EXHIBIT 10
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EQUIPMENT SERVICES AGREEMENT
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dated as of December 31, 1999
among
TRANSAMERICA LEASING INC.,
PACER LOGISTICS INC.
and
PACER INTERNATIONAL INC.
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TABLE OF CONTENTS
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Page
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RECITALS................................................................... 19
ARTICLE 1 - DEFINITIONS.................................................... 19
ARTICLE 2 - APPOINTMENT.................................................... 22
(a) Exclusivity.......................................................... 22
(b) Non-Exclusive Locations.............................................. 22
ARTICLE 3 - SERVICES....................................................... 22
(a) Maintenance and Repair Management Services........................... 23
(b) Miscellaneous Services............................................... 23
ARTICLE 4 - PERFORMANCE STANDARDS.......................................... 23
ARTICLE 5 - RATES, BILLING AND PAYMENT..................................... 23
(a) Maintenance and Repair Management Service Rates...................... 23
(b) Basic Billing........................................................ 23
(c) Additional Billing................................................... 24
(d) Payment.............................................................. 24
(e) Service Charge....................................................... 24
(f) Review and Adjustment Process........................................ 24
(g) Twelve and Twenty-Four Month Reconciliations......................... 27
(h) Minimum Equipment Volumes............................................ 27
(i) Conspicuity.......................................................... 27
(j) Lease Termination Charges............................................ 27
ARTICLE 6 - TERM AND TERMINATION........................................... 28
(a) Term................................................................. 28
(b) Termination for Cause................................................ 28
(c) Termination for Convenience.......................................... 29
(d) Termination Based Upon Assignment.................................... 29
(e) Early Termination Charges and Payment................................ 29
(f) Survival of Payment Obligations...................................... 30
ARTICLE 7 - AUDIT RIGHTS................................................... 30
ARTICLE 8 - REPORTING REQUIREMENTS......................................... 30
ARTICLE 9 - MOST FAVORED USER.............................................. 30
ARTICLE 10 - VENDOR CONTRACTS.............................................. 31
ARTICLE 11 - MISCELLANEOUS................................................. 31
(a) No Assignment of Rights.............................................. 31
(b) No Delegation of Duties.............................................. 31
(c) Governing Law........................................................ 31
(d) Forum Selection...................................................... 31
(e) Notices.............................................................. 32
(f) Service of Process................................................... 33
(g) Counterparts......................................................... 33
(h) Headings............................................................. 33
(i) Amendment............................................................ 33
(j) Successors and Assigns............................................... 33
(k) Waiver............................................................... 33
(l) Rights and Remedies.................................................. 33
(m) Severability......................................................... 33
(n) Joint and Several Liability.......................................... 33
(o) Force Majeure........................................................ 33
(p) Indemnification and Consequential Damages............................ 34
(q) Confidentiality...................................................... 34
(r) Singular and Plural.................................................. 34
(s) Entire Agreement..................................................... 34
SCHEDULE A................................................................. 36
MAINTENANCE AND REPAIR MANAGEMENT SERVICES AND BUSINESS RULES.............. 36
A.1 MAINTENANCE AND REPAIR MANAGEMENT SERVICES............................. 36
A.2 BUSINESS RULES......................................................... 38
A.3 LOCATIONS.............................................................. 40
A.4 NON-EXCLUSIVE LOCATION FORM............................................ 44
SCHEDULE B................................................................. 45
MAINTENANCE AND REPAIR RATES............................................... 45
SCHEDULE C................................................................. 46
GENERAL AND ADMINISTRATIVE RATES........................................... 46
SCHEDULE C.1............................................................... 47
SAMPLE BILLING FORMAT...................................................... 47
SCHEDULE C.2............................................................... 48
COST SAVINGS FEE SCHEDULE.................................................. 48
SCHEDULE D................................................................. 49
ADJUSTMENT AND RECONCILIATION EXAMPLES..................................... 49
D.1 CONTAINER THREE AND SIX MONTH REVIEW AND ADJUSTMENT.................... 49
D.2 CHASSIS SIX MONTH REVIEW AND ADJUSTMENT................................ 50
D.3 12 AND 24 MONTH RECONCILIATION......................................... 51
SCHEDULE E................................................................. 52
EARLY TERMINATION RATES.................................................... 52
SCHEDULE F................................................................. 53
CONSPICUITY CHARGES........................................................ 53
3
Exhibit 10
EQUIPMENT SERVICES AGREEMENT
THIS EQUIPMENT SERVICES AGREEMENT (this "Agreement") is made and entered
into as of December 31, 1999, by and among TRANSAMERICA LEASING, INC.
("Transamerica"), a Delaware corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, PACER LOGISTICS INC., a Delaware
corporation with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and PACER INTERNATIONAL INC., a Tennessee corporation with
offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Pacer Logistics Inc. and Pacer International Inc. will be collectively referred
to herein as "Pacer." Transamerica and Pacer will be individually referred to
herein as a "party" and collectively referred to herein as the "parties."
RECITALS
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WHEREAS, Pacer operates a Stacktrain System for the movement of
containerized freight throughout the United States, Canada and Mexico.
WHEREAS, Pacer will own, lease or operate during the calendar year 2000 a
fleet of approximately 21,600 Pacer Chassis and 21,000 Pacer Containers for use
in its Stacktrain System. The parties recognize that the size of this fleet may
vary from month-to-month during the Term of this Agreement.
WHEREAS, Pacer will utilize the APL Equipment and the Non-Pacer Equipment
and will operate such APL Equipment and Non-Pacer Equipment in the Stacktrain
System from time to time.
WHEREAS, Pacer wishes to engage Transamerica to provide certain maintenance
and repair management and other services in connection with the Equipment which
it deploys in the Stacktrain System.
WHEREAS, Transamerica wishes to provide such maintenance and repair
management and other services for and on behalf of Pacer, and to arrange for the
maintenance and repair of Equipment, all in accordance with the terms of this
Agreement and consistent with industry standards, any applicable regulatory
requirements, and any applicable AAR, FHWA and BIT requirements.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
- DEFINITIONS
The following capitalized terms shall have the following meanings
throughout this Agreement:
"AAR" means the Association of American Railroads.
"Actual Costs Per Day" means the average daily maintenance and repair costs
for Equipment as measured by the Actual Repair Costs for such Equipment during a
specified period or periods of time divided by the corresponding Pacer Equipment
Days for such Equipment during the same period or periods.
"Actual Repair Costs" means, as to each unit and all units of Equipment,
all actual maintenance and repair costs incurred by Transamerica under Business
Rules 1 and 2 of Schedule A.2 with respect to such Equipment (based upon
approved vendor invoices), but excluding (a) maintenance and repair costs
required for or in connection
with the redelivery of Equipment to an Owner, (b) maintenance and repair costs
incurred with respect to New Equipment during the Free Period for such New
Equipment, (c) maintenance and repair costs incurred directly by Pacer with
respect to Equipment in a Non-Exclusive Location, as designated in a Non-
Exclusive Location Form, and (d) maintenance and repair costs incurred directly
by Pacer in any location throughout an Equipment Force Majeure Period.
"APL" means American President Lines.
"APL Containers" means containers owned or leased by APL which are operated
by Pacer in the Stacktrain System.
"APL Chassis" means the chassis owned or leased by APL which are operated
by Pacer in the Stacktrain System.
"APL Equipment" means the APL Containers and the APL Chassis.
"BIT" means California Bienniel Inspection of Terminals Program.
"Business Day" means a day other than a Saturday, Sunday or legal holiday.
"Business Rules" means the standard of performances referenced and adopted
by the parties in Article 4, as amended in writing from time to time.
"Chassis" means the Pacer Chassis, the APL Chassis and the Non-Pacer
Chassis.
"Containers" means the Pacer Containers, the APL Containers and the Non-
Pacer Containers.
"Early Termination Rates" means the rates set forth in Schedule E to this
Agreement.
"EDI" means electronic data interchange.
"Effective Date" means January 1, 2000.
"Equipment" means the Containers and Chassis.
"Equipment Force Majeure" means a force majeure event declared by Pacer
pursuant to Article 11(o) of this Agreement.
"Equipment Force Majeure Period" means, as to each unit of Equipment, the
number of days, if any, that such unit of Equipment is subject to an Equipment
Force Majeure.
"FHWA" means the U.S. Department of Transportation Federal Highway
Administration annual chassis inspection program.
"Free Period" means, as to each unit of New Equipment, the calendar period
from the date that such unit is added by Pacer to the Stacktrain System until
sixty (60) days thereafter.
"General and Administrative Rates" means the rates set forth in Schedule C
to this Agreement.
"Locations" means the locations described in Schedule A.3 to this
Agreement.
"Maintenance and Repair Rates" means the maintenance and repair rates for
Pacer Chassis and Pacer Containers set forth in Schedule B to this Agreement.
"Minimum Equipment Volumes" means 21,100 Pacer Chassis (excluding P&O
Chassis) and 20,900 Pacer Containers.
"New Equipment" means any and all units of Pacer Equipment which are added
by Pacer to the Stacktrain System after the Effective Date which (a) are new
builds, or (b) have been refurbished or reconditioned in a manner which makes
them immediately useable in the Stacktrain System without maintenance or repair
of any kind.
"Non-Exclusive Location" means a Location described in a Non-Exclusive
Location Form.
"Non-Exclusive Location Form" means the form described in Article 2(b) and
Schedule A.4 of this Agreement.
"Non-Exclusive Period" means, as to each unit of Equipment, the number of
days, if any, that such unit of Equipment spends in a Non-Exclusive Location.
"Non-Pacer Chassis" means chassis owned or leased by a Person (other than
Pacer, P&O or APL) who is not a party to this Agreement and which are operated
by Pacer in the Stacktrain System.
"Non-Pacer Containers" means containers owned or leased by a Person (other
than Pacer or APL) who is not a party to this Agreement and which are operated
by Pacer in the Stacktrain System.
"Non-Pacer Equipment" means Non-Pacer Containers and Non-Pacer Chassis.
"Owner" means each title owner or lessor of each unit of Equipment.
"Pacer Actual Costs Per Day" means average daily maintenance and repair
costs for Pacer Equipment as measured by the Pacer Actual Repair Costs for such
Pacer Equipment during a specified period or periods divided by the
corresponding Pacer Equipment Days for such Pacer Equipment during the same
period or periods.
"Pacer Actual Repair Costs" means the Actual Repair Costs less any amounts
included therein which are billable to APL by Pacer for the maintenance of APL
Equipment, plus any amounts billed by APL to Pacer in connection with the
maintenance of Pacer Equipment.
"Pacer Chassis" means the chassis owned or leased by Pacer, and the P&O
Chassis operated by Pacer, for use in the Stacktrain System, but excluding APL
Chassis and Non-Pacer Chassis.
"Pacer Containers" means the containers owned or leased by Pacer for use in
the Stacktrain System, but excluding APL Containers and Non-Pacer Containers.
"Pacer Equipment" means the Pacer Containers and the Pacer Chassis.
"Pacer Equipment Days" means, as to each unit of Pacer Equipment, the
number of days that such unit is in the Stacktrain System during the Term, less
the Free Period, the Non-Exclusive Period and the Equipment Force Majeure
Period, as applicable to such unit.
"Permitted Assignee" means, as to Pacer, a parent or subsidiary of Pacer, a
corporation controlled by or under common control with Pacer, or a corporate
successor to Pacer, or its parent or subsidiary, by merger, acquisition or
corporate reorganization.
"Permitted Delegatee" means, as to Transamerica, a parent or subsidiary of
Transamerica, a corporation controlled by or under common control with
Transamerica, or a corporate successor to Transamerica, or its parent or
subsidiary, by merger, acquisition or corporate reorganization.
"Person" means any individual, partnership, corporation, association,
limited liability company or governmental entity. "P&O" means P&O Nedlloyd
Limited.
"P&O Chassis" means chassis owned by P&O and operated by Pacer in the
Stacktrain System.
"Services" means the services to be provided by Transamerica to Pacer as
described in Article 3 of this Agreement.
"Stacktrain System" means the stacktrain system operated by Pacer for the
movement of containerized freight throughout the United States, Canada and
Mexico.
"Term" means the term of this Agreement as more fully described in Article
6 of this Agreement.
"Territory" means the United States, Canada and Mexico.
"Vendors" means the maintenance and repair vendors designated in Schedule
A.3 or such other maintenance and repair vendors which may be selected or
designated by the parties from time to time.
- APPOINTMENT
Exclusivity. Except as provided in Article 2(b), Pacer hereby appoints
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Transamerica as the exclusive provider of Services throughout the Territory
throughout the Term of this Agreement. Transamerica hereby accepts such
appointment and agrees to provide such Services for and on behalf of Pacer and
the Equipment in accordance with the terms of this Agreement.
Non-Exclusive Locations. The parties acknowledge that despite their
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intentions and best efforts regarding exclusivity, Transamerica may be unable to
render Services from time to time during the Term of this Agreement at one or
more of the Locations. Whenever Pacer determines that Transamerica or a Vendor
is unable to render Services in a particular Location during a particular
period, for whatever reason, it shall complete and deliver to Transamerica a
Non-Exclusive Location Form in the form of Schedule A.4. Each Location
identified in a Non-Exclusive Location Form shall be deemed a Non-Exclusive
Location for the period designated in such Form. Pacer shall be solely
responsible for the maintenance and repair of all Equipment (including payment
for all repairs and maintenance) in a Non-Exclusive Location for the period so
designated. As set forth in Schedule A.1, Note 4, all Pacer Equipment in a Non-
Exclusive Location shall be subject only to general and administrative charges
under Article 5(b) and Schedule C of this Agreement throughout a Non-Exclusive
Period. The Maintenance and Repair Rates set forth in Schedule B shall not apply
to Pacer Equipment in a Non-Exclusive Location during a Non-Exclusive Period.
- SERVICES
Maintenance and Repair Management Services. Transamerica shall provide
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maintenance and repair management services, as more particularly described on
Schedule A.1 to this Agreement, for and on behalf of Pacer and the Equipment,
and shall arrange for the maintenance and repair of Equipment at the Locations
consistent with the terms and conditions of Schedule A.1 and the Business Rules.
Without limiting the generality of the foregoing, maintenance and repair
management services shall include the following services:
the review of actual maintenance and repair invoices against agreed schedules of
repair charges as between Transamerica and vendors;
the processing of maintenance and repair invoices and the payment of accepted
maintenance and repair invoices;
the random audit of maintenance and repairs made by Vendors;
the maintenance of a maintenance and repair history for each unit of Equipment
in order to generate management reports detailing the costs incurred to maintain
or repair such Equipment;
the provision of web enabled reporting and remote access to the maintenance and
repair database; and
the provision of information to be used for third-party cost recovery by Pacer
in situations where a third party damages a unit of Equipment and repair
estimates for such unit exceed Two Hundred and Fifty Dollars ($250).
Miscellaneous Services. Transamerica shall provide such other services for
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and on behalf of Pacer and the Equipment, as may be agreed by the parties from
time to time, and as set forth in such additional schedules as may be attached
hereto.
- PERFORMANCE STANDARDS
The general and specific standards governing Transamerica's performance of
the Services are set forth in the Business Rules attached as Schedule A.2 and
incorporated herein by reference. The parties shall review the Business Rules
as soon as practicable after April 1, 2000, and shall endeavor to amend the
Business Rules, as necessary, to avoid material economic harm to either party by
continued application thereof.
- RATES, BILLING AND PAYMENT
Maintenance and Repair Management Service Rates. Subject to the rate
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adjustments provided in this Article 5, Transamerica shall ▇▇▇▇ and Pacer shall
pay the per diem rates set forth in Schedule B (Maintenance and Repair Rates)
and Schedule C (General and Administrative Rates) to this Agreement in respect
of all Services provided by Transamerica pursuant to Article 3(a).
Basic Billing. Except as provided in Schedule A.1, Notes 3, 4 and 5,
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Transamerica shall ▇▇▇▇ ▇▇▇▇▇ monthly in arrears in respect of all Pacer
Equipment in the Stacktrain System during such month. Transamerica shall provide
Pacer with a monthly maintenance and repair management services invoice, based
upon the Maintenance and Repair Rates set forth in Schedule B and the General
and Administrative Rates set forth in Schedule C, as such rates may be amended
from time to time. As applicable to Schedule B, and except as provided in
Schedule A.1, Notes 3, 4 and 5, such invoice shall be calculated on the basis of
the per unit per diem rates described in Schedule B, as amended from time to
time, as multiplied by the number of days and the daily number of Pacer Chassis
and Pacer Containers in the Stacktrain System for the month
covered by such invoice. As applicable to Schedule C, and except as provided in
Schedule A.1, Note 3, such invoice shall be calculated on the basis of the per
unit per diem rates described in Schedule C, as amended from time to time, as
multiplied by the number of days and the daily number of Pacer Chassis and Pacer
Containers in the Stacktrain System for the month covered by such invoice. A
sample billing format is attached hereto as Schedule C.1
(a) Additional Billing. In addition to the monthly billing referenced in
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Article 5(b), Transamerica shall ▇▇▇▇ ▇▇▇▇▇ in respect of the following:
Cost Savings. Transamerica's share of all cost-savings calculated as part of
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the twelve (12) and twenty-four (24) month reconciliations required pursuant to
Article 5(g) of this Agreement.
[i] Conspicuity Charges. Monthly conspicuity charges required
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pursuant to Article 5(i) and Schedule F of this Agreement. Lease Termination
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Charges. All maintenance and repair costs required for or in connection with the
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redelivery of Equipment to an Owner pursuant to Article 5(j).
[ii] Early Termination Charges. All early termination charges and
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payments required pursuant to Article 6(d) of this Agreement, including all
charges and payments referenced in the last sentence of Article 6(d).
Overage Charges. All overage charges required pursuant to Article 5(f)[iv] of
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this Agreement.
Payment. Except as otherwise provided in this Agreement, Pacer shall pay
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each correct and proper invoice rendered by Transamerica under this Agreement
within thirty (30) days of the date of receipt of such invoice. Such payment
shall be made in immediately available funds and without offset or discount of
any kind. To the extent that Pacer disputes any invoice or portion thereof, it
shall immediately notify and specify the basis for such dispute to Transamerica.
Any undisputed portion of any invoice shall be fully and timely paid by Pacer in
accordance with this Article 6(d).
(b) Service Charge. Any amount or sum which is not paid when and as due
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under this Agreement shall be subject to a service charge equal to one and one-
half percent (1.5%) per month. The service charge shall be assessed by
Transamerica and paid by Pacer, or assessed by Pacer and paid by Transamerica,
as the case may be, on each billed and unpaid amount from the date when such
amount becomes due until the date when such amount is fully and finally paid.
Review and Adjustment Process. The Maintenance and Repair Rates set forth
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in Schedule B shall be reviewed and adjusted during the Term, as follows:
First Three Months: January 1 - March 31, 2000. As soon as practicable (and no
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later than thirty (30) days) after the end of this period, the parties will
undertake a review of the Actual Repair Costs and Actual Costs Per Day for such
period. To the extent that the Actual Costs Per Day are greater (overage) or
less (shortfall) than the daily per unit rates set forth on Schedule B,
excluding from such calculation any and all rates excluded pursuant to Schedule
A.1, Note 3, then a settlement shall be made by and between the parties in
accordance with Article 5(f)[iv]. No changes shall be made to the
Schedule B rates applicable to the Second Three Month period as a result of the
Actual Repair Costs and Actual Costs Per Day experienced during this period.
[i] Second Three Months: April 1 - June 30, 2000. As soon as
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practicable (and no later than thirty (30) days) after the end of this period,
the parties will undertake a review of the Actual Repair Costs and Actual Costs
Per Day for such period. To the extent that Actual Costs Per Day are greater
(overage) or less (shortfall) than the daily per unit rates set forth on
Schedule B, excluding from such calculation any and all rates excluded pursuant
to Schedule A.1, Note 3, then a settlement shall be made by and between the
parties in accordance with Article 5(f)[iv]. In addition, the Maintenance and
Repair Rates set forth on Schedule B shall be adjusted upward or downward for
the Second Six-Month Period (July 1 - December 31, 2000) to reflect Actual Costs
Per Day incurred during the period January 1, 2000, to June 30, 2000.
[ii] Second Six-Month Period (July 1 - December 31, 2000) and
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Succeeding Six-Month Periods. As soon as practicable (and no later than thirty
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(30) days) after the end of the second six-month period, the parties will
undertake a review of the Actual Repair Costs and Actual Costs Per Day for such
period. To the extent that the Actual Costs Per Day are greater (overage) or
less (shortfall) than the then-existing daily per unit rates set forth on
Schedule B, excluding from such calculation any and all rates excluded pursuant
to Schedule A.1, Note 3, then a settlement shall be made by and between the
parties in accordance with Article 5(f)[iv]. In addition, the Maintenance and
Repair Rates set forth on Schedule B shall be adjusted upward or downward for
the third-six month period, January 1 - June 30, 2001, to reflect such Actual
Costs Per Day. A similar review shall be conducted at the end of the third,
fourth and fifth six-month periods and settlements shall be made as between the
parties with respect to any overages or shortfalls, in accordance with the
provisions of Article 5(f)[iv]. Schedule B rate adjustments shall be made, as
appropriate, in each of the following fourth, fifth and sixth six-month periods.
[iii] Overages and Shortfalls. The total dollar amount of all
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overages and shortfalls as between Actual Repair Costs Per Day and scheduled
Maintenance and Repair Rates during the second three-month period, and during
each of the second, third, fourth, and fifth six-month periods, shall be
calculated by the parties using the methodology described in Schedules D.1 and
D.2. The dollar amount of any shortfall shall be paid by Transamerica to Pacer
within thirty (30) days of the date of receipt of Pacer's invoice for such
shortfall, or, at Pacer's option, deducted from any amounts owed by Pacer to
Transamerica pursuant to Article 5(g). The dollar amount of any overage shall be
paid by Pacer to Transamerica within thirty (30) days of the date of receipt of
Transamerica's invoice for such overage. A final reconciliation of any overages
and/or shortfalls incurred during the final six-month period shall be made as
soon as practicable (and no later than ninety (90) days) after the end of the
Term and a final adjustment shall be made between the parties in a manner
consistent with this Article 5(f)[iv].
[iv] FHWA and BIT Costs. For purposes of calculating any upward or
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downward adjustments to the Chassis Maintenance and Repair Rates contained in
Schedule B, as required under this Article 5(f), changes in actual FHWA and BIT
costs shall not be included or calculated, unless such changes are incurred as a
result of any changes to federal, state or local law or regulations relating to
the inspection, maintenance or repair of Chassis.
[v] Container Maintenance and Repair Cost Variance. For purposes of
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calculating any upward or downward adjustments to the Container Maintenance and
Repair Rates contained in Schedule B, as required under this Article 5(f), only
Actual Repair Costs (for Containers) which are greater or less than existing
scheduled costs by a factor greater than one percent (1%) will be included in
the adjustment for the succeeding period.
Twelve and Twenty-Four Month Reconciliations. It is the intention of the
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parties that Transamerica will share in all maintenance and repair cost savings
realized by Pacer. In furtherance of this intention, the parties have devised a
preliminary formula for determining the amount of savings realized by Pacer and
the portion of that total savings to be shared with Transamerica. This
preliminary formula is set forth in the remainder of this Article 5(g). As soon
as practicable after December 31, 2000, and December 31, 2001, Transamerica
shall analyze and report on the Pacer Actual Repair Costs and Pacer Actual Costs
Per Day for the nine months beginning April 1, 2000, and for the twelve months
beginning January 1, 2001, respectively, in a format similar to the format
attached as Schedule D.3 hereto. To the extent that the Pacer Actual Costs Per
Day for Pacer Containers are less than the assumed costs per unit per day, as
set forth on Schedule B, Pacer shall pay a Container cost-savings fee to
Transamerica based upon the fee schedule attached as Schedule C.2 hereto. In
addition, to the extent that the Pacer Actual Costs Per Day for Pacer Chassis
are less than the assumed costs per unit per day, as set forth on Schedule B,
Pacer shall pay a Chassis cost-savings fee to Transamerica based upon the fee
schedule attached hereto as Schedule C.2. The parties agree that the formula
described herein to determine the Container and Chassis cost-savings fees set
forth in Schedule C.2 will be reviewed after the first three months of
operations under this Agreement (i.e., after March 31, 2000), and, if such
formula is inequitable to either party, such formula will be subject to change
based upon good faith negotiations between the parties. If the formula is
determined to be equitable to both parties, then the formula will be utilized by
the parties without modification. In the event that this Agreement is terminated
prior to December 31, 2000, or prior to December 31, 2001, for any reason,
Transamerica shall perform the analysis as of the date of such termination, and
Pacer shall pay a Container fee and a Chassis cost-savings fee based upon the
results thereof, as if the Agreement had not been terminated. Notwithstanding
the foregoing, in the event that Pacer shall terminate this Agreement for cause
under Article 6(b), Pacer shall not be responsible for any Container or Chassis
cost-savings fees which are otherwise earned in the year of such termination.
Minimum Equipment Volumes. All general and administrative ▇▇▇▇▇▇▇▇ rendered
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by Transamerica pursuant to this Article shall be calculated on the basis of the
actual number of Pacer Chassis and Pacer Containers in the Stacktrain System on
a daily basis, excluding New Equipment during its applicable Free Period. In the
event that such actual number of Pacer Chassis and Pacer Containers in the
Stacktrain System is less than the Minimum Equipment Volumes by five percent
(5%) or more in any two consecutive quarters, then Transamerica can require an
adjustment of the General and Administrative Rates set forth in Schedule C.
Pacer and Transamerica shall be required to negotiate such rate adjustment in
good faith. If the parties are unable to reach agreement within sixty (60) days
on the amount of such rate adjustment, Transamerica may terminate this Agreement
upon sixty (60) days written notice to Pacer. Such termination shall be deemed a
termination for cause under Article 6(b)[iii] for all purposes under this
Agreement.
Conspiculty. As more particularly set forth on Schedule F, Pacer shall
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reimburse Transamerica for the cost of installing reflective tape on all Chassis
which are leased to Pacer by Transamerica.
Lease Termination Charges. All repair and maintenance costs associated with
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Equipment which is returned to an Owner shall be billed separately to and paid
by Pacer on a
monthly basis in accordance with Article 5(c)[iii]. Such costs shall not be
included in the calculation of Actual Repair Costs for purposes of Article
5(f)[i], [ii], [iii] and [iv] or Article 5(g).
ARTICLE 2 - TERM AND TERMINATION
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Term. This Agreement shall commence on the Effective Date and shall
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continue thereafter for a period of thirty-six (36) months until December 31,
2002, unless sooner terminated pursuant to this Article 6 (the "Term").
Termination for Cause.
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Either party may terminate this Agreement if the other party fails to remit or
pay amounts when and as due under this Agreement and such non-payment continues
for a period of fifteen (15) days following receipt of written notice of such
non-payment. Pacer may terminate this Agreement if Transamerica fails to cure
any material breach of its obligation to perform the Services within thirty (30)
days of any written notice from Pacer of the breach and demand for cure, unless
Transamerica shall submit a Services performance plan within such thirty (30)
day period, in which case Transamerica shall have an additional thirty (30) days
to cure the breach, it being the intention of the parties that Transamerica
shall have sixty (60) days from the date of notice and demand to cure any breach
where a Services performance plan is submitted by Transamerica within the first
thirty (30) days. In the event that Pacer terminates this Agreement for cause,
Pacer shall not be obligated to pay early termination charges pursuant to
Article 6(d). Transamerica may terminate this Agreement if Pacer fails to cure
any material non-payment breach of this Agreement within sixty (60) days of
receipt of any written notice from Transamerica of the breach and demand for
cure. In the event that Transamerica terminates this Agreement for cause under
this Article 6(b), and without prejudice to Transamerica's other rights and
remedies arising under this Agreement or by operation of law, Transamerica shall
be entitled to receive, and Pacer shall be obligated to remit, all early
termination charges and payments under Article 6(d) and Schedule E of this
Agreement, including all reasonable incremental and out of pocket costs incurred
by Transamerica in supporting any move by Pacer to a new service provider and
all other charges referred to in the last sentence of Article 6(d).
A non-breaching party and a breaching party may negotiate and resolve in writing
any alleged breach of this Agreement on any financial or non-financial terms
which are mutually satisfactory to them. Unless otherwise agreed in writing,
such negotiation and resolution shall not constitute a waiver, release or
limitation of any other rights or remedies which the non-breaching party may
have under this Agreement, including the right of termination under this Article
6(b).
Termination for Convenience. Transamerica or Pacer may terminate this
---------------------------
Agreement without cause and for no reason upon six (6) months prior written
notice to the other. Pacer's right to terminate this Agreement for convenience
is subject to its reciprocal obligation to make such early termination payments
to Transamerica and to pay such other charges as are described in Article 6(d).
In the event that Transamerica exercises its right to terminate this Agreement
for convenience, [i] Pacer shall not be obligated to pay the early termination
payments and charges described in Article 6(d) or the cost-savings fees
described in Article 5(g) and [ii] Transamerica shall support Pacer's move to a
new service provider and shall be responsible for its own incremental and out-
of-pocket costs in connection therewith.
(a) Termination Based Upon Assignment.
---------------------------------
In the event that Pacer assigns this Agreement or the Services to any Permitted
Assignee which is a lessor of containers or chassis or to any provider of
maintenance and repair management services in competition with Transamerica,
then Transamerica may terminate this Agreement upon six (6) months prior written
notice to Pacer. In the event that Transamerica terminates this Agreement under
this Article 6(d), such termination shall be deemed a termination for
convenience by Transamerica under Article 6(c), except that Transamerica shall
have no obligation or responsibility to support Pacer's move to a new service
provider.
In the event Transamerica delegates its duties, obligations or responsibilities
under this under this Agreement to any Permitted Delegatee which is a rail
carrier, motor carrier, stacktrain operator or intermodal marketing company that
competes with the stacktrain services provided by Pacer, then Pacer may
terminate this Agreement upon six (6) months prior written notice to
Transamerica. In the event that Pacer terminates this Agreement under this
Article 6(d), such termination shall be deemed a termination for convenience by
Pacer under Article 6(c), except that Pacer shall have no obligation or
responsibility to pay the early termination charges and payments as set forth in
Article 6(e).
Early Termination Charges and Payment. Upon receipt of a termination-for-
-------------------------------------
convenience notice from Pacer pursuant to Article 6(c), or upon a termination-
for-cause by Transamerica pursuant to Article 6(b), Pacer shall be obligated to
pay to Transamerica an early termination fee based upon the Early Termination
Rates set forth in Schedule E. Each unit of Pacer Equipment shall be assessed an
early termination charge, based upon the applicable per diem Early Termination
Rate for that unit, multiplied by the number of days and the daily number of
Pacer Containers and Pacer Chassis in the Stacktrain System calculated as
follows: [i] in the case of Pacer Equipment in the Stacktrain System as of the
Effective Date, from the Effective Date to the date that such Pacer Equipment is
subsequently removed from the Stacktrain System or the actual date of
termination of this Agreement, whichever is earlier; and [ii] in the case of New
Equipment, from the calendar day following the last day of the Free Period to
the date that such New Equipment is subsequently removed from the Stacktrain
System or the actual date of termination of this Agreement, whichever is
earlier. Transamerica shall ▇▇▇▇ and Pacer shall pay such charges in accordance
with the terms of this Agreement. In addition to such payment, Pacer shall pay
[i] all reasonable incremental and out-of-pocket costs incurred by Transamerica
in supporting Pacer's move to a new service provider, [ii] all lumpsum
conspiculty charges required by Schedule E in the event of termination prior to
June 30, 2001, and [iii] all reconciliation payments required by Article 5(f),
and [iv] all reconciliation payments required by
Article 5(g) in the event of termination prior to December 31, 2000 or December
31, 2001, as the case may be.
(b) Survival of Payment Obligations. The payment obligations of the
-------------------------------
parties under Articles 5 and 6 of this Agreement shall survive any termination
of this Agreement by either party under this Article 6.
- AUDIT RIGHTS
Pacer shall have the right upon reasonable advance notice to Transamerica
to review, inspect and audit the books and records of Transamerica relating to
the Services, including Vendor bills, payments to Vendors, and agreed repair
charges as between Transamerica and Vendors. All such reviews, inspections and
audits shall occur during regular business hours and shall be at the cost and
expense of Pacer. If any review, inspection or audit by Pacer establishes any
gross negligence or willful misconduct on the part of Transamerica in respect of
billing or the assessment of fees and charges under this Agreement, Transamerica
shall be responsible for the cost of such review, inspection or audit, up to a
maximum of $10,000 per review, inspection and audit, up to an annual maximum of
$50,000 for all such reviews, inspections, and audits.
- REPORTING REQUIREMENTS
Pacer shall provide Transamerica with information concerning any change
in the number of Pacer Chassis units and Pacer Container units in the Pacer
Equipment fleet, and will cause APL to provide Transamerica with information
concerning any change in the number of APL Chassis units in the APL Equipment
fleet, throughout the Term of this Agreement. Such information shall be provided
within five (5) days of each such change and shall include as to each unit, at a
minimum, the date that such unit was added to or removed from the Stacktrain
System, the alphabetical and numerical marks on such unit, the Equipment type,
and the Owner of such unit. Transamerica shall have no obligation to provide
Services to any added Pacer Chassis, Pacer Containers or APL Chassis unless
Pacer or APL, as the case may be, shall have provided the information required
by this Article 8 as to such unit. Pacer shall cause APL to provide all
invoicing for work performed on Pacer Equipment in an e-commerce format
acceptable to Transamerica. Such format will be consistent with the format
required of other Vendors.
- MOST FAVORED USER
Except as otherwise provided in this Agreement, Transamerica shall not
perform services to APL (for all equipment types) and any direct competitors of
Pacer, excluding railroads (for domestic chassis or containers), which are
similar to the Services, at General and Administrative Rates which are more
favorable than those set forth in Schedule C, unless those more favorable
General and Administrative Rates are also offered to Pacer under this Agreement
with an application date which is retroactive to the date on which they are
offered to such major user. Upon request by Pacer (not more than once per
calendar year), Transamerica shall cause its external auditor to provide written
assurances to Pacer that any general and administrative rates charged by
Transamerica to APL (for services to APL other than those described in this
Agreement) or any direct competitors of Pacer (excluding railroads) for services
similar to the Services are not less than the General and Administrative Rates
set forth in Schedule C. The assurances provided by such auditor will be based
upon the following formula:
The auditor will calculate all container revenue
(including maintenance and repair charges and general
and administrative charges) earned by Transamerica from
APL or any other direct competitor of Pacer (excluding
railroads). The auditor will subtract from such
container revenue all actual maintenance and repair
costs relating to the containers in question. The
difference between such revenues and costs shall be
divided by the total equipment days for such containers
to arrive at the applicable general and administrative
rate per day. The rates per day will be compared to the
corresponding rates for containers contained in
Schedule C. The same type of calculation and comparison
shall be completed with respect to chassis, using the
applicable chassis revenue, maintenance and repair
costs, and equipment days.
- VENDOR CONTRACTS
Transamerica will use commercially reasonable efforts to negotiate or modify
contracts with existing and future Vendors to require that such contracts (a)
contain indemnity provisions covering Transamerica and Pacer, (b) require
Vendors to carry third party liability insurance in an amount not less than
$5,000,000 per occurrence naming Transamerica and Pacer as additional named
insureds. In the event that Transamerica is unable to negotiate or modify a
contract with a particular Vendor which contains these provisions, the parties
shall jointly decide whether such Vendor shall be retained. If the parties are
unable to agree, Pacer shall decide, in its sole discretion, whether to retain
such Vendor. Unless otherwise provided herein, a decision to retain or reject a
particular Vendor shall not relieve the parties of any obligations which they
otherwise have to each other under this Agreement.
- MISCELLANEOUS
No Assignment of Rights. Pacer may not assign this Agreement or its right
-----------------------
to receive Services from Transamerica under this Agreement to any Person without
the prior written consent of Transamerica, and any such assignment, or purported
assignment, shall be void and of no effect. Notwithstanding the immediately
preceding sentence, Pacer may assign this Agreement and/or its right to receive
Services under this Agreement to a Permitted Assignee without the prior written
consent of Transamerica. Nothing contained herein shall prohibit Pacer from
effecting an initial public offering.
No Delegation of Duties. Transamerica may not delegate its duties,
-----------------------
obligations or responsibilities under this Agreement to any Person without the
prior written consent of Pacer and any such delegation, or purported delegation,
shall be void and of no effect. Notwithstanding the immediately preceding
sentence, Transamerica may delegate its duties, obligations or responsibilities
under this Agreement to a Permitted Delegatee without the prior written consent
of Pacer. Nothing contained herein shall prevent Transamerica from effecting an
initial public offering.
Governing Law. This Agreement shall be governed by and construed under the
-------------
laws of the State of New York.
Forum Selection. Each party irrevocably consents to the jurisdiction and
---------------
venue of the federal and state courts located in New York, New York, in
connection with any and all
actions, suits and proceedings arising from or related to this Agreement or the
execution, delivery, performance or breach of this Agreement. Nothing herein
will affect the right of any party to bring any action, suit or proceeding
against another party or its property in any other court with proper
jurisdiction.
Notices. Any notices required or permitted hereunder shall be in writing
-------
and shall be valid and sufficient when sent, if sent by facsimile transmission
to the number set forth below; or when received, if delivered personally; or, if
mailed, then three (3) days after dispatched in any post office of the United
States, by registered or certified mail, postage prepaid, addressed to the other
party as follows:
If to Transamerica:
Transamerica Leasing Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President, N.A. Domestic Intermodal
With a Copy to: Vice President and General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Pacer:
Pacer Logistics Inc., and
Pacer International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President, Operations
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Service of Process. Service of process may be made by one party upon
------------------
another by [i] mailing a copy of such process (registered or certified mail),
postage prepaid, addressed to the other party at the address shown in Article
11(e), or [ii] by sending a copy of such process by facsimile transmission,
directed to the facsimile number of such party shown in Article 11(e). If
service is by mail, service will be complete seven days after such process has
been mailed. If service is by facsimile, service will be complete when such
process is actually received. Nothing herein will affect the right of either
party to serve legal process in any other manner permitted by law.
Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
Headings. Titles and headings of the Articles and sub-Articles of this
--------
Agreement are for convenience or reference only and do not form a part of this
Agreement and will not in any way affect the interpretation of this Agreement.
Amendment. No explanation or information by any of the parties will alter
---------
or affect the meaning or interpretation of this Agreement and no modification or
amendment to this Agreement will be valid unless in writing and executed by the
party against whom enforcement is sought.
Successors and Assigns. The terms and conditions of this Agreement will
----------------------
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties.
Waiver. The waiver of any breach of any term or condition will not be
------
deemed a waiver of any other or subsequent breach, whether of like or different
nature.
Rights and Remedies. No rights or remedies afforded a party are intended to
-------------------
be exclusive, and, upon the breach of any provision of this Agreement by a
Breaching Party, the Non-Breaching Party will be entitled to exercise all rights
or remedies provided by law or otherwise.
Severability. If any term or provision of this Agreement shall be adjudged
------------
to be invalid or unenforceable, to any extent, such invalidity or
unenforceability shall not affect or render invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
Joint and Several Liability. Pacer Logistics Inc. and Pacer International
---------------------------
Inc. shall be jointly and severally responsible for the contractual obligations
of Pacer to Transamerica under this Agreement.
Force Majeure. Transamerica shall have no liability to Pacer, and its
-------------
performance under this Agreement shall be excused, to the extent that any
failure to perform is due to acts of God or the public enemy, war, strikes,
labor difficulties, riots, insurrections, floods, earthquakes, explosions, fire,
quarantine restrictions, epidemics or other causes beyond the control and
without the fault or negligence of Transamerica. Pacer shall be able to declare
an Equipment Force Majeure as to designated units of Equipment in a particular
Location to the extent that such Equipment is rendered unavailable to the
Stacktrain System for a period of seventy-two (72) hours or more due to acts of
God or the public enemy, war, strikes, labor difficulties, riots, insurrections,
floods, earthquakes, explosions, fire, quarantine restrictions, epidemics, or
other causes beyond the control and without the fault or negligence of Pacer.
Either party declaring a force majeure event pursuant to this Article 10(n)
shall [i] immediately notify the other party of such event, such notification to
include a description of the event and the commencement date of such event, and
[ii] immediately notify the other party when such event has abated or ended. The
declaration of an Equipment Force Majeure by Pacer shall not relieve Pacer of
any obligations to Transamerica under this Agreement, except as specifically set
forth in Schedule A.1, Note 5.
Indemnification and Consequential Damages. Pacer shall indemnify and hold
-----------------------------------------
Transamerica harmless from and against all liabilities, losses, damages and
expenses, including reasonable attorneys' fees, sustained or incurred by
Transamerica to the extent that such liability, loss, damage or expense is
caused by [i] the gross negligence of Pacer, [ii] the material breach of this
Agreement by Pacer, [iii] the failure to perform under this Agreement by Pacer,
or [iv] the willful or intentional misconduct of Pacer or any of its employees.
Transamerica shall indemnify and hold Pacer harmless from and against all
liabilities, losses, damages and expenses, including reasonable attorneys' fees,
sustained or incurred by Pacer to the extent that such liability, loss, damage
or expense is caused by [i] the gross negligence of Transamerica, [ii] the
material breach of this Agreement by Transamerica, [iii] the failure to perform
under this Agreement by Transamerica, or [iv] the willful or intentional
misconduct of Transamerica or any of its employees. Under no circumstances shall
either party be liable to the other for any lost profits, or for special,
consequential or exemplary damages, even if the party has been advised of the
possibility of such damages or lost profits.
Confidentiality. The parties agree that the terms and conditions of this
---------------
Agreement and its Schedules are confidential and proprietary, and that
unauthorized disclosure could be damaging from a commercial or competitive
standpoint under many circumstances. Therefore, except as otherwise provided in
this Agreement and except to the extent required by law, the contents of this
Agreement and its Schedules shall not be disclosed or released by either party
without consent of the other party during the Term of this Agreement and for a
period of six (6) calendar months following the end of such Term.
Singular and Plural. All defined terms and all variations thereof shall
-------------------
refer to the singular or plural, as the text may require.
Entire Agreement. This Agreement represents the entire agreement between
----------------
the parties concerning the subject matter hereof and all prior agreements
(whether written or oral), term sheets, memoranda, correspondence, etc., between
the parties are hereby merged into this Agreement.
[INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
TRANSAMERICA LEASING, INC.
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
PACER LOGISTICS INC.
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Financial Officer
PACER INTERNATIONAL INC.
By:________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇
Executive Vice President, Operations
SCHEDULE A
----------
MAINTENANCE AND REPAIR MANAGEMENT SERVICES AND BUSINESS RULES
-------------------------------------------------------------
A.1 MAINTENANCE AND REPAIR MANAGEMENT SERVICES
----------------------------------------------
Transamerica will perform the maintenance and repair management services listed
below, subject to the terms and conditions of Notes 1, 2, 3, 4, 5, 6, 7 and 8
below:
cause Equipment at each Location to be maintained and repaired in accordance
with the Business Rules, applicable industry standards, regulatory requirements
and AAR, FHWA and BIT requirements, and other provisions and standards set forth
in this Agreement;
provide accurate maintenance and repair ▇▇▇▇▇▇▇▇ to Pacer and require accurate
maintenance and repair ▇▇▇▇▇▇▇▇ from its vendors;
negotiate and maintain contracts with all Vendors;
receive electronically via e.commerce all Vendor repair estimates and invoices
and compare to previously approved tariffs;
pay all accepted maintenance and repair invoices, reject back to Vendors any
unacceptable invoices and pay rejected invoices when and as properly corrected;
utilize Transamerica technical department to audit selected Vendors and report
the results of such audits to Pacer;
maintain a maintenance and repair data base for all maintenance and repair work
performed on Pacer Equipment, including work performed by APL, which
incorporates key edits and controls and which contains maintenance and repair
histories;
provide web enabled reporting and provide to Pacer remote access to the
Transamerica maintenance and repair data base;
provide Pacer with monthly reporting on maintenance and repair experience;
invoice Pacer monthly a cost per day for maintenance and repair management
services in accordance with Article 5 of this Agreement;
provide Pacer with a monthly and cumulative report of maintenance and repair
cost savings/overages versus repair costs outlined in Article 5(g); and
provide Pacer with the amounts to be billed to APL for maintenance and repair
performed by Transamerica on APL Equipment.
Note 1: Damage Prior to the Effective Date. The parties acknowledge that some
----------------------------------
Equipment may be damaged, but not repaired, as of the Effective Date
of this Agreement. Transamerica shall be responsible for the actual
costs associated with the repair of such Equipment only where such
Equipment was inspected and repair estimates made after the Effective
Date, it being the intention of this provision that Transamerica shall
have no responsibility for the cost of repairs where repair estimates
were made prior to the Effective Date.
Note 2: Repairs Post-Termination. The parties acknowledge that repairs to some
------------------------
Equipment damaged during the Term will not be made until after the
expiration of the Term. Transamerica will be responsible for the
actual cost and completion of any repairs made to the Equipment after
the end of the Term to the extent that the repairs were first
estimated prior to the end of the Term. To the extent that those
repairs are made within sixty (60) days after the end of the Term, the
cost of these repairs will be included in the final six month
reconciliation under Article 5(f)[iv]. To the extent that such repairs
are not completed within this 60 day period, the estimated cost of
these repairs will be included in the final six month reconciliation
under Article 5(f)[iv].
Note 3: Billing for New Equipment. Transamerica will not include a unit of New
-------------------------
Equipment in any maintenance and repair billing or any general and
administrative billing pursuant to Article 5(b) and Schedules B and C
of this Agreement during the Free Period for such unit.
Notwithstanding the immediately preceding sentence, Transamerica shall
▇▇▇▇ ▇▇▇▇▇, monthly in arrears, and Pacer shall pay Transamerica, for
any and all actual repairs made to each and every unit of New
Equipment during its Free Period. Such ▇▇▇▇▇▇▇▇ shall describe the
repairs made and shall identify, as to each unit of New Equipment, the
specific unit number, the location where the repair was made and the
date of the repair.
Note 4: Billing for Equipment in Non-Exclusive Locations. All units of Pacer
------------------------------------------------
Equipment situated in a Non-Exclusive Location from time to time shall
be excluded from maintenance and repair billing pursuant to Article
5(b) and Schedule B of this Agreement during any Non-Exclusive Period.
All such Pacer Equipment shall be included in (and shall remain
subject to) all general and administrative billing pursuant to Article
5(b) and Schedule C of this Agreement throughout such Non-Exclusive
Period.
Note 5: Billing for Equipment Subject to Equipment Force Majeure. All units of
--------------------------------------------------------
Pacer Equipment which are subject to an Equipment Force Majeure shall
be excluded from maintenance and repair billing pursuant to Article
5(b) and Schedule B of this Agreement throughout the duration of any
Equipment Force Majeure Period. Whenever Pacer declares an Equipment
Force Majeure, Pacer shall be solely responsible for the maintenance
and repair of all Pacer Equipment included within such Equipment Force
Majeure (including payment for all maintenance and repairs) throughout
the duration of such Equipment Force Majeure Period. All Pacer
Equipment which is otherwise subject to an Equipment Force Majeure
shall be included in (and shall remain subject to) all general and
administrative billing pursuant to Article 5(b) and Schedule C of this
Agreement throughout such Equipment Force Majeure Period.
Note 6: APL Chassis. Notwithstanding anything in this Agreement to the
-----------
contrary, Transamerica shall not be required to cause the maintenance
or repair of any APL Chassis, or to pay for the maintenance and repair
of any APL Chassis, except where maintenance or repair is required
when a Pacer Container is attached thereto.
Note 7: Non-Pacer Chassis. Notwithstanding anything in this Agreement to the
-----------------
contrary, Transamerica shall not be required to cause the maintenance
or repair of any Non-Pacer Chassis, or to pay for the maintenance and
repair of any Non-Pacer Chassis, except where maintenance and repair
is required, a Pacer Container is attached thereto and Pacer has
otherwise authorized such maintenance and/or repair in accordance with
the Business Rules.
Note 8: APL Containers and Non-Pacer Containers. Transamerica shall have no
---------------------------------------
obligation to cause the maintenance and repair of any APL Container or
Non-Pacer Container.
A.2 BUSINESS RULES
------------------
1. Transamerica will cause the maintenance and repair of the following
Equipment without obtaining the prior written approval of Pacer: (a) all
Pacer Chassis which, at the time of the required maintenance or repair, do
not have Containers attached thereto; (b) all Pacer Chassis which, at the
time of the required maintenance or repair, have Pacer Containers attached
thereto; (c) all APL Chassis which, at the time of the required maintenance
or repair, have Pacer Containers attached thereto; and (d) all Pacer
Containers having maintenance or repair estimates which are less than $250
per unit.
2. Transamerica will not cause the maintenance and repair of the following
Equipment without obtaining the prior written approval of Pacer: (a) any
Pacer Chassis, which at the time of the required maintenance or repair, has
a Non-Pacer Container attached thereto; (b) any Non-Pacer Chassis which, at
the time of the required maintenance or repair, has a Pacer Container
attached thereto; (b) any Pacer Chassis which, at the time of the required
maintenance or repair, has an APL Container attached thereto; or (c) any
Pacer Container having a maintenance or repair estimate which is greater
than $250 per unit.
3. The pre-approval categories and limits contained in paragraphs 1 and 2 may
be modified by Pacer from time to time upon written notice delivered to
Transamerica at least five (5) Business Days prior to the proposed
effective date of such modification.
4. Vendors will be paid within 45 days of acceptance of invoice.
5. There will be no ▇▇▇▇-up of Vendor/supplier costs by Transamerica to Pacer.
6. Pacer will be given the benefit of any Vendor volume discounts.
7. Pacer will be notified of new Vendor/supplier arrangements in a timely
manner.
8. Transamerica will not require any Vendor in any Location to give
discriminatory preference to equipment owned or operated by Transamerica
with respect to repair schedules.
9. Beginning June 30, 2000, unless otherwise requested by Pacer in writing,
Transamerica will meet the following turn time (average by Location)
standards: (A) Repairs not requiring estimates or prior approval will be
made within two (2) Business Days following actual discovery, provided,
--------
that, all parts and materials necessary for such repair are in inventory
----
and are otherwise available. The foregoing turn time standards will not
apply to minor repairs, which, for reasons of economy, are not made until
just prior to a unit of Equipment's over-the-road usage. (B) Repairs
requiring estimates and prior approval will be made within four (4)
Business Days of issuance of the estimate and approval thereof, provided,
--------
that, all parts and materials necessary for such repair are in inventory
----
and are otherwise available. The parties acknowledge that these turn time
standards may be adversely affected by certain factors such as seasonal
deliveries during non-peak seasons and/or positioning of Equipment to a
specific Location to reduce repair costs. Such factors can adversely affect
the turn time within a specific Location and will be taken into
consideration by the parties when evaluating a vendor's performance.
10. All invoices to be audited within the system for
. duplicate invoices; and
. costs within agreed tariff and rates.
11. Transamerica will incorporate Vendors into its routine audit program.
Audits to check on performance of work within agreed upon standards.
A.3 LOCATIONS
-------------
------------------------------------------------------------------------------------------------------------------
Region Vendor Name Provides Service for:
------------------------------------------------------------------------------------------------------------------
Southern ATS (▇▇▇▇▇/NS)
------------------------------------------------------------------------------------------------------------------
Mexico Almaceenes Diversos S.A de C.V. Altamira
------------------------------------------------------------------------------------------------------------------
Mexico Container Service de mexico S. A. de C.V. Altamira
------------------------------------------------------------------------------------------------------------------
Mexico Inspecciones y Serv. Portuarios El Golfo. S.A. de C.v. Altamira
------------------------------------------------------------------------------------------------------------------
Southern Don's Trailer Repair Atlanta
------------------------------------------------------------------------------------------------------------------
Southern Peachtree Trailers Atlanta
------------------------------------------------------------------------------------------------------------------
Southern ATS Atlanta, GA (APL CY, NS)
------------------------------------------------------------------------------------------------------------------
Southern Transus Atlanta, GA (Transus CY)
------------------------------------------------------------------------------------------------------------------
Eastern Eastern America Baltimore, MD
------------------------------------------------------------------------------------------------------------------
Eastern Parsec Inc Baltimore, MD
------------------------------------------------------------------------------------------------------------------
Eastern Picorp, Inc Baltimore, MD
------------------------------------------------------------------------------------------------------------------
Eastern Cope Bestway Boston, MA
------------------------------------------------------------------------------------------------------------------
Eastern Trax Transportation Boston, MA
------------------------------------------------------------------------------------------------------------------
Southern Container Care Charleston, SC
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Charleston, SC
------------------------------------------------------------------------------------------------------------------
Southern Container Maintenance Charleston, SC (Columbus St)
------------------------------------------------------------------------------------------------------------------
Southern H&B Charleston, SC (NS/CSX)
------------------------------------------------------------------------------------------------------------------
Southern Coastal Container Charleston, SC (Opti-Trans/Wando)
------------------------------------------------------------------------------------------------------------------
Eastern Container Care Chesapeake, VA
------------------------------------------------------------------------------------------------------------------
Eastern ▇.▇. ▇▇▇▇▇ Chesapeake, VA
------------------------------------------------------------------------------------------------------------------
Chicago ECHLIN Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago M&S Transport Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago MGM Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago ▇'▇▇▇▇▇ Transportation Works Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago Pomps Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago Transportation Equipment & Service Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago U.S. Transport Repair Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago Yards Container Pool Chicago, IL
------------------------------------------------------------------------------------------------------------------
Chicago Belle Tire Cincinnati, OH
------------------------------------------------------------------------------------------------------------------
Chicago Container Port Group Cincinnati, OH
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇ Co Cincinnati, OH
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇▇ Tire Cincinnati, OH
------------------------------------------------------------------------------------------------------------------
Chicago Worthy Cartage Cincinnati, OH
------------------------------------------------------------------------------------------------------------------
Chicago Belle Tire Cleveland, OH
------------------------------------------------------------------------------------------------------------------
Chicago Container Port Group Cleveland, OH
------------------------------------------------------------------------------------------------------------------
Chicago Container Port Group Columbus, OH
------------------------------------------------------------------------------------------------------------------
Chicago Parsec Columbus, OH
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇▇ Tire Columbus, OH
------------------------------------------------------------------------------------------------------------------
SW QTS Dallas (BN)
------------------------------------------------------------------------------------------------------------------
SW ATS Dallas (CY)
------------------------------------------------------------------------------------------------------------------
SW K&R Dallas (UP)
------------------------------------------------------------------------------------------------------------------
SW Equipment Storage Services Dallas, TX
------------------------------------------------------------------------------------------------------------------
PSW Complete Container Services Denver CO
------------------------------------------------------------------------------------------------------------------
PSW Crown Container Denver CO
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Region Vendor Name Provides Service for:
------------------------------------------------------------------------------------------------------------------
Chicago Belle Tire Detroit, MI
------------------------------------------------------------------------------------------------------------------
Chicago Container Port Group Detroit, MI
------------------------------------------------------------------------------------------------------------------
Chicago Tri-Modal Detroit, MI
------------------------------------------------------------------------------------------------------------------
SW ERO Enterprises El Paso, TX (All)
------------------------------------------------------------------------------------------------------------------
Mexico Logistica de Terminal de Contenedores S.A. de C.V. Ensenada
------------------------------------------------------------------------------------------------------------------
PSW C&R Tire Service Fontana, CA
------------------------------------------------------------------------------------------------------------------
Eastern GPS Terminal Services Harrisburg, PA
------------------------------------------------------------------------------------------------------------------
Eastern Transcorp Harrisburg, PA
------------------------------------------------------------------------------------------------------------------
Mexico ▇▇▇▇▇ ▇.▇. de ▇.▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Mexico Llantera ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
SW ATS Houston, TX
------------------------------------------------------------------------------------------------------------------
SW Container Care Houston, TX
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Houston, TX
------------------------------------------------------------------------------------------------------------------
SW Intermodal Services Houston, TX
------------------------------------------------------------------------------------------------------------------
Chicago Container Port Group Indianapolis, IN
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇▇ Tire Indianapolis, IN
------------------------------------------------------------------------------------------------------------------
Chicago XMGM Indianapolis, IN
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Jacksonville, FL
------------------------------------------------------------------------------------------------------------------
Southern Transportation Equipment Specialist Jacksonville, FL
------------------------------------------------------------------------------------------------------------------
Southern XMGM Jacksonville, FL
------------------------------------------------------------------------------------------------------------------
Southern Diamond Trailer Jacksonville, FL (NS)
------------------------------------------------------------------------------------------------------------------
Chicago Clays Tire Service Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago KRJ Trailer Repair Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago MoKan Container Services Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇ Trailer Repair Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago ▇'▇▇▇▇▇ Transportation Works Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago Tri-Model Kansas City
------------------------------------------------------------------------------------------------------------------
Chicago Western Trailer Kansas City
------------------------------------------------------------------------------------------------------------------
Southern Truck 'N Trailer Lake Charles, LA
------------------------------------------------------------------------------------------------------------------
Eastern Parsec Inc Langhorne, PA
------------------------------------------------------------------------------------------------------------------
Southern Intermodal Services Laredo, TX
------------------------------------------------------------------------------------------------------------------
PSW Total Intermodal Services Los Angeles CA (▇▇▇▇▇▇ Yard, UP, +
Misc locations)
------------------------------------------------------------------------------------------------------------------
PSW Container Works Los Angeles CA (Misc locations)
------------------------------------------------------------------------------------------------------------------
PSW P&J Trailer Repair Los Angeles CA (Misc locations)
------------------------------------------------------------------------------------------------------------------
PSW Intermodal Maintenance Services Los Angeles, CA (City of Industry,
ICTF)
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇ Commercial Storage Louisville, KY
------------------------------------------------------------------------------------------------------------------
Chicago ▇▇▇▇▇▇▇ Tire Louisville, KY
------------------------------------------------------------------------------------------------------------------
Mexico Refrigerated Container Service de Mexico S.A. de C.V. Manzanillo
------------------------------------------------------------------------------------------------------------------
SW ATS Memphis, TN (BN)
------------------------------------------------------------------------------------------------------------------
SW Delta Memphis, TN (UP)
------------------------------------------------------------------------------------------------------------------
SW Mr. Maintenance Memphis, TN (UP)
------------------------------------------------------------------------------------------------------------------
Mexico Kawasakikisen de Mexico S.A. de C.V. Mexico
------------------------------------------------------------------------------------------------------------------
Mexico Logistica de Terminal de Contenedores S.A. de C.V. Mexico
------------------------------------------------------------------------------------------------------------------
Southern Southestern Trailer Miami, FL (CY)
------------------------------------------------------------------------------------------------------------------
Southern Diamond Trailer Miami, FL (FEC)
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Region Vendor Name Provides Service for:
------------------------------------------------------------------------------------------------------------------
Southern Anchor Repair Miami, FL (Port)
------------------------------------------------------------------------------------------------------------------
Chicago Jet Intermodal Milwaukee, WI
------------------------------------------------------------------------------------------------------------------
Chicago Tri-Model Minneaplois, MN
------------------------------------------------------------------------------------------------------------------
SW Choctaw Mobile, AL (All)
------------------------------------------------------------------------------------------------------------------
Canada ATS Montreal
------------------------------------------------------------------------------------------------------------------
Southern Tenmet, Inc. Nashville, TN
------------------------------------------------------------------------------------------------------------------
SW Avondale New Orleans
------------------------------------------------------------------------------------------------------------------
SW Container Care New Orleans
------------------------------------------------------------------------------------------------------------------
SW PTRS-NOLA New Orleans
------------------------------------------------------------------------------------------------------------------
Eastern ▇▇▇▇▇▇ Industries Newark, NJ
------------------------------------------------------------------------------------------------------------------
Pac Central Container Works Oakland, CA
------------------------------------------------------------------------------------------------------------------
Pac Central Hawk Intermodal Oakland, CA
------------------------------------------------------------------------------------------------------------------
Pac Central Intermodal Maintenance Services Oakland, CA
------------------------------------------------------------------------------------------------------------------
Pac Central Pacific Coast Retreaders Oakland, CA
------------------------------------------------------------------------------------------------------------------
Chicago Tri-Model Omaha, NE
------------------------------------------------------------------------------------------------------------------
Chicago TSL Omaha, NE
------------------------------------------------------------------------------------------------------------------
Chicago TTG Tire Repair Omaha, NE
------------------------------------------------------------------------------------------------------------------
Chicago ITC OTR
------------------------------------------------------------------------------------------------------------------
Eastern Eastern America Philadelphia, PA
------------------------------------------------------------------------------------------------------------------
Chicago G.P.S. Pittsburgh, PA
------------------------------------------------------------------------------------------------------------------
PNW Container Care Portland, OR
------------------------------------------------------------------------------------------------------------------
PNW Portland Container Repair Inc Portland, OR
------------------------------------------------------------------------------------------------------------------
Mexico Logistica de Terminal de Contenedores S.A. de C.V. Queretaro
------------------------------------------------------------------------------------------------------------------
Mexico Logistica de Terminal de Contenedores S.A. de ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------------------------------------------------------------------------
Pac Central ▇▇▇ & Sons Sacramento, CA
------------------------------------------------------------------------------------------------------------------
PSW Intermountain Welding Salt Lake City, UT
------------------------------------------------------------------------------------------------------------------
Mexico Logistica de Terminal de Contenedores S.A. de C.V. Saltillo
------------------------------------------------------------------------------------------------------------------
PSW Border Tire San Diego, CA
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Savannah, GA
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Savannah, GA (CY)
------------------------------------------------------------------------------------------------------------------
Southern ATS Savannah, GA (NS)
------------------------------------------------------------------------------------------------------------------
PNW Container Care Seattle, WA (UP)
------------------------------------------------------------------------------------------------------------------
Southern GLOBAL (Itel) Seattle, WA (UP)
------------------------------------------------------------------------------------------------------------------
PNW Puget Sound Mobile Trailer Repair Seattle, WA (UP)
------------------------------------------------------------------------------------------------------------------
Eastern H&M South Kearny, NJ
------------------------------------------------------------------------------------------------------------------
Chicago C.P.G St. Louis, MO
------------------------------------------------------------------------------------------------------------------
Chicago MFR Tires St. Louis, MO
------------------------------------------------------------------------------------------------------------------
Chicago Midwest Systems St. Louis, MO
------------------------------------------------------------------------------------------------------------------
Chicago ▇'▇▇▇▇▇ Transportation Works St. Louis, MO
------------------------------------------------------------------------------------------------------------------
Chicago Container Base St. ▇▇▇▇, MN
------------------------------------------------------------------------------------------------------------------
Pac Central XMGM Stockton, Modesto, CA
------------------------------------------------------------------------------------------------------------------
Eastern Penn Truck Lines Syracuse, NY
------------------------------------------------------------------------------------------------------------------
Southern ▇▇▇▇▇ Mechanical Tampa, FL (All)
------------------------------------------------------------------------------------------------------------------
Chicago Whiteacre Toledo, OH
------------------------------------------------------------------------------------------------------------------
Canada Central Mobile Toronto
------------------------------------------------------------------------------------------------------------------
Canada Precision Metals Toronto
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
Region Vendor Name Provides Service for:
------------------------------------------------------------------------------------------------------------------
Canada Speedway Tire and Service Toronto
------------------------------------------------------------------------------------------------------------------
PSW Interstar VARIOUS
------------------------------------------------------------------------------------------------------------------
Mexico Container Care Veracruz
------------------------------------------------------------------------------------------------------------------
Mexico Reparaciones Integrales de Contenedores S.A. Veracruz
------------------------------------------------------------------------------------------------------------------
Chicago Belle Tire Woodhaven
------------------------------------------------------------------------------------------------------------------
Chicago G.P.S. Woodhaven
------------------------------------------------------------------------------------------------------------------
Chicago XMGM Woodhaven
------------------------------------------------------------------------------------------------------------------
Southern IMPACT Charleston, SC, Savannah, GA,
Charlotte, NC
------------------------------------------------------------------------------------------------------------------
Southern Sail Orlando, FL
------------------------------------------------------------------------------------------------------------------
A.4 NON-EXCLUSIVE LOCATION FORM
-------------------------------
The undersigned parties to that certain Equipment Services Agreement
dated December 31, 1999 (the "Agreement"), in accordance with to Article 2(b) of
the Agreement, hereby designate the following location to be a Non-Exclusive
Location for the period designated below:
Region: ___________________________________________
Vendor Name(s): _________________________________________
_________________________________________
_________________________________________
Reason(s): _________________________________________
Period: _________________________________________
No. Pacer Chassis Affected: ___________________________________
Date: _________________________________________
PACER INTERNATIONAL INC.
By: __________________________
SCHEDULE B
----------
MAINTENANCE AND REPAIR RATES
----------------------------
Chassis: $1.20 per unit per day
-------
Aluminum Containers: $0.58 per unit per day
-------------------
Steel Containers: $0.23 per unit per day
----------------
The parties acknowledge that the foregoing rates are subject to upward or
downward adjustment based upon the six month review and adjustment provisions
contained in Article 5(f) of this Agreement.
The Chassis rate is based upon the following cost assumptions as of the
Effective Date of the Agreement:
------------------------------------------------------------------------------
AVERAGE COST COST PER UNIT PER PERCENT OF
REPAIR per incident DAY DAILY RATE
------------------------------------------------------------------------------
Tires $56.00 $.672 56%
------------------------------------------------------------------------------
FHWA/BIT $36.00 $.072 6%
------------------------------------------------------------------------------
Landing Gear $51.00 $.132 11%
------------------------------------------------------------------------------
Brakes $39.00 $.072 6%
------------------------------------------------------------------------------
Electrical $16.00 $.108 9%
------------------------------------------------------------------------------
Securing Devices $22.00 $.048 4%
------------------------------------------------------------------------------
Other Damage $.096 8%
------------------------------------------------------------------------------
TOTAL $1.20
------------------------------------------------------------------------------
Note: The Maintenance and Repair Rates listed on this Schedule B are applicable
----
to all Pacer Containers and Pacer Chassis, and the only exceptions
thereto are the billing exceptions set forth in Schedule A.1, Notes 3, 4
and 5.
SCHEDULE C
----------
GENERAL AND ADMINISTRATIVE RATES
--------------------------------
----------------------------------------------------------
PACER CHASSIS PACER CONTAINERS
----------------------------------------------------------
$0.146 per unit per day $0.117 per unit per day
----------------------------------------------------------
The foregoing rates are comprised of individual Hardware-Software rates and
Administration rates, which are as follows:
--------------------------------------------------------------------------
PACER CHASSIS PACER CONTAINERS
--------------------------------------------------------------------------
Hardware-Software Administration Hardware-Software Administration
--------------------------------------------------------------------------
$.060 $.086 $.048 $.069
--------------------------------------------------------------------------
EDI Transaction Costs. The foregoing rates include EDI transaction costs
---------------------
(included in Hardware-Software) and are based on a maximum of 25,000
transactions per month. If actual EDI transactions exceed this number by 5% or
more in any month, Transamerica shall ▇▇▇▇ ▇▇▇▇▇, and Pacer shall pay, for all
transactions in excess of 25,000 transactions for that month at a rate of four
cents ($0.04) per transaction.
Note: The General and Administrative Rates listed on this Schedule C are
----
applicable to all Pacer Chassis and Pacer Containers and the only
exception thereto is the billing exception set forth in Schedule A.1,
Note 3.
SCHEDULE C.1
------------
SAMPLE BILLING FORMAT
---------------------
--------------------------------------------------------------------------------------------------------------------------------
Steel Aluminum
--------------------------------------------------------------------------------------------------------------------------------
Chassis Containers Containers Total
--------------------------------------------------------------------------------------------------------------------------------
Monthly Billing: Maintenance and Repair Management Services
--------------------------------------------------------------------------------------------------------------------------------
Maintenance and Repair Billing as Per Schedule B
--------------------------------------------------------------------------------------------------------------------------------
Total Days for All Pacer Equipment in Stacktrain System 713,000 217,000 465,000 1,395,000
--------------------------------------------------------------------------------------------------------------------------------
Less Free Period for New Equipment as per Schedule A.1, Note 3 (15,500) (3,100) (9,300) (27,900)
--------------------------------------------------------------------------------------------------------------------------------
Less Pacer Equipment in Non-Exclusive Location 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
Less Pacer Equipment subject to Equipment Force Majeure 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
Pacer Equipment Days 697,500 213,900 455,700 1,367,100
--------------------------------------------------------------------------------------------------------------------------------
Maintenance and Repair Rate Per Day as Per Schedule B $ 1.20 $ 0.23 $ 0.58
--------------------------------------------------------------------------------------------------------------------------------
Maintenance and Repair Billing as Per Schedule B and Article 5(b) $837,000 $ 49,197 $264,306 $1,150,503
--------------------------------------------------------------------------------------------------------------------------------
General and Administrative Billing as per Schedule C
--------------------------------------------------------------------------------------------------------------------------------
Total Days for All Pacer Equipment in Stacktrain System 713,000 217,000 465,000 1,395,000
--------------------------------------------------------------------------------------------------------------------------------
Less Free Period for New Equipment as per Schedule A.1, Note 3 (15,500) (3,100) (9,300) (27,900)
--------------------------------------------------------------------------------------------------------------------------------
Pacer Equipment Days 697,500 213,900 455,700 1,367,100
--------------------------------------------------------------------------------------------------------------------------------
General and Administrative Rate Per Day as Per Schedule C $ 0.146 $ 0.117 $ 0.117
--------------------------------------------------------------------------------------------------------------------------------
General and Administrative Billing as per Schedule C and Article 5(b) $101,835 $ 25,026 $ 53,316 $ 180,177
--------------------------------------------------------------------------------------------------------------------------------
Conspicuity Billing as Per Article 5(i) (Transamerica Chassis)
--------------------------------------------------------------------------------------------------------------------------------
Net Chassis Days as Indicated Above 697,500
--------------------------------------------------------------------------------------------------------------------------------
Conspicuity Rate Per Day as Per Schedule F $ 0.027
--------------------------------------------------------------------------------------------------------------------------------
Conspicuity Billing as per Article 5(i) and Schedule F $ 18,833 $ 18,833
--------------------------------------------------------------------------------------------------------------------------------
Billing for Lease Termination Repairs on Equipment Terminated to Owner
(Article 5(j))
--------------------------------------------------------------------------------------------------------------------------------
Analysis to be provided $ 3,000 $ 2,000 $ 1,000 $ 6,000
--------------------------------------------------------------------------------------------------------------------------------
Billing for Actual Repairs on New Equipment
(Schedule A.1, Note 3)
--------------------------------------------------------------------------------------------------------------------------------
Analysis to be provided $ 2,000 $ 1,000 $ 500 $ 3,500
--------------------------------------------------------------------------------------------------------------------------------
Total Monthly Billing $964,931 $ 77,586 $320,211 $1,362,728
--------------------------------------------------------------------------------------------------------------------------------
47
SCHEDULE C.2
------------
COST SAVINGS FEE SCHEDULE
-------------------------
2000
----
------------------------------------------------------------------------------------------
Up to $.01 savings $ 0
------------------------------------------------------------------------------------------
between $.01 and $.02 $ 32,000
------------------------------------------------------------------------------------------
between $.02 and $.03 $ 63,000
------------------------------------------------------------------------------------------
between $.03 and $.04 $ 103,000
------------------------------------------------------------------------------------------
between $.04 and $.05 $ 135,000
------------------------------------------------------------------------------------------
over $.05 $ 150,000 plus $30,000 for each additional $.01 or
part thereof
------------------------------------------------------------------------------------------
2001
----
------------------------------------------------------------------------------------------
Up to $.01 savings $ 0
------------------------------------------------------------------------------------------
between $.01 and $.02 $ 43,000
------------------------------------------------------------------------------------------
between $.02 and $.03 $ 86,000
------------------------------------------------------------------------------------------
between $.03 and $.04 $ 138,000
------------------------------------------------------------------------------------------
between $.04 and $.05 $ 180,000
------------------------------------------------------------------------------------------
over $.05 $ 200,000 plus $40,000 for each additional $.01 or
part thereof
------------------------------------------------------------------------------------------
Note: The foregoing fees shall apply with respect to Pacer Containers and Pacer
----
Chassis, as provided in Article 5(g) of this Agreement.
SCHEDULE D
----------
ADJUSTMENT AND RECONCILIATION EXAMPLES
--------------------------------------
D.1 CONTAINER THREE AND SIX MONTH REVIEW AND ADJUSTMENT.
--------------------------------------------------------
The following are examples of the Three and Six Month Review and Adjustment
Process described in Article 5(f)f(ii) and (iii) for Aluminum and Steel
Containers:
Steel Aluminum
----- --------
Containers Containers Total
---------- ---------- -----
Actual Repair Cost Calculation
------------------------------
Actual Repair Cost For the Period $133,800 $ 870,800 $1,004,600
Pacer Equipment Days (C) 637,000 1,456,000
Actual Cost Per Day (B) $ 0.210 $ 0.598
======================
Calculation of Repair Cost Using Rates on Schedule B
----------------------------------------------------
Pacer Equipment Days (C) 637,000 1,456,000
Rates Per Schedule B $ 0.23 $ 0.58
----------------------------------
▇▇▇▇▇▇▇▇ Per Schedule B $146,510 $ 844,480 $ 990,990
----------------------------------
Shortage (Overage) $ 13,610
1% of ▇▇▇▇▇▇▇▇ (A) 9,910
------------
Payment From (To) Pacer $ 3,700
============
Note (A): Amount should be deducted from payments due to Pacer when there is
overage
Note (B): The subsequent period maintenance and repair per day charges will be
adjusted to these amounts
Note (C): Pacer Equipment Days for use on this Schedule will be those reported
in the monthly ▇▇▇▇▇▇▇▇ by Transamerica to Pacer for the
corresponding period.
D.2 CHASSIS SIX MONTH REVIEW AND ADJUSTMENT
--------------------------------------------
The following is an example of the Six Month Review and Adjustment Process
described in Article 5(ii) and (iii) for Chassis Assumptions: Previous Chassis
billing rate = $1.20
Basis of Previous/Initial Rate Actual Experience for Period
Actual Cost
Cost Per Day Per Day (C)
Repair Average Cost Per Chassis Percent Average Cost Per Chassis Percent
------ ------------ ----------- ------- ------------ ----------- -------
Tires $ 56.00 $ 0.672 56% $58.00 $0.696 56%
FHWA/BIT $ 36.00 $ 0.072 6% $40.00 $0.080 6%
Landing Gear $ 51.00 $ 0.132 11% $52.00 $0.135 11%
Brakes $ 39.00 $ 0.072 6% $37.00 $0.068 6%
Electrical $ 16.00 $ 0.108 9% $17.50 $0.118 10%
Securing Devices $ 22.00 $ 0.048 4% $21.00 $0.046 4%
Other Damage $ 0.096 8% $0.096 8%
---------- ------
Total Chassis $ 1.20 $1.239
========== ======
Calculation of the Adjustment
-----------------------------
Actual Cost Per Day $1.239
Unallowable FHWA/BIT Adjustment (B) $0.008
------
Actual Cost for Adjustment (B) $1.231
======
Three and Six Month Reconciliations Chassis
Actual Repair Cost Calculation
Total Maintenance and Repair Cost for the Period $2,534,302
Less
Billing for Lease Termination Repairs (D) $ 10,000
Billing for Actual Repairs on New Equipment
(Free Period) (D) $ 10,000
----------
Actual Repair Cost $2,514,302
Unallowable FHWA/BIT
Rate per day $ 0.008
Pacer Equipment Days (E) 2,029,300
----------
$ 16,234
----------
$2,498,068
----------
Calculation of ▇▇▇▇▇▇▇▇ Using Rates on Schedule B
Pacer Equipment Days (E) 2,029,300
Rates Per Schedule B $ 1.20
----------
▇▇▇▇▇▇▇▇ Per Schedule B $2,435,160
----------
Overage (Shortage) (A) $ 79,142
==========
Note (A): Overages are to be paid to Transamerica by Pacer. Shortages are to be
paid by Transamerica to Pacer.
Note (B): The subsequent period's maintenance and repair per day charge will be
adjusted to this amount.
Note (C): Figures are based on Actual Repair Costs.
Note (D): These amounts have been deducted prior to calculating Actual Costs
Per day.
Note (E): Pacer Equipment Days for use on this Schedule will be those reported
in the monthly ▇▇▇▇▇▇▇▇ by Transamerica to Pacer for the
corresponding period.
D.3 12 AND 24 MONTH RECONCILIATION
-----------------------------------
The following is an example of the and 12 and 24 month reconciliations for
Chassis and Containers described in Article 5(g).
TWELVE MONTH RECONCILIATION
Chassis
-------
Basis for Cost Savings Calculation Chassis
-------
Pacer Equipment Days - Chassis
Three Month Reconciliation dated June 30, 2000 2,029,300
Six Month Reconciliation dated December 31, 2000 4,261,530
--------------
6,290,830
--------------
Pacer Actual Repair Costs from
Three Month Reconciliation dated March 31,2000 $2,498,068
Six Month Reconciliation dated December 31, 2000 $4,496,522
--------------
$6,994,589
--------------
Pacer Actual Cost Per Day $ 1.112
Assumed Cost Per Day per Schedule B $ 1.20
--------------
Pacer Actual Cost per day (Less than), Greater than Maintenance
and Repair Rates per Article 5(g) ($0.088)
--------------
Containers Steel Aluminum
---------- ---------- ----------
Containers Containers Total
---------- ---------- ----------
Basis for Cost Savings Calculation
Pacer Equipment Days - Containers
Three Month Reconciliation dated June 30, 2000
Six Month Reconciliation dated December 31, 2000 637,000 1,456,000 2,093,000
1,337,700 3,057,600 4,395,300
---------------------------------------
1,974,700 4,513,600 6,488,300
---------------------------------------
Pacer Actual Repair Costs from
Three Month Reconciliation dated March 31,2000
Six Month Reconciliation dated December 31, 2000 $ 133,800 $ 870,800 $1,004,600
$ 350,000 $1,567,440 $1,917,440
---------------------------------------
$ 483,800 $2,438,240 $2,922,040
---------------------------------------
Pacer Actual Cost Per Day $ 0.4504
==========
Assumed Cost Per Day per Article 5(g)
Pacer Equipment Days - Containers 1,974,700 4,513,600 6,488,300
---------------------------------------
Rates Per Day as per Article 5(g) $ 0.23 $ 0.58
---------------------------------------
Assumed Cost $ 454,181 $2,617,888 $3,072,069
---------------------------------------
Assumed Cost Per Day per Article 5(g) $ 0.4735
Pacer Actual Cost per day (Less than), Greater than Maintenance
and Repair Rates per Article 5(g) ($0.0231)
==========
Note: The twenty four month analysis would be done in the same manner but would
----
use the data taken from the June 30, 2001 and December 31, 2001 six month
reconciliations.
SCHEDULE E
----------
EARLY TERMINATION RATES
-----------------------
-----------------------------------------------------------
PACER CHASSIS PACER CONTAINERS
-----------------------------------------------------------
Year 1 $0.031 per unit per day $0.031 per unit per day
-----------------------------------------------------------------------------------------
Year 2 $0.008 per unit per day $0.008 per unit per day
-----------------------------------------------------------------------------------------
Note: The Early Termination Rates listed on this Schedule E are applicable to
----
Pacer Chassis and Pacer Containers in accordance with Article 6(e) of
this Agreement.
SCHEDULE F
----------
CONSPICUITY CHARGES
-------------------
Transamerica shall ▇▇▇▇ and Pacer shall pay during the first 18 months of
this Agreement, January 1, 2000 - June 30, 2001, $.027 per Pacer Chassis per day
for each Pacer Chassis in the Stacktrain System to cover the cost of applying
reflective material to all Pacer Chassis owned by Transamerica and leased to
Pacer which require such reflective material. In the event that this Agreement
is terminated prior to June 30, 2001, Transamerica shall ▇▇▇▇ and Pacer shall
pay One Hundred Dollars ($100.00) for each and every Pacer Chassis (owned by
Transamerica) to which reflective material was applied, less any and all amounts
previously billed by Transamerica and paid by Pacer for such unit(s) pursuant to
the first sentence of this Schedule F. Any costs incurred to apply reflective
material to Pacer Chassis which are not owned by Transamerica shall be billed by
Transamerica and paid by Pacer on a monthly basis in accordance with Article 5
of this Agreement.
