ROLLING STOCK ACQUISITION AGREEMENT
DATE: April 8, 1997
PARTIES: Swift Leasing Co., Inc., an Arizona corporation ("Swift Leasing")
The lessors of various tractors and trailers (the "Rolling
Stock") whose names and addresses appear on Exhibit A to this
Agreement ("Owners")
R E C I T A L S
A. Owners have leased the Rolling Stock to Direct Transit, Inc., an
Iowa corporation (the "Debtor") under various lease agreements (the "Debtor
Leases"), however, Debtor has rejected the Debtor Leases thereby severing any
interest of Debtor in the Rolling Stock.
B. Debtor is currently operating as a debtor-in-possession in a
proceeding filed under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code"), Case Number 96-52691XS (the "Bankruptcy") in the United
States Bankruptcy Court for the Northern District of Iowa (the " Bankruptcy
Court").
C. Swift Transportation Co., Inc., an Arizona corporation ("Swift"),
the parent corporation of Swift Leasing, has entered into an Asset Purchase
Agreement with the Debtor dated February 20, 1997 (the "Asset Purchase
Agreement"), which Asset Purchase Agreement has been approved by the Bankruptcy
Court.
D. Contingent upon the closing of the Asset Purchase Agreement, Swift
Leasing has agreed to purchase and/or lease from each Owner, such Owner's
Rolling Stock and each Owner agrees to sell and/or lease (at each Owner's sole
discretion) the Rolling Stock to Swift Leasing subject to the terms and
conditions contained in this Agreement. Each such purchase or lease between
Swift Leasing and each Owner shall be considered as a separate transaction
between Swift Leasing and each such Owner.
AGREEMENTS:
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ACQUISITION OF ROLLING STOCK
1.1 Agreement to Sell or Lease. Upon and subject to the terms and
conditions of this Agreement, at the Closing (as defined in Article II), and
except as otherwise specifically provided in Article IV, each Owner shall either
(i) sell, convey, assign, transfer and deliver to Swift Leasing
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all right, title and interest of each such Owner in its Rolling Stock (a "Sale")
or (ii) lease (a "Lease") its Rolling Stock to Swift Leasing, in each case free
and clear of all taxes, mortgages, liens, pledges, security interests (other
than an Owner's interest in the Rolling Stock in the event of a Lease), charges,
claims, restrictions, and encumbrances of any nature whatsoever, including, but
not limited to, any interest of Debtor in the Rolling Stock.
1.2 Agreement to Purchase or Lease. Upon and subject to the terms and
conditions of this Agreement and the representations, warranties and covenants
of each Owner contained herein, Swift Leasing shall, at the Closing, purchase
and/or lease the Rolling Stock from each Owner (a "Purchase" or "Lease") in
exchange for the Purchase Price (defined in Section 1.3) or the Lease Payment
(defined in Section 1.4).
1.3 Purchase Price for Purchase of Rolling Stock. Subject to the
adjustment provided for under Section 1.3.1 below, the Purchase Price paid to
each Owner for the Rolling Stock to be purchased (the "Purchase Price") shall be
equal to the values set forth in Schedule 1.3, depending upon the year, make and
model of each such item of Rolling Stock as set forth in said Schedule 1.3 (the
"Gross Rolling Stock Value").
1.3.1 Adjustment to Purchase Price. The Purchase Price to be
paid to each Owner by Swift Leasing for each Purchase of Rolling Stock shall be
reduced by the (i) Depreciation Deduction (calculated in accordance with Section
4.1 below) and (ii) either the Damage Deduction (calculated in accordance with
Section 4.2 below) or the Fixed Deduction (calculated in accordance with Section
4.3 below).
1.4 Monthly Lease Payments. Subject to the adjustment under Section
1.4.1, the monthly lease payment paid to an Owner under a Lease (the "Lease
Payment") shall be based upon the Gross Rolling Stock Value set forth in
Schedule 1.3.
1.4.1 Adjustment to Lease Payment. The Lease Payment shall be
reduced based upon adjustments to the Gross Rolling Stock Value for the (i)
Depreciation Deduction and (ii) either the Damage Deduction or the Fixed
Deduction.
1.5 Payment of Purchase Price and Effective Date of Lease for Rolling
Stock. The Purchase Price for the Rolling Stock shall be paid to an Owner by
Swift Leasing upon delivery of title to such Rolling Stock to Swift Leasing by
Owner and Swift's acknowledgement that it has possession of such Rolling Stock.
Swift shall acknowledge possession of such Rolling Stock at Closing unless it is
aware at the Closing that an item of Rolling Stock has been destroyed, cannot be
located, is not Qualified Rolling Stock, or is a High Damage Item. The effective
date for each Lease shall be the date upon which an executed copy of the Lease
and the Rolling Stock is delivered to Swift Leasing. In either case, delivery
shall not be considered to be effective unless and until Swift Leasing has
acknowledged possession of the Rolling Stock to be leased or purchased, as the
case may be, as set forth above. Swift Leasing shall be obligated to accept
delivery for Rolling Stock which is purchased or leased (but not prior to the
Closing Date), subject to Swift Leasing's
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and an Owner's agreement as to the amount of the Depreciation Deduction, the
Damage Deduction and/or the Fixed Deduction.
1.6 Withholding of Purchase Price and Calculation of Lease Payment. The
Purchase Price for an Owner's Fleet of Rolling Stock shall be reduced by the
Depreciation Deduction, and either the Damage Deduction or the Fixed Deduction.
In the case of an Owner who has not elected the application of the Fixed
Deduction pursuant to Section 4.3, the Maximum Damage Deduction shall be
utilized when determining the Purchase Price to be paid at the Closing or the
Lease Payment. In the event that less than the Maximum Damage Deduction is
required to repair (including estimates of repair) or bring the Rolling Stock
acquired by Swift Leasing from an Owner up to the Applicable Standard (as
defined in Section 4.2), the unused portion of the Maximum Damage Deduction, if
any, after Swift has completed its final inspection and/or effected the repairs
to the Owner's Fleet shall be returned to the Owner (in the event of a Purchase)
within ten business days after Swift Leasing has completed its final inspection,
repairs, and/or estimate of repairs with respect to said Owner's Fleet, together
with an accounting of all such deductions taken by Swift Leasing. In the event
of a Lease, Swift Leasing shall determine the credit, if any, due to Owner and
provide Owner of an accounting of such credit, together with the amount of the
Damage Deduction utilized for repairs or otherwise taken as a deduction, with
such accounting to be given to the Owner within ten business days after Swift
Leasing has completed its final inspection, repairs or estimate of repairs with
respect to such Owner's Fleet. Any credit due to such Owner shall be paid to
such Owner as additional rent in equal installments over the remaining term of
such Lease. Swift Leasing shall have 60 days following the Closing Date (the "60
day Period") in which to ascertain whether or not any Rolling Stock is missing,
is not Qualified Rolling Stock, is a High Damage Item and shall complete its
final inspection of and/or repairs to or estimate of repairs required to be made
to the Rolling Stock within the 60 day Period. With respect to any Owner who has
elected the Damage Deduction option pursuant to Section 4.2 of this Agreement,
subsequent to the expiration of the 60 day Period, (i) Swift Leasing may not
make any further adjustments as to items of Rolling Stock which have been
inspected prior to the expiration of such 60 day Period, and (ii) Swift Leasing
may not take any Damage Deduction on items of Rolling Stock not inspected by the
end of such 60 day Period.
ARTICLE II
CLOSING
The closing (the "Closing") of the transaction contemplated hereby
shall take place in Phoenix, Arizona at 10:00 a.m., M.S.T., concurrently with
the closing of the Asset Purchase Agreement (the "Closing Date"). All funds due
to the Owners at Closing shall be paid by wire transfer of funds pursuant to
wire transfer instructions provided to Swift Leasing prior to Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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3.1 Representations and Warranties of the Owners. Each Owner hereby
represents and warrants to Swift Leasing solely as to itself and its Rolling
Stock the following:
3.1.1 Corporate Power; Authorizations; Enforceable
Obligations.
(i) Owner has the corporate power, authority and
legal right to execute, deliver and perform this Agreement;
(ii) Execution, delivery and performance of this
Agreement by Owner have been duly authorized by all necessary corporate action
of Owner;
(iii) This Agreement has been, and all other
agreements, documents and instruments required to be delivered by Owner in
accordance with the provisions hereof (the "Owner's Documents") will be, duly
executed and delivered on behalf of Owner by duly authorized officers of Owner;
and
(iv) This Agreement constitutes and the Owner's
Documents, when executed and delivered, will constitute, the legal, valid, and
binding obligations of Owner, enforceable against Owner in accordance with their
terms.
3.1.2 Liens. The Rolling Stock acquired by Swift Leasing
pursuant to this Agreement, either by Purchase or Lease, shall be sold or leased
to Swift Leasing, free and clear of all taxes (including, but not limited to,
Federal Highway Use Taxes due and payable as of the Closing Date), mortgages,
liens, pledges, security interests (other than the ownership interest of Owner
in the case of a Lease), charges, claims, restrictions or encumbrances of any
nature whatsoever, provided, however, that no sales, use or transaction
privilege taxes with respect to the sale of the Rolling Stock shall be due as
long as the situs of the transaction is Phoenix, Arizona, and to the extent that
any such taxes are imposed by any Arizona state or local taxing authority, Swift
Leasing shall be responsible for payment of any such taxes.
3.1.3 Separate Transactions. Each Owner is entering into a
separate sale or lease of its Rolling Stock to Swift Leasing.
3.2 Representations and Warranties of Swift Leasing. Swift Leasing
hereby represents and warrants to each Owner the following:
3.2.1 Corporate Power; Authorizations; Enforceable
Obligations.
(i) Swift Leasing has the corporate power, authority
and legal right to execute, deliver and perform this Agreement;
(ii) Execution, delivery and performance of this
Agreement by Swift
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Leasing has been duly authorized by all necessary corporate action of Swift
Leasing;
(iii) This Agreement has been, and all other
agreements, documents and instruments required to be delivered by Swift Leasing
in accordance with the provisions hereof (the "Swift Leasing Documents") will
become a duly executed and delivered on behalf of Swift Leasing by duly
authorized officers of Swift Leasing;
(iv) This Agreements constitutes and the Swift
Leasing Documents, when executed and delivered, will constitute, the legal,
valid, and binding obligations of Swift Leasing, enforceable against Swift
Leasing in accordance with their terms.
3.2.1 Preliminary Inspections. Swift shall utilize reasonable
efforts prior to Closing, to preliminarily inspect and provide Owners with a
summary of the estimated costs of repairs and maintenance to bring the Rolling
Stock in conformance with the Applicable Standards, a copy of which summary is
attached hereto as Schedule 3.2.1.
ARTICLE IV
DEDUCTIONS FROM GROSS ROLLING STOCK VALUE
4.1 Depreciation Deduction. The Gross Rolling Stock Value which shall
be utilized to determine the adjusted purchase price and the adjusted lease
payment shall be reduced by monthly depreciation of $850 per tractor and $100
per trailer, calculated on a per diem basis, for each day that possession of any
such item of Rolling Stock is transferred to Swift Leasing or Swift after
December 31, 1996 (the "Depreciation Deduction"). The Depreciation Deduction
through the Closing Date is reflected on Schedule 1.3.
4.2 Deduction for Failure to Meet Certain Conditions. At the time of
its transfer to Swift Leasing, each item of Rolling Stock must not be damaged,
require repair or maintenance and must be in sound and road worthy operating
condition. Furthermore, but not in limitation of the foregoing, at the time of
such transfer, each item of Rolling Stock: (i) must contain no physical damage,
including, but not limited to, broken glass, interior and exterior sheet metal
damage which, in the aggregate, exceeds $250; (ii) the tires must contain at
least 50% of the original tread on the steer axle and at least 50% of the
original first-time recap or retread on the drive or trailer axles; and (iii)
there must be remaining at least 50% of the brake lining for each such item of
Rolling Stock (collectively the "Applicable Standard"). To the extent that any
item of Rolling Stock does not meet the Applicable Standard, and subject to the
provisions of Section 4.2.1 below, the Gross Rolling Stock Value shall be
reduced (the "Damage Deduction") on a per item basis, based upon Swift Leasing's
actual or estimated cost (which shall be commercially reasonable) to bring each
item of Rolling Stock up to the Applicable Standard, but not to a new condition
or any condition substantially higher than the Applicable Standard. All Rolling
Stock so acquired shall be subject to final inspection by Swift Leasing.
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4.2.1 Maximum Damage Deduction. Notwithstanding the above
Section 4.2, the maximum amount which shall be subtracted as a Damage Deduction
(the "Maximum Damage Deduction") from the Gross Rolling Stock Value of an
Owner's Fleet, with respect to "Qualified Rolling Stock" shall be equal to
$2,500 per tractor and $500 per trailer, multiplied by the number of Qualified
Rolling Stock in such Owner's Fleet. No item of Rolling Stock shall be
considered to be Qualified Rolling Stock if the Damage Deduction for any such
item of Rolling Stock exceeds $5,000 for a tractor or $1,500 for a trailer.
Swift Leasing shall not be obligated to acquire any Rolling Stock which is not
Qualified Rolling Stock unless the Owner of such Rolling Stock and Swift Leasing
mutually agree upon the value of such item, separate and apart from the
acquisition of the remainder of the Owner's Fleet. Furthermore, Swift Leasing
shall not be obligated to acquire any tractor or trailer which is inoperable and
beyond economic repair (an "Inoperable Item") nor shall Swift Leasing be
obligated to acquire any item of Rolling Stock which cannot be located (a
"Missing Item"). Inoperable and Missing Items known to Swift (based upon
information received from the Debtor) are set forth on Schedule 4.2.1 attached
hereto.
4.2.2 Example. To illustrate the application of Section 4.2.1,
if Owner's Fleet consists of 230 tractors and only 215 of such tractors qualify
as Qualified Rolling Stock, the Maximum Damage Deduction for these 215 tractors
may not exceed (but might be less than) $537,500, in the aggregate. Swift
Leasing would, in such case, not be required to acquire the 15 tractors not
considered to be Qualified Rolling Stock unless the Owner and Swift Leasing
mutually agree upon the appropriate Damage Deduction for each tractor not
qualifying as Qualified Rolling Stock (the "Additional Deduction", and the Gross
Rolling Stock Value would be reduced by the Additional Deduction as well as the
Maximum Damage Deduction and Depreciation Deduction. which would be in addition
to the Maximum Damage Deduction for the Owner's Qualified Rolling Stock.
4.3 Fixed Deduction. Any Owner, by checking the box next to its
signature block, may avoid the application of the Section 4.2 above, by agreeing
to a fixed deduction for each item of Rolling Stock in the Owner's Fleet equal
to $2,750 per tractor and/or $550 per trailer (the "Fixed Deduction"). The Fixed
Deduction shall not apply to any tractor or trailer for which the Damage
Deduction for that particular tractor or trailer exceeds 50% of that tractor's
or trailer's Gross Rolling Stock Value (a "High Damage Item"). Furthermore,
Swift Leasing shall not be obligated to acquire any High Damage Item, any
Inoperable Item or any Missing Item . The Fixed Deduction would apply to the
balance of the Owner's Fleet irrespective of Swift Leasing's actual or estimated
actual cost of repairs.
4.3.1 Insurance Proceeds. Any Owner electing the Fixed
Deduction shall assign and does hereby assign to Swift Leasing all of its rights
to any insurance proceeds which might be available under Debtor's body damage
coverage (the "Insurance Proceeds"). Each Owner shall be required to execute
such documents as reasonably requested by Swift Leasing to give effect to such
assignment and take such actions as reasonably requested by Swift Leasing to
ensure that the Bankruptcy Court approves of the assignment and transfer to
Swift Leasing of the rights to such
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Insurance Proceeds. Furthermore, each Owner shall be required to fully cooperate
with Swift Leasing in connection with Swift Leasing's claim against any insurer
to collect such Insurance Proceeds. An Owner shall not be required to assign its
rights to the Insurance Proceeds with respect to any High Damage Item, any
Inoperable Item or any Missing Item not acquired by Swift Leasing pursuant to
this Section 4.3.
4.3.2 Example. To illustrate the application of Section 4.3.1,
if an Owner specifically elects the application of Section 4.3, and if such
Owner's Fleet consists of 102 tractors, two of which are considered to be High
Damage Items, Swift Leasing would not acquire the two High Damage Items but
would acquire the remaining 100 tractors. In addition to the Depreciation
Deduction, a Fixed Deduction equal to $275,000 would be subtracted from the
Gross Rolling Stock Value for these 100 tractors and this adjusted Gross Rolling
Stock Value would be utilized in order to determine the Purchase Price or the
Lease Payment. Furthermore, the Owner would be required to assign all of its
rights to Swift Leasing with respect to any Insurance Proceeds recoverable with
respect to these 100 tractors.
ARTICLE V
CONDITIONS PRECEDENT TO THE CLOSING
5.1 Conditions Precedent to Swift Leasing's Obligations. All of the
obligations of Swift Leasing under this Agreement are, at Swift Leasing's
discretion, subject to the fulfillment or satisfaction, at the times indicated
herein, of each of the following conditions precedent:
5.1.1 Representations and Warranties True as of the Closing
Date. The representations and warranties of Owners contained in this Agreement
or in any schedule, certificate or document delivered by Owner to Swift Leasing
pursuant to the provisions hereof shall have been true on the date hereof and
shall be true on the Closing Date with the same effect as though such
representations and the warranties were made as of such date.
5.1.2 Closing of Asset Purchase Agreement. Swift, Debtor and
the Petersons shall have closed, concurrently herewith, all of the transactions
contemplated under the Asset Purchase Agreement.
5.1.3 Rejection of Leases. Debtor shall have rejected each of
the Debtor Leases and such rejection shall have been approved by the Bankruptcy
Court prior to or concurrently with the closing of the Asset Purchase Agreement.
5.1.4 Ability to Acquire Sufficient Rolling Stock. Swift shall
be able to acquire at least 600 tractors and 1,200 trailers, in the aggregate,
from Owners (excluding Rolling Stock which is (i) not Qualified Rolling Stock,
(ii) a High Damage Item, (iii) a Missing Item, or (iv) one of the 13 Tractors.
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5.1.5 Approval by Bankruptcy Court. Prior to the Closing, the
Bankruptcy Court shall have entered an order, in a form satisfactory to Swift
Leasing's counsel, approving the Asset Purchase Agreement and all transactions
contemplated thereunder, including, but not limited to, the sale or lease of the
Rolling Stock to Swift Leasing, free and clear of all taxes, mortgages, liens,
pledges, successor liability, security interests (except for any ownership
interest of any Owner), charges, claims, restrictions and encumbrances of any
nature whatsoever.
5.1.6 Owner's Deliveries. Owner shall have delivered to Swift
Leasing at or prior to the Closing the following, all of which shall be in a
form reasonably satisfactory to Swift Leasing and its counsel such instruments
of title, such bills of sale, deeds and assignments with covenants of warranty
as to title, assignments, endorsements, leases and other good and sufficient
instruments and documents of conveyance, transfer or lease (as applicable), in
form reasonably satisfactory to Swift Leasing and its counsel, as shall be
necessary and effective to transfer and assign to, and vest in, Swift Leasing
(i) good and valid title in and to the Rolling Stock acquired by Purchase, free
and clear of all taxes, liens, mortgages, and encumbrances as provided herein;
or (ii) a good and valid leasehold interest in the Rolling Stock to be leased by
Swift Leasing. In the event an Owner elects the Damage Deduction as provided in
Section 4.2, the bill of sale to be utilized for such conveyance shall be
identical to Exhibit B attached hereto. In the event an Owner elects the Fixed
Deduction, pursuant to Section 4.3, the bill of sale to be utilized for such
conveyance shall be identical to Exhibit C.
5.1.7 Satisfaction of Conditions Precedent Under Asset
Purchase Agreement. All of the conditions under the Asset Purchase Agreement
shall have been satisfied, except those waived by Swift or Swift Leasing.
5.1.8 Assignment of Insurance Proceeds. Any Owner making the
election proved for in Section 4.3 shall have assigned, in form satisfactory to
Swift Leasing and its counsel, all of such Owner's rights to the Insurance
Proceeds and such assignment shall have been approved by the Bankruptcy Court.
5.2 Conditions Precedent to the Obligations of Owner. All obligations
of the Owners under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
5.2.1 Representations and Warranties True as of the Closing
Date. The representations and warranties of Swift Leasing contained in this
Agreement or in any list, certificate or document delivered by Swift Leasing to
Owners pursuant to the provisions hereof, shall be true on the Closing Date with
the same effect as those such representations and warranties were made as of
such date.
5.2.2 Compliance with this Agreement. Swift Leasing shall have
performed and complied with all agreements and conditions required hereunder to
be performed or complied with by Swift Leasing prior to or at the Closing.
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5.2.3 Payment of Purchase Price, Etc. Swift Leasing shall have
paid the Purchase Price by wire transfer of funds to each Owner or executed the
appropriate Lease with an Owner with respect to the Rolling Stock to be acquired
pursuant to this Agreement.
ARTICLE VI
POST CLOSING MATTERS
6.1 Credit Due to Owners. With respect to each Owner who has not
elected the application of Section 4.3 above, Swift Leasing shall provide to
such Owner within ten (10) business days after the expiration of the 60 day
Period, a full and final accounting as to the cost or estimated cost of repairs
and/or deductions made pursuant to Section 4.2, and in the case of a Purchase,
shall pay to any such Owner, any credit due to that Owner pursuant to Section
1.6. In the event of a Lease, Swift Leasing shall inform said Owner the
additional amount that each monthly Lease Payment shall be supplemented for the
remainder of the Lease in order to pass through the credit due to such Owner
pursuant to Section 1.6.
6.2 Assignment of Insurance Proceeds. Any Owner electing the option
under Section 4.3 shall, from time to time after the Closing, at Swift Leasing's
request, execute, acknowledge and deliver to Swift Leasing such other
instruments and will take such other actions and execute and deliver such other
documents, certifications and further assurances as Swift Leasing may reasonably
require to vest more effectively in Swift Leasing, the rights to the Insurance
Proceeds. Each Owner shall cooperate with Swift Leasing and execute and deliver
to Swift Leasing such other instruments and documents and take such other
actions as may be reasonably requested from time to time by Swift Leasing as
necessary to assist Swift Leasing in collection of the Insurance Proceeds.
6.3 Assurances as to Title. Each of the parties hereto will cooperate
with the other and execute and deliver to the other party hereto such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by the other party as necessary to carry out,
evidence and confirm the intended purposes of this Agreement, including, but not
limited to, the Purchase or Lease of the Rolling Stock by Swift Leasing.
6.4 Credit Due Swift Leasing. Each Owner acknowledges that Swift
Leasing shall not be required to purchase any Inoperable Item, any Missing Item,
any High Damage Item or any tractor or trailer which is not Qualified Rolling
Stock (unless an Owner and Swift Leasing have separately agreed to the purchase
of such tractor or trailer which is not Qualified Rolling Stock pursuant to
Section 4.2.1). The parties acknowledge that since Swift Leasing may not have
inspected all of the Rolling Stock prior to Closing as part of its preliminary
inspection, an item of Rolling Stock may, at the Closing Date, be damaged to
such an extent such that Swift Leasing is not required to acquire such item or
that Swift Leasing may discover subsequent to the Closing Date that an item of
Rolling Stock purchased or leased was inoperable, destroyed or missing as of the
Closing, and, if missing, could not be located.. In all cases, Swift Leasing
shall notify each Owner as soon as possible subsequent to the Closing, but in no
event later than the expiration of the
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60 day Period, that it has inadvertently acquired an item of Rolling Stock that
it was not obligated to acquire and each such Owner, upon such notification and
receipt of evidence demonstrating that such item of Rolling Stock was either
inoperable, destroyed or missing at Closing, a High Damage Item or not Qualified
Rolling Stock, shall refund to Swift Leasing within ten (10) business days after
receipt of such notice, the amount of the Purchase Price (in the event of a
Purchase) after the return to Owner of the title to such item of Rolling Stock
and the item of Rolling Stock (assuming it is not destroyed or missing); or in
the event of a Lease, all Lease Payments made by Swift Leasing and any such
Lease shall be cancelled immediately upon the return of such item of Rolling
Stock to each Owner (assuming that the item of Rolling Stock is not destroyed or
missing) and each Owner shall bear the risk of any damage or loss to its Rolling
Stock prior to the Closing and Swift Leasing shall bear the risk of any damage
or loss to Rolling Stock occurring subsequent to the Closing. As to any Rolling
Stock which is in transit and is being utilized to deliver a load picked up by
the Debtor prior to 11:59 p.m. M.S.T. pm on the day preceding the Closing which
load is not delivered until after the Closing, the Owner of any such Rolling
Stock, and not Swift Leasing, shall bear the risk of loss with respect to such
Rolling Stock until the load is delivered, after which time the risk of loss
shall shift to Swift Leasing.
ARTICLE VII
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated by written notice at
any time prior to the Closing Date only:
(a) by mutual consent of Swift Leasing and each Owner; or
(b) by Swift Leasing (i) if at any time the representations
and warranties of an Owner contained herein with respect to itself or its
Rolling Stock were incorrect in any material respect when made or at any time
thereafter, including as of Closing; (ii) if an Owner breaches any covenant or
agreement made under this Agreement or any document contemplated by this
Agreement; or (iii) by Swift Leasing in the event that the Closing of the Asset
Purchase Agreement fails to occur.
7.2 Effect of Termination. In the event of the termination of this
Agreement under any of the reasons set forth in Section 7.1 above, neither party
shall have any further liability to the other hereunder and each shall bear its
respective costs and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Agreement.
7.3 Sales, Transfer and Documentary Taxes, Etc. Each Owner shall pay
all federal, state and local sales, documentary and other transfer taxes, if
any, due as a result of the purchase, sale, transfer or lease of its Rolling
Stock to Swift Leasing and shall indemnify, reimburse, and hold harmless Swift
Leasing in respect of the liability for payment of or failure to pay any such
taxes or the filing of or failure to file any reports required in connection
therewith, provided, however, that
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if the Closing takes place in Phoenix, Arizona, an Owner shall not be
responsible for payment of any state or local sales, use or transaction
privilege tax since the parties acknowledge that Arizona law provides an
exemption from the application of sales, use or transaction privilege tax if a
sale of rolling stock is made to a leasing company which intends to lease such
rolling stock to an interstate motor carrier, which Swift Leasing represents to
each Owner to be its intent. To the extent that the State of Arizona or any
local taxing authority within the State of Arizona (an "Arizona Taxing
Authority") attempts to impose such a tax, Swift Leasing shall be responsible
for the payment of any such tax and any Owner receiving a notice from an Arizona
Taxing Authority attempting to impose such a tax shall immediately forward same
to Swift Leasing which shall either pay such tax or timely protest the
imposition of such tax. Each Owner agrees to cooperate with Swift Leasing in
connection with such protest, provided, however, that the cost of such protest
shall be borne by Swift Leasing. In the event that such protest and subsequent
appeals are unsuccessful, Swift Leasing shall pay any such taxes.
Notwithstanding anything contained in this Agreement to the contrary, Swift
Leasing shall pay any titling fees imposed by the State of Arizona (the state in
which Swift intends to title the Rolling Stock) and any registration fees
imposed by the state in which Swift registers the Rolling Stock.
7.4 Expenses. Except as otherwise specifically provided for in this
Agreement, each party hereto shall pay its own expenses incidental to the
preparation of this Agreement, carrying out of the provisions of this Agreement,
and the consummation of the transactions contemplated hereby.
7.5 Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the transactions
contemplated hereby, provided, however, that it is the intent of the parties
hereto that this Agreement shall be read in conjunction with the Asset Purchase
Agreement. This Agreement shall not be amended or modified except by written
instrument duly executed by each of the parties hereto. Any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement.
Notwithstanding the above, the parties contemplate that in the event of a
Purchase, appropriate bills of sale and/or conveyance and transfer of title
documents will have to be executed between each Owner and Swift Leasing and, in
the event of a Lease, an Owner and Swift Leasing will agree upon a mutually
acceptable form of lease agreement.
7.6 Assignment and Binding Effect. This Agreement may be not be
assigned prior to the Closing by any party hereto without the prior written
consent of the other parties. Subject to the foregoing, all of the terms and
provisions of this Agreement shall be binding and inure to the benefit of and be
enforceable by the successors and assigns of each Owner and Swift Leasing. The
rights and obligations of each Owner hereunder are several, and not joint. Each
Owner shall be liable to Swift Leasing for only those representations,
warranties, covenants and agreements that relate to such Owner and its Rolling
Stock.
7.7 Waiver. Any condition, term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument duly executed by such party.
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Any such written waiver shall not imply a waiver as to any other term,
condition, circumstance or occasion nor estop any party from enforcing any term,
condition, right or remedy not expressly so waived. Failure of a party to insist
upon adherence to any term or condition of this Agreement on any occasion shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon adherence to that term or condition or any other term or condition
of this Agreement.
7.8 Notices. Any notice or communication under this Agreement shall be
in writing and delivered (by hand, telecopier, telegraph, telex or courier) or
deposited in the United States mail (first class, registered or certified),
postage fully prepaid and addressed as stated below. Notice by United States
mail shall be deemed given on the third day after its deposit. Notice by
telecopier, telegraph or telex shall be deemed given on the day sent. Notice by
hand delivery or courier shall be deemed given on the first business day when
such delivery is first attempted. Either party may, from time to time, specify
as its address for purposes of this Agreement any other address upon the giving
of 10 days notice thereof to the other party in the manner required by this
paragraph. This paragraph shall not prevent the giving of written notice in any
other manner, but such notice shall be deemed effective only when and as of its
actual receipt at the proper address and by the proper addressee.
7.9 Situs of Contract, Governing Law. The parties acknowledge that the
situs of this Agreement shall be Maricopa County, Arizona. This Agreement shall
be governed by and interpreted and enforced in accordance with the laws of the
State of Arizona.
7.10 Headings, Gender and Person. All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
7.11 Schedules and Exhibits. All Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
7.12 Jurisdiction. Except with respect to such matters as shall
properly remain within the jurisdiction of the Bankruptcy Court, Swift Leasing
and each Owner consents to the jurisdiction and venue of the state and federal
courts located in Maricopa County, Arizona and/or the District of Arizona with
respect to any legal action, in tort or contract, arising directly or indirectly
from this Agreement or the relationship created hereby. This provision shall not
bar enforcement of a provisional, extraordinary, in-rem or post-judgment remedy
in any court whose original jurisdiction is essential or exclusive as to that
remedy, despite the above consent to jurisdiction.
7.13 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered
12
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument. This Agreement shall become
binding when one or more counterparts taken together shall have been executed
and delivered by the parties. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts. After Swift Leasing has executed this Agreement, and once each
Owner has executed this Agreement, a separate contract shall arise between Swift
Leasing and each such Owner.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
SWIFT LEASING: OWNERS:
SWIFT LEASING CO., INC., an Arizona SEE ATTACHED EXHIBIT "A"
corporation
By: /s/ William F. Riley, III
---------------------------
William F. Riley, III
Its: Vice-President
13
EXHIBIT "A-1"
KEYCORP LEASING LTD.
By: /s/ Daniel L. Bailey
-------------------------------------
Daniel L. Bailey
Its: Vice-President
-------------------------------
KeyCorp Leasing Ltd.
54 State Street
Albany, New York 12207
Telephone: 518-487-4536
Telecopier: 518-486-8215
FIXED DEDUCTION
14
EXHIBIT "A-2"
LaSALLE NATIONAL LEASING CORPORATION
By: /s/ William C. Rogalla
-------------------------------------
William C. Rogalla
First Vice-President
LaSalle National Leasing Corporation
135 South LaSalle Street
Chicago, Illinois 60603
Telephone: 312-904-2752
Telecopier: 312-904-4699
DAMAGE DEDUCTION
15
EXHIBIT "A-3"
FLEET CAPITAL CORPORATION
By: /s/ Chris Tierney
-------------------------------------
Its: Vice President
-------------------------------
Fleet Capital Corporation
50 Kennedy Plaza
Providence, RI 02903
Telephone: 401-278-6902
Telecopier: 401-278-3257
FIXED DEDUCTION
16
EXHIBIT "A-4"
ASSOCIATES LEASING, INC.
By: /s/ Chuck Wilson
-------------------------------------
Its: Bankruptcy Manager
-------------------------------
Associates Leasing, Inc.
P.O. Box 141029
Irving, Texas 75014-1029
Telephone: 972-652-3557
Telecopier: 972-652-8622
FIXED DEDUCTION
17
EXHIBIT "A-5"
FIRSTAR BANK IOWA, N.A., as agent
For Firstar Leasing Services
By: /s/ John Schwab
-------------------------------------
Its: Vice President
-------------------------------
Firstar Bank Iowa, N.A.
222 Second Avenue S.E.
P.O. Box 3013
Cedar Rapids, Iowa 52401
Telephone: 319-368-4040
Telecopier: 319-368-4111
FIXED DEDUCTION
18
EXHIBIT "A-6"
MERCEDES-BENZ CREDIT CORPORATION
By: /s/ John Worthington
-------------------------------------
Its: District Finance Manager
-------------------------------
Mercedes-Benz Credit Corporation
801 Warrenville Road, Suite 400
Lisle, IL 60532
Telephone: 630-241-5993
Telecopier: 800-533-3398
DAMAGE DEDUCTION
19
EXHIBIT "A-7"
SECURITY NATIONAL BANK OF
SIOUX CITY IOWA
By: /s/ Kendall J. Strand
-------------------------------------
Its: Commercial Service Officer
-------------------------------
By: /s/ Steven Schmidt
-------------------------------------
Its: SR. V.P. Comm. Services
-------------------------------
Security National Bank of
Sioux City Iowa
601 Pierce Street
Sioux City, Iowa 51101
Telephone: 712-277-6537
Telecopier: 712-277-6566
FIXED DEDUCTION
20
EXHIBIT "A-8"
THE CIT GROUP (Equipment Credit
Services, Inc.)
By: /s/ Edward Gresh
-------------------------------------
Its: Senior Portfolio Manager
-------------------------------
The CIT Group
900 Ashwood Parkway, Suite 600
Atlanta, GA 30338
and
Alan S. Kopit, Esq.
HAHN, LOESER PARKS
3300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2301
Telephone: 216-621-0150
Telecopier: 216-241-2824
FIXED DEDUCTION
21
EXHIBIT "A-9"
METLIFE CAPITAL LIMITED PARTNERSHIP
By: /s/ Judy Johnston
-------------------------------------
Its: V.P./Regional Credit Manager
-------------------------------
Metlife Capital Limited Partnership
10900 N.E. Fourth Street, Suite 500
Bellevue, Washington 98004-5853
Telephone: 206-451-7672
Telecopier: 206-451-2780
FIXED DEDUCTION
22
EXHIBIT "A-10"
NBD EQUIPMENT FINANCING, INC.
By: /s/ Robert J. Izzo
-------------------------------------
Its: First Vice President
-------------------------------
NBD Equipment Financing, Inc.
One First National Plaza, Suite 0631
Chicago, Illinois 60670
Telephone: 312-732-5413
Telecopier: 312-732-3596
FIXED DEDUCTION
23
EXHIBIT "A-11"
NBD LEASING, INC.
By: /s/ Robert J. Izzo
-------------------------------------
Its: First Vice President
-------------------------------
NBD Leasing, Inc.
One First National Plaza, Suite 0631
Chicago, Illinois 60670
Telephone: 312-732-5413
Telecopier: 312-732-3596
FIXED DEDUCTION
24