LEASE AGREEMENT
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THIS AGREEMENT, entered into the 31ST day of August by and between A-Z
Bus Sales, Inc., a California Corporation, hereinafter referred to as "A-Z Bus
Sales, Inc." and The Majestic Companies, Ltd. hereinafter referred as " Lessee".
WITNESSETH
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WHEREAS, A-Z Bus Sales, Inc. is the owner of certain bus described as
follows:
Year/Make: Serial No: Stock No.:
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1996 IHC AM TRANS AST902136 99U209S
hereinafter referred to (plurally or Singular) as ("buses or bus") and
WHEREAS, Lessee desires to lease the (buses or bus) for a term as hereinafter
specified.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
promises herein contained, the parties mutually agree as follows:
Article 1 - Term. A-Z Bus Sales, Inc. hereby leases the (Buses or bus) to Lessee
and Lessee hereby leases from A-Z Bus Sales, Inc., for a 24 month period from
the date the bus is delivered and accepted on or about SEPTEMBER 15, 1999. Each
rental payment in the amount of $1,276.54, is due on the 15th. THE SCHEDULE OF
PAYMENT IS SET FORTH IN THE SCHEDULE ATTACHED AND INCORPORATED IN THIS LEASE BY
THIS REFERENCE. Sales tax, if applicable, shall be in addition to monthly rental
payments. Security deposit in the amount of $20,000.00, is payable upon
execution of this agreement and will be applied as non-refundable rent due under
the agreement. Licensing and title fees paid by A-Z Bus Sales, Inc. shall be
reimbursed by Lessee when invoiced.
Article 2 - General Lease Provisions
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A. The provisions of the Article 2 create a lease of the bus only and
not a sale thereof or the creation of any other interest therein by
Lessee. A-Z Bus Sales, Inc., shall remain the sole owner of the
(buses or bus), and nothing contained in this Agreement or in the
payment of rent hereunder shall enable Lessee to acquire any right,
title or interest in or to the (buses or bus).
B. The (buses or bus) leased herein shall be at all times under the sole
and absolute control of Lessee, subject to the rights of A-Z Bus
Sales, Inc., as provided herein.
C. The interest in the bus leased hereunder of A-Z Bus Sales, Inc., and
any Lessor or Lessee hereunder are subject to a first security
interest in favor of N/A.
D. Lessee shall xxxx the interior of each bus in clear, legible type
with the inscription "Property of A-Z Bus Sales, Inc., Colton,
California" and shall maintain such inscription herein throughout the
term of this Agreement.
E. Lessee shall, at its own expense, keep and maintain the (buses or
bus) in good operating condition and working order, including, but
not limited to, all fuel and oil changes and all washing, polishing
and storing, including, all proper oil, battery, cooling and
anti-freeze levels and ratios, and all repairs occasioned by accident
or casualty; and further, Lessee shall perform, subject to the
assignments in Paragraph G hereof, all preventive maintenance
required to insure full validation of the manufacturer's warrants
F. A-Z Bus Sales, Inc., is hereby given the right and privilege, upon
reasonable prior notice to Lessee and during its regular business
hours, to inspect the (buses or bus) on the premises of Lessee, or
wherever located, to verify that Lessee is maintaining the bus in
good operating condition; in the event that A-Z Bus Sales, Inc.
determines that Lessee is not maintaining the bus in good operating
condition, Lessee shall then have 3 days to cure same, failing which
Lessee shall be deemed in default hereunder.
G. A-Z Bus Sales, Inc. makes no warranty, representation, or guaranty,
express or implied, written or oral, of mechanical condition or
fitness of purpose whatsoever; except that if a manufacturer's does
cover the bus, A-Z Bus Sales, Inc. shall assign to Lessee that
warranty during lease term.
LESSEE AGREES to indemnify and hold Lessor harmless from any liability from
any personal injuries, property damage, or any other damages or injuries
which result from the use or operation of said vehicles. Lessee and A-Z Bus
Sales, Inc. agree there is categorically no employment relationship between
Lessee and A-Z Bus Sales. Lessee shall assume any and all loss or damages
to said vehicles while within the Lessee's control and possession.
H. Lessee shall employ and have absolute control and supervision over
the operators of the (buses or bus); provided, however, that it will
not permit any person to operate the (buses or bus) unless such
person is a competent and careful duly licensed driver.
I. This lease shall not be assignable nor sublet in any form by Lessee
unless to one of its related companies.
J. Lessee shall pay all use taxes, personal property taxes and other
direct taxes imposed on the ownership, possession, use or operation
of the(buses or bus) or levied against or based upon the amount of
rent to be paid hereunder or assessed in connection with the
execution, filing or recording of this Agreement. The term "direct
taxes" as used herein shall include all taxes (except income taxes),
charges and fees imposed by any federal, state or local authority.
Further, Lessee assumes all responsibility and the cost expense of
all licensing, registration, permits and such other certificates as
may be
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required for the lawful operation of the bus. If Lessee fails to make
the payments herein, Lessee shall be deemed to be in default
hereunder.
K. Lessee shall insure the bus and keep said insurance in full force and
effect with insurance companies satisfactory to A-Z Bus Sales, Inc.,
as follows: For comprehensive fire, theft, and collision in the
amount of $42,292.00 with $1,000.00 deductible, personal liability
insurance in the amount of $5,000,000.00 and property damage
insurance in the amount of $500,000.00 with no deductible; such
insurance shall be written in the name of Lessee and A-Z Bus Sales,
Inc., 0000 X. Xxxxxxxxx Xxx., X.X. Xxx 000, Xxxxxx, Xxxxxxxxxx 00000
shall be named as additional insured, and also, indorsed "Insurance
as to interest of A-Z Bus Sales, Inc. shall not be invalidated by any
act of the insures". In the event that Lessee fails to procure or
maintain the insurance required herein, A-Z Bus Sales, Inc. shall
have the option to secure such insurance for the account if Lessee,
and if A-Z Bus Sales, Inc. pays the premiums, Lessee shall reimburse
A-Z Bus Sales, Inc. within seven (7) days after receipt of an invoice
thereof, and the failure of Lessee to make such reimbursement when
due, shall be deemed a default hereunder. A thirty (30) day
cancellation notice is required by A-Z Bus Sales, Inc. In the event
Lessee fails to procure or maintain insurance as required herein,
Lessee shall defend, indemnify, and hold A-Z Bus Sales, Inc. harmless
of all claims, including risks against which it would otherwise have
been required to insure hereunder, including but not limited to,
property damage, theft and personal injury.
Ten days prior to the expiration date of Certificate of Insurance,
entire lease becomes null and void and the bus shall be returned to
A-Z Bus Sales, Inc. This is to insure that vehicles will not be
operated without proper insurance. No advance notice of this
agreement is necessary and A-Z Bus Sales, Inc. has full authority to
reclaim the vehicles.
L. If: (1) Lessee shall default in the payment of any rent or additional
rent as provided herein, or the making or any other payment hereunder
when due; or (b) Lessee shall default in the performance of any other
covenant herein, and any of the foregoing defaults shall continue for
seven (7) days after notice, thereto to Lessee by A-Z Bus Sales,
Inc.; or (c) Lessee becomes insolvent or makes an assignment for the
benefit of creditors; or (d) Lessee applies for or consents to the
appointment of a received, trustee, or liquidator of Lessee, or of
all of a substantial part of the assets of Lessee, or if such
receiver, trustee , or liquidator is appointed without the
application or consent of Lessee; or (3) a petition, if filed by or
against Lessee under the Bankruptcy Act of any amendment thereto
(including, without limitation, a petition for reorganization,
arrangement, or extension) or under any other insolvency law or law
providing for the relief of debtors, then if and to the extent
permitted by applicable law, A-Z Bus Sales, Inc. shall have the right
to exercise either of the following remedies: (1) to declare any
unpaid rents due and payable whereupon the same shall become
immediately due and payable; (2) without demand or legal process to
enter upon the premises where the
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(buses or bus) may be found and take possession of and remove the
(buses or bus), whereupon all rights of Lessee in the vehicle shall
terminate absolutely. Lessee shall hold A-Z Bus Sales, Inc. harmless
and waive any claim or any damages incurred in connection with
removing the (buses or bus). Lessee shall remain liable for all
reasonable expenses incurred in the enforcement of these provisions
and all prepaid rents and security deposits shall be forfeited by
Lessee. The remedies of A-Z Bus Sales, Inc. hereunder are cumulative
and may, to the extent permitted by law, be exercised concurrently or
separately and the exercise of one remedy shall not be deemed to be
an election of such remedy or to preclude the exercise of the other
remedy. No failure on the part of A-Z Bus Sales, Inc. to exercise,
and no delay in exercising any right or remedy herein, shall operate
as a waiver thereof, of any other right or remedy hereunder preclude
any other of further exercise thereof, or the exercise of any other
right or remedy.
Failure to pay A-Z Bus Sales on a current basis under the terms and
conditions as agreed herein will nullify and void the entire
agreement immediately. By such action, customer's further use of
(buses or bus) is unauthorized and same (buses or bus) are to be
returned to A-Z Bus Sales, Inc. within twenty-four (24) hours of same
cancellation of agreement. Local authorities will be notified of any
unauthorized use.
Should Lessee fail to timely make lease payments within five days
following the payment due date, A-Z Bus Sales, Inc. may, at its
option, for charge Lessee a penalty equal to ten percent (10%) of the
overdue payment or payments.
Article 3 - Options at Expiration of Term. Provided Lessee is not in
default of any obligation hereunder, then Lessee, at the expiration of this
Agreement, shall have an option to lease purchase from A-Z Bus Sales, Inc. any
or all of the referenced buses for $1.00. Lessee shall exercise the option
herein granted by giving written notice of this exercise to A-Z Bus Sales, Inc.
at least thirty (30) days prior to the expiration of the Lease period. In the
event that Lessee does not make any election as to an option, then Lessee shall
be deemed to have elected to return the (buses or bus) to A-Z Bus Sales, Inc.
and to terminate this Agreement, pursuant to the terms of Article 4.
Article 4 - Termination. In the event that Lessee elects not to lease the (buses
or bus) at the expiration of the term, then Lessee shall, at its own expense,
return the (buses or bus) to A-Z Bus Sales, Inc. in Colton, CA in the same
condition as received, and in good operating order, repair, and condition,
reasonable wear and normal depreciation excepted. If the Lessee fails to perform
on any of the terms or revisions, A-Z Bus Sales, Inc. has the right to terminate
this Lease and consider all deposits forfeited.
Article 5 - Security Interest. Lessee hereby grants A-Z Bus Sales, Inc. a
security interest in the(buses or bus) described herein to the extent of A-Z Bus
Sales' interest hereunder, whether as a Lessor or a Vendor, and for this purpose
this Lease Agreement shall, in addition to all other rights and obligations
herein created, be deemed a Security Agreement.
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Article 6 - Succession and Notice
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A. This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto, their assigns, successors, transferees and their
heirs, executors, administrators and legal representatives.
B. This Agreement constitutes the entire agreement between the parties,
and cannot be amended or altered in any manner except in writing,
signed by both parties.
C. This Agreement shall be construed under laws of the State of
California, and if any provisions hereof, or the application of any
provision to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement shall be valid and
binding between the parties hereto.
D. Any Notice, payments or correspondence required to be given under
this Agreement or by any applicable provision of any state or federal
law, regulation or resolution shall be given to A-Z Bus Sales, Inc.,
0000 X. Xxxxxxxxx Xxx., X.X. Xxx 000, Xxxxxx, Xxxxxxxxxx, 00000; and
to Lessee, The Majestic Companies, Ltd., 0000 Xxx Xxx Xxxxx Xx., 0xx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
Article 7 - Standard Arbitration Clause. Any controversy or claim arising out of
or relating to this contract, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
IN WITNESS WHEREOF, the names of A-Z Bus Sales, Inc. and Lessee have
been hereunto subscribed by the respective officers thereunto duly
authorized.
A-Z Bus Sales, Inc. The Majestic Companies, Ltd.
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By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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Date: 8-31-99 Date: 8-31-99
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