EXHIBIT 10.2
MASTER
EQUIPMENT FINANCE LEASE
THIS MASTER EQUIPMENT FINANCE
LEASE made and entered
into this 19th day of September, 2006, is by and between DHW
Leasing, L.L.C, a South Dakota limited liability company, 230 S.
Phillips Avenue, Suite 202, Sioux Falls, SD 57104 (“
Lessor ”) and Granite City Food & Brewery, Ltd., a
Minnesota corporation, 5402 Parkdale, Suite 101, St. Louis Park, MN
55416 (“ Lessee ”).
In consideration of the mutual
promises set forth below, the parties agree as follows:
1.
MASTER LEASE . This Master Lease sets forth the
terms and conditions upon which the parties intend to govern
various lease transactions. Each separate lease shall be
evidenced by a numbered Schedule A, executed by Lessor and Lessee,
incorporating the terms hereof, as well as the particular terms of
such lease (each, a “Lease”). In the event the
terms of the Lease conflict with the terms of this Master Lease,
the Lease terms shall prevail. Lessor hereby leases to
Lessee, and Lessee hereby leases from Lessor, all machinery,
equipment, and other personal property described in each Schedule A
(hereafter collectively called the “ Equipment
”). The Equipment is, and shall at all times be, the
sole and exclusive property of Lessor, and Lessee shall have no
right, title, or interest in or to the Equipment except the right
to quiet use of the Equipment and the right to purchase the
Equipment as provided in the Lease. Each Lease incorporating
this Master Lease or made a part hereof shall be characterized as a
“ finance lease ” within the meaning of Article
2A of the Uniform Commercial Code (“Article 2A”),
whether or not each requirement of the definition thereof has been
technically or strictly met. Lessee acknowledges and agrees
that this Master Lease and any Lease is intended as a
“Finance Lease” as determined in Minn. State. Section
336.2A-103(1)(G) and that Lessor is entitled to all benefits,
privileges and protections of a Lessor under a Finance
Lease.
2.
TERM . The term of each Lease shall commence
upon execution of the Lease and shall continue until Lessee has
made all payments required of it under the Lease. For
purposes of the Lease, “Interim Period” shall mean the
date as specified in an applicable Schedule A, and generally
meaning the time from which Lessor has secured funds available to
purchase the Equipment, through the time at which the Equipment has
been received and accepted by Lessee.
3.
RENT; FEES; INTERIM RENT .
(a)
As rent for the Equipment, Lessee shall pay Lessor the rental set
forth on the applicable Schedule A, payable monthly beginning on
the First Payment Date (as set forth in the applicable Schedule A)
and continuing on the same day of each successive month until the
number of payments required under such Schedule A are made.
In addition, Lessee shall pay the amount of any personal property
taxes, including sales and use taxes, all maintenance, insurance,
and other costs or expenses related to the Equipment or
Lessee’s obligations under the Lease.
(b)
In addition to the rent described in (a) above, Lessee shall pay to
Lessor upon execution of each Lease, an upfront fee equal to 0.25%
of the principal amount financed by each Lease, as well as any
other filing and recording fees related to the origination of each
loan underlying the purchase and lease of Equipment under the
Lease.
(c)
For interest accruing on monies advanced during the Interim Period,
Lessee shall pay Lessor interim rent at the daily interest rate set
forth in the applicable Schedule A.
(d)
Lessee’s obligation to pay rent to Lessor shall be
irrevocable and independent, and is not subject to cancellation,
termination, modification, repudiation, excuse, or substitution
without the express written consent of Lessor, which consent may be
withheld in its sole discretion.
(e)
All payments of rent shall be made at the address set forth above,
or at such other place as Lessor may designate in writing. In
the event Lessee fails to pay rent within ten (10) days of its due
date, it shall pay a late charge equal to five percent (5%) of that
payment, but not less than $5.00 (or if a lesser amount is required
by law, such lesser amount) and following Lessor’s delivery
of written notice of default to Lessee with ten (10) days
opportunity to cure, Lessee shall pay interest on the amount of
each such delinquent payment at the rate of 18% per annum (or if a
lesser amount is required by law, such lesser amount) until
paid. Such interest calculations shall be computed for the
actual number of days elapsed between the date such payment was due
and the date such payment is actually received by
Lessor.
(f)
PROVIDED THAT LESSOR PURCHASES THE EQUIPMENT, THE LEASE IS A NET
LEASE AND LESSEE ACKNOWLEDGES AND AGREES THAT LESSEE’S
OBLIGATION TO PAY ALL RENT AND ALL OTHER AMOUNTS REQUIRED HEREUNDER
AND TO THE EXTENT SET FORTH HEREIN AND IN THE SCHEDULE A AND THE
RIGHTS OF LESSOR IN AND TO SUCH RENTALS AND SUCH OTHER AMOUNTS
SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE AFFECTED BY
OR SUBJECT TO ANY CIRCUMSTANCE, INCLUDING, WITHOUT LIMITATION, (A)
ANY SETOFF, COUNTERCLAIM, ABATEMENT, RECOUPMENT, REDUCTION,
DEFENSE, OR OTHER RIGHTS OF LESSEE OR THE MANUFACTURER OR SUPPLIER
OF THE EQUIPMENT FOR ANY REASON WHATSOEVER, (B) ANY DEFECT IN
DESIGN, CONDITION, OPERATION, FITNESS FOR PURPOSE OR USE OF, OR ANY
DAMAGE TO OR LOSS OR DESTRUCTION OF, THE EQUIPMENT OR ANY
INTERRUPTION OR CESSATION IN THE USE OR THE POSSESSION THEREOF BY
LESSEE FOR ANY REASON WHATSOEVER, (C) ANY INSOLVENCY, BANKRUPTCY,
REORGANIZATION OR SIMILAR PROCEEDING BY OR AGAINST LESSEE OR
LESSOR, OR (D) ANY OTHER CIRCUMSTANCE, HAPPENING OR EVENT
WHATSOEVER, WHETHER OR NOT SIMILAR TO THE FOREGOING INCLUDING
WITHOUT LIMITATION, THE INVALIDITY, LACK OF ENFORCEABILITY OR DUE
AUTHORIZATION OF THE LEASE OR ANY PROVISION HEREOF, OR THE
EXISTENCE OF ANY MORTGAGES, LIENS (WHICH TERM THROUGHOUT THE LEASE
SHALL INCLUDE, WITHOUT LIMITATION, SECURITY INTERESTS), CHARGES,
ENCUMBRANCES OR CLAIMS OR RIGHTS OF OTHERS WHATSOEVER WITH RESPECT
TO THE EQUIPMENT, WHETHER OR NOT RESULTING FROM CLAIMS AGAINST
LESSOR NOT RELATED TO THE OWNERSHIP OF THE EQUIPMENT. IT
IS
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THE INTENTION OF THE PARTIES THAT
ALL RENT AND OTHER AMOUNTS PAYABLE BY LESSEE HEREUNDER SHALL BE
PAYABLE IN ALL EVENTS IN THE MANNER AND AT THE TIMES HEREIN
PROVIDED UNLESS LESSEE’S OBLIGATIONS IN RESPECT THEREOF HAVE
BEEN TERMINATED PURSUANT TO THE EXPRESS PROVISIONS OF THE
LEASE. NOTHING IN THIS SECTION 3(f) SHALL CONSTITUTE A WAIVER
OF LESSEE’S RIGHT TO MAKE A CLAIM FOR DAMAGES AGAINST LESSOR
ARISING OUT OF LESSOR’S BREACH OF THE TERMS AND CONDITIONS OF
THIS MASTER LEASE OR ANY LEASE OR ANY OTHER CONTRACTUAL COMMITMENT
BY LESSOR TO LESSEE.
4.
USE . Lessee shall use the Equipment in
accordance with all insurance policies, in a careful and proper
manner and shall comply with and conform to all national, state,
municipal and other laws, ordinances and regulations relating to
the possession, use or maintenance of the Equipment. If at
any time during the term of the Lease Lessor supplies Lessee with
labels, plates or other markings stating that the Equipment is
owned by Lessor, Lessee shall affix and keep the same upon a
prominent place on the Equipment. Lessee’s use of the
Equipment shall be confined to the location described in Schedule A
or at such other location as Lessor shall approve in advance in
writing. Lessee shall not permit the Equipment to be used by
anyone other than Lessee’s employees and patrons.
5.
LESSEE’S SELECTION OF EQUIPMENT AND INSPECTION
. Lessee represents that it selects the Equipment and the
supplier of the Equipment. Lessor agrees to order the
Equipment from the supplier in accordance with Lessor’s
customary practices, and Lessor shall not be obligated to lease the
Equipment to Lessee unless the supplier fills the order.
Lessor shall have no liability because of any delay or default by
the supplier in filling the order. Lessee will accept the
Equipment if delivered in good repair and authorizes Lessor to add
to the Schedules any serial numbers or other identification of the
Equipment when known. Any delay in the delivery of the
Equipment will not affect the validity of this Master Lease or any
Lease. Lessee shall inspect and test, if appropriate, the
Equipment immediately upon delivery and if the Equipment is found
to be in good order and Lessee is satisfied with the Equipment,
Lessee shall execute and deliver to Lessor prior to the
Commencement Date an acceptance certificate in form satisfactory to
Lessor (hereinafter termed “ Acceptance
”). Lessee’s execution of the Acceptance shall
constitute Lessee’s acknowledgment as between Lessor and
Lessee that the Equipment is in good repair and condition, has been
installed properly, has been placed in service as of the date of
the certificate, and is performing satisfactorily, and is of the
manufacture, design and capacity selected by Lessee and that Lessee
is satisfied that the same is suitable for its purpose. To
the extent Lessee has a right to revoke, reject or return the
Equipment as nonconforming, unsatisfactory, in breach of any
warranty or otherwise, or to cancel or repudiate this Master Lease
or any Schedule A, upon execution and delivery of said Acceptance
Lessee waives all such rights (provided, that Lessor grants to
Lessee authority to pursue all rights for a breach of express or
implied warranties against the Equipment manufacturer or
supplier).
6.
LESSOR’S INSPECTION . Upon reasonable
notice to Lessee, Lessor may inspect any of the Equipment at any
reasonable time. Lessee shall, upon request by Lessor, advise
Lessor in writing of the exact location of the
Equipment.
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7.
ALTERATIONS . Lessee shall not make any
alterations, additions or improvements to the Equipment without the
prior written consent of Lessor provided, however, that nothing
contained in this Paragraph 7 shall be deemed to prohibit Lessee
from performing ordinary maintenance and repairs to the Equipment
as required by Paragraph 9 of this Master Lease. Title to all
parts added to the Equipment through alterations, additions or
improvements shall immediately vest in Lessor.
8.
TAXES . Lessee shall be responsible for all
federal, state, county and municipal taxes, assessments or other
governmental charges including, without intending to limit the
generality of the foregoing, any personal property taxes incurred
in connection with the shipment, use, operation, ownership,
leasing, sale or possession of the Equipment during the term of the
Lease, excepting only taxes on Lessor’s income. Lessee
shall comply with all state and local laws requiring the filing of
ad valorem tax returns on the Equipment. Any statements for
such taxes received by Lessor shall be forwarded promptly to the
Lessee by the Lessor for payment or, if paid by Lessor, shall be
reimbursable to Lessor upon presentment to Lessee of Lessor’s
invoice therefor. Lessee shall keep the Equipment free and
clear of all levies, attachments, liens, and encumbrances other
than those being contested in good faith by appropriate proceedings
and which, as a result of such contest, do not adversely threaten
Lessor’s title to the Equipment. Lessee shall give
Lessor immediate written notice of attempted levies, attachments,
liens, encumbrances, or other judicial process of every kind
whatsoever and shall cooperate with Lessor, and take whatever
action may be necessary, to enable Lessor to file, register, or
record this Master Lease or such other notice as Lessor may
determine and wherever required or permitted by law for the proper
protection of Lessor’s title to the Equipment; and Lessee
shall pay all costs, charges and expenses incident thereto.
Any filing, registration or recording made by Lessor shall not be
deemed evidence of any intent to create a security interest under
the Uniform Commercial Code.
9.
REPAIRS; COSTS; RISK OF LOSS . Lessee shall, at
its own expense, keep the Equipment in first class condition,
repair, and working order, reasonable wear and tear only excepted,
and shall furnish all parts, mechanisms, and devices required to
keep the Equipment in good mechanical and working order.
Lessee shall pay all costs, fees, expenses and charges incurred in
connection with the shipment, use, operation, ownership, leasing,
sale or possession of the Equipment during the term of the
Lease.
Lessee hereby assumes all risk of
loss, damage, theft or destruction of the Equipment from any cause
whatsoever from the date the Equipment is shipped by the vendor or
manufacturer. No loss, damage, theft, or destruction of or to
the Equipment or any part thereof shall impair or abate any
obligation of Lessee under the Lease, which shall continue in full
force and effect, except as provided in the Lease.
(a)
In the event of loss or destruction of the Equipment from any cause
whatsoever from the date the Equipment is shipped by the vendor or
manufacturer to the date of Acceptance by the Lessee, which risk of
loss or destruction may be borne by the vendor or manufacturer
pursuant to the terms of any purchase order, contract of sale, or
under applicable law, Lessor shall promptly attempt to obtain
recovery from the vendor or manufacturer with respect to such loss
or destruction of the Equipment. Lessor shall not be required
to commence litigation against such vendor or
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manufacturer, and if Lessor
determines, in its sole discretion, that such vendor or
manufacturer will not pay Lessor in full on account for such loss
or destruction of the Equipment or will not otherwise satisfy
Lessor with respect to such loss or destruction, Lessor will assign
or otherwise make available to Lessee all of Lessor’s rights
or causes of action against such vendor or manufacturer with
respect to such loss or destruction of the Equipment upon payment
by Lessee to Lessor of all sums theretofore paid by Lessor to such
vendor or manufacturer for the Equipment.
(b)
In the event of damage of any kind whatsoever to any item of the
Equipment on or after the date of Acceptance by Lessee, Lessee
shall, at Lessor’s option, either place the same in good
repair, condition, and working order or if, Lessee elects not to
repair or replace the same, Lessee shall pay Lessor the “
Stipulated Loss Value ” in cash as set forth in
Schedule A within thirty (30) days after the occurrence of any of
the foregoing events. “Stipulated Loss Value”
shall not exceed 100% of the amount of the remaining principal
balance of the loan used to finance the Lease.. Upon such
payment the Lease shall terminate with respect to such item of
Equipment and Lessee thereupon shall become entitled to such item
of Equipment AS-IS-WHERE-IS without warranty from Lessor,
express or implied, with respect to any matter whatsoever except as
provided in Section 10(b) herein.
10.
DISCLAIMER OF WARRANTIES; ASSIGNMENT OF MANUFACTURER’S
WARRANTIES . Lessee acknowledges and agrees that it
has selected each item, type, quality,
