EXHIBIT 10.37
TO
REGISTRATION STATEMENT ON FORM SB-2
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TRI-ELECTION RIDER TO EQUIPMENT LEASE WITH FINOVA CAPITAL CORPORATION
TRI-ELECTION RIDER TO EQUIPMENT LEASE BETWEEN FINOVA CAPITAL CORPORATION
("LESSOR") AND MENDOCINO BREWING COMPANY, INC. ("LESSEE") Dated
Master Lease No. 5754300 Schedule No. 5754300 (the Master Lease and all
Schedules thereto is hereafter the "Lease")
1. Notwithstanding any provision contained in the Lease to the contrary,
including, but not limited to, the section of the Schedule entitled "Option to
Purchase., upon expiration of the term of the Schedule (the "Initial Lease
Term") and payment by Lessee of all rentals and other sums due as set forth in
the Schedule, and provided that no Event of Default (as defined in the Lease)
shall have occurred and be continuing, Lessee, at its option, may purchase all
of Lessor's right, title and interest in and to all, but not less than all, of
the equipment described in and covered by the Schedule (the "Equipment") for a
purchase price equal to the greater of (a) the then Fair Market Value of the
Equipment determined as hereinafter provided not to exceed thirty (30%) of the
actual Equipment Cost, or (b) twenty-five (25%) percent of the original cost of
the Equipment to Lessor. In order to exercise such option, Lessee shall notify
Lessor in writing of Xxxxxx's intention to exercise such option at least one
hundred twenty (120) days prior to the expiration of the Initial Lease Term and
shall deliver to Lessor, on or before the expiration of the Initial Lease Term,
an appraisal and payment of the purchase price. For the purpose of this
Paragraph, the "Fair Market Value" of the Equipment shall be determined by an
independent third-party appraiser selected by Xxxxxx and reasonably acceptable
to Lessor. The appraiser's report shall be in writing and delivered to Lessor
prior to the expiration of the Initial Lease Term. All fees and expenses of the
appraiser shall be paid by Xxxxxx.
2. If the Lessee for any reason does not purchase the Equipment in accordance
with Paragraph 1 hereof, the Initial Lease Term set forth in the Schedule
applicable to the Equipment shall automatically be extended for an additional
term of twelve (12) months (the "Extended Term") at a monthly rental factor of
.0220 times the actual Equipment Cost which the parties acknowledge to be the
fair market rental value of the Equipment, the first such rental being due and
payable by Lessee on the expiration date of the Initial Lease Term. Upon
expiration of the Extended Term, in accordance with the terms of the Lease,
Lessee shall either return the Equipment to Lessor or purchase the Equipment for
its fair market value in accordance with the section of the Schedule entitled
"Option to Purchase".
3. Except as amended hereby, the Lease shall remain in full force and effect and
are, in all respects, hereby ratified and affirmed.
4. Notwithstanding anything to the contrary contained in the Lease, the Lessee
shall have no obligation to make any indemnity payments pursuant to the section
entitled "Tax Indemnity" to the extent that such indemnity obligations arise
solely from the acts or omissions of the Lessor. For purposes of this provision
however, the following shall not be deemed to be a Lessor's act or omission: (i)
those acts or omissions taken by the Lessor while the Lessee is in default
pursuant to the term of the Lease; (ii) those acts or omissions that are
required, permitted or contemplated by the Lease or any document relating
thereto; (iii) the execution, negotiation, overall structuring
EXHIBIT 10.37
and documents relating to the transactions contemplated hereby and thereby; or
(iv) those acts or omissions taken with the consent of the Lessee.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers as of the day and year first above
written.
LESSOR:
FINOVA CORPORATION
BY
PRINTED NAME: XXX XXXXXXXX
TITLE: V.P.
DATE:
LESSEE:
MENDOCINO BREWING COMPANY, INC.
BY: /s/ Xxxxxx Xxxxxx
PRINTED NAME: XXXXXX XXXXXX
TITLE: V.P.
DATED: 9/5/96
EXHIBIT 10.37
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