Exhibit 10.52
Commencement Date 08-01-02
Lease Term 07-31-03
This lease is non-cancelable for the term indicated
Commercial Equipment Lease Agreement
THIS COMMERICAL EQUIPMENT LEASE AGREEMNT ("Equipment Lease") is by and
between Fair Holdings, Inc., an Ohio corporation (hereinafter "Lessor") and
Xxxxxx Industries, Inc., a Maryland corporation (hereinafter "Lessee").
TERMS
1. Lease. Lessor hereby agrees to lease to Lessee, a Lessee hereby agrees
to lease from Lessor, the personal property described on the attached Schedule
"A" upon the terms and conditions set forth herein and in any related
Schedule(s) (such property together with all replacements, repairs, and
additions incorporated therein or affixed thereto being referred to herein as
the "Equipment"), which schedules are incorporated and made part hereof by
reference herein. Throughout this document the term Equipment Lease shall herein
refer to this Equipment Lease and any related Schedule(s).
2. Term. The term of this Equipment Lease with respect to the Equipment
(the Term) shall commence on the date that is set forth above (the "Commencement
Date") and shall terminate on the last day of the Lease Term set forth above
(the "Lease Term"), unless earlier terminated in accordance with the provisions
of this Equipment Lease. This Equipment Lease shall automatically be renewed for
another one (1) year term unless Lessee notifies Lessor 60 days prior to the end
of the term of its intention to terminate this Equipment Lease at the end of
such term.
3. Rent. The rent for the Equipment for the entire Lease Term shall be
$125.48 per month (the "Rent"), with the first such monthly payment due and
payable on the Commencement Date. All subsequent monthly Rent payments shall be
due in advance on the same date of each month, or the first business day
thereafter is such payment becomes due on a non-business day, at a location to
be designated in writing from time to time by Lessor. Payments due hereunder
shall be subject to the provisions of paragraph 10.
4. Additional Payment. Lessee shall pay, in addition to Rent, any other
amounts set forth herein.
5. Lessee Inspection: Conclusive Presumptions. Lessee shall inspect each
item of Equipment within forty-eight (48) hours after receipt thereof. Unless
within such period of time Lessee gives written notice to Lessor specifying any
defect in or any other proper objection to the Equipment, Lessee agrees that it
shall be conclusively presumed, as between Lessor and Lessee, that Lessee has
fully inspected and acknowledged that the Equipment is in good condition and
repair, and that Lessee is satisfied with and has accepted the Equipment in such
good condition and repair and as satisfactory in all aspects for the purposes of
this Equipment Lease.
6. Uses and Location. (a) Lessee shall use the Equipment in a careful and
proper manner, only in the normal and ordinary course of Lessee's business, and
Lessee shall comply with, and shall use the Equipment in accordance with, (1)
all state, federal and local laws, rules, regulations, statutes and ordinances
applicable to Lessor relating to the use, possession, operation, licensing,
registration, maintenance or inspection of the Equipment, (2) any insurance
policies in effect with respect to the Equipment, (3) any warranties of any
manufacturer with respect to the Equipment or any component thereof as attached
as Schedule "A", and (4) the operating instructions furnished by manufacturers
or other suppliers of the Equipment. (b) Upon 24 hours prior notice, Lessor
shall have the right to inspect the Equipment and observe its use during normal
business shall maintain possession of the Equipment. Lessee shall give Lessor
immediate notice of any attachment or other judicial process affecting the
Equipment and whenever requested by Lessor of the exact location of the
Equipment.
7. Title and Return. (a) The Equipment is the property, and at all times
shall remain, the sole and exclusive property of Lessor, and the delivery of the
Equipment to Lessee and Lessee's possession thereof shall constitute a bailment.
Lessee shall have no rights, title or interest to the Equipment, except as
expressly set forth in this Equipment Lease. (b) Upon expiration or earlier
termination of this Equipment Lease, unless there has been a Casualty Occurrence
to the Equipment, Lessee shall return the Equipment to Lessor in good repair,
condition and working order, ordinary wear and tear resulting from proper use
thereof alone excepted, by delivering the Equipment at Lessee's cost and expense
to a location to be designated by Lessor. .
8. Maintenance and Repairs. With respect to items not subject to
Manufacturer's warranty, Lessee, at its own cost and expense, shall (a) maintain
and keep the Equipment and all components thereof in good repair, condition and
working order and in good condition as to appearance and mechanical performance,
ordinary wear and tear from authorized use excepted, (b) make all reasonable and
necessary repairs, (c) purchase replacements for and replace worn or defective
components of the Equipment, so as to keep the Equipment in good mechanical and
working order, and (d) cause the Equipment and all components thereof to meet
the applicable standards of any applicable governmental agency with jurisdiction
over Lessor, Lessee or the Equipment whether or not such pay for any and all
replacement parts and components required by this section, and all such
replacement parts and components shall be free and clear of all liens and
encumbrances. Title to all such replacement parts and components shall
immediately pass to Lessor upon installation thereof.
9. Alterations. Without the prior written consent of Lessor, Lessee shall
not make any material alterations, additions or improvements to the Equipment.
All additions and improvements of whatsoever kind or nature made to the
Equipment shall belong to and become the property of Lessor upon the expiration,
or earlier termination of this Lease.
10. No Warranties. By Lessor. LESEE HAS SELECTED BOTH (a) THE EQUIPMENT AND
(b) THE MANUFACTURER OR OTHER SUPPLIER FROM WHOM LESSOR IS OT PURCHASE IT.
LESSOR MAKES NO WARRANTY, EXPRESSED OR IMPLIED AS TO ANY MATTER WHATSOEVER,
INCLUDING WITHOUT LIMITATION THE DESIGN OR THE CONDITION OF THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND, AS TO LESSOR,
LESSEE LEASES THE EQUIPMENT "AS IS". If any item of Equipment or all the
Equipment is not properly installed, does not operate as represented or
warranted by its manufacturer, or is unsatisfactory for any reason, Lessee shall
make any claim on account thereof directly against such manufacturer and shall,
upon satisfactory resolution of the claim by manufacturer, pay Lessor all rents
payable under this Lease. In the event manufacturer is unable or unwilling to
resolve the claim, Lessor will engage a mutually agreed party to resolve the
claim to Lessee's reasonable satisfaction at Lessor's expense. Lessor hereby
agrees to assign to Lessee, solely for the purpose of making and prosecuting any
such claim all of the rights which Lessor has against such manufacturer for
breach of warranty or other representation representing the Equipment. LESSOR
SHALL NOT BE LIABLE FOR ANY DIRECT OR CONSEQUENTIAL DAMAGES INCURRED BY LESSEE
AS A RESULT OF ANY BREACH OF WARRANTY OR REPRESENTATION WITH RESPECT TO THE
EQUIPMENT AND LESSOR SHALL NOT BE LIABLE TO LESSEE FOR LOSS OF USE OF THE
OCCASIONED BY LESSEE'S INABILITY TO USE THE EQUIPMENT, FOR ANY REASON
WHATSOEVER. The provisions of this paragraph are intended to be a complete
exclusion and negation of any express or implied warranties by Lessor with
respect to the Equipment, whether arising under the Uniform Commercial Code or
under any other law now or hereafter in effect, or otherwise.
11. Insurance. Lessee, at its own expense, shall provide, maintain and pay
for (a) insurance against a loss or theft of or damage the Equipment for an
amount equal to its replacement cost naming Lessor as a loss-payee, All such
insurance that Lessee is required by this Equipment Lease to maintain shall be
obtained with an insurance company with at least an A- rating by A.M. Best and
shall provide that any loss thereunder shall be payable notwithstanding any
action, inaction, breach or warranty or condition, breach of declarations,
misrepresentations or negligence of Lessee, its employees or agents. Each such
policy shall contain an agreement by the insurer that notwithstanding lapse of
any policy for any reason, or rights of cancellation by the insurer or any
cancellation by Lessee, such policy shall continue in full force for the benefit
of the Lessor, for at least thirty (30) days after written notice thereof to
Lessor, and no alteration in any such policy shall be made except upon thirty
(30) days written notice of such proposed alteration to Lessor and written
approval by Lessor. If Lessee fails to acquire any policy of insurance required
to be maintained pursuant to this paragraph, or fails to renew or replace any
such policy at lease twenty (20) days prior to the expiration thereof, or fails
to keep any such policy in full force and effect, Lessor shall have the option
(but not the obligation) to pay the premiums any such policy of insurance or to
procure new insurance in an amount type, coverage and immediately due and
payable to Lessor by Lessee upon demand by Lessor. No exercise by Lessor of such
option shall in any way affect the provisions of this Equipment Lease, including
the provisions that failure by Lessee to maintain the prescribed insurance shall
constitute an Event of Default. The proceeds of such insurance shall be applied
toward the repair or replacement of the Equipment if such repairs exceed the
fair market value of the Equipment.
12. Taxes and General Covenants. (a) Lessee agrees to pay when due, all
sales, use, property, excise, license and registration, duties, taxes, ad
valorem and assessments, charges or fees of any nature whatsoever (including any
fees incurred with respect to engaging a third-party to apply and process any
permits, fees or taxes) (Except for any taxes based upon Lessor' net income)
however designated, now and hereafter imposed by any governmental entity,
whether based upon the Rent or the Equipment or the purchase delivery,
ownership, leasing, use, possession or return thereof. Any fees, taxes or other
charges paid by Lessor upon failure of Lessee to make such payment shall at
Lessor's demand become immediately due from Lessee to Lessor. Lessor reserves
the right, upon notice to Lessee, to pay property taxes imposed on Equipment
which is leased pursuant to a fair market value or a true lease. If so paid,
Lessor will xxxx Lessee for the tax that shall become an obligation of Lessee
under this Lease. (b) Lessee shall keep the Equipment free and clear of any
levies, liens and encumbrances. Upon Lessor's request, Lessee shall execute,
acknowledge and deliver in recordable form any documents or other instruments
with respect to the Equipment or this Lease as the Lessor may consider necessary
or desirable to comply with the filing or recording requirements of any
jurisdiction.
13. Indemnity. Lessee shall indemnify and defend against, and hold Lessor
harmless from, any and all claims, actions, damages (including reasonable
attorney's fees) obligations, liabilities and liens (including any of the
foregoing arising or imposed without Lessor's fault or negligence, or in
connection with latent or other defects or under the doctrine of strict
liability), imposed or incurred by or asserted against Lessor or its successors
or assigns, arising out of the manufacture, purchase, lease, possession,
operation, condition, return or use of the Equipment, or by operation of law.
Lessee shall give Lessor prompt written notice of any matter hereby indemnified
against and agrees that upon written notice by Lessor of the assertion of such a
claim, action, damage, obligation, liability of lien, Lessee shall assume full
responsibility for the defense thereof. This paragraph 13 shall survive the
expiration or other termination of this Equipment Lease. If Lessee fails to
provide an adequate defense, in Lessor's sole discretion, then Lessor may retain
its own counsel at Lessee's expense. All of Lessor's rights and privileges
arising out of this paragraph 13 shall survive the expiration of other
termination of this Equipment Lease. Any amounts required to be paid under this
paragraph which cannot be paid on the dates on which Rent would become due
because of the expiration or other termination of this Equipment Lease shall be
due upon demand by the party claiming that such payment is due.
14. Event of Default. The occurrence of any of the following events each of
them an Event of Default) shall constitute a default under this lease:
(a) failure of Lessee to pay any installment of Rent or any other sum required
by this Equipment Lease to be paid by Lessee within ten (10) days after
receipt of notice of such non-payment.
(b) Failure of Lessee to observe, perform or comply with any term, obligation,
covenant or condition contained in this Equipment Lease or any Schedule
other than the obligation referred to in subparagraph (a) above within
fifteen (15) calendar days after receipt of notice of such failure.
(c) Any attempted sale encumbrance by Lessee of the Equipment or any item of
Equipment.
(d) Failure of Lessee to contest a lien or encumbrance known to Lessee and
asserted against the Equipment or any Item of Equipment.
(e) Failure to maintain any insurance required under paragraph 11 of this
Equipment Lease. (f) Lessee ceases to do business as a going concern.
(g) Lessee shall (1) be generally not paying its debts as they become due, (2)
admit its inability to pay its debts generally as they become due, (3) be
insolvent, either in that its liabilities exceed its assets, or in that it
is unable to pay its debts as they become due, (4) make a general
assignment for the benefit of creditors, (5) file a petition in bankruptcy,
or admit (by answer, default or otherwise) the material allegations of any
petition in bankruptcy filed against it under the Federal Bankruptcy Laws
(as in effect of the date f this Equipment Lease or as they may be amended
from time to time), or under any other law for the relief of debtors or for
the discharge, arrangement or compromise of debtors' debts of (6) consent
to the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequester or other official with similar powers of Lessee or a substantial
part of its assets.
(h) A petition shall be filed against Lessee in proceedings under the Federal
Bankruptcy Law (as in effect at the date of this Equipment Lease, or they
be amended from time to time), or under any other laws for the relief of
debtors or for the discharge, arrangement or compromise of debtors' debts,
or any order shall be rendered by any court of competent jurisdiction
appointing a receiver, trustee, or liquidator of Lessee or of all or part
of Lessee's assets, and such petition or order is not dismissed or stayed
within sixty (60) consecutive calendar days after entry thereof.
15. Remedies. Upon the occurrence of any Event of Default, and any time
thereafter, Lessor may at its option exercise any one or more of the following
remedies:
(a) Declare the entire amount of all unpaid Rent under this Equipment Lease
(including installments of Rent which would otherwise have become due after
the Event of Default), if any to be due and payable immediately.
(b) Terminate this Equipment Lease as to any or all items of Equipment,
whereupon all rights of Lessee to the use of the Equipment shall absolutely
cease and terminate but Lessee shall remain liable upon all of Lessee's
obligations under this Lease. Any such termination shall occur only by
written notice by Lessor to Lessee. Any such termination shall not impair
Lessor's right to exercise the other remedies set out herein.
(c) Immediately take possession of the Equipment after terminating this
Equipment Lease as provided in subparagraph (b) of this paragraph, and for
this purpose may enter upon any premises of Lessee without any liability
for such entry.
(d) Sell the Equipment or any other item of Equipment, with or without taking
possession of it, at public auction or private sale at such time and upon
such terms as Lessor may determine, free and clear of any rights of Lessee.
In such case Lessor may recover from Lessee the difference between (i) the
sum of (A) the present value of the rent required under this Equipment
Lease after the Event of Default, (B) the present value of the fair market
value which the Equipment would have had at the normal expiration of the
Equipment Lease had there been no event of default (as determined by an
independent appraiser acceptable to Lessor), and (C) all of the other
payments due to Lessor under this Equipment Lease as of the date of sale
including, but not limited to amounts due pursuant to paragraph 14 of this
Equipment Lease, and the proceeds of any sale of such Equipment (which
proceeds have been reduced by the reasonable expenses incurred by the
Lessor in the retaking of possession, preparation for sale, and sale of
such Equipment). To the extent that it does not duplicate amounts credited
to Lessee and deducted from amounts Lessor may recover under the preceding
sentence, Lessee shall be entitled, in mitigation of damages, to the net
proceeds of any such sale after deduction from such proceeds of all costs,
charges and expenses incurred by Lessor in the exercise of its remedies
under this paragraph 16, up to the amount paid by Lessee under the
preceding sentence.
(c) Lease the Equipment, or any item of Equipment, with or without taking
possession of it, for such period and rental, and to such personals as
Lessor may elect. In such case, Lessor may recover from the Lessee the
greater of: (1) the aggregate of (A) the present value of the aggregate of
the Rent required under this Equipment Lease for the term of this Equipment
Lease remaining after the Event of Default, and (B) all of the other
payments due to Lessor under this Equipment Lease as of the date of the new
lease, including, but not limited to amounts due pursuant to paragraphs 4
and 14 of this Lease, less the present value of the contracted for rent for
the Equipment to become due under the terms of the new lease for the period
beginning on the date the event of default occurred and ended on the date
the Term would have expired and had there been no Event of Default, or (2)
the aggregate of (A) the present value of the aggregate of the Rent
required under this Equipment Lease for the term remaining after the Event
of Default, and (B) all of the other payments due to Lessor under this
Equipment Lease as of the date of the new lease, including but not limited
to amounts due pursuant to paragraphs 4 and 14 hereof, less the present
value of the fair rental value (as determined by an independent appraiser
acceptable to Lessor) of such Equipment for the period beginning on the
date the Term would have expired if there had been an Event of Default. To
the extent that it does not duplicate amounts credited to Lessee and
deducted from amounts Lessor may recover under subparagraphs (1) and (2) of
this subparagraphs (1) and (2) of this subparagraph (e), Lessee shall be
entitled, in mitigation of damages, to the net present value of the
contracted for Rent under any new lease for the period beginning on the
date of the Event of Default occurred and ending on the date of this
Equipment Lease would have terminated had there been no Event of Default
(discounted at the interest rate at which as new Lessee could borrow funds
on a secured basis for a term equivalent to the term of the new lease),
after deduction from such present value of all costs, charges and expenses,
including attorney's fees, incurred by Lessor in the exercise of Lessor's
remedies under this paragraph 17, up to the amount paid by Lessee under
this subparagraph (e).
(f) Pursue any other remedy at law or in equity. If this Lease or any Schedule
thereto is deemed at any time to be a lease intended as security, Lessee
grants Lessor a security interest in the Equipment to secure its
obligations under this lease and all other indebtedness at any time owing
by Lessee to Lessor and agrees that upon the occurrence of an Event of
Default, in addition to all of the other rights and remedies available to
Lessor hereunder, Lessor shall have all of the rights and remedies of a
Senior Secured party under the Uniform Commercial Code.
16. Remedies Not Exclusive. No right or remedy conferred in this Equipment
Lease is exclusive of any other right or remedy conferred herein or by law, but
all such remedies are cumulative of every other right or remedy conferred
hereunder or at law or in equity, by statue or otherwise, and may be exercised
concurrently or separately from time to time.
17. Lessor's Expenses. Lessee shall pay Lessor all costs and expenses,
including reasonable attorney's fees and court costs, incurred by Lessor in
exercising any of its rights or remedies hereunder or enforcing any of the
terms, conditions, or provisions hereof.
18. Assignment. (a) Without Lessor's prior written consent, Lessee shall
not (1) assign, transfer, pledge or hypothecate the Equipment Lease, the
Equipment or any items thereof, or any interest therein, or (2) sublet or lend
the Equipment or any items thereof to be used by anyone other than Lessee,
Lessee's employees or race teams related to Lessee. Consent to anyone of the
foregoing acts applies only in the given instance and is not a consent to any
subsequent like acts by Lessee or any other person. (b) Lessee's interest herein
may not be assigned or transferred by operation of Law. (c) Lessor may assign
this Equipment Lease or mortgage the Equipment or both in whole or in part, with
notice to Lessee. Upon notice of such assignment, Lessee shall (if Lessor
requests) acknowledge receipt thereof in writing. Each such assignee or
mortgagee shall have all of the rights, but none of the obligations of Lessor
under this Equipment Lease. Lessor agrees that Lessee may quietly enjoy the use
of the Equipment subject to, and so long as Lessee complies with, all the terms
and conditions of this Equipment Lease. Subject to the foregoing, this lease
inures to the benefit of and is binding upon the heirs, legatees, personal
representatives, successors and assigns of the parties hereto.
19. Personal Property. The Equipment is, and at all times shall be and
remain, personal property. At its own cost and expense, Lessee shall take all
actions that may be necessary or desirable to cause the Equipment and each
component thereof to retain its character as personal property.
20. Late Charge. If Lessee fails to pay any installment or rent or any
other sum to be paid by Lessee to Lessor within ten (10) days after the due date
thereof, Lessee shall pay Lessor a late charge equal to 1% of such installment
or if there is a maximum contract rate fixed by law, then at such rate.
21. Non-waiver. No covenant or condition of this Equipment Lease can be
waived except by the written consent of Lessor. Forbearance or indulgence by
Lessor in any regard whatsoever, shall not constitute a waiver of the covenant
or condition to be performed by Lessee to which such forbearance or indulgences
may apply, and until complete performance by Lessee of such covenant or
condition, Lessor shall be entitled to invoke any remedy available to Lessor
under this Equipment Lease or by law or in equity despite such forbearance or
indulgence.
22. Entire Agreement. This instrument and the Schedules constitute the
entire agreement between Lessor and Lessee and shall not be amended, altered or
changed except by written agreement signed by the parties.
23. Notices. Service of all notices under this Equipment Lease shall be
sufficient if given personally or mailed do the party involved at its respective
address or at such address as such party may provide in writing from time to
time. Any such notice mailed to such address shall be effective when deposited
in the United States mail, duly addressed and with first class postage pre-paid.
24. Titles. The titles of the paragraphs of this Equipment Lease are solely
for the convenience of the parties, and are not an aid in the interpretation of
the instrument.
25. Time. Time is of the essence of this Equipment Lease and each and all
of its provisions.
26. Governing Law. The validity, construction and performance of this
Equipment Lease shall be governed by the laws (including the conflict of laws
rules) of the State of Indiana. Lessee hereby consents to the jurisdiction of
any state or federal court located in Xxxxxx County, Indiana.
27. Incorporation By Reference. All Schedules, annexes or other attachments
to this Equipment Lease as if set out in full at the first place in the
Equipment Lease that references is made thereto.
28. Further Assurances. At Lessor's request, from time to time, Lessee
shall sign financing assignments or other documents or instruments necessary to
make public filings reflecting Lessor's ownership of and interest in the
Equipment, and Lessee authorized Lessor to make any such filings that Lessor may
deem appropriate. Such filings and this provision are precautionary only and do
not evidence any intention that this Equipment Lease create a security interest.
In addition to the foregoing, Lessee shall provide to Lessor any confirmation
and/or reaffirmation of the representations and warranties contained in
paragraphs 14 and 18 of this Lease from any legal counsel or certified public
accountant acceptable to Lessor as Lessor may require.
LESSEE: LESSEE:
Xxxxxx Industries, Inc. Fair Holdings, Inc.
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxx Xxxxxxxx Xxxxxxx X. Xxxxxx
Its: President Its: Chairman
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