Covenant Transport Enters $30 Million Sale Leaseback of HQ

SEC Edgar Web Site - April 3, 2006

On April 3, 2006, Covenant Transport, Inc. entered into a purchase and sale agreement on its headquarters facility, a maintenance facility, a body shop, and approximately forty-six (46) acres of surrounding property in Chattanooga, Tennessee for a purchase price of $30 million. Concurrent with the sale of the Property, Covenant entered into a twenty-year lease agreement whereby Covenant will lease back the Property at an annual rental rate of approximately $2.5 million, subject to annual rent increases of 1.0%.

Under the Lease Agreement, Covenant-TN has eight (8) consecutive options to extend the term of the lease by five (5) years for each such option. If the Purchaser decides to sell or otherwise convey title to the Property during the term of the Lease Agreement, Covenant-TN shall have a right of first refusal to purchase the Property on the same terms offered to any third party. Sphere: Related Content