VOLVO
VOLVO TRUCK FINANCE NORTH AMERICA INC.
MASTER LEASE AGREEMENT
LESSEE NAME AND ADDRESS
LEGAL NAME: AMERICAN FREIGHTWAYS, INC.
CHECK ONE: CORPORATION [X] PARTNERSHIP [ ] JOINT VENTURE [ ]
LLC [ ]
STREET ADDRESS: 0000 XXXXXXX XXXXX
MAILING ADDRESS: X.X. XXX 000
CITY: XXXXXXXX STATE: AR ZIP: 72602-0840
COUNTY: XXXXX TELEPHONE: 000-000-0000 FACSIMILE: 000-000-0000
FEDERAL ID/SN: 00-0000000 ICC NO:
CUSTOMER NO: 0305296
1. LEASE: Subject to the terms and conditions of this Master
Lease Agreement (this "AGREEMENT") Volvo Truck Finance North
America, Inc., a Delaware corporation with its principal place of
business in North Carolina ("LESSOR"), agrees to lease to Lessee
and Lessee agrees to lease from Lessor the motor vehicles,
trailers, and such other equipment (collectively the "VEHICLES")
described in the Schedules to be attached to this Agreement from
time to time (each a "SCHEDULE") as may be agreed upon by Lessor
and Lessee. All of the terms and conditions of each Schedule and
all other documents executed by Lessor and Lessee shall be
incorporated by this reference in this Agreement. Lessee's
obligations with respect to the Vehicles as described in the
respective Schedule shall become irrevocable upon the execution of
the Certificate of Acceptance for such Vehicles.
(a) ACCEPTANCE OF VEHICLES BY LESSEE. Upon completion of
delivery of all of the Vehicles described on a Schedule, Lessee
shall inspect such Vehicles and, if in good order and in
conformance with any applicable purchase order or supply contract,
Lessee will accept delivery of the Vehicles on behalf of the
Lessor, and execute and deliver the applicable Certificate of
Acceptance.
(b) LESSOR'S OBLIGATIONS TO FUND ANY SCHEDULE.
Notwithstanding any other provision of this Agreement, Lessor shall
have no obligation to lease the Vehicles on any Schedule or pay the
manufacturer or supplier until all of the following conditions
precedent are fulfilled to the reasonable satisfaction of Lessor
with respect to such Schedule (each a "CLOSING DATE"): (i) All of
the representations and warranties made by Lessee in this Lease or
the Schedule are true and accurate as of the Closing Date; (ii)
Lessor has received evidence of Lessee's compliance with the
insurance requirements of this Agreement; (iii) Lessor has received
UCC financing statements as required by Lessor; (iv) Lessee has
provided a certificate of its secretary or other authorized officer
certifying (1) the accuracy of its charter documents; (2)
resolutions of its governing board duly authorizing the execution,
delivery, and performance of this Agreement, the Schedules, and all
other related documents (the foregoing together with any guaranty
being collectively the "LEASE DOCUMENTS"); and (3) the incumbency
and signatures of the officers authorized to execute the Lease
Documents; (v) receipt of the Schedule and all exhibits or
attachments duly executed by Lessee; (vi) confirmation of the
absence of an Event of Default or an event which, but for the
passage of time or the giving of notice or both would constitute an
Event of Default, on the Closing Date; and (vii) no enactment of
any statute or adoption of any regulation which has or will have an
adverse effect on the anticipated federal or state income tax
consequences to Lessor, in which case Lessee shall not be obligated
to lease from Lessor any Vehicles not already subject to a
Certificate of Acceptance. If any of the conditions precedent
specified in the preceding (i )-(vii) are not satisfied or waived
by Lessor in its sole and absolute discretion, Lessee shall
promptly pay Lessor and indemnify, defend, and hold Lessor harmless
against all amounts which Lessor has expended or may become
obligated to pay and any claims, including the claims of any
supplier or manufacturer, with respect to any Vehicle and the
transactions contemplated under the applicable Schedule.
2. FINANCE LEASE: This Agreement is a "FINANCE LEASE" as defined
in Section 2A - 103 of the Uniform Commercial Code (the "UCC") as
adopted in the State of North Carolina (25-2A-101 et seq., General
Statutes of North Carolina). Lessee acknowledges that Lessor has
neither selected, manufactured, nor supplied the Vehicles. Lessee
selected the Vehicles and the suppliers of the Vehicles. Lessor is
acquiring the Vehicles at the request of Lessee in connection with
this Agreement. Lessee received and approved copies of the purchase
order(s) or supply contract(s) for the Vehicles prior to entering
into this Agreement.
3. PRECAUTIONARY SECURITY AGREEMENT. Should it be determined,
notwithstanding the express intent of the parties, that this
Agreement is not a "finance lease" or a lease under the UCC but
rather an agreement intended for security, then solely in that
event and for the expressly limited purposes thereof, Lessee grants
Lessor a security interest in the Vehicles to secure the prompt
payment and performance, when and as due, of the obligations and
indebtedness of Lessee to Lessor under this Agreement. Lessee
hereby also grants Lessor a security interest in all accessions and
additions to, substitutions and replacements for, and proceeds
(including insurance proceeds), accounts, and income arising from
or generated by the Vehicles. Lessee hereby appoints the Lessor as
agent for the benefit of the Lessee and grants Lessor an
irrevocable power of attorney, to take any and all actions and to
execute and file all documents necessary to establish, maintain,
and continue the perfected security interest of Lessor in the
Vehicles, in the name of and on behalf of Lessee, at Lessee's sole
cost and expense. This power of attorney is coupled with an
interest and is irrevocable during the term of this Agreement.
Lessee shall take all actions and execute and file all documents
reasonably requested by Lessor to establish, maintain, and continue
the perfected security interest of Lessor. Lessee shall, within ten
(10) days after receipt of notice from Lessor, pay all costs and
expenses of filing and recording (including the costs of all
searches deemed necessary by Lessor) to establish, maintain, and
determine the validity and priority of Lessor's security interest.
4. TERM: Unless terminated earlier by Lessor, with respect to
each Schedule, this Agreement shall be effective from the date such
Schedule is executed by Lessor for a term expiring on the Lease
Termination Date. Lessee's right to use and possess the Vehicles
described on any Schedule will begin when all of the following have
occurred: (a) Lessee has executed the applicable Certificate of
Acceptance and all other documents required thereby; (b) Lessee has
supplied Lessor with evidence of insurance coverage on the Vehicles
acceptable to Lessor in its reasonable discretion; and (c) Lessee
has paid to Lessor both the Advance Rent and the Interim Rent, if
any, designated on the applicable Schedule. Notwithstanding any
other provision of this Agreement, the term of this Agreement for
each Schedule shall continue until all of the Vehicles are returned
to Lessor in the condition required by the Schedule. As of any
applicable date, the Stipulated Loss Value for a Vehicle is the
Lessor's Cost as shown on the applicable Schedule multiplied by the
Stipulated Loss Factor as of the applicable date and as designated
on Exhibit B to such Schedule. THIS AGREEMENT IS A "NET LEASE" AND
MAY NOT BE TERMINATED BY LESSEE FOR ANY REASON WHATSOEVER.
5. RENTAL PAYMENTS: Lessee shall make all of the following
payments to Lessor (collectively "Rent"): (a) the Advance Rent set
forth on any Schedule will be due on the Date of Acceptance; (b)
Interim Rent set forth on any Schedule will be due on the Date of
Acceptance and will be calculated by multiplying the Daily Lease
Rate Factor times the number of days between the Date of Acceptance
to and including the Base Lease Commencement Date; (c) Regular
Monthly Rental Payments (plus any Additional Monthly Rent) will be
due on the date of each month during the Base Lease Term and in the
amounts stated in the applicable Schedule; and (d) All sales and
use taxes and the like will accompany each payment in an amount
sufficient to pay such taxes and other charges in full.
Notwithstanding any other provision of this Agreement, the term of
this Agreement and Lessee's obligations to pay Rent on a Vehicle
shall continue if Lessee has not returned the Vehicle to Lessor in
the condition required by this Agreement on the Lease Termination
Date (unless Lessee had previously paid Lessor the Stipulated Loss
Value for such Vehicle or is exercising any option to purchase the
Vehicle) until the Vehicle is returned to Lessor in the required
condition. Lessee agrees to make all payments of Rent in the
manner required by Lessor, including but not limited to by wire
transfer, check, or electronic funds transfer.
6. ABSOLUTE NON-TERMINABLE OBLIGATION: LESSEE'S OBLIGATION TO
MAKE PAYMENT OF ALL RENT AND ALL OTHER AMOUNTS WHEN DUE AND TO
OTHERWISE PERFORM AS REQUIRED UNDER THIS AGREEMENT SHALL BE
ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY
ABATEMENT, REDUCTION, SET-OFF, DEFENSE, COUNTERCLAIM, INTERRUPTION,
DEFERMENT OR RECOUPMENT OR TERMINATION, UNDER ANY CIRCUMSTANCE OR
FOR ANY REASON WHATSOEVER, AND SHALL NOT REQUIRE PRIOR NOTICE OR
DEMAND. Any default under a warranty, service contract, or
insurance policy, even when obtained through or from Lessor, does
not constitute a defense to Lessee's obligation to make each and
every payment in full when due under this Agreement. Lessee will
make all Rent and other payments directly to Lessor at such places
as Lessor may from time to time designate in writing. Payments
will be applied when actually received on good funds by Lessor. To
compensate Lessor for the additional costs of processing late
payments, a one-time late charge of 5% will be charged on any
payment not actually received within ten days of its due date. All
other monetary obligations due and not paid when due will bear
interest at the lesser of 18% per annum or the maximum rate allowed
by law. Lessor may, at its option, apply all payments to any past
due charges and then to charges not yet due.
7. NO WARRANTY: LESSOR, NOT BEING THE MANUFACTURER, SUPPLIER, OR
VENDOR OF THE VEHICLES MAKES NO WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED, AS TO THE VALUE, CONDITION, QUALITY, MATERIAL, DESIGN,
MERCHANTABILITY, OR FITNESS OR SUITABILITY OF ANY VEHICLES FOR ANY
PURPOSE. LESSEE ACKNOWLEDGES THAT LESSEE HAS SELECTED THE VEHICLES
BASED ON LESSEE'S OWN JUDGMENT AND HAS NOT RELIED ON ANY STATEMENTS
OR REPRESENTATIONS OF LESSOR. In no event will Lessor be liable
for loss or damage to cargo, contents, attachments, lost profits or
to the Vehicles, or incidental, special, or consequential damages
of any nature, regardless of cause. So long as no Event of Default
has occurred Lessor hereby assigns to Lessee the right to enforce
all warranties made by the manufacturer, supplier, or vendor of the
Vehicles.
8. LESSEE'S REPRESENTATIONS: Lessee warrants and represents to
Lessor, expressly acknowledging that Lessor is relying on these
warranties and representations, as of the date of this Agreement
and/or each Closing Date, as applicable, and until all of Lessee's
obligations under this Agreement have been satisfied in full, that:
(i) all information supplied by Lessee to Lessor in any financial,
credit or accounting statement is and will be true, correct, valid
and genuine; (ii) the Vehicles are to be used only for business
purposes; (iii) Lessee is duly organized, validly existing, and in
good standing under the laws of the state of its formation; (iv)
Lessee has the full authority to enter into each of the Lease
Documents and to perform all of its obligations under each of the
Lease Documents; (v) Lessee has duly authorized, executed, and
delivered each of the Lease Documents to which it is a party, and
each such Lease Document constitutes the legal, valid, and binding
obligation of Lessee, enforceable against Lessee in accordance with
its terms; (vi) that each of the Lease Documents does not require
the approval of any stockholder, trustee, or holder of any
obligation of Lessee and does not and will not violate any law,
rule, or order now binding upon Lessee, or the charter, by-laws, or
other governing documents of Lessee, or violate the provisions of,
constitute a default under, or result in the creation of any lien
or encumbrance upon the property of Lessee under, any contract or
agreement to which Lessee is a party or by which it or its assets
are bound or require the consent or approval or the giving of
notice to the Federal, or any state, or local government (other
than customary titling, registration, and security interest
filings); (vii) there are no pending or overtly threatened actions
or proceedings, which either, individually, or in the aggregate,
would materially adversely affect the financial condition of Lessee
or Lessee's ability to fully perform all of its obligations under
all of the Lease Documents; (viii) Lessee maintains its principal
place of business at the address set forth on page 1 of this
Agreement; and (ix) Lessor's ownership of and interest in the
Vehicles shall at all times be prior to any other interests in the
Vehicles.
9. LESSEE'S OBLIGATIONS AND COVENANTS: In addition to and not in
limitation of any other agreements of Lessee under the Lease
Documents, Lessee agrees at its sole expense: (a) to use each
Vehicle only in the United States (or in Canada for not more than
60 days per rolling 12 calendar month period to be determined
individually for each Vehicle) in accord with all applicable laws,
regulations, and insurance policies; (b) to keep each Vehicle free
from all claims, liens, encumbrances and attachments of any kind
whatsoever; (c) to file, report, and pay on its and Lessor's
behalf by the applicable due date all taxes, fees, and assessments
on the Vehicles and the Lease, sending a copy of such filing and
payment contemporaneously to Lessor; (d) to defend any action,
proceeding or claim affecting the Vehicles or Lessor's interest
therein; (e) to obtain a certificate of title on each of the
Vehicles showing Lessor's title to the Vehicles, and to preserve
and perfect Lessor's title to all of the Vehicles; (f) that Lessee
will not (or permit any party to) misuse, secrete, sell, rent,
lend, encumber, transfer, or illegally use any of the Vehicles nor
permit any Vehicle to be operated by or be in the possession of any
party other than Lessee; (g) Lessee will not use or permit the use
of any Vehicle off an improved road or for transportation of
passengers or of material designated as HAZARDOUS, RADIOACTIVE,
TOXIC, FLAMMABLE, OR EXPLOSIVE, OR ENVIRONMENTALLY HAZARDOUS,
UNSAFE, OR DANGEROUS under any state, federal, or local law, rule,
or requirement; (h) that Lessor may enter any premises to inspect
the Vehicles, Vehicles or Lessee's books and records regarding the
Vehicles at any time during usual business hours; (i) to provide
Lessor with its complete financial information, including Income
Statements and Balance Sheets, compiled according to generally
accepted accounting principles -- unaudited on a quarterly basis
within 60 days after the end of each quarter and audited on an
annual basis within 90 days after year end; (j) to give Lessor
prompt written notice of any lien or claim for which it is
obligated to indemnify Lessor; and (k) that Lessee will not alter
or permit the alteration of any Vehicles without the prior written
consent of Lessor, and that Lessee will remove or cause the removal
of all markings prior to the return of the Vehicles to Lessor.
10. VEHICLE CONDITION: In addition to any other requirements of
this Agreement, Lessee will, at its sole expense, maintain each of
the Vehicles so as to meet all of the following requirements: (a)
each Vehicle will be preserved in first class operating condition,
repair, and appearance in accordance with all manufacturer service
requirements and warranties; (b) all replacement and substitute
parts and accessories will be original Vehicle manufacture, or from
commercially reputable providers with similar or superior value,
serviceability, and warranty; (c) each Vehicle will be kept in
roadworthy condition so as to continuously and fully comply with
all government requirements, including the United States Department
of Transportation. If Lessor notifies Lessee that any Vehicle is
not being maintained within the above standards, Lessee will have
20 days from the date of receipt of the written notification to
make the necessary corrections.
11. INSURANCE AND RISK OF LOSS: All risk of loss, damage or
destruction of the Vehicles will at all times be on Lessee. Lessee
will keep the Vehicles insured at Lessee's expense against
liability in an amount not less that $1,000,000 per occurrence, and
loss or damage by fire, theft and other customary risks for the
greater of the full insurable values or the then applicable
Stipulated Loss Value for the Vehicles. Coverage and insurer will
be subject to Lessor's approval, provided however that such insurer
shall have a Best Class rating of at least B+VIII. Lessor and any
third party designated by Lessor shall be named as an additional
insured and/or loss payee, as applicable, on each policy. Each
policy will further provide that Lessor's interest can not be
invalidated by any act, omissions, or neglect of anyone other than
Lessor and that the insurer will give Lessor thirty days advance
written notice of any policy cancellation or non-renewal, whether
such cancellation is at the direction of Lessee or insurer. Lessee
will promptly deliver a copy of each policy or insurance
certificate to Lessor and proof of renewal at least 30 days prior
to expiration or cancellation. If Lessee fails to provide the
required insurance, Lessor may purchase such insurance at Lessee's
expense, purchase of which need not include liability coverage or
protection of Lessee's interest. Lessee irrevocably appoints
Lessor as Lessee's attorney-in-fact to execute and endorse all
documents, checks or drafts received in payment of loss or damage
under any insurance policy. Lessee will immediately notify Lessor
in writing of any substantial damage, theft or loss which makes any
Vehicle unfit for continued or repairable use at which time Lessee
will pay to Lessor the Stipulated Loss Value for the Vehicle
calculated as of the day upon which the next Regular Monthly Rental
Payment is due, together with all other sums then owed in
connection with the Vehicle. Upon receipt of the Stipulated Loss
Value and all other amounts then due, Lessor shall transfer title
to the Vehicle "Where-Is," "As-Is" to Lessee or as Lessee directs,
with Lessee being responsible for all costs of such transfer.
Lessor has no obligation to replace any Vehicle and may apply
insurance proceeds to any of Lessee's obligations as Lessor deems
appropriate.
12. RETURN OF VEHICLES: In addition to the other requirements of
this Agreement, whenever Lessee's right to possess any of the
Vehicles terminates, for any reason whatsoever, including after the
occurrence of an Event of Default, Lessee will promptly, at its
sole expense, assemble and return the Vehicles to locations
selected by Lessor. Lessee will also return to Lessor all license
plates, registration certificates, manufacturer warranty
agreements, maintenance records and other documents relating to the
Vehicles. Upon return of a Vehicle, should the average annual
miles exceed the maximum mileage provision as specified in the
applicable Schedule, Lessee will pay to Lessor an additional return
charge equal to the Mileage Rate set forth on the Schedule, times
the number of excess miles. If Lessor takes possession of any
property not subject to its interests, it shall notify Lessee and
may dispose of the property if Lessee fails to take possession
within thirty (30) days. If a Vehicle is not returned in the
condition set forth below, Lessee shall pay to Lessor within five
(5) days of receipt of written notice from Lessor an amount to
repair and recondition the Vehicle, in order to offset its decline
in value, and to obtain the appropriate licenses and registration.
(a) ROADWORTHY. Each Vehicle will be in roadworthy
condition, and all original equipment or replacement equipment of
similar value made by the same manufacturer will be intact and in
first class working condition, free of mechanical problems to any
of its parts and accessories. Permanently installed attachments
must remain with the Vehicle unless a written exception is executed
by each of Lessor and Lessee. If attachments are removed, the
Vehicle must be returned to its original condition.
(b) CAB AND BODY. The cost of necessary repairs to sheet
metal (cab, body, fuel tanks) will not exceed four hours labor,
flat rated against Xxxxxxxx or other industry accepted guide, and
$200 replacement parts at truck manufacturers published "fleet"
price. All decals, permits, numbers, and other customer
identification will be removed from each Vehicle by Lessee in such
a manner as not to damage the surface. Interior trim will be free
of tears, and no glass will be broken, chipped or cracked. The
windshield seal must be free of visible gasket/adhesive material.
All mechanical and electrical equipment including radios, heaters
and air conditioners must be in proper operating condition.
(c) MECHANICAL POWER TRAIN. The Vehicle must be capable of
performing at 85% of its rated capacity, at the wheels, under full
load without excess oil leakage or blow-by. The condition of the
engine and power train will be determined by diagnostic testing
conducted by National Truck Protection Co., Inc. or conducted at a
service center authorized by Lessor which uses National Truck
Protection Co., Inc. standards. Passwords for the engine
electronic program, if applicable, must be supplied.
(d) SYSTEMS. Cooling and lubrication systems will not be
contaminated or leaking between fluid systems nor will any system
be damaged by the failure to properly maintain fluids. Batteries
must be of original CCA rating and capable of holding a charge
starting the Vehicle.
(e) TIRES, WHEELS, AND BRAKES. Tires and wheels will be made
of matched generic type, quality, and design as originally supplied
and have at least 9/32" tread on front tires and 12/32" tread on
rear tires. Front tires will be original casings. Rear tires may
have first time recapped casings. Brake linings will have at least
50% remaining wear. There must be no irregular, or unusual wear or
damage to the tread or sidewalls. All rear wheel positions must be
of matched tread design.
(f) DOCUMENTS AND RECORDS. Each Vehicle will have a title
free and clear of all liens and encumbrances, meet any ICC
requirements, have a state inspection certificate valid for at
least 120 days after the date of return; proof of payment of ad
valorem, highway and all other taxes, a copy of a vehicle
maintenance packet, license plates and registration compliance, and
a valid, current DOT inspection certification.
(g) INSPECTIONS. Not more than 90 days and not less than 45
days prior to return of a Vehicle on the applicable Lease
Termination Date, Lessee will make the Vehicle available so that
Lessor may conduct a "walk-around" appraisal. Inspections may be
made by National Truck Protection at the request and expense of
Lessor if the Vehicles meet the National Truck Protection standard.
Lessee is responsible for the cost of inspection of Vehicles not
meeting the established National Truck Protection standard.
13. ASSIGNMENT:
(a) TRANSFER BY LESSOR: LESSOR MAY ASSIGN OR TRANSFER THIS
AGREEMENT ANY SCHEDULE OR LESSOR'S INTEREST IN ANY OF THE VEHICLES
WITHOUT NOTICE TO LESSEE. Any assignee or transferee of Lessor
shall have all of the rights, but none of the obligations, of
Lessor under this Agreement and Lessee agrees that it will not
assert against any assignee or transferee of Lessor any defense,
counterclaim, or offset which Lessee may have against Lessor.
Lessee acknowledges that any assignment or transfer by Lessor shall
not materially change Lessee's duties or obligations under this
Lease nor materially increase the burden or risks imposed on
Lessee.
(b) TRANSFER BY LESSEE: LESSEE SHALL NOT ASSIGN, SUBLEASE,
TRANSFER, OR DISPOSE OF ALL OR ANY PART OF ITS RIGHTS OR
OBLIGATIONS UNDER THIS AGREEMENT OR IN THE VEHICLES, OR ENTER INTO
ANY SUBLEASE OF ALL OR ANY OF THE VEHICLES, WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR, (REGARDLESS OF WHETHER SUCH ACTION
OCCURS VOLUNTARILY OR BY OPERATION OF LAW).
(c) SECURITY INTEREST AND ASSIGNMENT. Notwithstanding the
prohibition against assignments or subleases without Lessor's prior
written consent, Lessee hereby transfers, conveys, and assigns to
Lessor and grants to Lessor a security interest in all of Lessee's
right, title, and interest in, but none of its obligations under
any sublease of the Vehicles, and all proceeds and income arising
therefrom. Any sublease permitted under this Agreement shall be in
form and contain terms and conditions acceptable to Lessor and
assigned to Lessor by form approved by Lessor, all such approvals
by Lessor to be granted or withheld in Lessor's sole and absolute
discretion.
14. LESSEE'S INDEMNITIES: Lessee agrees that: (a) Lessee will
indemnify and hold harmless Lessor and its agents for, from, and
against all losses, penalties, claims, and causes of action
including legal fees and expenses of every kind and nature related
to this Agreement or the selection, manufacture, purchase,
delivery, lease, possession, use, misuse, contents, repair,
collision, personal injury, death, condition or return of any of
the Vehicles; (b) Lessor may, at its sole option, take any action
Lessor deems necessary to cure any Event of Default, and Lessee
will immediately and fully compensate Lessor for such action; and
(c) Lessor is entitled to the accelerated cost recovery (or
depreciation) deductions with respect to each Vehicle. Should any
taxing authority disallow, eliminate, reduce, recapture, or
disqualify, in whole or in part, any tax benefits with respect to
any Vehicle (whether because of a change in tax law or policy or
because of a change in the status or condition of the Vehicle),
then Lessee will immediately pay a sum that permits Lessor to
receive (on an after-tax basis over the full term of the Lease) the
same after-tax cash flow and after-tax yield that Lessor may have
reasonably assumed upon entering into the Lease. Any written
request from Lessor for such a payment will be binding, unless
objected to within 14 days of notification, and due upon request.
15. EVENTS OF DEFAULT: Each of the following shall constitute an
Event of Default which will allow Lessor to exercise all of its
rights under this Agreement and applicable law: (a) Lessee fails to
make any payment in full when due under this Agreement; (b) Lessee
breaches any provision, covenant, or warranty in this Agreement and
such breach continues after ten (10) days written notice to Lessee;
(c) any of the Vehicles is lost, severely damaged, destroyed or
attached and Lessor does not receive the Stipulated Loss Value for
such Vehicle, plus all other amounts then due under this Agreement
for such Vehicle, within ten (10) days after the date on which such
damage, destruction, or attachment occurs; (d) an odometer on any
Vehicle fails or appears to have been tampered with and is not
repaired within two weeks; (e) Lessee or any guarantor dies,
becomes insolvent or ceases to do business in the ordinary course,
or suffers a material adverse change in its management or
ownership; (f) a petition in bankruptcy is filed by or against
Lessee or any guarantor, or Lessee or guarantor admits its
inability or is unable to pay its debts as they come due, or a
receiver or trustee is appointed for Lessee or any guarantor; (g)
any guarantor, surety or endorser for Lessee defaults on any
obligation or liability to Lessor; (h) Lessee or any guarantor
shall default with respect to any agreement with, or obligation to,
any other party for the payment of borrowed money, contractual
obligation, or rent, and such default exceeds an aggregate amount
of One Million Dollars ($1,000,000); (i) any representation or
warranty made by Lessee or any guarantor in any of the Lease
Documents or any information delivered by Lessee or any guarantor
in obtaining or hereafter in connection with the credit evidenced
by this Agreement is materially incomplete, incorrect or misleading
as of the date made or delivered; (j) the consolidation or merger
of Lessee or guarantor with any other person or entity, or the
taking of any action by Lessee or any guarantor towards a
dissolution, liquidation, consolidation, or merger; and (k) the
sale or transfer (voluntarily or by operation of law) by Lessee or
any guarantor of all or substantially all of Lessee's or any
guarantor's assets to any person or entity.
16. WAIVER OF DEFAULTS: Lessor may, in its sole discretion, waive
an Event of Default or permit a cure of an Event of Default, at
Lessee's sole expense. Any such waiver will not constitute a
waiver of any other Events of Defaults or a waiver of the same type
of an Event of Default at another time.
17. REMEDIES: Whenever an Event of Default has occurred under
this Agreement, Lessor will have all the rights and remedies
provided by this Agreement, the UCC, and other applicable law.
Lessor's rights and remedies are cumulative. At the option of
Lessor, with or without notice, Lessee's rights to the Vehicles may
be canceled and all rental payments and other amounts owed under
this Agreement will be immediately due and payable in full,
together with all costs and expenses, including attorneys' fees,
incurred by Lessor in the enforcement of its rights and remedies
under this Lease. Lessor may take possession of any Vehicles (with
or without legal process) and, to the extent permitted by law, may
enter any locked or unlocked premises for that purpose. Lessor
may, at its option, sell, lease, or otherwise dispose of any or all
of the Vehicles after it obtains possession. Upon such sale,
Lessee will pay to Lessor immediately, as liquidated damages for
loss of bargain and not as a penalty, the amount by which the
Stipulated Loss Value exceeds the net sales proceeds of such
Vehicles in addition to all other amounts due. If any Vehicle is
not immediately returned to Lessor, or if Lessor is prevented from
retaking possession, Lessee will pay Lessor immediately the
Stipulated Loss Value for such Vehicle as of the date rental
payments are next due, in addition to all other owed charges.
Lessor may at its sole discretion seek remedies with respect to
Lessee's obligations on some or all of the Schedules without
diminishing Lessor's rights to separately or later pursue remedies
on any of Lessee's other obligations. To the extent permitted by
law, Lessee waives all other remedies, including specific
performance, the right to deduct damages from current amounts due,
and all indirect, consequential, punitive, and incidental damages.
18. STATUTE OF LIMITATIONS.: Any action by Lessee against Lessor
under this Agreement shall be commenced within one (1) year after
any such cause of action accrues.
19. SURVIVAL. The representations, warranties, and covenants of
the Lessee in this Agreement shall survive the execution and
delivery of this Agreement.
20. INTEGRATION, ENTIRE AGREEMENT. This Agreement and the
Schedules attached hereto constitute the entire agreement and
understanding of Lessor and Lessee and supersede all prior
representations, warranties, agreements, understandings, and
negotiations. Acceptance of late payments shall not waive the TIME
IS OF THE ESSENCE PROVISION, the right of Lessor to require that
subsequent payments be made when due, or the right of Lessor to
declare an Event of Default if subsequent payments are not made
when due.
21. COSTS, EXPENSES, AND FEES. In the event of any dispute
between the parties, the prevailing party in such dispute shall
recover from the other all fees and expenses (including reasonable
attorney's fees and expenses) incurred in connection with such
dispute, regardless of whether litigation is instigated.
22. SEVERABILITY. If any provision of any of this Agreement is
unenforceable, such provision shall be modified to the minimum
extent possible to make such provision enforceable and the
enforceability of the other provisions of this Agreement shall not
be affected.
23. CHOICE OF LAW. This Agreement shall not be effective until
accepted by Lessor at its North Carolina headquarters and shall be
governed by the substantive (and not choice of law or conflicts)
laws of the State of North Carolina.
24. TIME IS OF THE ESSENCE. Time is off the essence with regard
to each provision of this Agreement as to which time is a factor.
25. NOTICES AND DEMANDS. All demands or notices under this
Agreement shall be in writing (including without limitation,
telecopy or facsimile, receipt confirmed) and mailed, telecopied,
or delivered to the address previously specified in writing by the
party to whom such notice is being given. Any demand or notice
mailed shall be mailed first-class mail, post-prepaid, return-
receipt requested. Demands or notices shall be effective upon the
earlier of (i) actual receipt by the addressee or (ii) the date
shown on the return receipt, fax confirmation, or delivery receipt.
26. RESCISSION OR RETURN OF PAYMENTS. If at any time, all or any
part of any amount received by the Lessor under this Agreement,
must or is claimed to be subject to avoidance, rescission, or
return to Lessee or any other party for any reason whatsoever, such
obligation and any liens, security interests and other encumbrances
that secured such obligations at the time such avoidance,
rescission, or returned payment was received by Lessor shall be
deemed to have continued in existence or shall be reinstated, as
the case may be, all as though such payment had not been received.
27. HEADINGS. The headings at the beginning of sections of this
Agreement are solely for convenience and do not modify any
sections.
28. NUMBER AND GENDER. The singular shall include the plural and
vice versa and each gender shall include the other genders.
29. MULTIPLE FINANCE ACCOMMODATIONS. If Lessee has more than one
lease or other finance accommodation with Lessor, Lessee agrees
that: (i) this Agreement and the documents relating to such other
finance accommodation shall all remain in effect and neither shall
supersede the other, regardless of whether this Agreement and such
other financing documents have differing terms, conditions, and
requirements; and (ii) regardless of any such differences, Lessee
shall comply with all of the terms, condition, and requirements of
this Agreement and of such other financing documents.
30. WAIVERS. Lessee waives, to the fullest extent permitted by
law, presentment, notice of dishonor, and all other notices of
demands of any kind (except as otherwise expressly provided in this
Agreement).
31. AMENDMENT OR MODIFICATION. No term or provision of this
Agreement maybe amended, waived, modified, discharged, or
terminated orally but only in writing, executed by the parties. By
executing this Agreement, Lessee agrees to be bound by the terms of
this Lease and, to the extent applicable, the provision concerning
a separately signed document pursuant to UCC Section 2A-208 has
been satisfied.
Dated: As of the 18th day of August, 1997.
LESEE: VOLVO TRUCK FINANCE NORTH
AMERICA, INC.
American Freightways, Inc. 7823 National Service Road
XX Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
By /s/Xxxxx Xxxxxx By /s/Xxxxxxxxxxx Xxxxxxxxx
Executive Vice President Customer Accounts Manager
Title Title
