EXHIBIT 10-2
BAILMENT AGREEMENT
This Bailment Agreement (this "Agreement") is made as of August 2, 2005,
between PREMIER TOOL & DIE CAST CORP., a Michigan corporation ("Premier") and
LEXINGTON PRECISION CORPORATION, a Delaware corporation ("Lexington").
WHEREAS, Premier and Lexington have entered into an Equipment Purchase
Agreement (the "Purchase Agreement"), dated as of the date hereof, pursuant to
which Premier has purchased certain machinery, equipment and inventory (the
"Purchased Assets") from Lexington, as more particularly defined in the Purchase
Agreement.
WHEREAS, Premier desires to leave the Purchased Assets in Lexington's
facility located at 201 Winchester Road, Lakewood, New York (the "Premises") and
to permit Lexington to use the Purchased Assets as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, parties hereto hereby agree as
follows:
1. Bailment. Lexington and Premier agree that the Purchased Assets shall
be held by Lexington as bailee on the terms and conditions set forth in this
Agreement, including, the Terms of Bailment set forth on Exhibit A. Premier
shall at all times maintain full ownership of the Purchased Assets as bailor.
The term of this bailment arrangement shall commence on the date first written
above and shall expire on the earlier of (the "Termination Date") (a) September
30, 2005 or (b) such earlier date as Premier removes all of the Purchased Assets
from the Premises. Lexington shall have no liability for any destruction or
damage to the Purchased Assets or to repair the Purchased Assets. Each of the
parties will comply with its obligations set forth on Exhibit A.
2. Use of Purchased Assets. During the term of this Agreement, Premier
hereby authorizes Lexington to use the Purchased Assets for the manufacture and
production of die castings for Premier or to be sold to Premier's customers.
Lexington shall have no obligation to maintain the Purchased Assets, whether in
good working order or otherwise, or to repair any damage to any of the Purchased
Assets or to replace any Purchased Assets which are destroyed or lost,
irrespective of the cause thereof.
3. Removal of Purchased Assets. Premier, at its sole cost and expense,
shall cause the Purchased Assets to be removed from the Premises on or prior to
the Termination Date, during normal business hours upon prior written notice to
Lexington. Premier shall be responsible for any and all damages caused by the
removal of the Purchased Assets from the Premises. In the event that Premier
fails to remove the Purchased Assets as provided in this Section 3, Premier
shall be responsible for paying a monthly storage fee in the amount of $12,500
for any month or part thereof while any Purchased Assets remain on the Premises.
In addition, in the event Premier fails to remove the Purchased Assets as
provided in this Section 3, Lexington, in its sole discretion, may remove such
Purchased Assets, and Premier shall be responsible for the costs and expenses of
such removal and any storage costs incurred by Lexington after such Purchased
Assets are so removed from the Premises.
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4. General Provisions.
(a) No Agency. Neither Lexington, nor any of its employees, agents or
representatives, shall be deemed for any purposes whatsoever to be an employee,
agent, officer or representative of Premier, nor shall any of them have any
authority to represent Premier or to enter into or to accept any offers,
contracts or agreements on behalf of Premier. Neither Premier, nor any of its
employees, agents or representatives, shall be deemed for any purposes
whatsoever to be an employee, agent, officer or representative of Lexington, nor
shall any of them have any authority to represent Lexington or to enter into or
to accept any offers, contracts or agreements on behalf of Lexington.
(b) Governing Law; Jurisdiction; Consent to Service of Process. This
Agreement shall be governed by and construed exclusively in accordance with the
internal laws of the State of New York, without reference to its principles of
conflicts of laws.
(c) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective successors and assigns. No party
may assign its rights or obligations hereunder except with the written consent
of the other party.
(d) Counterparts and Facsimile Signatures. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, and all
of which shall constitute one and the same instrument. Signatures sent by
facsimile shall constitute and be binding to the same extent as originals.
(e) Section Headings. The section headings in this Agreement are included
for purposes of convenience only and shall not affect in any way the
construction or interpretation of any of the provisions of this Agreement.
(f) Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been given on the
date when delivered personally, the next business day after delivery to a
nationally recognized overnight delivery service for next business day delivery,
or on the fifth day after mailing if mailed by first class mail, registered or
certified, postage prepaid, and properly addressed as follows or to such other
address as either party may designate by notice to the other party in accordance
with this Section:
If to Lexington: Lexington Precision Corporation
40 East 52nd Street
New York, New York 10022
Attention: Michael A. Lubin,
Chairman of the Board
If to Premier: Premier Tool & Die Cast Corp.
9886 North Tudor Road
Berrien Springs, MI 49103
Attention: Paul Brancaleon, President
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(g) Amendment. Neither this Agreement nor any of its provisions may be
waived, modified, amended, discharged or terminated except by an instrument in
writing signed by the parties hereto.
THIS AGREEMENT has been executed by the parties hereto as of the day and
year first above written.
PREMIER TOOL & DIE CAST CORP.
By: /s/ Paul Brancaleon
--------------------------
Name: Paul Brancaleon
Title: President
LEXINGTON PRECISION
CORPORATION
By: /s/ Michael A. Lubin
--------------------------
Name: Michael A. Lubin
Title: Chairman
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EXHIBIT A
TERMS OF BAILMENT
1. LOCATION OF PURCHASED ASSETS. Lexington shall not remove the Purchased
Assets from the Premises. Lexington shall not use the Purchased Assets except
pursuant to the Agreement.
2. LIENS; NO TRANSFER. Lexington shall not cause any lien, security
interest or encumbrance to be placed on any of the Purchased Assets, except in
favor of Premier. Notwithstanding anything in the Agreement to the contrary,
Lexington shall be entitled to hold and retain the Purchased Assets until
Premier pays all amounts owed to Lexington pursuant to the Agreement or any
other agreement or understanding between the parties with respect to the
manufacture of products by Lexington for Premier or customers of Premier.
Lexington shall not sell, transfer or otherwise dispose of the Purchased Assets
during the term of the Agreement.
3. INFORMATION, INSPECTION AND COMPLIANCE. Lexington shall allow Premier
during normal business hours, upon prior written notice to inspect the Purchased
Assets. Premier shall be solely responsible for any and all acts by, or damages
caused by, its employees, representatives and agents at the Premises and for any
claims by its employees, representatives or agents for bodily injury or death.
4. RISK OF LOSS; INDEMNIFICATION. Premier shall bear the entire risk of
loss of the Purchased Assets, except to the extent of any insurance proceeds
received by Lexington in respect of the insurance policies covering such
Purchased Assets maintained pursuant to paragraph 5 below. Premier assumes full
responsibility and liability for death of or injury to person and damage to or
loss of property resulting from, and hereby indemnifies and holds Lexington
harmless from and against all claims, damages and expenses (including, without
limitation, attorneys' fees) arising out of the use, operation, storage and
maintenance of the Purchased Assets, except to the extent of any insurance
proceeds received by Lexington . In the event that any of the Purchased Assets
need to be repaired, Premier shall be solely responsible for any and all costs
and expenses thereof.
5. INSURANCE. Lexington shall maintain, with financially sound and
reputable insurance companies, insurance with respect to the Premises and the
personal property located thereon against loss or damage in an amount not less
than the full replacement value thereof. All such insurance policies shall name
Premier as additional insured in respect of Premier's interest in personal
property located at the Premises owned by Premier and shall provide that any
such policy may not be cancelled or terminated nor the coverage reduced without
at least thirty (30) days' prior written notice to Premier and shall permit
Premier to pay any premium within twenty (20) days after receipt of any notice
stating that such premium has not been paid when due. Lexington shall furnish to
Premier, upon request, a certificate of insurance evidencing such insurance.
6. TAXES AND OTHER OBLIGATIONS. Premier shall pay, before they become
delinquent, all taxes and assessments upon the Purchased Assets.
7. SECURITY INTEREST. Premier has and shall continue to have sole
ownership of the Purchased Assets. In recognition of the possibility that,
notwithstanding the preceding sentence,
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Lexington may be considered to have acquired an ownership interest in the
Purchased Assets and to protect Premier's interests if that should happen,
Lexington grants to Premier a security interest in the Purchased Assets.
Lexington is granting this security interest to Premier solely to provide, to
the maximum extent permitted by applicable law, that Premier's rights in and
ownership of the Purchased Assets are superior to the claims of any present or
future creditors of Lexington, including any trustee in bankruptcy, and the
granting of this security interest shall not detract from or impair Premier's
ownership of the Purchased Assets, as provided for herein.