EXHIBIT 10.19
▇.▇. ▇▇▇▇▇▇▇▇ COMPANY
LONG TERM LEASE AGREEMENT
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Genstar Container Corporation, either on its own behalf or as agent for others
(hereinafter referred to as "Genstar") a U.S. corporation, with offices at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇.▇.
▇▇▇▇▇▇▇▇ Company (hereinafter referred to as "Lessee"), a Delaware corporation,
with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ hereby
enter into this Long Term Lease Agreement this 1st day of August, 1997.
A. EQUIPMENT COVERED
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This Agreement concerns 200 x 40 foot high cube (HC) refrigerated containers
(the "containers") designated by a variety of prefixes. All containers meet
full I.S.O. standards. Of these containers 100 will be equipped with Thermo
King Model # M37.6 machinery and the balance of 100 units will be equipped
with Thermo King Model # M37.3 machinery.
B. LEASE/BUILD-UP PERIOD
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(i) Lease Period: All containers shall be leased by Lessee from October 1,
1997 through September 30, 2005 at the rate applicable under Paragraph C. The
Agreement shall be renegotiated 30 days prior to September 30, 2005.
(ii) Build-Up Period: Any containers interchanged prior to November 1, 1997
shall be leased from the date of its interchange through October 31, 2005 at
the per diem rate set out in Paragraph C.
(iii) Early Return: Notwithstanding the above, the Lessee may, subject to 60
days written notice before the yearly anniversary date, opt to terminate any
or all of the containers on lease under this Agreement after either three,
four, five, six, seven or eight years, subject to retroactive rate increases
as set out in Paragraph C. effective from the date of initial interchange to
the date of redelivery of each container.
Such early return option shall lapse unless exercised in accordance with the
above procedure.
In the event the Agreement is not renegotiated, the wind-down terms of this
Agreement will apply, as defined in Paragraph G.
(iv) The containers will be on lease for a minimum of three years.
PLEASE INITIAL:
LESSEE_____ LESSOR_____
2
C. PER DIEM RENTAL CHARGES
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The per diem billing rate for the containers are as follows:
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EQUIPMENT TYPE Per Diem
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40 Foot HC Refrigerated US $9.39
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In the event that a container is redelivered in accordance with paragraph B.
(iii), Lessee will be billed the difference between the per diem billing rate
and the per diem rate below, counting from the date of the initial
interchange to the date of redelivery of each container. Billing will
commence from the date that the containers are accepted at the Union Pacific
Ramp in Los Angeles except that freedays will be granted until the containers
are available for pick-up in Chicago.
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EQUIPMENT TYPE YEAR: THREE FOUR FIVE SIX SEVEN EIGHT
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40 Foot HC Refrigerated US$ 11.59 11.05 10.59 10.18 9.83 9.39
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D. CONTAINER DELIVERY
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The containers will be delivered in the following manner: Genstar will be
responsible to deliver the containers to the Union Pacific Railroad's
intermodal ramp in Los Angeles. Lessee will be responsible to transport the
containers from Los Angeles to the Union Pacific Ramp in Chicago. Genstar
will be responsible to deliver the containers from the Union Pacific's
Chicago Ramp to Genstar's container yard in Chicago from which they will be
picked up by Lessee..
E. LIFT-ON AND LIFT-OFF CHARGES (HANDLING)
---------------------------------------
Genstar will absorb the lift-on charge for all deliveries and a lift-off
charge for all redeliveries.
The lift-on charge shall include a pre-trip inspection and the lift-off
charge shall include a post-trip inspection pursuant to Exhibit [C] attached
hereto.
Any changes to the above charges are subject to sixty (60) days notice from
Genstar to Lessee.
F. TERMINATION FEE
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SEE EXHIBIT B.
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G. FLOOR MODIFICATION
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Each container will be modified to accommodate a sheet of "Ramada" netting to
be laid over the t-bar floor and secured as per the instructions of Lessee.
Lessor offers no warranty as to the suitability of this modification for the
task intended and accepts no liability for any damage to the cargo carried or
incidental damage or contamination of any type arising as a result of the
modification. The per diem quoted in section "C" will include the initial
labor and material costs of
PLEASE INITIAL:
LESSE ______ LESSOR________
3
the modification. The Lessee will be responsible for any subsequent costs for
replacement, or repair.
H. WIND-DOWN
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In the event that this Agreement is not renegotiated prior to September 30,
2005, Lessee shall redeliver the containers to Genstar over a 3 month wind-
down period beginning October 1, 2005 . All terms and conditions of this
Agreement will apply during the 3 month wind-down period. If any container is
not redelivered prior to the end of the 3 month wind-down period, then the
redelivery terms and conditions of the Agreement and the terms and conditions
set forth in the standard Genstar Lease Agreement attached hereto as Exhibit
[A] will apply. A per diem rental charge as stated below shall be effective
from the end of said 3 month wind-down period until the date each such
container is redelivered.
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40 Foot HC Refrigerated
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I. REDELIVERY
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Exhibit (B) specifies the terms and conditions of redelivery together with
any drop-off charges that will be assessed. Upon ninety (90) days notice to
the Lessee from Genstar, redelivery locations and drop-off charges may be
amended.
J. DAMAGED EQUIPMENT/OFF-HIRE PROCEDURE
------------------------------------
Any damage sustained by a container while it is on lease to Lessee will be
the responsibility of Lessee, excluding normal wear and tear as determined by
the then current standards of the Institute of International Container
Lessors or owner's manual. Damage to the container which does not constitute
normal wear and tear and could have been prevented by routine washing,
routine lubrication, spot painting or other normal repair maintenance shall
be for Lessee's account. Damages and/or alterations to the containers
affecting security, water tightness, weatherproof qualities, air flow,
mechanical and/ or electrical function of integral components and/or
affecting the integrity of design or structure, or regulatory, classification
or certification requirements as applicable, or affecting the inside or
outside dimension or cubic content of any container, whether or not such
damages and/or alterations add thereto or subtract therefrom, or damages
and/or alterations which may threaten the safety of persons or property,
shall not constitute normal wear and tear, and Lessee shall be liable
therefor.
Any containers redelivered to an authorized depot will be off-hired on the
date of physical turn-in.
A damaged container shall be approved for repair within 10 days following
receipt of the damage estimate. In the event that the repair authorization is
not received within 10 days following receipt of the estimate, Genstar or its
designated agent may proceed with repairs on behalf of Lessee.
PLEASE INITIAL:
LESSEE _____ LESSOR ____
4
K. MAINTENANCE
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a) Lessee shall at its own expense while each container is on lease hereunder
maintain each container in good and efficient working order and keep it fully
and properly repaired.
b) Without limitation upon the foregoing, Lessee shall:
(i) Ensure that all such instructions and recommendations in regard to
operation, maintenance, pre-trip inspections and periodic service of the
container as proscribed by the IICL 4 repair criteria, in manuals or other
documents provided to Lessee at the time of delivery, and other instructions
supplied by Genstar thereafter or displayed upon any container are strictly
observed.
(ii) Ensure that all maintenance and repair work is carried out by suitably
skilled labor and under competent supervision and (where applicable) by the
use of components or parts and materials of a standard and type equivalent to
the original;
(iii) Notify Genstar promptly of any accident or breakdown which will involve
major renovation or repair work and in such a case permit Genstar or any
expert on its behalf to inspect the damage and consult with Genstar in regard
to the manner in which the necessary work is to be carried out.
c) Lessee shall upon reasonable notice permit Genstar's representatives or
agents to conduct field inspections of the containers .
d) Lessee shall make no changes or alterations or modifications to any
container unless the making of the same shall first have been agreed in
writing by Genstar.
e) Lessee shall keep the color, identification marks and Genstar's logo upon
each container in good and clean condition and shall not cause or permit
the same to be deleted, altered or supplemented in any way, except with the
written consent of Genstar. Genstar hereby consents to Lessee placing its
"▇▇▇▇" ▇▇▇▇ upon each container. Application and material costs to be
included in the per diem quoted in section "C" Lessee to be responsible the
costs associated with the and removal of the "▇▇▇▇" MARKS.
L. REPLACEMENT VALUE IN THE EVENT OF TOTAL CONSTRUCTIVE OR
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Physical Loss
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(i) In the event of total constructive or physical loss to a container,
Lessee shall pay Genstar the depreciated replacement value of the container.
The depreciated replacement value per container is determined by
depreciating the replacement value stated below at a rate of 5% per annum to
a maximum depreciation of 40% (i.e. a minimum residual value of 60%),
commencing from the date Genstar first placed the container on lease after
manufacture.
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40 Foot HC Refrigerated US$ 30,013.00
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PLEASE INITIAL:
LESSE ______ LESSOR_______
5
(ii) Salvage Rights (Total Loss While On Lease)
In the event of total constructive or physical loss of a container while on
lease to Lessee, salvage rights shall be retained by Lessee. Any customs,
sales, transfer, turn-over, value added, excise or other taxes which may be
applicable shall be borne by Lessee.
Lessee shall, on a best effort basis, remove from the container, at its
expense, all markings and lettering pertaining to Genstar and its ownership
of the container (including customs certificate and plate of approval).
(iii) Salvage Rights (Total Loss At Genstar Depot)
In the event of total constructive loss of a container at a Genstar depot,
Genstar will retain all salvage rights.
All terms and conditions as specified in Paragraph K.(ii) shall apply. Lessee
shall have up to ten (10) days to dispose of the container without incurring
additional charges, after which Genstar may instruct the depot to charge
customary storage charges to the Lessee. All handling-out and neutralization
charges (if applicable) shall be borne by Lessee.
(iv) Should Lessee later determine that an event of loss did not occur,
Genstar will reimburse the previously paid replacement value less any
per diem due from the date of the original occurrence until the
reinstatement date plus an administrative fee of US$ 100.00.
(v) In the event that the contract is renewed at the end of the 8 year
lease term the residual value and depreciation schedule will be re-
negotiated to reflect the remaining life of the equipment.
M. BILLING AND PAYMENT
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Genstar will ▇▇▇▇ Lessee per diem charges monthly in arrears. Lessee will
remit a wire payment to Genstar within thirty (30) days after the date of the
invoice.
N. INSURANCE
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In addition to and in clarification of the insurance requirements described
in Exhibit [A], Lessee must carry insurance with a suitably financially rated
and reputable carrier or carrier's that is/are mutually acceptable to both
parties. Lessee will provide Genstar with a copy of the current insurance
policy. This shall include annual renewal policies and nominate Genstar as
additional payee and co-insured.
O. OTHER LIEN
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PLEASE INIITAL:
LESSE ______ LESSOR _____
6
Lessee shall not permit any lien, encumbrance, charge or similar (security)
right (a "lien") to be created, vested or continued in any container or part
thereof, which is the subject of this Agreement, without prior written
approval of Genstar. Lessee will compensate Genstar upon first request for
all costs, charges, expenses, etc. (including legal fees), payable by Genstar
to have any container or part thereof released from any such lien. Lessee
will promptly, at its own expense, take such action as may be necessary to
discharge or remove any such lien if the same shall arise at any time.
P. LEASING PROCEDURE
-----------------
The terms and conditions set forth in the standard Genstar Lease Agreement
attached hereto as Exhibit (A) are part of this Agreement and apply to all
containers leased under this Agreement. In the event of any conflict
between the terms set forth in the standard Lease Agreement and items A. - Q.
above, then the latter shall prevail.
Some of the Equipment is leased by Genstar from an affiliate of Genstar under
a head-lease. The term of this Lease for that Equipment will be limited to
the term of the head-lease unless Genstar makes arrangements (which Genstar
agrees to make) to maintain lessee's right of quiet possession under Section
6.a. of Exhibit A.
A standard Genstar Lease Agreement will not be issued to and signed by Lessee
covering every container leased by Lessee .
The parties hereto have executed this Agreement to be effective on August
1st, 1997.
GENSTAR CONTAINER CORPORATION LESSEE
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- -------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Vice President
---------------------- ----------------------------
Date: ______________________ Date: ____________________________
PLEASE INITIAL:
LESSEE ______ LESSOR _______
7
EXHIBIT A
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1. DELIVERY OF EQUIPMENT
Lessee acknowledges receipt of the equipment leased hereunder in good
condition as evidenced conclusively by its execution of the equipment
interchange prescribed by Lessor. Lessee agrees to return the equipment to
Lessor in as good condition as received, normal wear and deterioration
excepted, and obtain an equipment interchange from Lessor upon such return
identifying and acknowledging any changes in the condition of the equipment
subsequent to its delivery to Lessee. Changes which could have been
prevented by normal maintenance shall not constitute normal wear and
deterioration.
2. RENTAL, OTHER CHARGES AND DURATION
a. Lessee agrees to pay the rental charges in the amount set forth on the
face hereof for all equipment described thereon from the day such equipment
is delivered and/or interchanged to Lessee until the day such equipment is
returned to Lessor. However, if the equipment is not returned in good
condition, Lessee agrees to pay for the cost of any repairs and rental
charges pursuant to Paragraph 3.
b. Lessee shall return all equipment to Lessor's terminal at the point(s) of
termination designated on the face hereof, or in the event Lessor so
designates, to another terminal within the same port area. In the event
Lessor consents in writing to a drop-off of equipment by Lessee at a terminal
other than designated on the face hereof, Lessee agrees to pay Lessor the
drop-off charge shown on the Lessor's then current schedule of acceptability.
c. All service charges, including handling and transportation charges
incurred in transferring the equipment or charged by any bank or other
organization in connection with payment to Lessor as aforesaid, shall be paid
by Lessee.
d. All payments due to Lessor shall by payable in United States Dollars,
unless otherwise indicated on the face hereof, and shall be paid within
fifteen (15) days of the date of Lessor's invoice to Lessee at the address on
the face hereof. In the event Lessor's invoice is not paid when due, Lessor
may, without prejudice to any other remedy if may have, charge as additional
rental, a late charge at the rate of eighteen (18) percent per annum on the
unpaid balance.
e. In the event the Lessee is not a United States person (citizen or
resident of the United States, domestic partnership, domestic corporation or
any United States estate or trust), this lease shall terminate with respect
to a unit of equipment on the earlier of: (i) the redelivery of the equipment
pursuant to the terms hereof or (ii) one year and nine months from the On
Lease Date with respect to such unit of equipment.
PLEASE INITIAL:
LESSE ______ LESSOR _______
8
3. RISK OF LOSS AND DAMAGE
Lessee is liable to Lessor for all damage to or loss or destruction of the
equipment subsequent to delivery and prior to return by Lessor except that
caused by normal wear and deterioration. Normal wear and deterioration shall
not include damage by forklifts or other handling equipment.
a. Damage. In the event Lessee fails to repair damaged equipment prior to
returning it to Lessor, Lessor will present a repair estimate to Lessee's
local agent for acceptance and no equipment will be repaired until
authorization is given by Lessee. Lessee shall be liable to Lessor for the
cost of such repair and for the rental charges which shall continue until the
day on which such damaged equipment has been repaired and is fit for
subsequent rental. Lessee will, at Lessor's request, make payment of repair
costs direct to the repair company designated by Lessor.
b. Loss or Total Damage. In the event of loss, theft, or destruction of the
equipment or damage thereto which Lessor, in its sole discretion, shall
determine is not repairable, rental charges shall terminate upon receipt by
Lessor of written notice thereof from Lessee provided payment of the
replacement value for like equipment as shown on the face hereof is made to
Lessor not more than 30 days after receipt of such notice. If payment is not
made within 30 days, rental charges shall continue unabated until such
payment is received by Lessor. Rental and other payments by Lessee specified
hereunder shall not be applied to charges for the replacement value of
equipment unless so specified by Lessee.
4. OPERATION, MAINTENANCE AND REPAIR
a. Lessee shall use the equipment properly, and shall at its sole cost and
expense, maintain the equipment in good repair and safe operating condition.
Such maintenance shall include, but not be limited to the replacement of all
badly worn or broken parts with new parts of equivalent design and material,
as well as the abrasive cleaning, priming and top coating of all corroded
areas on a routine "as needed basis". Lessee shall be liable for any repairs
wrongly made, or of a quality inferior to Lessor's minimum acceptable
standard as set forth in the Repair Manual issued from time to time by the
Institute of International Container Lessors. Lessee shall be responsible
for removal of all debris and shoring from any containers leased hereunder
prior to their return to Lessor. Lessee shall be liable for all costs and
losses to Lessor arising out of Lessee's failure to maintain the equipment in
good condition or make such repairs or replace such parts as may be necessary
to maintain the equipment in good condition. If the foregoing is performed
by Lessor, the expenses relating thereto will be for the account of Lessee.
b. Lessee shall use the equipment in accordance with good operating
practices and shall comply with all loading limitations, handling procedures
and operating instructions prescribed by the Manufacturer and Lessor, which
include but are not limited to the latest applicable Regulations and
Recommendations of the International Organization of Standardization as well
as any applicable local regulations, and prevent usage which may damage or
shorten the life of the equipment including, without limitation, excessive
impact and unbalanced loading. Lessee shall not use the
PLEASE INITIAL:
LESSE ______ LESSOR _______
9
equipment for storage or transportation of goods which may damage the
equipment including, without limitation, unprotected corrosive substances,
poorly secured materials, or bulk commodities which may corrode, oxidize,
severely dent, puncture, contaminate, stain or damage the equipment. Lessor
understands that Lessee intends to transport bulk potatoes and other
agricultural commodities in the containers. Lessee is permitted to transport
such bulk agricultural commodities provided that Lessee complies to all other
terms and conditions of this agreement
c. Receipt or delivery of equipment or any other act by an agent or employee
of, or independent contractor engaged by Lessee shall be deemed to be the act
of Lessee and be binding upon Lessee.
▇. ▇▇▇▇▇▇'▇ equipment is identified by appropriate lettering and numbering
which Lessee agrees not to change or obliterate, except that at the written
request of Lessor. Lessee shall change or supplement such marks as Lessor
shall request. Lessee may, however, add other markings as may be required,
provided that the equipment so marked, when returned by Lessee to Lessor,
shall be free of all such markings and the surface in the same conditions as
prior to the addition of Lessee's markings. If Lessee fails to remove such
markings, Lessor shall remove such markings for the account of Lessee.
e. Lessee shall, at its expense, comply with all laws, regulations or orders
which in any way affect the equipment or its use, operation or storage.
Lessor shall have no responsibility for compliance with any such laws,
regulations or orders, including without limitation, all such laws,
regulations or orders as may relate to customs, transportation, handling,
safety, and labor regulations.
f. Lessee shall, at its expense, comply with all rules and practices of
ports, depots, storage areas and transportation companies consistent with the
other requirements of this Paragraph 4.
g. If containers are leased hereunder, it shall be the obligation of Lessee
to comply with the International Convention for Safe Containers (CSC) in all
respects and Lessee shall, pursuant to this Lease, have and exercise Lessor's
responsibilities under the CSC including, without limitation: plating
(design-type approval to be obtained and plates to be provided by Lessor),
maintenance, examination, re-examination and marking with re-examination
dates (stickers to be provided by Lessor) of each container. Such
examination, or re-examination, shall be performed in accordance with the
Rules and Regulations for the Safety Approval of Cargo Containers of the
United States Department of Transportation. Lessee shall also comply with
the Customs Conventions on Containers, 1956 and 1972, including, without
limitation, all obligations of the operator relating to temporary admission,
transport of goods under customs seal, maintenance of records and reporting
to governmental or other authorities.
h. Lessee will, upon Lessor's written request, furnish to Lessor a schedule
or schedules showing the locations and dates at such locations that Lessor's
equipment has been used by Lessee.
5. DEFAULT; REMEDIES UPON DEFAULT
PLEASE INITIAL:
LESSE ______ LESSOR _______
10
Should Lessee default (i) in the payment of any sum due hereunder within
fifteen (15) days of the date Lessee is invoiced by Lessor, (ii) in the
performance of its other obligations under this Lease or (iii) cease doing
business as a going concern, become insolvent, commit an act of bankruptcy,
or become the subject of any proceeding under the United States Bankruptcy
Code or any similar law of another nation or a political subdivision thereof,
then Lessor may, without notice, and without releasing Lessee of its
obligations hereunder, terminate this Lease, declare the balance of the
rental to be due and payable , and retake possession of the equipment free of
any claims of Lessee. In the event of such termination by Lessor, Lessee
shall no longer be in possession of the equipment with Lessor's consent and
Lessee shall return the equipment to Lessor at such place as Lessor shall
direct. Lessee shall continue to pay rental charges for equipment until the
equipment is (i) returned in as good condition as received normal wear and
deterioration excepted, (ii) repaired and made fit for subsequent rental or
(iii) settlement acceptable to Lessor is made. In the event Lessor retakes
possession of all, or any part, of the equipment, Lessee authorizes Lessor to
take possession of any property in, on or attached to such equipment which is
not the property of Lessor, and without liability for its care or
safekeeping, to place such property in storage at the risk and expense of
Lessee. Termination shall not relieve Lessee of any liabilities or
obligations incurred prior to such return, repair or settlement and Lessee
shall in any event remain fully liable for reasonable damages as provided by
law, and for all costs and expenses incurred by Lessor on account of such
default, including all costs and reasonable attorney's fees.
6. EXCLUSION OF WARRANTIES; LESSEE'S OBLIGATIONS ABSOLUTE
a. THE EQUIPMENT IS LEASED AS IS. LESSOR WARRANTS THAT LESSEE SHALL HAVE
QUIET POSSESSION, SAVE AS AFORESAID, NO CONDITION OR WARRANTY WHATSOEVER OF
ANY KIND HAS BEEN OR IS GIVEN BY LESSOR IN RELATION TO THE EQUIPMENT, AND ALL
CONDITIONS AND WARRANTIES WHETHER EXPRESSED OR IMPLIED, WHETHER IN RELATION
TO THE FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE OR COUNTRY, OR
WHETHER IN RELATION TO MERCHANTABILITY OR AS TO DESCRIPTION, STATE, QUALITY
OR CONDITION OF THE EQUIPMENT AT DELIVERY OR AT ANY OTHER TIME ARE HEREBY
WAIVED, EXCLUDED AND EXTINGUISHED. LESSOR SHALL IN NO EVENT BE LIABLE FOR
CONSEQUENTIAL DAMAGES OR LOSS OF PROFITS EVEN IF LESSOR HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
b. LESSEE'S OBLIGATIONS UNDER THIS AGREEMENT ARE ABSOLUTE AND SHALL NOT BE
AFFECTED BY ANY CIRCUMSTANCE OR EVENT BEYOND LESSEE'S CONTROL OF WHATEVER
NATURE.
c.
d. TO THE EXTENT POSSIBLE, AND NOTWITHSTANDING THE DISCLAIMER BY LESSOR OF
ANY WARRANTIES SET FORTH HEREIN, LESSOR SHALL DELIVER TO LESSEE A COPY OF ANY
WARRANTY AGREEMENT LESSOR MAY RECEIVE FROM THERMO KING AND LESSEE SHALL LOOK
SOLELY TO THERMO KING FOR THE ENFORCEMENT OF SUCH WARRANTY, AND LESSEE SHALL
COMPLY WITH ALL THE CONDITIONS OF SUCH WARRANTY IMPOSED BY THERMO KING..
PLEASE INITIAL:
LESSE ______ LESSOR _______
11
7. NOTICES
All ▇▇▇▇▇▇▇▇ and written notices required to be given by either party shall
be in writing and shall be airmailed, telexed or cabled, except as may
otherwise be provided herein, to the other party at its address first
hereinabove specified, or at such other address as such party may hereafter
from time to time designate in writing and shall be deemed received, in the
case of airmail, five days after it is postmarked, and in the case of telex,
upon transmission (with answerback confirmed) to other party's telex
facilities. All payments to Lessor shall be by check to Lessor or by wire
transfer acceptable to Lessor.
8. TAXES, FEES AND FINES
a. Lessee shall pay all taxes (other than taxes on Lessor's net income) and
charges levied on, or in connection with, the equipment subsequent to
delivery, including without limitation, property, sales, use and excise
taxes, duties, customs charges, withholding taxes and all further government
levies, fees or charges. Lessee shall pay all duties, fines and penalties
arising out of use of the equipment including without limitation, any duties,
fines or penalties imposed under the customs laws and regulations of federal,
state, foreign and local governments and agencies.
b. Lessee shall pay all charges incurred in ports, depots, storage areas or
otherwise arising out of the use of the equipment.
9. INDEMNITY AND INSURANCE
a. Indemnity
Lessee shall indemnify, defend and hold Lessor harmless for any and all
claims, losses, expenses, costs or damages, (including without limitation
expenses in defending any claim or suit such as attorney's fees, court costs
and other expenses) arising or alleged to arise directly or indirectly or
incidentally out of (a) any failure of Lessee to comply with its obligations
under this Lease; (b) any claim, whether private or governmental, for
personal injury or death, and for loss or damage to person, including
employees of the Lessee, property, cargo and/or vessels and/or transport
equipment arising out of or incident to the ownership, selection, possession,
leasing, operation, control, use, storage, loading, unloading, stuffing,
unstuffing, moving, maintenance, delivery, handling or return of the
equipment; (c) any forfeiture, seizure, confiscation, nationalization or
impounding of or charge or lien on the equipment. Each party undertakes
promptly to give notice to the other of claims against it or action against
it with respect thereto and Lessee agrees not to settle any action without
the consent of the Lessor.
b. Insurance
The Lessee agrees to procure and maintain in full force and effect during the
term of this lease, at its sole cost and expense with insurers acceptable to
the Lessor, the following insurance:
PLEASE INITIAL:
LESSE ______ LESSOR _______
12
(1) "All Risks" insurance to cover physical loss or damage to the leased
container(s) for not less than the full stipulated replacement value
thereof.
(2) Broad Form Comprehensive General Liability and Automobile Liability
Insurance to a minimum limit of U.S. $1,000,000 any one occurrence to cover
third party Bodily Injury and property Damage.
Such insurance shall include those policy extensions commonly referred to as
Completed Operations, Blanket Contractual, Personal Injury, Non-Owned
Automobile Liability and Employer's Liability and shall be primary
insurance.
Any and all deductibles under the terms of the foregoing insurance shall be
for Lessee's account. All policies shall name Lessor as additional insured
and contain a waiver of subrogation in favor of the Lessor. All policies
will contain a requirement that the Lessor receive 30 days written notice of
cancellation or material change. Lessee will provide the Lessor with
Certificates evidencing the insurance specified within 10 days of date lease
commences, in a form acceptable to the Lessor.
Should the Lessee fail to procure or maintain any of the required insurance,
or by act or omission vitiate or invalidate any of the insurance, the Lessee
shall indemnify the Lessor to the extent he suffers or incurs loss, damage,
liability or expense in consequence of such failure, act or omission.
10. SUBLEASING AND DIRECT INTERCHANGING
Lessee shall not have the right to assign this Lease or to sublet, rent,
directly interchange or otherwise hire out, or part with possession of the
equipment to any other party without the prior written consent of Lessor and
such consent of Lessor shall not operate to relieve Lessee of any of its
obligations hereunder.
11. DESIGNATION OF OWNERSHIP
If at any time during the term hereunder Lessor supplies Lessee with labels,
plates or other markings stating that the equipment is owned by Lessor or is
subject to any interest of a lender, Lessee shall affix and kept the same
upon a prominent place on the equipment. Lessee agrees to execute and file
Uniform Commercial Code financing statements and any and all other
instruments necessary to perfect Lessor's or its lender's interest in this
lease, the payments due hereunder and the equipment leased hereunder.
12. GENERAL
a. This lease is binding upon the parties, their successors and assigns and
shall be construed and interpreted with the laws of the State of California.
Any dispute, arising under or in connection with this lease will be
exclusively decided by the competent court of San Francisco, California,
U.S.A., or, at the option of Genstar, by any other court that may appear
competent to decide such dispute.
PLEASE INITIAL:
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b. The paragraph headings in this Lease are for convenience only and shall
not be deemed to alter or affect any provision hereof.
c. Lessee hereby waives any and all existing and future set-offs and
counterclaims against the rental charges or payments due under this Lease.
d. In the event Lessee has not executed a Master Agreement with Lessor
covering the leasing of this equipment, this Lease shall contain the entire
agreement between the parties with respect to the subject matter hereof and
may be amended, modified or changed only by an agreement in writing executed
by the parties hereto. If the Lessee fails, however, to give to Lessor a
written objection to its contents within seven (7) days after this Lease is
received, or if Lessee takes possession of any of the equipment provided for
hereunder and retains it after receipt of this Lease then this Lease shall
be effective and binding upon Lessee whether or not signed. Notwithstanding
any Master Agreement, this Lease is subject to acceptance by Lessor at its
office in San Francisco, California, and shall be deemed accepted if Lessee
is not notified to the contrary within a reasonable time. If the Lease is
not accepted, Lessee shall return the equipment to any of Lessor's terminals
within sixty (60) days from such notification.
e. Lessee shall conform to the provisions of all statutes bylaws or
regulations in force from time to time in respect of or affecting in any
manner performance under this Lease and shall give all notices required by
the said statutes, bylaws and regulations including, but not limited to,
compliance with the Occupational Health and Safety Act and similar
legislation in force in jurisdictions in which the equipment may be used or
the Lessee may do business and shall pay all fees, assessments, or other
sums payable thereunder or in respect thereof.
PLEASE INITIAL:
LESSE ______ LESSOR _______
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EXHIBIT B
REDELIVERY SCHEDULE
-------------------
The following schedule specifies the monthly redelivery limits by port for
container redeliveries together with any one time charges that may apply. All
container redeliveries shall be made only at authorized Genstar depots within
these port areas. These depot charges are subject to change upon ninety (90)
days notice to Lessee from Genstar.
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40 HIGH CUBE REFRIGERATED
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Port Monthly Port Limits Drop-Off Charge (US$)
------------------------------------------------------------------
Miami Unlimited 0.00
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Chicago Unlimited 450.00
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Seattle Unlimited 150.00
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Los Angeles Unlimited 0.00
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PLEASE INITIAL:
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EXHIBIT C
ADDITIONAL MAINTENANCE REQUIREMENTS FOR REFRIGERATED CONTAINERS
---------------------------------------------------------------
REFRIGERATED CONTAINERS
-----------------------
A. With respect to Equipment that constitutes refrigerated containers
("Refrigerated Containers") Lessee shall comply with all the operation
and maintenance requirements contained in this Exhibit, in manuals or
other documents provided to lessee at the time of delivery, in
instructions supplied by Lessor after delivery and any instructions
displayed on any Refrigerated Containers, which requirements are in
addition to all operation and maintenance requirements contained in the
Agreement, this Exhibit or elsewhere in this Schedule.
B. Lessee shall ensure that all maintenance and repair work on the
Refrigerated Containers is carried out by suitably skilled labor and
under competent supervision and (where applicable) by the use of
components or parts and materials of a standard and type equivalent to
the original.
C. Lessee shall notify Lessor within 48 hours of any accident to or
breakdown of any Refrigerated Containers which will require major
renovation or repair work. Lessee will fully cooperate with Lessor to
comply with all procedures required in order for Lessor to preserve and
assert any available warranty claims and will permit Lessor or Lessor's
representative to inspect the damage and will consult with Lessor to
determine with manner in which and by whom the necessary work is to be
carried out.
D. Lessee shall refer to all operations and service manuals covering the
Refrigerated Containers for electrical and refrigeration information,
service instructions recommended by the manufacturer and detailed
replacement parts lists. Lessee shall follow all operation and
maintenance recommendations contained in such manuals.
PLEASE INTIAL:
LESSE _______ LESSOR _____
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REFRIGERATED CONTAINERS ONLY
----------------------------
A. Prior to loading any Refrigerated Containers, Lessee shall perform each
of the following:
1. Prior to starting the Refrigerated Containers, Lessee shall:
a. Visually inspect Refrigerated Containers for loose parts and
damaged components.
b. Check evaporator fan motor mounting bolts for proper
securement.
c. Check defrost drain pans and drain lines for obstructions and
clear if necessary. Wash with fresh water and ensure water
flows drain hose.
d. Check condition and position of fresh air makeup vent cover.
e. Inspect moisture sight glass indicators. Replace drier if
needed.
f. Inspect power plugs, receptacles and power cables. Ensure power
supply source for proper voltage.
g. If so equipped, manually wind temperature recording clock and
set desired temperature (set point).
h. Check controller for loose and / or sub-standard wiring and
printed circuit boards if so equipped. Megger test unit.
2. After completing the steps set forth above, Lessee shall start
each Refrigerated Container and shall perform the following steps
(unless the manual provided by the manufacturer requires a
different trip start / datacorder sequence, in which case such
sequence shall be followed as to such Refrigerated Container):
a. Verify that the phase reversal system is working properly and
all fans are rotating in the proper direction.
b. Check that the compressor has the proper amount of oil.
i. Compressor stopped, compressor sight glass should show a
level of 1/2 to 2/3.
ii. Compressor running, should show turbulence from oil spray
in the sight glass.
c. After 15-20 minutes of operation and in the cooling mode, check
for proper charge of refrigerant. Check for condition of
refrigerant (wet/dry) by observing liquid line indicator.
PLEASE INITIAL:
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d. Observe system pulldown and verify system cycle sequence
including defrost initiation and termination.
e. While system is pulling down, check AC amperage under load.
Check AC amperage of compressor, evaporator and condenser fan
motors and all heaters (defrost and drain pan) while unit is
heating and in defrost mode.
f. While system is pulling down, check that compressor unloaders
and/or modulation systems are working properly.
g. While system is pulling down, check for proper operational
sequence of the temperature controller/microprocessor.
h. While system is pulling down, check for proper operation of all
indicator displays.
i. Check operation of protection/safety systems.
B. Lessee shall perform the following inspection on each Refrigerated
Container on an annual basis in order to insure that the refrigerator
units are being properly maintained.
1. General Condition of Unit
-------------------------
a. Check for physical damage to the unit such as loose or missing
fasteners, chipped painted and/or handling damage.
b. Check all electrical components and terminal boards for tight
connections, chafing on wires, sufficient wire ties and wire
length on swing out panels.
c. Check for proper sealing of gaskets on all doors.
d. Check water tightness of electrical control panels.
e. Check for leaks in complete refrigeration system.
f. Check evaporate and condenser fan mounting bolts for proper
securement and fan alignment.
g. Check fresh water and clean evaporator and condenser coils.
h. Check defrost initiation/termination.
i. Check for proper operation of fresh air make-up vent.
2. Refrigeration and Electrical Systems.
-------------------------------------
a. Check refrigerant charge and inspect for refrigerant leaks.
b. Check compressor oil level.
c. Check moisture-liquid indicator.
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d. Check evaporator and condenser fan rotation and verify
operation of automatic phase correction system.
e. Check/verify system cycle sequence including defrost initiation
and termination. Verify operation of cylinder unloaders,
modulation valve, suction solenoid valve, expansion valve and
liquid line solenoid valve as applicable.
f. Check AC amperage of system under load. Check AC amperage draw
of compressor, electric heaters, condenser fan and evaporator
fans. Megger test.
g. If applicable, inspect recorder. Check operation of manually
wound clock and operation of pen and lifter, stylus and
calibration.
h. Inspect main power plugs, cables and receptacles.
i. If applicable, inspect and verify operation of dual voltage
power transformer.
j. If applicable, inspect water connection fittings for the water-
cooled condenser and verify operation and calibration of safety
device.
PLEASE INTITAL:
LESSE ____ LESSOR _____