EXHIBIT 10.7
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MIS SUPPORT AGREEMENT
THIS MIS SUPPORT AGREEMENT ("Agreement") is made as of this 17th day
of October, 1996 (the "Effective Date"), by and between Ryder Truck Rental,
Inc., a Florida corporation 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.), a Delaware corporation with its principal place of business at
0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 ("TRS"). Ryder and TRS are at times
referred to herein individually as a "Party" and collectively as the "Parties".
WHEREAS, Ryder and TRS are parties to an Asset and Stock 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") and, in order to facilitate the orderly
transfer of certain assets of the Division to TRS and at TRS's request, Ryder
agrees to provide certain MIS support services for the Division on a
transitional basis and for a limited period after the Closing in accordance with
the terms of this Agreement.
NOW, THEREFORE, in consideration of the rights and obligations set
forth herein and in the Asset Purchase Agreement, the adequacy of which is
hereby acknowledged, the Parties agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
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have the meanings set forth in the Asset Purchase Agreement.
2. Services to be Provided.
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(a) Transition Services. Ryder hereby agrees to provide, or cause
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its Affiliates (as defined hereinbelow) or a third party to provide, to TRS from
and after the Closing, the administrative and support services described on
Schedules A through K hereto (each, a "Transition Service" and collectively, the
"Transition Services") for such period of time as TRS may determine to be
desirable for the conduct of the Business, but not to exceed the maximum period
for each such Transition Service as may be set forth in the applicable Schedule
hereto (the "Maximum Service Period"). Unless Ryder otherwise agrees (in its
sole discretion), and unless otherwise expressly set forth in the Schedules
hereto, Ryder shall not be required to provide any Transition Service for more
than twenty-four (24) months after the Closing.
From time to time, TRS may request Ryder to perform certain services
for its wholly owned subsidiary, RCTR, Inc.
* 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.
("RCTR"). TRS agrees to obtain from RCTR such authorizations as are necessary to
accomplish such services. Ryder shall have no duty to inquire of TRS whether
such authorizations have been obtained. Ryder may rely upon TRS' covenant in the
second sentence of this paragraph. 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 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.
(b) Level of Transition Services. The specific service levels and
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limitations applicable to each Transition Service shall be set forth in the
relevant Schedule therefor. Nothing in this Agreement shall oblige Ryder to act
in breach of the requirements of any law, rule or regulation applicable to it or
violate any rights of, or any agreements with, any third party.
(c) Third Party Providers. Ryder, in its sole discretion, may (i)
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outsource all or any part of the Transition Services; and (ii) retain the
services of third parties (including, without limitation, Affiliates, agents,
consultants and subcontractors) to render all or any part of the Transition
Services. Any and all such parties referred to in (i) and (ii) above are
hereinafter referred to as "Third Party Providers." Ryder shall provide TRS at
least thirty (30) days prior notice in the event Ryder elects to outsource
Transition Services under any of Schedules A, B, C, F, J or K which include in
excess of * in monthly xxxxxxxx with respect to any such Schedule, provided,
however, that such notice shall not be required in the event of termination of
any employee (other than for purposes of outsourcing) providing services
hereunder. Ryder shall not utilize outsourcing for the purpose of diminishing
the skill or manner with which Transition Services are performed.
(d) Former Employees. Ryder shall be entitled to use, in the
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provision of the Transition Services, a reasonable amount of the services of
those former employees of Ryder who are employed by TRS as a result of the
acquisition of certain assets relating to the Business by TRS, which employees
shall be made available by TRS to Ryder for this purpose upon reasonable prior
notice. The Scheduling of Services to be rendered by such employees by TRS
shall be mutually agreed upon by the Transition Coordinators from time to time.
(e) New Equipment. Ryder shall obtain on behalf of TRS any
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additional hardware or software required by Ryder to provide a Transition
Service ("New Equipment"); provided, however, that no such purchase shall be
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made on behalf of TRS in excess of $5,000 on any one (1) purchase order without
the prior written consent of TRS's Transition Coordinator. Ryder shall not be
liable for any delays in performing any Transition Service
* 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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resulting from TRS's failure to give timely approval of any required acquisition
of New Equipment. Further, the parties agree that Ryder shall not be obligated
to perform any Transition Service in the event any necessary New Equipment that
is not approved by TRS pursuant to this section. Ryder shall (i) make
commercially reasonable efforts to identify suppliers with the most favorable
terms for any New Equipment, and (ii) act as TRS's agent in acquiring the New
Equipment on behalf of TRS. TRS shall pay to Ryder, the supplier or a third
party lessor, as applicable, the purchase, license or lease fees in respect of
the New Equipment. Except as otherwise agreed in writing by the Parties or as
otherwise provided in this Agreement, all rights in and title to any New
Equipment purchased by Ryder on behalf of TRS and paid for by TRS shall belong
to TRS.
(f) TRS Software. Solely for purposes of the Transition Services and
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without limiting any of Ryder's rights under the Software License Agreement of
even date herewith between Ryder and TRS, TRS hereby grants to Ryder the right
to use, copy, modify and prepare derivative works of any software owned by,
licensed by or used by TRS that is required by Ryder to provide a Transition
Service, which license shall terminate effective upon the termination of the
applicable Transition Service. TRS shall grant a similar license to any Third
Party Provider that may be retained by Ryder to the extent necessary to render
any Transition Service. TRS, at its expense, shall obtain all consents or
approvals necessary to allow Ryder and Third Party Providers to exercise such
rights as necessary to provide the Transition Services.
(g) Ryder's Access. To the extent reasonably required for Ryder's
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personnel to perform the Transition Services, TRS shall provide Ryder's
personnel and Third Party Providers with reasonable access to TRS's facilities,
including, without limitation, office space and dealer locations, and
telecommunications and computer equipment, systems and software. As a condition
to providing any Transition Service, Ryder may restrict or prohibit any changes
in the location of, certain telecommunications and computer equipment and
systems being transferred to TRS pursuant to the Asset Purchase Agreement to the
extent set forth in the applicable Schedules, and TRS shall be bound by all such
requirements and restrictions.
(h) Software Provided by Ryder. From time to time in connection with
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Ryder's rendering the Transition Services to TRS, Ryder may provide or make
software available to TRS. Unless otherwise agreed to in writing by the Parties
pursuant to a separate agreement, TRS shall not license, sublicense, lease,
sublease, transfer, copy, modify, adapt, reverse engineer, decompile,
disassemble, disclose or provide any such software, nor create derivative works
therefrom or use the software to provide any services to third parties.
Further, in no event shall 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.
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software be transferred to any machine other than the one (1) machine upon which
the software is installed, or to any location other than the location at which
the software has been installed, without the express prior written consent of
Ryder.
(i) Transition Coordinators. Each of TRS and Ryder shall designate
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one (1) transition coordinator (each, a "Transition Coordinator" and
collectively, the "Transition Coordinators") who will provide continuous
oversight and coordination of, and communicate concerning disputes with respect
to, the Transition Services who will be available to TRS and Ryder during normal
business hours and who will be responsible for providing for, or delegating the
provision of assistance regarding, the Transition Services. TRS and Ryder may
from time to time substitute the persons serving as Transition Coordinators with
other persons who, in the reasonable judgment of the Party appointing the
Transition Coordinator, are qualified to serve in those positions.
(j) As used herein the term "Year 2000 Issues" shall mean issues with
respect to computer hardware and software systems arising out of the change from
calendar year 1999 to calendar year 2000. Ryder currently plans to retain one
or more Third Party Providers to ascertain the scope of services which may be
required by Ryder as a result of Year 2000 Issues. The Parties agree that Ryder
shall have no obligation whatsoever to (i) include any of TRS's hardware or
software in said study, nor consult with TRS pertaining thereto or (ii) make any
modifications to Ryder's or TRS's hardware or software as a result of any Year
2000 Issue, provided, that since a portion of Ryder's hardware and software will
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be utilized by TRS pursuant to the Asset Purchase Agreement, this Agreement and
the Software License Agreement between the Parties of even date herewith, Ryder,
at its sole expense, shall make said studies available to TRS. At the request
of TRS and subject to (x) TRS's agreement to reimburse Ryder for any related
increased costs and (y) Ryder's rights under its agreements with third party
software developers who may be retained by Ryder, Ryder shall also make
available to TRS any modifications to software shared by Ryder and TRS and which
is being licensed to TRS by Ryder under the Software License Agreement, of even
date, provided however that Ryder shall have no obligation to install any such
modifications and disclaims all representations and warranties with respect
thereto including without limitation the warranties of merchantability, fitness
for a particular purpose and non-infringement.
3. Terms and Termination.
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(a) Early Termination. Any specific Transition Service may be
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terminated at TRS's election upon ninety (90) days, prior written notice to
Ryder at any time prior to the expiration of the Maximum Service Period for such
Transition Service
* 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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provided, however, that all Transition Services described on the same Schedule
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(other than those Transition Services contained on Schedules A and K) must be
terminated simultaneously. Any termination of any Transition Service shall not
terminate this Agreement with respect to any other Transition Service then being
provided subject to this Agreement. If any Transition Service is terminated by
TRS, TRS may not elect to reinstitute such Transition Service.
(b) Term. Unless earlier terminated by mutual agreement of the
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Parties or pursuant to the terms hereof, this Agreement will expire with respect
to each Transition Service at the end of the Maximum Service Period for such
Transition Service. TRS specifically acknowledges and agrees that all
obligations of Ryder to provide each Transition Service shall immediately cease
upon the expiration of the Maximum Service Period for such Transition Service
(or any extension thereof which may be mutually agreed to by the Parties), and
Ryder's obligations to provide all of the Transition Services shall immediately
cease upon the termination of this Agreement. Upon the cessation of Ryder's
obligation to provide any Transition Service, TRS shall immediately cease using,
directly or indirectly, such Transition Service (including, without limitation,
any and all Ryder software or third party software and all computer and
telecommunications services and equipment used in connection with Ryder's
provision of such Transition Service, unless the same has been provided to TRS
pursuant to a separate agreement).
4. Compensation; Taxes.
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(a) Price of Services. The Transition Services shall be provided to
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TRS at the rates set forth on the applicable Schedules hereto.
(b) Billing. Ryder shall invoice TRS weekly in arrears for all
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charges for Transition Services to TRS, which invoice shall be accompanied by
reasonable documentation or explanation supporting such 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. In the case of charges believed to be
billed in error, TRS shall timely pay the undisputed portion of the invoice, and
on or before the due date for payment of the charges ("Due Date"), TRS shall
notify Ryder in writing of the portion believed to be billed in error and give
Ryder an explanation, in reasonable detail, of the reasons for its belief. The
due date for these disputed sums shall then be extended for ten (10) days (or
such later time as both parties may agree in writing) from the Due Date to give
the parties time to negotiate
* 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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resolution of the dispute, which both parties will do in good faith.
All charges shall conclusively be presumed correct unless Ryder
receives notice within one hundred eighty (180) days of the invoice date.
All overdue amounts shall bear interest at a rate equal to the lower
of: (i) ten percent (10%) per annum or (ii) the highest rate permitted by law
("Past Due Interest").
At Ryder's request, TRS shall pay directly any and all fees payable to
subcontractors that provide Transition Services to TRS.
(c) Additional Fees and Taxes Payable. In addition to the payments
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described in Sections 2(e) and 4(a) hereof, TRS shall reimburse to Ryder an
amount equal to the sum of: (i) subject to and without duplication of the
provisions of Sections 2(e) and 4(a) hereof, all direct out-of-pocket fees and
expenses (e.g. reasonable travel and lodging) incurred by Ryder in rendering the
Transition Services, (ii) * (iii) any and all taxes (other than taxes based on
Ryder's net income or gross income) assessed on the provision of the Transition
Services (including, without limitation, personal property taxes which may be
payable by Ryder or software licensed to or acquired by Ryder in order to render
the Transition Services hereunder) without any offset or deduction of any nature
whatsoever. Such costs, expenditures and taxes will be billed to TRS in the
monthly invoices rendered pursuant to Section 4(a) hereof. * .
(d) Letter of Credit. TRS shall obtain and maintain a letter of
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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
9(a)(i) of this Agreement or any of the other agreements between the parties of
even date herewith entitled Vehicle Maintenance Agreement, Used Truck Sales
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.
* 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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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 11(c) 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 11(c)
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.
(e) Financial Statements. TRS agrees to provide Ryder with the
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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: (i) 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 Ratios; 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.
5. Confidential Information. Each Party will keep, and will cause
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its Affiliates to keep, confidential any and all Confidential Information of the
other Party that it receives in the course of performing its obligations under
this Agreement and will not, without the other Party's written consent, use any
of such Confidential Information except in connection with performing its
obligations hereunder. Access to Confidential Information by officers,
directors, employees and agents of each Party will be restricted on a "need-to-
know" basis. In connection with the implementation of each Transition Service,
the Transition Coordinators will mutually agree upon what methods are necessary,
including, but not limited to, access controls, passwords and other security
measures, to effect the purposes of this Section 5. Notwithstanding the
foregoing, to the extent that a Party may become legally compelled, such Party
may disclose such information if such Party shall first have afforded
* 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 other Party reasonable opportunity to obtain an appropriate protective order
or other assurance of confidential treatment for the information required to be
disclosed. Upon termination of this Agreement, each Party will return, and will
cause its Affiliates to return, to the other Party all tangible embodiments (in
both written and electronic form, including all copies thereof) of the
Confidential Information which are in its respective possession. Ryder and TRS
agree that they will, if requested by the other Party, cause any employees or
agents of it or its Affiliates who are engaged in providing Transition Services
hereunder to agree in writing to be bound by the provisions of this Section 5.
6. Insurance; Indemnities.
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(a) During the term of this Agreement, TRS will 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
Commercial General Liability Seventy-Five Million and
Insurance Policy with Broad no/100 Dollars ($75,000,000.00)
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, TRS shall cause the coverage provided by each
such policy to be kept in place for a period of one (1) year after the effective
date of termination or expiration of this Agreement.
TRS may self-insure up to One Million and No/100 Dollars
($1,000,000.00) as a deductible.
(b) Each liability Insurance Policy shall:
(i) be written by an insurance company reasonably acceptable to
Ryder (it being understood that an insurance company rated A or better by
A.M. Best & Company is acceptable);
(ii) name TRS as an insured, and be amended to name Ryder, 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 cancelled, or any
material change is made in the coverage which affects
* 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 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 TRS or any other Person (other than Ryder) and shall
insure each Additional Insured regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by TRS or any
other Person (other than TRS);
(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 TRS to indemnify the Additional Insureds hereunder.
The first Twenty-Five Million Dollars ($25,000,000) of general liability
insurance shall be on an occurrence form.
(c) At least once a year, from time to time at Ryder's request, and
any time a new policy is to go into effect, TRS shall provide Ryder with
insurance certificates and other evidence, reasonably satisfactory to Ryder,
that the benefits and coverage required by this Section 6 are in full force and
effect. The certificate 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 Article 6. Ryder shall have no duty to examine such
insurance certificates or the Insurance Policies to verify compliance. TRS
shall provide a copy of its insurance policies to Ryder promptly following a
request therefor, if available.
(d) Notwithstanding anything to the contrary in this Agreement,
neither party shall be liable for, and each party waives and releases the other
party from (and as to RCTR's
* 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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damages, TRS indemnifies and holds harmless Ryder 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.
7. TRS's Exclusive Remedy.
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(a) Corrective Remedy. TRS agrees that the remedy available to it in
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the event of a material failure of Ryder to provide any Transition Service
(other than any failure due to the gross negligence or willful misconduct of
Ryder) should be addressed to correcting said failure, rather than to penalizing
Ryder. In recognition of this aim, TRS's sole and exclusive remedy for such a
failure shall be that Ryder shall use commercially reasonable efforts to
complete performance of the applicable Transition Service within a commercially
reasonable time.
(b) Limitation of Remedy.
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(i) The corrective remedy set forth in Section 7(a) hereof shall
not apply if Ryder's failure to meet any of its obligations hereunder is
due to a failure by TRS or any third party retained by TRS to provide
services, data or materials that Ryder requires to perform the Transition
Services;
(ii) Ryder shall be excused from the corrective remedy set forth
in Section 7(a) if and to the extent that: (i) Ryder's failure to meet its
obligations as to the Transition Service at issue is a direct or indirect
result of TRS's failure to timely and accurately perform its
responsibilities as set forth in this Agreement and (ii) TRS fails to
provide reasonable cooperation in completing performance and correcting the
problems that led to the failure at issue.
(c) Adequacy of Remedy. TRS ACKNOWLEDGES AND AGREES THAT THE
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EXCLUSIVE REMEDY SET FORTH HEREIN SHALL NOT BE DEEMED OR ALLEGED BY TRS TO HAVE
FAILED OF ITS ESSENTIAL PURPOSE.
8. Disclaimer of Warranties.
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(a) EXCEPT AS PROVIDED IN SECTION 6(e) ABOVE AND AS PROVIDED IN
SCHEDULE A HEREOF OR AS OTHERWISE EXPRESSLY SET FORTH HEREIN OR IN THE ASSET
PURCHASE AGREEMENT, RYDER MAKES NO WARRANTIES, EXPRESS OR IMPLIED (INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NON-INFRINGEMENT) REGARDING THE TRANSITION SERVICES OR ANY GOODS
(INCLUDING, WITHOUT LIMITATION, COMPUTER AND TELECOMMUNICATIONS HARDWARE AND
SOFTWARE) WHICH MAY BE PROVIDED OR MADE
* 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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AVAILABLE TO TRS IN CONNECTION WITH THE PROVISION OF THE TRANSITION SERVICES
HEREUNDER.
9. Default.
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(a) Material Breach. If at any time any party is in Material Breach
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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, and (ii) as to any other type of failure, a material
failure of performance of such 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 11(c)
below.
(b) Bankruptcy; Insolvency. This Agreement shall automatically
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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.
(c) Draws on Letter of Credit. Subject to the provisions of the next
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paragraph, in the event of Material Breach by TRS pursuant to clause (i) of
Section 9(a), 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,
including Past Due Interest owed to date of draw, then the Material Breach shall
be deemed cured and Ryder
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PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
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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 Section 9(a). 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
those sums not owed with interest thereon computed at the same annual rate of
interest as set forth above in the definition of "Past Due Interest."
If and to the extent a failure of payment by TRS arises from an
assertion by TRS, timely disputed pursuant to Section 9(a), 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
its 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) Collection Costs; Attorneys' Fees. 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.
10. No Hiring or Solicitation. TRS covenants to Ryder that neither
-------------------------
it nor its affiliates controlled by it shall solicit or induce any employee of
Ryder or a Ryder Affiliate who provides services to accept employment with TRS
or any Affiliate of TRS hereunder during the term in which such services are
provided or within one year thereafter, without the prior written consent of
Ryder. It is understood, however, that Ryder will not unreasonably withhold its
consent as to any employee who has been primarily engaged in providing services
to TRS hereunder during the six months prior to termination of those services.
Ryder agrees that neither advertising of employment positions nor post-closing
contact of an employee of Ryder by a contracted head hunter for TRS who is not
told to target one or more of those employees nor a contact to TRS or an
Affiliate controlled by TRS initiated post-closing by one of those employees
regarding employment shall be considered "solicitation" or "inducement" or an
attempt to do so.
11. Miscellaneous.
-------------
* 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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(a) Relationship of the Parties. It is expressly understood and
---------------------------
agreed that in rendering the Transition Services hereunder, Ryder is acting as
an independent contractor and that this Agreement does not constitute either
Party as an employee, partner, joint venturer, agent or other representative of
the other Party for any purpose whatsoever. Neither Party has the right or
authority to enter into any contract, warranty, guarantee or other undertaking
in the name of or for the account of the other Party, or to assume or create any
obligation or liability of any kind, express or implied, on behalf of the other
Party, or to bind the other Party in any manner whatsoever, or hold itself out
as having any right, power or authority to create any such obligation or
liability on behalf of the other or to bind the other Party in any manner
whatsoever (except as to any actions taken by either Party at the express
written request and direction of the other Party).
(b) Dispute Resolution. In the event of any dispute or disagreement
------------------
between the Parties with respect to the interpretation of any provision of this
Agreement, or with respect to the performance of either Party hereunder, the
Parties' respective Transition Coordinators will meet for the purpose of
resolving the dispute. If the Transition Coordinators are unable to resolve the
dispute within five (5) working days, or as otherwise agreed, the dispute will
be submitted to an executive officer of each party (the "Representatives") who
will meet as often as the parties reasonably deem necessary in order to gather
and furnish to each other all essential, non-privileged information that the
parties believe germane to resolution of the matter at issue. During the course
of these non-judicial dispute resolution procedures, documents used to resolve
the dispute shall be limited to essential, non-privileged information. All
requests shall be made in good faith and be reasonable in light of the economics
and time efficiencies intended by the dispute resolution procedures. The
Representatives may mutually agree to appoint a neutral advisor to facilitate
negotiations and, if requested by both parties, to render non-binding opinions.
No formal proceedings for the resolution of any dispute may be commenced until
thirty (30) days following initiation of negotiations under this Section 11(b)
or for such shorter period as the parties may mutually agree to in writing. The
provisions of this Section 11(b) will not apply (a) to an action to seek
injunctive relief to stay a breach of this Agreement or otherwise, (b) in the
event of TRS's failure to pay Ryder in accordance with the terms set forth in
Section 4 hereof or (c) to an action to seek specific performance of Ryder's
willful failure to perform its obligations under this Agreement.
(c) 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 condi-
* 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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tions or other Acts of God, invasions, insurrections, riots, closing of the
public highways, 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.
(d) Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become 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.
(e) Governing Law; Jurisdiction and Forum.
-------------------------------------
(i) 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.
(ii) 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 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.
(iii) 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
* 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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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.
(f) 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.
(g) 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
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 Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: President
with a copy to:
Ryder TRS, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
* 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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or at such other address and to the attention of such other person as TRS may
designate by written notice to Ryder.
(h) 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 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.
(i) 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.
(j) 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,
* 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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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.
(k) 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.
(l) 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.
(CONTINUED ON NEXT PAGE)
* 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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IN WITNESS WHEREOF, the parties have caused this MIS Support Agreement
to be executed by their duly authorized officers as of the date first written
above.
RYDER TRUCK RENTAL, INC. RYDER TRS, INC. (F/K/A
"RYDER" RCTR HOLDINGS, INC.)
"TRS"
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------- ------------------------
Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Executive V.P.-Development Senior Vice President
& Treasurer
* 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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