Kentucky Agreement to Lease Equipment (with Warranty) by and between The Magdovitz Family Trust and KY USA Energy, Inc. dated July 18, 2008
EXHIBIT
10.19
Kentucky
Agreement to Lease Equipment (with Warranty) by and between The Magdovitz Family
Trust and KY USA Energy, Inc. dated July 18, 2008
KENTUCKY
AGREEMENT TO LEASE EQUIPMENT (with Warranty)
THIS
AGREEMENT TO LEASE EQUIPMENT (“Lease”) is made and effective this 18th day of
July, 2008, by and between THE
MAGDOVITZ FAMILY TRUST, Xxxxxx Xxxxxxxxx, Trustee, of 000 Xxxxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxxxxxx, 00000, hereinafter referred to as LESSOR, and KY USA ENERGY, INC., a Kentucky
Corporation, of P. O. Xxx 0000, Xxxxxx, Xxxxxxxx, 00000, hereinafter
referred to as LESSEE.
LESSOR
desires to lease to LESSEE, and LESSEE desires to lease from LESSOR, certain
tangible personal property.
NOW,
THEREFORE, 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 from LESSOR, the following
described equipment (the “Equipment”): All equipment listed in Attachment
#1.
2. TERM.
The term
of this Lease shall commence on the ____ day of ____________, 2008, and shall
expires forty-two (42) months thereafter.
3. SHIPPING.
LESSEE
shall be responsible for shipping the Equipment to LESSEE’S
premises.
4. RENT.
The
monthly rent for the Equipment shall be paid in advance in installments
of $7,318.91 each month, beginning on August 1, 2008 and on the first
day of each succeeding month throughout the term hereof, at 000 Xxxxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxxxxxx 00000, or at such other place as LESSOR may designate
from time to time. Any installment payment not made by the tenth
(10th) day of
the month shall be considered overdue and in addition to LESSOR’S other
remedies, LESSOR may levy a late payment charge equal to five percent (5%) per
month on any overdue amount. Rent for any partial month shall be
prorated.
5. USE.
LESSEE
shall use the Equipment in a careful and proper manner and shall comply with and
conform to all national, state, municipal, police and other laws, ordinances and
regulations in any way relating to the possession, use or maintenance of the
Equipment.
6. RIGHT TO
LEASE.
LESSOR
WARRANTS THAT LESSOR HAS THE RIGHT TO LEASE THE EQUIPMENT, AS PROVIDED IN THIS
LEASE.
7. REPAIRS.
LESSEE,
at its own cost and expense, shall keep the Equipment in good repair, condition
and working order and shall furnish any and all parts, mechanisms and devises
required to keep the Equipment in good mechanical working order.
8. LOSS AND
DAMAGE.
A. LESSEE
hereby assumes and shall bear the entire risk of loss and damage to the
Equipment from any and every cause whatsoever. 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 through the term of the
Lease.
B. In
the event of loss of damage of any kind whatever to the Equipment, LESSEE shall,
at LESSOR’S option:
(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; or
(c) Pay
to LESSOR the replacement cost of the Equipment.
(d)
Continue to make all payments required by this agreement as
scheduled.
9. SURRENDER.
Upon the
expiration or earlier termination of this Lease, LESSEE shall return the
Equipment to LESSOR in good repair, condition and working order, ordinary wear
and tear resulting from proper use thereof alone excepted, by delivering the
Equipment at LESSEE’S cost and expense to such place as LESSOR shall specify
within the city of county in which the same was delivered to LESSEE, or at
LESSEE’S option. At the end of forty-two (42) months, the equipment
will be deemed to be worn out and LESSEE is hereby granted the option to
purchase same for $1.00.
10. INSURANCE.
LESSEE
shall procure and continuously maintain and pay for:
A. All
risk insurance against loss of and damage to the Equipment for not less than the
full replacement value of the Equipment, naming LESSOR as loss payee,
and;
B. Combined
public liability and property damage insurance with limits as approved by
LESSOR, naming LESSOR as additionally named insured and a loss
payee.
The
insurance shall be in such form and with such company or companies as shall be
reasonably acceptable to LESSOR, shall provide at least thirty (30) days advance
written notice to LESSOR of any cancellation, change or modification, and shall
provide primary coverage for the protection of LESSEE and LESSOR without regard
to any other coverage carried by LESSEE or LESSOR protecting against similar
risks. LESSEE shall provide LESSOR with an original policy or certificate
evidencing such insurance. LESSEE hereby appoints LESSOR as LESSEE’S
attorney in fact with power and authority to do all things, including, but not
limited to, making claims, receiving payments and endorsing documents, checks or
drafts necessary or advisable to secure payments due under any policy of
insurance required under this Agreement.
11. 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
all license and registration fees, assessments, sales, use and property taxes,
gross receipts, taxes arising out of receipts from use or operation of the
Equipment, and other taxes, fees and governmental charges similar or dissimilar
to the foregoing, together with any penalites or interest thereon, imposed by
and state, federal or local government or any agency, or department thereof,
upon the Equipment or the purchase, use, operation or leasing of the Equipment
or otherwise in any manner with respect thereto and whether or not the same
shall be assessed against or in the name of LESSOR or
LESSEE. However, LESSEE shall not be required to pay or discharge any
such tax or assessment so long as it shall, in good faith and by appropriate
legal proceedings, contest the validity thereof in any reasonable manner which
will not affect or endanger the title and interest of LESSOR to the Equipment;
provided, LESSEE shall reimburse LESSOR for any damages or expenses resulting
from such failure to pay or discharge.
12. LESSOR’S
PAYMENT.
In case
of failure of LESSEE to procure or maintain said insurance or to pay fees,
assessments, charges and taxes, all as specified in this Lease, LESSOR shall
have the right, but shall not be obligated, to effect such insurance, or pay
said fees, assignments, 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 consequences,
including interest at ten percent (10%) per annum, as failure to pay any
installment of rent.
13. INDEMNITY.
LESSEE
shall indemnify LESSOR against, and hold LESSOR harmless from, any and all
claims, actions, suits, proceedings, costs, expenses, damages and liabilities,
including reasonable attorney’s fees and costs, arising out of, connected with,
or resulting from LESSEE’S use of the Equipment, including without limitation
the manufacture, selection, delivery, possession, use, operation, or return of
the Equipment. Additionally, should LESSOR for any reason undertake
to do repairs on said equipment, pay the insurance and/or taxes on same, LESSEE
shall indemnify LESSOR for all costs and expenditures so related.
14. DEFAULT.
If LESSEE
fails to pay any rent or other amount herein provided within ten (10) days after
the same is due and payable, or if LESSEE fails to observe, keep or perform any
other provision of this Lease required to be observed, kept or performed by
LESSEE, 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 without
notice or demand to LESSEE.
B. To
xxx for and recover all rents, and other payments, then accrued or thereafter
accruing.
C. To
take possession of the Equipment, without demand or notice, wherever same may be
located, without any court order or other process of law. LESSEE hereby waives
and any all damages occasioned by such taking of
possession.
D. To
terminate this Lease.
E. To
pursue any other remedy at law or in equity.
Notwithstanding
any 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 the
LESSEE to be performed under this Lease. All of LESSOR’S remedies are
cumulative, and may be exercised concurrently or separately.
15. 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 LESSEE
makes any assignment for the benefit of his creditors, or if a writ of
attachment or execution is levied on 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 the Equipment, LESSOR shall have and may exercise any
one or more of the remedies set forth in Section 14 hereof; and this Lease
shall, at the option of the LESSOR, without notice, immediately terminate and
shall not be treated as an asset of LESSEE after the exercise of said
option.
16. 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.
17. 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 including, but not limited to, a
UCC financing statement. LESSOR is hereby specifically authorized to
file any and all documents necessary to perfect a security interest in all
equipment covered by this lease.
18. ENTIRE
AGREEMENT.
This
instrument constitutes the entire agreement between the parties on the subject
matter hereof and it shall not be amended, altered or changed except by a
further writing signed by the parties hereto.
19. NOTICES.
Service
of all notices under this Agreement shall be sufficient if given personally or
mailed certified, return receipt requested, postage prepaid, at the address
hereinafter set forth, or to such address as such party may provide in writing
from time to time.
If to
LESSOR:
The
Magdovitz Family Trust
Xxxxxx
Xxxxxxxxx, Trustee
000
Xxxxxx Xxxxx
Xxxxxxxx
Xxxxx, XX 00000
If to
LESSEE:
KY USA
Energy, Inc.
Xxxxxx X.
Xxxxxxxx, President
P. O. Xxx
0000
Xxxxxx,
XX 00000
20. ASSIGNMENT.
LESSEE
shall not assign this Lease or its interest in the Equipment without the prior
written consent of LESSOR.
21. HEADINGS.
Headings
used in this Lease are provided for convenience only and shall not be used to
construe meaning or intent.
22. GOVERNING
LAW.
This
Lease shall be construed and enforced according to laws of the Commonwealth of
Kentucky.
WITNESS
THE SIGNATURES OF THE PARTIES TO THIS AGREEMENT TO LEASE EQUIPMENT.
LESSOR:
THE MAGDOVITZ FAMILY TRUST
|
__________________________________
|
Date:____________,
2008
|
(sign)
XXXXXX XXXXXXXXX,
Trustee
(print)
LESSEE:
KY USA ENERGY, INC., a Kentucky Corporation
|
__________________________________
|
Date:____________,
2008
|
(sign)
XXXXXX X. XXXXXXXX,
President
(print)
GUARANTOR:
KENTUCKY USA ENERGY, INC. (KYUS)
|
__________________________________
|
Date:____________,
2008
|
(sign)
XXXXXX X. XXXXXXXX,
President
(print)
