EXHIBIT 10.8
MASTER EQUIPMENT LEASE AGREEMENT
THIS MASTER EQUIPMENT LEASE AGREEMENT, dated as of ___________, 2004
("Agreement"), between EXPRESS LEASING SYSTEMS, INC., with an office at 0000
Xxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxxxxx 00000, in Xxxxxxxx County (hereinafter
called, together with its successors and assigns, if any, "LESSOR"), and EXPRESS
FREIGHT SYSTEMS, INC., a corporation organized and existing under the laws of
the State of Tennessee with its mailing address and chief place of business at
000 Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, in Xxxxxxxx County
(hereinafter called "LESSEE").
WITNESSETH:
I. LEASING:
(a) Subject to the terms and conditions set forth below, Lessor agrees to lease
to Lessee, and Lessee agrees to lease from Lessor, the equipment ("EQUIPMENT")
described in Annex A to SCHEDULE 1 hereto. Terms defined in Schedule 1 and not
otherwise defined herein shall have the meanings ascribed to them in Schedule 1.
(b) The obligation of Lessor to lease the Equipment to Lessee under Schedule 1
shall be subject to receipt by Lessor, prior to the Lease Commencement Date,
defined below, of evidence of insurance which complies with the requirements of
Section IX, and such other documents as Lessor may reasonably request. As a
further condition to such obligations of Lessor, Lessee shall, upon delivery of
the Equipment (but not later than the Lease Commencement Date) execute and
deliver to Lessor a Certificate of Acceptance (in the form of Annex C to
Schedule 1) covering the Equipment. Upon execution by Lessee of any Certificate
of Acceptance, the Equipment described thereon shall be deemed to have been
delivered to, and irrevocably accepted by, Lessee for lease hereunder.
II. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder and Lessee's right to use the Equipment shall
commence on the date of execution by Lessee of the Certificate of Acceptance for
the Equipment ("LEASE COMMENCEMENT DATE"). The original term of this Agreement
shall be the period of thirty-six (36) beginning on April 21, 2004 as set forth
on Schedule 1. If original term is extended, the word "term" shall be deemed to
refer to all extended terms, and all provisions of this Agreement shall apply
during any extended terms, except as may be otherwise specifically provided in
writing. (b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor. Payments of rent shall be in the amount set forth
in, and due in accordance with, the provisions of Schedule 1. In no event shall
any rent payments be refunded to Lessee. If rent is not paid within five (5)
days of its due date, Lessee agrees to pay a late charge of five cents ($0.05)
per dollar on, and in addition to, the amount of such rent but not exceeding the
lawful maximum, if any.
III. TAXES:
Lessee shall have no liability for taxes imposed by the United States of America
or any State or political subdivision thereof which are on or measured by the
net income of Lessor. Lessee shall report (to the extent that it is legally
permissible) and pay promptly all other taxes, fees and assessments due,
imposed, assessed or levied against any Equipment (or the purchase, ownership,
delivery, leasing, possession, use or operation thereof, or any rentals or
receipts
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hereunder), assessed against Lessor or Lessee by any foreign, federal, state or
local government or taxing authority during or related to the term of this
Agreement, including, without limitation, all license and registration fees, and
all sales, use, road use, personal property, excise, gross receipts, franchise,
stamp or other taxes, imposts, duties and charges, together with any penalties,
fines or interest thereon (all hereinafter called "Taxes"). Lessee shall (i)
reimburse Lessor upon receipt of written request for reimbursement for any Taxes
charged to or assessed against Lessor, (ii) send to Lessor a copy of all
assessments of Taxes assessed against Lessee; and (iii) on request of Lessor,
submit to Lessor written evidence of Lessee's payment of such Taxes.
IV. REPORTS:
(a) Lessee will notify Lessor in writing, within five (5) days after any tax or
other lien shall attach to any Equipment, of the full particulars thereof and of
the location of the Equipment on the date of such notification and shall either:
(i) satisfy and remove such lien within five (5) days after such notice; or (ii)
not later that the end of the period allowed for notice, provide a bond, escrow
or other security, reasonably satisfactory to Lessor, in an amount reasonably
sufficient to satisfy the lien and all expenses associated with challenging the
lien. (b) Lessee will within 90 days of the close of each fiscal year of Lessee,
deliver to Lessor, Lessee's balance sheet and profit and loss statement,
certified by a recognized firm of certified public accountants. Lessee will
deliver to Lessor quarterly, within forty-five (45) days of the close of each
fiscal quarter of Lessee, in reasonable detail, copies of Lessee's quarterly
financial report certified by the chief financial officer of Lessee. (c) Lessee
will permit Lessor to inspect any Equipment during normal business hours. (d)
The Primary Equipment Location shall be as specified in Schedule 1, Lessee and
will promptly notify Lessor of any relocation of Equipment to a new Primary
Equipment Location and Lessee will keep records of the actual location of the
Equipment or otherwise be able to locate the Equipment at all times. Upon the
written request of Lessor, Lessee will notify Lessor forthwith in writing of the
location of any Equipment as of the date of such notification. (e) Lessee will
promptly and fully report to Lessor in writing if any Equipment is lost or
damaged (where the estimated repair costs would exceed 10% of its then fair
market value), or is otherwise involved in an accident causing personal injury
or property damage. (f) Within thirty (30) days after any request by Lessor,
Lessee will furnish a certificate of an authorized officer of Lessee stating
that he has reviewed the activities of Lessee and that, to the best of his
knowledge, there exists no default (as described in Section XI) or event which
with notice or lapse of time (or both) would become such a default.
V. DELIVERY, USE AND OPERATION:
(a) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable federal,
state, and local laws and regulations. (b) LESSEE SHALL NOT ASSIGN, MORTGAGE,
SUBLET OR HYPOTHECATE ANY EQUIPMENT, OR THE INTEREST OF LESSEE HEREUNDER, NOR
SHALL LESSEE REMOVE ANY EQUIPMENT FROM THE CONTINENTAL UNITED STATES, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE LESSOR. (c) Lessee will keep the Equipment free
and clear of all liens and encumbrances other than those granted in favor of or
result from acts of Lessor.
VI. SERVICE:
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(a) Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and tear excepted. Lessee shall, if
at any time requested by Lessor, affix in a prominent position on each unit of
Equipment plates, tags or other identifying labels showing ownership thereof by
Lessor. (b) Lessee will not, without the prior consent of Lessor, affix or
install any accessory, equipment or device on any Equipment if such addition
will impair the originally intended function or use of the Equipment. All
additions, repairs, parts, supplies, accessories, equipment, and devices
furnished, attached or affixed to any Equipment which are not readily removable
shall be made only in compliance with applicable law; shall become part of the
Equipment; and no compensation shall be due Lessee therefor. Lessee will not,
without the prior written consent of Lessor and subject to such conditions as
Lessor may impose for its protection, affix or install any Equipment to or in
any other personal or real property. (c) Any alterations or modifications to the
Equipment that may, at any time during the term of this Agreement, be required
to comply with any applicable law, rule or regulation shall be made at the
expense of Lessee.
VII. STIPULATED LOSS VALUE:
Lessee shall promptly and fully notify Lessor in writing if any item of
Equipment shall be or become worn out, lost, stolen, destroyed, irreparably
damaged in the reasonable determination of Lessee, or permanently rendered unfit
for use from any cause whatsoever (such occurrences being hereinafter called
"CASUALTY OCCURRENCES"). On the rental payment date next succeeding a Casualty
Occurrence (the "PAYMENT DATE"), Lessee shall pay Lessor the sum of (x) the
Stipulated Loss Value of such unit calculated as of the rental payment date next
preceding such Casualty Occurrence ("CALCULATION DATE"); and (y) all rental and
other amounts which are due hereunder as of the Payment Date. Upon payment of
all sums due hereunder, the term of this lease as to such unit shall terminate
and (except in the case of the loss, theft or complete destruction of such unit)
Lessee shall be entitled to ownership and possession of such unit.
VIII. LOSS OR DAMAGE:
Lessee hereby assumes and shall bear the entire risk of any loss, theft, damage
to, or destruction of, any unit of Equipment from any cause whatsoever from the
Lease Commencement Date.
IX. INSURANCE:
Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts and against such hazards as Lessor may require, including, but not
limited to, insurance for damage to or loss of the Equipment and liability
coverage for personal injuries, death or property damage, with Lessor named as
additional insured and with a loss payable clause in favor of Lessor, as its
interest may appear, irrespective of any breach of warranty or other act or
omission of Lessee. The insurance shall provide (i) liability coverage in an
amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00) total
liability per occurrence, and (ii) casualty/property damage coverage in an
amount equal to the higher of the Stipulated Loss value or the full replacement
cost of the Equipment; or at such other amounts as may be required by Lessor
with Lessor named as loss payee. All such policies shall be with companies, and
on terms, satisfactory to Lessor. Lessee agrees to deliver to Lessor evidence of
insurance satisfactory to Lessor. No insurance shall be subject to any
co-insurance clause. Lessee hereby appoints Lessor as
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Lessee's attorney-in-fact to make proof of loss and claim for insurance, and to
make adjustments with insurers and to receive payment of and execute or endorse
all documents, checks or drafts in connection with payments made as a result of
such insurance policies. Any expense of Lessor in adjusting or collecting
insurance shall be borne by Lessee. Lessee will not make adjustments with
insurers except (i) with respect to claims for damage to any unit of Equipment
where the repair costs do not exceed 10% of such unit's fair market value, or
(ii) with Lessor's written consent. Said policies shall provide that the
insurance may not be altered or canceled by the insurer until after thirty (30)
days written notice to Lessor. Lessor may, at its option, apply proceeds of
insurance, in whole or in part, to (i) repair or replace Equipment or any
portion thereof, or (ii) satisfy any obligation of Lessee to Lessor hereunder.
X. RETURN OF EQUIPMENT:
(a) Upon any termination of this Agreement or Schedule 1, other than normal
expiration of the term or early termination pursuant to Section XIX of this
Agreement, Lessee shall promptly, at its own cost and expense: (i) perform any
testing and repairs required to place the affected units of Equipment in the
same condition and appearance as when received by Lessee (reasonable wear and
tear excepted) and in good working order for their originally intended purpose;
(ii) if periodic service or maintenance is required, cause such units to be
serviced and/or maintained by an authorized manufacturer's representative or
such other service person as is satisfactory to Lessor; and (iii) return such
units to a location within the continental United States as Lessor shall direct.
(b) Until Lessee has fully complied with the requirements of Section X(a) above,
Lessee's rent payment obligation and all other obligations under this Agreement
shall continue from month to month notwithstanding any expiration or termination
of the lease term. Lessor may terminate such continued leasehold interest upon
ten (10) days notice to Lessee. (c) upon the normal expiration of the term and
payment of the Acquisition Fee, as defined in Section XX, or upon early
termination pursuant to Section XIX of this Agreement, all right title and
interest in and to the Equipment, AS IS, WHERE IS, AND WITH ALL FAULTS, shall
transfer to Lessee. Lessor shall execute any documents required to effect such
transfer at the request and expense of Lessee.
XI. DEFAULT:
(a) Lessor may, in writing, declare this Agreement in default if: Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within five (5) days; Lessee breaches any of its insurance
obligations under Section IX; Lessee breaches any of its other obligations to
Lessor hereunder or under any instrument, document or agreement between Lessor
and Lessee and fails to cure that breach within ten (10) days after written
notice thereof; any representation or warranty made by Lessee in connection with
this Agreement shall be false or misleading in any material respect; Lessee
becomes insolvent or ceases to do business as a going concern; any Equipment is
illegally used; a petition is filed by or against Lessee under any bankruptcy or
insolvency laws; an event of default has occurred under the Agreement and Plan
of Merger (as amended between XRG, Inc., XRG Acquisition Sub I, Inc., Lessee and
the former stockholders of Lessee, under any of the other "Transaction
Agreements" as defined in the Agreement and Plan of Merger Addendum. Such
declaration shall apply to all Schedules except as specifically excepted by
Lessor. (b) After default, at the request of Lessor, Lessee shall comply with
the provisions of Section X(a). Lessee hereby authorizes Lessor to enter, with
or without legal process, any premises where any Equipment is believed to be and
take possession thereof. Lessee shall, without further demand, forthwith pay to
Lessor (i) as liquidated damages for loss of
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a bargain and not as a penalty, the Stipulated Loss Value of the Equipment
(calculated as of the rental next preceding the declaration of default), and
(ii) all rentals and other sums then due hereunder. Lessor may, but shall not be
required to, take possession of any or all the Equipment, and operate such
Equipment for the account of Lessee; provided, however, that Lessor may and
Lessee shall notify the customers to which service would be provided using such
Equipment that payment to Lessee shall be made to Lessor. Lessor may, but shall
not be required to, sell Equipment at private or public sale, in bulk or in
parcels, with or without notice, and without having the Equipment present at the
place of sale; or Lessor may, but shall not be required to, lease, otherwise
dispose of or keep idle all or part of the Equipment; and Lessor may use
Lessee's premises for any or all of the foregoing without liability for rent,
costs, damages or otherwise. The proceeds of operation, sale, lease or other
disposition, if any, shall be applied in the following order of priorities: (1)
to pay all of Lessor's costs, charges and expenses incurred in taking, removing,
holding, repairing and operating, selling, leasing and/or otherwise disposing of
Equipment; then, (2) to the extent not previously paid by Lessee, to pay Lessor
all sums due from Lessee hereunder; then (3) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (4) any surplus shall be
retained by Lessor. Lessee shall pay any deficiency in (1) and (2) forthwith.
(c) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, defense or preservation of Lessor s rights and remedies
hereunder, or if prohibited by law, such lesser sum as may be permitted. Waiver
of any default shall not be a waiver of any other or subsequent default. (d) Any
default under the terms of this or any other agreement between Lessor and Lessee
may be declared by Lessor a default under this and any such other agreement.
XII. ASSIGNMENT:
Lessor may, without the consent of Lessee, assign this Agreement or Schedule 1.
Lessee agrees that if Lessee receives written notice of an assignment from
Lessor, Lessee will pay all rent and other amounts payable under any assigned
Equipment Schedule to such assignee or as instructed by Lessor. Lessee further
agrees to confirm in writing receipt of a notice of assignment as may be
reasonable requested by assignee. Lessee hereby waives and agrees not to assert
against any such assignee any defense, set-off, recoupment claim or counterclaim
that Lessee has or may at any time have against Lessor for any reason
whatsoever.
XIII. NET LEASE; NO SET-OFF, ETC:
This Agreement is a net lease. Lessee's obligation to pay rent and other amounts
due hereunder shall be absolute and unconditional. Lessee shall not be entitled
to any abatement or reductions of, or set-offs against, said rent or other
amounts, including, without limitation, those arising or allegedly arising out
of claims (present or future, alleged or actual, and including claims arising
out of strict tort or negligence of Lessor) of Lessee against Lessor under this
Agreement or otherwise. Nor shall this Agreement terminate or the obligations of
Lessee be affected by reason of any defect in or damage to, or loss of
possession, use or destruction of, any Equipment from whatsoever cause. It is
the intention of the parties that rents and other amounts due hereunder shall
continue to be payable in all events in the manner and at the times set forth
herein unless the obligation to do so shall have been terminated pursuant to the
express terms hereof.
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XIV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor, its
agents, employees, successors and assigns from and against any and all losses,
damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature, in contract or tort, whether caused by
the active or passive negligence of Lessor or otherwise, and including, but not
limited to, Lessor's strict liability in tort, arising out of (i) the selection,
manufacture, purchase, acceptance or rejection of Equipment, the ownership of
Equipment during the term of this Agreement, and the delivery, lease,
possession, maintenance, uses, condition, return or operation of Equipment
(including, without limitation, latent and other defects, whether or not
discoverable by Lessor or Lessee and any claim for patent, trademark or
copyright infringement or environmental damage) or (ii) the condition of
Equipment sold or disposed of after use by Lessee, any sublessee or employees of
Lessee. Lessee shall, upon request, defend any actions based on, or arising out
of, any of the foregoing. (b) All of Lessor's rights, privileges and indemnities
contained in this Section XIV shall survive the expiration or other termination
of this Agreement and the rights, privileges and indemnities contained herein
are expressly made for the benefit of, and shall be enforceable by Lessor, its
successors and assigns.
XV. DISCLAIMER:
LESSOR DOES NOT MAKE, HAS NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE,
ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH
RESPECT TO THE EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following, regardless of
any negligence of Lessor (i) any liability, loss or damage caused or alleged to
be caused directly or indirectly by any Equipment, any inadequacy thereof, any
deficiency or defect (latent or otherwise) therein, or any other circumstance in
connection therewith; (ii) the use, operation or performance of any Equipment or
any risks relating thereto; (iii) any interruption of service, loss of business
or anticipated profits or consequential damages; or (iv) the delivery,
operation, servicing, maintenance, repair, improvement or replacement of any
Equipment. If, and so long as, no default exists under this Lease, Lessee shall
be, and hereby is, authorized during the term of this Lease to assert and
enforce, at Lessee's sole cost and expense, from time to time, in the name of
and for the account of Lessor and/or Lessee, as their interests may appear,
whatever claims and rights Lessor may have against any Supplier of the
Equipment.
XVI. REPRESENTATIONS AND WARRANTIES OF LESSEE:
Lessee hereby represents and warrants to Lessor that on the date hereof and on
the date of execution of each Schedule: (a) Lessee has adequate power and
capacity to enter into, and perform under, this Agreement and all related
documents (together, the "DOCUMENTS") and is duly qualified to do business
wherever necessary to carry on its present business and operations, including
the jurisdiction(s) where the Equipment is or is to be located. (b) The
Documents have
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been duly authorized, executed and delivered by Lessee and constitute valid,
legal and binding agreements, enforceable in accordance with their terms, except
to the extent that the enforcement of remedies therein provided may be limited
under applicable bankruptcy and insolvency laws. (c) No approval, consent or
withholding of objections is required from any governmental authority or
instrumentality with respect to the entry into or performance by Lessee of the
Documents except such as have already been obtained. (d) The entry into and
performance by Lessee of the Documents will not: (i) violate any judgment,
order, law or regulation applicable to Lessee or any provision of Lessee's
Certificate of Incorporation or By-Laws; or (ii) result in any breach of,
constitute a default under or result in the creation of any lien, charge,
security interest or other encumbrance upon any Equipment pursuant to any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party. (e) There are
no suits or proceedings pending or threatened in court or before any commission,
board or other administrative agency against or affecting Lessee, which will
have a material adverse effect on the ability of Lessee to fulfill its
obligations under this Agreement. (f) The Equipment accepted under any
Certificate of Acceptance is and will remain tangible personal property. (g)
Each Balance Sheet and Statement of Income delivered to Lessor has been prepared
in accordance with generally accepted accounting principles, and since the date
of the most recent such Balance Sheet and Statement of Income, there has been no
material adverse change. (h) Lessee is and will be at all times validly existing
and in good standing under the laws of the State of its incorporation (specified
in the first sentence of this Agreement). (i) The Equipment will at all times be
used for commercial or business purposes.
XVII. GRANT OF SECURITY INTEREST; USURY SAVINGS:
(a) Lessee hereby grants to Lessor a first security interest in the property of
Lessee as more fully set forth in that Security Agreement dated _________,
together with any and all proceeds, substitutions, replacements or exchanges
therefor, and any and all insurance and/or other proceeds of the property in and
against which a security interest is granted hereunder. (b) It is the intention
of the parties hereto to comply with any applicable usury laws to the extent
that Schedule 1 is determined to be subject to such laws; accordingly, it is
agreed that, notwithstanding any provision to the contrary in Schedule 1 or the
Lease, in no event shall Schedule 1 require the payment or permit the collection
of interest in excess of the maximum amount permitted by applicable law. If any
such excess interest is contracted for, charged or received under Schedule 1 or
the Lease, or in the event that all of the principal balance shall be prepaid,
so that under any of such circumstances the amount of interest contracted for,
charged or received under Schedule 1 or the Lease shall exceed the maximum
amount of interest permitted by applicable law, then in such event (a) the
provisions of this paragraph shall govern and control, (b) neither Lessee nor
any other person or entity now or hereafter liable for the payment hereof shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the maximum amount of interest permitted by applicable law, (c) any
such excess which may have been collected shall be either applied as a credit
against the then unpaid principal balance or refunded to Lessee, at the option
of the Lessor, and (d) the effective rate of interest shall be automatically
reduced to the maximum lawful contract rate allowed under applicable law as now
or hereafter construed by the courts having jurisdiction thereof. It is further
agreed that without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received under Schedule 1 or the Lease which
are made for the purpose of determining whether such rate exceeds the maximum
lawful contract rate, shall be made, to the extent permitted by applicable law,
by amortizing, prorating, allocating and spreading in equal parts during the
period of the full stated term of the indebtedness evidenced hereby, all
interest at
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any time contracted for, charged or received from Lessee or otherwise by Lessor
in connection with such indebtedness; provided, however, that if any applicable
state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for Lessor to receive a greater
interest per annum rate than is presently allowed, the Lessee agrees that, on
the effective date of such amendment or preemption, as the case may be, the
lawful maximum hereunder shall be increased to the maximum interest per annum
rate allowed by the amended state law or the law of the United States of
America.
XVIII. GOVERNING LAW
This Agreement shall be governed by and construed under the laws of the State of
TENNESSEE without giving effect to any conflict of laws principles. Lessor and
Lessee hereby irrevocably consent to the jurisdiction of and venue in the
federal and state courts located in that state for the resolution of any dispute
arising under this Agreement.
XIX. RESERVED FOR FUTURE USE.
XX. AGREEMENT TO PURCHASE AND SELL:
(a) So long as no default exists hereunder and the Lease has not been earlier
terminated, Lessee shall, at lease expiration, purchase all (but not less than
all) of the Equipment in Schedule 1 on an AS IS, WHERE IS BASIS for cash equal
to the amount indicated in Schedule 1 (the "ACQUISITION FEE"). The Acquisition
Fee shall be due and payable in immediately available funds on the Expiration
Date by Lessee to Lessor.
XXI. MISCELLANEOUS:
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
LEASE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court (including, without limitation, contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. In the event of litigation, this Lease may be filed as a written
consent to a trial by the court. (b) Unless and until Lessee exercises its
rights under Section XIX above, nothing herein contained shall give or convey to
Lessee any right, title or interest in and to any Equipment except as a lessee.
Any cancellation or termination by Lessor, pursuant to the provision of this
Agreement, Schedule 1, supplement or amendment hereto, or the lease of any
Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder. All Equipment shall at all times remain
personal property of Lessor regardless of the degree of its annexation to
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any real property and shall not by reason of any installation in, or affixation
to, real or personal property become a part thereof. (c) Time is of the essence
of this Agreement. Lessor's failure at any time to require strict performance by
Lessee of any of the provisions hereof shall not waive or diminish Lessor's
right thereafter to demand strict compliance therewith. Lessee agrees, upon
Lessor's request, to execute any instrument necessary or expedient for filing,
recording or perfecting the interest of Lessor. All notices required to be given
hereunder shall be deemed adequately given if sent by registered or certified
mail to the addressee at its address stated herein, or at such other place as
such addressee may have designated in writing. This Agreement and Schedule 1 and
Annexes thereto constitute the entire agreement of the parties with respect to
the subject matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY
WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING
AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
_____/____
initials
(d) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated to, effect
such compliance, in whole or in part; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance shall
constitute additional rent due to Lessor within five days after the date Lessor
sends notice to Lessee requesting payment. Lessor's effecting such compliance
shall not be a waiver of Lessee's default. (e) Any rent or other amount not paid
to Lessor when due hereunder shall bear interest, both before and after any
judgment or termination hereof, at the lesser of eighteen percent per annum or
the maximum rate allowed by law. Any provisions in this Agreement and Schedule 1
which are in conflict with any statute, law or applicable rule shall be deemed
omitted, modified or altered to conform thereto.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
EXPRESS LEASING SYSTEMS, INC. EXPRESS FREIGHT SYSTEMS, INC.
BY:____________________ BY:__________________
NAME:__________________ NAME:________________
TITLE:_________________ TITLE:_______________
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EQUIPMENT SCHEDULE
(NET LEASE - FIXED RATE)
SCHEDULE NO. 1
DATED THIS 21ST DAY OF APRIL, 2004
TO MASTER EQUIPMENT LEASE AGREEMENT
LESSOR & MAILING ADDRESS LESSEE & MAILING ADDRESS
EXPRESS LEASING SYSTEMS, INC. EXPRESS FREIGHT SYSTEMS, INC.
0000 XXXX XXXX 000 XXXXXXXXXX XXXX
XXXXXX XXXXXXXX, XX 00000 XXXXXXXXXXX, XX 00000
Capitalized terms not defined herein shall have the meanings assigned to them in
the Master Equipment Lease Agreement identified above ("AGREEMENT"; said
Agreement and this Schedule being collectively referred to as "LEASE").
A. EQUIPMENT
Pursuant to the terms of the Lease, Lessor agrees to lease to Lessee the
Equipment listed on Annex A attached hereto and made a part hereof.
B. FINANCIAL TERMS
1. First Rent Payment Date: April 21, 2004.
2. Capitalized Lessor's Cost: $3,000,000.00.
3. Basic Term Lease Rate Factor: 0.0185186.
4. Monthly Lease Payment: $55,555.000
5. Basic Term (No. of Months): 36.
6. Basic Term Commencement Date: April 21, 2004.
7. Primary Equipment Location: Chattanooga, TN.
8. Lessee Federal Tax ID No:_______________.
9. Termination Date: Thirty-six (36) months after Lease
Commencement Date.
10. Interest Rate: 12% per annum.
11. Lessee agrees and acknowledges that the Capitalized Lessor's
Cost of the Equipment as stated on the Schedule is equal to
the fair market value of the Equipment on the date hereof.
12. Acquisition Fee: One Million Dollars ($1,000,000.00)
C. TERM AND RENT
1. Basic Term Rent. Commencing on April 21, 2004 and on the same day of each
month thereafter (each a "RENT PAYMENT DATE") during the Basic Term, Lessee
shall pay as rent
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("BASIC TERM RENT") the Monthly Lease Payment, equal to the product of the Basic
Term Lease Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule which Monthly Lease Payment is hereby determined by the parties to
be $55,555.00 per month throughout the original term of this Lease.
D. INSURANCE
1. Public Liability: $1,000,000 total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of
the Stipulated Loss Value or the full replacement cost of the
Equipment.
E. INTEREST RATE: Interest shall accrue on all payments not made by the RENT
PAYMENT DATE on which they are due from such date until the date paid at the
Interest Rate, which is an annual rate, computed on a daily basis.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to
be executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
EXPRESS LEASING SYSTEMS, INC. EXPRESS FREIGHT SYSTEMS, INC.
BY:____________________ BY:___________________
NAME:__________________ NAME:_________________
TITLE:_________________ TITLE:________________
ATTEST:
BY:___________________
NAME:_________________
TITLE:________________
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ANNEX A
TO
SCHEDULE NO. 1
TO MASTER EQUIPMENT LEASE AGREEMENT
DESCRIPTION OF EQUIPMENT
SERIAL TYPE AND MODEL NUMBER
MFG. NUMBERS OF EQUIPMENT OF UNITS
SEE ATTACHED
INITIALS:______________________ ___________________
LESSOR LESSEE
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ANNEX C
TO
SCHEDULE NO. 1
TO MASTER EQUIPMENT LEASE AGREEMENT
CERTIFICATE OF ACCEPTANCE
TO: EXPRESS LEASING SYSTEMS, INC. ("LESSOR")
Pursuant to the provisions of the above schedule and lease
(collectively, the "Lease"), Lessee hereby certifies and warrants that (a) all
Equipment listed in the related invoice is in operating condition and in working
order; and (b) Lessee accepts the Equipment for all purposes of the Lease and
all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; and (ii) the representations and warranties made
by Lessee pursuant to or under the Lease are true and correct on the date
hereof.
LESSEE: EXPRESS FREIGHT SYSTEMS, INC.
By: _______________________
Title: ____________________
Dated: ____________________
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ANNEX D
TO
SCHEDULE NO. 1
TO MASTER EQUIPMENT LEASE AGREEMENT
STIPULATED LOSS TABLE
MONTH STIPULATED LOSS AS A % OF COST
-------- ------------------------------
1 100.0000000000%
2 97.0000000000%
3 94.4444446667%
4 91.0000000000%
5 88.8888893333%
6 86.1111116667%
7 83.3333340000%
8 80.5555563333%
9 77.0000000000%
10 75.0000010000%
11 72.2222233333%
12 69.0000000000%
13 66.6666680000%
14 63.8888903333%
15 61.1111126667%
16 58.3333350000%
17 55.5555573333%
18 52.7777796667%
19 50.0000020000%
20 47.2222243333%
21 44.4444466667%
22 41.6666690000%
23 38.8888913333%
24 36.1111136667%
25 33.3333360000%
26 30.5555583333%
27 27.7777806667%
28 25.0000030000%
29 22.2222253333%
30 19.4444476667%
31 16.6666700000%
32 13.8888923333%
33 11.1111146667%
34 8.3333370000%
35 5.5555593333%
36 2.7777816667%
INITIALS: The Stipulated Loss Value for any unit of Equipment shall be
equal to the Capitalized Lessor's Cost of such unit multiplied
______ / ______ by the appropriate percentage derived from the above table.
LESSOR / LESSEE In the event that the Lease is for any reason extended, then
the last percentage figure shown above shall control
throughout any such extended term.
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CERTIFICATE CONCERNING
PAYMENT OF PERSONAL PROPERTY TAXES
(LESSEE REPORTS EQUIPMENT)
To: EXPRESS LEASING SYSTEMS, INC.
To insure Lessee's compliance with the provisions of the Master
Equipment Lease Agreement dated as of April _____, 2004 (the "Lease") by and
between the undersigned, as Lessee, and EXPRESS LEASING SYSTEMS, INC., as
Lessor, with respect to the payment of personal property taxes on the Equipment
described in Annex A to Schedule 1 to the Lease, Lessee hereby agrees that it
will (a) list all the Equipment, (b) report all property taxes, use taxes,
registration fees and/or licensing fees assessed against the Equipment and (c)
pay all such taxes when due directly to the appropriate taxing authority until
Lessor shall otherwise direct in writing. Upon request of Lessor, Lessee shall
promptly provide proof of filing and proof of payment to Lessor.
LESSEE: EXPRESS FREIGHT SYSTEMS, INC.
By:_______________________
Title:____________________
Date:_____________________
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EXPRESS FREIGHT SYSTEMS, INC.
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
ATTN: Xxxx Limerick, Sr.
Dear Mr. Limerick:
EXPRESS LEASING SYSTEMS, INC. is entering into an agreement to lease
certain equipment set forth on the attached Annex A (the "Equipment") pursuant
to that certain Master Equipment Lease Agreement dated ___________(the
"AGREEMENT") with EXPRESS LEASING SYSTEMS, INC.. Lessor hereby grants to Lessee,
to the fullest extent permissible, the right to enforce on Lessor's behalf any
and all promises and warranties, including those of any third party, provided to
the Lessor by any manufacturer or supplier of the Equipment in connection with
or as part of the contract by which Lessor acquired the Equipment and with
respect to the Equipment, Lessee may communicate with such manufacturer or
supplier and receive an accurate and complete statement of such promises and
warranties, including any disclaimers and limitations of them or of remedies.
EXPRESS LEASING SYSTEMS, INC.
By:________________________
Its:_______________________
ACKNOWLEDGED AND AGREED:
EXPRESS FREIGHT SYSTEMS, INC.
____________________________
By:______________________
Its:_____________________
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CORPORATE GUARANTY
Date: April _______, 2004
To induce EXPRESS LEASING SYSTEMS, INC. to enter into, purchase or
otherwise acquire, now or at any time hereafter, any promissory notes, security
agreements, chattel mortgages, pledge agreements, conditional sale contracts,
lease agreements, and/or any other documents or instruments evidencing, or
relating to, any lease, loan, extension of credit or other financial
accommodation (collectively "ACCOUNT DOCUMENTS" and each an "ACCOUNT DOCUMENT")
to EXPRESS FREIGHT SYSTEMS, INC., a corporation organized and existing under the
laws of the State of Tennessee ("CUSTOMER"), but without in any way binding you
to do so, the undersigned, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby guarantee to you, your
successors and assigns, the due regular and punctual payment of any sum or sums
of money which the Customer may owe to you now or at any time hereafter, whether
evidenced by an Account Document, on open account or otherwise, and whether it
represents principal, interest, rent, late charges, indemnities, an original
balance, an accelerated balance, liquidated damages, a balance reduced by
partial payment, a deficiency after sale or other disposition of any leased
equipment, collateral or security, or any other type of sum of any kind
whatsoever that the Customer may owe to you now or at any time hereafter, and
does hereby further guarantee to you, your successors and assigns, the due,
regular and punctual performance of any other duty or obligation of any kind or
character whatsoever that the Customer may owe to you now or at any time
hereafter (all such payment and performance obligations being collectively
referred to as "OBLIGATIONS"). Undersigned does hereby further guarantee to pay
upon demand all losses, costs, attorneys' fees and expenses that may be suffered
by you by reason of Customer's default or default of the undersigned.
This Guaranty is a guaranty of prompt payment and performance (and
not merely a guaranty of collection). Nothing herein shall require you to first
seek or exhaust any remedy against the Customer, its successors and assigns, or
any other person obligated with respect to the Obligations, or to first
foreclose, exhaust or otherwise proceed against any leased equipment, collateral
or security which may be given in connection with the Obligations. It is agreed
that you may, upon any breach or default of the Customer, or at any time
thereafter, make demand upon the undersigned and receive payment and performance
of the Obligations, with or without notice or demand for payment or performance
by the Customer, its successors or assigns, or any other person. Suit may be
brought and maintained against the undersigned, at your election, without
joinder of the Customer or any other person as parties thereto. The obligations
of each signatory to this Guaranty shall be joint and several.
The undersigned agrees that its obligations under this Guaranty
shall be primary, absolute, continuing and unconditional, irrespective of and
unaffected by any of the following actions or circumstances (regardless of any
notice to or consent of the undersigned): (a) the genuineness, validity,
regularity and enforceability of the Account Documents or any other document;
(b) any extension, renewal, amendment, change, waiver or other modification of
the Account Documents or any other document; (c) the absence of, or delay in,
any action to enforce the Account Documents, this Guaranty or any other
document; (d) your failure or delay in obtaining any other guaranty of the
Obligations (including, without limitation, your failure to obtain the signature
of any other guarantor hereunder); (e) the release of, extension of time for
payment or performance by, or any other indulgence granted to the Customer or
any other person with
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respect to the Obligations by operation of law or otherwise; (f) the existence,
value, condition, loss, subordination or release (with or without substitution)
of, or failure to have title to or perfect and maintain a security interest in,
or the time, place and manner of any sale or other disposition of any leased
equipment, collateral or security given in connection with the Obligations, or
any other impairment (whether intentional or negligent, by operation of law or
otherwise) of the rights of the undersigned; (g) the Customer's voluntary or
involuntary bankruptcy, assignment for the benefit of creditors, reorganization,
or similar proceedings affecting the Customer or any of its assets; or (h) any
other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.
This Guaranty may be terminated upon delivery to you (at your
address shown above) of a written termination notice from the undersigned upon
the complete discharge of all Obligations under any and all then existing
Account Documents. However, as to all Obligations (whether matured, unmatured,
absolute, contingent or otherwise) incurred by the Customer prior to your
receipt of such written termination notice (and regardless of any subsequent
amendment, extension or other modification which may be made with respect to
such Obligations), this Guaranty shall nevertheless continue and remain
undischarged until all such Obligations are indefeasibly paid and performed in
full.
The undersigned agrees that this Guaranty shall remain in full force
and effect or be reinstated (as the case may be) if at any time payment or
performance of any of the Obligations (or any part thereof) is rescinded,
reduced or must otherwise be restored or resumed by you, all as though such
payment or performance had not been made. If, by reason of any bankruptcy,
insolvency or similar laws effecting the rights of creditors, you shall be
prohibited from exercising any of your rights or remedies against the Customer
or any other person or against any property, then, as between you and the
undersigned, such prohibition shall be of no force and effect, and you shall
have the right to make demand upon, and receive payment from, the undersigned of
all amounts and other sums that would be due to you upon a default with respect
to the Obligations.
Notice of acceptance of this Guaranty and of any default by the
Customer or any other person is hereby waived. Presentment, protest demand, and
notice of protest, demand and dishonor of any of the Obligations, and the
exercise of possessory, collection or other remedies for the Obligations, are
hereby waived. The undersigned warrants that it has adequate means to obtain
from the Customer on a continuing basis financial data and other information
regarding the Customer and is not relying upon you to provide any such data or
other information. Without limiting the foregoing, notice of adverse change in
the Customer's financial condition or of any other fact that might materially
increase the risk of the undersigned is also waived. All settlements,
compromises, accounts stated and agreed balances made in good faith between the
Customer, its successors or assigns, and you shall be binding upon and shall not
affect the liability of the undersigned.
Payment of all amounts now or hereafter owed to the undersigned by
the Customer or any other obligor for any of the Obligations is hereby
subordinated in right of payment to the indefeasible payment in full to you of
all Obligations and is hereby assigned to you as a security therefor. The
undersigned hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims against the
Customer, any other obligor for any of the Obligations, any collateral therefor,
or any other assets of the Customer or any such other obligor, for subrogation,
reimbursement, exoneration, contribution. indemnification, setoff or other
recourse in respect of sums paid or payable to you by the undersigned hereunder,
and the undersigned hereby further irrevocably and unconditionally waives and
relinquishes any and all other benefits which it might otherwise directly or
indirectly
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receive or be entitled to receive by reason of any amounts paid by, or collected
or due from, it, the Customer or any other obligor for any of the Obligations,
or realized from any of their respective assets
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY. THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS).
THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, OR ANY
RELATED DOCUMENTS. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
As used in this Guaranty, the word "person" shall include any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or any government or any political
subdivision thereof.
This Guaranty is intended by the parties as a final expression of
the guaranty of the undersigned and is also intended as a complete and exclusive
statement of the terms thereof. No course of dealing, course of performance or
trade usage, nor any paid evidence of any kind, shall be used to supplement or
modify any of the terms hereof. Nor are there any conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its provisions may
only be waived, modified, varied, released, terminated or surrendered, in whole
or in part, by a duly authorized written instrument signed by you. No failure by
you to exercise your rights hereunder shall give rise to any estoppel against
you, or excuse the undersigned from performing hereunder. Your waiver of any
right to demand performance hereunder shall not be a waiver of any subsequent or
other right to demand performance hereunder.
This Guaranty shall bind the undersigned's successors and assigns
and the benefits thereof shall extend to and include your successors and
assigns. In the event of default hereunder, you may at any time inspect
undersigned's records, or at your option, undersigned shall furnish you with a
current independent audit report.
If any provisions of this Guaranty are in conflict with any
applicable statute,rule or law, then such provisions shall be deemed null and
void to the extent that they may conflict therewith, but without invalidating
any other provisions hereof.
Each signatory on behalf of a corporate guarantor warrants that he
had authority to sign on behalf of such corporation and by so signing, to bind
said guarantor corporation hereunder.
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IN WITNESS WHEREOF, this Guaranty is executed the day and year
above written.
XRG, INC.
By:______________________________________________
(Signature)
Name:
___________________________________________
Title:
__________________________________________
ATTEST:
____________________________________________
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CERTIFIED RESOLUTION
The undersigned hereby certifies that he is Secretary of XRG, Inc.,
that the following resolution was passed at a meeting of the Board of Directors
of said corporation held on_____________, 2004 duly called, a quorum being
present, that said resolution has not since been revoked or amended, and that
the form of guaranty referred to therein is the form shown attached hereto:
"RESOLVED that it is to the benefit of this corporation that it
execute a guaranty of the obligations of EXPRESS FREIGHT SYSTEMS, INC.
("CUSTOMER") to EXPRESS LEASING SYSTEMS, INC. and that the benefit to be
received by this corporation from such guaranty is reasonably worth the
obligations thereby guaranteed, and further that such guaranty shall be
substantially in the form annexed to these minutes, and further that
the________________ and ____________________ (Title of Officers) of this
corporation are authorized to execute such guaranty on the behalf of this
corporation."
WITNESS my hand and the seal of this corporation on this _____ day
of __________, 2004.
[SEAL] ______________________________
Secretary
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