4.7 Special Bonus Program. The Company shall establish
a special bonus program (the "Special Bonus Program") providing for bonus
payments to Company employees with an aggregate value equal to $4,800,000;
provided that Buyer
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Designator shall, upon such terms as shall have been agreed as provided below,
have funded $2,400,000 thereof in cash to the Company or Buyer at the Closing,
as Buyer shall direct. The Special Bonus Program shall be on such terms as Buyer
Designator and Buyer shall agree after good faith negotiations and, in any
event, shall provide for broad participation by employees of the Company (it
being understood that it is the intent of the parties that the Special Bonus
Program provide incentive to approximately 1,400 employees of the Company and
that, subject to agreement between Buyer Designator and Buyer, all or a portion
of the benefits under such Special Bonus Program may be stock options issued by
Buyer); provided that Buyer may, at its option, fund one-half of the Special
Bonus Program in stock options of Buyer with a value of $2,400,000.
ARTICLE V
CLOSING CONDITIONS
SECTION 5.1 Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or other legal restraint or prohibition
preventing the consummation of the Transactions shall have been issued
by any court of competent jurisdiction or by any governmental or
regulatory body and still be in effect; nor shall any statute, rule,
regulation or executive order have been promulgated or
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enacted by any Governmental Entity which enjoins or otherwise prohibits
or makes illegal the consummation of the Transactions.
(b) All applicable waiting periods under the HSR Act
(including any extensions thereof) shall have expired or been
terminated, and all applicable approvals and clearances under any other
applicable merger control law or regulation shall have been obtained,
except those for which the failure to obtain such approval or clearance
would not result in a Company Material Adverse Effect.
(c) The closing of the transactions contemplated by the
Preferred Stock Purchase Agreement shall have been consummated.
(d) The closing of the transactions contemplated by the Common
Stock Purchase Agreement shall have been consummated.
SECTION 5.2 Conditions to the Obligations of Buyer. The
obligation of Buyer to effect the Closing is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions:
(a) The representations and warranties of the Company shall be
true and accurate as of the Closing Date as if made at and as of such
date (except for those representations and warranties that address
matters only as of a particular date or only with respect to a specific
period of time which need only be true and accurate as of such date or
with respect to such period), except where the failure of such
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representations and warranties to be so true and correct (without
giving effect to any limitation contained therein as to "materiality"
or "Company Material Adverse Effect"), would not, individually or in
the aggregate, have a Company Material Adverse Effect.
(b) The Company shall have performed in all material respects
the Company's obligations hereunder required to be performed by the
Company at or prior to the Closing.
(c) The Company shall have delivered to Buyer and to Buyer
Designator a certificate, duly executed by the Company, to the effect
set forth in Sections 5.2(a) and 5.2(b).
(d) Since October 31, 1996, except as may be disclosed in this
Agreement or in the Schedules hereto, there shall not have occurred any
material adverse change in the business, financial condition or results
of operations of the Company Entities taken as a whole, excluding any
effect resulting from (i) general economic conditions, (ii) any
occurrence or condition affecting the vehicle rental industry generally
or (iii) any occurrence or condition arising out of the execution,
delivery or performance of this Agreement and the consummation of the
Transactions or the public announcement of any thereof.
SECTION 5.3 Conditions to the Obligations of the Company. The
obligation of the Company to effect the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions:
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(a) The representations and warranties of Buyer shall be true
and accurate as of the Closing Date as if made at and as of such date
(except for those representations and warranties that address matters
only as of a particular date or only with respect to a specific period
of time which need only be true and accurate as of such date or with
respect to such period), except where the failure of such
representations and warranties to be so true and correct (without
giving effect to any limitation contained therein as to "materiality"
or exception contained therein for matters that would or would not, as
the case may be, prevent or materially hinder or delay the ability of
Buyer to perform its obligations under this Agreement and to consummate
the Transactions), would not, individually or in the aggregate, prevent
or materially hinder or delay the ability of Buyer to perform its
obligations under this Agreement and to consummate the Transactions.
(b) Buyer shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the
Closing.
(c) Buyer shall have delivered to the Company and to Buyer
Designator a certificate, duly executed by its Chief Executive Officer
or Chief Financial Officer, to the effect set forth in Sections 5.3(a)
and 5.3(b).
SECTION 5.4 No Closing Unless All Transactions Occur.
Notwithstanding anything to the contrary in this Agreement or
elsewhere, the Closing shall be deemed not to have occurred (and
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any actions taken by any party hereunder in connection with the Closing shall be
unwound) unless all of the conditions to closing contained in each of the
Preferred Stock Purchase Agreement and the Common Stock Purchase Agreement shall
have been satisfied (or waived in accordance with the terms and conditions of
such agreements) and such closings under such agreements shall have been
consummated in accordance with the terms of such agreements.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination. This Agreement shall be terminated
and the transactions contemplated hereby shall be abandoned if, prior to the
Closing, the Preferred Stock Purchase Agreement shall have been terminated.
SECTION 6.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 6.1, this Agreement shall
forthwith become null and void, and there shall be no liability on the part of
the Company or Buyer except for the Company's or Buyer's, as the case may be,
breach of this Agreement and except that the provisions of the last sentence of
Section 4.1, Article VII and Article VIII shall survive any such termination.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
LIMITATION OF REMEDIES
SECTION 7.1 Survival of Representations and Warranties. The
respective representations and warranties of the Company and Buyer contained in
Article III shall survive the
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Closing (subject, with respect to remedies for breach thereof, to Section 7.2),
to but not including the first anniversary of the Closing Date and from and
after the first anniversary of the Closing Date the respective representations
and warranties of the Company and Buyer contained in Article III shall terminate
and be of no further force or effect, except to the extent that, prior to such
first anniversary of the Closing Date, written notice of the breach of such
representation and warranty shall have been given (which written notice shall
specify the particular representation and warranty the breach of which is
alleged and the particular facts underlying each such allegation), in the case
of an alleged breach of a representation and warranty by the Company, to the
Company (with a copy to Buyer Designator), or, in the case of an alleged breach
of a representation and warranty by Buyer, to Buyer (with a copy to Buyer
Designator). Notwithstanding the immediately preceding sentence, the
representations and warranties of the Company contained in Sections 3.1(a),
3.1(b), 3.1(c), 3.1(k), 3.1(l) and 3.1(o) shall survive the Closing (subject,
with respect to remedies for breach thereof, to Section 7.2), to but not
including the third anniversary of the Closing Date and from and after the third
anniversary of the Closing Date the representations and warranties of the
Company contained in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(k), 3.1(l) and 3.1(o)
shall terminate and be of no further force or effect, except to the extent that,
prior to such third anniversary of the Closing Date, written notice of the
breach of such representation and warranty shall have been given
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in the same manner and to the same person as set forth in the
preceding sentence.
SECTION 7.2 Limitation of Remedies. (a) The provisions of
Article VII of the Preferred Stock Purchase Agreement, subject to the
limitations and exclusions thereof, shall be the sole and exclusive remedy, at
law or in equity, of Buyer for any liabilities, obligations, losses, damages,
claims, actions, suits, judgments or settlements, including costs, expenses and
disbursements, including reasonable attorneys' fees and expenses (collectively,
"Losses"), arising out of or resulting from any breach by the Company of a
representation or warranty contained in Section 3.1, and the Company shall have
no liability for any such Losses, except to the extent any such Loss arises out
of or results from fraud or willful misrepresentation on the part of the
Company.
(b) In no event shall any party hereto be liable to the other
(or to any other person) for consequential, punitive or special damages arising
out of any breach of the provisions of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. All notices, requests, demands or other
communications provided herein shall be made in writing and shall be deemed to
have been duly given (unless otherwise specifically provided in any Section of
this Agreement) if delivered as follows:
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If to the Company:
Budget Rent A Car Corporation
0000 Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Chief Executive Officer
Fax: 000-000-0000
with copies to:
Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Secretary
Fax: (000) 000-0000
Tel: (000) 000-0000
-and-
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
Tel: (000) 000-0000
If to Buyer:
Team Rental Group, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Fax: 000-000-0000
Tel: 000-000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx III, Esq.
Fax: (000) 000-0000
Tel: (000) 000-0000
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on (i) the date of delivery
if sent by messenger, (ii) on the business day following the business day on
which delivered
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to a recognized courier service if sent by overnight courier, or (iii) on the
fifth business day after the mailing thereof if sent by mail. Notices may also
be delivered by fax, provided that any such notice also is delivered in a manner
contemplated by clause (i), (ii) or (iii) above.
SECTION 8.2 Publicity. The parties hereto agree that, without
the prior written consent of Buyer Designator, they will not issue any press
release or otherwise make any public announcement with respect to this Agreement
or the Transactions, except as may be required by applicable law (including
federal securities laws) if such party determines in good faith that it is
appropriate to do so and provides prompt prior written notice to Buyer
Designator. The Company agrees that, without the prior written consent of Buyer,
it will not issue any such press release or otherwise make any such public
announcement with respect to this Agreement or the Transactions.
SECTION 8.3 Costs and Expenses. All costs and expenses
incurred in connection with this Agreement and the consummation of the
Transactions shall be paid by the party incurring such expenses.
SECTION 8.4 Amendment and Modification. This Agreement may be
amended, modified and supplemented in any and all respects by written agreement
of the parties hereto; provided, however, that no amendment, modification or
supplement shall be effective without the prior written consent of Buyer
Designator.
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SECTION 8.5 Waivers and Extensions. Each party to this
Agreement may waive any right of such party or any breach or default of the
other party to this Agreement or conditions to its own obligations; provided
that such waiver will not be effective against the waiving party unless it is in
writing, is signed by such party and specifically refers to this Agreement;
provided, further, that (i) no waiver by the Company shall be effective without
the prior written consent of Buyer Designator and (ii) no waiver by Buyer shall
be effective without the prior written consent of Buyer Designator unless such
waiver by Buyer includes an absolute and unconditional release of Buyer
Designator from any and all Losses that may arise out of or result from the
right, breach, default or condition waived by Buyer. Waivers may be made in
advance or after the right waived has arisen or the breach or default waived has
occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
SECTION 8.6 Interpretation. (a) When a reference is made in
this Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section, Exhibit or Schedule of this Agreement unless otherwise indicated.
Titles and headings of sections of this Agreement are for convenience only and
shall not
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affect the construction of any provision of this Agreement. The term "Schedules"
or "Schedule" means the schedules included in disclosure schedules delivered to
Buyer or Seller, as the case may be, to the other concurrently with the
execution and delivery hereof.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation".
(c) Whenever the phrase "to the Company's knowledge" is used
in this Agreement, such phrase means the actual knowledge of the persons listed
on Schedule 8.6(c).
(d) Whenever the phrase "consistent with past practice" or any
similar phrase is used in this Agreement with respect to any Company Entity,
such phrase shall be deemed to mean past practice of the Company Entities taken
as a whole since October 1995.
(e) The term "person" means an individual, corporation,
partnership, limited liability company, association, trust, incorporated
organization, Governmental Entity or other entity.
SECTION 8.7 Entire Agreement; Third Party Beneficiaries;
Assignment. This Agreement and the Confidentiality Agreement (including the
exhibits hereto and the documents, including the Preferred Stock Purchase
Agreement and the Common Stock Purchase Agreement, and the instruments referred
to herein and therein): (a) constitute the entire agreement and supersede all
prior agreements and understandings, both written
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and oral, among the parties with respect to the subject matter hereof, and (b)
are not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder, except that Buyer Designator shall be a third
party beneficiary of, and entitled to enforce, the representations, warranties,
covenants, conditions and other terms and provisions of this Agreement. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other party and Buyer
Designator. This Agreement will be binding upon the parties and their respective
successors and assigns.
SECTION 8.8 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement in accordance with
Section 8.4 so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby may be consummated as originally contemplated to the fullest
extent possible.
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SECTION 8.9 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Michigan without
giving effect to the principles of conflicts of law thereof.
SECTION 8.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any material provision of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to the remedy of specific performance of the material
terms hereof, subject to Section 7.2, in addition to any other remedy at law or
equity.
SECTION 8.11 Resolution of Disputes. If a dispute arises
between the parties relating to this Agreement, then the parties hereto (and
Buyer Designator, as a third party beneficiary of the provisions of this
Agreement) shall implement the procedures set forth in Section 8.11 of the
Preferred Stock Purchase Agreement, subject to the provisions thereof.
SECTION 8.12 Consent to Jurisdiction; Waiver of Jury
Trial. (a) Subject to Section 8.11, each of the parties hereto:
(i) consents to submit itself to the personal
jurisdiction of (A) the United States District Court for the Eastern
District of Michigan in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement to
the extent such court would have jurisdiction with respect to such
dispute and (B) the Courts of the State of Michigan otherwise;
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(ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction or venue by motion or other request for
leave from any such court;
(iii) agrees that it will not bring any action relating
to this Agreement or any of the transactions contemplated by this
Agreement in any court other than such courts; and
(iv) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in Section 8.1 or at
such other address of which the other party shall have been notified
pursuant thereto; and
(v) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction.
(B) EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING IN RELATION TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
[Continued on next page.]
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SECTION 8.13 Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Agreement with legal and binding effect as of
the date first above written.
BUDGET RENT A CAR CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: Chairman
TEAM RENTAL GROUP, INC.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chairman and Chief Executive
Officer
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