Port Drayage Tractor Replacement Program

TABLE OF CONTENTS

PAGE

The Issue 1

EPA Diesel Engine Standards 2

Evans Fleet by Model Year 3

Proposal/Concept 4

Financial Structure 5

Replacement Tractor Specifications 5

Independent Contractor Qualifications &
Conditions 6

Tractor Lease/Purchase Example - 2007 7

Tractor Lease/Purchase Example - 2006 8

Program Partners 9

Who We Are: Evans Network 10-11

Who We Are: Ameriquest Transportation 12

Who We Are: Cure Leasing & Maintenance 13

Appendix 1: Truck Specifications 14-15

Appendix 2: Service & Maintenance Program 16-17

Appendix 3: Maintenance Expenditure
Worksheet 18

Appendix 4: Lease Form 19-23

Appendix 5: Maintenance Program Agreement 24-28

THE ISSUE

The Port Drayage industry is predominately serviced by independent
contractors operating their own tractors which they have leased to
motor carriers. Due to the economic realities of the Port Drayage
business, these independent contractors usually purchase older used
tractors which have been in service in long-haul freight transporta-
tion.

Surveys have shown that the average tractor used in Port Drayage is
more than ten years old. The Evans’ Port Drayage fleet mirrors this
with an average age of eleven years.

The following chart illustrates the distribution of the Evans’ fleet by
manufacturers' model year. This char also shows the EPA Heavy
Duty Diesel Engine Standards for PM and NOx.

PORT DRAYAGE TRACTOR REPLACEMENT PROGRAM - PAGE 1

EPA DIESEL ENGINE STANDARDS

The following chart lists the EPA Heavy Duty Diesel Engine Stan-
dards from 1984 to 2007. All engines manufactured during these
periods were required to meet these standards.

MODEL YEARS EPA EPA PM After DMF
NOx STANDARDS PARTICULATE Retrofit*
MATTER (PM)
STANDARDS
2007-2010 0.2 PM .01 N/A

2004-2006 2.4 PM .10 .05 -.04

1998-2003 4.0 PM .10 .05 - .04

1994-1997 5.0 PM .10 N/A

1991-1993 5.0 PM .25 N/A

1984-1990 10.7 PM .60 N/A

< 1984 N/A N/A N/A

* After retrofitting Donaldson Diesel Multistage Filter.

The following chart graphically illustrates the relative differences in
the EPA Particulate Matter (PM) standards, by year.


EVANS FLEET BY MODELYEAR

This chart shows the number of Evans’ Independent Contractor
Tractors in each of the EPA Engine Standards category.

MODEL YEARS Number Percentage Percentage
of of of
Tractors Fleet PM Emissions *

2007-2009 36 2.3% 0.2%

2004-2006 131 8.7% 7.2%

1998-2003 905 60.2% 49.6%

1994-1997 320 21.2% 17.6

1991-1993 63 4.2% 8.6%

1984-1990 47 3.1% 15.5%

< 1984 4 0.3% 1.3%

TOTAL 1,506 100.0% 100.0%

* Weighted average PM emissions based on EPA Heavy Duty Diesel Engine Standards.

Our goal is to focus on the replacement of the tractors in the “Red
Zone” first. Since these tractors have the heaviest emissions NOx =
10.7-5.0 g/bhp-hr and PM = .60-.25 g/bhp-hr we will target the
first phase of this program towards the “Red Zone” equipment.
While the “Red Zone” tractors account for only 7.6% of the fleet
these same tractors, based on a conservative estimate, account for
25.4% of PM emissions. Subsequently, we would direct our efforts
to the older “Yellow Zone” vehicles.

No. of Tractors Percentage
RED ZONE 114 7.6%
YELLOW ZONE 1,356 90.0%
GREEN ZONE 36 2.4%


PROPOSAL/CONCEPT

Our primary goal is to replace the 1993 and older Port Drayage trac-
tor equipment. This would be accomplished in the following manner.

Currently, Evans has 114 of these independent contractors in the
fleet.

1. Tractors would be purchased through the Ameriquest Asset Man-
agement system from Ameriquest member truck leasing compa-
nies. All maintenance records would be provided. The balance of
any remaining warranty would be included.
2. Tractors would be equipped with a GPS tracking device in order to
locate the vehicle in the event that it becomes necessary.
3. Tractors would be equipped with anti-idling technology such as
Espar Cab Heaters (where appropriate).
4. Where necessary and beneficial, tractors would be equipped with
the appropriate emission reduction devices such as Donaldson
Diesel Multistage filters or Diesel Oxidation Catalysts filters.
5. The vehicle being replaced would be salvaged so that it could not
be resold or exported.
6. Interested independent contractors would be screened and quali-
fied in order to participate in the program.
7. Independent contractors would lease purchase the newer tractor
on a 36 to 48 month direct finance lease with an option to pur-
chase the tractor at the expiration of the lease.
8. The conditions of the program would require that if the independ-
ent contractor decided to terminate his/her relationship with Ev-
ans they would be required to buy the vehicle at a predetermined
price (per the lease) or return the vehicle to Evans so that the ve-
hicle could be re-seated.


FINANCIAL STRUCTURE

• Grant Funds: Down Payment $15,000 for a 2007 Tractor and
$10,000 for a 2006 Tractor.

• Evans Matching funds: $3,500 (used to purchase the vehicle
being replaced)

• Driver Payment Escrow: Three (3) Payments (May be waived)

• Leasing Company/Lender Funds: Balance

• Direct finance lease from Cure Leasing & Maintenance, LLC. The
term would be dependent on the age of the tractor, at acquisi-
tion.
Model Year 2007 = 48 Months
Model Year 2006 = 36 Months

• $5,600 to $8,000 purchase option at the end of the term.

• Possible warranty purchase and replacement vehicle insurance

• Evans to collect the payments, from independent contractor set-
tlements and remit to Cure Leasing & Maintenance

• Evans guarantees re-seating of the vehicle in the event of
default

REPLACEMENT TRACTOR SPECIFICATIONS

Year(s): 2006-2007
Type: Day Cab or Sleeper
Manufacturer(s): Freightliner, International, Volvo
Engine(s): Cummins or Detroit Diesel
Horsepower Range: 400-450


INDEPENDENT CONTRACTOR
QUALIFICATIONS & CONDITIONS
• Contracted to Evans for a minimum of two (2) years.

• Clean driving record, no accidents, no claims.

• No bankruptcy within the last five (5) years.

• Works consistently each week.

• Escrow requirements fully met

• Maintenance reserve fund active

• No outstanding loans or advances from Evans.

• Must meet down payment requirement.

• Must have clear title to 1997 or older tractor. Must show proof of
ownership for a period of two years.

• Must have a valid TWIC card.

• Must agree to allow installation of GPS tracking device or Vehicle
Locator device.

• Sign a direct finance lease with Cure Maintenance and Leasing.

• Agree to remain in the Port Drayage business for the duration of
the lease. Lessee will have purchase options.

• Submit photographs of the vehicle to be taken out of service, in-
cluding all sides, VIN, engine serial number, odometer and license
plate.


TRACTOR PURCHASE EXAMPLE
2007 International 9400i 435 HP

48 Month Term

Purchase Price (Estimated) Includes GPS and Anti- Idling $36,000
Equipment where appropriate 1
Grant for Down Payment $15,000

Evans Matching Funds (Trade in & Disposal) $3,500

Net Cost $17,500
Capitalized Cost $17,500

Monthly Lease Payment (48 Month Term) (Purchase Op- $525.00
tion at the end of the lease $8,000)
Monthly License Tag and HVUT Reserve $196.00
2
Monthly Maintenance Reserve $583.00

Total Monthly Cost $1,304.00

Weekly Cost $300.93

1. Purchase price is estimated and will be subject to used truck market conditions and may vary at the
time of acquisition.
2. Monthly Maintenance reserve is to be capped at $5,000. See appendices 2 and 3 for details.


TRACTOR PURCHASE EXAMPLE
2006 Freightliner, Cummins 450 HP

36 Month Term
Purchase Price (Estimated) Includes GPS, Anti-Idling $30,000
Equipment and DMF1
Grant for Down Payment $10,000

Evans Matching Funds (Trade in & Disposal) $3,500

Net Cost $16,500

Capitalized Cost $16,500

Monthly Lease Payment (36 Month Term) (Purchase Op- $503.00
tion at the end of the lease $5,600)
Monthly License Tag and HVUT Reserve $196.00

Monthly Maintenance Reserve2 $583.00

Total Monthly Cost $1,282.00

Weekly Cost $295.85

1. Purchase price is estimated and will be subject to used truck market conditions and may vary at the
time of acquisition.
2. Monthly Maintenance reserve is to be capped at $5,000. See appendices 2 and 3 for details.


PROGRAM PARTNERS


The Evans Network of Companies is comprised of nine affiliated companies provid-
ing truck transportation services in the forty-eight contiguous states. The Evans
Network was founded in 1939 in Pottsville, Pennsylvania.

Our primary business focus is on the international container drayage transporta-
tion business serving all major East Coast marine ports and major railroad facili-
ties.


OPERATING STATISTICS

$235,000,000 Annual Revenue (2009 est.)
325,000 Container Drayage Shipments
149,000 LTL Shipments
47,000 Van Truckload Shipments
1,506 Tractors
500 Dry Van Trailers
100 Operating Service Centers

PORTS AND RAIL FACILITIES SERVICED BY EVANS


AmeriQuest is a leading provider of comprehensive fleet management ser-
vices. By leveraging the strength of over 700,000 vehicles, AmeriQuest deliv-
ers savings, expertise, and opportunities to its private fleet and truckload carrier
members. AmeriQuest provides supply management services, asset manage-
ment services, material handling services, financing, technology products, and
outsourced transportation management services such as full service leasing, in-
tegrated logistics, and contract maintenance.

Capital Equipment
By leveraging the strength of more than 700,000 vehicles in our network, we
can provide the same procurement savings as large-scale corporate entities.
Our supply management program includes more than 70 leading manufacturers
of fleet-related equipment, parts, and supplies.

Vehicle Remarketing
AmeriQuest provides vehicle remarketing services for their members. Ameri-
Quest has a network of more than 1,850 truck and equipment dealers.

Financing
AmeriQuest leverages its intimate knowledge of fleet operations, equipment
components, maintenance, remarketing, and industry trends to provide a flexi-
ble finance solution designed specifically to increase productivity and lower
overall operating costs.

About NationaLease
NationaLease is one of the largest full service truck leasing organizations in
North America, with more than 600 services locations throughout the U.S. and
Canada, a combined customer fleet of 125,000 tractors, trucks, and trailers, and
annual revenue in excess of $4 billion. The company provides comprehensive
services for private fleets and transportation service providers and now com-
prises 175 independent businesses employing 22,000 people.

For more information see: www.ameriquestcorp.com


CURE Leasing and Maintenance, LLC (CURE) provides financing
solutions and maintenance services to independent contractors and
contract carriers that are affiliated with delivery and logistics compa-
nies.

CURE Leasing and Maintenance programs provide independent
contractors/owner operators with the solutions they need to get on
the road and stay on the road. CURE has many years of experience
working with independent contractors / owner operators.

CURE Leasing and Maintenance was founded in 2004 to provide
a superior leasing solution to independent contractors and contract
carriers. While CURE original mission was to provide a financing al-
ternative for independent drivers, the service offering expanded rap-
idly.

In 2005, CURE added a maintenance program to help contractors
minimize cost and maximize the return on their maintenance spend-
ing. Registration Services and Insurance options were added in 2006
making CURE Leasing and Maintenance a “one stop” shop for con-
tractors around the country.

For more information see: www.cureleasing.com


APPENDIX 1 - Page 1


APPENDIX 1 - Page 2


APPENDIX 2 - Page 1


APPENDIX 2 - Page 2


APPENDIX 3
MAINTENANCE EXPENDITURE WORKSHEET


APPENDIX 4 - Page 1
LEASE FORM


APPENDIX 4 - Page 2
LEASE FORM


APPENDIX 4 - Page 3
LEASE FORM


APPENDIX 4 - Page 4
LEASE FORM


APPENDIX 5 - Page 1
MAINTENANCE PROGRAM AGREEMENT


APPENDIX 5 - Page 2


APPENDIX 5 - Page 3


APPENDIX 5 - Page 4


APPENDIX 5 - Page 5


Port Drayage Tractor Replacement Program

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Port Drayage Tractor Replacement Program