EXHIBIT 10.32
CHASSIS LEASE AGREEMENT
THIS CHASSIS LEASE AGREEMENT, together with all schedules and
exhibits hereto, (the "Lease) is made this 1st day of January, 1998, by and
between:
THE IVY GROUP, a New Jersey General Partnership, with offices located at 000
Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, as "Lessor"
and
TRAC LEASE INC., a Delaware Corporation, with offices located at 000 Xxxxxxx
Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx , as "Lessee"
1. EQUIPMENT TYPE AND QUANTITY: Six Hundred Eighteen (618) chassis (the
"Equipment") listed on the attached Schedule "A".
2. POSSESSION AND CONTROL: Lessee acknowledges and agrees that the subject
chassis are presently in its possession or control.
3. TERM: The initial term of this lease shall be one year commencing on
January 1, 1998 and shall automatically renew thereafter for additional one
year periods unless terminated in advance by either party in writing not less
than six months prior to the expiration of the then current term.
4. RENTAL: Lessee shall pay Lessor Two Dollars and Zero Cents ($2.00) per diem
for each chassis leased by Lessee pursuant to this Agreement. Rental charges
hereunder shall be paid monthly in arrears. All payments remitted hereunder
shall be paid in currency of the United States. The obligation to make rental
or any other payments to the Lessor shall not be deemed waived, delayed or
eliminated for any reason, including without limitation, force major, war,
civil commotion insurrection or the like which has the effect of denying the
Lessee the temporary or permanent use of any leased chassis. No payment to be
made by the Lessee hereunder shall be subject to reduction, limitation,
impairment, set-off or counterclaim whether arising out of an alleged breach
by Lessor or any third party or otherwise, provided, however, that this
paragraph shall not be deemed a bar to Lessee's right to assert any claims to
which it may be entitled against Lessor, in a separate proceeding.
5. ADDITIONAL RENT: Lessee shall pay to Lessor, as additional rent collectible
hereunder, all sums as may be or have been advanced by Lessor on behalf of
Lessee to assure compliance with all of the Lessee's obligations under the
provisions of this Lease.
6. LATE CHARGE: Lessor shall be entitled to collect, as additional rent
hereunder, an amount equal to five percent (5%) of the aggregate monthly
rental charges for each and every payment not received by Lessor within ten
calendar days of the payment due date.
7. TAXES AND FEES: Lessee shall pay all sales, use, excise, property stamp or
other taxes, levies, import duties, charges or withholdings of any nature,
together with all penalties, fines or interest thereon, now or hereafter in
effect during the term of this Lease, assessed or imposed by any governmental
authority by reason of the acquisition, use, operation or maintenance of the
chassis.
8. LICENSING AND REGISTRATION: Lessee shall comply with all license and
registration requirements for the chassis as its sole cost and expense.
9. DISCLAIMER OF WARRANTIES: Lessee understands and acknowledges that the
Lessor is not the manufacturer or seller of the chassis and supplies the
chassis in their "as is" condition without obligation to install, test,
service or maintain the equipment. The only warranty applicable to the
equipment is the manufacturer's warranty, if any. As long as the Lessee is in
full compliance and no event of default has occurred hereunder, Lessor assigns
to Lessee warranty rights, if any, it has as owner of the equipment against
the manufacturer, supplier or any other person.
LESSOR EXPRESSLY DISCLAIMS ANY WARRANTIES OR CONDITIONS OTHERWISE IMPLIED BY
LAW INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. REMEDIES UNDER THE MANUFACTURER'S WARRANTY
SHALL BE THE ONLY REMEDY AVAILABLE TO THE LESSEE OR ANY OTHER PERSON. LESSOR
SHALL NOT BE LIABLE FOR LOSS OF USE OF THE EQUIPMENT, LOSS OF TIME,
INCONVENIENCE OR ANY OTHER CONSEQUENTIAL DAMAGES.
10. LESSEE'S REPRESENTATIONS AND WARRANTIES:
A. Lessee is a Corporation duly organized and validly existing under the laws
of the State of Delaware. Lessee has full power to own its assets and conduct
its business as presently being conducted and is authorized to conduct such
business under the laws of every jurisdiction where authorization is required.
B. Lessee has the power and authority to enter into and perform its
obligations hereunder, and the execution, delivery and performance of this
Lease and all related documents and instruments; i.) have been duly authorized
by necessary by all action on the part of the Lessee; ii.) do not require any
approval or consent of any third party or any federal, state or municipal
authority or agency except such as have been duly obtained; and iii.) do not
and will not contravene any law, rule, regulation, order, decree or judgment
now binding on the Lessee or the Articles or Certificate of Incorporation of
Lessee and iv.) does not and will not contravene the provisions of , nor cause
a default under or result in the creation of any lien or encumbrance upon the
property of Lessee under any indenture, contract or other agreement to which
Lessee is a party or by which it or its property is bound, nor is Lessee
currently in default under any such agreement.
C. This Lease and any and all related documents and instruments have been duly
executed and delivered by Lessee and constitute the legal, valid and binding
obligations of the Lessee enforceabl
ocuments and instruments. Further, Lessee is not in default under
any material provision of any agreement, instrument or undertaking, including
without limitation, under any material obligation for the payment of borrowed
money, for the deferred purchase price of any property or for the payment of
any rent or other payment under any lease.
E. Under the laws of the states in which the Equipment is or is to be located,
the Equipment consists solely of personal property.
F. The financial statement of Lessee are true and correct in all material
respects and have been prepared in accordance with generally accepted
accounting principles consistently applied, and accurately, completely and
fairly represent the financial condition of the Lessee and the results of its
operations as of the dates of and for the periods covered by such statements.
Since the date of the last financial statement, there has been no adverse
material change in Lessee's financial condition or results of operations, nor
does there exist any fact, situation or event which materially adversely
affects or may materially adversely affect the property, business, assets,
income, prospects or condition (financial or otherwise) of Lessee.
G. The units of Equipment are depreciate assets in the hands of the Lessor.
The Lessee will not claim any depreciation deductions under the Internal
Revenue Code with respect to the units of Equipment subject to this Lease.
H. Lessee warrants that the Equipment is leased and will be used for business
purposes only.
11. LOCATION AND USE.
A. Lessee shall at its expense, obtain an maintain all licenses continuously
during the term of this Lease as may be required by any governmental authority
for use of the Equipment.
X. Xxxxxx will not be liable for any loss or interruption or damage to
Lessee's business due to any mechanical failure or delay in connection with
the furnishing or use of the Equipment.
C. The Equipment is leased for use in the United States. Lessee shall use the
Equipment only in the course of its own business, and shall permit the
Equipment to be operated only by Lessee's agents, employees or sublessees who
are legally licensed to operate the Equipment. No person shall have authority
to act on behalf of Lessor without written authority. Lessee shall comply with
all federal, state or municipal requirements applicable to the use and
operation of the Equipment. Lessee shall hold Lessor harmless from any fines
and penalties assessed against the Equipment, Lessee or Lessor, and from any
and all damage suffered by Lessor arising out of the operation of Equipment,
and from all claims asserted by any party, including Lessee's employees,
agents and sublessees arising out of, or in any way connected with, the
operation, condition, or use of the Equipment. If the equipment is confiscated
by any public authority, or if Lessor suffers damage, because of Lessee's use
of the Equipment for an illegal purpose, Lessee shall pay to Lessor the amount
of such damage, and Lessor may, at its option, terminate this Lease.
12. OPERATION, MAINTENANCE AND REPAIRS: Lessee shall, at all times, maintain
or require the chassis to be maintained at its own cost and expense in good
and safe repair and operation condition in accordance with manufacturer's
specifications and the IICL current chassis inspection standards. Lessee shall
be responsible for all damages and changes in the condition of the chassis.
Lessee's maintenance and repair obligations shall included replacement of
parts as may be necessary. Lessee shall comply with all loading limitations,
handling procedures and operation instructions to prevent excessive impact or
unbalanced loading.
Lessee shall make no modifications, improvements, repairs or replacements, nor
attach accessories or additions to any chassis, without the prior written
consent of the Lessor, except as may be necessary to comply with this lease
agreement. All improvements, repairs, accessories and replacements made or
attached to any chassis by Lessee shall become part of the chassis and the
property of Lessor without Lessor incurring any liability therefore. Lessee
shall not change or supplement any identification marks on any chassis except
as agreed upon in writing between Lessor and Lessee.
Lessee shall at all times comply with all conventions, laws, regulations or
orders of federal, state, foreign and local governments and agencies which
affect any chassis or its use, operation or storage or which affect this lease
and shall be liable for all fines, penalties, fees and interest thereon for
failure to so comply. Lessee shall comply with the CSC and shall have and
exercise such responsibility as would otherwise be Lessor's as owner for
maintenance, examination and repair. Lessee shall also comply in all respects
with all applicable customs conventions that provide requirements relating to
temporary admission, transport of goods under customs seal, maintenance of
records or otherwise. Lessee shall, at its expense, comply with all rules and
practices of ports, depots, storage areas and transportation companies
consistent with the other requirements herein.
13. SUBSTITUTION: Throughout the term of this Lease, Lessee shall have the
right to substitute other comparable units of Equipment for the units leased
hereunder. All costs and expenses associated with conveying title and
substituting said units shall be borne by Lessee.
14. INSURANCE: Lessee shall, at its sole cost and expense, provide and
maintain insurance on the subject equipment as follows:
A. Comprehensive and collision damage coverage on the equipment for the actual
cash value and with the Lessor
named as an additional insured and loss payee;
B. Bodily injury and property damage liability insurance having combined
coverage limits of not less that $5,000,000.00 with Lessor named as additional
insured and loss payee.
C. Any other insurance reasonable requested by the Lessor or required by any
governmental authority.
All insurance required hereunder shall be written with a company satisfactory
to the Lessor and shall provide that the insurance shall not be invalidated as
to the Lessor by an act, omission or neglect of Lessee and further providing
that the insurance shall not be cancelled without at least thirty (30) days
prior written notice to the Lessor. Lessee shall furnish copies of said
insurance policies or certificates of insurance to the Lessor.
Lessee shall notify Lessor immediately in writing of any accident involving
the subject chassis and shall cooperate fully with Lessor and all insurance
companies in the investigation, prosecution and defense of claims. The
proceeds of such insurance, at Lessor's option, shall be applied either toward
the replacement or repair of the chassis or toward payment of any obligation
of the Lessee under this Lease. Lessor shall in no event, be entitled to
duplicate receipt of funds under this paragraph and the Risk of Loss
provisions set forth herein below.
15. RISK OF LOSS: Lessee shall be liable for all loss and damage to each
chassis, normal wear and tear excepted, and shall repair same prior to return
to Lessor. In the event that any chassis is damaged beyond repair,
requisitioned by any governmental entity, lost or destroyed (a "Casualty
Occurrence"), upon submission of evidence satisfactory in the reasonable
opinion of Lessor of such loss, the Lessee shall, upon discovery and
declaration of said Casualty Occurrence, pay the Lessor the depreciated value
for such chassis to a minimum residual value of 40%. The depreciated value
shall be calculated by depreciating the then current replacement value of the
chassis. at the rate of 0.5% per month commencing the date of manufacturer
through and including the month of the Casualty Occurrence. Lessee shall pay
rental charges pursuant hereto until the date that full settlement is made
therefor. Full settlement shall consistent of proof of such loss and full
payment of the depreciated value of the chassis. In the event of a Casualty
Occurrence, in lieu of payment of the depreciated value of the chassis,
Lessee, in its sole and absolute discretion, may, but shall not be obligated
to, elect to substitute for the lost or damaged chassis a replacement chassis
of equal or better type, model, kind, age and condition which shall become in
all respects subject to the terms hereof.
16. REDELIVERY OF THE CHASSIS: At the conclusion of the initial terms and any
extensions thereto, Lessee shall be granted a build-down period not to exceed
one hundred eighty days within which to return all chassis in its possession.
During this period, all provisions of this lease shall remain in full force
and effect. Should Lessee fail to redeliver all of the chassis within the 180
day build down period, the rental rate for each chassis that has not been
redelivered shall remain at the then current per diem rate as set forth herein
or as may have been renegotiated for any extension periods until such time as
the chassis is redelivered provided that Lessee shall have made a good faith
effort to redeliver all of the chassis during the build down period and
continues to make a good faith effort until the last chassis is redelivered.
Lessee shall redeliver each chassis at Lessee's sole expense, to Lessee's
authorized depot at any pool point in the United States listed in Lessee's
most recent "Bulletin" ("Pool Points") or at any other location agreed to in
advance in writing by the Lessor. Such Equipment, upon redelivery pursuant
hereto, shall i.) be free and clear of all mortgages, liens, security
interests, charges, encumbrances and claims ("Liens"), other than liens
created by the Lessor or claimants against the Lessor which are not the result
of any default by the Lessee hereunder ("Lessor's Liens"), and ii.) meet all
compulsory standards then in effect under the applicable rules of any
governmental agency or national organization with jurisdiction, and iii.) be
equipped with a complete set of tires with a minimum tread of 4/32", with air
to 85 p.s.i. for 24 hours. There will be no cuts to tire cord or flat spots
within 4/32" of the cord or a tread depth more than 4/32" from the surface.
Minor oxidation only shall be acceptable.
With respect to any chassis returned to any Pool Point of the Lessee, Lessee
agrees to permit the Lessor to store such chassis or replacement chassis at
such Pool Point for a period not to exceed thirty (30) days at Lessee's
expense and at no cost to Lessor. Lessee's insurance obligations under Article
14 hereof shall continue during said storage period.
17. DEFAULT: Lessee shall be in default hereunder (an event of "Default") if:
(a) Lessee shall fail to remit rent or additional rent or any other payment
within fifteen (15) days after such payment shall have become due and owing;
or
(b) Lessee fail to obtain and maintain the insurance required to be carried
hereunder; or
(c) Lessee fails to perform or observe any other duty, obligation, condition
or covenant contained in this Lease or other document furnished in connection
herewith and such failure shall continue for ten (10) days after receipt of
notice of such failure or deficiency; or
(d) Lessee becomes insolvent, that is, unable to pay its debts as they mature,
becomes the subject of any proceeding under the Bankruptcy Code, as amended,
or any other insolvency law or law providing for the relief of debtors; or
(e) any certificate or representation of Lessee is or proves to have false in
any material respect at the time of making or certification.
18. LESSOR'S RIGHTS UPON DEFAULT: If an event of Default occurs, the Lessor
shall have the right to exercise any one or more of the following remedies:
A. To terminate this Lease.
B. To declare the entire amount of rent and other sums due Lessor under this
Lease for its entire term immediately due and payable.
C. To take possession of the Equipment without demand or notice wherever the
same may be located without any court order or process of law. Lessee hereby
waives any damages occasioned by such taking of possession. Any taking of
possession shall not constitute a termination of this Lease unless Lessor
expressly notifies Lessee in writing.
D. To require Lessee to purchase the Equipment. If requested by Lessor, Lessee
shall purchase the Equipment for cash at a price determined by multiplying the
monthly rental by the number of months remaining in the Base Lease Term,
adding thereto any delinquent rentals, the residual value (as set forth in
Paragraph 15) of the Equipment computed as of the monthly rent payment date
next succeeding the date of Default, any prepaid expenses incurred by Lessor,
including but not limited to license fees, sales or use tax, insurance
premiums or other amounts owing by Lessee to Lessor, and subtracting therefrom
any unearned leasing charges. If Lessee fails to purchase the Equipment upon
Lessor's request, Lessor may re-lease or sell the Equipment. If sold, the sale
may be public or private and may be at wholesale to a dealer. If the net
proceeds of sale (gross proceeds less expenses of Lessor in preparing and
holding the Equipment for disposition) and all expenses of disposition are
less than the amount owing as determined in this subparagraph 18 (d), such
deficiency shall constitute part of Lessor's damages and be forthwith paid by
Lessee. If the Equipment is re-leased and the wholesale value of the Equipment
at the time of re- lease is less than the amount owing as determined herein,
such deficiency shall constitute a part of Lessor's damages and be forthwith
paid by Lessee.
X. Xxxxxx may, at its option, retain the Equipment in lieu of all damages
caused by Lessee's Default . Lessors shall not be deemed to have exercised
this option unless Lessee is so notified by Lessor in writing.
F. Lessee shall pay Lessor all costs and expenses, including attorneys's fees
incurred by Lessor in exercising any of its rights or remedies under this
Paragraph or in enforcing any of the terms or conditions of this Lease.
X. Xxxxxx may pursue any other remedy provided by law or in this Lease.
19. ASSIGNMENT OF RENTS AND PROFITS:
A. Lessee hereby sells, assigns and transfers unto Lessor all rents, issues
and profits now due and which may hereafter become due through and including
the entire term of this Lease Under or by virtue of any sublease of Units of
the Equipment, it being the intention hereby to establish an absolute transfer
and assignment of all such subleases and the rents, issues and profits
therefrom.
B. Although it is the intention of the parties that this assignment of rents
and profits is a present assignment, it is expressly understood and agreed
that Lessor shall not exercise any of the rights herein, until and unless a
Default shall have occurred hereunder.
X. Xxxxxx shall be entitled to collect the rents, issues and profits and all
other income of any kind under such subleases which accrue following a Default
hereunder directly from the sublessees thereunder, shall have and may exercise
all other rights, powers, privileges and remedies of Lessee thereunder and may
execute such similar subleases and other agreements for the use of the Units
on such terms and conditions as it may, in its sole discretion, determine.
D. Lessee hereby authorizes and instructs each and every sublessee under a
sublease of Units of Equipment to pay all rents and other payments provided
for in the corresponding sublease to Lessor upon receipt of written demand
from Lessor to pay the same.
20. QUIET ENJOYMENT: Except and unless there exists an event of default by
Lessee, the Lessee shall have the right to use and enjoy the leased equipment
free from any and all interference by Lessor, its agents, assigns or parties
claiming through Lessor.
21. INDEMNIFICATION: Lessee shall defend, indemnify and hold Lessor harmless
from and against any and all claims, causes of action, liability, damage or
loss, including without limitation, expenses incurred in connection with any
claim or suit including attorneys' fees, court costs and other expenses,
arising directly, indirectly or in any manner whatsoever without limitation,
out of (a) Lessee's failure to comply with its obligations under this Lease,
or (b) any attempt by a third party to assert or impose liability upon the
Lessor for Lessee's acts or omissions, or (c) any claim, whether private or
governmental, for personal injury or death or loss or damage to person or
property or cargo or vessels or in any manner whatsoever without limitation
arising from or out of or incident to the manufacture, ownership, selection,
possession, leasing, operation, control, use, storage, loading, unloading,
maintenance, delivery or return of any chassis or replacement unit leased
hereunder, and (d) any forfeiture, seizure or impounding of or charge or lien
imposed or asserted against any unit.
22. INTENT, TITLE, SECURITY INTEREST: It is the express intent of the parties
that this Lease constitute a true lease and not a security agreement. This
Lease shall be deemed to be "chattel paper" for purposes of the Uniform
Commercial Code as adopted in the State of New Jersey. Title to each chassis
shall at all times remain with the Lessor and Lessee has no right, title or
interest in the equipment except as Lessee hereunder. Lessee has no option to
purchase the equipment upon the expiration of the Lease term.
In the event that a Court of competent jurisdiction, notwithstanding the
express intention of the parties, declares this Lease to be a Lease intended
for security, then, solely in that event, shall this agreement constitute a
security agreement and Lessee be deemed to have granted the Lessor a security
interest in this Lease and every unit of equipment, any and all substitutions
or replacements of any unit, any and all subleases involving any unit of
equipment and proceeds, including insurance proceeds, to secure the prompt
payment and performance of all obligations and indebtedness of Lessee
hereunder.
Lessor is authorized to file this Lease, a financing statement or other notice
with any filing officer or to otherwise make this Lease a matter of public
record. Lessee shall execute all documents requested by Lessor to effectuate
the filing of such notice and hereby grants an irrevocable power of attorney
to Lessor for the purpose of executing and filing in Lessee's name and behalf
all such documents.
23. JURISDICTION: The Lease shall be construed and enforceable in accordance
with the laws of the State of New Jersey. Lessee agrees that any action
concerning this Lease shall be venued in the Courts of the State of New
Jersey. The parties hereby irrevocably submit to the personal jurisdiction of
the Courts of the State of New Jersey, both Federal and State, for the
purposes of any suit, action or other proceeding arising out of or relating to
this Lease.
24. GENERAL:
A. BINDING EFFECT: All of the terms, provisions and conditions herein shall
apply to, bind and inure to the benefit of the successors and assigns of
parties to this Lease.
B. NOTICES: Any notice required to be given by a party shall be delivered to
the other party at the address set forth above or at other such location as
the parties may direct in writing from time to time. All notices shall be
deemed to have been provided and sufficient if it is in writing and sent by
certified or registered mail, facsimile transmission evidenced by transmission
journal receipt or delivery receipted national carrier service.
C. SEVERABILITY AND ENFORCEABILITY: In the event that any one or more of the
covenants, agreements, terms or provisions contained in this Lease shall be
invalid, illegal or unenforceable in any respect, the validity of the
remaining covenants, agreements, terms or provisions contained herein shall be
in no way affected, prejudiced or disturbed thereby.
D. MARGINAL CAPTIONS: The marginal captions herein are inserted only for
convenience of reference and in no way define, limit or describe the scope or
intent of this Assignment or any particular paragraph or section hereof, nor
the proper construction hereof.
E. WAIVER: No failure on the part of the Lessor to enforce its rights granted
hereunder shall constitute or operate as a waiver of any right or remedy
provided for herein or available at law or in equity nor shall any single or
partial exercise of any right or remedy preclude any other or further exercise
thereof or of any other right or remedy.
F. ENTIRE AGREEMENT: This writing constitutes the entire agreement between the
parties. Any alteration, amendment or modification must be in writing and
executed by the party to be bound thereby or against whom enforcement is
sought.
IN WITNESS WHEREOF, the parties have set their hands and seals this
1st day of January, 1998.
TRAC LEASE INC.,
ATTEST:
BY: /s/Xxxxxxxx X. Xxxxxxx /s/ Xxxxxx Xxxxxxx
ATTEST:
THE IVY GROUP
BY: /s/Xxxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxxxx
