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EXHIBIT 10.24
VENTURE EQUIPMENT ACQUISITION COMPANY -
VENTURE INDUSTRIES CORPORATION
MACHINERY USAGE AGREEMENT
WHEREAS VENTURE EQUIPMENT ACQUISITION COMPANY and VENTURE INDUSTRIES
CORPORATION (the "Parties") desire to enter into a Machinery and Equipment Usage
Agreement (the "Agreement") concerning the machinery and equipment set forth in
SCHEDULE A attached hereto and made a part hereof (presently located at 17085
Masonic, Fraser, Michigan) for a usage fee equal to the lesser of: (i) the
monthly rate, or (ii) the daily rate for the total number of Usage Days in any
one month, all of which is set forth on a per machine basis in Schedule A;
AND WHEREAS the Parties have agreed to the following terms;
NOW THEREFORE, THIS MACHINERY AND EQUIPMENT USAGE AGREEMENT is hereby made
and entered into as of the 15th day of February, 1995 (hereinafter sometimes
referred to as the "Commencement Date"), by and between VENTURE EQUIPMENT
ACQUISITION COMPANY (hereinafter together with its successors and assigns,
referred to as "Owner"), and VENTURE INDUSTRIES CORPORATION (hereinafter
referred to as "User"), who hereby amend, as of the effective date, all other
agreements, if any, by and between the parties concerning the rental or usage of
the equipment listed on Schedule A (the "Equipment") as follows:
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1. USAGE FEE PAYABLE BY USER. (A) User, in consideration and in respect of
the right granted by Owner to use the Equipment, shall pay to Owner for any one
month a sum (prorated for the value of each piece of Equipment subject to this
Usage Agreement as initially set forth on Schedule A and as the parties shall
from time to time reasonably agree upon) equal to the lesser of:
(i) SIXTY FIVE THOUSAND EIGHT HUNDRED SIXTY FIVE DOLLARS ($65,865) per
month (the "Monthly Rate"); or
(ii) THREE THOUSAND TWO HUNDRED NINETY THREE AND TWENTY FIVE ONE
HUNDREDTHS DOLLARS ($3,293.25) per Usage Day (the "Daily Rate"); provided, that
at each anniversary of the Effective Date of this Agreement, the daily rate and
the monthly rate shall be prospectively adjusted to reflect the rate of
inflation (as measured by the Revised Consumer Price Index - All Items figured
for All Urban Consumers, published by the United States Department of Labor,
Bureau of Labor Statistics, or, if such index is not published, a comparable
index selected by the parties) from the Effective Date to said anniversary date.
A "Usage Day" shall mean a day during the month in question the User
actually uses the Equipment (it being hereby agreed that any use during any
calendar day shall be considered one full day of usage for purposes of the fee
owed to Owner by User).
(B) Said sum shall be payable monthly at Owner's place of business or such
other place as Owner shall direct in writing.
(C) The due date of the first payment shall be the date in the next
calender month which numerically corresponds to the Effective Date (or if there
is no such date in the next calender month, the last date of such month) [such
period being herein considered a "month"], with subsequent payments being due at
one month intervals.
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(D) Nothing herein to the contrary withstanding, User shall not be liable
for any payments to Owner accrued after this Agreement has been terminated.
2. USAGE RIGHT. (A) In consideration of the payment of Usage Fees, Owner
hereby (i) agrees to make available for pick-up by User or use on Owner's
premises, on an as is, where is basis, and (ii) grants to User the right,
subject to paragraph 2(B) and Section 4, to use the Equipment during the period
from the Effective Date to the date of termination of this Agreement.
(B) Owner shall be permitted to use the Equipment when not in use by User,
subject to the following conditions. At any time that Owner desires that itself
or a third party use such Equipment (or any portion thereof) which is on User's
premises, (i) Owner shall give User not less than ten (10) days prior notice of
the dates of intended use, (ii) the scheduling of such use shall not
unreasonably interfere with the requirements of User's business and (iii)(x)
Owner shall arrange on terms reasonably satisfactory to User for Owner or any
third party user to fully indemnify and hold User harmless from any damage,
liability or other cost which is the result of any negligence or intentional
harm caused by them or their invitees, employees, agents or sub-contractors to
the extent to which such damage, liability or other cost is not recoverable from
User's insurance carrier and (y) during any period that Owner or such third
party is using such Equipment, Owner or such third party user shall reimburse
User for any electrical charges or other variable costs of User which User
incurs as a result of the access permitted above.
(C) Nothing herein to the contrary withstanding, under no circumstances or
condition shall any act or omission, including the affixing of such Equipment to
the premises, result in Owner losing any right of ownership to the Equipment and
to this end Owner shall have the right to, and User shall
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cooperate in aiding Owner, enter into a security agreement with User or file
any UCC statement required or reasonable convenient to protecting Owner's
rights in this regard.
3. TERMINATION. (A) Owner shall have the option to terminate this
Agreement (i) on or after the eleventh (11th) anniversary of the Effective Date;
(ii) if both the Senior Secured Notes, Series A, due March 15, 2000 and the
Senior Subordinated Notes, due April 1, 2004, are fully paid, redeemed or
defeased in accordance with their terms, or (iii) as to any particular piece of
Equipment if (a) User shall fail to pay for the usage of such piece of Equipment
for at least thirty (30) days in any sixty (60) consecutive day period (the
"Minimum Amount"), (b) following such failure, Owner shall give User a written
notice of termination which shall state that such piece of Equipment shall cease
to be subject to this Agreement and that such termination will occur on a date
specified in such notice which shall be not earlier than twenty (20) days from
the date of such notice (the "Termination Date") unless prior thereto User pays
Owner that portion of the Minimum Amount not yet paid for the period in question
and (c) User shall fail to pay that portion of the Minimum Amount not yet paid
for the period in question to Owner prior to the Termination Date.
4. CONTINUOUS OWNER ACCESS. Owner shall have reasonable access to the
Equipment at User's premises subject to the convenience and requirements of
User's business and upon not less than two (2) days prior written notice in
order to (i) make repairs and (ii) do testing; provided, that Owner shall (and
Owner hereby agrees to do so) fully indemnify and hold User harmless from any
damage, liability or cost which is the result of any negligence or intentional
harm by Owner or its invitees, employees, agents or sub-contractors to the
extent to which such damage,
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liability or other cost is not recoverable from User's insurance carrier or
third party's insurance carrier.
5. CARE AND REPAIR OF PROPERTY. Except as provided in Section 6, Owner
shall keep the Equipment in good repair, condition, and working order, and shall
furnish any and all parts and labor required for that purpose.
6. LOSS. User shall utilize the Equipment in a careful and proper manner
which reasonably follows the common methods of usage of such Equipment, and in a
manner fit for the usages which the Equipment itself is customarily used, and in
compliance with all applicable laws, ordinances and regulations.
User shall be liable to Owner for any loss or damage to the Equipment which
results from User's negligence or misuse of the Equipment. Otherwise, Owner,
subject to User's obligation to insure the Equipment in accordance with Section
9, shall bear the entire risk of loss of and damage to the Equipment.
User shall be liable for any loss, damage or liability to third parties,
including User's invitees, employees, agents and sub-contractors as a result of
the use of such Equipment by User, its employees, agents, sub-contractors (other
than Owner and its agents) and invitees.
7. REMOVAL UPON TERMINATION. Whether or not the same has attached to the
premises or otherwise become a fixture, upon termination of this Agreement, or
User's right to use any particular piece of Equipment, or upon it being
necessary for the repair of the Equipment that
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Owner temporarily remove the same from User's premises, Owner shall be
permitted to remove such Equipment and shall have full right of access to the
premises in order to enable it to remove such Equipment from User's premises
during normal business hours or such other hours as User shall reasonably
specify; provided, that Owner shall not unduly interfere with the right of User
to conduct its business and that Owner shall fully indemnify User regarding any
damage, liability or other cost which is the result of any negligence or
intentional harm caused by User or its agents in removing such Equipment, to
the extent to which such damage, liability or other cost is not recoverable
from User's insurance carrier.
8. ALTERATIONS AND IMPROVEMENTS TO THE EQUIPMENT. Provided that either (i)
the same does not materially reduce the value of the Equipment or (ii)
permission of Owner is first obtained, User may, at its sole cost and expense,
modernize, add to and improve the Equipment from time to time. Upon the
termination of the right of User to such any particular piece of Equipment or
all of the Equipment, User shall, at its own expense, have the right to remove
from such Equipment any such modernization, addition or improvement if User has
first given Owner thirty (30) day's written notice of User's unexpensed or
unamortized cost basis in such modernization, addition or improvement and Owner
has not tendered the same.
9. INSURANCE. User shall maintain, and provide Owner with a copy thereof,
a liability policy which shall name Owner as an additional insured party, and
shall provide (a) comprehensive insurance against risk of loss and damage to the
Equipment and (b) comprehensive general liability insurance, including blanket
contractual coverage against claims for, or arising out of, bodily injury,
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death, or property damage from the Equipment. The initial limits of coverage
shall be, if dual limits are provided, not less than FIVE MILLION DOLLARS
($5,000,000.00) with respect to injury or death of a single person and not less
than TEN MILLION DOLLARS ($10,000,000.00) with respect to any one occurrence;
and not less than FIVE MILLION DOLLARS ($5,000,000.00) with respect to any one
occurrence of property damage.
10. ASSIGNMENT. The rights of Owner and User hereunder shall not be
assigned, pledged, transferred or otherwise disposed of without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
11. EVENTS OF DEFAULT AND REMEDIES THEREFOR. An event of default shall
occur and be continuing, and Owner shall have the right to terminate this
Agreement at any time thereafter (whether or not said Owner is deemed to have
waived its right to so terminate) and pursue any remedy available to Owner at
law or equity, if User (a) ceases to do business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
its debts as they become due, or files a voluntary petition in bankruptcy; or
(b) within sixty (60) days after the commencement of any proceedings seeking
reorganization, arrangement, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law of regulation, such proceeding
shall not have been dismissed, or if within sixty (60) days after the
appointment without consent or acquiescence of any trustee, receiver or
liquidator of it or of all or any substantial part of its assets and properties,
such appointment shall not be vacated; provided, that if the Owner of the
Equipment is no longer Venture Equipment Acquisition Company or an affiliate of
Venture Equipment
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Acquisition Company, or Larry J. Winget or an affiliate of Larry J. Winget, and
such Owner did not acquire its rights hereunder in breach of Section 10 and is
not otherwise in breach of this Agreement, an additional event of default shall
occur if User fails to perform any material provision of this Agreement and
such failure continues for a period of thirty (30) days after notice thereof,
time being of the essence.
12. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Michigan.
13. INTEGRATION. This writing constitutes the entire agreement between the
parties as to the matter set forth herein and shall supersede all previous or
contemporaneous negotiations, commitments, and writings with respect to the
matters set forth herein.
14. MODIFICATION. The parties may, by written instrument, amend, modify or
extend this Agreement. This Agreement may only be so amended, modified or
extended by a writing signed by authorized representatives of both parties. The
terms and provisions of this Agreement shall prevail over any conflicting,
additional, or other terms appearing in any notice, request, instruction,
invoice, or other writing submitted by either party under this Agreement at any
time.
15. WAIVER. No waiver of any provision or breach of this Agreement shall be
construed as a continuing waiver, or shall constitute a waiver of such
provisions or breach, or of any other provision or breach.
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16. HEADINGS, INTERPRETATION. The paragraph headings herein are included
solely for convenience and shall in no event affect or be used in connection
with the interpretation of this Agreement. Each separate provision of this
Agreement shall be treated as severable, to the end that if any one or more such
provisions shall be adjudged or declared illegal, invalid, or unenforceable,
this Agreement shall be interpreted and shall remain in full force and effect,
as though such provision or provisions had never been contained in this
Agreement.
17. NOTICES. Any notice, demand, delivery, invoice, or other writing
required or desired to be given or made pursuant to this Usage Agreement shall
be in writing, and shall be deemed to have been given and received, and to be
effective for all purposes, the third business mail day after having been mailed
via the United States Postal Service in an envelope properly stamped and
addressed to the proper party at the address (or such other address as the
recipient shall have designated in writing) that follows:
If to Owner: VENTURE EQUIPMENT ACQUISITION COMPANY
33662 James J. Pompo Dr.
Fraser, Michigan 48026
If to User: VENTURE INDUSTRIES CORPORATION
33662 James J. Pompo Dr.
Fraser, Michigan 48026
IN WITNESS WHEREOF, the Owner and User have executed this Usage Agreement
as of the Commencement Date.
OWNER:
VENTURE EQUIPMENT ACQUISITION COMPANY
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BY: /s/ Michael G. Torakis
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MICHAEL G. TORAKIS,
VICE PRESIDENT
USER:
VENTURE INDUSTRIES CORPORATION
BY: /s/ Michael G. Torakis
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MICHAEL G. TORAKIS,
VICE PRESIDENT
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