Exhibit 10.25





Exhibit 10.25




BB&T EQUIPMENT FINANCE CORPORATION




MASTER LEASE AGREEMENT




THIS MASTER LEASE AGREEMENT (this “Lease”) is made as of December 30, 2009, between BB&T
EQUIPMENT FINANCE CORPORATION, its successors and assigns (“Lessor”), and ABF FREIGHT SYSTEM, INC.,
its successors and permitted assigns (“Lessee”).



Lessee desires to lease from Lessor the equipment and other property (the “Equipment”)
described in each Equipment Schedule executed pursuant to this Lease (each, a “Schedule”)
incorporating by reference the terms and conditions of this Lease (the term “Lease” shall also
include any Riders to this Lease entered into with respect to such Schedule). Certain definitions
and construction of certain of the terms used in this Lease are provided in Section 19 hereof.



For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Lease agree as follows:



1. AGREEMENT TO LEASE; TERM. This Lease is effective as of the date specified above. By entering
into a Schedule, Lessor leases the Equipment described therein to Lessee, and Lessee leases such
Equipment from Lessor, in each case, subject to the terms and conditions in this Lease and such
Schedule and all of the other documents and agreements executed in connection herewith
(collectively, the “Lease Documents”). Each Schedule, incorporating the terms and conditions of
this Lease, will constitute a separate instrument of lease. The term of lease with respect to each
item of Equipment leased under a Schedule shall commence on the date of execution of such Schedule
and continue for the term provided in that Schedule.



2. RENT. Lessee shall pay Lessor (a) the rental installments (“Basic Rent”) as and when specified
in each Schedule, without demand, and (b) all of the other amounts payable in accordance with this
Lease, such Schedule and/or any of the other Lease Documents (“Other Payments”, and together with
the Basic Rent, collectively, the “Rent”). Upon Lessee’s execution thereof, the related Schedule
shall constitute a non-cancelable net lease, and Lessee’s obligation to pay Rent, and otherwise to
perform its obligations under or with respect to such Schedule and all of the other Lease
Documents, are and shall be absolute and unconditional and shall not be affected by any
circumstances whatsoever, including any right of setoff, counterclaim, recoupment, deduction,
defense or other right which Lessee may have against Lessor, the manufacturer or vendor of the
Equipment (the “Suppliers”), or anyone else, for any reason whatsoever (each, an “Abatement”).
Lessee agrees that all Rent shall be paid in accordance with Lessor’s or Assignee’s written
direction. Time is of the essence. If any Rent is not paid within five (5) days of the due date,
Lessee shall pay a late charge equal to five (5) percent of the amount in arrears.



3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE. Lessee represents, warrants and agrees
that, as of the effective date of this Lease and of each Schedule: (a) Lessee has the form of
business organization indicated, and is and will remain duly organized and existing in good
standing under the laws of the state specified, under Lessee’s signature and is duly qualified to
do business wherever necessary to perform its obligations under the Lease Documents, including each
jurisdiction in which the Equipment is or will be located. Lessee’s legal name is as shown in the
preamble of this Lease; and Lessee’s Federal Employer Identification Number and organizational
number are as set forth under Lessee’s signature. Within the previous six (6) years, Lessee has
not changed its name, done business under any other name, or merged or been the surviving entity of
any merger, except as disclosed to Lessor in writing. (b) The Lease Documents (1) have been duly
authorized by all necessary action consistent with Lessee’s form of organization, (2) do not
require the approval of, or giving notice to, any governmental authority, (3) do not contravene or
constitute a default under any applicable law, Lessee’s organizational documents, or any agreement,
indenture, or other instrument to which Lessee is a party or by which it may be bound, and (4)
constitute legal, valid and binding obligations of Lessee enforceable against Lessee, in accordance
with the terms thereof. (c) Other than Lessee’s obligations for Lessee’s contractual employees as
provided by existing multiemployer plans, there are no pending actions or proceedings to which
Lessee is a party, and there are no other pending or threatened actions or proceedings of which
Lessee has knowledge, before any court, arbitrator or administrative agency, which, either
individually or in the aggregate, would have a Material Adverse Effect. As used herein, “Material
Adverse Effect” shall mean (i) a materially adverse effect on the business, condition (financial
or otherwise), operations, performance or properties of Lessee, or on Lessor’s rights and remedies
under this Lease, or (ii) a material impairment of the ability of Lessee to perform its obligations
under or remain in compliance with such Schedule or any of the other Lease Documents. Further,
Lessee is not in default under any financial or other material agreement that, either individually,
or in the aggregate, would have a Material Adverse Effect. (d) Under the applicable laws of each
such jurisdiction, such Equipment consists (and shall continue to consist) solely of personal
property and not fixtures. Such Equipment is removable from and is not essential to the premises
at which it is located. (e) The financial statements of Lessee (copies of which have been
furnished to Lessor) have been prepared in accordance with generally accepted accounting principles
consistently applied (“GAAP”), and fairly present Lessee’s financial condition and the results of
its operations as of the date of and for the period covered by such statements, and since the date
of such statements there has been no material adverse change in such conditions or operations. (f)
With respect to any Collateral, Lessee has good title to, rights in, and/or power to transfer all
of the same. (g) The Supplier is not an affiliate of Lessee. (h) The Supply Contract (as such
term is hereinafter defined) represents an arms’ length transaction and the purchase price for the
Equipment specified therein is the amount obtainable in an arms’ length transaction between a
willing and informed buyer and a willing and informed seller under no compulsion to sell.



LEASE AGREEMENT — TRUE LEASE





 


 









 







4. FURTHER ASSURANCES AND OTHER COVENANTS. Lessee agrees as follows: (a) Lessee shall obtain and
deliver to Lessor and/or promptly execute or otherwise authenticate any documents, filings, waivers
(including any landlord and mortgagee waivers), releases and other records, and will take such
further action as Lessor may reasonably request in furtherance of Lessor’s rights under any of the
Lease Documents. Lessee irrevocably authorizes Lessor to file UCC financing statements (“UCCs“),
and other filings with respect to the Equipment or any Collateral. Without Lessor’s prior written
consent, Lessee agrees not to file any corrective or termination statements or partial releases
with respect to any UCCs filed by Lessor pursuant to this Lease. (b) Lessee shall provide written
notice to Lessor: (1) thirty (30) days prior to any change in Lessee’s name or jurisdiction or form
of organization; (2) promptly upon the occurrence of any Event of Default (as defined in Section
15) or event which, with the lapse of time or the giving of notice, or both, would become an Event
of Default (a “Default”); and (3) promptly upon Lessee becoming aware of any alleged violation of
applicable law relating to the Equipment or this Lease. (c) Lessee has been advised by Lessor that
the USA Patriot Act establishes minimum standards of account information to be collected and
maintained by Lessor, and that to help the government fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to obtain, verify and record
information that identifies each person who opens an account; and specifically, this means that
when Lessee executes this Lease, Lessor may ask for Lessee’s name and address, the date of birth of
the officers executing this Lease, and other information that will allow Lessor to identify Lessee;
and that Lessor may also ask to see the driver’s license or other identifying documents of the
officers of Lessee executing this Lease. (d) Lessee is and will remain in full compliance with all
applicable laws including, without limitation, (i) ensuring that no person who owns a controlling
interest in or otherwise controls Lessee is or shall be (A) listed on the Specially Designated
Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”),
Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation, or (B) a person designated under Sections 1(b),
(c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or
any other similar Executive Orders, and (ii) compliance with all applicable Bank Secrecy Act
(“BSA”) laws, regulations and government guidance on BSA compliance and on the prevention and
detection of money laundering violations.



5. CONDITIONS PRECEDENT. Lessor’s agreement to purchase and lease any Equipment under a Schedule,
is conditioned upon Lessor’s determination that all of the following have been satisfied: (a)
Lessor having received the following, in form and substance reasonably satisfactory to Lessor: (1)
evidence as to due compliance with the insurance provisions of Section 11; (2) if requested, lien
searches in the jurisdiction of Lessee’s organization, and wherever else Lessor deems appropriate;
(3) UCCs, real property waivers and all other filings required by Lessor; (4) a certificate of an
appropriate officer of Lessee certifying: (A) resolutions duly authorizing the transactions
contemplated in the applicable Lease Documents, and (B) the incumbency and signature of the
officers of Lessee authorized to execute such documents; (5) an opinion of counsel for Lessee as to
each of the matters set forth in sub-parts (a) through (c) of Section 3; (6) the only manually
executed original of the Schedule, and counterpart originals of all other Lease Documents; (7) all
purchase documents pertaining to the Equipment (collectively, the “Supply Contract”); (8) if
requested by Lessor, good standing certificates from the jurisdiction of Lessee’s organization and
the location of the Equipment, and evidence of Lessee’s organizational number; (9) the Master Lease
Guaranty (the “Guaranty”), in form and substance satisfactory to Lessor, duly executed by Arkansas
Best Corporation (the “Guarantor”); (10) a certificate of Guarantor’s secretary certifying: (A)
resolutions duly authorizing the undertaking to guarantee the payment and performance of the
obligations of Lessee under this Lease, and (B) the incumbency and signature of the officers of
Guarantor authorized to execute the Guaranty; (11) an opinion of counsel for Guarantor as to each
of the matters set forth in Subparts (a)(1) and (2), (b) and (c) of Section 4 of the Guaranty; and
(12) such other documents, agreements, instruments, certificates, opinions, and
assurances, as Lessor reasonably may require. (b) All representations and warranties provided by
Lessee in favor of Lessor in any of the Lease Documents shall be true and correct on the effective
date of the related Schedule (Lessee’s execution and delivery of the Schedule shall constitute
Lessee’s acknowledgment of the same). (c) There shall be no Default or Event of Default under the
Schedule or any other Lease Documents. The Equipment shall have been delivered to and accepted by
Lessee, as evidenced by the Schedule, and shall be in the condition and repair required hereby; and
on the effective date of such Schedule Lessor shall have received good title to the Equipment
described therein, free and clear of any claims, liens, attachments, rights of others and legal
processes (“Liens”).



LEASE AGREEMENT — TRUE LEASE







 


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6. ACCEPTANCE UNDER LEASE. Upon delivery, Lessee shall inspect and, if conforming to the condition
required by the applicable Supply Contract, accept the Equipment and execute and deliver to Lessor
a Schedule describing such Equipment. The Schedule will evidence Lessee’s unconditional and
irrevocable acceptance under the Schedule of the Equipment described therein. However, if Lessee
fails to accept delivery of any item of the Equipment, or accepts such Equipment but fails to
satisfy any or all of the other conditions set forth in Section 5, Lessor shall have no obligation
to purchase or lease such Equipment. In such event, Lessor’s rights shall include, among other
things, the right to demand that Lessee (a) fully assume all obligations as purchaser of the
Equipment, with the effect of causing Lessor to be released from any liability relating thereto,
(b) immediately remit to Lessor an amount sufficient to reimburse it for all advance payments,
costs, taxes or other charges paid or incurred with respect to the Equipment (including any of such
amounts paid by Lessor to Supplier under the Supply Contract or as a reimbursement to Lessee),
together with interest at the Default Rate accruing from the date or dates such amounts were paid
by Lessor until indefeasibly repaid by Lessee in full, and (c) take all other actions necessary to
accomplish such assumption.



7. USE AND MAINTENANCE. (a) Lessee shall (1) use the Equipment solely in the continental United
States (provided, however, that without limiting Lessee’s indemnification obligations pursuant to
Section 14(b) hereof, Lessee may use the Equipment on an occasional basis in Mexico and/or Canada
so long as such use does not cause the Equipment to be deemed to constitute tangible property “used
predominantly outside the United States”, within the meaning of the Internal Revenue Code of 1986,
as now or hereafter amended (the “Code”)) and in the conduct of its business, for the purpose for
which the Equipment was designed, in a careful and proper manner, and shall not permanently
discontinue use of the Equipment; (2) operate, maintain, service and repair the Equipment, and
maintain all records and other materials relating thereto, (A) in accordance and consistent with
(i) the Supplier’s recommendations and all maintenance and operating manuals or service agreements,
whenever furnished or entered into, including any subsequent amendments or replacements thereof,
issued by the Supplier or service provider, (ii) the requirements of all applicable insurance
policies, (iii) the Supply Contract, so as to preserve all of Lessee’s and Lessor’s rights
thereunder, including all rights to any warranties, indemnities or other rights or remedies, (iv)
all applicable laws, and (v) the prudent practice of other similar companies in the same business
as Lessee, but in any event, to no lesser standard than that employed by Lessee for comparable
equipment owned or leased by it; and (B) without limiting the foregoing, so as to cause the
Equipment to be in good repair and operating condition and in at least the same condition as when
delivered to Lessee hereunder, except for ordinary wear and tear resulting despite Lessee’s full
compliance with the terms hereof; (3) provide written notice to Lessor not less than thirty (30)
days after any change of the location of any Equipment (or the location of the principal garage of
any Equipment, to the extent that such Equipment is mobile equipment) as specified in the Schedule;
and (4) not attach or incorporate the Equipment to or in any other property in such a manner that
the Equipment may be deemed to have become an accession to or a part of such other property. (b)
Within a reasonable time, Lessee will replace any parts of the Equipment which become worn out,
lost, destroyed, damaged beyond repair or otherwise unfit for use, by new or reconditioned
replacement parts which are free and clear of all Liens and have a value, utility and remaining
useful life at least equal to the parts replaced (assuming that they were in the condition required
by this Lease). Any modification or addition to the Equipment that is required by this Lease shall
be made by Lessee. Title to all such parts, modifications and additions to the Equipment
immediately shall vest in Lessor, without any further action by Lessor or any other person, and
they shall be deemed incorporated in the Equipment for all purposes of the related Schedule.
Unless replaced in accordance with this Section, Lessee shall not remove any parts originally or
from time to time attached to the Equipment, if such parts are essential to the operation of the
Equipment, are required by any other provision of this Lease or cannot be detached from the
Equipment without materially interfering with the operation of the Equipment or adversely affecting
the value, utility and remaining useful life which the Equipment would have had without the
addition of such parts. Except as permitted in this Section, Lessee shall not make any material
alterations to the Equipment. (c) Upon forty-eight (48) hours’ notice, Lessee shall afford Lessor
and/or its designated representatives access to the premises where the Equipment is located for the
purpose of inspecting such Equipment and all applicable maintenance or other records relating
thereto at any reasonable time during normal business hours; provided, however, if a Default or
Event of Default shall have occurred and then be continuing, no notice of any inspection by Lessor
shall be required. If any discrepancies are found as they pertain to the general condition of the
Equipment, Lessor will communicate these discrepancies to
Lessee in writing. Lessee shall then have thirty (30) days to rectify these discrepancies at its
sole expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed
representative, if corrective measures were required.



LEASE AGREEMENT — TRUE LEASE





 


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8. DISCLAIMER; QUIET ENJOYMENT. (a) THE EQUIPMENT IS LEASED HEREUNDER “AS IS, WHERE IS”. LESSOR
SHALL NOT BE DEEMED TO HAVE MADE, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING ANY PART, OR ANY MATTER WHATSOEVER, INCLUDING,
AS TO EACH ITEM OF EQUIPMENT, ITS DESIGN, CONDITION, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE, TITLE, ABSENCE OF ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR LATENT DEFECT
(WHETHER OR NOT DISCOVERABLE BY LESSEE), COMPLIANCE OF SUCH ITEM WITH ANY APPLICABLE LAW,
CONFORMITY OF SUCH ITEM TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE DOCUMENT OR TO THE
DESCRIPTION SET FORTH IN THE RELATED SCHEDULE OR ANY OF THE OTHER LEASE DOCUMENTS, OR ANY
INTERFERENCE OR INFRINGEMENT (EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8(b)), OR ARISING FROM ANY
COURSE OF DEALING OR USAGE OF TRADE, NOR SHALL LESSOR BE LIABLE, FOR ANY INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR ABSOLUTE LIABILITY IN TORT; AND LESSEE HEREBY
WAIVES ANY CLAIMS ARISING OUT OF ANY OF THE FOREGOING. Without limiting the foregoing, Lessor will
not be responsible to Lessee or any other person with respect to, and Lessee agrees to bear sole
responsibility for, any risk or other matter that is the subject of Lessor’s disclaimer; and
Lessor’s agreement to enter into this Lease and any Schedule is in reliance upon the freedom from
and complete negation of liability or responsibility for the matters so waived or disclaimed herein
or covered by the indemnity in this Lease. So long as no Event of Default has occurred, Lessee may
exercise Lessor’s rights, if any, under any warranty with respect to the Equipment. Lessee’s
exercise of such rights shall be at its sole risk, shall not result in any prejudice to Lessor, and
may be exercised only during the term of the related Schedule. Lessee shall not attempt to enforce
any such warranty by legal proceeding without Lessor’s prior written approval. (b) Lessor
warrants that during the term of each Schedule, so long as no Event of Default has occurred,
Lessee’s possession and use of the Equipment leased thereunder shall not be interfered with by
Lessor or anyone rightfully claiming an interest through Lessor. The preceding warranty is in lieu
of all other warranties by Lessor, whether written, oral or implied, with respect to this Lease or
the Equipment. Any actual or purported breach of this warranty shall not give rise to any
Abatement, but Lessee may bring a direct cause of action against Lessor for any actual damages
directly resulting from any such breach.



9. FEES AND TAXES. Lessee agrees to: (a) (1) if permitted by law, file in Lessee’s own name or on
Lessor’s behalf, directly with all appropriate taxing authorities all declarations, returns,
inventories and other documentation with respect to any personal property taxes (or any other taxes
in the nature of or imposed in lieu of property taxes) due or to become due with respect to the
Equipment, and if not so permitted by law, to promptly notify Lessor and provide it with all
information required in order for Lessor to timely file all such declarations, returns,
inventories, or other documentation, and (2) pay on or before the date when due all such taxes
assessed, billed or otherwise payable with respect to the Equipment directly to the appropriate
taxing authorities; (b) (1) pay when due as requested by Lessor, and (2) defend and indemnify
Lessor on a net after-tax basis against liability for all license and/or registration fees,
assessments, and sales, use, property, excise, privilege, value added and other taxes or other
charges or fees now or hereafter imposed by any governmental body or agency upon the Equipment or
with respect to the manufacture, shipment, purchase, ownership, delivery, installation, leasing,
operation, possession, use, return, or other disposition thereof or the Rent hereunder (other than
taxes on or measured solely by the net income of Lessor (except as and to the extent expressly
addressed in Section 14(b) hereof)); and (c) indemnify Lessor against any penalties, charges,
interest or costs imposed with respect to any items referred to in clauses (a) and (b) above (the
items referred to in clauses (a), (b), and (c) above being referred to herein as “Impositions”).
Any Impositions which are not paid when due and which are paid by Lessor shall, at Lessor’s option,
become immediately due from Lessee to Lessor.



10. TITLE; GRANTING CLAUSE. (a) Lessee and Lessor intend that: (1) each Schedule, incorporating by
reference the terms of this Lease, constitutes a true “lease” and a “finance lease” as such terms
are defined in Article 2A and not a sale or retention of a security interest; and (2) Lessor is and
shall remain the owner of each item of Equipment (unless sold by Lessor pursuant to any Lease
Document), and Lessee shall not acquire any right, title or interest in or to such Equipment except
the right to use it in accordance with the terms of the related Schedule. (b) In order to secure
the prompt payment of the Rent and all of the other amounts from time to time outstanding with
respect hereto and to each Schedule, and the performance and observance by Lessee of all of the
provisions hereof and thereof and of all of the other Lease Documents, Lessee hereby collaterally
assigns, grants, and conveys to Lessor, a security interest in and lien on all of Lessee’s right,
title and interest in and to all of the following (whether now existing or hereafter created, and
including any other collateral described on any rider hereto; the “Collateral”): (1) (if contrary
to the parties’ intentions a court determines that such Schedule is not a true “lease” under the
UCC) the Equipment described in such Schedule or otherwise covered thereby (including all
inventory, fixtures or other property comprising the Equipment), together with all related software
(embedded therein or otherwise) and general intangibles, all additions, attachments, accessories
and accessions thereto whether or not furnished by the Supplier; (2) all subleases, chattel paper,
accounts, security deposits, and general intangibles relating thereto, and any and all
substitutions, replacements or exchanges for any such item of Equipment or other collateral, in
each such case in which Lessee shall from time to time acquire an interest; and (3) any and all
insurance and/or other proceeds of the property and other collateral in and against which a
security interest is granted hereunder. The collateral assignment, security interest and lien
granted herein shall survive the termination, cancellation or expiration of each Schedule until
such time as Lessee’s obligations thereunder and under the other Lease Documents are fully and
indefeasibly discharged. (c) If contrary to the parties’ intentions a court determines that any
Schedule is not a true “lease”, the parties agree that in such event Lessee agrees that: (1) with
respect to the Equipment, in addition to all of the other rights and remedies available to Lessor
hereunder upon the occurrence of a Default, Lessor shall have all of the rights and remedies of a
first priority secured party under the UCC; and (2) any obligation to pay Basic Rent or any Other
Payment, to the extent constituting the payment of interest, shall be at an interest rate that is
equal to the lesser of the maximum lawful rate permitted by applicable law or the effective
interest rate used by Lessor in calculating such amounts.



LEASE AGREEMENT — TRUE LEASE





 


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11. INSURANCE. Upon acceptance under a Schedule, until the Equipment is returned to Lessor in
accordance with this Lease, Lessee shall maintain all-risk insurance coverage with respect to the
Equipment insuring against, among other things: (a) any casualty to the Equipment (or any portion
thereof), including loss or damage due to fire and the risks normally included in extended
coverage, malicious mischief and vandalism, for not less than the full replacement value of the
Equipment; and (b) any commercial liability arising in connection with the Equipment, including
both bodily injury and property damage with a combined single limit per occurrence of not less than
the amount specified in the Schedule; having a deductible or self-insured retention in a maximum
amount of $1,000,000.00 or such greater amount as may be mutually agreed to by Lessor and Lessee.
Notwithstanding the foregoing, provided that no Event of Default has then occurred, Lessee may
self-insure with respect to the coverage required pursuant to Clause (a) of the immediately
preceding sentence. The required insurance policies (including endorsements) or self-insurance
shall (i) be in form and amount generally acceptable under industry standards, and written by
insurers of recognized reputation and responsibility satisfactory to Lessor (but such insurer shall
carry a current rating by A.M. Best Company of at least “A” for a general policyholder and a
financial rating of at least “VIII”), (ii) be endorsed to name Lessor as an additional insured (but
without responsibility for premiums), (iii) provide that any amount payable under the required
physical damage coverage shall be paid directly to Lessor as sole loss payee, and (iv) provide for
thirty (30) days’ written notice by such insurer of cancellation, material change, or non-renewal.
Lessee agrees that it shall obtain and maintain such other coverages (including pollution
coverage), or cause adjustments to be made to the scope, amount or other aspects of the existing
coverages, promptly upon Lessor’s request, as and when Lessor and Lessee agree that such additional
coverages or modifications to be appropriate in light of any changes in applicable law, prudent
industry practices, Lessee’s anticipated use of the Equipment or other pertinent circumstances.



12. LOSS AND DAMAGE. (a) At all times until the Equipment is returned to Lessor in accordance
with this Lease, Lessee shall bear the risk of loss, theft, confiscation, taking, unavailability,
damage or partial destruction of the Equipment and shall not be released from its obligations under
any Schedule or other Lease Document in any such event. (b) Lessee shall provide prompt written
notice to Lessor of any Total Loss or any material damage to the Equipment. Any such notice must
be provided together with any damage reports provided to any governmental authority, the insurer or
Supplier, and any documents pertaining to the repair of such damage, including copies of work
orders, and all invoices for related charges. (c) Without limiting any other provision hereof,
Lessee shall repair all damage to any item of Equipment from any and all causes, other than a Total
Loss, so as to cause it to be in the condition and repair required by this Lease. (d) A “Total
Loss” shall be deemed to have occurred to an item of Equipment upon: (1) the actual or constructive
total loss of any item of the Equipment, (2) the loss, disappearance, theft or destruction of any
item of the Equipment, or damage to any item of the Equipment that is uneconomical to repair or
renders it unfit for normal use, or (3) the condemnation, confiscation, requisition, seizure,
forfeiture or other taking of title to or use of any item of the Equipment or the imposition of any
Lien thereon by any governmental authority. On the next rent payment date following a Total Loss
(a “Loss Payment Date”), Lessee shall pay to Lessor the Basic Rent due on that date plus the
Stipulated Loss Value of the item or items of the Equipment with respect to which the Total Loss
has occurred (the “Lost Equipment”), together with any Other Payments due hereunder with respect to
the Lost Equipment. Upon making such payment, (i) Lessee’s obligation to pay future Basic Rent
shall terminate solely with respect to the items of Lost Equipment so paid for, but Lessee shall
remain liable for, and pay as and when due, all Other Payments, and (ii) Lessor shall convey to
Lessee all of Lessor’s right, title and interest in the Lost Equipment, “AS IS WHERE IS”, but
subject to the requirements of any third party insurance carrier in order to settle an insurance
claim. As used in this Lease, “Stipulated Loss Value” shall mean the product of the Total Invoice
Cost of the Lost Equipment, times the percentage factor applicable to the Loss Payment Date, as set
forth in the Schedule of Stipulated Loss Values incorporated in such Schedule. After the final
rent payment date of the original term or any renewal term of a Schedule, the Stipulated Loss Value
shall be determined as of the last rent payment date during the
applicable term of such Schedule, and the applicable percentage factor shall be the last percentage
factor set forth in the Schedule of Stipulated Loss Values incorporated in such Schedule. (e)
Lessor shall be under no duty to Lessee to pursue any claim against any person in connection with a
Total Loss or other loss or damage. (f) If Lessor receives a payment under an insurance policy
required under this Lease in connection with any Total Loss or other loss of or damage to an item
of Equipment, and such payment is both unconditional and indefeasible, then provided Lessee shall
have complied with the applicable provisions of this Section, Lessor shall either (1) if received
pursuant to a Total Loss, remit such proceeds to Lessee up to an amount equal to the amount paid by
Lessee to Lessor as the Stipulated Loss Value, or credit such proceeds against any amounts owed by
Lessee pursuant to Section 12(d), or (2) if received with respect to repairs made pursuant to
Section 12(c), remit such proceeds to Lessee up to an amount equal to the amount of the costs of
repair actually incurred by Lessee, as established to Lessor’s satisfaction.



LEASE AGREEMENT — TRUE LEASE





 


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13. REDELIVERY. (a) Lessee shall provide written notice to Lessor not less than one hundred
eighty (180) days and not more than two hundred forty (240) days prior to the expiration of the
term of any Schedule (or of any renewal thereof, if applicable) of Lessee’s intent to return the
Equipment described on such Schedule to Lessor upon the expiration of the term of such Schedule.
IF LESSEE FAILS TO PROVIDE THE FOREGOING NOTICE IN A TIMELY MANNER, THE TERM OF THE APPLICABLE
SCHEDULE AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL
ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE ON WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING
WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO PAY TO LESSOR PER DIEM RENT AT THE LAST PREVAILING
LEASE RATE UNDER THE APPLICABLE SCHEDULE; provided, however that Lessor may elect to terminate
such extension at any time upon ten (10) days written notice to Lessee. During such extension
period, the terms and conditions of this Lease (including, without limitation, the provisions of
this Section 13) shall continue to be applicable. Solely for purposes of the definition of
Stipulated Loss Value in Section 12(d) hereof, any such extension shall be deemed a renewal of the
term of such Schedule. (b) Upon the expiration or earlier cancellation or termination of any
Schedule, Lessee shall return the Equipment described on such Schedule to Lessor free and clear of
all Liens whatsoever, to any of Lessee’s distribution center locations within the continental
United States. Lessee shall provide, at its expense, transit insurance for the redelivery period
in an amount equal to the replacement value of such Equipment and Lessor shall be named as the
loss payee on all such policies of insurance. Lessee shall cause: (1) the Supplier’s
representative or other qualified person acceptable to Lessor (the “Designated Person”) to
de-install such Equipment in accordance with the Supplier’s specifications (as applicable) and
pack such Equipment properly and in accordance with the Supplier’s recommendations (as
applicable); and (2) such Equipment to be transported in a manner consistent with the Supplier’s
recommendations and practices (as applicable). Upon return, such Equipment shall be: (i) in the
same condition as when delivered to Lessee under the related Schedule, ordinary wear and tear
excepted; (ii) mechanically and structurally sound, capable of performing the functions for which
such Equipment was originally designed, in accordance with the Supplier’s published and
recommended specifications (as applicable); (iii) redelivered with all component parts in good
operating condition (and all components must meet or exceed the Supplier’s minimum recommended
specifications, unless otherwise agreed by Lessor in writing); (iv) redelivered with all software
and documentation necessary for the operation of such Equipment for the performance of the
functions for which such Equipment was originally designed (whether or not such software is
embedded in or otherwise is a part of such Equipment); and (v) cleaned and cosmetically
acceptable, with all Lessee-installed markings removed and all rust, corrosion or other
contamination having been removed or properly treated, and in such condition so that it may be
immediately installed and placed in service by a third party. Upon delivery, such Equipment shall
be in compliance with all applicable Federal, state and local laws, and health and safety
guidelines. Lessee shall be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs, demonstration costs and other related costs
necessary to cause such Equipment to be in full compliance with the terms of this Lease. (c) If
requested by Lessor, Lessee shall also deliver all related records and other data to Lessor,
including all records of maintenance, modifications, additions and major repairs, computerized
maintenance history, and any maintenance and repair manuals (collectively, the “Records”). All
manuals or other documents delivered to Lessor that are subject to periodic revision will be fully
up-to-date and current to the latest revision standard of any particular manual or document. In
the event any such Records are missing or incomplete, Lessor shall have the right to cause the
same to be reconstructed at Lessee’s expense. (d) In addition to Lessor’s other rights and
remedies hereunder, if such Equipment and the related Records are not returned in a timely
fashion, or if repairs are necessary to place any item of Equipment in the condition required in
this Section, Lessee shall (i) continue to pay to Lessor per diem rent at the last prevailing
lease rate under the applicable Schedule with respect to such item of Equipment, for the period of
delay in redelivery, and/or for the period of time reasonably necessary to accomplish such
repairs, and (ii) pay to Lessor an amount equal to the aggregate cost of any such repairs.
Lessor’s acceptance of such rent on account of such delay and/or repair does not constitute an
extension or renewal of the term of the related Schedule or a waiver of Lessor’s right to prompt
return of such Equipment in proper condition. Such amount shall be payable upon the earlier of
Lessor’s demand or the return of such Equipment in accordance with this Lease. (e) Without
limiting any other terms or conditions of this Lease, the provisions of this Section are
of the essence of each Schedule, and upon application to any court of equity having jurisdiction,
Lessor shall be entitled to a decree against Lessee requiring Lessee’s specific performance of its
agreements in this Section.



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14. INDEMNITY. (a) General. Lessee shall indemnify, defend and keep harmless Lessor and
any Assignee (as defined in Section 17), and their respective agents and employees (each, an
“Indemnitee”), from and against any and all Claims (other than such as may directly and proximately
result from the actual, but not imputed, negligence or willful misconduct of such Indemnitee), by
paying, on a net after-tax basis, or otherwise discharging same, when and as such Claims shall
become due. Lessee agrees to further indemnify each such Indemnitee with respect to Claims for
which such Indemnitee is strictly liable. Lessor shall give Lessee prompt notice of any Claim
hereby indemnified against and Lessee shall be entitled to control the defense of and/or to settle
any Claim, in each case, so long as (1) no Default or Event of Default has occurred and is then
continuing, (2) Lessee confirms, in writing, its unconditional and irrevocable commitment to
indemnify each Indemnitee with respect to such Claim, (3) Lessee is financially capable of
satisfying its obligations under this Section, (4) Lessor approves the defense counsel selected by
Lessee, and (5) there is no reasonable risk of criminal liability being imposed on Lessor or any of
its directors, officers or employees as a result of such Claim. The term “Claims” shall mean all
claims, allegations, harms, judgments, settlements, suits, actions, debts, obligations, direct
damages, demands (for compensation, indemnification, reimbursement or otherwise), losses,
penalties, fines, liabilities (including strict liability), charges that Lessor has incurred or for
which it is responsible, in the nature of interest, Liens, and costs (including attorneys’ fees and
disbursements and any other legal or non-legal expenses of investigation or defense of any Claim,
whether or not such Claim is ultimately defeated or enforcing the rights, remedies or indemnities
provided for hereunder, or otherwise available at law or equity to Lessor), of whatever kind or
nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, by or against
any person, arising on account of (A) any Lease Document, including the performance, breach
(including any Default or Event of Default) or enforcement of any of the terms thereof, or (B) the
Equipment, or any part or other contents thereof, any substance at any time contained therein or
emitted therefrom, including any hazardous substances, or the premises at which the Equipment may
be located from time to time, or (C) the ordering, acquisition, delivery, installation or rejection
of the Equipment, the possession of any property to which it may be attached from time to time,
maintenance, use, condition, ownership or operation of any item of Equipment, and by whomsoever
owned, used, possessed or operated, during the term of any Schedule with respect to that item of
Equipment, the existence of latent and other defects (whether or not discoverable by Lessor or
Lessee) any claim in tort for negligence or strict liability, and any claim for patent, trademark
or copyright infringement, or the loss, damage, destruction, theft, removal, return, surrender,
sale or other disposition of the Equipment, or any item thereof, including, Claims involving or
alleging environmental damage, or any criminal or terrorist act, or for whatever other reason
whatsoever. If any Claim is made against Lessee or an Indemnitee, the party receiving notice of
such Claim shall promptly notify the other, but the failure of the party receiving notice to so
notify the other shall not relieve Lessee of any obligation hereunder.



(b) Tax Indemnity. (1) Lessee represents and warrants that: (A) it believes that it
is reasonable to estimate that the useful life of the Equipment exceeds the lease term (including
any interim and fixed rental renewal periods) by the greater of one (1) year or twenty (20) percent
of such estimated useful life, and that said Equipment will have a value at the end of the lease
term, including any fixed rate renewal period, of at least twenty (20) percent of the Total Invoice
Cost of the Equipment, without including in such value any increase or decrease for inflation or
deflation during the original lease term; and (B) the Equipment is, and will be used by Lessee so
as to remain, property eligible for the MACRS Deductions (as defined below).



(2) (A) If by reason of (i) any act or failure to act of Lessee (including a breach of any
covenant or agreement of Lessee set forth in this Lease), or (ii) the misrepresentation of or
breach by Lessee of any of the warranties and representations set forth in Section 14(b) (1) of
this Lease and Section 6(b) of the Schedule (if applicable), Lessor in computing its taxable income
or liability for tax, shall lose, or shall not have, or shall lose the right to claim or there
shall be disallowed or recaptured for Federal and/or state income tax purposes, in whole or in
part, the benefit of MACRS Deductions; or (B) Lessor shall become liable for additional tax as a
result of Lessee having added an attachment or made an alteration to the Equipment, including
(without limitation) any such attachment or alteration which would increase the productivity or
capability of the Equipment so as to violate the provisions of Rev. Proc. 2001-28, 2001-1 C.B. 1156
(as it may hereafter be modified or superseded); or (C) Lessor shall be entitled to claim a lesser
credit for foreign taxes against its Federal income tax liability than that to which Lessor would
have been entitled if each item of income, gain, loss and deduction with respect to the Equipment
had been treated as income from sources within the United States pursuant to Section 861 of the
Code; hereinafter referred to as a “Loss”; then Lessee shall pay Lessor the Tax Indemnification
Payment as additional rent and Lessor shall revise the Schedule(s) of Stipulated Loss Values to
reflect the Loss. As used herein, “MACRS Deductions” shall mean the deductions under Section 167
of the Code, determined in accordance with the modified Accelerated Cost Recovery System with
respect to the Total Invoice Cost of any item of the
Equipment using the accelerated method set forth in Section 168(b)(1) or 168(b)(2) of the Code
as in effect on the date of this Lease for property assigned to the class of property specified in
the Schedule pertaining thereto and (if the applicable Schedule specifies that bonus depreciation
is available) taking into account the fifty (50) percent special depreciation allowance and basis
adjustment under Section 168(k)(1) of the Code; “Lessor” shall be deemed to include the
consolidated Federal taxpayer group of which Lessor is a member; and “Tax Indemnification Payment”
shall mean such amount as, after consideration of (i) all taxes required to be paid by Lessor in
respect of the receipt thereof under the laws of any governmental or taxing authority in the United
States, and (ii) the amount of any interest or penalty which may be payable by Lessor in connection
with the Loss, shall be required to cause Lessor’s after-tax net return (the “Net Return”) to be
equal to, but no greater than, the Net Return computed consistently with current tax laws (and with
the assumption that Lessor is taxed at the highest marginal Federal and state tax rates) as of the
date of this Lease that would have been available to Lessor had the Loss not occurred.



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(c) Lessor promptly shall notify Lessee in writing of such Loss and Lessee shall pay to Lessor
the Tax Indemnification Payment within thirty (30) days of such notice. For these purposes, a Loss
shall occur upon the earliest of: (A) the happening of any event (such as disposition or change in
use of any item of the Equipment) which will cause such Loss, (B) the payment by Lessor to the
Internal Revenue Service or state taxing authority of the tax increase (including an increase in
estimated taxes) resulting from such Loss; (C) the date on which the Loss is realized by Lessor; or
(D) the adjustment of the tax return of Lessor to reflect such Loss.



15. DEFAULT. A default shall be deemed to have occurred hereunder and under a Schedule upon the
occurrence of any of the following (each, an “Event of Default”): (a) non-payment of Basic Rent on
the applicable rent payment date; (b) non-payment of any Other Payment within five (5) days after
it is due; (c) failure to maintain, use or operate the Equipment in compliance with applicable law;
(d) breach by Lessee of its covenants pursuant to Section 4(d) hereof; (e) failure to obtain,
maintain and comply with all of the insurance coverages required under this Lease; (f) any transfer
or encumbrance, or the existence of any Lien, that is prohibited by this Lease; (g) a payment or
other default by Lessee under any loan, lease, guaranty or other financial obligation to Lessor or
its affiliates which default has been declared; (h) a payment or other default by Lessee under any
material (that is, for an amount in excess of $10,000,000) loan, lease, guaranty or other material
financial obligation to any third party which default has been declared; (i) an inaccuracy in any
representation or breach of warranty by Lessee (including any false or misleading representation or
warranty) in any financial statement or Lease Document, including any omission of any substantial
contingent or unliquidated liability or claim against Lessee; (j) the commencement of any
bankruptcy, insolvency, receivership or similar proceeding by or against Lessee or any of its
properties or business (unless, if involuntary, the proceeding is dismissed within sixty (60) days
of the filing thereof) or the rejection of this Lease or any other Lease Document in any such
proceeding; (k) the failure by Lessee generally to pay its debts as they become due or its
admission in writing of its inability to pay the same; (l) Lessee shall (1) enter into any
transaction of merger or consolidation, unless Lessee shall be the surviving entity (such actions
being referred to as an “Event”), unless the surviving entity is organized and existing under the
laws of the United States or any state, and prior to such Event: (A) such person executes and
delivers to Lessor (x) an agreement satisfactory to Lessor, in its sole discretion, containing such
person’s effective assumption, and its agreement to pay, perform, comply with and otherwise be
liable for, in a due and punctual manner, all of Lessee’s obligations having previously arisen, or
then or thereafter arising, under any and all of the Lease Documents, and (y) any and all other
documents, agreements, instruments, certificates, opinions and filings requested by Lessor; and (B)
Lessor is satisfied as to the creditworthiness of such person, and as to such person’s conformance
to the other standard criteria then used by Lessor when approving transactions similar to the
transactions contemplated in this Lease; (2) cease to do business as a going concern, liquidate, or
dissolve; or (3) sell, transfer, or otherwise dispose of all or substantially all of its assets or
property; (m) effective control of Lessee’s voting capital stock, issued and outstanding from time
to time, is not retained by the present holders (unless Lessee shall have provided thirty (30)
days’ prior written notice to Lessor of the proposed disposition and Lessor shall have consented
thereto in writing); (n) there occurs a default or anticipatory repudiation under the Guaranty; or
(o) breach by Lessee of any other covenant, condition or agreement (other than those in items
(a)-(n)) under this Lease or any of the other Lease Documents that continues for thirty (30) days
after Lessor’s written notice to Lessee (but such notice and cure period will not be applicable
unless such breach is curable by practical means within such notice period). The occurrence of an
Event of Default with respect to any Schedule shall, at the sole discretion of Lessor, constitute
an Event of Default with respect to any or all Schedules to which it is then a party.
Notwithstanding anything to the contrary set forth herein, Lessor may exercise all rights and
remedies hereunder independently with respect to each Schedule.



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16. REMEDIES. (a) If an Event of Default occurs with respect to any Schedule, the Lessor
thereunder may (in its sole discretion) exercise any one or more of the following remedies with
respect to such Schedule and any or all other Schedules to which such Lessor is then a party: (1)
proceed at law or in equity, to enforce specifically Lessee’s performance or to recover damages;
(2) declare each such Schedule in default, and cancel each such Schedule or
otherwise terminate Lessee’s right to use the Equipment and Lessee’s other rights, but not its
obligations, thereunder and Lessee shall immediately assemble, make available and, if Lessor
requests, return the Equipment to Lessor in accordance with the terms of this Lease; (3) enter any
premises where any item of Equipment is located and take immediate possession of and remove (or
disable in place) such item (and/or any unattached parts) by self-help, summary proceedings or
otherwise without liability (except for liability for loss or damage to cargo or other property
located in the Equipment); provided, however, Lessor shall not be entitled to any lien with regard
to any cargo or other property located in the Equipment and Lessee shall have the absolute right to
remove such cargo or property prior to any such taking; (4) use Lessee’s premises for storage
without liability; (5) sell, re-lease or otherwise dispose of any or all of the Equipment, whether
or not in Lessor’s possession, at public or private sale, with or without notice to Lessee, and
apply or retain the net proceeds of such disposition, with Lessee remaining liable for any
deficiency and with any excess being retained by Lessor; (6) enforce any or all of the preceding
remedies with respect to any related Collateral, and apply any deposit or other cash collateral, or
any proceeds of any such Collateral, at any time to reduce any amounts due to Lessor; (7) demand
and recover from Lessee all Liquidated Damages and all Other Payments whenever the same shall be
due; and (8) exercise any and all other remedies allowed by applicable law, including the UCC. As
used herein, “Liquidated Damages” shall mean the liquidated damages (all of which, Lessee hereby
acknowledges, are damages to be paid in lieu of future Basic Rent and are reasonable in light of
the anticipated harm arising by reason of an Event of Default, and are not a penalty) described in
the first sentence of parts (1) or (2) of Section 16(b), depending upon the recovery and
disposition of the Equipment leased under the applicable Schedule. Upon the occurrence of the
Event of Default described in Section 15(j) hereof, the remedy provided in Clause (7) above shall
be automatically exercised without the requirement of prior written notice to Lessee or of any
other act or declaration by Lessor, and the Liquidated Damages described therein shall be
immediately due and payable.



(b) (1) If an Event of Default occurs with respect to any Schedule, if Lessor recovers the
Equipment and disposes of it by a lease or elects not to dispose of the Equipment after recovery,
upon demand, Lessee shall pay to Lessor an amount equal to the sum of (A) any accrued and unpaid
Rent as of the date Lessor recovers possession of the Equipment, plus (B) the present value
as of such date of the total Basic Rent for the then remaining term of such Schedule, minus
(C) either, as applicable, (i) the present value, as of the commencement date of any substantially
similar re-lease of the Equipment, of the re-lease rent payable for that period, commencing on such
date, which is comparable to the then remaining term of such Schedule or (ii) the present value, as
of that certain date which may be determined by taking into account Lessor’s having a reasonable
opportunity to remarket the Equipment, of the “market rent” for such Equipment (as computed
pursuant to Article 2A) in the continental United States on that date, computed for that period,
commencing on such date, which is comparable to the then remaining term of such Schedule; provided,
however, Lessee acknowledges that if Lessor is unable after reasonable effort to dispose of the
Equipment at a reasonable price and pursuant to other reasonable terms, or the circumstances
reasonably indicate that such an effort will be unavailing, the “market rent” in such event will be
deemed to be $0.00, but in the event that Lessor does eventually re-lease or otherwise dispose of
the Equipment, it will apply the net proceeds of such disposition, to the extent received in good
and indefeasible funds, as a credit or reimbursement, as applicable, in a manner consistent with
the applicable provisions of Article 2A. Any amounts discounted to present value, shall be
discounted at the rate of three percent (3%) per annum, compounded annually.



(2) If an Event of Default occurs with respect to any Schedule, if Lessee fails to return the
Equipment in the manner and condition required by this Lease, or Lessor recovers and sells the
Equipment, upon demand, Lessee shall pay to Lessor an amount calculated as the Stipulated Loss
Value of the Equipment (determined as of the next rent payment date after the date of the
occurrence of the subject Event of Default), together with all other Rent due with respect to the
related Schedule as of such determination date, any amount due from Lessee pursuant to Rider No. 1
attached to the Schedule, and all Enforcement Costs (defined in Section 16(c)), less a credit for
any disposition proceeds, if applicable pursuant to the application provisions in the next
sentence. If Lessor demands the Liquidated Damages under this part (2), and recovers and sells the
Equipment, any proceeds received in good and indefeasible funds shall be applied by Lessor, with
respect to the related Schedule: first, to pay all Enforcement Costs, to the extent not
previously paid; second, to pay to Lessor an amount equal to any unpaid Rent due and
payable, together with the Liquidated Damage amounts specified in this part (2), to the extent not
previously paid; third, to pay to Lessor any interest accruing on the amounts covered by
the preceding clauses, at the Default Rate, from and after the date the same becomes due, through
the date of payment; and fourth, (A) if the Lessor under such Schedule is also the Lessor
under any other Schedules (whether by retaining the same, or as Assignee), to satisfy any remaining
obligations under any or all such other Schedules, or (B) if such Lessor is not the Lessor under
any other Schedule, or if Lessee’s obligations to such Lessor under such other Schedules have been
fully and indefeasibly satisfied, to reimburse Lessee for such amounts to the extent paid by Lessee
as Liquidated Damages pursuant to this part (2).



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(c) A cancellation of any Schedule shall occur only upon written notice by Lessor to Lessee.
Unless already specifically provided for in Section 16(b), if an Event of Default occurs with
respect to any Schedule, Lessee shall also be liable for all of the following (“Enforcement
Costs”): (1) all unpaid Rent due before, during or after exercise of any of the foregoing remedies,
and (2) all reasonable legal fees (including consultation, drafting notices or other documents,
expert witness fees, sending notices or instituting, prosecuting or defending litigation or
arbitration) and other enforcement costs and expenses incurred by reason of any Default or Event of
Default or the exercise of Lessor’s rights or remedies, including all expenses incurred in
connection with the return or other recovery of any Equipment in accordance with the terms of this
Lease or in placing such Equipment in the condition required hereby, or the sale, re-lease or other
disposition (including but not limited to costs of transportation, possession, storage, insurance,
taxes, lien removal, repair, refurbishing, advertising and brokers’ fees), and sales or use taxes
incurred by Lessor in connection with any disposition of the Equipment after the occurrence of an
Event of Default, and all other pre-judgment and post-judgment enforcement related actions taken by
Lessor or any actions taken by Lessor in any bankruptcy case involving Lessee, the Equipment, or
any other person. From and after the date on which an Event of Default occurs, Lessee shall pay
interest to Lessor with respect to all amounts due hereunder until such amounts are received by
Lessor in good funds at a per annum interest rate that is the lesser of ten (10) percent or the
maximum rate permitted by applicable law (the “Default Rate”). No right or remedy is exclusive and
each may be used successively and cumulatively. Any failure to exercise the rights granted
hereunder upon any Default or Event of Default shall not constitute a waiver of any such right. No
extension of time for payment or performance of any of Lessee’s obligations hereunder shall operate
to release, discharge, modify, change or affect the original liability of Lessee for such
obligations, either in whole or in part. In any action to repossess any Equipment or other
Collateral, Lessee waives any bonds and any surety or security required by any applicable laws as
an incident to such repossession. Notices of Lessor’s intention to accelerate, acceleration,
nonpayment, presentment, protest, dishonor or any other notice whatsoever (other than as expressly
set forth herein) are waived by Lessee. Any notice given by Lessor of any disposition of the
Equipment or any Collateral or other intended action of Lessor which is given in accordance with
this Lease at least five (5) business days prior to such action, shall constitute fair and
reasonable notice of such action. The execution of a Schedule shall not constitute a waiver by
Lessor of any pre-existing Default or Event of Default. With respect to any disposition of any
Equipment or Collateral pursuant to this Section, (i) Lessor shall have no obligation, subject to
the requirements of commercial reasonableness, to clean-up or otherwise prepare the same for
disposition, (ii) Lessor may comply with any applicable law in connection with any such
disposition, and any actions taken in connection therewith shall not be deemed to have adversely
affected the commercial reasonableness of any disposition thereof, (iii) Lessor may disclaim any
title or other warranties in connection with any such disposition, and (iv) Lessee shall remain
responsible for any deficiency remaining after Lessor’s exercise of its remedies and application of
any funds or credits against Lessee’s obligations under any Schedule, and Lessor shall retain any
excess after such application.



17. ASSIGNMENT. (a) LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST OR ANY COLLATERAL, SUBLET
THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. Without limiting the foregoing, (1) Lessee may not
attempt to dispose of any of the Equipment, and (2) Lessee shall (A) maintain the Equipment free
from all Liens, other than Permitted Liens, (B) notify Lessor immediately upon receipt of notice of
any Lien affecting the Equipment, and (C) defend Lessor’s title to the Equipment. A “Permitted
Lien” shall mean any Lien for Impositions, Liens of mechanics, materialmen, or suppliers and
similar Liens arising by operation of law, provided that any such Lien is incurred by Lessee in the
ordinary course of business, for sums that are not yet delinquent or are being contested in good
faith and with due diligence, by negotiations or by appropriate proceedings which suspend the
collection thereof and, in Lessor’s sole discretion, (i) do not involve any substantial danger of
the sale, forfeiture or loss of the Equipment or any interest therein, and (ii) for the payment of
which adequate assurances or security have been provided to Lessor. No disposition referred to in
this Section shall relieve Lessee of its obligations, and Lessee shall remain primarily liable
under each Schedule and all of the other Lease Documents. (b) Lessor may at any time with or
without notice to Lessee grant a security interest in, sell, assign, delegate or otherwise transfer
(an “Assignment”) all or any part of its interest in the Equipment, this Lease or any Schedule and
any related Lease Documents or any Rent thereunder, or the right to enter into any Schedule, and
Lessee shall perform all of its obligations thereunder, to the extent so transferred, for the
benefit of the beneficiary of such Assignment (such beneficiary, including any successors and
assigns, an “Assignee”). Lessee agrees not to assert against any Assignee any Abatement (without
limiting the provisions of Section 2) or Claim that Lessee may have against Lessor, and Assignee
shall not be bound by, or otherwise required to perform any of Lessor’s obligations, unless
expressly assumed by such Assignee. Lessor shall be relieved of any such assumed obligations. If
so directed in writing, Lessee shall pay all Rent and all other sums that become due under the
assigned Schedule and other Lease Documents directly to the Assignee or any other party designated
in writing by Lessor or such Assignee. Lessee acknowledges that Lessor’s right to enter into an
Assignment is essential to Lessor and, accordingly,
waives any restrictions under applicable law with respect to an Assignment and any related
remedies. Upon the request of Lessor or any Assignee, Lessee also agrees (i) to promptly execute
and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in form and substance
satisfactory to the requesting party, an insurance certificate and such other documents and
assurances reasonably requested by Lessor or Assignee, and (ii) to comply with all other reasonable
requirements of any such Assignee in connection with any such Assignment. Upon such Assignment and
except as may otherwise be provided herein, all references in this Lease to “Lessor” shall include
such Assignee. (c) Subject always to the foregoing, this Lease and each Schedule shall inure to
the benefit of, and are binding upon, Lessee’s and Lessor’s respective successors and assigns.



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18. MISCELLANEOUS. (a) This Lease, each Schedule, any Riders hereto or thereto and any commitment
letter between the parties, constitute the entire agreement between the parties with respect to the
subject matter hereof and thereof and shall not be amended or modified in any manner except by a
document in writing executed by both parties. (b) Any provision of this Lease that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. (c) The representations, warranties and
agreements of Lessee herein shall be deemed to be continuing and to survive the execution and
delivery of this Lease, each Schedule and any other Lease Documents. With respect to each
Schedule, the obligations of Lessee under Sections 8, 9, 10, 12, 13 and 14 hereof, together with
any of Lessee’s obligations under the other provisions of this Lease (as incorporated therein)
which have accrued but not been fully satisfied, performed or complied with prior to the expiration
or earlier cancellation or termination of such Schedule, shall survive the expiration or earlier
cancellation or termination thereof. (d) All of Lessee’s obligations hereunder and under any
Schedule shall be performed at Lessee’s sole expense. Lessee shall reimburse Lessor promptly upon
demand for all expenses incurred by Lessor in connection with (1) any action taken by Lessor at
Lessee’s request, or in connection with any option, (2) the filing or recording of real property
waivers and UCCs, (3) any Enforcement Costs not recovered pursuant to Section 16, (4) all
inspections, and (5) all lien search reports (and copies of filings) requested by Lessor. If
Lessee fails to perform any of its obligations with respect to a Schedule, Lessor shall have the
right, but shall not be obligated, to effect such performance, and Lessee shall reimburse Lessor,
upon demand, for all expenses incurred by Lessor in connection with such performance. Lessor’s
effecting such compliance shall not be a waiver of Lessee’s default. (e) Lessee irrevocably
appoints Lessor as Lessee’s attorney-in-fact (which power shall be deemed coupled with an interest)
to: (1) make minor corrections to manifest errors in factual data in any Schedule and/or any
addenda, attachments, exhibits and/or riders to this Lease or any Schedule; and (2) execute,
endorse and deliver any documents and checks or drafts relating to or received in payment for any
loss or damage under the policies of insurance required by this Lease, but only to the extent that
the same relates to the Equipment, or are required by titling agencies in order to reflect Lessor
as the owner and/or lienholder with respect to certificates of title pertaining to motor vehicles
(if any) comprising the Equipment. (f) LESSOR AND LESSEE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO WHICH LESSEE AND/OR LESSOR MAY BE PARTIES ARISING OUT OF OR IN ANY WAY PERTAINING
TO THIS LEASE. (g) All notices (excluding billings and communications in the ordinary course of
business) hereunder shall be in writing, personally delivered, delivered by overnight courier
service, sent by facsimile transmission (with confirmation of receipt), or sent by certified mail,
return receipt requested, addressed to the other party at its respective address stated below the
signature of such party or at such other address as such party shall from time to time designate in
writing to the other party; and shall be effective from the date of receipt. (h) This Lease shall
not be effective unless and until accepted by execution by an officer of Lessor at the address, in
the State of Maryland (the “State”), as set forth below the signature of Lessor. THIS LEASE AND
ALL OF THE OTHER LEASE DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER, SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF THE STATE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
The parties agree that any action or proceeding arising out of or relating to this Lease may be
commenced in any state or Federal court in the State, and agree that a summons and complaint
commencing an action or proceeding in any such court shall be properly served and shall confer
personal jurisdiction if served personally or by certified mail to it at the mailing address below
Lessee’s signature, or as it may provide in writing from time to time, or as otherwise provided
under the laws of the State. (i) This Lease and all of the other Lease Documents may be executed
in counterparts. Photocopies or facsimile transmissions of signatures shall be deemed original
signatures and shall be fully binding on the parties to the same extent as original signatures.
The transfer or possession of the “Original” of this Lease shall be irrelevant to the full or
collateral assignment of, or grant of security interest in, any Schedule; provided, however, no
security interest in any Schedule may be created through the transfer, possession or control, as
applicable, of any counterpart of such Schedule other than the original thereof, which shall be
identified as the document or record (as applicable) marked “Original” and all other counterparts
shall be marked “Duplicate”. (j) If Lessor is required by the terms
hereof to pay to or for the benefit of Lessee any amount received as a refund of an Imposition or
as insurance proceeds, Lessor shall not be required to pay such amount, if any Default has occurred
and not been cured or any Event of Default shall have occurred and not been waived by Lessor. In
addition, if Lessor is required by the terms hereof to cooperate with Lessee in connection with
certain matters, such cooperation shall not be required if a Default or Event of Default has then
occurred and is continuing. (k) To the extent Lessor is required to give its consent or approval
with respect to any matter, the reasonableness of Lessor’s withholding of such consent shall be
determined based on the then existing circumstances; provided, that Lessor’s withholding of its
consent shall be deemed reasonable for all purposes if (i) the taking of the action that is the
subject of such request, might result (in Lessor’s discretion), in (A) an impairment of Lessor’s
rights, title or interests hereunder or under any Schedule or other Lease Document, or to the
Equipment, or (B) expose Lessor to any Claims or Impositions, or (ii) Lessee fails to provide
promptly to Lessor any filings, certificates, opinions or indemnities required by Lessor as a
condition to such consent. (l) There is no restriction (either express or implied) on any
disclosure or dissemination of the tax treatment or tax structure of the transactions contemplated
by this Lease or any documents executed in connection herewith. Further, each party hereto
acknowledges that it has no proprietary rights to any tax matter or tax idea or to any element of
the transaction structure contemplated by this Lease; and each party hereto (and any employee,
representative or agent of any party hereto) may disclose to any and all persons (without
limitation of any kind), the Federal tax treatment and Federal tax structure of the transaction
contemplated by this Lease. This Section 18(l) is intended to cause the transaction contemplated
by this Lease to be treated as not having been offered under conditions of confidentiality for
purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code and Section 6111 of the Code and the Treasury
Regulations promulgated thereunder; and shall be construed in a manner consistent with such
purpose.



LEASE AGREEMENT — TRUE LEASE





 


11









 







19. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when used in this Lease or in
any of the Schedules have the following meanings: (1) “affiliate”: with respect to any given
person, shall mean (i) each person that directly or indirectly owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five (5) percent or more of the voting
stock, membership interest or similar equity interest having ordinary voting power in the election
of directors or managers of such person, (ii) each person that controls, is controlled by, or is
under common control with, such person, or (iii) each of such person’s officers, directors,
members, joint venturers and partners. For the purposes of this definition, “control” of a person
means the possession, directly or indirectly, of the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by contract or
otherwise; (2) “applicable law” or “law”: any law, rule, regulation, ordinance, order, code, common
law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award,
permit or similar norm or decision of any governmental authority; (3) “AS IS, WHERE IS”: AS IS,
WHERE IS, without warranty, express or implied, with respect to any matter whatsoever; (4)
“business day”: any day, other than a Saturday, Sunday, or legal holiday for commercial banks under
the laws of the state of the Lessor’s notice address; (5) “governmental authority”: any federal,
state, county, municipal, regional or other governmental authority, agency, board, body,
instrumentality or court, in each case, whether domestic or foreign; (6) “person”: any individual,
corporation, limited liability entity, partnership, joint venture, or other legal entity or a
governmental authority, whether employed, hired, affiliated, owned, contracted with, or otherwise
related or unrelated to Lessee or Lessor; and (7) “UCC” or “Uniform Commercial Code”: the Uniform
Commercial Code as in effect in the State or in any other applicable jurisdiction; and any
reference to an article (including Article 2A) or section thereof shall mean the corresponding
article or section (however termed) of any such applicable version of the Uniform Commercial Code.
(b) The following terms when used herein or in any of the Schedules shall be construed as follows:
(1) “herein,” “hereof,” “hereunder,” etc.: in, of, under, etc. this Lease or such other Lease
Document in which such term appears (and not merely in, of, under, etc. the section or provision
where the reference occurs); (2) “including”: means including without limitation unless such term
is followed by the words “and limited to,” or similar words; and (3) “or”: at least one, but not
necessarily only one, of the alternatives enumerated. Any defined term used in the singular
preceded by “any” indicates any number of the members of the relevant class. Any Lease Document or
other agreement or instrument referred to herein means such agreement or instrument as supplemented
and amended from time to time. Any reference to Lessor or Lessee shall include their permitted
successors and assigns. Any reference to an applicable law shall also mean such law as amended,
superseded or replaced from time to time.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




LEASE AGREEMENT — TRUE LEASE





 


12









 







IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement to be duly
executed, under seal, as of the day and year first above set forth.



	 	 	 	 	 	 	 	 	 	 
	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	ABF FREIGHT SYSTEM, INC.	 
	Lessor	 	 	 	Lessee	 
	 
	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Stephen Gray           
	[SEAL]	 	 	By:
	 	 /s/ Judy R. McReynolds          	[SEAL]
	 

	 	 
	 	 	 	 	 	 	 
	 

	 	Name: Stephan Gray
	 	 	 	 	 	Name: Judy R. McReynolds	 
	 

	 	Title:   Senior Vice President
	 	 	 	 	 	Title:   Assistant Treasurer	 
	 
	 	 	 	 	 	 	 	 	 
	 

	 	600 Washington Avenue
	 	 	 	 	 	3801 Old Greenwood Road	 
	 

	 	Suite 201
	 	 	 	 	 	Fort Smith, Arkansas 72903	 
	 

	 	Towson, Maryland 21204
	 	 	 	 	 	Facsimile: 479-785-8650	 
	 

	 	Facsimile: 410-825-1691	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Form of Organization: Corporation	 
	 	 	 	 	 	 	Jurisdiction of Organization: Delaware	 
	 	 	 	 	 	 	Organizational No.: 0937905	 
	 	 	 	 	 	 	Federal Employer Identification No.: 71-0249444	 






LEASE AGREEMENT — TRUE LEASE





 


13









 







BB&T EQUIPMENT FINANCE CORPORATION




EQUIPMENT SCHEDULE SERIES ____ NO. _____




executed pursuant to that certain Master Lease Agreement dated as of December 30, 2009 (the
“Lease”; which is incorporated herein by reference). This Equipment Schedule, incorporating by
reference the terms and conditions of the Lease, constitutes a separate instrument of lease. To the
extent of any conflict or inconsistency between the terms of this Equipment Schedule and the Lease,
the terms of this Equipment Schedule shall prevail.



1. EQUIPMENT. The Equipment leased hereunder shall be as set forth in the schedule attached
hereto.



TOTAL INVOICE COST: $________________________




2. TERM. Upon and after the date of execution hereof, the Equipment shall be subject to the
terms and conditions provided herein and in the Lease.



A full term of lease with respect to said Equipment shall commence on the date hereof and
shall extend for thirty-six (36) months after the first day of
 _____, 2010 (the “Base
Lease Commencement Date”).




3. RENT.



(a) During the period from the date hereof to the Base Lease Commencement Date (the “Interim
Term”), the pro-rated daily rent for said Equipment shall be
$______  per day; computed as

 _____% of the Total Invoice Cost specified above. This pro-rated payment shall be made on the
last day of the month for each month during the Interim Term.



(b) From and after the Base Lease Commencement Date, the monthly rent for said Equipment
during the term of this Lease shall be $_____, computed as
 _____% of the Total
Invoice Cost specified above. Rent payments shall be made, in advance, on the first day of the
month for each month during the term of this Lease.



4. LESSEE’S CONFIRMATION. Lessee hereby confirms and warrants to Lessor that the Equipment:
(a) was duly delivered to Lessee at the location specified in Section 5 hereof; (b) has been
received, inspected and determined to be in compliance with all applicable specifications and that
the Equipment is hereby accepted for all purposes of the Lease; and (c) is a part of the
“Equipment” referred to in the Lease and is taken subject to all terms and conditions therein and
herein provided.



5. LOCATION OF EQUIPMENT. The location of the Equipment is specified on the Schedule of
Equipment attached hereto.



6. TAX ATTRIBUTES. (a) The class of property to which the Equipment is assigned (as
referenced in Section 14(b)(2) of the Lease) is 3-year property.



(b) The bonus depreciation [is/is not] available with respect to the Equipment. [IF BONUS
DEPRECIATION IS AVAILABLE, INCLUDE THE FOLLOWING: Lessee represents and warrants that: (1) each
item of Equipment constitutes “qualified property” pursuant to Section 168(k) of the Code and is
eligible for the additional first-year depreciation deduction equal to fifty (50) percent of the
Total Invoice Cost of the Equipment contemplated by the Code, as specified on this Schedule; (2)
the Equipment shall be treated as originally placed in service not earlier than the date of the
execution and delivery of this Schedule, or in the event the transaction is a sale-leaseback
transaction, Lessee shall not have placed in service the Equipment subject to this Lease at any
time prior to three (3) months before the execution and delivery of this Schedule; (3) Lessee has
not arranged to purchase, and Lessor is not purchasing, the Equipment pursuant to a binding written
contract entered into before January 1, 2008; and (4) each item of Equipment shall be placed in
service before January 1, 2010.]


 


 









 





7. COMMERCIAL LIABILITY INSURANCE. The amount of commercial liability insurance referenced in
Section 11 of the Lease is $10,000,000.00.




8. PERSONAL PROPERTY TAXES.



Please choose one of the options below by initialing where indicated. Initial ONLY ONE choice of option:





OPTION 1 Lessee’s Initials:
 _____ 




(Applicable in Jurisdictions Requiring Lessor to List Equipment): Lessee agrees that it will not
list any of such Equipment for property tax purposes or report any property tax assessed against
such Equipment until otherwise directed in writing by Lessor. Upon receipt of any property tax
bill pertaining to such Equipment from the appropriate taxing authority, Lessor will pay such tax
and will invoice Lessee for the expense. Upon receipt of such invoice, Lessee will promptly
reimburse Lessor for such expense;




OPTION 2 Lessee’s Initials:
 _____ 




(Applicable in Jurisdictions Permitting Lessee to List Equipment): Lessee agrees that it will (a)
list all such Equipment, (b) report all property taxes assessed against such Equipment, and (c) pay
all such taxes when due directly to the appropriate taxing authority until Lessor shall otherwise
direct in writing.



9. SCHEDULE OF STIPULATED LOSS VALUES. This Schedule of Stipulated Loss Values shall be
applicable solely to the Equipment described in this Equipment Schedule.



	 	 	 
	Rent
	 	Percent of Total
	Payment No.
	 	Invoice Cost
	 
	 	 







10. RIDER. Rider No. 1 attached hereto is incorporated in this Equipment Schedule.



11. PAYMENT AUTHORIZATION. Lessor is hereby irrevocably authorized and directed to pay the
Total Invoice Cost specified above as follows:



	 	 	 	 	 
	Company Name
	 	Address
	 	Amount
	 
	 	 
	 	 






Lessor is hereby authorized to insert such factually correct information as is necessary to
complete this Equipment Schedule, including (without limitation) the date of execution, and the
rental payment amount(s) and factor(s).



[OPTIONAL: USE ONLY IF ALL EQUIPMENT ON THIS SCHEDULE IS SALE-LEASEBACK]




12. BILL OF SALE. In consideration of the payment by Lessor of the amount specified herein
as the Total Invoice Cost of the items of Equipment listed on the Schedule of Equipment attached
hereto, the receipt and sufficiency of which are hereby acknowledged, Lessee does hereby bargain,
sell, assign, transfer and set over to Lessor such Equipment, together with whatever claims and
rights Lessee may have against the manufacturer and/or supplier of such Equipment, including (but
not limited to) all warranties with respect thereto.


 


15









 





Lessee represents and warrants that: (a) Lessee has good and marketable title to such
Equipment conveyed hereunder and does hereby transfer an interest therein free and clear of any and
all encumbrances, liens, charges or defects; (b) the transfer of an interest in such Equipment (1)
has been duly authorized by all necessary action on the part of Lessee, (2) does not require the
consent of any stockholder, member, trustee or holders of any indebtedness of
Lessee, except such as have been duly obtained, and (3) does not and will not contravene any
law, governmental rule, regulation or order now binding on Lessee, or the organizational documents
of Lessee, or contravene the provisions of, or constitute a default under, or result in the
creation of any lien or encumbrance upon the property of Lessee under, any indenture, mortgage,
contract or other agreement to which Lessee is a party or by which it or its property is bound; and
(c) no filing or recordation must be made, no notice must be given, and no other action must be
taken with respect to any state or local jurisdiction, or any person, in order to preserve to
Lessor all the rights transferred hereby.



DATE OF EXECUTION: __________________, 20_____




	 	 	 	 	 	 	 	 	 	 
	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	ABF FREIGHT SYSTEM, INC.	 
	Lessor	 	 	 	Lessee	 
	 
	 	 	 	 	 	 	 	 	 
	By: 

	 	                     
	[SEAL]	 	 	By: 
	 	                     	[SEAL]
	 

	 
	 	 	 	 	 	 
	 

	Name: 	 
	 	 	 	 	Name: 	 	 
	 

	Title: 	 
	 	 	 	 	Title: 	 	 






 


16









 





BB&T EQUIPMENT FINANCE CORPORATION




RIDER NO. 1 TO EQUIPMENT SCHEDULE SERIES ___ NO. _____




To and
part of Equipment Schedule Series ______  No.
 _____ 
dated as of the
 _____ 
day of

 _____, 20_____ 
(the “Schedule”), executed pursuant to that certain Master Lease Agreement
dated as of the 30th day of December, 2009 (the “Lease”), each between BB&T EQUIPMENT FINANCE
CORPORATION, its successors and assigns (“Lessor”), and ABF FREIGHT SYSTEM, INC., its successors
and permitted assigns (“Lessee”).



A. TERMINAL RENTAL ADJUSTMENT. It is presently anticipated that the fair market value of the
Equipment upon the expiration of the original lease term relating thereto will be an amount equal
to the Estimated Residual Value of the Equipment specified on this Schedule. Upon expiration of
the original lease term, Lessor will attempt to sell the Equipment. If the Net Proceeds of Sale
(as hereafter defined) is less than thirty (30) percent of the Total Invoice Cost of the Equipment
(the “Estimated Residual Value”), promptly upon demand Lessee shall pay to Lessor the amount of the
difference. If the Net Proceeds of Sale exceeds the Estimated Residual Value, the amount of the
difference promptly shall be paid by Lessor to Lessee. If the Equipment has not been sold on the
expiration date of the original lease term relating thereto, then the Net Proceeds of Sale shall be
deemed to be zero; and promptly upon demand Lessee shall pay to Lessor an amount equal to the
Estimated Residual Value of the Equipment. If Lessor thereafter shall sell the Equipment, the Net
Proceeds of Sale promptly shall be paid by Lessor to Lessee. Any such payment by either Lessee or
Lessor shall be deemed to be a Terminal Rental Adjustment with respect to the Equipment. As used
herein, “Net Proceeds of Sale” shall mean the gross selling price actually received by Lessor less
all (i) selling expenses incurred by Lessor, (ii) amounts which (if not paid) would constitute a
lien on the Equipment for which Lessee is responsible under the Lease, and (iii) applicable sales
or other transfer taxes paid by Lessor. As used herein, “Equipment” shall mean the Equipment
described on all Schedules of this series.



As required by Section 7701(h) of the Internal Revenue Code of 1986, as now or hereafter
amended, Lessee shall execute and deliver to Lessor the Certification by Lessee in substantially
the form attached hereto as Exhibit No. 1. Lessee acknowledges that the Truth in Mileage Act of
1986 (and the regulations promulgated thereunder) requires the lessee of motor vehicles (at the
time such motor vehicles are terminated from the lease) to provide a written disclosure to the
lessor regarding the mileage of such motor vehicles. Under this law, the “failure to complete or
providing false information may result in fines and/or imprisonment”. Therefore, Lessee agrees to
provide to Lessor (on a form provided by Lessor) upon termination of a motor vehicle from the Lease
the mileage disclosure information required by the Federal regulations.



B. OPTION TO PURCHASE. Provided that no Default or Event of Default has then occurred, Lessee
shall have the option to purchase, upon the expiration of the term of the Lease, all but not less
than all of the Equipment upon the following terms and conditions: If Lessee desires to exercise
this option it shall, at least two hundred forty (240) days before expiration of the term of the
Lease with respect to the first Schedule of this series to terminate in accordance with its terms,
give Lessor written notice of its intention to exercise this option to purchase and shall engage in
negotiations with Lessor to determine the purchase price for the Equipment. Not less than one
hundred eighty (180) days before expiration of the term of the Lease with respect to the first
Schedule of this series to terminate in accordance with its terms, Lessee shall give Lessor written
notice of its election to purchase on the terms mutually agreed upon during negotiations. Such
election shall be effective with respect to all Equipment leased under all Schedules of this
series. At the expiration of the term of the Lease, Lessee shall pay to Lessor in cash any Rent
due on that date plus the purchase price for the Equipment so purchased, determined as hereinafter
provided. Lessee’s exercise of the purchase option contained herein shall constitute a sale of the
Equipment pursuant to Section A above and Lessee shall be responsible for the performance of its
obligations pursuant to Section A above.



The purchase price of the Equipment shall be an amount equal to its then Fair Market Value,
together with all taxes and charges upon sale. For purposes of this Section, “Fair Market Value”
shall be deemed to be an amount equal to the sale price obtainable in an arms’ length transaction
between a willing and informed buyer and a willing and informed seller under no compulsion to sell
(and assuming that, as of the date of determination, the Equipment is in at least the condition
required by Section 13 of the Lease). If the parties are unable to agree on the Fair Market Value
of the Equipment, then Lessor and Lessee shall at Lessee’s expense obtain appraisal values from
three independent appraisers (one to be
selected by Lessor, one by Lessee, and the other by the two selected by Lessor and Lessee;
each of whom must be associated with a professional organization of equipment or personal property
appraisers, such as the American Society of Appraisers) and the average Fair Market Value as
determined by such appraisers shall be binding on the parties hereto.


 


 









 





Notwithstanding any election of Lessee to purchase, the provisions of the Lease shall continue
in full force and effect until the passage of ownership of the Equipment upon the date of purchase.
On the date of purchase, Lessor shall deliver to Lessee a bill of sale transferring and assigning
to Lessee, without recourse or warranty, except (with respect to the status of title conveyed) in
respect of Lessor’s acts, all of Lessor’s right, title and interest in and to the Equipment.
Lessor shall not be required to make and may specifically disclaim any representation or warranty
as to the condition of the Equipment or any other matters.



	 	 	 	 	 	 	 	 	 	 
	BB&T EQUIPMENT FINANCE CORPORATION	 	 	 	ABF FREIGHT SYSTEM, INC.	 
	Lessor	 	 	 	Lessee	 
	 
	 	 	 	 	 	 	 	 	 
	By: 

	 	                     
	[SEAL]	 	 	By: 
	 	                     	[SEAL]
	 

	 
	 	 	 	 	 	 
	 

	Name: 	 
	 	 	 	 	Name: 	 	 
	 

	Title: 	 
	 	 	 	 	Title: 	 	 





 


18









 





EXHIBIT NO. 1




CERTIFICATION BY LESSEE




This Certification is provided by the undersigned (“Lessee”) in connection with that certain
Master Lease Agreement dated as of December
 _____, 2009 (the “Lease”), with BB&T EQUIPMENT FINANCE
CORPORATION. The parties intend and agree that the Lease constitute a “qualified motor vehicle
operating agreement” within the meaning of Section 7701(h) of the Internal Revenue Code of 1986, as
now or hereafter amended, and this Certification is required to be provided pursuant to that
Section.



Lessee hereby certifies, under penalty of perjury, that it intends that more than fifty (50)
percent of the use of the Equipment (as such term is defined in the Lease) is to be in a trade or
business of the Lessee.



Lessee acknowledges that it has been advised that it will not be treated as the owner of the
Equipment for Federal income tax purposes.



IN WITNESS WHEREOF, Lessee has caused this Certification to be duly executed, under seal, as
of the
 _____ 
day of December, 2009.



	 	 	 	 	 
	 	ABF FREIGHT SYSTEM, INC.

Lessee

 	 
	 	By:  	          
 	[SEAL]
	 	 	Name:  	 	 
	 	 	Title: