NONCOMPETITION AGREEMENT
This Noncompetition Agreement ("Agreement"), effective as of the
Effective Date, as defined below, is made by and between Swift Transportation
Co., Inc., or its assignees ("Swift") and Charles G. Peterson and Sandra
Peterson, his wife ("Chuck and Sandy"), residents of the State of Florida, as
well as Chad Peterson and Jason Peterson ("Chad and Jason"), residents of the
States of Iowa and North Carolina, respectively. Chuck and Sandy, as well as
Chad and Jason are sometimes hereinafter collectively referred to as the
"Petersons").
WHEREAS, Direct Transit, Inc. ("DTI"), an Iowa corporation engaged in
the motor carrier business, concurrent with the execution of this Agreement, has
entered into an Asset Purchase Agreement with Swift dated February 20, 1997 (the
"Purchase Agreement"), under which Swift will acquire certain assets of DTI,
including good will, customer lists, and customer contracts (the "Assets");
WHEREAS, Charles G. Peterson is and has been President and the sole
shareholder of DTI for the entire corporate existence and has used his expertise
in developing DTI's business and possesses knowledge in skills necessary to
operate DTI's business;
WHEREAS, Sandra Peterson as well as Chad and Jason are intimately
familiar with the operations of DTI's business;
WHEREAS, the value of the Assets to Swift would be substantially
diminished if the Petersons were free to compete with Swift or assist others in
competition with Swift once the purchase of the Assets is completed; and
WHEREAS, Swift has required this Agreement pursuant to Section 5.1.14
of the Purchase Agreement as a condition precedent to performance of its
obligations under the Purchase Agreement.
NOW, THEREFORE, in consideration of the above recitals and the
following covenants, the parties hereby agree as follows:
1. Term. This Agreement shall commence on the Effective Date, as
defined below, and shall continue for eight (8) years thereafter, unless
terminated earlier as provided elsewhere in this Agreement.
2. Effective Date. This Agreement shall not become effective until the
Closing Date of the Purchase Agreement, and it is contingent upon the closing of
such transaction.
3. Consideration. As complete consideration for the obligations of the
Petersons under this Agreement, the Petersons will receive upon the Effective
Date, the sum of $1,045,000.
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4. Noncompetition. During any time within the period commencing on the
Effective Date and ending on the eighth anniversary thereafter, either directly
or indirectly, or by affiliation with any person, firm, corporation, entity or
business (whether as a partner, member, officer, director, manager, employee,
agent, consultant or otherwise):
(a) Charles and Sandra, jointly and severally, covenant and
agree not to engage in the business of providing motor carrier or transportation
logistic services from any location within the geographical United States; and
(b) The Petersons, jointly and severally, covenant and agree
not to
(i) solicit or receive any current or past customer
or prospect of DTI, existing as of the Effective Date, for the purpose of
providing transportation services to such customer or prospect; and
(ii) hire any person employed by Swift on or after
the Effective Date or induce any such person to leave the employ of Swift.
Swift agrees to notify Chad and Jason, at least quarterly, during the
term of this Agreement of any customers previously serviced by DTI which Swift
no longer services and upon receipt of such notice, the restrictive covenants
contained in this Section 4, solely with respect to the customers set forth in
such notice, shall no longer apply as to Chad and Jason.
In consideration of the monies paid to the Petersons as well as other
good and valuable consideration, the Petersons agree that this Agreement is not
and shall not be considered an executory contract in the event that any of the
Petersons file for relief under any Chapter of the Bankruptcy Code nor shall any
of the Petersons seek discharge of the personal covenants contained in this
Agreement. Furthermore, the parties agree that in the event that any of the
Petersons file for bankruptcy, and if any of the Petersons breach this
Agreement, the Petersons agree that Swift shall be entitled to seek relief from
the automatic stay provision of the Bankruptcy Code and agree to support Swift
in any application for relief from such automatic stay.
5. Governing Law and Jurisdiction. This Agreement shall be governed by
and interpreted and enforced in accordance with the laws of the State of
Arizona. Except with respect to any matter as shall properly be before the
jurisdiction of any United States Bankruptcy Court, the Petersons consent to the
jurisdiction and venue of any state or federal court located in Maricopa County,
Arizona, with respect to any action, either in tort or contract, arising from
this Agreement.
6. Default and Remedies. In the event that the Petersons (or any one of
them) breach this Agreement and fail to cure such breach within ten days after
written notice thereof is given to the breaching party, Swift may, at its
option, seek monetary damages and/or obtain injunctive or other equitable relief
to prevent the further breach of this Agreement.
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7. Attorney's Fees. In the event that suit is brought in order to
enforce any provision of this Agreement, the prevailing party shall be entitled
to recover their costs and reasonable attorneys fees incurred in enforcing this
Agreement.
8. Notice. All notices under this Agreement shall be sent in the same
manner as provided in Section 8.8 of the Purchase Agreement to the addresses of
the parties set forth below or such other address as a party may designate from
time to time by notice to the other parties.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date set forth below.
CHARLES G. PETERSON SWIFT TRANSPORTATION CO., INC.
By: /s/ Charles G. Peterson By: /s/ William F. Riley III
- ------------------------------------- -------------------------------------
Title: Title: Executive Vice President
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Date: 4-4-97 Date: 4-8-97
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Address: 2200 S. 75th Avenue
Phoenix, Arizona 85043
SANDRA PETERSON
By: /s/ SANDRA PETERSON
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Title:
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Date: 4-4-97
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CHAD PETERSON
By: /s/ CHAD PETERSON
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Title:
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Date: 4-4-97
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JASON PETERSON
By: /s/ JASON PETERSON
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Title:
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Date: 4-4-97
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