Legal
Standard terms and conditions that apply to all lease transactions with Flex Fleet Trailer Leasing.
These Standard Terms and Conditions (these "T&Cs") apply to, and are incorporated by reference into, every Lease entered into with Flex Fleet Trailer Leasing, LLC and its subsidiaries, affiliates, and assumed-name divisions (collectively, "Flex Fleet"). Each Lease is subject to and deemed to incorporate the version of these T&Cs in effect on the date such Lease is executed, unless the Lease expressly provides otherwise.
Flex Fleet may amend these T&Cs from time to time. Any amendment will apply (i) to Leases executed on or after the effective date of the amendment, and (ii) to Leases already in effect only upon thirty (30) days' prior written notice to Customer. Flex Fleet will retain each prior version of these T&Cs and will furnish a copy to Customer upon written request. Capitalized terms used herein are defined in Section 1.
As used in these T&Cs, the following terms have the following meanings:
"Acceptable Wear" means only those minor defects and conditions expressly identified as acceptable in the Return Condition Standards attached hereto as Exhibit A. Any defect or condition not expressly identified as acceptable in the Return Condition Standards does not constitute Acceptable Wear.
"Applicable Law" means any applicable federal, state, local, or foreign law, statute, code, rule, regulation, order, judgment, opinion, treaty, or legal requirement.
"Brake Wear Charge" means the brake wear charge specified in a Lease, which applies for each 1/8th of an inch of brake lining or pad wear at each Wheel End. If a Lease does not specify a Brake Wear Charge, the Brake Wear Charge will be the greater of the following per Wheel End: (i) $55 for each 1/8th inch of wear; or (ii) Flex Fleet's standard brake wear charge rate in effect at the time the Equipment is returned.
"Claims" means any and all claims, losses, damages, penalties, actions, suits, assessments, taxes, fines, tolls, and liabilities, together with all reasonable legal costs, fees, and expenses in connection therewith.
"Customer" means any individual or entity that signs or otherwise enters into a Lease.
"Customer Agent" means the driver or other representative who (i) picks up, inspects, takes possession of, or returns a unit of Equipment on behalf of Customer, and/or (ii) executes a Lease on behalf of Customer.
"Equipment" means any Flex Fleet semi-trailer, chassis, refrigerated trailer, or other over-the-road or storage equipment, together with any attached Monitoring Devices.
"Event of Loss" will be deemed to occur if Equipment (or any component thereof) is lost, stolen, destroyed, damaged beyond economical repair, confiscated, seized, or requisitioned, as reasonably determined by Flex Fleet, whether due to accident, fire, lightning, theft, explosion, flood, windstorm, mischief, vandalism, or otherwise.
"Excess Brake Wear" means brake lining or pad wear in excess of 1/8th of an inch for every 20,000 miles traveled, measured per Wheel End.
"Excess Tire Wear" means tire tread wear in excess of 1/32nd of an inch for every: (i) 12,000 miles traveled, for Equipment with closed tandem axles equipped with an automatic tire inflation system ("ATIS"); (ii) 10,000 miles traveled, for Equipment with closed tandem axles not equipped with an ATIS; or (iii) 8,000 miles traveled, for Equipment with spread axles, regardless of ATIS.
"Inbound Inspection" means the inspection report documenting the condition of Equipment upon delivery to or pick-up by Flex Fleet at termination of a Lease. The Inbound Inspection will be performed at a Flex Fleet location following delivery to or pick-up by Flex Fleet, irrespective of whether such delivery or pick-up occurs at such Flex Fleet location.
"Indemnified Parties" means Flex Fleet, its affiliates, members, and shareholders, and their respective assigns, successors, lenders, licensors, employees, officers, and directors.
"Initial Lining Depth" means the outgoing brake lining or pad depth recorded in the Outbound Inspection.
"Initial Tread Depth" means the outgoing tire tread depth recorded in the Outbound Inspection.
"CDW" means Flex Fleet's Collision, Damage and Theft Waiver program described in Section 11(b).
"CDW Deductible" means the CDW deductible specified in a Lease; provided, that if a Lease does not specify a CDW deductible, the CDW Deductible will be $7,500 for each refrigerated unit or specialty unit and $1,500 for each other unit of Equipment.
"Lease" means any and all arrangements or agreements whereby a customer leases, rents, or otherwise takes possession of Equipment, including, without limitation, any Trailer Rental Agreement, Long-Term Trailer Lease Agreement, Master Rental/Lease Agreement, or any other agreement, together with any addenda, schedules, and exhibits related thereto.
"Long-Term Lease" means any Lease with a Term of 12 months or greater.
"Loss Value" means, unless otherwise provided in the Lease, the fair market value of the Equipment (or applicable component thereof) as of the first day of the month during which an Event of Loss occurs, as reasonably determined by Flex Fleet.
"Monitoring Devices" means all tracking devices, telematics units, satellite transponders, refrigeration hour meters, hubodometers, and related devices, as applicable.
"Net Maintenance Lease" means any Lease identified as a "Net Maintenance" Lease, and any Lease that is not expressly identified as a Standard Maintenance Lease.
"Outbound Inspection" means the inspection report documenting the condition of each unit of Equipment at the time of delivery to or pick-up by Customer. The Outbound Inspection will be performed prior to delivery to or pick-up by Customer. Outbound Inspections are hereby incorporated into the applicable Lease by reference.
"Replacement Tires" means tires of equal or better quality to those located on the Equipment as of the Outbound Inspection, as reasonably determined by Flex Fleet, and which satisfy each of the following: (i) low-rolling-resistance tires verified under the U.S. EPA SmartWay program, where the Equipment was delivered with SmartWay-verified tires; (ii) a qualifying and approved casing; (iii) a DOT date code not more than eight (8) years old at the time of installation; and (iv) non-recapped, where the Equipment was delivered with non-recapped tires. Equipment delivered with original-casing tires must be returned with original-casing tires. If a replacement tire does not satisfy the foregoing standards, Customer will be charged the value of the outbound tire it replaced.
"Return Condition Standards" means the return condition and acceptable-repair standards attached hereto as Exhibit A, as the same may be amended in accordance with the amendment provisions applicable to these T&Cs.
"Return Location" means the return location(s) specified in a Lease; provided, however, that if a Lease does not specify a return location, the Return Location will be the Flex Fleet location from which the Equipment was rented or leased.
"Service Location" means the location or locations at which Flex Fleet will perform its maintenance and inspection obligations under a Standard Maintenance Lease, as identified in the Lease. If a Lease does not identify a Service Location, the Service Location will be any Flex Fleet location.
"Standard Maintenance Lease" means any Lease expressly identified as a "Standard Maintenance" Lease.
"Storage Only Equipment" means any Equipment identified in a Lease as "Storage Only," and any Equipment leased at a mileage rate equal to or greater than ten cents ($0.10) per mile.
"Term" means the period identified as the "Lease Term" or "Contract Term" in a Lease, together with all renewals and extensions thereof.
"Tire Wear Charge" means the tire tread wear charge specified in a Lease, which applies for each 1/32nd of an inch of tread wear for each tire; provided, that if a Lease does not specify a tread wear charge, the Tire Wear Charge will be the greater of the following per tire: (i) $45 for each 1/32nd of an inch of tire wear; or (ii) Flex Fleet's standard tire wear charge rate in effect at the time the Equipment is returned.
"Use Charges" means the payments required to be made by Customer under a Lease for each day (including Saturdays, Sundays, and holidays) that Equipment is on lease or rent to Customer, irrespective of whether such Equipment is in the use, possession, control, or operation of Customer. Use Charges include the rental rate set forth in the Lease plus any and all other charges required to be paid by Customer thereunder, including, without limitation, mileage charges, CDW charges, maintenance accrual charges, refrigeration charges, Tire Wear Charges, Brake Wear Charges, and the return-related charges described in Section 10.
"Wheel End" means each brake assembly position on a unit of Equipment, whether drum or air disc.
Customer acknowledges that it will become bound by these T&Cs if Customer or any Customer Agent signs a Lease or otherwise takes possession of Equipment. Whenever Customer signs or otherwise enters into a Lease or any amendment thereto, takes possession of Equipment, makes payment of any invoice, or completes any other transaction with Flex Fleet, Customer represents and warrants that Customer (and any Customer Agent acting on behalf of Customer) is authorized to enter into such agreements and transactions with Flex Fleet, and expressly acknowledges receipt and ongoing acceptance of these T&Cs. During the Term of each Lease, Customer will have exclusive possession, control, and use of the applicable Equipment and assumes complete responsibility for the operation thereof. Customer agrees that it is Customer's responsibility to review these T&Cs and any amendments hereto prior to entering into any transaction with Flex Fleet.
(a) Equipment and Term. The Equipment covered by a Lease and the Term thereof will be specified in the Lease. The Term of any Long-Term Lease will commence (the "Commencement Date") on the first day of the month following the earlier of (i) delivery of all Equipment covered by such Lease, and (ii) three (3) business days following written notice to Customer that all Equipment covered by the Lease is available for pick-up or delivery. Customer's failure to return any Equipment in accordance with Section 10 prior to expiration of the applicable Term will constitute a material default under the Lease. Prior to delivering possession of any Equipment, Flex Fleet will provide a motor vehicle registration and license plate for the Equipment.
(b) Ownership; No Conveyance. By executing a Lease, Flex Fleet does not convey any right, title, or interest in any Equipment to Customer other than the right to possess and use the Equipment in accordance with the Lease. Flex Fleet and Customer agree that Equipment will be considered personal property for all purposes, irrespective of whether such Equipment is affixed to realty. If Flex Fleet is not the legal owner of any Equipment, the Lease for such Equipment will be subject and subordinate to the provisions of any written agreement between Flex Fleet and the legal owner. Equipment may be subject to a security interest held by a third-party lender, and the rights and obligations of Customer hereunder are expressly subject and subordinate to the rights of any such lender.
(c) Precautionary Security Interest; Filing Authorization. In the event a court of competent jurisdiction determines that a Lease constitutes a conditional sale or financing arrangement, Customer grants Flex Fleet a continuing first-priority security interest in the Equipment and all proceeds thereof to secure Customer's obligations under such Lease. Customer hereby irrevocably authorizes Flex Fleet to file, at Customer's expense, one or more UCC-1 financing statements (and any amendments or continuations thereof) describing the Equipment and its proceeds, and to file such statements in any jurisdiction Flex Fleet deems appropriate. Such filings are precautionary and do not affect the characterization of the Lease as a true lease.
(d) Substitute Equipment. Flex Fleet may, at its option and upon reasonable notice, furnish substitute Equipment of comparable type and capacity while any unit of Equipment is undergoing maintenance, repair, or inspection. Use Charges applicable to the original unit will apply to the substitute unit during such period, and all terms of the Lease and these T&Cs will apply to the substitute unit.
Customer agrees to pay Flex Fleet in accordance with Flex Fleet's payment terms and to pay all Use Charges for Equipment that Customer rents or leases from Flex Fleet.
(a) Payment and Late Charges. Flex Fleet may invoice Customer monthly for estimated charges under each Lease and these T&Cs. A true-up of estimated charges will occur from time to time and/or at the end of the applicable Term at Flex Fleet's option, whereupon Customer will pay Flex Fleet any shortfall and Flex Fleet will pay or credit Customer any overpayment. Customer will pay all invoices in immediately available funds (or by ACH, if required under a Lease) within thirty (30) days from the date of the invoice. Customer will not pay any invoice by credit card without Flex Fleet's prior written approval. Any payment not received within thirty (30) days from the invoice date will be subject to a late charge equal to the lesser of (i) 1.5% per month of the past-due amount, or (ii) the maximum rate allowed by law, from the invoice date until paid in full. Customer will pay Flex Fleet an administrative fee of $25 for each check, electronic payment, or other form of payment returned for insufficient funds or otherwise declined. Customer will not be entitled to any abatement, reduction, or setoff against any payments due under a Lease for any reason whatsoever. No amounts under a Lease may be prepaid except as expressly set forth in the Lease.
(b) Use Charges Generally. Customer will pay all Use Charges for Equipment leased or rented by Customer as provided in the applicable Lease. Use Charges will begin to accrue on the date such Equipment is available for delivery to or pick-up by Customer, as applicable. Customer will remain responsible for all Use Charges due under a Lease until the latest to occur of (i) expiration of the applicable Term, (ii) Customer's return of the Equipment in accordance with Section 10 and payment of all sums due upon return, or (iii) Customer's payment of any Loss Value due hereunder. Use Charges may include, without limitation, the following:
(i) Rental/Lease Charges. Customer will pay all rental and lease charges for each unit of Equipment as provided in the applicable Lease.
(ii) Mileage Charges. To the extent required under a Lease, Customer will pay mileage charges for actual miles traveled by a unit of Equipment at the rate specified in the Lease. Miles traveled will be measured by the hubodometer attached to each unit of Equipment, read at the time of the Outbound Inspection and the Inbound Inspection. If any hubodometer is missing or fails to function properly, Customer will pay a mileage charge based on the average miles traveled by similar units leased or rented from Flex Fleet, as reasonably determined by Flex Fleet.
(iii) Tire and Brake Wear Charges. Except as otherwise provided in a Lease, upon Customer's return of any Equipment, Customer will pay all Tire Wear Charges, Brake Wear Charges, and other amounts due under Section 10. Flex Fleet will measure tread depth at the lowest point of remaining tread on each tire, and brake lining depth at each Wheel End, at the time of both the Outbound Inspection and the Inbound Inspection.
(iv) Citations and Tolls. Customer will be solely responsible for payment of all traffic and parking fees, tickets, and citations relating to the Equipment (including, without limitation, parking violations, moving violations, photograph or radar tickets, weight station citations, automated toll violations, toll fees and fines, and all similar tickets or citations) (collectively, "Citations"). Customer will promptly reimburse Flex Fleet for all Citations paid directly by Flex Fleet and will pay Flex Fleet its then-standard processing fee for each such Citation.
(v) Maintenance Accrual Charges. Customer will timely pay all maintenance accrual charges specified in the Lease. Maintenance accrual charges received by Flex Fleet will be applied toward any maintenance, repair, or other amounts due to Flex Fleet upon Customer's return of the applicable Equipment under Section 10. Any unapplied maintenance accrual charges will be refunded to Customer after Customer has returned all leased or rented Equipment to Flex Fleet.
(c) Holdover. If Customer retains possession of any Equipment after expiration of the applicable Term without Flex Fleet's prior written consent, Use Charges for such Equipment will automatically increase to one hundred fifty percent (150%) of the daily equivalent of the rate then in effect, accruing from the date of expiration until the Equipment is returned in accordance with Section 10. Acceptance of holdover Use Charges does not constitute consent to the holdover, extend the Term, or waive any of Flex Fleet's remedies under Section 12.
(d) Rate Adjustment. If Customer rents or leases any Equipment on a daily, weekly, or month-to-month basis, Flex Fleet may increase the Use Charges with respect to such Equipment upon at least thirty (30) days' written notice to Customer, without limiting its remedies under Section 12.
(e) Early Termination. If Customer returns any Equipment subject to a Long-Term Lease prior to expiration of the applicable Term, Customer will remain liable for the Use Charges that would have accrued for the remainder of the Term, unless the Lease expressly provides for early termination or Flex Fleet agrees otherwise in writing. Flex Fleet will credit against such amount the net proceeds actually received by Flex Fleet from any re-rental or re-lease of the returned Equipment during the remainder of the Term, less all costs of repossession, transport, storage, refurbishment, and remarketing.
If a security deposit is required under a Lease, Customer must remit such security deposit in full prior to taking possession of the Equipment. The security deposit may be applied to offset any amounts due and owing by Customer to Flex Fleet. Any unused portion of the security deposit will be refunded to Customer after Customer has returned all Equipment to Flex Fleet, less any applicable deductions for repair, replacement, and other charges provided for in a Lease or these T&Cs. Flex Fleet is not required to hold security deposits in a segregated account, and no interest will accrue to Customer thereon.
Unless otherwise provided in a Lease, Customer will take possession of the Equipment at the Flex Fleet location specified in the Lease. Prior to delivering possession of any Equipment, Flex Fleet will inspect the same and provide Customer an Outbound Inspection. By taking possession of Equipment, Customer acknowledges and agrees that such Equipment is in the condition reported in the Outbound Inspection. Customer will be solely responsible for any damage to the Equipment not referenced in the Outbound Inspection. If Customer takes possession of any Equipment for which no Outbound Inspection is provided by Flex Fleet, such Equipment will be deemed to have been received by Customer in good and acceptable working order and free of all defects and damage. Customer acknowledges that delivery of Equipment may be subject to delays beyond Flex Fleet's control and agrees that Customer will have no claim against Flex Fleet for damages resulting from any such delay.
(a) Maintenance Options; Default. Each Lease will be identified as either a Standard Maintenance Lease or a Net Maintenance Lease. Any Lease not expressly identified as a Standard Maintenance Lease will be deemed a Net Maintenance Lease. Storage Only Equipment is governed by Section 7(d) regardless of the maintenance option identified in the Lease.
(b) Net Maintenance Leases. Under a Net Maintenance Lease, Customer will, at Customer's sole expense, maintain the Equipment in good operating order and in the same condition and appearance as noted on the Outbound Inspection, including, without limitation, all preventive maintenance, emergency service, damage repairs, and replacements. Customer will be solely responsible for all maintenance and, when necessary, replacement of all parts, accessories, and tires. Customer will cause all repairs and maintenance to be completed in accordance with Flex Fleet's repair and maintenance standards and with all requirements necessary to preserve Flex Fleet's warranty rights relating to the Equipment. Customer will timely conduct all inspections of the Equipment required under Applicable Law, including, without limitation, all inspections required by the Department of Transportation and the California Commercial Motor Vehicle Safety Act of 1988, as amended (commonly referred to as the Basic Inspection of Terminals) (collectively, "Legally-Required Inspections"), through the use of qualified and trained personnel, and will promptly remit to Flex Fleet all documents relating thereto. Brake relines must be performed as a complete reline by axle when lining reaches 1/4 of an inch of remaining thickness, together with replacement of all worn or damaged related components including drums, and a complete wheel-end inspection with torque set to manufacturer specification. All maintenance must be performed by a qualified service company or a qualified employee of Customer in accordance with manufacturer requirements and in a manner that preserves Flex Fleet's warranty rights. Customer will promptly notify Flex Fleet of any required structural repair and make the affected Equipment available to Flex Fleet for inspection. For the avoidance of doubt, the maintenance obligations in this Section 7(b) do not create any allowance for Acceptable Wear at return; wear charges under a Net Maintenance Lease are governed exclusively by Section 10(c).
(c) Standard Maintenance Leases. Under a Standard Maintenance Lease, and unless otherwise provided in the Lease, Flex Fleet will provide the following maintenance services during the Term so long as Customer returns the Equipment to the Service Location for maintenance servicing at the times set forth in the Lease (service charges will apply for maintenance performed at a location other than a Flex Fleet facility):
(i) replacement of tires worn through Acceptable Wear when remaining tread depth reaches 4/32nds of an inch;
(ii) replacement of brake linings worn through Acceptable Wear when remaining lining thickness reaches 3/8ths of an inch;
(iii) preventive maintenance and the annual DOT/FHWA inspection when due;
(iv) repair of wiring shorts, defective wiring, and defective lamps; and
(v) repair or replacement of brake, suspension, and body components, light bulbs, and lubricants worn through Acceptable Wear, as needed.
Except for the services expressly listed in Sections 7(c)(i)–(v) above, Customer will be responsible for all Equipment maintenance and repairs and all expenses associated therewith, and all operating costs with respect to the Equipment will be borne by Customer. Without limiting the foregoing, under a Standard Maintenance Lease Customer remains responsible for daily pre-trip safety inspections, maintaining proper hub lubrication levels and brake adjustment, maintaining tire inflation at manufacturer-recommended settings, repairing flats, replacing tires damaged by road hazards, curbing, cuts, flat-spotting, or operation while under-inflated or flat, thawing frozen brakes and valves, damage to brake components including drums, replacement of broken or missing lamps and lenses, and any additional licensing, special permits, or replacement of lost license plates.
(d) Storage Only Equipment. Flex Fleet will have no obligation to perform maintenance or inspection services on Storage Only Equipment, and the services described in Section 7(c) do not apply to Storage Only Equipment. Customer will not use Storage Only Equipment to transport goods over the road. If Customer operates Storage Only Equipment over the road at any time after completion of the Outbound Inspection, Customer will be responsible for all drayage, road service, maintenance, mileage, and other charges associated with such use, including, without limitation, a mileage charge of twenty-five cents ($0.25) per mile payable to Flex Fleet. Customer must return Storage Only Equipment without any wear to the tires or brakes.
(e) Refrigeration Units. Refrigeration units require an "A" service every 1,500 operating hours and a "B" service every 3,000 operating hours, in each case performed by an authorized service provider. Except as otherwise provided in the Lease or any Schedule thereto, Flex Fleet will schedule and perform these services and will be solely responsible for preventive maintenance servicing and repairs to any refrigeration unit attached to Equipment, regardless of whether the Lease is a Standard Maintenance Lease or a Net Maintenance Lease. Customer will monitor hour meter readings and notify Flex Fleet when a unit approaches a service interval. Customer will make refrigerated Equipment available to Flex Fleet for such servicing and repairs promptly following Flex Fleet's request. Customer remains responsible for maintaining proper fuel, oil, coolant, and refrigerant levels and for all damage to refrigeration units other than Acceptable Wear.
(f) Repair Quality Standards. Customer will use trailer-manufacturer-grade materials and parts for all repairs, and all parts, accessories, equipment, and devices used in Equipment repair will be of equal or better quality than the items repaired or replaced, as reasonably determined by Flex Fleet. Any parts, accessories, equipment, or devices that do not comply with this standard may be replaced by Flex Fleet at Customer's expense, including all labor, drayage, road service, maintenance, mileage, and other charges. Any repair that fails to meet the standards set forth in this Section 7(f) or in the Return Condition Standards, as reasonably determined by Flex Fleet, will be corrected by Flex Fleet at Customer's expense. Any tires replaced at locations other than Flex Fleet facilities must be returned to Flex Fleet within thirty (30) days of such replacement, or Flex Fleet will invoice Customer for the full cost of such tires, including all labor, mileage, and road service charges. If Customer replaces any parts, accessories, or tires, such replacement items become the property of Flex Fleet immediately upon attachment to the Equipment. If Customer is required to replace any damaged or inoperable tires, Customer will replace the same with Replacement Tires.
(g) Damage; Notice; Events of Loss. Customer is responsible for all damage to the Equipment other than Acceptable Wear. Upon Flex Fleet's request, Customer will provide Flex Fleet with written descriptions of all repairs made to the Equipment. Customer will promptly notify Flex Fleet of any potential mechanical failure or problem relating to the Equipment. Customer will notify Flex Fleet and Customer's insurance carrier within seventy-two (72) hours following any Event of Loss. Upon an Event of Loss, Customer will pay Flex Fleet the Loss Value of the Equipment (or component thereof), plus (i) all Use Charges relating to such Equipment due but unpaid through the date Customer pays the Loss Value, (ii) all labor, drayage, mileage, maintenance, road service, storage, recovery, and other charges relating to such Equipment, and (iii) the estimated or actual cost, at Flex Fleet's option, to replace any damaged Monitoring Devices. If Customer files a stolen vehicle report with respect to any Equipment and such Equipment is subsequently located, Customer will promptly notify the applicable authorities and will be solely responsible for all costs, expenses, and fines resulting therefrom.
(h) Right of Inspection. Flex Fleet will have the right, upon three (3) days' prior notice, to inspect Equipment (wherever located) during normal business hours for the purpose of confirming the existence, condition, or proper maintenance thereof.
(a) Permitted Use. Customer will: (i) use the Equipment only for commercial purposes; (ii) not allow any person to operate the Equipment other than duly licensed agents or employees of Customer; (iii) comply with, and ensure that all persons operating or using the Equipment comply with, all Applicable Laws (routine traffic violations excepted) and all manufacturer load weight, load distribution, and other specifications relating to the use, operation, or maintenance of the Equipment; (iv) conduct regular safety inspections of Equipment and ensure the Equipment receives regular maintenance and lubrication; and (v) ensure Equipment is not operated if in need of repairs or maintenance.
(b) Geographic Restrictions. Customer will not operate, transport, or permit the Equipment to be operated or transported outside the continental United States and Canada without Flex Fleet's prior written consent, which may be withheld in Flex Fleet's sole discretion. Without limiting the foregoing, Equipment may not be taken into Mexico under any circumstances absent such prior written consent. CDW does not apply to any Event of Loss occurring outside the continental United States and Canada, whether or not Flex Fleet has consented to such use. If Equipment is taken outside the continental United States and Canada without Flex Fleet's prior written consent, (i) such use will constitute a material default under the Lease, and (ii) Customer will be liable for the Loss Value of the Equipment plus all costs of recovery and repatriation. Customer is solely responsible for compliance with all customs, import, registration, and insurance requirements applicable to operation of the Equipment in Canada.
(c) Taxes and Assessments. Customer will timely pay all taxes, fees, and assessments, including, without limitation, all license and registration fees (except as otherwise provided in Section 3), and all sales, use, property, gross receipts, excise, transaction, ad valorem, privilege, intangible, stamp, tonnage, mileage, highway use, road use, fuel, and other taxes, duties, imposts, or charges, together with any fines, penalties, or interest thereon (unless such fines, penalties, or interest arise solely from Flex Fleet's gross negligence or willful misconduct), now or hereafter imposed by any governmental body with respect to the Equipment or the use, possession, ownership, leasing, operation, delivery, or return thereof (excluding franchise taxes and any taxes based on Flex Fleet's net income).
(d) Representations. By executing a Lease, Customer represents and warrants to Flex Fleet that (i) the Equipment is suitable and appropriate for Customer's intended use, and (ii) Customer's execution of such Lease will not result in the creation of any lien, charge, security interest, or other encumbrance upon any Equipment pursuant to any indenture, mortgage, deed of trust, bank loan, credit agreement, or other instrument to which Customer is a party.
(e) Hazardous Materials. Customer will not use Equipment for the transportation or storage of radioactive materials, hazardous waste or materials, medical waste, corrosive substances, explosives, gases, or bulk liquids in violation of Applicable Law (each, a "Prohibited Substance"). Customer will promptly notify Flex Fleet of any use of the Equipment in violation of the immediately preceding sentence. If Flex Fleet determines that a Prohibited Substance has contaminated Equipment or been placed in any Equipment in violation of Applicable Law, Customer will, at Flex Fleet's option, either (i) promptly pay Flex Fleet the Loss Value of such Equipment, or (ii) restore and decontaminate the Equipment at Customer's expense and provide proof of such decontamination, including, without limitation, methodology and decontamination sampling results and any other inspection or testing Flex Fleet deems appropriate.
(f) Markings and Alterations. Customer will not remove or damage any marks of identification on the Equipment. Prior to Customer's return of any Equipment, Customer will remove all marks of identification, decals, and logos applied to the Equipment by or for Customer, including all adhesive residue, and will restore the surface at Customer's expense. Customer will not make any alterations to the Equipment or remove any parts, accessories, or attachments without Flex Fleet's prior written consent, except as expressly permitted under Section 13.
(g) Liens and Encumbrances. Customer will keep the Equipment free of all liens, charges, and encumbrances, including mechanic's, repairer's, storage, and warehouse liens, and will promptly discharge or bond over any such lien at Customer's expense. Customer will not abandon the Equipment at any third-party facility.
(a) Sub-License. If a Monitoring Device is installed on Equipment, Flex Fleet grants Customer a non-exclusive, non-transferable, limited sub-license to access the monitoring services associated with such Monitoring Device (the "Monitoring Services") for the sole purpose of operating the Equipment in accordance with the Lease. Flex Fleet may terminate the Monitoring Services and the sub-licenses granted under this Section at any time upon notice to Customer. Customer's use of information derived from the Monitoring Services is at Customer's own risk. Customer acknowledges that disruption of Monitoring Services may occur from time to time for routine and emergency maintenance and for other reasons beyond Flex Fleet's control.
(b) Flex Fleet's Data Rights. Flex Fleet retains all right, title, and interest in and to all data generated by Monitoring Devices, including location, utilization, mileage, hour-meter, and diagnostic data ("Equipment Data"). Flex Fleet may collect, store, use, and disclose Equipment Data for fleet management, maintenance planning, billing, loss prevention, recovery of Equipment, enforcement of the Lease, compliance with Applicable Law, and analytics purposes, and may disclose Equipment Data to its lenders, insurers, service providers, and legal counsel.
(c) Customer Notice Obligations. Customer acknowledges that Equipment Data may reveal the location and movement of Equipment operated by Customer's drivers and personnel. Customer is solely responsible for providing any notices to, and obtaining any consents from, its drivers, employees, and contractors required under Applicable Law, including, without limitation, the California Consumer Privacy Act, as amended. Customer will indemnify the Indemnified Parties against any Claims arising from Customer's failure to provide such notices or obtain such consents.
(d) No Tampering. Customer will not remove, disable, obstruct, tamper with, or interfere with any Monitoring Device. Any such act constitutes a material default under the Lease, and Customer will be liable for the replacement cost of the affected Monitoring Device plus all associated labor and recovery charges.
(a) Return Obligation. Upon expiration or earlier termination of the Term, Customer will return the applicable Equipment to the Return Location in good and efficient operating order and in substantially the same condition and appearance as set forth in the Outbound Inspection, subject to the wear allowance applicable to the maintenance option elected in the Lease as set forth in Sections 10(b) and 10(c) below. Customer will notify Flex Fleet of all units intended to be returned at least twenty-four (24) hours prior to return. If Customer fails to provide such notice, Flex Fleet may assess its then-standard unscheduled return handling fee, and Use Charges will continue to accrue until the Equipment is checked in at the Return Location during normal business hours.
(b) Tire and Brake Charges — Standard Maintenance Leases. If Customer returns any Equipment subject to a Standard Maintenance Lease with Excess Tire Wear on any tire, Customer will pay the Tire Wear Charge for every 1/32nd of an inch of Excess Tire Wear for each such tire. If Customer returns any such Equipment with Excess Brake Wear, Customer will pay the Brake Wear Charge per Wheel End for every 1/8th of an inch of Excess Brake Wear. Wear that does not exceed the Excess Tire Wear or Excess Brake Wear thresholds constitutes Acceptable Wear under a Standard Maintenance Lease and is not chargeable.
(c) Tire and Brake Charges — Net Maintenance Leases. Notwithstanding any reference to Acceptable Wear elsewhere in these T&Cs, no wear allowance applies to tires or brakes under a Net Maintenance Lease. If Customer returns any Equipment subject to a Net Maintenance Lease with any tire having remaining tread depth of less than one hundred percent (100%) of the Initial Tread Depth, Customer will pay the Tire Wear Charge per tire for every 1/32nd of an inch by which the tread depth has decreased from the Initial Tread Depth; provided, however, that if such Equipment accrued fewer than 25,000 miles during the applicable Term, then in lieu of such Tire Wear Charge Customer will pay Flex Fleet's then-standard mileage charge rates for the actual miles driven, less any mileage charges already paid by Customer under Section 4(b)(ii) for the same miles. If Customer returns Net Maintenance Lease Equipment with remaining brake lining depth of less than one hundred percent (100%) of the Initial Lining Depth, Customer will pay the Brake Wear Charge per Wheel End for every 1/8th of an inch by which the lining depth has decreased from the Initial Lining Depth.
(d) Condition and Cleanliness Charges. Equipment must be returned swept clean and free of all cargo, pallets, dunnage, debris, nails, straps, load bars, liquids, and odors, with all Customer decals, placards, and adhesive residue removed. Equipment must be returned free of any condition identified as chargeable in the Return Condition Standards. Refrigerated Equipment must be returned with the fuel tank at the level recorded on the Outbound Inspection and with a functioning hour meter. Flex Fleet may assess its then-standard charges for washout, debris removal, decal and residue removal, fuel replenishment, and repair of any chargeable condition, in each case in addition to any Tire Wear Charges and Brake Wear Charges due under this Section 10.
(e) Inbound Inspection Controls. The Inbound Inspection will govern the determination of the Equipment's condition at return. Customer may attend the Inbound Inspection at its own expense if it so requests in writing at least twenty-four (24) hours in advance. If Customer does not attend, the Inbound Inspection performed by Flex Fleet will be conclusive absent manifest error.
(a) Insurance Requirements. Customer will, at Customer's expense, maintain the following insurance coverage with insurers acceptable to and approved by Flex Fleet: (i) commercial general liability insurance (including contractual liability) against claims for bodily injury and property damage with minimum limits of $1,000,000 combined single limit per occurrence and $2,000,000 general aggregate, naming Flex Fleet as additional insured; (ii) commercial automobile liability insurance against liability for bodily injury and property damage with minimum limits of (A) $1,000,000 combined single limit per occurrence, or (B) $1,000,000 for bodily injury per occurrence and $250,000 for property damage per occurrence, in either case naming Flex Fleet as additional insured; and (iii) physical damage insurance ("Physical Damage Insurance") insuring against loss or damage to the Equipment in an amount not less than the full replacement value of the Equipment, with a deductible of no more than $2,500 per occurrence, naming Flex Fleet as loss payee.
Each such policy must (i) be primary insurance, up to and including the stated policy limits, and not excess over any other coverage; (ii) contain a clause specifying that no action or misrepresentation by Customer will invalidate the policy; (iii) require the insurer to give Flex Fleet at least thirty (30) days' prior written notice of any cancellation, non-renewal, or material modification; and (iv) contain no exclusion for punitive damages. Customer will provide Flex Fleet with a certificate of insurance (in form acceptable to Flex Fleet) evidencing the required insurance prior to taking possession of Equipment and will ensure such insurance remains in force until Customer returns all Equipment to Flex Fleet. Customer will take all necessary action to enforce Flex Fleet's status as additional insured and loss payee, including cooperating with Flex Fleet and filing insurance claims for lost or stolen Equipment upon Flex Fleet's request. Nothing in this Section 11 limits Customer's liability under the Lease or Applicable Law. If Customer fails to maintain any required insurance, Flex Fleet may, at its option, procure the required insurance at Customer's expense.
(b) Collision Damage Waiver. Notwithstanding Section 11(a)(iii), Customer may satisfy its obligation to maintain Physical Damage Insurance by participating in Flex Fleet's Collision, Damage and Theft Waiver program. To participate in the CDW program with respect to any Equipment, Customer must (i) expressly elect to participate in the applicable Lease; (ii) timely pay all CDW charges set forth in the Lease; (iii) be in compliance with all terms and conditions of the Lease and these T&Cs, and be current on all payments owing to Flex Fleet, both at the time of the Event of Loss and at the time the claim is resolved; and (iv) upon the occurrence of an Event of Loss, (A) report such occurrence to Flex Fleet in writing within seventy-two (72) hours, (B) file a police report (if the Equipment is stolen or if a police report is otherwise made) and provide a copy to Flex Fleet, together with any other documentation reasonably requested by Flex Fleet, (C) pay Flex Fleet the applicable CDW Deductible, and (D) otherwise reasonably cooperate with Flex Fleet.
Subject to the exclusions below, CDW applies only to physical damage to the Equipment resulting from (i) collision, whether the Equipment is moving or standing, (ii) fire, and (iii) theft of an entire unit of Equipment where a police report is filed and provided to Flex Fleet.
If Customer satisfies all of the foregoing obligations, Customer will be relieved from further liability for property damage arising from a covered Event of Loss. CDW does not apply, and Customer remains fully liable, where the Event of Loss arises from or relates to: (i) Customer's breach of any representation or warranty or failure to perform any obligation set forth in the Lease or these T&Cs, including Customer's failure to properly use, care for, or maintain the Equipment; (ii) the negligence, willful misconduct, or violation of law by Customer or any of its employees, agents, contractors, or affiliates; (iii) any natural disaster or weather event, including, without limitation, hail, wind, windstorm, tornado, hurricane, lightning, wildfire, flood, storm surge, mudslide, earthquake, landslide, subsidence, or other earth movement; (iv) nuclear hazard, war, military action, terrorism, riot, or seizure by civil authority; (v) tire or wheel theft, unless the entire unit of Equipment is stolen, and tire damage, unless the tires are damaged during or as a result of a collision; (vi) floor damage caused by, during, or in connection with loading or unloading of the Equipment, or freight that was not properly secured; (vii) damage caused by or in connection with tractor/trailer coupling, uncoupling, or lifting; (viii) mysterious disappearance, or Equipment that is lost, missing, or unaccounted for without a police report evidencing theft; (ix) contamination of the Equipment or its cargo, or any Prohibited Substance; (x) cargo loss or damage of any kind; or (xi) any event occurring outside the continental United States or Canada.
CDW does not cover, and Customer remains solely responsible for: (i) any charges assessed upon return of the Equipment under Section 10, including Tire Wear Charges, Brake Wear Charges, and charges for any condition identified as chargeable in the Return Condition Standards; (ii) recovery of the Equipment, any tractor, or any cargo; and (iii) towing, transport, and storage charges of any kind.
Upon an Event of Loss, Use Charges will continue to accrue until Customer has paid the required CDW Deductible. The CDW Deductible is payable by Customer with respect to each separate incident or occurrence. Customer's CDW will terminate immediately upon any default by Customer.
CUSTOMER ACKNOWLEDGES AND AGREES THAT CDW IS NOT INSURANCE COVERAGE OF ANY KIND. CDW IS A CONTRACTUAL WAIVER BY FLEX FLEET OF CERTAIN DAMAGE CLAIMS AGAINST CUSTOMER, OFFERED AS PART OF FLEX FLEET'S LEASING PROGRAM. CDW IS NOT REGULATED AS INSURANCE, IS NOT UNDERWRITTEN BY AN INSURER, AND PROVIDES NO LIABILITY, CARGO, OR THIRD-PARTY COVERAGE. CUSTOMER REMAINS OBLIGATED TO MAINTAIN ALL INSURANCE REQUIRED UNDER SECTION 11(a)(i) AND 11(a)(ii).
Flex Fleet may terminate Customer's CDW upon at least thirty (30) days' written notice. Flex Fleet may also increase CDW charges under a Lease upon at least thirty (30) days' notice to Customer (a "CDW Increase Notice"), and Customer will be deemed to have agreed to such increase unless Customer provides written notice to Flex Fleet of its election to terminate CDW within thirty (30) days following receipt of the CDW Increase Notice. Upon any CDW termination, Customer will obtain, prior to the termination date, Physical Damage Insurance covering the Equipment and naming Flex Fleet as loss payee in accordance with Section 11(a).
(c) Indemnification. To the fullest extent permitted by Applicable Law, and except to the extent arising from Flex Fleet's gross negligence or willful misconduct, Customer will indemnify, defend, and hold the Indemnified Parties harmless from and against any and all Claims relating to or arising out of the use, lease, rental, possession, maintenance, repair, condition, or operation of the Equipment during the Term (or any other period during which such Equipment is leased or rented to Customer), even if such Claims were caused or alleged to be caused in whole or in part by the negligence of any Indemnified Party, and including, without limitation, any and all Claims arising from or incident to: (i) the acts or omissions of Customer or Customer's agents, employees, contractors, or assignees; (ii) the performance, breach, or default of the Lease by Customer, or Flex Fleet's enforcement of any of the terms of the Lease; (iii) the death or injury of any person; (iv) damage to any property; (v) damage to, or any damage or injury resulting from, any cargo placed on or contained in the Equipment; (vi) any taxes and assessments, including all import and customs duties and all withholding, property, and sales or use taxes, and all penalties; or (vii) the escape, seepage, leakage, spillage, discharge, use, emission, or release of any Prohibited Substance from or in the Equipment.
The furnishing of insurance required hereunder will not be deemed to limit Customer's obligations under this Section 11(c). If any action or proceeding is brought against any Indemnified Party and such claim is one for which Customer is obligated to indemnify hereunder, Customer will, upon notice from Flex Fleet, resist and defend such action or proceeding with respect to that claim (by counsel reasonably satisfactory to Flex Fleet) at Customer's expense. Customer will not settle or compromise any claim against any Indemnified Party, including any claim for which Customer has assumed the defense, without Flex Fleet's prior written consent.
(d) Waiver of Subrogation. Except as provided in the following sentence, Customer and Flex Fleet mutually release each other from any and all liability or responsibility (to the other or anyone claiming through or under them by way of subrogation or otherwise) for any loss or damage to property covered by the insurance policies required to be carried by the parties hereunder or any other insurance actually carried by such party, and mutually waive all rights of subrogation in favor of any insurance carrier against the other arising out of any such loss or damage. This waiver does not apply to, and Flex Fleet expressly reserves all rights with respect to, (i) Customer's Physical Damage Insurance under which Flex Fleet is named loss payee, (ii) any CDW Deductible or Physical Damage Insurance deductible payable by Customer, and (iii) any loss or damage excluded from CDW under Section 11(b).
(a) Events of Default. Customer will be in "Default" hereunder if: (i) Customer fails to pay any amount due hereunder within ten (10) days after the applicable due date; (ii) Customer or any guarantor of Customer (A) becomes insolvent, (B) voluntarily files, or has filed against it involuntarily, a petition for liquidation, reorganization, adjustment of debt, or similar relief under any present or future Applicable Law, (C) makes an assignment for the benefit of creditors, (D) appoints or submits to the appointment of a trustee, receiver, or liquidator with respect to any of its assets, (E) admits in writing its inability to pay its debts as they become due, or (F) ceases doing business as a going concern; (iii) any letter of credit, guaranty, or other security given to secure performance of a Lease expires, terminates, or becomes worthless in the reasonable opinion of Flex Fleet; (iv) Customer makes or permits any unauthorized lien against, or assignment or transfer of, a Lease, any Equipment, or any interest therein; (v) Customer fails to comply with its obligations under Section 8(b), Section 8(e), or Section 11; (vi) Customer consolidates with or merges into another entity, or undergoes a transfer of a majority of its voting equity or of all or substantially all of its assets, in each case without Flex Fleet's prior written consent; (vii) Customer breaches any representation or warranty set forth herein; (viii) Customer fails to return any Equipment at the end of the applicable Term; or (ix) Customer fails to perform any of its other obligations under any Lease and such failure continues for at least thirty (30) days after Flex Fleet has requested performance, correction, or remediation thereof.
(b) Remedies. Upon a Default, Flex Fleet may exercise any one or more of the following remedies (which are cumulative and may be exercised simultaneously, in each case to the extent permitted by Applicable Law): (i) cancel or terminate any or all Leases between Customer and Flex Fleet (provided that these T&Cs will remain in effect until all Equipment subject to the cancelled or terminated Leases is returned to Flex Fleet); (ii) declare the balance of the remaining payments under any or all Leases immediately due and payable by acceleration, as provided in Section 12(c); (iii) enter onto Customer's premises and repossess the Equipment without incurring any liability or further obligation to Customer and without relieving Customer from any of its obligations hereunder; (iv) require Customer to pay all collection costs incurred in recovery of any sums due or repossession of any Equipment, including reasonable attorneys' fees; (v) recover from Customer all costs to transport and store the Equipment throughout the remainder of the applicable Term; (vi) set off and apply any amounts owing by Flex Fleet to or for the account of Customer against any amounts owing by Customer to or for the account of Flex Fleet; and (vii) exercise any other right or remedy available under Applicable Law.
(c) Accelerated Damages. If Flex Fleet accelerates under Section 12(b)(ii), the amount due will equal (i) all Use Charges and other amounts accrued and unpaid as of the date of acceleration, plus (ii) the aggregate Use Charges that would have become due for the remainder of the applicable Term, discounted to present value at a rate of five percent (5%) per annum, plus (iii) all amounts payable under Section 10 in respect of the condition of the Equipment upon return or repossession, plus (iv) all costs of repossession, transport, storage, and remarketing. Flex Fleet will credit against the amount calculated under clause (ii) the net proceeds actually received by Flex Fleet from any re-rental, re-lease, or sale of the affected Equipment allocable to the remainder of the Term, less all costs of repossession, transport, storage, refurbishment, and remarketing. The parties acknowledge and agree that the foregoing formula represents a reasonable estimate of Flex Fleet's damages, that actual damages would be impracticable or extremely difficult to determine, and that this provision is intended as a reasonable liquidation of damages and not as a penalty.
(d) Limited Waiver. To the extent permitted by Applicable Law, Customer waives any right to require Flex Fleet to dispose of or marshal the Equipment in any particular manner, order, or sequence. Nothing in this Section 12 waives any requirement that Flex Fleet act in a commercially reasonable manner where such requirement cannot be waived under Applicable Law.
(e) Repossession; Third-Party Property. If Flex Fleet repossesses Equipment following a Default and such Equipment contains property belonging to Customer or any third person, Customer agrees that Flex Fleet may, after ten (10) days' notice to Customer's last known physical address, remove, store, sell, or dispose of such property. Customer acknowledges that Flex Fleet is under no obligation to determine whether such property belongs to Customer or to any third party, and agrees to defend, indemnify, and hold the Indemnified Parties harmless from and against any and all Claims arising from or relating to Flex Fleet's taking possession of, storing, selling, or disposing of such property.
(a) Tractor-Trailer GHG Regulation. Sections 95300 through 95312 of Title 17 of the California Code of Regulations (as amended from time to time, the "HDV Regulations") govern the operation of 53-foot or longer box-type trailers in the State of California. Customer will comply with all HDV Regulations when conducting operations in California, including any applicable reporting requirements. Customer may make modifications to the Equipment to the extent necessary to comply with the HDV Regulations; provided, that (i) Customer provides advance written notice of any such modifications to Flex Fleet; (ii) Customer is solely responsible for all costs associated with such modifications; (iii) Customer effects such modifications in accordance with the recommendations and standards of all applicable manufacturers; and (iv) unless otherwise agreed in writing, Customer is responsible for removing any additional equipment or other modifications, and repairing any associated damage, prior to returning the Equipment to Flex Fleet. Customer will not permit Equipment that does not comply with the HDV Regulations to be operated in the State of California.
THE LESSEE OF A BOX-TYPE TRAILER UNDERSTANDS THAT WHEN USING A HEAVY-DUTY TRACTOR TO PULL A FIFTY-THREE (53) FOOT OR LONGER BOX-TYPE TRAILER ON A HIGHWAY WITHIN CALIFORNIA, THE BOX-TYPE TRAILER MUST BE COMPLIANT WITH SECTIONS 95300–95312, TITLE 17, CALIFORNIA CODE OF REGULATIONS, AND THAT IT IS THE RESPONSIBILITY OF THE LESSEE TO ENSURE THIS BOX-TYPE TRAILER IS COMPLIANT. THE REGULATIONS MAY REQUIRE THIS TRAILER TO HAVE LOW-ROLLING-RESISTANCE TIRES AND AERODYNAMIC TECHNOLOGIES THAT ARE U.S. ENVIRONMENTAL PROTECTION AGENCY SMARTWAY VERIFIED TECHNOLOGIES PRIOR TO CURRENT OR FUTURE USE IN CALIFORNIA.
(b) TRU Regulation. Sections 2477 through 2477.24 of Title 13 of the California Code of Regulations (as amended from time to time, the "TRU Regulation") govern the operation of transport refrigeration units in the State of California. Customer will be solely responsible for complying with the TRU Regulation with respect to Equipment in Customer's possession, including, without limitation, (i) complying with all applicable registration, reporting, and fee requirements, including registration in the CARB Equipment Registration system, and (ii) making any modifications to the Equipment required under the TRU Regulation. Customer is authorized to install any equipment or make modifications to the Equipment necessary to comply with the TRU Regulation, provided that Customer obtains Flex Fleet's prior written consent. Customer will not permit refrigerated Equipment that does not comply with the TRU Regulation to be operated in the State of California, and will remove any additional equipment installed to comply with the TRU Regulation and repair any associated damage prior to returning the Equipment to Flex Fleet. Customer will promptly provide Flex Fleet with copies of all registrations, reports, and correspondence with the California Air Resources Board relating to the Equipment.
(c) Basic Inspection of Terminals. Customer acknowledges that Equipment operated in California is subject to the Basic Inspection of Terminals program administered by the California Highway Patrol and, under a Net Maintenance Lease, is responsible for all associated inspection, recordkeeping, and maintenance obligations.
CUSTOMER AGREES THAT ALL EQUIPMENT IS LEASED, AND ALL MONITORING SERVICES ARE LICENSED, ON AN "AS IS, WHERE IS" BASIS, AND THAT CUSTOMER HAS SELECTED THE EQUIPMENT AS SUITABLE FOR ITS PURPOSES. EXCEPT AS EXPRESSLY STATED IN THESE T&Cs OR IN A LEASE, FLEX FLEET MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND. FLEX FLEET DISCLAIMS, AND CUSTOMER EXPRESSLY WAIVES, EVERY WARRANTY RELATING TO THE EQUIPMENT AND THE MONITORING SERVICES, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, CAPACITY, AND WORKMANSHIP; WARRANTIES AGAINST PATENT INFRINGEMENT; WARRANTIES AGAINST DEFECTS, WHETHER LATENT OR APPARENT; AND WARRANTIES THAT THE EQUIPMENT OR MONITORING SERVICES CONFORM TO ANY APPLICABLE LAW, SPECIFICATION, OR CONTRACT.
FLEX FLEET WILL NOT BE LIABLE, UNDER ANY THEORY OF CONTRACT, TORT, OR OTHERWISE, FOR ANY LOSS OF USE, LOSS OF REVENUE, LOST OR ANTICIPATED PROFITS, OR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO ANY LEASE OR THE USE, PERFORMANCE, OR MAINTENANCE OF THE EQUIPMENT OR MONITORING SERVICES, EVEN IF FLEX FLEET HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, CUSTOMER WAIVES ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE, INCLUDING THOSE ARISING UNDER SECTIONS 2A-401, 2A-402, AND 2A-508 THROUGH 2A-522, AND ANY OTHER RIGHTS CONFERRED BY STATUTE THAT WOULD LIMIT OR MODIFY FLEX FLEET'S RIGHTS AS DESCRIBED IN THE LEASE.
IN NO EVENT WILL FLEX FLEET'S TOTAL AGGREGATE LIABILITY TO CUSTOMER EXCEED THE TOTAL USE CHARGES PAID BY CUSTOMER DURING THE THREE (3) MONTHS IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO THE CLAIM. NOTHING IN THIS SECTION 14 LIMITS LIABILITY THAT CANNOT BE LIMITED UNDER APPLICABLE LAW, INCLUDING LIABILITY ARISING FROM FRAUD OR WILLFUL INJURY UNDER CALIFORNIA CIVIL CODE SECTION 1668.
All notices required or permitted under these T&Cs must be in writing and will be deemed given: (i) upon personal delivery; (ii) one (1) business day after deposit with a nationally recognized overnight courier, charges prepaid; (iii) three (3) business days after deposit in the United States mail, postage prepaid, certified or registered, return receipt requested; or (iv) upon transmission by electronic mail to the address designated by the recipient, provided that no bounce-back or delivery failure notification is received.
Notices to Flex Fleet must be sent to the address and email address set forth in the applicable Lease or, if none, to Flex Fleet Trailer Leasing, LLC, Attn: Director of Sales & Operations, at Flex Fleet's principal place of business, with a copy by email to the address published at www.flexfleettrailers.com. Notices to Customer may be sent to any address or email address set forth in the applicable Lease, in Customer's credit application, or otherwise most recently provided to Flex Fleet in writing. Each party is responsible for keeping its notice information current, and notice sent to the most recently provided address is effective notwithstanding any change of which the sending party has not been notified in writing.
(a) Assignment. Customer will not assign any Lease, or sublet, rent, or otherwise part with possession of any Equipment, without Flex Fleet's prior written consent. Flex Fleet may, without notice to Customer, assign any Lease and/or any payments due thereunder, and may grant a security interest in any Lease and the Equipment to any lender.
(b) Relationship of the Parties. No term or condition of a Lease, and no act or omission of the parties, will be construed to create or imply a joint venture, partnership, principal/agent, fiduciary, or employer/employee relationship between the parties.
(c) Entire Agreement. Each Lease, together with these T&Cs and all exhibits, schedules, and incorporated inspections, sets forth the entire understanding of the parties with respect to its subject matter. No agreement, representation, or understanding not specifically contained in a Lease will be binding unless in writing and signed by Flex Fleet. Any pre-printed or standard terms appearing on Customer's purchase order, load tender, invoice, portal, or other business form are of no force or effect, and Flex Fleet expressly rejects them, regardless of whether Flex Fleet signs or acknowledges such form.
(d) Governing Law and Venue. Each Lease, and its interpretation and enforcement, are governed by the laws of the State of California, without regard to its conflict of laws principles. Venue for any dispute arising out of or in connection with a Lease will be exclusively in the Superior Court of California, County of Riverside, or in the United States District Court for the Central District of California, Eastern Division. Each party waives any objection it may now or hereafter have regarding such venue, including any objection based on forum non conveniens.
(e) Judicial Reference. If any dispute arising out of or relating to a Lease is not resolved by agreement of the parties, the parties agree that such dispute will be heard by a referee appointed pursuant to California Code of Civil Procedure Sections 638 et seq., who will try all issues of fact and law and report a statement of decision. The parties will share the referee's fees equally, subject to reallocation to the prevailing party under Section 16(f). This Section 16(e) does not limit either party's right to seek provisional remedies, including writs of possession and injunctive relief, or to exercise self-help remedies including repossession.
(f) Attorneys' Fees and Collection Costs. In any action relating to a Lease, the prevailing party will be entitled to recover all of its reasonable attorneys' fees and costs, including all appellate and judgment-collection attorneys' fees and costs. If Flex Fleet engages a law firm, collection agency, or other company to collect any amounts due from Customer, Customer will be responsible for and agrees to pay all such fees and costs.
(g) Severability. If any provision of any Lease is determined by a tribunal of competent jurisdiction to be invalid or unenforceable, the validity of the remainder of the Lease will not be affected, and such provision will be deemed modified to the minimum extent necessary to make it consistent with Applicable Law and, as so modified, will be enforceable and enforced.
(h) Time Is of the Essence; Waiver; Survival. Time is of the essence with respect to each Lease. Flex Fleet's failure to exercise any right or remedy, or to insist on Customer's punctual performance or payment, will not constitute a waiver. The representations, warranties, obligations, and indemnities of Customer under each Lease and hereunder will survive the termination or cancellation of the Lease to the extent required for their full observance and performance.
(i) Force Majeure. Flex Fleet will not be liable for any failure or delay in performance caused by events beyond its reasonable control, including acts of God, fire, flood, earthquake, epidemic, war, terrorism, civil unrest, labor disputes, port congestion, supply chain disruption, shortage of equipment or components, utility or telecommunications failure, cyberattack, or governmental action. This Section 16(i) does not excuse Customer's obligation to pay any amounts when due.
(j) Electronic Records and Signatures. The parties consent to the use of electronic records and electronic signatures in connection with each Lease and all related documents, including Outbound Inspections, Inbound Inspections, delivery receipts, and amendments, in accordance with the federal ESIGN Act and the California Uniform Electronic Transactions Act. An electronic signature captured on a tablet, mobile device, or web-based platform, or an image of a signature transmitted by email or facsimile, has the same legal effect as an original manual signature. Records maintained by Flex Fleet in electronic form, including photographs and inspection records captured at pick-up and return, are admissible as business records and constitute the parties' originals.
(k) Financial Reporting. Upon Flex Fleet's written request, and unless Customer is a publicly traded company, Customer will supply Flex Fleet with its most recent interim financial statements and its most recent annual financial statements, in each case within thirty (30) days of such request. Flex Fleet may request such statements no more than twice in any twelve-month period absent a Default. Flex Fleet will keep all such financial statements strictly confidential and will use them solely for credit evaluation purposes.
(l) Counterparts. Each Lease may be executed in counterparts, each of which is deemed an original and all of which together constitute one instrument.
These Return Condition Standards define "Acceptable Wear" for purposes of the T&Cs. Conditions listed in the "Acceptable Wear" column are not chargeable to Customer under a Standard Maintenance Lease. Conditions listed in the "Chargeable Condition" column are chargeable to Customer at Flex Fleet's then-standard repair rates or actual cost of repair, whichever Flex Fleet elects.
Under a Net Maintenance Lease, Customer is responsible for all maintenance and repair, and no allowance for Acceptable Wear applies to tires or brakes. Tire and brake charges under a Net Maintenance Lease are governed by Section 10(c) of the T&Cs.
| Component | Acceptable Wear (not chargeable) | Chargeable Condition |
|---|---|---|
| Tires | Tread wear within the Excess Tire Wear threshold; remaining tread depth of 4/32″ or greater; minor sidewall scuffing; matched sizes and types as delivered. | Remaining tread depth below 4/32″; exposed cord or belts; casing damage from operation below 2/32″; sidewall cuts, bulges, or plugs; flat-spotting or run-flat damage; mismatched, recapped, or non-SmartWay tires where SmartWay tires were delivered; casing DOT date code older than 8 years; original-casing tires not returned on their original casings; missing or damaged ATIS components. |
| Wheels & Hubs | Surface rust, road film, minor curb rash on rim edge. | Bent, cracked, or welded rims; missing or damaged wheel studs, nuts, or hub caps; hub oil leaks; missing oil-level windows. |
| Brakes | Lining wear within the Excess Brake Wear threshold; remaining lining of 1/4″ or greater; normal drum or rotor glazing; brakes in proper adjustment. | Remaining lining below 1/4″; reline performed on fewer than all wheel ends of an axle; cracked, scored, or out-of-round drums; seized or leaking chambers or valves; broken or missing slack adjusters, S-cams, springs, or hardware; wheel ends not torqued to manufacturer specification; any out-of-service brake condition. |
| Air System | Minor surface abrasion on hose covers; normal fitting discoloration. | Any air leak; cut, chafed, spliced, or taped hoses; missing or damaged gladhands, seals, or hangers; non-functioning ABS. |
| Suspension & Axles | Surface rust on springs, hangers, and axle housings. | Cracked or broken springs or hangers; bent or misaligned axles; leaking or torn air bags; worn or missing bushings; damaged or missing shock absorbers. |
| Landing Gear | Surface rust; minor scuffing on legs or sand shoes. | Gear that does not raise or lower under load; damaged or seized gearbox; missing or bent crank handle; bent legs; missing or damaged sand shoes or braces. |
| Sidewalls & Roof | Scuffs, scratches, and dents less than 6″ in any direction that do not penetrate the skin, do not deform structural members, and do not affect weather-tightness. | Any penetration, tear, puncture, or hole; dents 6″ or greater; dents that deform posts, rails, or bows; separated or delaminated panels; any condition permitting water intrusion; damaged or missing roof bows. |
| Front & Rear Frame | Surface rust; minor scuffing on the upper coupler and bumper. | Cracked or bent frame, crossmembers, or upper coupler; damaged or missing kingpin or kingpin wear beyond manufacturer tolerance; bent, cracked, or missing ICC bumper; damaged rear sill or corner posts. |
| Doors & Hardware | Surface scratches; minor scuffing on panels and hardware. | Doors that do not open, close, seal, or latch properly; bent, cracked, or delaminated door panels; damaged or missing hinges, cam bars, keepers, or locking rods; torn, missing, or hardened door seals; damaged or missing door holdbacks. |
| Floor | Surface scuffs, scratches, and gouges less than 1/4″ deep that do not penetrate the wear surface. | Broken, cracked, delaminated, splintered, or soft boards; gouges 1/4″ deep or greater; any hole or penetration; loose, missing, or protruding fasteners; oil, chemical, or biological saturation; missing or damaged threshold plate. |
| Interior Lining & Logistics | Scuffs and minor surface marks on lining panels. | Punctured, cracked, or missing lining panels; damaged or missing logistics track, E-track, load bars, straps, or decking beams; damaged or missing scuff band. |
| Lighting & Electrical | Minor lens crazing; normal harness weathering. | Any non-functioning lamp, marker, or reflector; cracked, broken, or missing lenses; cut, spliced, taped, or chafed wiring; corroded or damaged 7-way receptacle; missing, torn, or non-reflective DOT conspicuity tape. |
| Refrigeration Unit | Normal accumulation of road film; cosmetic weathering of the housing. | Any active fault or alarm code; refrigerant, fuel, oil, or coolant leak; non-functioning hour meter; damaged or missing bulkhead, air chute, or return-air bulkhead; fuel level below that recorded on the Outbound Inspection; damaged or missing shore-power cord (where equipped). |
| Markings & Identification | Flex Fleet's own decals, unit numbers, and DOT markings intact and legible. | Any Customer decal, placard, lettering, or adhesive residue remaining; removed, defaced, or illegible Flex Fleet unit number, VIN plate, license plate, registration, annual inspection decal, or CARB compliance label. |
| Cleanliness & Contents | Light road dust and normal interior dust. | Any cargo, pallets, dunnage, debris, nails, banding, straps, or trash remaining; standing liquid; residual odor; evidence of pest, mold, chemical, or biological contamination; any condition requiring washout. |
| Documentation | — | Missing or expired annual DOT inspection documentation, BIT records, or CARB registration records where Customer is responsible for the same under the Lease. |
Flex Fleet may update these Return Condition Standards from time to time in accordance with the amendment provisions applicable to the T&Cs. The version of these Return Condition Standards attached to or in effect on the date of the applicable Lease will govern that Lease.
Measurements are taken at the Inbound Inspection and compared against the Outbound Inspection for the same unit. Where a condition is not addressed above, Flex Fleet will apply the applicable manufacturer's service standard and, where relevant, the out-of-service criteria published by the Commercial Vehicle Safety Alliance.
