TERMINATION AND RELEASE
AGREEMENT
Termination and
Release Agreement dated as of July 22, 2008 (this “
Agreement ”) is by and between Railway &
Industrial Services, Inc., (“ RIS ”) and
Chartwell International, Inc., (“ Chartwell
”).
WHEREAS, RIS
and Chartwell entered into a Purchase and Sale Agreement dated
July 10, 2005 (the “ PSA ”) under which RIS
was to sell to Chartwell, and Chartwell was to purchase from RIS,
95 railcars (the “ Railcars ”), and RIS was to
provide certain retrofitting services to Chartwell related to the
Railcars as described in the Contracts,
WHEREAS,
pursuant to the terms of the PSA, Chartwell paid RIS $1,425,000.00
as partial payment in advance for the Railcars, and to secure the
return to Chartwell of such partial payment in the event RIS failed
to deliver to Chartwell the Railcars, RIS executed a Purchase Money
Security Agreement dated as of July 10, 2005 (the “
PMSA ” and, together with the PSA, the “
Contracts ”) granting Chartwell a security interest in
the Railcars,
WHEREAS, RIS
has delivered 60 of the Railcars to Chartwell, Chartwell has sold 8
of the other Railcars to Teal Inc (“ Teal ”),
and RIS has sold 27 of the other Railcars to Greenbrier Management
Services (“ Greenbrier ”), but a dispute has
arisen between the parties respecting payment for these Railcars,
and the sale of such other Railcars to Teal and Greenbrier (the
“ Dispute ”),
WHEREAS, RIS
and Chartwell now desire to settle and amicably resolve the Dispute
on the terms as set out in this Agreement, without admitting any
liability.
NOW THEREFORE,
for valuable consideration, the receipt and adequacy of which is
acknowledged hereby, the parties agree as follows:
1.
Termination of the Contracts . The Contracts are terminated
in their entirety, effective as of the date hereof. RIS shall have
no further obligation to deliver Railcars to Chartwell, and
Chartwell will have no further obligation to purchase Railcars from
RIS. Both parties acknowledge that RIS has already delivered to
Chartwell, and Chartwell has already accepted and fully paid for,
(the “ Delivered Railcars ”) the sixty Railcars
listed on Exhibit “A” attached hereto. Both
parties further agree, ratify and consent to the prior sale of the
remaining 35 Railcars to Greenbrier (27) and Teal (8),
respectively (the “ Remaining Railcars ”) as
listed on Exhibit “B” attached hereto. The
parties acknowledge that with respect to RIS the Remaining Railcars
sold to Teal have been sold on an as-is, where-is basis, that RIS
makes no warranties, expressed or implied, including as to
merchantability or fitness for a particular purpose, respecting
such Remaining Railcars, and that Chartwell hereby disclaims all
such warranties. Chartwell represents and warrants to RIS that
Chartwell, in its dealings with Teal, has done nothing contrary to
the foregoing or that might give Teal any reason to believe RIS has
made or is bound to any such warranties respecting the Remaining
Railcars.
2. Payment
to Chartwell . RIS shall pay to Chartwell via wire transfer
$155,200.00 upon the parties’ execution of this
Agreement.
3. Security
Interests in the Railcars . Effective upon its receipt of the
payment described in Section 2 above, Chartwell releases any
and all security interests, liens or encumbrances it may have or
may have permitted or caused against the Remaining Railcars, or any
revenue, proceeds
1
or related
funds that RIS may have received or earned arising from the
Railcars, or any inventory or other property of RIS, and shall, at
Chartwell’s own expense, promptly take such actions, and
execute such instruments and documents as may be necessary to
effectuate such releases, including, but not limited to, the filing
of any necessary UCC Termination Statements. In addition, Chartwell
hereby irrevocably authorizes RIS to execute on behalf of Chartwell
any UCC Termination Statement, STB filings or similar documents
that RIS determines to be necessary to effectuate such release.
Chartwell represents and warrants to RIS that no security interest,
lien or encumbrance exists except as and to the extent Chartwell
has previously disclosed in writing to RIS.
4. Drawings
and Specifications . RIS shall deliver to Chartwell the
drawings and specifications respecting the Delivered Railcars as
more specifically described in Exhibit “C”
hereto.
5. Release
of the Parties . For and in consideration of the mutual
covenants set forth herein, RIS, for itself and for any person,
association or entity claiming by
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