EXHIBIT 10.219
L E A S E A G R E E M E N T
THIS Lease, made on JANUARY 25, 2003 by and between Oshkosh/McNeilus
Financial Services Partnership , a California general partnership hereinafter
called "Lessor" and Ready Mix, Inc. hereinafter called "Lessee".
WITNESSETH:
For and in consideration of the mutual covenants and promises hereinafter set
forth, the parties hereto agree as follows:
1. LEASE. Lessor hereby Leases to Lessee, and Lessee hereby leases and hires
from Lessor, all machinery, equipment and other property described in (a)
the schedule executed by the parties concurrently herewith or hereafter and
made a part hereof, and (b) any schedule or schedules hereafter executed by
the parties hereto and made a part hereof. All said machinery, equipment
and other property described in all said schedules is hereinafter
collectively called "Equipment" or "Leased Equipment", and all said
schedules are hereinafter collectively called "schedule".
2. TERM. The term of this Lease respecting each item of Equipment commences
when said item of Equipment is delivered to Lessee. The term of this
Lease ends on the date designated for such item in the schedule.
3. RENT. The rent for any and every item of Equipment described in the
schedule shall be the amount designated therefor in the schedule. Lessee
shall pay Lessor said rent in advance, in the amounts and at the times set
forth in the schedule, at the office of Lessor, or to such other person
and/or at such other place as Lessor may from time to time designate in
writing. All payments of rent or any other payments herein shall be in U.S.
legal tender.
4. DELIVERY USE AND OPERATION OF THE LEASED EQUIPMENT.
(a) All units of Equipment shall be received directly from Lessor's
supplier to Lessee. [Lessor authorizes one or more persons designated by
Lessee as the authorized representative or representatives of Lessor to
accept delivery of the Equipment.] Lessee agrees that the Equipment will be
used by Lessee solely in the conduct of its business, Lessee will allow
only qualified, properly licensed personnel selected, employed, and
controlled by Lessee to operate the Equipment in a manner at all times
complying with all applicable federal, state and local laws and
regulations. Lessee shall be solely responsible for fines and penalties
incurred in the use or operation of the Leased Equipment for violations of
any statute, ordinance, by law or regulation of any duly constituted
governmental authority. Lessee shall comply with all federal, state, county
and municipal statutes, ordinances and regulations which may be applicable
to the leasing, use or operation of the Leased Equipment hereunder and
shall prepare and furnish to Lessor all documents, returns or forms legally
required.
(b) Lessee shall put the Leased Equipment only to the use contemplated
by the manufacturer and shall use the Equipment in a proper and careful
manner. Lessee shall affix to the Leased Equipment and maintain thereon
such labels, plates or decals as may be provided by Lessor, or
conspicuously mark said Leased Equipment with such language as Lessor may
reasonably request, to the effect that such Leased Equipment is owned by
Lessor. Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor. Lessor is
hereby authorized at Lessee's expense to cause this Lease or any statement
in respect thereto, showing the interest of the Lessor in the Leased
Equipment, to be filed or recorded with any governmental office deemed
appropriate by Lessor.
(c) The Leased Equipment shall be located at the address of Lessee
specified herein or such other place as shall be mutually agreed upon in
writing between Lessor and Lessee. Lessee shall promptly advise Lessor of
any circumstances with respect to location which may in any manner affect
Lessor's title thereto.
5. LESSEE'S INSPECTION: CONCLUSIVE PRESUMPTIONS, TAX INDEMNIFICATION. Lessee
shall inspect the Equipment within forty-eight (48) hours after receipt
thereof. Unless Lessee, within said period of time, gives written notice to
Lessor specifying any defect in or other proper objection to the Equipment,
Lessee agrees that it 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.
Lessee hereby represents, warrants and covenants that (i) at the time it
is accepted pursuant to Paragraphs 1 and 5 of this Lease, each unit of
Equipment will qualify in the hands of Lessor for all of the Tax Benefits
specified in Section D of the schedule relating to such unit; and,(ii) at
no time during the term of this Lease with respect to any Equipment will
the Lessee take or omit to take, nor will it permit any sublessee or
assignee to take or omit to take, any action (whether or not such act or
omission is otherwise permitted by the terms of this Lease) which act or
omission will result in the disqualification of any Equipment for, or the
recapture of, all or any portion of such Tax Benefits. If as a result of a
breach of any representation, warranty or covenant of the Lessee contained
in this Lease any schedule, any certification or declaration delivered to
Lessor by Lessee or in the Purchase Order relating to any unit of
Equipment, (x) the tax advisor of Lessor (all references to Lease in
Paragraph 5 of this Lease include Lessor and the consolidated taxpayer
group of which Lessor is a member) shall determine that Lessor is not
entitled to claim on its Federal income tax return all or any portion of
the Tax Benefits with respect to any unit of Equipment; or (y) any such Tax
Benefit claimed on the Federal income tax return of the Lessor is
disallowed or adjusted by the Internal Revenue Service; or (z) any Tax
Benefit is recomputed or recaptured (any such determination, disallowance,
recomputation, or recapture being herein called a ("Loss"), then Lessee
shall pay to Lessor as an indemnity as additional rent such amount, or from
time to time such amounts, on the next succeeding rental payment date after
written notice to Lessee by Lessor of such Loss, as shall, in the
reasonable opinion of Lessor, cause Lessor's after-tax economic yields and
cash flows being hereinafter called the "Net Economic Return" to equal the
Net Economic Return that would have been realized by Lessor if such Loss
had not occurred. The amount payable to Lessor pursuant to this paragraph
shall be payable upon written statement describing in reasonable detail
such Loss and the computation of the amount so payable.
Lessee recognizes that the following acts, among others, may result in a
Loss: (A) sublease of Equipment to or other use of Equipment by a
tax-exempt entity, governmental entity, or foreign person, (B) personal,
nonbusiness use of the Equipment, or (C) use of the Equipment outside the
United States.
6. LESSOR'S INSPECTION. Lessor or Lessor's designee, shall at any times during
business hours have the right to enter into and upon the premises where the
Equipment may be located for the purpose of inspecting the same or
observing its use. Lessee
shall give Lessor immediate notice of any attachment or other judicial
process affecting any item of Equipment and shall, whenever requested by
Lessor, advise Lessor of the exact location of the Equipment.
7. ALTERATIONS. Without the prior written consent of Lessor, Lessee shall not
make any 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.
8. MAINTENANCE AND REPAIRS. Lessee, at its sole cost and expense, will (i)
furnish complete, suitable and adequate maintenance service for the
Equipment, including, but not limited to, washing, cleaning, oiling,
greasing and inspection, and (ii) furnish all fuel, oil and other
lubricants for the Equipment and (iii) provide all tires and tubes
necessary for the operation of the Equipment. Lessee, at its own expense
and cost, shall keep the Equipment in (at all times) good repair, condition
and working order, and shall furnish any and all funds, labor, parts,
mechanisms, and devices required to keep the Equipment in good mechanical
and working order. Any replacement parts installed by Lessee shall become
part of the Equipment, shall be owned by the Lessor, and shall be subject
to the terms and conditions of this Agreement.
9. LOSS AND DAMAGE: STIPULATED LOSS VALUE. Lessee hereby assumes and shall
bear the entire risk of loss and damage to the Equipment from any and every
cause whatsoever, including requisition by a governmental agency or entity.
No loss or damage to the Equipment or any part thereof shall impair any
obligation of Lessee under this Lease which shall continue in full force
and effect. In the event of loss or damage of any kind whatever to any item
of Equipment, Lessee, at Lessee's sole cost and expense and at the option
of Lessor shall:
(a) Place the same in good repair, condition and working order; or
(b) Replace the same with like Equipment in good repair, condition and
working order whereupon such replacement Equipment, if deemed
satisfactory to Lessor (in its sole and absolute discretion) shall
become the sole property of Lessor and shall be substituted for the
lost or damaged Equipment under this Lease and shall be subject to all
of the terms hereof; or,
(c) If same is determined by Lessor to be lost, stolen, destroyed or
damaged beyond repair, pay Lessor therefor in cash the "Stipulated
Loss Value" as set forth in the schedule for such equipment. Upon such
payment this Lease shall terminate with respect to such item of
Equipment so paid for and Lessee thereupon shall become entitled to
such item of Equipment as-is-where-is without warranty, express or
implied, with respect to any matter whatsoever.
10. SURRENDER. Upon the expiration or earlier termination of this Lease, with
respect to any item of Equipment, Lessee shall (unless Lessee has paid
Lessor in cash the "Stipulated Loss Value" of such item of Equipment
pursuant to paragraph 9 hereof) promptly return the same to Lessor in good
repair, condition and working order, reasonable wear and tear resulting
from proper use thereof alone excepted, in the following manner as may be
specified by Lessor:
(a) By delivering such item of Equipment at Lessee's cost and expense to
such place as Lessor shall specify within the city or county in which
the same was delivered to Lessee or to which same was moved with the
written consent of Lessor; or
(b) By loading such item of Equipment at Lessee's cost and expense on
board such carrier as Lessor shall specify and shipping the same,
fully insured against loss or damage, freight collect, to the
destination designated by Lessor.
Prior to so returning any such item of Equipment, Lessee shall, at its own
cost and expense pay for any repairs required to place the affected units
of Equipment in the same condition as when received by Lessee, reasonable
wear and tear excepted. As applied to any unit of Equipment, "reasonable
wear and tear" shall mean that such unit has been maintained by Lessee in
"Average Saleable Condition". "Average Saleable Condition" shall be
satisfied when all of the following minimum standards are met:
(A) Tires: All tires shall be round, black, hold air and be of the same
type (original size) and manufacturer (i.e., matched), and have a
minimum of fifty percent (50%) remaining tread.
(B) Transmission, Rear Axle and Engine: The transmissions and rear axle
must meet the manufacturer's minimum operation specifications as
determined by standard testing procedures. The engine must have been
maintained in accordance with manufacturer's recommendations,
including overhauling as required. At the time of return, the engine
must be capable of meeting manufacturer's minimum operational
specifications while under full load. Determinations of whether or not
these specifications are met shall be made by subjecting such engine
to crankcase, manifold pressure and dynamometer tests as well as a
road test, which tests must be performed by a factory-authorized
service center.
(C) Mixer Components: All excess concrete or build up of concrete in or on
the mixer shall have been removed, and the drum shall be free of
concrete, jack hammer extrusions and sledge hammer indentations or if
Refuse Components: The Refuse body and packing mechanism must be
operational with all options intact and in proper operating condition.
The hydraulic systems and cylinders shall be in proper working
condition without any leaks or damage.
(D) General Condition: With respect to each unit, all body damage to
doors, fenders, chassis and the like shall have been fully repaired,
and the cost of necessary repairs for damages to exterior and interior
materials may not exceed $250.00. All lights must be in proper
operating condition, with lenses not cracked or broken. Windows and
any glass shall not be broken, chipped or cracked. All operating
components of the vehicle must meet applicable motor vehicle
inspection standards and be able to perform their function as
originally intended. All mechanical and electrical Equipment,
including radios, heaters and air conditioner units must be in proper
operating condition. The vehicle must pass Department of
Transportation inspection upon its return to the lessor.
(E) Documents and Records: Maintenance records, maintenance record
jackets, repair orders, license plates, registration certificates and
all other similar documents, in their entirety, are held in or affixed
on the unit of Equipment or are otherwise delivered to Lessor.
11. INSURANCE. Lessee shall keep all Equipment insured against all risks of
loss or damage from every cause whatsoever for not less than the higher of
Stipulated Loss Value thereof or the full replacement cost thereof, in
either case as determined by Lessor and shall carry at least bodily
injury/property damage liability insurance in the amount of $1,000,000.00
combined single limit. All said insurance shall be in form and amount and
with companies approved by Lessor and shall be in the joint names of
Lessor, Lessor's assignee hereunder, and Lessee. Lessee shall pay the
premiums thereof and deliver said policies, or duplicates thereof, to
Lessor concurrently herewith and on each policy renewal date hereafter.
Each insurer shall agree, by endorsement upon the policy or policies issued
by it or by independent instrument furnished to Lessor, that it will give
Lessor not less than thirty (30) days written notice before the policy in
question or the coverage provided thereby shall be altered,
canceled, or the coverage terminated [ILLEGIBLE] or allowed to expire.
Lessee shall deliver to Lessor [ILLEGIBLE] an original certificate of
insurance for each such policy or renewal thereof in detail reasonably
satisfactory to Lessor. The proceeds of such insurance, at the option of
Lessor, shall be applied (a) toward the replacement, restoration or repair
of the Equipment or (b) toward payment of the obligations of Lessee
hereunder. Lessee hereby appoints Lessor as Lessee's attorney in fact to
make claim for, receive payment of, and execute and endorse all documents,
checks, or drafts for, loss or damage under said insurance policy. Lessee
shall not utilize the Equipment in any manner or location which would cause
the Equipment and/or its use not to be covered by such insurance policies.
12. TAXES. Lessee shall keep the Equipment free and clear of all levies, liens,
and encumbrances. Lessee, or Lessor at Lessee's expense, shall report, pay
and discharge when due (i) all license and registration fees, assessments,
sales, use, property, gross receipts, and value-added taxes, whether or not
the same shall be assessed against or in the name of Lessor or Lessee, (A)
arising out of receipts from the Lease, use or operation of the Equipment,
(B) imposed by any state, federal or local government or any agency or
department thereof upon the Equipment or any item or portion thereof or the
purchase use, operation or leasing of the Equipment or otherwise in any
manner with respect thereto (ii) all other taxes, fees and governmental
charges similar or dissimilar to the foregoing (excluding any net income
tax on the income of Lessor, provided that Lessee agrees to pay (x) that
portion of any such net income tax which is in direct substitution for, or
which relieves Lessee from, a tax which Lessee would otherwise be obligated
to pay under the terms of this paragraph and (y) any additional state
income tax liability of Lessor resulting from the use of the Equipment in
violation of paragraph 4(c) hereof, together with any penalties or interest
thereon. If applicable law permits any such tax, assessment, or other fee
to be contested without being paid. Lessee shall not be required to pay or
discharge any such tax of assessment while it shall, in good faith by
appropriate legal proceedings, and its own cost and expense, contest the
validity thereof in any reasonable manner which will not affect or endanger
the title and interest of Lessor to the Equipment; however, Lessee shall
reimburse Lessor for any damages or expenses resulting from such failure to
pay or discharge. If Lessee desires to contest any tax, fee or assessment
imposed on Lessor, Lessor shall assist in such contest, provided that the
timing and manner of such contest is consistent with Lessor's timing and
manner for contesting other similar taxes, fees or assessments and that
Lessee pays all cost and expenses associated with such contest.
13. LESSOR'S PAYMENT. In case of failure of Lessee to procure or maintain the
insurance required by paragraph 11 hereof or to pay fees, assessments,
charges and taxes, it is required to pay under paragraph 12 hereof, Lessor
shall have the right, but shall not be obligated, to effect such insurance,
or pay said fees, assessments, charges and taxes, as the case may be. In
that event, the cost thereof shall be repayable to Lessor with the next
installment of rent, and failure to repay the same shall carry with it the
same consequence, including interest at one and one-half per cent (1 1/2%),
or the highest legal interest rate, whichever is less, per month, or any
part thereof, as failure to pay an installment of rent.
14. DISCLAIMER OF WARRANTIES AND LIMITATIONS OF DAMAGES.
(a) LESSOR SHALL NOT BE LIABLE TO LESSEE FOR ANY LIABILITY, CLAIM, LOSS,
DAMAGE (DIRECT OR CONSEQUENTIAL) OR EXPENSE OF ANY KIND OR NATURE
CAUSED, DIRECTLY OR INDIRECTLY, BY ANY EQUIPMENT OR ANY INADEQUACY
THEREOF FOR ANY PURPOSE, OR ANY DEFICIENCY OR DEFECT (LATENT OR
PATENT) THEREIN, OR THE USE OR MAINTENANCE THEREOF, OR ANY REPAIRS,
SERVICING OR ADJUSTMENTS THERETO, OR ANY DELAY IN PROVIDING OR FAILURE
TO PROVIDE ANY THEREOF, OR ANY INTERRUPTION OR LOSS OF SERVICE OR USE
THEREOF, OR ANY LOSS OF BUSINESS, OR ANY DAMAGE WHATSOEVER AND HOWEVER
CAUSED. LESSOR SHALL NOT, BY VIRTUE OF HAVING LEASED THE EQUIPMENT
UNDER THIS LEASE, BE DEEMED TO HAVE MADE ANY REPRESENTATION OR
WARRANTY, WHETHER WRITTEN OR ORAL OR EXPRESS OR IMPLIED, AS TO THE
MERCHANTABILITY, FITNESS (FOR USE OR FOR ANY PARTICULAR PURPOSE),
DESIGN OR CONDITION OF, OR AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP IN THE EQUIPMENT.
AS BETWEEN LESSOR AND LESSEE, LESSOR LEASES THE EQUIPMENT AS-IS,
WITHOUT WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO
(i) THE FITNESS OR MERCHANTABILITY OF ANY ITEM OR ITEMS OF EQUIPMENT,
(ii) LESSOR'S TITLE THERETO, (iii) LESSEE'S RIGHT TO THE QUIET
ENJOYMENT THEREOF, OR (iv) ANY OTHER MATTER WHATSOEVER, IT BEING
AGREED THAT ALL SUCH RISKS, AS BETWEEN LESSOR AND LESSEE ARE TO BE
BORNE BY LESSEE. Lessee acknowledges that each unit of Leased
Equipment subject to this Lease is of a type, size, design and
capacity selected solely by Lessee. If the Leased Equipment does not
operate as represented or warranted by the manufacturer or seller
thereof, or is unsatisfactory for any reason, Lessee shall make any
claim on account thereof solely against the manufacturer or seller and
no such occurrence shall relieve Lessee of any of its obligations
hereunder. Lessor hereby appoints and constitutes Lessee its agent and
attorney-in-fact during the term of this Lease to assert and enforce
from time to time, in the name and for the account of Lessor and
Lessee, as their interests may appear, but in all cases at the sole
cost and expense of Lessee, whatever claims and rights Lessor may have
as owner of the Equipment against any suppliers, manufacturers or
contractors in respect thereof; provided, however, that Lessor, in its
sole discretion, may at any time and on a case-by-case basis revoke
said appointment of Lessee as Lessor's agent and attorney-in-fact, and
thereafter assert directly such claims and rights it may have as
owner, but again at the sole cost and expense of Lessee. Any recovery
in cash or cash equivalent under such warranty shall be made payable
jointly to Lessee and Lessor. At Lessor's option, all cash proceeds or
equivalent thereof from such warranty recovery shall be used to repair
or replace the Leased Equipment.
(b) Inability of Lessee to use the Equipment due to any reason including,
without limitation, any defect in or unfitness of the Equipment, any
action by any governmental authority (including, without limitation,
legislative, executive, administrative or judicial bodies) or any
action by an independent supervisory agency, shall not relieve Lessee
of the obligation hereunder to pay rentals for the full term of this
Lease therefor, once the Equipment has been accepted or presumed
accepted by Lessee under paragraph 5 hereof.
15. INDEMNIFICATION BY LESSEE.
(a) Lessee covenants and agrees to indemnify, save harmless and defend
Lessor, all officers, agents, and employees of Lessor, the parent
companies and subsidiary companies of Lessor, their officers, agents
and employees, and the manufacturers and distributors of the Leased
Equipment, including but not limited to McNeilus Truck and
Manufacturing,
Inc., a Minnesota corporation (all hereinafter collectively called
"Indemnitees") from and against any and all, losses, damages, fees,
penalties, expenses, and injuries and from and against any and all
claims, suits, actions, or legal proceedings of any kind brought
against Indemnitees, or any of them for or on account of any person or
persons, corporation or corporations, or on account of any injuries
received or sustained by any person or persons in any manner, directly
or indirectly caused by, incident to or growing out of the actual or
alleged use, operation, or maintenance of the Leased Equipment between
the time of delivery thereof to Lessee and the time of surrender
thereof by Lessee to Lessor for disposition, including without
limitation, traffic violations. Lessee further agrees to take upon
itself the settlement of all claims and the defense of any suit or
suits or legal proceedings of any kind brought to enforce such claim
or claims, and to pay all judgments entered in such suit or suits and
all costs, attorneys' fees or other expenses. Such settlements and
defense efforts shall be conducted by a reputable attorney employed by
Lessee and reasonably acceptable to Lessor. In any instance where
said claims in any way affect an Indemnitees' interests under this
Agreement, Lessee shall not consummate any settlement without the
affected Indemnitees' prior written consent. Notwithstanding the
foregoing, Lessor shall be entitled at any time, at its own cost and
expense (but at Lessee's cost and expense if Lessee is not adequately
representing or, because of a conflict of interest, may not adequately
represent, any interest of Lessor), to participate in the defense
and/or settlement of any such claims, suits or legal proceedings and
to be represented by attorneys of its own choosing. If Lessor elects
to participate in such defense, Lessee shall cooperate with Lessor in
the conduct thereof.
(b) The indemnification, covenants, and other obligations contained in
paragraph 15(a) shall continue in full force and effect
notwithstanding the termination of this Agreement or the surrender of
the Leased Equipment by Lessee.
(c) THE PROVISIONS OF THIS PARAGRAPH 15 COMPREHEND, INCLUDE, AND COVER,
BUT ARE NOT LIMITED TO, CLAIMS HOWEVER ARISING, WHETHER BY REASON OF
NEGLIGENCE, BREACH OF WARRANTY, DEFECT IN MANUFACTURE, MAINTENANCE, OR
OTHERWISE, ON THE PART OF ANY ONE OR MORE OF THE INDEMNITEES, OR ANY
OTHER PARTY TO THIS LEASE, EVEN THOUGH STRICT LIABILITY IS CLAIMED.
(d) With the exception of Lessor, the above named Indemnitees are intended
as third-party beneficiaries to this Lease. By entering into the
covenants to indemnify in paragraph 15(b), Lessee intends to benefit
all Indemnitees. Lessee's agreement to so indemnify is given in
consideration for the agreement by Lessor to enter into this Lease.
Lessee understands and agrees that, with the exception of Lessor, all
above named Indemnitees have no liability or obligation to Lessee
under the terms of this Lease and that said Indemnitees are named in
this Lease solely as beneficiaries of Lessee's covenants to indemnify
assumed in this paragraph 15.
(e) The indemnification contained in paragraph 15(a) shall cover all
costs and expenses incurred by Indemnitees in connection with an
indemnification claim including, without limitation, attorney's fees.
16. SECURITY. As security for the prompt and full payment of the rent, and the
faithful and timely performance of all provisions of this Lease, and any
extension or renewal thereof, on its part to be performed, Lessee has
pledged and deposited with Lessor the amount or amounts set forth in the
schedule. In the event any default shall be made in the performance of any
of the covenants on the part of Lessee herein contained with respect to any
items of Equipment, Lessor shall have the right, but shall not be
obligated, to apply any or all of said security to the curing of such
default. Any such application by Lessor shall not be a defense to any
action by Lessor arising out of said default; and, upon demand, Lessee
shall restore said security to the full amount or amounts set forth in the
schedule. Upon the expiration, or earlier termination of this Lease, or
any extension or renewal thereof, provided Lessee has paid all of the rent
herein called for and fully performed all of the other provisions of this
Lease on its part to be performed, Lessor will return to Lessee any then
remaining balance of said security.
17. DEFAULT. If Lessee with regard to any item or items of Equipment fails to
pay any rent or other amount herein provided within fifteen (15) days after
the same is due and payable, or if Lessee with regard to any item or items
of Equipment fails to observe, keep or perform any other provision of this
Lease required to be observed, kept or performed by Lessee, or if Lessee
commits or omits any act which Lessor reasonably determines to impair
Lessee's prospect of making payments or performing any of the other
covenants required by Lessee hereunder, Lessor shall have the right to
exercise any one or more of the following remedies:
(a) To declare the entire amount of rent hereunder immediately due and
payable as to any or all items of Equipment, without notice or demand
to Lessee.
(b) To sue for and recover all rents, and other payments, then accrued or
thereafter accruing, with respect to any or all items of Equipment.
(c) To take possession of any or all items of Equipment, without demand or
notice, wherever the same may be located, without any court order or
other process of law. Lessee hereby waives any and all damages
occasioned by such taking of possession. Any said taking of possession
shall not constitute a termination of this Lease as to any or all
items of Equipment unless Lessor expressly so notifies Lessee in
writing.
(d) To terminate this Lease as to any or all items of Equipment.
(e) To pursue any other remedy at law or equity.
Notwithstanding any said repossession, or any other action which Lessor
may take, Lessee shall be and remain liable for the full performance of all
obligations on the part of Lessee to be performed under this Lease. All
such remedies are cumulative and may be exercised concurrently or
separately.
18. BANKRUPTCY. Neither this Lease nor any interest therein is assignable or
transferable by operation of law. If any proceeding under the Bankruptcy
Act, as amended, is commenced by or against the Lessee, or if the Lessee is
adjudged insolvent, or if the Lessee makes any assignment for the benefit
of its creditors, or if a writ of attachment or execution is levied on any
item or items of the Equipment and is not released or satisfied within ten
(10) days thereafter, or if a receiver is appointed in any proceeding or
action to which the Lessee is a party with authority to take possession or
control of any item or items of the Equipment, Lessor shall have and may
exercise any one or more of the remedies set forth in paragraph 17 hereof;
and this Lease shall, at the option of Lessor, without notice, immediately
terminate and shall not be treated as an asset of Lessee after the exercise
of said option.
19. CONCURRENT REMEDIES. No right or remedy herein conferred upon or reserved
to Lessor is exclusive of any other right or remedy herein or by law or
equity provided or permitted; but each shall be cumulative of every other
right or remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise [illegible] may be enforced concurrently therewith or from time to
time.
20. LESSOR'S EXPENSES. Lessee shall pay Lessor all costs and expenses, including
attorneys' fees, incurred by Lessor in exercising any of its rights or
remedies hereunder or enforcing any of the terms, conditions, or provisions
hereof.
21. ASSIGNMENT. WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT
(a) ASSIGN, TRANSFER, PLEDGE OR HYPOTHECATE THIS LEASE, THE EQUIPMENT OR ANY
PART THEREOF, OR ANY INTEREST THEREIN, OR (b) SUBLET OR LEND THE EQUIPMENT
OR ANY PART THEREOF, OR PERMIT THE EQUIPMENT OR ANY PART THEREOF TO BE USED
BY ANYONE OTHER THAN LESSEE OR LESSEE'S EMPLOYEES. CONSENT BY LESSOR TO ANY
OF THE FOREGOING PROHIBITED ACTS APPLIES ONLY IN THE GIVEN INSTANCE AND IS
NOT A CONSENT TO ANY SUBSEQUENT LIKE ACT BY LESSEE OR ANY OTHER PERSON.
SUBJECT ALWAYS 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.
22. LESSOR'S ASSIGNMENT. All rights of Lessor hereunder may be assigned,
pledged, mortgaged, transferred, or otherwise disposed of, either in whole
or in part, without notice to Lessee. If Lessor assigns this Lease or the
rentals due or to become due hereunder or any other interest herein, whether
as security for any of its indebtedness or otherwise, no breach or default
by Lessor hereunder or pursuant to any other agreement between Lessor or
Lessee, should there be one, shall excuse performance by Lessee of any
provision hereof, and Lessee hereby waives and is stopped from asserting any
defense, legal or equitable, pursuant to this Lease or otherwise, against
any assignee hereunder. No such assignee shall be obligated to perform any
duty, covenant or condition required to be performed by Lessor under the
terms of this Lease.
It is hereby agreed that the rights of the Lessee are subject and
subordinate to any lien given by Lessor to secure the purchase price of the
Equipment Leased hereby. Lessee acknowledges that any assignment or transfer
by Lessor shall not materially change Lessee's duties or obligations under
this Lease nor materially increase, the burdens or risks imposed on Lessee.
Lessee agrees that Lessor may assign or transfer this Lease or Lessor's
interest in the Equipment even if said assignment or transfer could be
deemed to materially affect the interests of Lessee.
23. OWNERSHIP. The Equipment is, and shall at all times be and remain, the sole
and exclusive property of Lessor; and the Lessee shall have no right, title
or interest therein or thereto except as expressly set forth in this Lease.
24. PERSONAL PROPERTY. The Equipment is, and shall at all times be and remain,
personal property notwithstanding that the Equipment, or any part thereof,
may now be, or hereafter become, in any manner affixed or attached to, or
imbedded in, or permanently rested upon, real property or any building
thereon, or attached in any manner to what is permanent as by means of
cement, plaster, nails, bolts, screws, or otherwise.
25. LATE PAYMENTS. Should Lessee fail to pay any part of the rent herein
reserved or any other sum required to be paid by Lessee to Lessor later than
10 (10) dates after the due date thereof, Lessee shall pay unto the Lessor a
late charge equal to 5% of such delinquent payment.
26. OFFSET. Lessee hereby waives any and all existing and future claims, and
offsets, against any rent or other payments due hereunder; and agrees to pay
the rent and other amounts hereunder regardless of nay offset or claim which
may be asserted by Lessee or on its behalf.
27. NON WAIVER. No covenant or condition of this 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 the same may apply, and, until complete
performance by Lessee of said covenant or condition, Lessor shall be
entitled to invoke any remedy available to Lessor under this Lease or by law
or in equity despite said forbearance or indulgence.
28. ADDITIONAL DOCUMENTS. If Lessor shall so request, Lessee shall execute and
deliver to Lessor such documents as Lessor shall deem necessary or desirable
for purposes of recording or filing to protect the interest of Lessor in the
Equipment.
29. ENTIRE AGREEMENT. This Lease together with the schedule and any statements,
certificates and addendums executed in connection with the execution of this
Lease and/or schedule constitutes the entire agreement between Lessor and
Lessee; and they shall not be amended, altered or changed except by a
written agreement signed by the parties hereto. Each schedule shall
constitute a separate lease incorporating the terms of this Master Lease. To
the extent required to satisfy section 7701(h) of the Internal Revenue Code,
the agreement also includes documents relating to the Lessor's financing of
acquisition of Equipment.
30. NOTICES. All notices under this Lease shall be in writing. Service of all
notices under this Lease shall be sufficient if given personally or mailed
to the party involved at its respective address herein set forth, 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 postage prepaid.
31. GENDER; NUMBER. Whenever the context of this Lease requires, the neuter
gender includes the masculine or feminine, and the singular number includes
the plural; and whenever the word "Lessor" is used herein, it shall include
all assignees of Lessor. If there is more than one Lessee named in the
Lease, the liability of each shall be joint and several.
32. TITLES. The titles to the paragraphs of this Lease are solely for the
convenience of the parties, and are not an aid in the interpretation of the
instrument.
33. TIME. Time is of the essence of this Lease and each and all of its
provisions.
34. GOVERNING LAW. The laws of the State of Minnesota shall govern all questions
or disputes relating to the interpretation, performance, validity,
enforcement or effect of this Agreement.
35. STATUTE OF LIMITATIONS. Any action by Lessee against Lessor for any default
by Lessor under this Lease, including breach of warranty or indemnity, shall
be commenced within one (1) year after any such cause of action accrues.
36. FINANCE LEASE. Lessor and Lessee agree that this Lease is a "Finance Lease"
as defined in Section 336.2A-103 of the Minnesota Statutes (1989). The
Lessor has not selected, manufactured or supplied the Equipment. The Lessor
acquired the Equipment in connection with this Lease. The Lessee has
received a copy of the contract evidencing the Lessor's purchase of the
Equipment on or before the signing of the Lease contract or the Lessee has
approved of the contract evidencing the Lessor's purchase of the Equipment.
Lessee accepts the provisions of said contract and agrees to be bound by all
waivers of warranties and limitations of damages recoverable from the
manufacturer of said Equipment.
37. JURY TRIAL WAIVER BOTH PARTIES TO THIS AGREEMENT HEREBY WAIVE ANY AND
ALL RIGHT TO ANY TRIAL BY JURY IN ANY ACTION OR PROCEEDINGS DIRECTLY
OR INDIRECTLY HEREUNDER.
38. ASSIGNEE NOTIFICATION Lessee acknowledges and agrees that all of the
rights under the Lease in and to the Leased Property, including
Lessee's right to possession of the Leased Property, are subordinate,
junior, and subject to the rights and claims of any assignee of
Lessor's rights under the Lease and any such Assignee's successors and
assigns (the "Assignee") against the Leased Property under any
instrument, lease, mortgage or title retention or other security
agreement, whether now existing or hereafter created, including but
not limited to the right of the Assignee to take possession of the
Leased Property. Lessee consents and agrees to the assignment to any
Assignee of (I) all monies due or to become due to Lessor under the
lease and (II) all rights and privileges of Lessor under the Lease.
Lessee promises and agrees to settle all claims against Lessor
directly with Lessor and hereby waives, relinquishes, and disclaims as
to the Assignee all counterclaims, rights of set-off, and defenses
Lessee may have against Lessor, including any right to withhold
payment of or to refrain from paying, any monies that are due or to
become due under the terms of the Lease, except that Lessee shall not
be liable to Assignee for monies paid to Lessor in accordance with the
terms of the Lease prior to the time Assignee notifies Lessee to pay
Assignee directly. Thereafter, the Lessee agrees to pay directly to
the Assignee all monies owing under the Lease. Lessee represents that,
except as stated in the Lease, it has not prepaid any rentals or other
monies owing under the Lease, and no deposits have been made. Lessee
agrees and acknowledges that Assignee will not assume and will not
have any obligations or liabilities under the Lease to Lessee or to
any other person by reason of any aforementioned assignment or
otherwise. Lessee agrees that it will not, without Assignee's prior
written consent: (I) prepay rentals or other monies owing under the
Lease, (II) modify or amend the Lease, (III) assign or sublet its
rights under the Lease or in the Leased Property, (IV) exercise any of
its rights under the Lease which are exercisable only with the consent
of Lessor, or (V) return the Leased Property to Lessor, Lessee hereby
acknowledging and agreeing to hold the Leased Property as bailee for
Assignee for the purpose of perfecting Assignee's lien, title
retention and/or security interest in the Leased Property as against
Lessor and its creditors. Lessee represents that it has no purchase or
renewal option concerning the Leased Property other than as stated in
the Lease. Lessee agrees that, at the same time it sends to Lessor
any notice under the Lease, it will send a copy thereof to Assignee at
such Addresses as Assignee may specify from time to time in writing.
THIS AGREEMENT SHALL NOT BE EFFECTIVE UNTIL APPROVED AND SIGNED AT OFFICE
OF LESSOR IN MINNESOTA.
NO ORAL AGREEMENT, GUARANTEE, PROMISES, REPRESENTATION OR WARRANTY SHALL
BE BINDING. IF ANY CHANGES ARE TO BE MADE IN THIS LEASE AGREEMENT, THEY
SHALL BE IN WRITING SIGNED BY THE PARTIES HERETO.
IN WITNESS WHEREOF the parties hereto have executed these presents the
day and year first above written.
OSHKOSH/McNEILUS FINANCIAL
SERVICES PARTNERSHIP LESSOR LESSEE
BY:OSHKOSH/McNEILUS FINANCIAL Ready Mix, Inc.
SERVICES, INC., its general partner 3430 East Flamingo Road
P.O. Box 70, County Road 34 East Las Vegas, NV 89121
Dodge Center, MN 55927
By: /s/ Jon Olson By: /s/ Robert R. Morris
---------------------------- ------------------------
Name: Jon Olson Name: Robert R. Morris
----------------------------- ------------------------
Title: Leasing Manager Title: President
----------------------------- -------------------------
CERTIFICATE OF RESOLUTION TO
Oshkosh/McNeilus Financial Services Partnership
I, Clint Tryon, Secretary of Ready Mix, Inc., incorporated in the State of
Nevada do hereby certify that the following resolutions have been duly adopted
by the Board of Directors of that corporation
[x] at a meeting of said Board and duly called held June 17, 2002
OR
[ ] by unanimous written action of said Board, as allowed by statute, effective
_________________ and that such resolutions have not been amended, modified or
otherwise altered and are in full force and effect on the date hereof:
RESOLVED, That any "One" of the following:
("one" or "two")
<Table>
<Caption>
Name and Title
Robert R Morris , President /s/ Robert R. Morris
- --------------------------------------------------- ----------------------
ALAN TERRIL , Vice President /s/ Alan Terril
- --------------------------------------------------- ----------------------
Clint Tryon , Secretary /s/ Clint Tryon
- --------------------------------------------------- ----------------------
Clint Tryon , Treasurer /s/ Clint Tryon
- --------------------------------------------------- ----------------------
- ---------------------------------------------------, Other ----------------------
</Table>
hereby is or are authorized, for and on behalf of this corporation, at any time
or from time to time to Lease Equipment, machinery, furniture, fixtures, and
other property, personal or mixed from Oshkosh/McNeilus Financial Services
Partnership,(the "Lessor"), in such quantities, for such times, at such rentals,
and upon such terms as he, she or they may see fit, to execute and deliver Lease
agreements to evidence the same, to assign to said Lessor this corporations's
rights to purchase any Equipment so to be Leased, to execute and to exercise
options to renew any such Leases or purchase any Leased Equipment, to accept
delivery of said Leased Equipment, to modify or extend the terms of any of the
foregoing, to give guaranties or other undertakings to said Lessor, to execute
financing statements covering such Leased Equipment, and to do and perform such
acts and things, to sign such instruments, documents, agreements and
certificates and to take such other steps as may be necessary, appropriate or
desirable to carry out the intent of this resolution, all of the foregoing to be
done in such form and on such terms and conditions as the officer or officers
performing or executing the same shall approve, such approval to be conclusively
evidenced by the performance or execution thereof.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of said corporation this 10th day of December 2002.
/s/ Clint Tryon
----------------------------------------
Secretary
CORPORATE TRUE LEASE GUARANTY
Oshkosh/McNeilus Financial Services Partnership,
County Road 34 East, P.O. Box 70 Dodge Center, MN 55927
To induce you to enter into a Lease, with you as Lessor and Ready Mix, Inc. as
Lessee, which Lease was executed by Lessee on January 25, 2003 and covers the
Equipment described in the Lease and any Schedule now or hereafter made a part
thereof but without in any way binding you to enter into the Lease, the
undersigned, for good and valuable consideration, does hereby guarantee to you,
your successor and assigns, the due, regular and punctual payment of the total
rental as provided in the Lease, and any Schedules now or hereafter made a part
thereof, whether it represents an original balance, a casualty or stipulated
loss value, a balance reduced by part payment, or a deficiency after sale of
Equipment or otherwise and does hereby further guarantee that the Lessee will
faithfully perform and fulfill all agreements and obligation provided in the
Lease at the time and in the manner therein provided. Undersigned does hereby
further guarantee to pay on demand all losses, costs, attorney's fees or
expenses which may be suffered by you by reason of Lessee's default or default
of the undersigned. The undersigned agrees that nothing hereby shall be deemed
to render this Guaranty in any way conditional, or to require you first to seek
or exhaust any remedy against Lessee, its successors, or assigns, or any other
person obligated or liable under said Lease, this Guaranty or any other
instrument; and it is agreed that you may, upon default of Lessee, or at any
time thereafter, make demand upon and receive payment of any sum or performance
of any covenant or agreement hereunder guaranteed by the undersigned, with or
without notice or demand for payment or performance by Lessee, its successors or
assigns, or any other person. Undersigned waives any and all impairment of its
rights (including, but not limited to, the release of any obligor or collateral
or any part thereof (with or without substitution), failure to perfect or
maintain the perfection of any interest in any collateral or property, or
failure to have title to the Lease Equipment) whether intentional or negligent,
by operation of law or otherwise.
Notice of acceptance of the guaranty and of any default by the Lessee or
any other person is hereby waived. Presentment, protest, demand, and notice of
protest, demand and dishonor of the Lease, and the exercise of possessory,
collection or other remedies on the Lease, are hereby waived. Notice of adverse
change in Lessee's financial condition or of any other fact which might
materially increase the risk of the undersigned is also waived, and the
undersigned agrees that you shall not be required to first foreclosure, proceed
against, or exhaust any collateral or security for any indebtedness or
obligation hereby guaranteed, before requiring the undersigned to pay the full
amount of liability hereby created. Suit may be brought and maintained against
the undersigned, at your election, without joinder of the Lessee or any other
person as parties thereto. The extension of the time of payment or the renewal
of the Lease or the extension of the time of performance of agreements or the
expansion of the Equipment covered by the Lease or any other indulgence may be
granted to the Lessee, its successors or assigns, or any other person, without
notice to the undersigned, and all settlements, compromises, accounts stated and
agreed balances made in good faith between the Lessee, its successors and
assigns and you shall be binding upon and shall not affect the liability of the
undersigned. The undersigned's obligations hereunder shall in no way be affected
or impaired by (i) Lessee's voluntary or involuntary bankruptcy, assignment for
the benefit of creditors, reorganization or similar proceedings affecting the
Lessee or any of its assets, and (ii) the release of Lessee from any of its
agreements contained in the Security Agreements by operation of law or
otherwise. THE UNDERSIGNED AGREES NOT TO SEEK CHANGE IN VENUE FROM ANY
JURISDICTION AND COURT IN WHICH ANY ACTION, PROCEEDING OR LITIGATION IS BROUGHT
BY YOU. As used in this Guaranty, the word "person" shall include any
individual, corporation, or partnership, and refers to the undersigned and to
anyone absolutely, contingently, partly or wholly liable for payment and/or
performance of the Lessee's obligations being guaranteed hereunder. This
Guaranty and each of its provisions may only be waived, modified, varied,
released, terminated or surrendered, in whole or in part, by a duly authorized
written instrument signed by you. No failure by you to exercise your rights
hereunder shall give rise to any estoppel against you, or excuse the undersigned
from performing hereunder. Your waiver of any right to demand performance
hereunder shall not be waiver of any subsequent or other right to demand
performance hereunder.
The undersigned further agrees that, without notice to the undersigned,
this Guaranty may be assigned at any time or from time to time, in whole, or in
part, to any assignees of Lessor's interest in the said Lease. This Guaranty
shall bind the undersigned's successors and assigns and the benefits thereof
shall extend to and include your successors and assigns. In the event of default
hereunder, you may at any time inspect undersigned's records, or at your option,
undersigned shall furnish you with a current independent audit report.
If any provisions of this Guaranty are in conflict with any applicable
statute, rule or law, then such provisions shall be deemed null and void to the
extent that they may conflict therewith, but without invalidating any other
provisions hereof. Each signatory on behalf of a corporate guarantor warrants
that he had authority to sign on behalf of such corporation and by so signing,
to bind said guarantor corporation hereunder.
The laws of the State of Minnesota shall govern all questions or disputes
relating to the interpretation, performance, validity, enforcement or effect of
this Agreement.
IN WITNESS WHEREOF, this Guaranty is executed the day and year above written.
Guarantor: Meadow Valley Corporation
By: /s/ Clint Tryon
-------------------------------
Name: Clint Tryon
-------------------------------
Title: Sec/Treas.
-------------------------------