Exhibit 10.24
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of June 30, 1999 (the
"Agreement"), among Avis Rent A Car, Inc., a Delaware corporation ("Acquiror"),
Avis Fleet Leasing and Management Corporation, a Texas corporation ("Acquiror
Sub") and a wholly owned subsidiary of Acquiror, PHH Corporation, a Maryland
corporation ("Parent"), and PHH Holdings Corporation, a Texas corporation
("Holdings") and a wholly owned subsidiary of Parent.
W I T N E S S E T H
WHEREAS, Acquiror, Acquiror Sub, Parent and Holdings are parties to
the Agreement and Plan of Merger and Reorganization (the "Merger Agreement"),
dated as of May 22, 1999, as amended by the Amendment to the Agreement and Plan
of Merger and Reorganization, dated as of June 30, 1999, providing for the
merger of Acquiror Sub and Holdings (the "Merger") pursuant to the Texas
Business Corporation Act (the "TBCA"), on the terms and subject to the
conditions set forth therein (capitalized terms not otherwise defined herein
shall have the respective meanings assigned to such terms in the Merger
Agreement);
WHEREAS, upon consummation of the Merger, Acquiror Sub shall acquire
the vehicle fleet management and fuel card businesses of Holdings (collectively,
the "Business");
WHEREAS, Parent, Holdings and/or their respective Affiliates (as
hereinafter defined) have experience in the vehicle fleet management and fuel
card businesses; and
WHEREAS, as a condition to closing under the Merger Agreement,
Parent and Holdings agreed to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Non-Competition. In consideration of the Merger
Consideration being delivered by Acquiror and Acquiror Sub to Parent and
Holdings on the date hereof, Parent and Holdings agree that for a period
commencing at the Effective Time and ending on the fifth anniversary of the
Effective Time, Parent and Holdings shall not, and shall cause each of their
respective affiliates not to, directly or indirectly, engage in or own any
interest in any business that engages in the vehicle fleet management or fuel
card businesses or markets any products or services that directly compete with
the Business, as presently conducted by the Transferred Companies (a
"Competitive Business"); provided, however, that it shall not be a violation of
this Agreement for Parent, Holdings or their respective affiliates to
(i) acquire, own or invest in securities representing less than five percent
(5%) of the outstanding voting power of the securities of a publicly traded
company; or (ii) develop and/or market any products or services that are either
marketed by Parent, Holdings or their respective affiliates (other than the
Transferred Companies) on the date hereof or are incidental to or derived from
products or services marketed by Parent, Holdings or their respective affiliates
(other than the Transferred Companies) on the date hereof; provided, however,
that any such incidental or derived products or services that are developed
and/or marketed by Parent, Holdings or their respective affiliates shall be so
developed and marketed indirectly through an outsourcing arrangement and, in
connection therewith, Parent, Holdings or such affiliate shall provide to
Acquiror Sub a right of first refusal to provide such product or service.
Notwithstanding the foregoing, nothing in this Agreement shall in any way (x)
prohibit Holdings, Parent or any of their affiliates from acquiring a
Competitive Business as part of an acquisition, by joint venture, merger or
other business combination, of the assets of, or a controlling interest in,
another Person (a "Target Business") if the revenue derived by the Target
Business from the Competitive Business in the fiscal year preceding such
acquisition constituted less than 15% of the total net revenues of the Target
Business; or (y) be deemed to apply to any preexisting Competitive Business of a
Person (or any of its subsidiaries) that acquires control of Cendant
Corporation, a Delaware corporation ("Cendant"), or one of its subsidiaries or
that acquires all or substantially all of the assets of Cendant or one of its
subsidiaries or merges with Cendant in a "merger of equals".
Section 2. Non-Solicitation of Employees. In consideration of the
Merger Consideration being delivered by Acquiror and Acquiror Sub to Parent and
Holdings, Parent and Holdings agree that for a period commencing at the
Effective Time and ending on the second anniversary of the Effective Time,
Parent, Holdings and their respective affiliates shall not solicit for
employment any Person who is currently an employee of the Transferred Companies
or induce or encourage any such Person to leave such Transferred Company's
employ, or to become employed by any Person other than such Transferred Company,
provided, however, that the foregoing shall not prohibit Holdings, Parent or any
of their affiliates from employing any such person who initiates contact with
Holdings, Parent or any of their affiliates regarding employment or who
initiates contact with Holdings, Parent or any of their affiliates in response
to any advertisement to the public in general or by a recruiter concerning
available positions and without any direct solicitation by or encouragement from
Holdings, Parent or any of their affiliates.
Section 3. Severability. It is the desire and intent of the parties
to this Agreement that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If any particular provisions or
portion of this Agreement shall be adjudicated to be invalid or unenforceable,
this Agreement shall be deemed amended to delete therefrom such provision or
portion adjudicated to be invalid or unenforceable, such amendment to apply only
with respect to the operation of such Agreement in the particular jurisdiction
in which such adjudication is made.
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Section 4. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
Section 5. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein, and there are not restrictions, promises,
representations, warranties, covenants, conditions or undertakings with respect
to the subject matter hereof, other than those expressly set forth or referred
to herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.
Section 6. Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such address for a party as shall be specified by like
notice; provided that notices of change of address shall be effective only upon
receipt thereof). Any such notice shall be effective upon receipt, if personally
delivered or telecopied, or one day after delivery to a courier for next-day
delivery.
If to Parent or Holdings:
PHH Corporation
6 Sylvan Way
Parsippany, New Jersey 07054
Telecopy: (973) 496-5355
Attention: General Counsel
Copies to:
Cendant Corporation
9 West 57th Street
37th Floor
New York, New York 10019
Telecopy: (212) 413-1922
Attention: General Counsel
and
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Telecopy: (302) 651-3001
Attention: Patricia Moran Chuff, Esq.
If to Acquiror or Acquiror Sub:
Avis Rent A Car, Inc.
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900 Old Country Road
Garden City, New York 11530
Telecopy: (516) 222-6922
Attention: Karen Sclafani, Esq.
Copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Telecopy: (212) 354-8113
Attention: Sean Geary, Esq.
Section 7. Governing Law. The substantive laws of the State of New
York shall govern the interpretation, validity and performance of the terms of
this Agreement, regardless of the law that might be applied under applicable
principles of conflicts of laws.
Section 8. Waiver. Either party may waive compliance by the other
party of any of the provisions of this Agreement. Any waiver (express or
implied) of any default or breach of this Agreement shall not constitute a
waiver of any other or subsequent default or breach. Any waiver must be in
writing and must be signed by the party waiving any provision hereof.
Section 9. Affiliates. As used herein, "Affiliate" shall mean, with
respect to any Person, any other Person that directly or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person; provided, however, that the term "Affiliate" shall
not include, with respect to any Person, any public corporation in which such
Person owns securities representing less than 50% of the outstanding voting
power.
Section 10. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same
Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the
terms and provisions of this Non-Competition Agreement as of the date first
above written.
AVIS RENT A CAR, INC.
By: __________________________
Name:
Title:
AVIS FLEET LEASING AND MANAGEMENT
CORPORATION
By: __________________________
Name:
Title:
PHH CORPORATION
By: __________________________
Name:
Title:
PHH HOLDINGS CORPORATION
By: __________________________
Name:
Title: