STOCK PURCHASE AGREEMENT
by and between
UPS LOGISTICS GROUP, INC.,
UPS TRUCK LEASING, INC.
XXXXXXX TRUCK LEASING CORP.
and
XXXXXXX LEASING CORP.
As of November 12, 1999
TABLE OF CONTENTS
ARTICLE I TRANSFER OF COMPANY SHARES; PURCHASE PRICE 2
Section 1.1 Purchase and Sale 2
Section 1.2 Purchase Price 3
Section 1.3 Payment of Purchase Price 3
Section 1.4 Target Working Capital 4
Section 1.5 Adjustment of Purchase Price 4
Section 1.6 Closing 7
Section 1.7 Deliveries by Seller 7
Section 1.8 Deliveries by Buyer 8
ARTICLE II RELATED MATTERS 9
Section 2.1 Use of Seller's Name and Logos 9
Section 2.2 No Ongoing or Transition Services 9
Section 2.3 Distributions 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELL 10
Section 3.1 Organization 10
Section 3.2 Authorization 11
Section 3.3 Capital Stock 12
Section 3.4 Ownership of the Common Stock 12
Section 3.5 Consents and Approvals; No Violations 12
Section 3.6 Financial Statements 13
Section 3.7 Absence of Material Adverse Effect 14
Section 3.8 Title, Ownership and Related Matters 15
Section 3.9 Intellectual Property 17
Section 3.10 Computer Software 17
Section 3.11 Year 2000 Compliance 17
Section 3.12 Litigation 18
Section 3.13 Compliance with Applicable Law 18
Section 3.14 Certain Contracts and Arrangements 18
Section 3.15 Employee Benefit Plans; ERISA 19
Section 3.16 Labor Matters 20
Section 3.17 Taxes 21
Section 3.18 Environmental 22
Section 3.19 Officers; Bank Accounts 23
Section 3.20 Certain Fees 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER 23
Section 4.1 Organization and Authority of Buyer 24
Section 4.2 Consents and Approvals; No Violations 24
Section 4.3 Litigation 25
Section 4.4 Certain Fees 25
Section 4.5 Certain Filings 26
ARTICLE V COVENANTS 27
Section 5.1 Conduct of the Company's Business 27
Section 5.2 Access to Information 28
Section 5.3 Consents 29
Section 5.4 Reasonable Best Efforts 29
Section 5.5 Public Announcements 29
Section 5.6 Covenant to Satisfy Conditions 30
Section 5.7 Employees; Employee Benefits 30
Section 5.8 Certain Tax Matters 32
Section 5.9 Supplemental Disclosure 40
Section 5.10 Guarantees 41
Section 5.11 Investigation by Buyer 41
Section 5.12 UPS Owned Facilities 42
Section 5.13 Rental Fleet Sales 42
Section 5.14 Outstanding Debt 44
Section 5.15 Reimbursement Program 44
Section 5.16 Additional Actions 44
Section 5.17 Off-Balance Sheet Financing 45
ARTICLE VI CONDITIONS TO OBLIGATIONS OF THE PARTIES 45
Section 6.1 Conditions to Each Party's Obligation 45
Section 6.2 Conditions to Obligations of Seller 46
Section 6.3 Conditions to Obligations of Buyer 48
ARTICLE VII TERMINATION 49
Section 7.1 Termination 49
Section 7.2 Procedure and Effect of Termination 50
ARTICLE VIII SURVIVAL OF REPRESENTATIONS 51
Section 8.1 Survival of Representations, Warranties
and Agreements 52
ARTICLE IX INDEMNIFICATION 52
Section 9.1 Indemnification Obligations of Seller 52
Section 9.2 Indemnification Procedure 54
Section 9.3 Orlando North VOH Plume
Indemnification 56
Section 9.4 Liability Limits 57
Section 9.5 Claims Period 57
Section 9.6 Exclusive Remedies 58
ARTICLE X MISCELLANEOUS 58
Section 10.1 Fees and Expenses 58
Section 10.2 Further Assurances 59
Section 10.3 Notices 59
Section 10.4 Severability 60
Section 10.5 Binding Effect; Assignment 61
Section 10.6 No Third Party Beneficiaries 61
Section 10.7 Interpretation 61
Section 10.8 Jurisdiction and Consent to Service 62
Section 10.9 Entire Agreement 62
Section 10.10 Governing Law 62
Section 10.11 Specific Performance 63
Section 10.12 Counterparts 63
Section 10.13 Amendment, Modification and Waiver 63
Section 10.14 Knowledge 63
Section 10.15 Schedules and Exhibits 64
Section 10.16 Arbitration 64
DEFINED TERMS
Term Section
Acceptance Notice. . . . . . . . . . . . . . . . . . . . . . 1.5(c)
Access Agreement . . . .. . . . . . . . . . . . . . . . . . . 9.3(c)
Adjustment Event . . . .. . . . . . . . . . . . . . . . . . . 1.3(a)
Affiliate. . . . . . . .. . . . . . . . . . . . . . . . . . .10.7(c)
Agreement. . . . . . . .. . . . . . . . . . . . . . . . . . Preamble
Alliance Agreement . . .. . . . . . . . . . . . . . . . . . . 6.2(d)
Allocation . .. . . . . . . . . . . . . . . . . . . . . . . . 5.8(b)
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Buyer Auditor. . . . . . . . . . . . . . . . . . . . . . . . 1.5(b)
Buyer Basket . . . . . . . . . . . . . . . . . . . . . . . . .9.4
Buyer Indemnified Parties. . . . . . . . . . . . . . . . . . .9.1
Buyer Losses . . . . . . . . . . . . . . . . . . . . . . . .9.1
Buyer Tax Group. . . . . . . . . . . . . . . . . . . . . . . .5.8(a)(i)
Cap Amount . . . . . . . . . . . . . . . . . . . . . . . . . .9.4
Claims Period. . . . . . . . . . . . . . . . . . . . . . . . .9.5
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . 1.6(a)
Closing Date Working Capital . . . . . . . . . . . . . . . . 1.5(a)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.9
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 1.3(a)
Company. . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Company Material Adverse Effect. . . . . . . . . . . . . . . 3.1(b)
Company Shares . . . . . .. . . . . . . . . . . . . . . . . Preamble
Confidentiality Agreement . . . . . . . . . . . . . . . . . . 5.2(b)
Consultant . . . . . . .. . . . . . . . . . . . . . . . . . . 9.3(a)
Contracts. . . . . . . .. . . . . . . . . . . . . . . . . . . 3.14
Corrective Action. . . . . . . . . . . . . . . . . . . . . . 9.3(a)
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7(a)
employee benefit plans . . . . . . . . . . . . . . . . . . . 5.7(a)
employee welfare benefit plan. . . . . . . . . . . . . . . . 5.7(a)
Environmental Claims . . . . . . . . . . . . . . . . . . . . .3.18(b)
Environmental Laws . . . . . . . . . . . . . . . . . . . . . .3.18(b)
Environmental Liabilities. . . . . . . . . . . . . . . . . . .9.1
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.15(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . .4.5
FDEP . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 9.3(a)
Final Balance Sheet. . . . . . . . . .. . . . . . . . . . . . 1.5(c)
Final Working Capital Statement. . . .. . . . . . . . . . . . 1.5(c)
Financial Statements . . . . . . . . . . . . . . . . . . . . .3.6
GAAP . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 1.5(b)
Guarantors . . . . . . .. . . . . . . . . . . . . . . . . . . 5.10
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . .3.18(b)
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . .3.5
Indemnified Claims . . . . . . . . . . . . . . . . . .. . . . .9.1
Indemnification Statement . . . . . . . . . . . . . .. . . . .5.8(b)(iii)
Independent Accountants. . . . . . . . . . . . . . . . . . . . 5.8(a)(ii)
Intellectual Property. . . . . . . . . . . . . . . . . . . . . 3.9(a)
Interim Balance Sheet. . . . . . . . . . . . . . . . . . . . 1.5(b)
Investor Rights Agreement. . . . . . . . . . . . . . . . . . . 6.2(e)
Investor Rights Agreement Term Sheet . . . . . . . . . . . . . 6.2(e)
IRS. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .3.15(b)
Leased Real Property . . . . . . . . . .. . . . . . . . . . . .3.8(a)(i)
Litigation Claims. . . . . . . . . . . . . . . . . . . . . . . 3.12
MADSP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8(b)
Objection Notice . . . . . . . . . . . . . . . . . . . . . . . 1.5(c)
Orlando North VOH Plume. . . . . . . . . . . . . . . . . . . . 9.3(a)
Outstanding Debt . . . . . . . . . . .. . . . . . . . . . . . .1.2
Owned Real Property. . . . . . . . . . . . . . . . . . . . . .3.8(a)(i)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . 3.8(a)(ii)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.7(b)
Plans. . . . . . . . . . . . . . . . . . . . .. . . . . . . . .3.15(a)
Pre-Closing Period . . . . . . . . . . . . . . . . . . . . . .5.8(a)(iii)
Preliminary Balance Sheet. . . . . . . . . . . . . . . . . . . 1.5(b)
Preliminary Working Capital Statement. . . . . . . . . . . . . 1.5(b)
Pre-Closing Period Returns . . . . . . . . . . . . . . . . . .5.8(b)(i)
Prior Operations Liability . . . . . . . .. . . . . . . . . . .9.1
Purchase Price . . . . . . . . . .. . . . . . . . . . . . . . .1.2
Real Property. . . . . . . . . . . . . . . . .. . . . . . . . .3.8(a)(i)
Realization Amount. . . . . . . . . . . . . . . . . . . . . .5.13(c)
Sale Vehicles. . . . . . . . . . . . . . . . . . . . . . . . .5.13(a)
SEC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.5
SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . .4.5
Section 338(h)(10) . . . . . . . . . .. . . . . . . . . . . . . 5.8(a)(iv)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . .4.5
Seller or Sellers. . . . . . . . . .. . . . . . . . . . . . . Preamble
Seller Auditor . . . . . . . . . . . . .. . . . . . . . . . . . 1.5(b)
Seller Benefit Plans . . . . . . . . . . . . . . . . . . . . . .3.15(c)
Seller Tradenames and Logos. . . . . . . . . . . . . . . . . . .2.1
Straddle Period. . . . . . . . . . . . . . . . . . . . . . . . 5.8(a)(iv)
Straddle Period Returns. . . . . . . . . . . . . . . . . . . . 5.8(c)(ii)
Target Working Capital . . . . . . . . . . . . . . . . . . . . .1.4
Tax Claim. . . . . . . . . .. . . . . . . . . . . . . . . . . . 5.8(d)(iv)
Tax Indemnified Party. . . . . . . . . . . . . . . . . . . . . 5.8(d)(iv)
Tax Indemnifying Party . . . . . . . . . . . . . . . . . . . . .5.8(d)(iv)
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.17(c)(i)
Tax Return . . . . . . . . . . . . . . . . . . . .. . . . . . .3.17(c)(ii)
To the Knowledge of Buyer. . . . . . . . . . . . . . . . . .10.14
To the Knowledge of Seller . . . . . . . . . . . . . . . . . .10.14
Transition Services Agreement. . . . . . . . . . . . . . . . . 6.2(f)
Unrelated Accounting Firm. . . . . . . . . . . . . . . . . . . 1.5(c)
UPS. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 5.10
UPS Owned Facilities . . . . . . . . . . . . . . . . . . . . . 5.12
SCHEDULES
Schedule 3.1 Foreign Qualifications
Schedule 3.3 Capital Stock
Schedule 3.5 Consents
Schedule 3.7 Absence of Change
Schedule 3.8 Title to Real Property
Schedule 3.8(b) Necessary Assets
Schedule 3.9 Intellectual Property
Schedule 3.12 Litigation
Schedule 3.14 Contracts
Schedule 3.15 Employee Benefits
Schedule 3.16 Labor Matters
Schedule 3.17 Taxes
Schedule 3.18 Environmental
Schedule 3.19 Officers; Bank Accounts
Schedule 5.15 Reimbursement for Environ
mental
Remediation Activities
EXHIBITS
Exhibit Number
Current Assets and Liabilities 1.5(a)
Accounting Principles 1.5(b)
Strategic Alliance Agreement 6.2(d)
Investor Rights Agreement Term Sheet 6.2(e)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of November 12,
1999 (this "Agreement"), is made and entered into by and between UPS
Logistics Group, Inc., a Delaware corporation ("Seller"), UPS Truck
Leasing, Inc., a Delaware corporation (the "Company"), Xxxxxxx
Leasing Corp., a Delaware corporation ("Buyer"), and Xxxxxxx Truck
Leasing Corp., a Delaware corporation ("Parent").
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and outstanding
shares of capital stock (the "Company Shares") of the Company; and
WHEREAS, pursuant to the terms and conditions of this
Agreement, Seller desires to sell, and Buyer desires to purchase, the
Company Shares.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
TRANSFER OF COMPANY SHARES; PURCHASE PRICE
Section 1.1 Purchase and Sale. Subject to the terms and
conditions set forth in this Agreement, at the closing provided for in
Section 1.6 hereof (the "Closing"), Seller agrees to sell, transfer and
deliver to Buyer, and Buyer agrees to purchase, acquire and accept from
Seller, the Company Shares.
Section 1.2 Purchase Price. Subject to adjustment as provided
in Section 1.3(b), the Purchase Price will be an amount equal to
$171,506,000 minus the amount of Outstanding Debt (as defined below)
(the "Purchase Price"). The Purchase Price shall be payable as
provided in Section 1.3. "Outstanding Debt" shall mean, as of the
Closing Date, any indebtedness of the Company owed to Seller or any of
its Affiliates (as hereinafter defined), as adjusted in accordance with
Section 5.17. Seller shall advise Buyer of the amount of Outstanding
Debt on the day prior to the Closing Date.
Section 1.3 Payment of Purchase Price.
(a) At the Closing, Buyer shall pay to Seller (subject to
adjustment as provided in Section 1.3(b)) the Purchase Price, which
shall be paid in the form of (i) a certificate representing 2,000,000
shares of Parent Common Stock (the "Common Stock"), (which solely for
the purposes of this Section 1.3(a) shall be deemed to have an
aggregate value of $20,000,000) and (ii) the balance in cash. In the
event of any change in the Common Stock between the date of this
Agreement and the Closing by reason of any stock dividend, stock split,
subdivision, reclassification, recapitalization, combination, exchange
of shares or the like (an "Adjustment Event"), the number of shares of
Common Stock referenced in Section 1.3(a)(i) shall be appropriately
adjusted so that Seller will receive the same proportionate amount of
the Common Stock Seller was entitled to receive immediately prior to
such Adjustment Event.
(b) Within five business days after the determination of the
Final Working Capital Statement (as hereinafter defined) in accordance
with Section 1.5 hereof, (i) if the amount of the Closing Date Working
Capital (as hereinafter defined) calculated in accordance with Section
1.5 is less than 97% of the Target Working Capital (as hereinafter
defined), then Seller shall pay to Buyer an amount equal to the
difference between 97% of the Target Working Capital and the Closing
Date Working Capital plus interest or (ii) if the amount of the Closing
Date Working Capital calculated in accordance with Section 1.5 is
greater than 103% of the Target Working Capital, Buyer shall pay to
Seller an amount equal to the difference between 103% of the Target
Working Capital and the Closing Date Working Capital plus interest.
Any payment under this Section 1.3(b) shall include interest on the
amount of that payment at the prime rate of interest (as published in
the "Money Rates" table of The Wall Street Journal on the Closing Date)
beginning on the Closing Date (as hereinafter defined) and ending on
the date of any such payment. Any payments required under this Section
1.3(b) shall be paid in cash.
(c) All cash payments required under this Section 1.3 shall
be made by wire transfer of immediately available federal funds to such
bank account(s) as shall be designated in writing by the recipient at
least three days prior to the Closing or promptly upon the
determination of the Final Balance Sheet (as hereinafter defined), as
the case may be.
Section 1.4 Target Working Capital. "Target Working
Capital" shall equal $15,289,000.
Section 1.5 Adjustment of Purchase Price.
(a) For purposes of this Agreement, the "Closing Date
Working Capital" shall mean the book value of those categories of
current assets of the Company listed on Exhibit 1.5(a) less the book
value of those categories of current liabilities of the Company
listed on Exhibit 1.5(a), in each case as reflected on the Final
Balance Sheet.
(b) Promptly following the Closing, Seller shall prepare
(i) a balance sheet of the Company as of the Effective Time (the
"Preliminary Balance Sheet"), in accordance with generally accepted
accounting principles ("GAAP") on a basis consistent with the
unaudited interim balance sheet of the Company as of September 30,
1999 (the "Interim Balance Sheet"), which principles are set forth on
Exhibit 1.5(b), and (ii) a calculation of the Closing Date Working
Capital based on the Preliminary Balance Sheet (the "Preliminary
Working Capital Statement"). Seller shall engage, and be responsible
for the fees and expenses of, Deloitte & Touche LLP (the "Seller
Auditor") to audit the Preliminary Balance Sheet and the Preliminary
Working Capital Statement and shall use all commercially reasonable
efforts to deliver to Buyer a final draft of the Preliminary Balance
Sheet and the Preliminary Working Capital Statement within 60 days
after the Closing Date, together with a final report of the Seller
Auditor thereon stating that the audit of the Preliminary Balance
Sheet has been made in accordance with GAAP on a basis consistent
with the Interim Balance Sheet. Representatives of Buyer shall have
the opportunity to observe the taking of the inventory of the Company
in connection with the preparation of the Preliminary Balance Sheet,
and to examine the work papers, schedules and other documents
prepared by Seller in connection with the preparation of the
Preliminary Balance Sheet and the Preliminary Working Capital
Statement. Seller shall use all commercially reasonable efforts to
cause the Seller Auditor to permit Buyer and its accounting firm (the
"Buyer Auditor") to examine the Seller Auditor's work papers used in
connection with its audit of the Preliminary Balance Sheet and the
Preliminary Working Capital Statement. Buyer shall be responsible
for the fees and expenses of the Buyer Auditor.
(c) If Buyer objects to the Preliminary Balance Sheet and
the Preliminary Working Capital Statement, Buyer shall deliver to
Seller a written notice of objection (an "Objection Notice") within
15 days following the delivery thereof. If Buyer has no objection to
the Preliminary Balance Sheet and the Preliminary Working Capital
Statement, Buyer shall promptly deliver to Seller a written notice of
acceptance (an "Acceptance Notice"). The Preliminary Balance Sheet
and the Preliminary Working Capital Statement shall be final and
binding on the parties if an Acceptance Notice is delivered or if no
Objection Notice is delivered to Seller within such 15-day period.
Any payment or portion of any payment required under Section 1.3 not
subject to an Objection Notice, shall be paid within five business
days following the delivery of an Objection Notice. Any Objection
Notice shall specify in reasonable detail the items on the
Preliminary Balance Sheet and the Preliminary Working Capital
Statement disputed and shall describe in reasonable detail the basis
for the objection and all information in the possession of Buyer
which forms the basis thereof, as well as the amount in dispute. If
an Objection Notice is given, the parties shall consult with each
other with respect to the objection. If the parties are unable to
reach agreement within 15 days after an Objection Notice has been
given, any unresolved disputed items shall be promptly referred to an
independent accounting firm designated by agreement of Seller and
Buyer (the "Unrelated Accounting Firm"). The Unrelated Accounting
Firm shall be directed to resolve disputed issues in accordance with
the terms of this Agreement and render a written report on the
unresolved disputed issues with respect to the Preliminary Balance
Sheet and the Preliminary Working Capital Statement as promptly as
practicable and to resolve only those issues of dispute set forth in
the Objection Notice. The resolution of the dispute by the Unrelated
Accounting Firm shall be final and binding on the parties. The fees
and expenses of the Unrelated Accounting Firm shall be borne equally
by Seller, on the one hand, and Buyer, on the other hand. The
Preliminary Balance Sheet and the Preliminary Working Capital
Statement as finally determined pursuant to this Section 1.5(c) are
referred to herein respectively as the "Final Balance Sheet" and the
"Final Working Capital Statement".
Section 1.6 Closing. (a) The Closing of the
transactions contemplated by this Agreement shall take place at the
offices of King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx.
If all of the conditions to Closing set forth in Article VI hereof
have been satisfied or waived prior to such time, the Closing shall
take place at 12:01 a.m. Eastern Time on January 1, 2000. If the
Closing does not occur at such time, the Closing shall take place
(assuming satisfaction or waiver of all conditions to Closing) at
11:59 p.m. Eastern Time on January 31, 2000, or at such other time as
the parties mutually agree. The date of the Closing is sometimes
referred to herein as the "Closing Date."
(b) Notwithstanding any other provision of Section
1.3, if the Closing occurs on January 1, 2000, the cash portion of
the Purchase Price payable at Closing shall be paid by Buyer on the
first business day following the Closing Date.
Section 1.7 Deliveries by Seller. At the Closing, Seller
will deliver or cause to be delivered to Buyer (unless delivered
previously) the following:
(a) The stock certificate or certificates representing all of
the Company Shares, duly endorsed in blank or accompanied by stock
powers duly executed in blank;
(b) The Transition Agreement (as hereinafter defined), executed
by Seller or its Affiliate;
(c) The Alliance Agreement (as hereinafter defined),
executed by Seller or its Affiliate;
(d) The Investor Rights Agreement (as hereinafter
defined), executed by Seller or its Affiliate; and
(e) All other documents, instruments and writings required
by Buyer to be delivered by Seller at or prior to the Closing
pursuant to this Agreement or otherwise reasonably required in
connection herewith.
Section 1.8 Deliveries by Buyer. At the Closing, Parent and
Buyer will deliver or cause to be delivered to Seller (unless
previously delivered) the following:
(a) The Purchase Price in accordance with Section 1.2 hereof
(including a certificate representing the Common Stock);
(b) The Transition Agreement, executed by Buyer or its
Affiliate;
(c) The Alliance Agreement, executed by Buyer or its
Affiliate;
(d) The Investor Rights Agreement, executed by Buyer or
its Affiliate; and
(e) All other documents, instruments and writings required
by Seller to be delivered by the Buyer at or prior to the Closing
pursuant to this Agreement or otherwise reasonably required in
connection herewith.
ARTICLE II
RELATED MATTERS
Section 2.1 Use of Seller's Name and Logos. It is expressly
agreed that Buyer is not purchasing, acquiring or otherwise obtaining
any right, title or interest in the names "UPS" or "UPS Truck
Leasing", or any tradenames, trademarks, identifying logos or service
marks related thereto or employing any part or variation of any of
the foregoing or any confusingly similar tradename, trademark or logo
(collectively, the "Seller Tradenames and Logos"). Buyer agrees that
neither it nor any of its Affiliates shall make any use of the Seller
Tradenames and Logos from and after the Closing Date; provided,
however, that Seller (or its Affiliate) shall grant Buyer a ninety
(90) day license for use of the UPS Truck Leasing logo as it
currently appears on the trucks of the Company in order for Buyer to
undertake the deletion or removal of the UPS Truck Leasing logo from
such trucks in a practical manner.
Section 2.2 No Ongoing or Transition Services. Except
as provided in the Transition Agreement, at the Closing, all data
processing, accounting, insurance, banking, personnel, legal,
communications, fuel procurement and other services provided to the
Company by Seller or any Affiliate of Seller, including any
agreements or understandings (written or oral) with respect thereto,
will terminate.
Section 2.3 Distributions. The parties agree that
Seller shall have the right, at or prior to the Closing, to cause the
Company to distribute all cash held by the Company to Seller or its
Affiliates, by one or more cash dividends, repurchase of existing
stock and/or other distributions. Except as provided in Section
1.3(b), no adjustment shall be made to the Purchase Price as a result
of any such dividends, repurchases or other distributions paid to
Seller or its Affiliates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
Section 3.1 Organization.
(a) The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware, and has all
requisite power and authority to own, lease and operate its
properties and assets and to carry on its operations as now being
conducted. The Company is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property or
assets owned, leased or operated by the Company or the nature of the
business conducted by the Company makes such qualification necessary,
except where the failure to be so duly qualified or licensed and in
good standing would not individually or in the aggregate have a
Company Material Adverse Effect (as hereinafter defined). Schedule
3.1 sets forth a list of all jurisdictions where the Company is
qualified to do business. Seller has heretofore made available to
Buyer complete and correct copies of the certificate of incorporation
and by-laws of the Company, as currently in effect.
(b) As used herein, a "Company Material Adverse Effect"
shall mean any event, change or effect that has occurred which has a
material adverse effect upon the financial condition, operating
results or business of the Company; provided, however, that a Company
Material Adverse Effect shall not include any event, change in or
effect upon the financial condition or business of the Company,
directly or indirectly, arising out of, attributable to or as a
consequence of: (a) conditions, events or circumstances generally
affecting the vehicle leasing industry or the overall economy; or (b)
the public announcement of either the execution of this Agreement or
the transactions contemplated hereunder.
Section 3.2 Authorization. Seller is a corporation
validly existing and in good standing under the laws of the State of
Delaware. Each of Seller and the Company has the corporate power and
authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery of this Agreement
and the performance by Seller and the Company of its respective
covenants and agreements hereunder has been duly and validly
authorized by the Boards of Directors of Seller, the Company and
United Parcel Service of America, Inc., and the shareholder of the
Company, and no other corporate proceedings on the part of Seller or
the Company is necessary to authorize the execution, delivery and
performance of this Agreement or the consummation of the transactions
so contemplated. This Agreement has been duly executed and delivered
by Seller and the Company and constitutes a valid and binding
agreement of Seller and the Company, enforceable against Seller and
the Company in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws, now or
hereafter in effect, relating to or limiting creditors' rights
generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 3.3 Capital Stock. Schedule 3.3 sets forth the
authorized, issued and outstanding capital stock of the Company. The
Company Shares constitute all of the issued and outstanding shares of
capital stock of the Company. The Company Shares have been validly
issued and are fully paid and non-assessable. There are no shares of
capital stock of the Company held as treasury shares. There are no
preemptive rights existing with respect to the capital stock of the
Company. There are not any outstanding securities convertible into,
exchangeable for, or carrying the right to acquire, equity securities
of the Company, nor are there any subscriptions, warrants, options,
rights or other arrangements or commitments which could obligate the
Company to issue any shares of its capital stock or equity interests.
The Company does not own, directly or indirectly, any capital stock
or any other equity or debt securities of any corporation, firm,
partnership, joint venture, association or other entity.
Section 3.4 Ownership of the Common Stock. Seller is
the sole owner of the Company Shares. Seller has good title to the
Company Shares, free and clear of all liens, claims, options,
security interests or other encumbrances.
Section 3.5 Consents and Approvals; No Violations.
Except as set forth on Schedule 3.5 and for applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (a) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws of the
Company or Seller; (b) require any filing with, or the obtaining of
any permit, authorization, consent or approval of, any governmental
or regulatory authority; (c) violate, conflict with or result in a
default (or any event which, with notice or lapse of time or both,
would constitute a default) under, or give rise to any right of
termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any note, mortgage, other evidence of
indebtedness, guarantee, license, agreement, lease or other contract,
instrument or obligation to which the Company or Seller is a party or
by which the Company or Seller or any of their respective assets may
be bound; or (d) violate any order, injunction, decree, statute, rule
or regulation applicable to the Company or Seller, excluding from the
foregoing clauses (b), (c) and (d) such requirements, violations,
conflicts, defaults or rights (i) which would not have a Company
Material Adverse Effect and would not adversely affect the ability of
Seller to consummate the transactions contemplated by this Agreement,
or (ii) which become applicable as a result of the business or
activities in which Buyer is or proposes to be engaged or as a result
of any acts or omissions by, or the status of or any facts pertaining
to, Buyer.
Section 3.6 Financial Statements. Seller has made
available to Buyer: (i) the unaudited balance sheets of the Company
as of December 31, 1997 and 1998 and the unaudited statements of
income and cash flows thereof for the respective fiscal years then
ended, including the notes thereto; and (ii) the unaudited balance
sheet of the Company as of September 30, 1999 and the unaudited
statements of income and cash flows thereof for the six month period
then ended, including the notes thereto. All of the foregoing
financial statements are hereinafter collectively referred to as the
"Financial Statements". Except as disclosed in the Financial
Statements, the Financial Statements have been prepared from, and are
in accordance with, the books and records of the Company and present
fairly, in all material respects, the financial position and results
of operations of the Company as of the dates and for the applicable
periods indicated, in each case in conformity with GAAP.
Section 3.7 Absence of Material Adverse Effect. Except
as set forth on Schedule 3.7, since September 30, 1999, the Company
has:
(a) conducted the Company's business in the ordinary
course;
(b) not sold any asset of the Company at a price of more
than $100,000 other than in the ordinary course of business;
(c) maintained accounts receivable, inventory, accounts
payable and other working capital accounts in a manner consistent
with normal business practices;
(d) not written up or down the value of any inventory or
determined as collectible any notes or accounts receivable that were
previously considered to be uncollectible, except for write-ups or
write-downs and other determinations in accordance with GAAP and in
the ordinary course of business and consistent with past practice;
(e) not pledged or permitted the imposition of any lien on
any of its assets;
(f) not suffered any change in its financial condition,
operating results or business or suffered any other event or
condition of any character which individually or in the aggregate has
had a Company Material Adverse Effect;
(g) not suffered any damage, destruction or loss of
tangible assets, whether or not covered by insurance, in excess of
$250,000, in the aggregate;
(h) not paid, discharged or satisfied any claims,
liabilities or obligations (absolute, accrued, contingent or
otherwise), except in each case in the ordinary course of business;
(i) not canceled any debts or waived any claims or rights
of substantial value, except in each case in the ordinary course of
business; and
(j) not granted any general increase in the compensation
payable or to become payable to its officers, directors, consultants
or employees (including any such increase pursuant to any bonus,
severance, termination, pension, profit-sharing or other plan or
commitment) or any special increase in the compensation payable or to
become payable to any officer, director, consultant or employee,
except for (i) normal merit and cost of living increases in the
ordinary course of business and in accordance with past practice and
(ii) severance commitments that are (and shall remain after Closing)
the sole responsibility of Seller and its Affiliates (other than the
Company).
Section 3.8 Title, Ownership and Related Matters.
(a) Real Property.
(i) To the Knowledge of Seller, Schedule 3.8(a)(i)
sets forth a list of the parcels of real property owned by the
Company (together with the fixtures and improvements thereon, the
"Owned Real Property") and the UPS Owned Facilities (as hereinafter
defined). Schedule 3.8(a)(i) also sets forth a list of the parcels
of real property currently leased by the Company (together with all
fixtures and improvements thereon, the "Leased Real Property" and
collectively with the Owned Real Property and the UPS Owned
Facilities, the "Real Property").
(ii) To the Knowledge of Seller, except as set forth
on Schedule 3.8(a)(ii) the Company has good and marketable title to
the Owned Real Property, and an Affiliate of the Company has good and
marketable title to the UPS Owned Facilities, in each case free and
clear of all liens, pledges, security interests, charges, claims,
leasehold interests, tenancies, restrictions and encumbrances of any
nature whatsoever other than (i) liens for taxes not yet due and
payable, (ii) statutory liens of landlords and liens of carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the
ordinary course of business and not yet delinquent, and (iii) matters
of record, zoning, building or other restrictions, variances,
covenants, rights of way, encumbrances, easements and other minor
irregularities in title, none of which, individually or in the
aggregate, interfere with the present use of or occupancy of any of
the Owned Real Property or the UPS Owned Facilities by the Company
(collectively, "Permitted Liens").
(iii) To the Knowledge of Seller, the Seller has a
valid leasehold interest in the Leased Real Property, free and clear
of any mortgages, pledges, liens, security interests or other
encumbrances of any nature, except for Permitted Liens.
(iv) To the Knowledge of Seller, the improvements on
the Real Property are free from any material structural defects.
Except as set forth on Schedule 3.8(a)(iv), to the Knowledge of
Seller, there are no condemnation or appropriation or similar
proceedings pending or threatened against any of the Real Property or
the improvements thereon.
(b) Necessary Assets. To the Knowledge of Seller, except
as set forth in Schedule 3.8(b), the Company has good and marketable
title to its material assets, free and clear of all liens, pledges,
security interests, charges, claims, restrictions and encumbrances of
any nature whatsoever (except, with respect to the Real Property,
Permitted Liens).
Section 3.9 Intellectual Property.
(a) To the Knowledge of Seller (as herein defined), the
conduct of the business of the Company does not infringe upon any
intellectual property right of any third party. There are no
pending, or to the Knowledge of Seller threatened, proceedings or
litigation or other adverse claims by any Person (as hereinafter
defined) against the use by the Company of any trademarks, trade
names, service marks, service names, logos, assumed names,
copyrights, patents or registrations and applications therefor which
are owned by the Company and are necessary for the operation of the
Company's business as currently conducted (collectively, the
"Intellectual Property"). Schedule 3.9 sets forth a list of all
Intellectual Property owned by the Company.
(b) The Company has valid licenses or other rights to use
the Intellectual Property necessary to permit the Company to conduct
its operations as currently conducted, except (i) for the Seller
Tradenames and Logos and (ii) where the failure to have such
ownership, licenses or rights would not have a Company Material
Adverse Effect.
Section 3.10 Computer Software. The Company has valid
licenses or other rights to use all material computer software
programs to permit it to conduct its operations as currently
conducted, except where the failure to have such ownership, licenses
or rights would not have a Company Material Adverse Effect.
Section 3.11 Year 2000 Compliance. Seller has provided
Buyer true and complete copies of all material reports and analyses
obtained by the Company or Seller with respect to Year 2000
compliance issues concerning the Company. The Company's major
systems have been modified, tested and certified.
Section 3.12 Litigation. Schedule 3.12 identifies all
claims, actions, suits, proceedings and governmental investigations
pending or, to the Knowledge of Seller, threatened against the
Company by or before any court, governmental or regulatory authority
or by any third party (other than claims, actions, suits, proceedings
and governmental investigation set forth on Schedule 3.18(b)) (the
"Litigation Claims").
Section 3.13 Compliance with Applicable Law. To the
Knowledge of Seller, the Company is in compliance in all material
respects with all applicable laws, ordinances, rules and regulations
of any federal, state, local or foreign governmental authority
applicable to the Company or its operations and necessary to carry on
its business as it is currently being conducted, to own or hold under
lease the properties and assets it owns or holds under lease and to
perform all of its obligations under the agreements to which it is a
party.
Section 3.14 Certain Contracts and Arrangements.
Schedule 3.14 sets forth a list of the following contracts to which
the Company is a party: (a) employment agreements; (b) indentures,
mortgages, notes, installment obligations, agreements or other
instruments relating to the borrowing of money or the guaranty by the
Company of any obligation for the borrowing of money; (c) real
property leases; (d) contracts with Affiliates; or (e) other
agreements, including without limitation, customer contracts, which
individually involve the receipt or payment by the Company after the
date hereof of more than $100,000 and are not terminable without
liability to the Company upon 30 days or less prior written notice
(together with those contracts, agreements and understandings
described in clauses (a), (b), (c) and (d) the "Contracts"). Seller
has made available to Buyer copies of all Contracts. To the
Knowledge of Seller, all such Contracts are valid, binding and
enforceable in accordance with their terms and, to the Knowledge of
Seller, neither the Company nor any other party thereto is in
material default under any of the aforesaid Contracts. Schedule 3.14
sets forth a list of all unresolved material default notices received
from or given to third parties pertaining to the Contracts and
identifies all Contracts containing fuel pricing guarantees.
Section 3.15 Employee Benefit Plans; ERISA. Except as
set forth on Schedule 3.15:
(a) There are no "employee benefit plans" (as defined in
Section 3.(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained for the benefit of employees of the
Company or other employee benefit, bonus or fringe benefit plans
maintained for the benefit of the employees of the Company to which,
or with respect to which, the Company has a material liability for
the payment of benefits or makes material contributions annually (the
"Plans").
(b) Each of the Plans that is subject to ERISA has been
administered in compliance in all material respects with ERISA. Each
of the Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has a favorable determination letter from the
Internal Revenue Service (the "IRS") to the effect that it is so
qualified. Except as set forth on Schedule 3.15, none of the Plans
is subject to Title IV of ERISA. There are no pending or, to the
Knowledge of Seller, threatened material claims (other than routine
claims for benefits) by, on behalf of or against any of the Plans or
any trusts which are a part of such Plans.
(c) Seller has furnished to Buyer a correct, complete and
correct copy of each plan, program, policy or arrangement which is
set forth in writing and which provides cash or property or other
compensation related benefits of any kind or description whatsoever
to or on behalf of any current of former employee or director of
Seller or any of their dependents and a complete description of any
such plain, program, policy or arrangement which is not set forth in
writing (collectively, the "Seller Benefit Plans"). A list of each
Seller Benefit Plan is set forth on Schedule 3.15.
Section 3.16 Labor Matters. The Company is in compliance
with all federal and state laws respecting employment and employment
practices, terms and conditions of employment, wages and hours, and
is not engaged in any unfair labor or unlawful employment practice,
the violation of or engagement in which would have a Company Material
Adverse Effect. Except as set forth on Schedule 3.16, there are no
controversies pending or, to the Knowledge of the Seller, threatened,
between the Company and any of its employees, which controversies
have had or are reasonably likely to have a Company Material Adverse
Effect. The Company is not a party to any collective bargaining
agreement or other labor union contract applicable to Persons
employed by the Company. There are no unfair labor practice
complaints pending against the Company before the National Labor
Relations Board. To the Knowledge of Seller, there are no strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with
respect to any employees of the Company.
Section 3.17 Taxes.
(a) Either Seller or the Company (i) has timely filed or
caused to be filed on a timely basis with the appropriate taxing
authorities all material Tax Returns (as hereinafter defined)
required to be filed by or with respect to the Company (including the
consolidated federal income Tax Returns and any consolidated,
combined or unitary state Tax Returns in which the Company is
included), and (ii) has paid or made adequate provision for the
payment of all Taxes (as hereinafter defined) shown to be due on such
Tax Returns or otherwise due and payable by the Company. All such
Tax Returns are true, correct and complete in all material respects.
(b) Except as set forth on Schedule 3.17, (i) there are no
liens for Taxes with respect to the assets of the Company (except for
statutory liens for current taxes not yet delinquent) and no material
claims with respect to Taxes are being asserted by any taxing
authority in writing; (ii) none of the Tax Returns applicable to the
Company are currently being audited or examined by any taxing
authority and there is no other action or proceedings currently
pending concerning Taxes relating to the Company; (iii) there is no
material unpaid tax deficiency, determination or proposed assessment
currently outstanding against the Company or for which the Company
could be jointly or severally liable; (iv) there are no outstanding
agreements or waivers extending the statute of limitations relating
to the assessment of Taxes applicable to the Company; (v) neither the
Company nor Seller on behalf of the Company has filed a consent
pursuant to Section 341(f) of the Code; (vi) the Company is not a
party to any agreement that would result, separately or in the
aggregate, in the payment of an excess parachute payment pursuant to
Section 280G of the Code; (vii) the Company is not a member of any
partnership or joint venture or the holder of a beneficial interest
in any trust (other than a trust that is treated as a grantor trust
or otherwise is disregarded as a separate taxable entity for federal
income tax purposes); and (viii) to the Company's knowledge, there
are no proposed reassessments of any property owned by the Company
that will result in a material increase in the amount of Tax to which
such property will be subject for periods after the Closing Date.
(c) As used in this Agreement:
(i) "Taxes" shall mean all taxes, levies, charges or
fees including income, corporation, advance corporation, gross
receipts, transfer, excise, property, sales, use, value-added,
license, payroll, pay-as-you-earn, withholding, social security and
franchise or other governmental taxes or charges, imposed by the
United States or any state, county, local or foreign government, and
such term shall include any interest, penalties or additions to tax
attributable to such taxes.
(ii) "Tax Return" shall mean any report, return or
statement required to be supplied to a taxing authority in connection
with Taxes.
Section 3.18 Environmental.
(a) To the Knowledge of Seller, except as set forth on
Schedule 3.18(a), the Company possesses, and is in compliance with,
all material permits, licenses and government authorizations relating
to protection of the environment, pollution control and hazardous
materials applicable to the Company;
(b) To the Knowledge of Seller, except as set forth on
Schedule 3.18(b), neither the Company nor any of its Affiliates has
received notice from a state or federal governmental authority that
the Company is responsible under any applicable federal, state, or
local law, regulation or ordinance relating to the protection of the
environment in effect at the time of this Agreement (the
"Environmental Laws") to investigate and/or remediate Hazardous
Materials (as hereinafter defined) on property the Company owns or on
which it operates (collectively, the "Environmental Claims"). For
purposes of this Agreement, "Hazardous Materials" shall mean any
waste, pollutant, hazardous substance, toxic, ignitable, reactive or
corrosive substance, hazardous waste, special waste, industrial
substance, by-product, process intermediate product or waste,
petroleum or petroleum-derived substance or waste, chemical liquids
or solids, liquid or gaseous products regulated under Environmental
Laws; and
(c) Except as set forth in Schedule 3.18(c), the
underground storage tank systems for which the Company is responsible
under applicable laws or existing agreements have been upgraded or
removed in compliance with 40 CFR Part 280 and any other applicable
laws.
Section 3.19 Officers; Bank Accounts. Schedule 3.19
lists each of the officers of the Company and all of the accounts
(and signatures thereto) of the Company with any bank, brokerage firm
or other financial institution or depository.
Section 3.20 Certain Fees. The Company will not have
any liability for any financial advisory or finders' fees in connection
with this Agreement or the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
Section 4.1 Organization and Authority of Buyer. Each
of the Parent and Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Parent owns all of the issued and outstanding stock of
Buyer. Each of Parent and Buyer has the corporate power and
authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery of this Agreement
and the performance by Parent and Buyer of its respective covenants
and agreements hereunder have been duly and validly authorized by the
Board of Directors of Parent and Buyer and the sole shareholder of
Buyer, and no other corporate proceedings on the part of Parent or
Buyer are necessary to authorize the execution, delivery and
performance of this Agreement or the consummation of the transactions
so contemplated. This Agreement has been duly executed and delivered
by Parent and Buyer and constitutes a valid and binding agreement of
Parent and Buyer, enforceable against Parent and Buyer in accordance
with its terms, except that (i) such enforcement may be subject to
any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other laws, now or hereafter in effect, relating to or
limiting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
Section 4.2 Consents and Approvals; No Violations.
Except for applicable requirements of the HSR Act, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) conflict with or result in
any breach of any provision of the incorporation documents or by-laws
of Parent or Buyer; (b) require any filing with, or the obtaining of
any permit, authorization, consent or approval of, any governmental
or regulatory authority; (c) violate, conflict with or result in a
default (or any event which, with notice or lapse of time or both,
would constitute a default) under, or give rise to any right of
termination, cancellation or acceleration under, any of the terms,
conditions or provisions of any note, mortgage, other evidence of
indebtedness, guarantee, license, agreement, lease or other contract,
instrument or obligation to which Parent or Buyer is a party or by
which Parent or Buyer or any of its assets may be bound; or (d)
violate any order, injunction, decree, statute, rule or regulation
applicable to Parent or Buyer, excluding from the foregoing clauses
(b), (c) and (d) such requirements, violations, conflicts, defaults
or rights (i) which would not adversely affect the ability of Parent
or Buyer to consummate the transactions contemplated by this
Agreement or (ii) which become applicable as a result of any acts or
omissions by, or the status of or any facts pertaining to, Parent or
Buyer.
Section 4.3 Litigation. There is no claim, action,
suit, proceeding or governmental investigation pending or, to the
Knowledge of Buyer (as hereinafter defined), threatened against
Parent or Buyer, by or before any court, governmental or regulatory
authority or by any third party which challenges the validity of this
Agreement or which would be reasonably likely to adversely affect or
restrict Parent's or Buyer's ability to consummate the transactions
contemplated hereby.
Section 4.4 Certain Fees. Except for the engagement of
Xxxxxxx Xxxxx neither Buyer nor any of its Affiliates has employed
any financial advisor or finder or incurred any liability for any
financial advisory or finders' fees in connection with this Agreement
or the transactions contemplated hereby.
Section 4.5 Certain Filings. Parent has filed all
forms, reports, statements and documents required to be filed with
the Securities and Exchange Commission (the "SEC") since January 1,
1997 (collectively, the "SEC Reports"), each of which has complied in
all material respects with the applicable requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations promulgated thereunder, or the Securities
Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations promulgated thereunder, each as in effect on the date so
filed. None of the SEC Reports (including, but not limited to, any
financial statements or schedules included or incorporated by
reference therein) contained when filed any untrue statement of a
material fact or omitted or omits to state a material fact required
to be stated or incorporated by reference therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
ARTICLE V
COVENANTS
Section 5.1 Conduct of the Company's Business. Seller
agrees that, during the period from the date of this Agreement to the
Closing, except as otherwise contemplated by this Agreement, the
Schedules or consented to by Buyer in writing, Seller shall cause the
Company:
(a) to use its reasonable best efforts to conduct its
business operations in the ordinary course consistent with past
practice;
(b) to use its reasonable best efforts to (i) maintain and
preserve its business operations, (ii) retain the services of its
employees, except for attrition of such employees in the ordinary
course of business, and (iii) maintain, preserve and retain
relationships with its suppliers and customers;
(c) not to sell or dispose of any material business
assets, except in the ordinary course of business;
(d) not to amend its certificate of incorporation or
bylaws;
(e) not to incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, other than
borrowings in the ordinary course of business consistent with past
practice;
(f) not to change its accounting policies except as
required by generally accepted accounting principles; and
(g) not to make any change in employment terms for any of
its employees other than terminations for cause or customary salary
increases and adjustments in benefits in the ordinary course of
business consistent with past practice, other than severance
commitments that are (and still remain) the sole responsibility of
Seller and its Affiliates (other than the Company).
Section 5.2 Access to Information.
(a) Between the date of this Agreement and the Closing,
Seller shall (i) give Buyer and its authorized representatives
reasonable access to all books, records, offices and other facilities
and properties of the Company, including Phase I and/or Phase II
environmental audits, and to the Company Executives (as hereinafter
defined); (ii) permit Buyer to make such inspections thereof as Buyer
may reasonably request; and (iii) cause the officers of the Company
to furnish Buyer with such financial and operating data and other
information with respect to the business and properties of the
Company as Buyer may from time to time reasonably request; provided,
however, that any such investigation shall be conducted during normal
business hours under the supervision of Seller's personnel and in
such a manner as to maintain the confidentiality of this Agreement
and the transactions contemplated hereby and not interfere
unreasonably with the business operations of Seller or the Company.
(b) All information concerning Seller or the Company
furnished or provided by Seller or their Affiliates to Buyer or its
representatives (whether furnished before or after the date of this
Agreement) shall be held subject to a confidentiality agreement by
and between Seller and Buyer, dated as of August 24, 1999 (the
"Confidentiality Agreement").
Section 5.3 Consents. (a) Each of Seller and Buyer
shall cooperate, and use its reasonable best efforts, to make all
filings (including without limitation all filings required under the
HSR Act) and obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities
and other third parties necessary to consummate the transactions
contemplated by this Agreement. In addition to the foregoing, Buyer
agrees to provide such assurances as to financial capability,
resources and creditworthiness as may be reasonably requested by any
third party whose consent or approval is sought in connection with
the transactions contemplated hereby.
(b) With respect to any agreements for which any required
consent or approval is not obtained prior to the Closing, Seller and
Buyer shall each use their reasonable best efforts to obtain any such
consent or approval after the Closing Date until such consent or
approval has been obtained.
Section 5.4 Reasonable Best Efforts. Each of Seller
and Buyer shall cooperate, and use its reasonable best 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 the transactions contemplated by this
Agreement.
Section 5.5 Public Announcements. Except as otherwise
agreed to by the parties, the parties shall not issue any report,
statement or press release or otherwise make any public statements
with respect to this Agreement and the transactions contemplated
hereby, except as in the reasonable judgment of the party may be
required by law. Upon the execution of this Agreement and the
Closing, Seller and Buyer will consult with each other with respect
to the issuance of a joint report, statement or press release with
respect to this Agreement and the transactions contemplated hereby.
Section 5.6 Covenant to Satisfy Conditions. Seller will
use its reasonable best efforts to ensure that the conditions set
forth in Article VI hereof are satisfied, insofar as such matters are
within the control of Seller, and Buyer will use its reasonable best
efforts to ensure that the conditions set forth in Article VI hereof
are satisfied, insofar as such matters are within the control of
Buyer. Seller and Buyer further covenant and agree, with respect to
a threatened or pending preliminary or permanent injunction or other
order, decree or ruling or statute, rule, regulation or executive
order that would adversely affect the ability of the parties hereto
to consummate the transactions contemplated hereby, to use all
reasonable efforts to prevent or lift the entry, enactment or
promulgation thereof, as the case may be.
Section 5.7 Employees; Employee Benefits. (a) Buyer
shall treat all service completed by an Employee (as hereinafter
defined) with the Company or any Affiliate thereof, and any
predecessor thereto, the same as service completed with Buyer for all
purposes, including waiting periods relating to preexisting
conditions under medical plans, vacations, severance pay, eligibility
to participate in, vesting or payment of benefits under, and
eligibility for early retirement or any subsidized benefit provided
for under any employee benefit plan (including, but not limited to,
any "employee benefit plan" as defined in Section 3(3) of ERISA)
maintained by Buyer on or after the Closing Date except for purposes
of computing benefits under the actual benefit formula in a pension
plan (as defined in Section 3(2) of ERISA). Prior to the Closing,
Seller shall furnish Buyer with a list of the length of service with
the Company or its Affiliates for each of the Employees. For
purposes of computing deductible amounts (or like adjustments or
limitations on coverage) under any employee welfare benefit plan
(including, without limitation, any "employee welfare benefit plan"
as defined in Section 3(l) of ERISA), expenses and claims previously
recognized for similar purposes under the applicable welfare benefit
plan of the Company or any Affiliate shall be credited or recognized
under the comparable plan maintained after the Closing Date by Buyer.
For purposes of this Agreement, "Employee" shall mean each person
employed by the Company as of the Closing.
(b) After the Closing Date, Buyer shall be responsible
for, and shall indemnify and hold harmless Seller and their
Affiliates and their officers, directors, employees, Affiliates and
agents and the fiduciaries (including plan administrators) of the
Plans, from and against, any and all claims, losses, damages, costs
and expenses (including, without limitation, attorneys' fees and
expenses) and other liabilities and obligations relating to or
arising out of (i) all salaries, bonuses, commissions, vacation
entitlements and other benefits accrued by the Company but unpaid as
of the Closing, and (ii) any claims of, or damages or penalties
sought by, any Employee, or any governmental entity on behalf of or
concerning any Employee, with respect to any act or failure to act by
Buyer to the extent arising from the employment, discharge, layoff or
termination of any Employee after the Closing.
(c) At least 30 days prior to the Closing, Buyer shall
provide Seller with a list of those employees of the Company that
Buyer desires to employ immediately following the Closing. Seller
will take necessary actions to assure that as of the Closing only
those persons (and other persons approved by Buyer) are employed by
the Company and shall assume all costs associated therewith.
(d) Any Employee that is terminated by Buyer during
2000 will be paid for accrued vacation in accordance with the
Company's prior practice; provided that the aggregate liability of
Buyer for such payments will not exceed the vacation accrual on the
Final Balance Sheet.
Section 5.8 Certain Tax Matters.
(a) Certain Definitions. As used in this Agreement:
(i) "Buyer Tax Group" means the affiliated group,
within the meaning of Section 1504(a) of the Code, of which Buyer is
the common parent.
(ii) "Independent Accountants" means Xxxxxx Xxxxxxxx &
Co.
(iii) "Pre-Closing Period" means any taxable
period, including that portion of any Straddle Period, which ends on
or before the Effective Time.
(iv) "Section 338(h)(10) Election" means the election
to be made by Buyer and Seller pursuant to Section 338(h)(10) of the
Code, as described in Section 5.8(b) hereof.
(v) "Straddle Period" means any taxable period that
includes (but does not end on) the Closing Date.
(b) Section 338(h)(10) Election. Seller will join with
Buyer in making the Section 338(h)(10) Election to treat the
transaction hereunder as the deemed sale of the assets of the Company
for federal and state income tax purposes. Seller and Buyer will use
their reasonable best efforts to agree on the allocation of the
"MADSP" among the assets of the Company pursuant to the applicable
Treasury Regulations under Section 338 of the Code (the "Allocation")
and will use the Allocation in reporting the deemed purchase and sale
of the assets of the Company for federal and state income tax
purposes. If the parties are unable to agree upon the Allocation
within 90 days before the due date of filing any Tax Return for which
the Allocation is relevant, the Allocation shall be made by the
Independent Accountants.
(c) Return Filing, Refunds, Credits and Transfer Taxes.
(i) Except with regard to Tax Returns for Straddle
Periods, Seller shall prepare, or cause to be prepared, and file, or
cause to be filed, on a timely basis all Tax Returns of or including
the Company for all Pre-Closing Periods (the "Pre-Closing Period
Returns"). Seller shall pay, or cause to be paid, all Taxes with
respect to the Company shown to be due on the Pre-Closing Period
Returns.
(ii) Buyer shall prepare, or cause to be prepared, and
shall file, or cause to be filed, on a timely basis all Tax Returns
other than the Pre-Closing Period Returns with respect to the
Company, including Tax Returns, if any, for the Straddle Period (the
"Straddle Period Returns"). Buyer shall pay, or cause to be paid,
all Taxes shown to be due on such Tax Returns.
(iii) Buyer shall provide Seller with copies of
any Straddle Period Returns at least thirty business days prior to
the due date thereof (giving effect to any extensions thereto),
accompanied by a statement calculating in reasonable detail Seller's
indemnification obligation pursuant to Section 5.8(e) hereof (the
"Indemnification Statement"). Seller shall have the right to review
such Straddle Period Returns and Indemnification Statement prior to
the filing of such Straddle Period Returns. If Seller disputes any
amounts shown to be due on such Tax Returns or the amount calculated
in the Indemnification Statement, Seller and Buyer shall consult and
resolve in good faith any issues arising as a result of the review of
such Straddle Period Return and Indemnification Statement. If Seller
agrees to the Indemnification Statement amount, Seller shall pay to
Buyer an amount equal to the Taxes shown on the Indemnification
Statement less any amounts paid by Seller or Company on or before the
Effective Time with respect to estimated taxes (which have not been
taken into account in determining the Indemnification Statement
amount) not later than three business days before the due date
(including any extensions thereof) for payment of Taxes with respect
to such Straddle Period Return. If the parties are unable to resolve
any dispute within fifteen business days after Seller's receipt of
such Straddle Period Return and Indemnification Statement, such
dispute shall be resolved by the Independent Accountants, which shall
resolve any issue in dispute as promptly as practicable. If the
Independent Accountants are unable to make a final determination with
respect to any disputed issue prior to the due date (including any
extensions) for the filing of the Straddle Period Return in question,
(A) Buyer shall file, or shall cause to be filed, such Straddle
Period Return without such final determination having been made and
(B) Seller shall pay to Buyer, not later than three days before the
due date (including any extensions thereof) for the payment of Taxes
with respect to such Straddle Period Return, an amount tentatively
determined by the Independent Accountants as the proper amount
chargeable to Sellers pursuant to this Section 5.8. Upon delivery to
Seller and Buyer by the Independent Accountants of its final
determination, appropriate adjustments shall be made to the amount
paid by Seller in accordance with the immediately preceding sentence
in order to reflect the final decision of the Independent
Accountants. The determination by the Independent Accountants shall
be final, conclusive and binding on the parties.
(iv) Seller and Buyer shall reasonably cooperate, and
shall cause their respective Affiliates, officers, employees, agents,
auditors and representatives reasonably to cooperate, in preparing
and filing all Tax Returns (including amended returns and claims for
refund), including maintaining and making available to each other all
records necessary in connection with Taxes and in resolving all
disputes and audits with respect to all taxable periods relating to
Taxes. Buyer recognizes that Seller will need access, from time to
time, after the Effective Time, to certain accounting and tax records
and information held by the Company to the extent such records and
information pertain to events occurring prior to the Effective Time;
therefore, Buyer agrees that from and after the Effective Time Buyer
shall, and shall cause the Company to, (A) retain and maintain such
records until such time as Seller determines that such retention and
maintenance is no longer necessary and (B) allow Seller and their
agents and representatives (and agents and representatives of its
Affiliates) to inspect, review and make copies of such records as
Seller reasonably may deem necessary or appropriate from time to
time. Buyer shall indemnify Seller from and against any penalties,
additions to tax or interest imposed on Seller as a result of any
failure of Buyer to provide tax records or other information to
Seller in a timely manner.
(v) Buyer shall not, and shall cause the Company not
to, dispose of or destroy any of the business records and files of
the Company relating to Taxes in existence at the Effective Time
without first offering to turn over possession thereof to Seller by
written notice to Seller at least thirty days prior to the proposed
date of such disposition or destruction.
(vi) Any refunds and credits of Taxes of the Company
or similar benefit (including any interest or similar benefit) which
are not included as assets or as a reduction of a liability or
reserve on the Interim Balance Sheet but which are received by the
Company or Buyer or for which the Company is entitled to a credit
with respect to (A) Taxes paid for any taxable period ending on or
before the Effective Time or (B) Taxes for which Seller has
indemnified the Buyer under the Agreement, shall be for the account
of Seller, and if received or utilized by Buyer or the Company, shall
be paid to Seller within five business days after Buyer or Company
receives such refund or utilizes such credit. Except as provided in
the next sentence, any refunds or credits of the Company with respect
to any Straddle Period shall be apportioned between Seller, on the
one hand, and Buyer, on the other hand, on the basis of an interim
closing of the books. In the case of a refund or credit attributable
to any Taxes that are imposed on a periodic basis and are
attributable to the Straddle Period, other than Taxes based upon or
related to gross or net income or receipts, the refund or credit of
such Taxes of the Company for the Pre-Closing Period shall be deemed
to be the amount of such refund or credit for the Straddle Period
multiplied by a fraction the numerator of which is the number of days
in the Straddle Period ending on the Closing Date and the denominator
of which is the number of days in the Straddle Period.
(vii) otwithstanding any other provisions of this
Agreement to the contrary, all sales, use, transfer, gains, stamp,
duties, recording and similar Taxes incurred in connection with the
transactions contemplated by this Agreement shall be paid by Buyer
and Buyer shall, at its own expense, accurately file or cause to be
filed all necessary Tax Returns and other documentation with respect
to such Taxes and timely pay all such Taxes. If required by
applicable law, Seller will join in the execution of any such Tax
Returns or such other documentation.
(d) Elections. Except as may be required by law, Buyer
shall not, and shall cause the Company not to, make, amend, or revoke
any Tax election if such action would adversely affect Seller or any
Person (other than the Company) as to whom or with whom Seller has
filed a consolidated return with respect to any taxable period ending
on or before the Effective Time or for the Pre-Closing Period or any
Tax refund with respect thereto.
(e) Tax Indemnification.
(i) Buyer shall indemnify, defend and hold harmless
Seller and its Affiliates, at any time after the Closing, from and
against any liability for Taxes of the Company for any taxable period
ending after the Effective Time except for Straddle Periods, in which
case Buyer's indemnity will cover only that portion of any such Taxes
that is not attributable to the Pre-Closing Period.
(ii) Seller shall indemnify, defend and hold harmless
Buyer and its Affiliates, at any time after the Closing, from and
against any liability for Taxes of the Company (including any joint
or several liability imposed under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign Tax law
as a result of the inclusion of the Company in any consolidated,
combined or unitary Tax Return), except as provided in Section
5.8(c)(vii) hereof, for the Pre-Closing Period (including the portion
of any Straddle Period ending on the Closing Date).
(iii) In determining the responsibility of Seller
and Buyer for Taxes attributable to any Straddle Period, Taxes based
upon or related to gross or net income or receipts shall be
apportioned on the basis of an interim closing of the books as of the
Effective Time, and all other Taxes shall be prorated on a daily
basis.
(iv) If a claim for Taxes shall be made by any taxing
authority in writing, which, if successful, might result in an
indemnity payment pursuant to this Section 5.8, the party seeking
indemnification (the "Tax Indemnified Party") shall promptly notify
the other party (the "Tax Indemnifying Party") in writing of such
claim (a "Tax Claim") within a reasonably sufficient period of time
to allow the Tax Indemnifying Party effectively to contest such Tax
Claim, and in reasonable detail to apprise the Tax Indemnifying Party
of the nature of the Tax Claim, and provide copies of all
correspondence and documents received by it from the relevant taxing
authority. Failure to give prompt notice of a Tax Claim hereunder
shall affect the Tax Indemnifying Party's obligation under this
Section to the extent that the Tax Indemnifying Party is prejudiced
by such failure to give prompt notice.
(v) With respect to any Tax Claim which might result
in an indemnity payment to Buyer pursuant to this Section 5.8(e)
(including, without limitation, Taxes of the Company for a Straddle
Period), Seller shall control all proceedings taken solely in
connection with such Tax Claim, provided that Seller acknowledges in
writing its liability to indemnify Buyer hereunder with respect to
such Tax Claim. Without limiting the foregoing, Seller may in its
reasonable discretion and at its sole expense pursue or forego any
and all administrative appeals, proceedings, hearings and conferences
with any taxing authority with respect to any Tax Claim for which
Seller may have an Indemnification obligation hereunder, and may, in
its reasonable discretion, either pay the Tax claimed and xxx for a
refund where applicable law permits such refund suits or contest such
Tax Claim. Neither Buyer nor Seller shall under any circumstances
settle or otherwise compromise any Tax Claim without first obtaining
the other parties prior written consent, which consent shall not be
unreasonably withheld. In connection with any proceeding taken in
connection with such Tax Claim, (A) Seller shall keep Buyer informed
of all material developments and events relating to such Tax Claim if
involving a material liability for Taxes and (B) Buyer shall have the
right, at its sole expense, to participate in any such proceedings.
Buyer shall cooperate with Seller in contesting such Tax Claim
(without charge to Seller), which cooperation shall include, without
limitation, the retention and the provision to Seller of records and
information which are reasonably relevant to such Tax Claim, and
making employees available to Seller to provide additional
information or explanation of any material provided hereunder or to
testify at proceedings relating to such Tax Claim, provided that no
charges shall be incurred by Seller for the services of such
employees. In the event that an audit or proceeding involving a Tax
Claim contested by Seller also involves a potential adjustment for
which Buyer would be liable, Buyer shall have the right, at its
expense, to control the audit or proceeding with respect to the
latter potential adjustment. With respect to any issue arising in
connection with a Tax claim for which both of the Seller and Buyer
could be liable, or which recurs for any period ending after the
Closing Date (whether or not the subject of audit at such time), each
party may participate in the audit or proceeding and the audit or
proceeding shall be controlled by that party which would bear the
burden of the greater portion of the sum of the Tax Claim and any
corresponding adjustments that may reasonably be anticipated in
future Tax periods. The principle set forth in the preceding
sentence shall govern also for purposes of deciding any issue that
must be decided jointly (in particular, choice of judicial forum) in
situations in which separate issues are otherwise controlled
hereunder by Buyer and Seller.
(vi) With respect to any Tax Claim not described in
Section 5.8(e)(v) hereof which might result in an indemnity payment
to Seller pursuant hereto, all proceedings shall be conducted in
accordance with provisions that are parallel to those in Section
5.8(e)(v) hereof.
(f) Miscellaneous.
(i) Seller and Buyer agree to treat all payments made
by either to or for the benefit of the other (including any payments
to the Company) under Article V or Article IX as adjustments to the
purchase price or as capital contributions for Tax purposes and that
such treatment shall govern for purposes hereto except to the extent
that the laws of a particular jurisdiction provide otherwise, in
which case such payment shall be made in an amount sufficient in
indemnify the relevant party on an after-Tax basis.
(ii) Notwithstanding any provision herein to the
contrary, the obligations of Seller to indemnify and hold harmless
Buyer and the Company pursuant to this Section 5.8 shall terminate at
the close of business on the 120th day following the expiration of
the applicable statute of limitations with respect to the Tax
liabilities in question (giving effect to any waiver, mitigation or
extension thereof).
(iii) Buyer or Seller shall be entitled to recover
professional fees and related costs that it may reasonably incur to
enforce the provisions of this Section 5.8 in the event of a breach
of the obligations under this Section 5.8.
Section 5.9 Supplemental Disclosure. If any event or
matter arises or comes to the attention of Seller or the Company
after the date of this Agreement which, if existing or occurring or
known to Seller or the Company at the date of this Agreement, would
have been required to be set forth or described in the Schedules or
which is necessary to correct any information in the Schedules which
has been rendered inaccurate thereby in any material respect, then
the Company shall promptly supplement or amend and deliver to Buyer
the Schedules which it has delivered pursuant to this Agreement, and
Buyer shall have the right, within five business days of receipt by
Buyer of such supplement or amendment, to terminate the Agreement
pursuant to Section 7.1(e).
Section 5.10 Guarantees. Prior to the Closing, Buyer
shall use commercially reasonable efforts (which efforts shall
include, if necessary, a replacement guaranty by Parent) to have
United Parcel Service of America, Inc. ("UPS") and its Affiliates
(collectively, the "Guarantors") released as guarantor from all off-
balance sheet financing related to leased equipment utilized by the
Company and from all real property leases to which the Company is a
party, provided that if any such guarantee cannot be removed prior to
Closing Buyer agrees to fully and unconditionally indemnify the
Guarantors for any costs associated with such guarantees. If
requested by Seller, Buyer shall execute and deliver at Closing a
specific indemnification instrument relating to any such continuing
guarantee obligations.
Section 5.11 Investigation by Buyer. Buyer has conducted
its own independent review and analysis of the business, operations,
technology, assets, liabilities, results of operations, financial
condition and prospects of the Company and acknowledges that Seller
has provided Buyer with access to the personnel, properties, premises
and records of the Company for this purpose. In entering into this
Agreement, Buyer has relied solely upon its own investigation and
analysis, and Buyer (a) acknowledges that neither Seller, the Company
nor any of their respective directors, officers, employees,
Affiliates, controlling Persons, agents or representatives makes or
has made any representation or warranty, either express or implied,
as to the accuracy or completeness of any of the information provided
or made available to Buyer or its directors, officers, employees,
Affiliates, controlling Persons, agents or representatives, and (b)
agrees, to the fullest extent permitted by law, that neither Seller,
Company nor any of their respective directors, officers, employees,
Affiliates, controlling Persons, agents or representatives shall have
any liability or responsibility whatsoever to Buyer or its directors,
officers, employees, Affiliates, controlling Persons, agents or
representatives on any basis (including, without limitation, in
contract or tort, under federal or state securities laws or
otherwise) based upon any information provided or made available, or
statements made, to Buyer or its directors, officers, employees,
Affiliates, controlling Persons, agents or representatives (or any
omissions therefrom), except as and only to the extent expressly set
forth herein with respect to the representations and warranties of
Seller in Article III and subject to the limitations and restrictions
contained herein. Buyer's sole rights and remedies relative to
transactions contemplated herein are limited to those set forth
herein.
Section 5.12 UPS Owned Facilities. Buyer and Seller will
use their good faith efforts to enter into an agreement with terms
and conditions mutually acceptable to both parties prior to the
Closing relating to certain UPS owned facilities that are currently
utilized in the business of the Company (the "UPS Owned Facilities").
All current agreements and arrangements between UPS or any of its
Affiliates and the Company regarding any of the UPS Owned Facilities
will be terminated simultaneously with the Closing.
Section 5.13 Rental Fleet Sales.
(a) Following the Closing, Buyer will continue
to utilize the Company's historic depreciation schedule with respect
to those vehicles in the Company's rental fleet with model years 1996
and earlier (the "Sale Vehicles").
(b) Buyer anticipates that it will sell each
Sale Vehicle following the 54-month anniversary of the date such Sale
Vehicle was put in service. All such sales will be for cash, and
Buyer will use its reasonable best efforts to maximize the sales
price for each Sale Vehicle in accordance with its customary
practices for sales out of Buyer's rental fleet (including, without
limitation, obtaining at least two bona fide bids for each Sale
Vehicle), and Buyer will not give priority to sales out of its
existing fleet. Buyer will consult with Seller at Seller's request
regarding the process for sale of the Sale Vehicles and will provide
Seller and its representatives with full access to all records
regarding the sale of the Sale Vehicles.
(c) Within five (5) business days following each
sale of a Sale Vehicle, Buyer will provide to Seller a detailed
written calculation of the Realization Amount (as defined below) with
respect to such Sale Vehicle. The "Realization Amount" shall equal
(i) the sales price of the applicable Sale Vehicle minus (ii) the sum
of (A) the net book value of such Sale Vehicle reflected on the
Company's books as of the date of sale and (B) Buyer's standard
preparation for sale charges for such type of Sale Vehicle (which
maximum charges currently range from $250-600 per vehicle). If the
Realization Amount is a positive number, the written calculation of
the Realization Amount shall be accompanied by payment to Seller (by
wire transfer of immediately available funds to an account designated
by Buyer) in an amount equal to 75% of the Realization Amount. If
the Realization Amount is a negative number, Seller shall pay to
Buyer (by wire transfer of immediately available funds to an account
designated by Buyer) within two business days following notification
of such calculation an amount equal to the Realization Amount
(expressed as a positive number). Neither party shall have any
obligation under this Section 5.13 with respect to any sale of a Sale
Vehicle that occurs (i) prior to the 54-month anniversary of the date
such vehicle was placed in service or (ii) more than 24 months
following the Closing Date.
(d) Seller may give notice to Buyer at any time
that Seller desires to assume responsibility for the sale of the Sale
Vehicles. If Seller gives such notice, the provisions of Section
5.13(c) above shall no longer be applicable. Instead, following such
notice, Seller will purchase each Sale Vehicle from Buyer on the
fifty-four month anniversary of the date such Sale Vehicle was placed
in service for a cash price equal to such Sale Vehicle's net book
value. Thereafter, Seller will have no further obligation to Buyer
with respect to such Sale Vehicle or any proceeds thereof.
Section 5.14 Outstanding Debt. At the Closing (or, if
the Closing occurs on January 1, 2000, on the first business day
thereafter), Buyer shall repay in full the Outstanding Debt with
funds provided by Buyer.
Section 5.15 Reimbursement Program. Following the
Closing, Buyer agrees to remit to Seller within five days following
receipt by Buyer any amounts received from a governmental entity as
reimbursement to the Company for environmental remediation
activities taken by the Company prior to the Closing and set forth on
Schedule 5.15.
Section 5.16 Additional Actions. After the execution of
this Agreement, upon Buyer's request and solely at Buyer's expense,
Seller will cause Deloitte & Touche LLP to audit the balance sheets
of the Company as of December 31, 1997 and 1998 and statements of
income and cash flows thereof for the respective fiscal years then
ended.
Section 5.17 Off-Balance Sheet Financing. For the
purpose of this Agreement, from October 31, 1999, the Outstanding
Debt will be increased solely by capital expenditures and decreased
solely by the net proceeds from asset sales. The Company will make a
good faith effort to monetize certain fleet assets through outside
financing generating $39.2 million in net proceeds (structured on the
same basis as similar transactions previously undertaken by the
Company or on such other basis as is mutually agreeable to Buyer and
Seller), which the parties anticipate will reduce the Outstanding
Debt to approximately $101 million at the Closing Date. To the
extent Outstanding Debt at Closing is more than $101 million, Buyer
will pay the difference to Seller in cash at Closing. To the extent
Outstanding Debt at Closing is less than $101 million, Seller will
pay the difference to Buyer in cash at Closing.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PARTIES
Section 6.1 Conditions to Each Party's Obligation. The
respective obligation of each party to consummate the transactions
contemplated herein is subject to the satisfaction at or prior to the
Closing of the following conditions:
(a) No statute, rule or regulation shall have been
enacted, promulgated or enforced by any court or governmental
authority which prohibits or restricts the consummation of the
transactions contemplated hereby;
(b) There shall not be in effect any judgment, order,
injunction or decree of any court of competent jurisdiction enjoining
the consummation of the transactions contemplated hereby;
(c) Any waiting periods applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired
or early termination shall have been granted;
(d) All consents, authorizations, waivers and approvals of
any governmental authority or other regulatory body or from parties
to contracts or other agreements to which the Company is a party as
may be required to be obtained in connection with the performance of
this Agreement, the failure to obtain which would prevent the
consummation of the transactions contemplated hereby or have a
Company Material Adverse Effect, shall have been obtained; and
the transactions contemplated by that certain Asset Purchase
Agreement, dated the date hereof, by and among Worldwide Dedicated
Services, Inc., Xxxxxxx Logistics, Inc., Xxxxxxx Dedicated Carriages,
Inc. and Xxxxxxx Transportation Systems, Inc. shall have been
consummated simultaneously with the Closing.
Section 6.2 Conditions to Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated
hereby are further subject to the satisfaction (or waiver) at or
prior to the Closing of the following conditions:
(a) The representations and warranties of Buyer contained
in Article IV of this Agreement shall be true and correct in all
material respects at the date hereof and as of the Closing as if made
at and as of such time, except for changes permitted or contemplated
hereby and except for representations and warranties which are as of
a specific date;
(b) Buyer shall have performed in all material respects
its obligations under this Agreement required to be performed by it
at or prior to the Closing pursuant to the terms hereof;
(c) Buyer shall have delivered to Seller or its Affiliates
those items set forth in Section 1.8 hereof;
(d) Buyer or its Affiliate shall have executed and
delivered an alliance agreement substantially in the form attached
hereto as Exhibit 6.2(d) (the "Alliance Agreement");
(e) Buyer or its Affiliate shall have executed and
delivered an investor rights agreement (the "Investor Rights
Agreement") substantially in accordance with the terms and conditions
set forth on the Investor Rights Agreement Term Sheet attached hereto
as Exhibit 6.2(e) (the "Investor Rights Agreement Term Sheet");
(f) Buyer or its Affiliate shall have executed and
delivered a transition services agreement in form and substance
reasonably satisfactory to Buyer and Seller (the "Transition Services
Agreement") and shall have reached agreement with Seller on certain
other material transitional issues; and
(g) Buyer or its Affiliate shall have executed and
delivered the Access Agreement (as hereinafter defined).
Section 6.3 Conditions to Obligations of Buyer. The
obligations of Buyer to consummate the transactions contemplated
hereby are further subject to the satisfaction (or waiver) at or
prior to the Closing of the following conditions:
(a) The representations and warranties of Seller contained
in Article III of this Agreement shall be true and correct in all
material respects at the date hereof and as of the Closing as if made
at and as of such time, except for changes permitted or contemplated
hereby and except for representations and warranties which are as of
a specific date;
(b) Seller shall have performed in all material respects
its obligations under this Agreement required to be performed by it
at or prior to the Closing pursuant to the terms hereof;
(c) The officers and directors of the Company shall have
tendered letters of resignation to Buyer, effective as of the Closing
Date;
(d) Seller shall have delivered to Buyer those items set
forth in Section 1.7 hereof;
(e) Seller or its Affiliate shall have executed and
delivered the Alliance Agreement;
(f) Seller or its Affiliate shall have executed and
delivered the Investor Rights Agreement;
(g) Seller or its Affiliate shall have executed and
delivered the Transition Services Agreement and shall have reached
agreement with Buyer on certain other material transition issues; and
(h) Seller or its Affiliate shall have executed and
delivered the Access Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned:
(a) at any time, by mutual written consent of Seller and
Buyer;
(b) by either party if the transactions contemplated
hereby shall have been permanently enjoined by a court of competent
jurisdiction, provided that no party hereto who brought or is
affiliated with the party who brought the action seeking the
permanent enjoinment of the transactions contemplated hereby may seek
termination of this Agreement pursuant to this Section 7.1(b);
(c) by Buyer if (i) any of the conditions set forth in
Sections 6.1 and 6.3 shall have become incapable of fulfillment and
shall not have been waived by Buyer or (ii) Seller shall breach in
any material respect any of its representations, warranties,
covenants or other obligations hereunder and, within twenty (20) days
after written notice of such breach to Seller from Buyer, such breach
shall not have been cured in all material respects or waived by
Buyer, or Seller shall not have provided reasonable assurance to
Buyer that such breach will be cured in all material respects on or
before the Closing Date; or
(d) by Seller if (i) any of the conditions set forth in
Sections 6.1 or 6.2 shall have become incapable of fulfillment and
shall not have been waived by Seller or (ii) Buyer shall breach in
any material respect any of its representations, warranties,
covenants or other obligations hereunder and, within twenty (20) days
after written notice of such breach to Buyer from Seller, such breach
shall not have been cured in all material respects or waived by
Seller or Buyer shall not have provided reasonable assurance to
Seller that such breach will be cured in all material respects on or
before the Closing Date;
(e) by Buyer, within five (5) business days following
receipt of any supplement or amendment to the Schedules, by written
notice to Seller if the matter which gives rise to such supplement or
amendment individually, or together with any other such matters, in
the aggregate has caused any of the representations and warranties of
Seller set forth in Article III (without giving effect to such
supplement or amendment) to be inaccurate in any material respect; or
(f) by Buyer or Seller, at any time on or after February
1, 2000, if the Closing shall not have occurred on or prior to such
date; provided, however, that the right to terminate this Agreement
under this Section 7.1(f) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
primary cause of, or resulted in, the failure of the Closing to have
occurred on or before such date.
Section 7.2 Procedure and Effect of Termination. In the
event of the termination of this Agreement and the abandonment of the
transactions contemplated hereby pursuant to Section 7.1 hereof,
written notice thereof shall forthwith be given by Seller, on the one
hand, or Buyer, on the other hand, so terminating to the other party
and this Agreement shall terminate and the transactions contemplated
hereby shall be abandoned, without further action by Seller, or
Buyer. If this Agreement is terminated pursuant to Section 7.1
hereof:
(a) each party shall redeliver all documents, work papers
and other materials of the other parties relating to the transactions
contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same or, upon prior
written notice to such party, shall destroy all such documents, work
papers and other materials and deliver notice to the parties seeking
destruction of such documents that such destruction has been
completed, and all confidential information received by any party
hereto with respect to the other party shall be treated in accordance
with the Confidentiality Agreement and Section 5.2(b) hereof;
(b) all filings, applications and other submissions made
pursuant hereto shall, at the option of Seller, and to the extent
practicable, be withdrawn from the agency or other Person to which
made; and
(c) there shall be no liability or obligation hereunder on
the part of Seller, the Company or Buyer or any of their respective
directors, officers, employees, Affiliates, controlling Persons,
agents or representatives, except that Seller or Buyer, as the case
may be, shall have liability to the other party if the basis of
termination is a willful, material breach by Seller or Buyer, as the
case may be, of one or more of the provisions of this Agreement, and
except that the obligations provided for in this Section, in
Section 10.1 hereof, in the Confidentiality Agreement and the non-
compete obligations in the Alliance Agreement shall survive any such
termination.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS
Section 8.1 Survival of Representations, Warranties and
Agreements. The representations and warranties of Seller and Buyer
made in Articles III and IV hereof, respectively, shall not survive
the Closing and, except as provided in Section 7.2(c) hereof, shall
not survive any termination of this Agreement; provided that any
covenant or agreement of any party contained herein which by its
terms shall survive the Closing shall survive until fully performed,
and provided, further, that this Section 8.1 is not intended in any
way to limit any covenant or agreement of the parties which
contemplates performance after the Closing, including, without
limitation, the covenants and agreements set forth in Sections 5.7
and 5.8 hereof.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification Obligations of Seller.
Subject to the limitations set forth in this Article IX, Seller shall
defend and hold harmless Buyer and its Affiliates, each of their
respective officers, directors, employees, agents and representatives
and each of the heirs, executors, successors and assigns of any of
the foregoing (collectively, the "Buyer Indemnified Parties") from,
against and in respect of any and all claims, liabilities,
obligations, losses, costs, expenses, penalties, fines and judgments
(at equity or at law) and damages whenever arising or incurred
(including, without limitation, amounts paid in settlement, costs of
investigation and reasonable attorneys' fees and expenses) arising
out of or relating to: (i) the Indemnified Claims (as hereinafter
defined); (ii) the Orlando North VOH Plume (as hereinafter defined);
(iii) the Environmental Claims (excluding the Orlando North VOH
Plume) and any other claim or enforcement action of any governmental
authority or any third party (other than the Orlando North VOH Plume)
and any remediation activities of Buyer, in each case to the extent
arising out of the generation, discharge, release, treatment,
transportation, storage or disposal by the Company of any Hazardous
Materials at any time prior to the Closing (collectively,
"Environmental Liabilities") to the extent not constituting a Prior
Operations Liability (as defined below), (iv) any Environmental
Liability arising with respect to real property that was previously
owned or leased by the Company but is no longer owned or leased by
the Company as of the Closing Date (a "Prior Operations Liability");
and (v) any accounts receivable of the Company reflected in the
Closing Date Working Capital that Buyer is unable to collect within
90 days following the Closing Date; provided, (A) Buyer has used its
reasonable best efforts to collect such receivable, (B) in the event
Buyer seeks indemnity under this Section 9.1(iv), Buyer shall assign
such receivable and all proceeds thereof to Seller and (C) the
indemnification to which Buyer is entitled will be limited to the
face amount of any uncollected receivables.
For purposes of this Agreement, the "Indemnified Claims" shall
mean those Litigation Claims marked with an asterisk on Schedule 3.12
and any claim of the type described below brought against the Company
(or Buyer as the successor to the Company) after the date hereof to
the extent based on an occurrence in connection with the Company's
operations prior to the Closing Date: workers' compensation, vehicle
accident or other personal injury or property damage claims normally
covered under a general liability insurance policy and employee
compensation and benefits (other than employee compensation and
benefits accrued as a liability on the Final Closing Balance Sheet
and reflected in the calculation of the Closing Date Working
Capital).
The claims, liabilities, obligations, losses, costs, expenses,
penalties, fines and damages of the Buyer Indemnified Parties
described in this Section 9.1 as to which the Buyer Indemnified
Parties are entitled to indemnification are hereinafter collectively
referred to as "Buyer Losses."
Section 9.2 Indemnification Procedure.
(a) Promptly after receipt by a Buyer Indemnified Party of
notice by a third party of threatened or filed claim or of the
threatened or actual commencement of any action or proceeding with
respect to which such Buyer Indemnified Party may be entitled to
receive payment from the other party for any Buyer Losses, such Buyer
Indemnified Party shall notify Seller, within 30 days of the notice
of threatening or filing of such claim or of the threatened or actual
commencement of such action or proceeding; provided, however, that
the failure to so notify Seller shall relieve Buyer from liability
under this Agreement with respect to such claim only if, and only to
the extent that, such failure to notify Seller results in the
forfeiture by Seller of rights and defenses otherwise available to
Seller with respect to such claim. Seller shall have the right, upon
written notice delivered to the Buyer Indemnified Party within 30
days thereafter, to assume the defense of such action or proceeding,
including the employment of counsel reasonably satisfactory to the
Buyer Indemnified Party and the payment of the fees and disbursements
of such counsel. In any action or proceeding with respect to which
indemnification is being sought hereunder, the Buyer Indemnified
Party or Seller, whichever is not assuming the defense of such
action, shall have the right to participate in such litigation and to
retain its own counsel at such party's own expense. Seller or the
Buyer Indemnified Party, as the case may be, shall at all times use
reasonable efforts to keep Seller or the Buyer Indemnified Party, as
the case may be, reasonably apprised of the status of the defense of
any action the defense of which they are maintaining and to cooperate
in good faith with each other with respect to the defense of any such
action.
(b) The Buyer Indemnified Party may not settle or
compromise any claim or consent to the entry of any judgment with
respect to which indemnification is being sought hereunder without
the prior written consent of Seller. Seller may not, without the
prior written consent of the Buyer Indemnified Party, settle or
compromise any claim or consent to the entry of any judgment with
respect to which indemnification is being sought hereunder unless (i)
simultaneously with the effectiveness of such settlement, compromise
or consent, Seller pays in full any obligation imposed on the Buyer
Indemnified Party by such settlement, compromise or consent and (ii)
such settlement, compromise or consent does not contain any equitable
order, judgment or term which in any manner affects, restrains or
interferes with the business of the Buyer Indemnified Party or any of
the Buyer Indemnified Party's affiliates.
(c) In the event the Buyer Indemnified Party shall claim a
right to payment pursuant to this Agreement not involving a third
party claim covered by Section 9.2(a), the Buyer Indemnified Party
shall send written notice of such claim to Seller. Such notice shall
specify the basis for such claim. As promptly as possible after the
Buyer Indemnified Party has given such notice, such Buyer Indemnified
Party and Seller shall establish the merits and amount of such claim
(by mutual agreement, litigation, arbitration or otherwise) and,
within five business days of the final determination of the merits
and amount of such claim, Seller shall pay to the Buyer Indemnified
Party immediately available funds in an amount equal to such claim as
determined hereunder.
Section 9.3 Orlando North VOH Plume Indemnification.
(a) Seller has retained an environmental consultant (the
"Consultant"), who is assessing the extent of the dissolved volatile
organic hydrocarbon plume as identified in the Groundwater Quality
Monitoring Report dated September 1999 prepared by Blasand, Xxxxx &
Xxx, Inc. ("Orlando North VOH Plume"). Seller is currently
negotiating with the Florida Department of Environmental Protection
("FDEP") to formalize any assessment, remediation, monitoring, risk
evaluation and reporting (as hereinafter referred to as "Corrective
Action") that is required by FDEP. Pursuant to its Section 9.1
indemnification obligation, Seller shall undertake the Corrective
Action agreed to with FDEP (which could include either long-term
groundwater monitoring or risk-based corrective action or
remediation) until the earlier of: (A) FDEP issues a letter
indicating that the Company (or Buyer as the successor to the
Company) is not required to perform any further action with respect
to the Orlando North VOH Plume; or (B) the Consultant has issued a
letter or report to FDEP indicating that the Corrective Action (as
approved by FDEP) has been satisfactorily performed, and FDEP has not
objected to the letter or report.
(b) Seller shall manage and control the Corrective Action
of the Orlando North VOH Plume, including, without limitation, the
right to retain consultants and counsel, to manage any
investigations, clean-up, response, remediation and associated
activities, and to negotiate, litigate, otherwise contest or settle
any claim relating thereto.
(c) Buyer agrees to reasonably cooperate with Seller to
ensure that the obligations and commitments with respect to the
Orlando North VOH Plume are carried out. Buyer agrees to provide to
Seller such information as may be reasonably requested regarding the
Orlando North VOH Plume and to provide Seller reasonable access to
Buyer's employees on a mutually convenient basis. Buyer also agrees
to provide access to the Orlando North property for the purpose of
allowing Seller to perform activities to fulfill Seller's obligations
hereunder in accordance with the terms of an access agreement to be
mutually agreed upon by the parties hereto ("Access Agreement");
provided that Seller shall conduct such activities so as to not
unreasonably interfere with Buyer's operations.
(d) Buyer shall operate after the Closing Date so as not
to compound or exacerbate the Orlando North VOH Plume. Seller shall
not be required to indemnify Buyer with respect to any compounding or
exacerbation of the Orlando North VOH Plume arising from post-Closing
operations of Buyer.
Section 9.4 Liability Limits. Notwithstanding anything
to the contrary set forth herein, Buyer Indemnified Parties shall not
make a claim against Seller for indemnification under Section
9.1(iii) for Buyer Losses unless and until the aggregate amount of
such Buyer Losses exceeds $1,000,000 (the "Buyer Basket"), in which
event the Buyer Indemnified Parties may claim indemnification only
for fifty percent of the Buyer Losses that exceed the Buyer Basket
and that arise under or pursuant to Section 9.1(iii). Seller's
indemnification obligations under Section 9.1(iii) shall not exceed
in the aggregate an amount equal to $10,000,000 (the "Cap Amount").
Section 9.5 Claims Period. For purposes of this
Agreement, a "Claims Period" is the period during which a Buyer
Indemnified Party may initiate a claim for indemnification pursuant
to Section 9.1. The Claims Period under this Agreement shall
commence on the Closing Date and shall terminate as follows:
(a) with respect to Buyer Losses arising under Section
9.1(ii), the Claims Period shall terminate on the fifth anniversary
of the earlier to occur of the actions (or lack of actions) by FDEP
described in the last sentence of Section 9.3(a).
(b) with respect to Buyer Losses arising under Section
9.1(iii), the Claims Period shall terminate on the fifth anniversary
of the Closing Date; and
(c) with respect to Buyer Losses arising under Sections
9.1(i),(iv) and (v), the Claims Period shall continue indefinitely,
except as limited by law (including by applicable statutes of
limitations).
Section 9.6 Exclusive Remedies. Following the Closing,
neither Buyer nor Seller shall make any claim nor have any remedy
against the other party arising out of or relating to the
transactions contemplated hereby other than any claim arising out of
or related to (a) indemnification pursuant to Section 5.7(b), 5.8(d)
or 9.1 or (b) a breach of any covenant set forth in this Agreement or
any agreement contemplated hereby required to be performed after the
Closing.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. Except as set forth in
this Section 10.1, whether or not the transactions contemplated
herein are consummated pursuant hereto, each of Seller and Buyer
shall pay all fees and expenses incurred by, or on behalf of, Seller
or Buyer, respectively, in connection with, or in anticipation of,
this Agreement and the consummation of the transactions contemplated
hereby.
Section 10.2 Further Assurances. From time to time after
the Closing Date, at the reasonable request of the other party hereto
and at the expense of the party so requesting, each of the parties
hereto shall execute and deliver to such requesting party such
documents and take such other action as such requesting party may
reasonably request in order to consummate more effectively the
transactions contemplated hereby.
Section 10.3 Notices. All notices, requests, demands,
waivers and other communications required or permitted to be given
under this Agreement shall be in writing and may be given by any of
the following methods: (a) personal delivery; (b) facsimile
transmission; (c) registered or certified mail, postage prepaid,
return receipt requested; or (d) UPS next day air or document
exchange. Notices shall be sent to the appropriate party at its
address or facsimile number given below (or at such other address or
facsimile number for such party as shall be specified by notice given
hereunder):
If to Buyer or Parent, to:
Xxxxxxx Leasing Corp.
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Leasing Corp.
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
If to Seller or the Company, to:
United Parcel Service, Inc.
00 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Legal Department
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Fax No. (000) 000-0000
Attention: Xxxxxxx X. Xxxx III
All such notices, requests, demands, waivers and communications
shall be deemed received upon (i) actual receipt thereof by the
addressee, (ii) actual delivery thereof to the appropriate address
or (iii) in the case of a facsimile transmissions, upon
transmission thereof by the sender and issuance by the transmitting
machine of a confirmation slip that the number of pages
constituting the notice have been transmitted without error. In
the case of notices sent by facsimile transmission, the sender
shall contemporaneously mail a copy of the notice to the addressee
at the address provided for above. However, such mailing shall in
no way alter the time at which the facsimile notice is deemed
received.
Section 10.4 Severability. Should any provision of this
Agreement for any reason be declared invalid or unenforceable, such
decision shall not affect the validity or enforceability of any of
the other provisions of this Agreement, which remaining provisions
shall remain in full force and effect and the application of such
invalid or unenforceable provision to Persons or circumstances other
than those as to which it is held invalid or unenforceable shall be
valid and enforced to the fullest extent permitted by law.
Section 10.5 Binding Effect; Assignment. This Agreement
and all of the provisions hereof shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned,
directly or indirectly, including, without limitation, by operation
of law, by any party hereto without the prior written consent of the
other parties hereto.
Section 10.6 No Third Party Beneficiaries. This
Agreement is solely for the benefit of Seller, and its successors and
permitted assigns, with respect to the obligations of Buyer under
this Agreement, and for the benefit of Buyer, and its respective
successors and permitted assigns, with respect to the obligations of
Seller, under this Agreement, and this Agreement shall not be deemed
to confer upon or give to any other third party any remedy, claim,
liability, reimbursement, cause of action or other right.
Section 10.7 Interpretation.
(a) The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the
meaning or interpretation of this Agreement.
(b) As used in this Agreement, the term "Person" shall
mean and include an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
(c) As used in this Agreement, the term "Affiliate" shall
mean a person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with the person specified.
Section 10.8 Jurisdiction and Consent to Service.
Without limiting the jurisdiction or venue of any other court, each
of Seller and Buyer (a) agrees that any suit, action or proceeding
arising out of or relating to this Agreement may be brought solely in
the state or federal courts of Georgia; (b) consents to the exclusive
jurisdiction of each such court in any suit, action or proceeding
relating to or arising out of this Agreement; (c) waives any
objection which it may have to the laying of venue in any such suit,
action or proceeding in any such court; and (d) agrees that service
of any court paper may be made in such manner as may be provided
under applicable laws or court rules governing service of process.
Section 10.9 Entire Agreement. This Agreement, the
Confidentiality Agreement, the Schedules and other documents
referred to herein or delivered pursuant hereto which form a part
hereof constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all other prior agreements
and understandings, both written and oral, between the parties or any
of them with respect to the subject matter hereof.
Section 10.10 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Georgia (regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof) as to all
matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 10.11 Specific Performance. The parties
acknowledge and agree that any breach of the terms of this Agreement
would give rise to irreparable harm for which money damages would not
be an adequate remedy and accordingly the parties agree that, in
addition to any other remedies, each shall be entitled to enforce the
terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
Section 10.12 Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
agreement.
Section 10.13 Amendment, Modification and Waiver. This
Agreement may be amended, modified or supplemented at any time by
written agreement of Seller and Buyer. Any failure of Seller or
Buyer to comply with any term or provision of this Agreement may be
waived, with respect to Buyer, by Seller and, with respect to Seller,
by Buyer, by an instrument in writing signed by or on behalf of the
appropriate party, but such waiver or failure to insist upon strict
compliance with such term or provision shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure to
comply.
Section 10.14 Knowledge. "To the Knowledge of Seller" or
any similar phrase contained in this Agreement shall mean the actual
knowledge of the officers of Seller and the Company. "To the
knowledge of Buyer" or any similar phrase contained in this Agreement
shall mean the actual knowledge of the officers of Buyer and Parent.
Solely for the purposes of this Section 10.14, the officers of Buyer,
Parent, Seller and the Company shall be deemed to have actual
knowledge of any written notice previously delivered to Buyer,
Parent, Seller, or the Company, respectively.
Section 10.15 Schedules and Exhibits. The Schedules and
all exhibits hereto are hereby incorporated into this Agreement and
are hereby made a party hereof as if set out in full in this
Agreement.
Section 10.16 Arbitration.
(a) Any controversy, claim or question or
interpretation arising out of or relating to this Agreement or the
breach thereof shall be finally settled by arbitration in the State
of Georgia under the then-effective Commercial Arbitration Rules of
the American Arbitration Association as modified by this Agreement,
and judgment on the award rendered by the arbitrators may be entered
in any court having jurisdiction. The award rendered by the
arbitrators shall be final and binding on the parties and not subject
to further appeal. Such arbitration can be initiated by written
notice by either party to the other party, which notice shall
identify the claimant's selected arbitrator. The party receiving
such notice shall identify its arbitrator within five (5) business
days following its receipt of such notice. The arbitrator selected
by the claimant and the arbitrator selected by the respondent shall,
within five (5) business days of their appointment, select a third
neutral arbitrator. In the event that they are unable to do so,
either party may request the American Arbitration Association to
appoint the third neutral arbitrator. The arbitrators shall have the
authority to award any remedy or relief that a court in Georgia could
order or grant, including, without limitation, specific performance
of any obligation created under this agreement, the awarding of
punitive damages, the issuance of injunctive or other provisional
relief, or the imposition of sanctions for abuse or frustration of
the arbitration process. The arbitration awards will be in writing
and specify the factual and legal basis for the award.
(b) It is the intent of the parties that any
arbitration shall be concluded as quickly as practicable (but,
barring extraordinary circumstances, in any event not more than
twenty (20) days after the date the third arbitrator is selected).
Unless the parties otherwise agree, once commenced, the hearing on
the disputed matters shall be held four days a week until concluded
with each hearing date to begin at 9:00 a.m. and to conclude at 5:00
p.m. The arbitrators shall use their best efforts to issue the final
award or awards within a period of five (5) business days after
closure of the proceedings. Failure of the arbitrators to meet the
time limits of this Section 10.16 shall not be a basis for
challenging the award.
(c) The arbitrators shall instruct the non-
prevailing party to pay all costs of the proceedings, including the
fees and expenses of the arbitrators and the reasonable attorneys'
fees and expenses of the prevailing party. If the arbitrators
determine that there is not a prevailing party, each party shall be
instructed to bear its own costs and to pay one-half of the fees and
expenses of the arbitrators.
(d) Notwithstanding the foregoing, nothing
contained herein shall prevent either party from seeking injunctive
relief in any court.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
UPS LOGISTICS GROUP, INC.
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Chief Executive Officer and President
UPS TRUCK LEASING, INC.
By: /s/ Xxxxxx X. XxXxxxxx
Name: Xxxxxx X. XxXxxxxx
Title: Chief Executive Officer and President
XXXXXXX TRUCK LEASING CORP.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President Finance and Treasurer
XXXXXXX LEASING CORP.
By: /s/ I. Xxxxx Xxxxx
Name: I. Xxxxx Xxxxx
Title: Chief Executive Officer and President
