Exhibit 4.6
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ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement"), dated as of May
28, 1999, between APL Limited, a Delaware corporation ("APL" or the "Provider"),
and APL Land Transport Services, Inc., a Tennessee corporation ("LTS").
RECITALS
WHEREAS, APL and Coyote Acquisition LLC, a Delaware limited liability
company (the "Purchaser"), have entered into a Stock Purchase Agreement, dated
as of March 15, 1999 (the "Stock Purchase Agreement"), pursuant to which APL has
agreed to sell to the Purchaser, and the Purchaser has agreed to purchase from
APL, shares of common stock of LTS.
WHEREAS, LTS desires to receive from the Provider and the Provider is
willing to provide to LTS certain administrative and support services as
described hereunder pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and agreements contained
herein, the parties hereto agree as follows:
1. Administrative Services.
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(a) APL shall make available and provide to LTS, in accordance with the
terms and conditions of this Agreement, certain administrative services as set
forth in Schedule A (the "Services").
(b) From time to time, LTS may request and APL may make available and
provide to LTS, as the parties may mutually agree, administrative and support
services in addition to those set forth in Section 1(a) above ("Additional
Services"). Such Additional Services shall be reflected in separate service
memoranda executed by both parties hereto and attached hereto as addenda, and
the terms of this Agreement shall govern all such addenda.
(c) APL shall perform and provide the Services and any Additional Services
for LTS in substantially the same manner with the same degree of care, skill
and prudence exercised by APL for its own operations. Subject to the provisions
of Section 6, APL shall be deemed to have satisfied its obligation to provide
the Services and Additional Services hereunder to the extent it has provided
such Services and Additional Services in accordance with APL's past practices in
connection with the provision of the same or similar procedures, facilities,
equipment, contractors and personnel that provided the Services or Additional
Services prior to the Closing (as defined in the Stock Purchase Agreement).
(d) Subject to the provisions of Section 5, (i) LTS shall afford to APL,
its employees and authorized agents and representatives reasonable access to the
properties, books, records, contracts, documents, files and other information of
LTS to the extent necessary to enable APL to perform and provide the Services
and the Additional Services, and (ii) APL shall afford to LTS, its employees and
authorized agents and representatives reasonable access to all information
related to the Services or the Additional Services produced or generated by APL
in the course of providing the same, including without limitation, technical,
economic and business data, computer information data bases and the like.
(e) If during the term of this Agreement LTS desires to segregate its
operations from the operations of APL at any joint facilities shared by APL and
LTS, APL shall provide for physical segregation of LTS employees as long as the
costs required to achieve such segregation are reasonable and do not exceed
$50,000 in the aggregate; provided that if the actual costs are materially
higher than such amount the parties will negotiate in good faith the allocation
of such costs. The parties agree to use their best efforts to obtain leases or
subleases for the space occupied by LTS employees during the term of this
Agreement.
2. Fees.
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(a) For Services and Additional Services for which APL shall be
compensated on a per transaction basis, LTS shall compensate APL in accordance
with the fee schedule set forth on Schedule A or as subsequently agreed to by
both parties in the case of Additional Services. For office space and associated
office services and front line office accounting and information resource
support, LTS shall compensate APL based on headcount or as subsequently agreed
to by both parties. For all other Services or Additional Services, LTS shall
compensate APL in an amount equal to the total amount of U.S. dollars expended
by APL in performing the Services or Additional Services for LTS including, but
not limited to, (i) the pro rata share of APL's costs, based on the number of
hours that APL employees spend performing Services or Additional Services for
LTS in relation to the total number of hours that APL employees spend performing
Services or Additional Services for APL and LTS combined, (ii) all travel costs
incurred by APL reasonably documented in performing the Services or Additional
Services for LTS, and (iii) any other out of pocket expenditures incurred by APL
in the course of performance of Services or Additional Services (Section
2(a)(i), (ii) and (iii) shall be the "Total Expenditures"). LTS shall pay to APL
the fees owned under this Agreement on a monthly basis, in arrears, commencing
on June 30, 1999 for as long as this Agreement remains in effect.
(b) APL represents and warrants to LTS that the transaction fees described
in Schedule A, when applied to the actual number of 1998 transactions, would not
differ adversely from the amounts reflected in the audited financial results for
the fiscal year ended December 25, 1998. In addition, APL represents and
warrants that the method for allocating
costs associated with office space and associated office services and front line
office accounting and information resource support do not differ adversely from
the method for allocating such costs reflected in the audited financial results
for the fiscal year ended December 25, 1998. In the event of any inaccuracy of
this representation, the parties agree to make such adjustments in good faith to
amounts payable under this Agreement as are necessary (i) to correct such
inaccuracy and (ii) to compensate the party prejudiced by such inaccuracy.
(c) During the term of this Agreement, LTS shall have the right to audit,
at its expense, appropriate documents or information of APL to verify the Total
Expenditures; provided, however, that no more than two such audits may be
conducted within any twelve-month period . If the audit determines that the
Total Expenditures as presented by APL is more than 10% higher than actual Total
Expenditures, APL shall reimburse LTS for the reasonable expense of audit and
any overpayment of fees under this Agreement.
3. Term and Termination.
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(a) APL shall provide the Services and Additional Services to LTS
hereunder for the period beginning from the date of the Closing, and ending on
one year from the date of the Closing or, with respect to each particular
Service or Additional Service, (i) on the date specified in a notice of
termination delivered pursuant to Section 3(b) below with respect to such
Service or Additional Service or (ii) on such other date as is mutually agreed
to by both parties.
(b) LTS may terminate any portion of the Services or Additional Services
by giving 90 days' prior written notice to APL. If either party shall default in
the performance of any of its material obligations under this Agreement and
shall fail or refuse to remedy such default to the reasonable satisfaction of
the other party within 30 days after receipt of written notice, the non-
breaching party may terminate this Agreement. If the default in performance
relates only to a specific Service or Additional Service and such default is not
a default in the performing of a material obligation under this Agreement,
termination will be limited to termination of that Service or Additional Service
on the same terms as set forth in the immediately preceding sentence. If any
party shall become insolvent, be placed in receivership, make an assignment for
the benefit of creditors or seek relief or have a petition filed against it
under federal bankruptcy law, the other party may terminate this Agreement
immediately upon written notice.
(c) If action by a federal, state or other governmental regulatory agency
materially affects a party's rights or obligations hereunder, such party may
terminate any portion of the Services or Additional Services or this Agreement
by giving 90 days' prior written notice to the other, or such shorter period as
may be required by such agency or by law.
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(d) Expiration or termination of all or a portion of this Agreement for
any reason shall not terminate the obligations described in Sections 5 and 6
which shall survive any such termination.
(e) Expiration or termination of this Agreement for any reason shall not
terminate either party's obligations or rights arising out of any act or
omission of such party occurring prior to such termination or expiration.
4. Relationship.
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(a) Nothing in this Agreement shall be deemed to create a partnership,
joint venture, agency relationship or relationship of employer and employee
between the parties. In performing the Services and Additional Services, APL
will at all times be an independent contractor and neither party is to be
considered the agent or legal representative of the other for any purpose
whatsoever.
(b) APL, in providing the Services and the Additional Services, will be
solely responsible for (i) determining the terms and conditions of employment
between itself and its employees, agents and representatives, including without
limitation, hiring, termination, hours of work, rates and payment of
compensation, and (ii) the payment, reporting, collection and withholding of
taxes and similar contributions.
5. Confidential Information.
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(a) The parties hereto agree on behalf of themselves and their directors,
officers, employees and agents: (i) to hold in trust and maintain confidential,
(ii) not to disclose to others without prior written approval from the
disclosing party, (iii) not to use for any purpose, other than in connection
with this Agreement, and (iv) to prevent duplication of and disclosure to any
other party, any Information (as hereinafter defined) received from the
disclosing party or developed, presently held or continued to be held, or
otherwise obtained by the receiving party, under this Agreement.
(b) "Information" shall include all results of the Services and Additional
Services, information disclosed by either party orally, visually, in writing, or
in other tangible form in the course of providing or receiving Services or
Additional Services, and shall include, without limitation and as applicable,
technical, economic and business data, know-how, flow sheets, drawings, business
plans, computer information data bases, and the like.
(c) The foregoing obligations of confidentiality, non-disclosure and non-
use shall not apply to any Information to the extent that the obligated party
demonstrates that:
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(i) such Information is or becomes knowledge generally available to
the public other than through the acts or omissions of the obligated party
which constitute a breach of this Agreement;
(ii) such Information is subsequently received by the obligated
party on a non-confidential basis from a third party who did not receive it
directly or indirectly from the disclosing party; or
(iii) disclosure of such Information is required under applicable law
or regulations or in connection with a lawsuit, claim, litigation or other
proceeding or in connection with tax or regulatory matters.
(d) The terms and conditions of this Section shall survive any termination
of this Agreement.
6. Limitation of Liability. (a) APL shall have no liability under this
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Agreement for damage or loss of any type suffered by LTS or any third party as a
result of the performance of Services or Additional Services provided hereunder
by APL except in the case of gross negligence or willful misconduct of APL and
(b) IN NO EVENT SHALL APL BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES.
7. Excusable Delay or Failure in Performance. APL shall not be liable
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for failure to perform any of its obligations under this Agreement during any
time APL is unable to perform due to any act of God, sabotage, military
operation, national emergency, civil commotion, labor disturbance, utility or
computer failure, or the order, requisition, request or recommendation of any
government agency or acting government authority, or APL's compliance therewith,
or government proration, regulation, or priority, or any change in laws or
regulations which prevent APL from providing services required by this
Agreement, in each case beyond APL's reasonable control.
8. Notices. All notices or communications hereunder shall be sent by
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personal service, by facsimile transmission or by overnight mail by courier of
internationally recognized standing addressed as follows (or such other address
as such party may designate in writing):
To LTS:
c/o Josh Harris
Apollo Management, L.P.
1301 Avenue of the Americas
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38th Floor
New York, NY 10019
Facsimile: (212) 261-4102
To APL:
1111 Broadway
Oakland, California 94607-5500
Attention: Timothy J. Windle
Facsimile: (510) 272-8932
Any notice hereunder shall be effective upon receipt by the intended recipient.
9. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York without regard to principles
of conflicts of laws.
10. Arbitration. Any dispute, controversy or claim between APL and LTS
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arising out of or relating to this Agreement, the Services or any Additional
Services, will be resolved by arbitration conducted in Oakland, California under
the auspices and according to the Commercial Arbitration Rules of the American
Arbitration Association. The arbitration shall be conducted in accordance with
the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement.
11. Entire Agreement. This Agreement constitutes the entire agreement,
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between the parties with respect to the subject matter hereof, and supersedes
all prior agreements between the parties with respect to the subject matter
hereof. There are no representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein.
12. Severability. Any provision of this Agreement that is held by a court
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of competent jurisdiction to violate applicable law shall be limited or
nullified only to the extent necessary to bring the Agreement within the
requirements of such law.
13. No Assignment. Neither of the parties hereto may assign or transfer
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any of its rights or delegate any of its obligations hereunder, whether by
operation of law or otherwise, to any other person or entity without the prior
written consent of the other party hereto. Any purported assignment or
delegation that is made other than in accordance with this Section 13 shall be
void and of no effect. Subject to the foregoing provisions of this Section 13,
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
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14. Waiver. This Agreement may not be amended or modified except by the
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express written consent of the parties hereto. Any waiver by the parties of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach thereof or of any other provision.
15. Third Party Beneficiaries. Except as expressly provided in this
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Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
16. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original and all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and each of the undersigned hereby warrants and represents that he or
she has been and is, on the date of this Agreement, duly authorized by all
necessary and appropriate action to execute this Agreement.
APL LIMITED
By: /s/ Timothy J. Rhein
___________________________________
Name: Timothy J. Rhein
Title: President and Chief Executive Officer
APL LAND TRANSPORT SERVICES, INC.
By: /s/ Ann Fingarette-Hasse
___________________________________
Name: Ann Fingarette-Hasse
Title: Assistant Secretary
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SCHEDULE A
Services provided under this Agreement by APL to LTS on a per transaction fee
basis shall include:
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Service Per Transaction Fee
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Accounts Payable
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. Per paper invoice (vendor and employee expense report) $ 2.75
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. Per EDI/ERS transaction $ 1.15
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. Per employee paycheck (for payroll processing only) $ 10.00
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. Per manual voucher/check request $ 30.00
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. Per ACH/wire transfer (excluding direct bank charges) $ 3.20
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Cargo Claims
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. Per claim handled $ 46.00
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Walker Administration
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. Per cost center account setup $ 30.00
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Other Services provided under this Agreement by APL to LTS shall include:
. office space and associated office services, inclusive of stationary and
supplies
. training (other than training relating to information systems) ordinarily
offered to applicable employees
. front line office accounting and information resource support
. for a period of up to 30 days after the Closing, (i) equipment dispatch
services at the Chicago and Houston terminal facilities and (ii) EDI clean-
up services at the Kearny terminal facility and such other locations as the
parties mutually agree upon
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