EQUIPMENT LEASE AGREEMENT
This Equipment Lease Agreement ("Agreement") is made and entered into as of
March 21, 2005, 2005 by and between Commodity Express Transportation, Inc., a
South Carolina corporation ("Lessor") AND Commodity Express Transportation,
Inc., a Delaware corporation, ("Lessee") and Power2Ship, Inc., a Florida
corporation, ("Lessee") (collectively referred to as the "Parties"). Each
Lessee is jointly and severally liable for the lease payments and performance of
all other terms of this Agreement. A judgment entered against one Lessee shall
be no bar to an action against the other Lessee.
The Parties agree as follows:
1. EQUIPMENT: Lessor hereby leases to Lessee the commercial trailers used to
haul dry commodities described in Schedule A ("Equipment"), which is hereby
incorporated into this Agreement
2. LEASE TERM: The initial date of lease for all Equipment listed in Schedule A
is March 21, 2005. Each individual trailer in the lease has a specified term,
depending on the age of the trailer, as described in Schedule A. As used in
this Agreement, "Lease Term" means from March 21, 2005, until the individual
trailer in question is surrendered based upon the attached lease schedule A.
3. LEASE PAYMENTS: Lessee agrees to pay to Lessor as rent for the Equipment the
amounts specified in Schedule A ("Rent") each month in advance on the first day
of each month at:
c/o Xx Xxxxxx
000 Xxxxx Xxxxxxx Xx.
Xxxxxxxx, XX 00000
If during the Lease Term any individual trailers are damaged beyond repair and
Lessor is reimbursed for the value of said trailers, according to the terms of
Section 13 of this Agreement, then the rents shall be reduced accordingly.
4. LATE CHARGES: If any amount under this Agreement is more than five calendar
days late, Lessee agrees to pay a late fee of five percent (5%) of the amount
that is late. The late fee will increase by five percent (5%) each subsequent
30 days that the amount is late.
5. SECURITY DEPOSIT: The Parties, and additional parties, have agreed to a
series of mutual covenants and concessions in a separate document entitled
Mutual Agreement, dated on or near the date of this Agreement. In consideration
of the covenants and concessions made in the Mutual Agreement, the Parties agree
to waive the requirement of a security deposit associated with this Agreement.
6. DELIVERY: Lessee shall acquire control of the Equipment on March 21, 2005.
Individual trailers may be at varying locations on that date. Lessor has no
duty to physically deliver any Equipment to Lessee at the beginning of the Lease
Term. Lessor will not be responsible for any costs associated with delivery of
Equipment to Lessee at the beginning of the Lease Term.
7. DEFAULTS: If Lessee fails to perform or fulfill any obligation under this
Agreement, Lessee shall be in default of this Agreement. Subject to any statute,
ordinance or law to the contrary, Lessee shall have seven (7) business days from
the date of notice of default by Lessor to cure the default. In the event Lessee
does not cure a default, Lessor may at Lessor's option (a) cure such default and
the cost of such action may be added to Lessee's financial obligations under
this Agreement; or (b) declare Lessee in default of the Agreement. If Lessee
shall become insolvent, cease to do business as a going concern or if a petition
has been filed by or against Lessee under the Bankruptcy Act or similar federal
or state statute, Lessor may immediately declare Lessee in default of this
Agreement. In the event of default, Lessor may, as permitted by law, re-take
possession of the Equipment. Lessor may, at its option, hold Lessee liable for
any difference between the Rent that would have been payable under this
Agreement during the balance of the unexpired term and any rent paid by any
successive lessee if the Equipment is re-let minus the cost and expenses of such
reletting. In the event Lessor is unable to re-let the Equipment during any
remaining term of this Agreement, after default by Lessee, Lessor may at its
option hold Lessee liable for the balance of the unpaid rent under this
Agreement as if this Agreement had continued in force.
8. POSSESSION AND SURRENDER OF EQUIPMENT: Lessee shall be entitled to
possession of the Equipment on the first day of the Lease Term. At the
expiration of the Lease Term, Lessee shall surrender the Equipment to Lessor by
delivering the Equipment to Lessor or Lessor's agent in good condition and
working order, ordinary wear and tear excepted, as it was at the commencement of
the Agreement. Delivery of the Equipment shall be to a location within 75 miles
of Columbia, South Carolina, mutually agreed upon by the Parties. If the
Parties agree to deliver the Equipment to a location beyond a 75 mile radius of
Columbia, Lessee may seek recovery from Lessor of the cost of delivery of the
Equipment beyond the 75 mile radius.
9. USE OF EQUIPMENT: Lessee shall only use the Equipment in a careful, proper
and legal manner and will comply with all laws, rules, ordinances, statutes and
orders regarding the use, maintenance of storage of the Equipment.
10. CONDITION OF EQUIPMENT AND REPAIR: Lessee or Lessee's agent has inspected
the Equipment and acknowledges that the Equipment is in a condition as noted on
the attached inspection reports. The Parties agree that if any individual
trailers covered by this Agreement have damage in excess of $250.00 then Lessee
shall cause such damage to be repaired, and will invoice Lessor for such
repairs. Any repairs made pursuant to this Agreement will be billed at a fixed
labor rate of $25.00 per hour, and actual cost for materials. Lessee shall
provide detailed invoices to Lessor for these repairs. Lessee and Lessor have
agreed that the payment for the first $10,000.00 of repairs shall be deferred
until January 31, 2006. If as of the closing date Lessee has not been able to
inspect all of the individual trailers covered by this Agreement, than Lessee
shall have thirty days from the date of closing to complete the inspections.
The Parties agree that Lessee will be responsible for surrendering the Equipment
in the same condition as accepted, normal wear and tear excepted. Provided, if
any of the individual trailers are surrendered with damage in excess of $250.00
then Lessor shall cause such damage to be repaired, and will invoice Lessee for
such repairs. Any repairs made pursuant to this Agreement will be billed at a
fixed labor rate of $25.00 per hour, and actual cost for materials. Lessor
shall provide detailed invoices to Lessee for these repairs.
11. GENERAL MAINTENANCE, DAMAGE AND LOSS: Lessee will, at Lessee's sole expense,
keep and maintain the Equipment in clean and good working order and repair
during the Lease Term. In the event the Equipment is lost or damaged beyond
repair, Lessee shall pay to Lessor the replacement cost of the Equipment. The
obligations of this Agreement shall continue in full force and effect through
the Lease Term.
12. TIRE MAINTENANCE: During the Lease Term, Lessee agrees to assume all
responsibilities, including payment of all sums due, for compliance with the
current Memorandum of Agreement, dated November 1, 2004, with amendments
("MOA"), between Lessor and The Goodyear Tire and Rubber Company for tire
maintenance and replacement. If requested by Lessor, Lessee agrees to enter
into a substantially similar agreement with The Goodyear Tire and Rubber
Company, or another company so long as Lessor does not suffer financially as a
result, for the purpose of relieving Lessor of the liability associated with
remaining bound by the MOA. Lessee shall have no obligations or requirements as
to minimum tread depth or tire conditions, when the Equipment is surrendered
according to paragraph 8 of this agreement.
Lessee agrees to indemnify and hold Lessor and Lessor's property, free and
harmless from any liability for losses or claims associated with Lessee's
failure to comply with the requirements of the MOA, including the payment of
penalties or the loss of use of the Equipment as a result of non-compliance with
the MOA. Lessor will provide Lessee with a copy of the MOA as soon as is
practical after the signing of this Agreement.
13. INSURANCE: Lessee shall be responsible for maintaining automobile liability
insurance on the Equipment at a minimum value of one million dollars
($1,000,000.00) per single occurrence. In addition Lessee shall carry Physical
Damage insurance covering loss or damage to the Equipment, with the insured
value of the Equipment being not less than 80% of the wholesale cash value. The
policy shall name Lessor as an additional insured and shall provide for losses
to be payable to Lessor for fire, theft, collision, property damage, personal
injury and other such risks as are appropriate. Upon request by Lessor, Lessee
shall provide proof of such insurance. In the event of a total loss of a piece
of Equipment, Lessee shall pay to Lessor compensation for the lost Equipment at
the following calculated amount: Schedule A value minus accumulated monthly
depreciation, which amount shall then be multiplied by eighty-five percent
(0.85).
14. ENCUMBRANCES, TAXES AND OTHER LAWS: Lessee shall keep the Equipment free
and clear of any liens or other encumbrances, and shall not permit any act where
Lessor's title or rights may be negatively affected. Lessee shall be
responsible for complying with and conforming to all laws and regulations
relating to the possession, use and/or maintenance of the Equipment.
Furthermore, Lessee shall promptly pay all taxes, fees, licenses and
governmental charges, together with any penalties or interest thereon, relating
to the possession, use or maintenance of the Equipment.
15. LESSORS REPRESENTATIONS: Lessor represents and warrants that he/she has
the right to lease the Equipment as provided in this Agreement and that Lessee
shall be entitled to quietly hold and possess the Equipment, and Lessor will not
interfere with that right as long as Lessee pays the Rent in a timely manner and
performs and complies with all other obligations under this Agreement.
16. CONSEQUENTIAL DAMAGES: In no event shall Lessor be liable for any loss of
profits or other consequential damages or any inconvenience resulting from any
theft of, damage to, loss of, defect in or failure of any of the Equipment or
the time consumed in recovering, repairing, adjusting, servicing or replacing
any Equipment; and there shall be no abatement or apportionment of rental during
this time. This paragraph does not apply to theft, damage, loss, defect or
failure that was the result of Lessor's negligence.
17. OWNERSHIP: The Equipment is and shall remain the exclusive property of
Lessor.
18. SEVERABILITY: If any part or parts of this Agreement shall be held
unenforceable for any reason, the remainder of this Agreement shall continue in
full force and effect. If any provision of this Agreement is deemed invalid or
unenforceable by any court of competent jurisdiction, and if limiting such
provision would make the provision valid, then such provision shall be deemed to
be construed as so limited.
19. ASSIGNMENT: Neither this Agreement nor Lessee's rights hereunder are
assignable except with Lessor's prior, written consent.
20. BINDING EFFECT: The covenants and conditions contained in the Agreement
shall apply to and bind the Parties and the heirs, legal representatives,
successors and permitted assigns of the Parties.
21. GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina.
22. NOTICE: Any notice required or otherwise given pursuant to this Agreement
shall be in writing and mailed certified return receipt requested, postage
prepaid, or delivered by overnight delivery service to:
LESSOR: LESSEE:
c/o Xx Xxxxxx Commodity Express Transportation, Inc.
000 Xxxxx Xxxxxxx Xxxx 000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxx Xxxxx, XX 00000
Either party may change such addresses from time to time by providing notice as
set forth above.
23. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between
the Parties and supersedes any prior understanding or representation of any kind
pertaining to the lease of the Equipment that precedes the date of this
Agreement. There are no other promises, conditions, understandings or other
agreements, whether oral or written, relating to the lease of the Equipment.
This Agreement may be modified in writing, but must be signed by both Lessor and
Lessee.
24. CUMULATIVE RIGHTS: Lessor's and Lessee's rights under this Agreement are
cumulative, and shall not be construed as exclusive of each other unless
otherwise required by law.
25. WAIVER: The failure of either party to enforce any provision(s) of this
Agreement shall not be deemed a waiver or limitation of that party's right to
subsequently enforce and compel strict compliance with every other provision of
this Agreement. The acceptance of rent by Lessor does not waive Lessor's right
to enforce any provisions of this Agreement.
26. INDEMNIFICATION: Except for damages, claims or losses due to Lessor's acts
or negligence, Lessee, to the extent permitted by law, will indemnify and hold
Lessor and Lessor's property, free and harmless from any liability for losses,
claims, injury to or death of any person, or for damage to property arising from
Lessee using and possessing the Equipment or from the acts or omissions of any
person or persons, including Lessee, using or possessing the Equipment with
Lessee's express or implied consent.
IN WITNESS WHEREOF, the parties sign below to signify agreement with, and
acceptance of, the terms and conditions of this Agreement.
COMMODITY EXPRESS TRANSPORTATION, INC., SOUTH CAROLINA
/s/ X. X. Xxxxxx
----------------
Signature
X.X. Xxxxxx
-----------
Printed name
President
---------
Title
3/21/04
-------
Date
COMMODITY EXPRESS TRANSPORTATION, INC., DELAWARE
/s/ Xxxxxxx Xxxxx
-----------------
Signature
Xxxxxxx Xxxxx
-------------
Printed name
Chief Executive Officer
-----------------------
Title
3/21/05
-------
Date
POWER2SHIP, INC.
/s/ Xxxxxxx Xxxxx
-----------------
Signature
Xxxxxxx Xxxxx
-------------
Printed name
Chief Executive Officer
-----------------------
Title
3/21/05
-------
Date
