EXHIBIT 10.1
AMENDMENT TO AGREEMENT
THIS AMENDMENT TO AGREEMENT (the "Amendment") is entered into effective
as of the 6th day of September 2001, by and among Allied Automotive Group, Inc.
("Carrier") and UPS Autogistics, Inc. ("Customer").
WHEREAS, Carrier and Ford Motor Company entered into that certain
agreement later assigned to Customer, dated April 3, 1992, as amended from time
to time, including the amendment dated August 1, 1999 (the "Prior Agreement");
and
WHEREAS, Carrier and Customer entered into that certain Letter
Agreement dated September 6, 2001, (the "Letter Agreement"); and
WHEREAS, the parties now desire to revoke the terms and conditions of
the Letter Agreement and to provide that the Prior Agreement is and has remained
in full force and effect notwithstanding the terms and conditions of Letter
Agreement; and
WHEREAS, the parties desire to enter into this Amendment and to amend
certain terms of the Prior Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. Carrier and Customer agree that the terms and conditions of the Letter
Agreement are revoked and are of no force or effect and further agree that
notwithstanding the terms of the conditions of the Letter Agreement, the Prior
Agreement is deemed reinstated and is in full force and effect as amended
hereby.
2. Commencing effective September 7, 2001, Carrier shall xxxx and Customer
shall pay an administrative processing fee in an amount equal to $[XXX] per
vehicle transported from all locations originating in the United States, and
$[XXX] Canadian for all locations originating in Canada, provided that Carrier
and Customer agree that the administrative processing fee shall be increased to
$[XXX] per vehicle transported from all locations originating in the United
States and $[XXX] Canadian for all locations originating in Canada immediately
upon the removal of business transported by Carrier for Customer at (i) Edison,
NJ and (ii) any of (a) [XXX], (b) [XXX], (c) [XXX], or (d) [XXX]. Customer
agrees to process Carrier xxxxxxxx electronically and pay the administrative
processing fee in accordance with the terms of the Prior Agreement. Carrier and
Customer agree that the administrative processing fee shall not apply to (i) new
locations not currently served by Carrier on behalf of Customer as of
September 7, 2001, (ii) rail diversions occurring after September 7, 2001, or
(iii) new business rerouted to existing locations.
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3. Notwithstanding the provisions of Section 2, Carrier will not charge
any administrative processing fee for any vehicle transported in the following
moves:
[XXX]
4. Carrier agrees that Customer has the sole discretion for managing and
designing the network, and Carrier does not have the right to increase the
administrative processing fee or the underlying rates charged to Customer as a
result of such management and design, other than the increase in the
administrative processing fee as set forth in Section 2 of this Amendment.
5. The Prior Agreement, as amended hereby, shall terminate on (i)
September 30, 2002 as to ramp locations and (ii) December 31, 2002 as to plant
locations
6. Except as provided in Section 2 of this Amendment and this Section 6,
the administrative processing fee and underlying rates charged to Customer shall
not be subject to upward or downward adjustment prior to the termination dates
specified in Section 5 hereof, except that Customer agrees to adjust rates based
on fuel price fluctuations using the current fuel surcharge process.
7. Subject to the provisions of Section 7.8, Carrier agrees to comply by
location with the following transit times and compliance percentages:
7.1(a) Shuttle: completed within twenty-four (24) hours, [XXX]
compliance; (b) Ramp to dealer: completed within forty-eight (48) hours; and
(c) Plant to dealer: completed within seventy-two (72) hours.
7.2 Commencing September 6, 2001, [XXX] percent of Carrier's ramp
and plant deliveries under this Amendment ("Deliveries") will be in compliance
with the transit times set forth in Section 7.1(b) and (c). The remaining [XXX]
percent will be made within an additional forty-eight (48) hours.
7.3 Commencing January 1, 2002, [XXX] percent of Carrier's
Deliveries will be in compliance with the transit times set forth in 7.1(b) and
(c). The remaining [XXX] percent will be made within an additional forty-eight
(48) hours.
7.4 Commencing July 1, 2002, [XXX] percent of Carrier's Deliveries
will be in compliance with the transit times set forth in 7.1 (b) and (c). The
remaining [XXX] percent will be made within an additional forty-eight (48)
hours.
7.5 Commencing January 1, 2003, [XXX] percent of Carrier's
Deliveries will be in compliance with the transit times set forth in 7.1 (b) and
(c). The remaining [XXX] percent will be made within an additional forty-eight
(48) hours.
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7.6 Customer will notify Carrier if a corrective action plan is
required due to Carrier's failure to comply with the standards specified in
Sections 7.1, 7.2, 7.3, 7.4, or 7.5. Carrier must submit a corrective action
plan within forty-eight (48) hours of such notification by Customer. Carrier
shall have thirty (30) days from such notification ("Cure Period") in which to
bring its performance into compliance with said standards. Customer may
terminate the obligation of Carrier and Customer as to any location not in
compliance at the end of the Cure Period. If Customer elects to so terminate,
Customer will give Carrier seventy-five (75) days' prior written notice thereof.
Carrier and Customer agree that, during any such seventy-five (75) day notice
period, Customer and Carrier will continue fully to perform all of their
respective obligations under this Amendment and Carrier will perform as to
transit standards at levels no worse than those achieved prior to such
corrective action plan during the Cure Period.
7.7 Carrier may not increase the administrative processing fee or
the underlying rates charged to Customer pursuant to the terms of this Amendment
in the event Customer terminates the obligations of Customer and Carrier as to
any location as a result of the breach by Carrier of Sections 7.1, 7.2, 7.3,
7.4, 7.5, or 7.6 of this Agreement.
7.8 Customer agrees to continue to use commercially reasonable
efforts to assist Carrier in achieving the performance standards set forth in
Sections 7.1, 7.2, 7.3, 7.4, and 7.5, and to define reporting of performance
acceptable to both parties, provided, however, Carrier bears the sole
responsibility for achieving such performance standards, anything to the
contrary in this Amendment notwithstanding. Customer agrees that Carrier shall
not be in breach of this Section 7 to the extent acts or events or circumstances
beyond the reasonable control of Carrier occur which prohibit compliance with
this Section 7.
8. Quarterly financial reporting is required by Carrier to Customer to
include at a minimum the following:
- Borrowing Base Report.
- Unit volume by terminal in total for Ford broken out
between shuttle and non-shuttle activity.
- Ford Revenue by terminal by month.
- Quarterly status of turnaround plan, including
initiatives and actual results of operations compared
to plan
- Copy of amended or new loan agreements, including
forbearance agreements and waivers.
Carrier will provide to Customer such monthly financial reports listed above to
the extent available.
9. Either Carrier or Customer may terminate the obligation of Carrier to
provide services on a location by location basis, without terminating the Prior
Agreement, on seventy-five (75) days prior written notice, with or without
cause. In the event all
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locations covered by the Prior Agreement are terminated, then the Prior
Agreement, as amended hereby, shall automatically be terminated and immediately
be of no further force or effect. During such seventy-five (75) day period,
Carrier may not increase or decrease the administrative processing fee or
underlying rates charged and Customer and Carrier and will continue fully to
perform their obligations under this Amendment. Any termination of the Prior
Agreement, as amended hereby, shall not release either party from any obligation
based on events that may have occurred before such termination.
10. The terms and conditions of the Prior Agreement, including the
underlying rates and charges and locations served by Carrier, are in full force
and effect, provided that the terms and conditions of this Amendment shall
govern and control in the event of a conflict with the Prior Agreement.
11. Section 1 and Section 17 of the Prior Agreement are terminated and are
of no further force or effect.
12. Section 10 of the Prior Agreement shall be amended to provide that (i)
the vehicle quality performance standard shall be [XXX] during the term of the
Prior Agreement, as amended hereby, (ii) the quality performance standards shall
be applied on a location by location basis, and (iii) the cure period of Carrier
shall be six (6) months following written notice of breach given by Customer to
Carrier per location. Customer agrees to continue to use commercially reasonable
efforts to assist Carrier in achieving the performance standards set forth in
this Section 12, provided, however, Carrier bears the sole responsibility for
achieving such performance standards, anything to the contrary in this Amendment
notwithstanding.
13. Customer represents to Carrier that it has the right and authority to
enter into this Amendment and to contract for the distribution of Ford Motor
Company vehicles in accordance with the terms of this Amendment.
14. Customer and Carrier agree that Section 5 of the Prior Agreement shall
be amended by deleting the third sentence of Section 5 and inserting the
following in its place:
"If, at any time during the term of this Agreement, forty percent (40%)
or more of the capital stock or substantially all of the assets of
Carrier shall be transferred, assigned, subcontracted, or sold to an
unaffiliated entity ("Acquirer"), other than transfers or assignments
to lenders in the ordinary course of business, Customer shall have the
right (but not the obligation) for a period of thirty (30) days from
the date of its receipt of written notice from Carrier that
consummation of such transfer or sale has been effected, to terminate
this Agreement in its entirety or with respect to any location affected
by such Agreement. In the event Customer elects to terminate this
Agreement pursuant to this Section 5, Customer and Carrier agree that
such termination will be effective seventy-five (75) days following
notice from Customer of its election to terminate this Agreement, and
during such seventy-five (75) day period, Carrier may not increase or
decrease the
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administrative processing fee or underlying rates charged, and Customer
and Carrier will continue to fully perform their obligations under this
Agreement."
The remaining provisions of Section 5 shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this document this
day of October, 2001, but effective as of the date first written above.
ALLIED AUTOMOTIVE GROUP, INC.
By:
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Title:
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UPS AUTOGISTICS, INC.
By:
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Title:
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[XXX] Represents material deleted per the Company's request for Confidential
Treatment and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of
1934.
