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EXHIBIT 10.3
CLOSED END VEHICLE LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into this 18 day of March 1996 between:
LESSOR Eldorado Bank Leasing
whose address is 19100 Von Karman Suite #550, Irvine, CA 92715 and
LESSEE Boyd's Wheels, Inc.
whose address is 8380 Cerritos Ave., Stanton, CA 90680
and covers the lease of the vehicle described below. As used in this agreement
the words "I", "me", or "my" refer to the Lessee and "you" or "your" refer to
the Lessor. I understand that the consumer lease disclosures you have included
in this lease are also made on behalf of
DESCRIPTION OF LEASED VEHICLE
MODEL YEAR MAKE MODEL BODY STYLE COLOR VEHICLE I.D. NUMBER LICENSE NUMBER
1996 Dodge Caravan Van Bright White 2B4FP2533TR675885 NEW
Vehicle includes following equipment and accessories:
X Air Conditioning Power Windows X Transmission Auto X Other Equipment Per M.S.R.P.
X Power Brakes Power Door Locks Radio X AntiLock Brakes
X Power Steering Power Seat Wheels
Tilt Wheel Cruise Control Roof/Rack
Trunk Key No. Ignition Key No. Leather
1. AGREEMENT TO LEASE
I agree to lease from you the vehicle described above. My obligations
and your obligations under this lease begin when you and I sign this
form. If the vehicle is not delivered to me at such time, you will use
your best efforts to deliver it to me as soon as practicable.
2. LEASE COMPUTATIONS
a. Lease Term (from lease signing) 1. 36 months
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2. -0- days
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b. End of Lease Purchase Option Price $ 10,050.00
(based in part on an average of ---------------
15,000 miles annually)
c. Average Monthly Lease Depreciation $ 234.12
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d. Base Monthly Lease Payment $ 337.86
---------------
e. Sales/Use Tax 7.75% of d. $ 26.18*+
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f. Luxury Car Tax $ -0-
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g. Total Monthly Lease Payment (d. plus f.) $ 364.04*
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I promise to pay you the number of monthly
lease payment indicated in a.1. above, with
the first payment to be due March 18, 1996
and the remaining payments to be due on the
18 day of each month, beginning on
4/18/96
h. Sum of All Monthly Lease Payments and $ 13,105.44*
Prorata Rent (a.1. times g. plus 3.c. plus 3.d) ---------------
i. Excess Mileage Charge 15 c
---------------
j. Early Termination Commencement 12 payments
(right commences after making this number of ---------------
monthly lease payments)
* Estimate based on current sales/use tax rate
+ MTE tax reimbursement, if appropriate.
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3. AMOUNTS DUE AT LEASE SIGNING
I will pay the amounts indicated below when I sign this lease:
a. Lease Inception Payment
1. Trade-In Allowance $ -0-
Description N//A ----------
2. Cash $ -0-
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3. Total $ -0-
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b. Tax on Lease Inception Payment $ -0-
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c. Prorata Rent $ -0-
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d. Tax on Prorata Rent $ -0-
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e. Refundable Security Deposit $ 350.00
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f. First Monthly Lease Payment $ 364.04
(includes sales/use tax) ----------
g. First Year's License/Registration/Excise Fees $ 396.00
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h. Luxury Car Tax $ -0-
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i. Other $ -0-
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j. TOTAL (a. through i.) $ 1,110.04
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4. INSURANCE
I agree that I must pay for and maintain during the lease term, and
until the vehicle is returned to you, insurance on the vehicle which has
the following minimum coverages:
a. BODILY INJURY LIABILITY: $100,000/300,000
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b. PROPERTY DAMAGE LIABILITY $ 50,000
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c. COLLISION WITH MAXIMUM DEDUCTIBLE OF: $ 1,000
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d. COMPREHENSIVE WITH MAXIMUM
DEDUCTIBLE OF: (Including fire and theft) $ 1,000
----------------
I understand that the policy must provide primary coverage for you
and/or another party you specify as an Additional Insured on coverage a.
and b. and for your or your assignee as Loss Payee on coverages c. and
d. and must also provide all insureds with at least 10 days notice of
cancellation or policy revision. I will buy the insurance from an
insurance company which is acceptable to you and will furnish you with
whatever written proof of coverage you may require.
INSURANCE COMPANY'S NAME
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AGENT'S NAME
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AGENT'S ADDRESS AND PHONE NUMBER
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( )
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INSURANCE VERIFIED BY:
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POLICY NO EXPIRATION DATE:
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BINDER NO. EFFECTIVE DATE:
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5. OFFICIAL FEES AND TAXES
a. Estimated Sales/Use Tax During
Lease Term (2.a.1x2.e.+3.b.+3.d.) $ 942.48
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b. Estimated License/Registration/Excise Fees
During Lease Term (3.g. or other estimate times
number of years of lease) $ 1,188.00
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c. Luxury Car Tax (2.a.1 times 2.f. or 3.h.) $ -0-
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d. TOTAL (a. plus b. plus c.) $ 2,130.48
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6. MECHANICAL BREAKDOWN PROTECTION
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While I have no obligation to do so, I understand that I may purchase
from you a contract under which I will have the right to have a portion
of the costs of repair of certain major mechanical breakdowns of the
vehicle and some related expenses paid by the contract administrator
listed in the contract. The term of this protection would be N/A years
from the date the lease is signed or until the vehicle's odometer shows
N/A miles, whichever happens first. If I have decided to purchase this
protection, I have reviewed the terms of the contract which describe the
details of this protection and understand that a copy of the filled-in
contract will be sent to me as soon as practicable. I have chosen the
following option:
a. I choose to purchase your mechanical breakdown LESSEE(S)
protection contract for the price of $ N/A INITIALS
which I will pay when I sign the lease. ------------
b. I choose to purchase your mechanical LESSEE(S)
breakdown protection contract INITIALS
and have its cash value of $ N/A ------------
If I have not initialed either a. or b., I have chosen not to purchase
your mechanical breakdown protection contract.
7. INSURANCE PROCEEDS DEFICIENCY LIABILITY RELEASE
As noted in Item 20, in the event of a casualty loss to the vehicle I
will be obligated to pay any difference between the proceeds of my
insurance and the total amount of my obligations under this lease.
However, if I have initialed below, I agree to purchase your optional
insurance proceeds deficiency liability release. If I purchase this
release, you will waive any right to collect a deficiency in insurance
proceeds from me in the event of a casualty loss of the vehicle which is
covered fully by my insurance policy. I understand that this release
does not cover the deductible under the policy, the product of item 2.f.
and the number of monthly lease payments remaining during the lease term
or amounts which may be past due at the time of a casualty and that I
will still be obligated to pay those amounts. I also understand this
release will not apply if an event not covered by my insurance policy,
such as a confiscation, occurs.
a. I choose to purchase your insurance proceeds deficiency liability
release for the price of $ N/A which I will pay when I sign the
lease.
------------
Lessee Initials
b. I choose to purchase your insurance proceeds deficiency liability
release and have its cash price of $ N/A amortized in the
monthly lease payments.
------------
Lessee Initials
If I have not initialed a. or b., I have chosen not to purchase this
release.
8. LEASE CHARGES AND DEPRECIATION
Portions of each monthly lease payment are for depreciation, lease fee
and sales/use/luxury car tax. While the total amount of each monthly
lease payment will be the same (assuming that current sales/use tax
rates, if applicable, do not change), the depreciation and lease fee
portions will differ with each payment. I realize this allocation of
monthly lease payments may be important in determining my liability if
the lease is terminated early as explained in Item 15 or the price at
which I may purchase the vehicle, if I have that option, as explained in
item 9. The next paragraph explains how the lease fee and depreciation
portions of any monthly lease payment are figured.
During the lease term you will earn a total of lease fees equal to the
product of the number of monthly lease payments due during the lease
term, Item 2.a.1., times the difference between the Base Monthly Lease
Payment, Item 2.d., and the average monthly lease depreciation, Item
2.c. These lease fees will be earned by you on a constant yield basis in
relation to the "adjusted lease balance" as it declines during the lease
term. The lease fee portion for any monthly lease payment is figured by
multiplying the rate which provides a constant yield times the adjusted
lease balance. At any given time, the adjusted lease balance is the
difference between the Initial
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Lease Balance described in the next sentence and the sum of (1) the
total depreciation amounts for all previously due monthly lease payments
and (2) one Base Monthly Lease Payment. The Initial Lease Balance equals
the End of Lease Purchase Option Price, Item 2.b., plus the product of
the average monthly lease depreciation, Item 2.c., and the number of
monthly lease payments due during the lease term, Item 2.a.1 The portion
of a monthly lease payment which does not go to either lease fees or
sales/use/luxury car tax is for depreciation. I realize I will not
receive any credit for depreciation for any prorata rent shown in Item
3.c.. These calculations follow the rules for journal entries for
lessors as to "Direct Financing Leases" set forth in the Financial
Accounting Standards Board's Standard No. 13.
9. PURCHASE OPTION
I understand that instead of returning the vehicle to you at expiration
or early termination, I may purchase the vehicle "AS-IS, WHERE-IS" if
this lease is not in default for the sum of:
a. The end of Lease Purchase Option Price, Item 2.b., if I purchase the
vehicle depreciation amounts credited to it as also described in Item
8, if I purchase the vehicle at early termination; plus
b. a purchase option fee of $200; plus
c. the product of Item 2.f. and the number of monthly lease payments
remaining during the lease term; plus
d. any official fees and taxes imposed in connection with the purchase.
I also realize that this is a lease and except for my right to possess
and use the vehicle while I keep my promises under this lease, I have no
ownership interest in the vehicle, its equipment, accessories or
replacement parts unless I exercise the purchase option.
10. OFFICIAL FEES AND TAXES
I agree to be responsible for the payment when due of all official fees
and taxes (other than your net income taxes) imposed by any governmental
authority in connection with the vehicle or this lease. You have
estimated in Item 5.d. the total of official fees and taxes you expect I
will have to pay during the lease term. I also understand there may be
excise or similar taxes which are assessed during the lease term but are
not due until afterwards and that I will remain liable for these
amounts.
11. LATE CHARGE AND LATE RETURN
If any monthly lease payment is not received by you within 10 days of
its due date, a late charge of the least of 5% of that payment, $25 or
such amount as may be set by law will be imposed, which I agree to pay.
I will pay you a returned check charge of $15 for any check I give you
which is not honored.
In addition, if I do not return the vehicle to you at lease expiration,
I will be liable for an additional monthly lease payment for each month
or portion of a month I retain the vehicle. I realize, however, that I
have no right to retain the vehicle after lease expiration without your
consent and that my holding over is a default under the lease.
12. VEHICLE RETURN
I understand that upon lease termination I must return the vehicle to
the place you specify. I also understand that I must pay you my
termination liability as calculated in Item 14 or 15 below, whichever is
applicable.
13. VEHICLE VALUATION AT EARLY TERMINATION
My termination liability in the event of early termination may be
affected by the realized value of the vehicle. The realized value may be
determined in one of the following ways:
a. Within 10 days after return of the vehicle, you and I may enter into
a written agreement as to the vehicle's value, should I request it,
or I may obtain a professional appraisal of the
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wholesale value of the vehicle which could be realized upon sale made
by a qualified person I find, who is acceptable to you as well as to
me. I know that the expense for any such appraisal will be mine.
b. If the realized value is not determined as above within 10 days after
return of the vehicle, you will attempt to obtain 3 bids to purchase
the vehicle at wholesale for cash or to dispose of the vehicle in
some other commercially reasonable manner. I will have the right to
submit a written bid which you agree to consider together with all
other bids you may receive. Even though you may decide not to sell
the vehicle to any bidder, the highest bona fide bid received (which
is supported by whatever proof of ability to pay you may require)
will be considered the realized value of the vehicle.
I understand that the realized value amount will be exclusive of any
official fees and taxes imposed upon vehicle disposition.
14. END OF LEASE TERMINATION LIABILITY
I agree that my payment liability at the end of the lease term will be
the sum of:
a. a termination fee of $350; plus
b. any monthly lease payments due you which are unpaid and any other
amounts arising from my failure to keep my promises under this lease;
plus
c. a charge shown in Item 2.i. for each mile the vehicle has been driven
in excess of the mileage the vehicle would have if it had been driven
the average number of miles a year stated in Item 2.b.; plus
d. any official fees and taxes imposed in connection with lease
termination (for example, sales/use taxes due on a mileage charge
under c.).
15. EARLY TERMINATION LIABILITY
At any time after I have paid the number of monthly lease payments
indicated in Item 2.j., I may terminate this lease on the due date of a
monthly lease payment if this lease is not in default. At any time after
I sign this lease, you may terminate it if conditions as stated in Item
20 occur or this lease is in default as stated in Item 21.
I agree that, except as provided in Items 7, 9 and 20, my payment
liability upon early termination will be the sum of:
1. a termination fee of $350; plus
b. any monthly lease payments already due you which are unpaid, any
monthly lease payments which would be due you before my early
termination right commences and any other amounts arising from my
failure to keep my promises under this lease; plus
c. the product of Item 2.f. and the number of monthly lease payments
remaining during the lease term; plus
d. the amount, if any, by which the Initial Lease Balance described in
Item 8 less all depreciation amounts credited to it as also described
in Item 8 exceeds the realized value; plus
e. any official fees and taxes imposed in connection with lease
termination (for example, sales/use taxes due on a deficiency balance
under d.).
16. VEHICLE MAINTENANCE
I agree at my expense to have the vehicle serviced in accordance with
the manufacturers' recommendations, to maintain the vehicle in good
running order and condition and to have all necessary repairs made.
Unless I obtain your written consent beforehand, I will not make any
changes to the vehicle which would decrease its economic value or
functional utility. Any changes made to the vehicle which cannot be
removed without decreasing its economic value or functional utility will
become your property when made. If you request, you may inspect the
vehicle at any reasonable time.
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I also agree that when I return the vehicle to you, if I have properly
maintained the vehicle, it will be in good running order and condition
and will have, among other things, no less than 5 matching tires of
equal quality to the originals (or 4 with emergency "doughnut" spare),
with each tire having at least 1/8 inch of remaining tread at its
shallowest point, and no chips, scratches, cracks or other damage or
defects in the glass, body or interior beyond normal wear and tear. If
it costs you more than $75 to put the vehicle in this condition, I
promise to pay the difference.
17. VEHICLE WARRANTIES AND DISCLAIMERS
To the extent they are assignable, you agree to assign to me all your
rights and remedies under the warranties applicable to the vehicle which
have been made by its manufacturers. I ACKNOWLEDGE THAT YOU MAKE NO
EXPRESS WARRANTIES REGARDING THE VEHICLE, THAT YOU DISCLAIM ANY IMPLIED
WARRANTIES AND THAT I AM LEASING IT FROM YOU "AS-IS".
18. LIENS AND CLAIMS
I will keep this lease and the vehicle free from any liens, encumbrances
or claims which you have not created under Item 23.e. I will hold you
harmless and indemnify you for all liability, loss and expense arising
from the use, condition or ownership of the vehicle, including any claim
made under the strict liability doctrine.
19. USE OF VEHICLE
I understand that I am responsible for all operating expenses (for
example, gasoline and oil) incurred in connection with the use of the
vehicle. I will not use or permit use of the vehicle:
a. for any unlawful purpose or in violation of any law;
b. by a person not having a valid drivers' license or one who for
insurance purposes is deemed an assigned risk or one who does not
exercise reasonable care in its operation;
c. for the transportation of persons for hire;
d. outside the state where I reside when I sign this lease for a period
exceeding 30 days without your prior written consent; or
e. outside the United States, without your prior written consent.
20. DAMAGE, LOSS OR POTENTIAL LOSS OF VEHICLE
I agree to be responsible for the risk of loss, damage or destruction of
the vehicle during the lease term and until I return the vehicle to you.
If the vehicle is damaged or destroyed in an accident or other
occurrence or confiscated by any governmental authority or is stolen or
is abandoned or is subject to undue peril, I will notify you of such
occurrence or condition as soon as possible. If the vehicle is damaged
and is in a condition which you believe is beyond reasonable repair, the
lease will be terminated immediately. With respect to any other
occurrence or condition included above, you reserve the right to
terminate the lease immediately. If the lease is terminated, my
termination liability will be determined on the basis of any early
termination except that the termination fee will be $200. While any loss
proceeds you receive from the insurance I provide will be credited to my
termination liability, I also acknowledge my liability for any
difference between the termination liability figure and the loss
proceeds amount.
21. DEFAULT
If any information in my credit application or that of a guarantor of
this lease is false or misleading or I fail either to make a monthly
lease payment when due or otherwise to keep my promises under this lease
or any other agreement I have with you or if I or a guarantor becomes
insolvent or dies, you can treat this lease as being in default.
In the event of default, you may do any one or more of the following
without giving me advance notice: (a) take any reasonable measures
designed either to correct the default or to save yourself from loss,
such as purchasing insurance to protect your interest if I fail to
fulfill my
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obligations under Item 4, in which case I will pay you upon demand for
the costs and expenses incurred; (b) terminate the lease and my rights
to possess and use the vehicle; (c) take possession of the vehicle by
any method or manner permitted by law; (d) determine my termination
liability on an early termination basis which I agree to pay upon your
demand; (e) apply my security deposit to any amounts I owe you; (f)
pursue any other remedy permitted by law.
I also agree to pay you upon your demand for all collections and legal
costs, including reasonable attorneys' fee and court costs, you incur,
to the extent permitted by law.
22. MORE THAN ONE LESSEE
If more than one lessee signs this lease, all lessees will be jointly
and severally liable. I agree that you can waive or delay the
enforcement of your rights as to one lessee without affecting your
rights as to any other lessees. I also agree that you can release any
lessee from his or her obligations without releasing any other lessees
from their obligations.
23. GENERAL PROVISIONS
I understand that:
a. Your waiver or delay in requiring me to keep my promises or in
enforcing your rights will not affect your ability to require me to
keep my promises or to enforce your rights afterwards;
b. You have no obligation to provide a replacement vehicle for any
reason;
c. Notices under this lease must be in writing, addressed to the
appropriate party at the address shown above, and must be mailed by
U.S. Mail, first class postage prepaid, and each party shall notify
the other of a change in address;
d. Any changes to this lease must be in writing and signed by the party
to be bound;
e. I HAVE NO RIGHT TO ASSIGN AN INTEREST IN THE LEASE OR THE VEHICLE OR
TO SUBLET OR LEND THE VEHICLE. I acknowledge that you may assign an
interest in this lease or the vehicle and that if I receive notice of
the assignment, I will acknowledge the notice and pay any assigned
amounts specified in the notice as you have directed. I agree that
unless otherwise provided by applicable law the rights of your
assignee will be free of any claims I may have against you and
further that no assignee is responsible for the performance of any of
your duties under this lease unless the assignee expressly assumes
the duties;
f. Any security deposit shown in Item 3.e. will not be considered as
rent, will not bear interest unless otherwise provided by applicable
law and will not release me from any of my obligations to you, and
you may at any time apply the deposit to the payment of my
obligations to you. I understand that you will return any remaining
balance of the deposit after I have paid off my liability under this
lease.
g. You will have no liability for a failure or delay in delivering the
vehicle or any other failure to perform your obligations related to
the lease if caused by circumstances beyond your control. In no event
will you be liable for consequential damages. Also, my obligations
under this lease are independent and irrevocable. As a result, you
will have no liability and my obligations will not be affected if the
vehicle is damaged or does not work properly, or if any other
occurrence which is not the direct result of your conduct affects my
use of the vehicle; and
h. I waive any right to confidentiality of my address in any
registration records related to the vehicle, including any such right
I may have under California Vehicle Code 1808.21, and authorize you
and your assignee to obtain my address from those records to assist
in the enforcement of this lease.
CONSUMER OR COMMERCIAL LEASE: I intend to use the vehicle (initial applicable
box only):
Primarily for personal, / / / / Primarily for agricultural, / / / /
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family or household OR business or commercial B.C.
purposes /X/ /X/ purposes /X/ /X/
THESE DISCLOSURES REQUIRE THE LESSEE'S INITIALS IF CALIFORNIA'S VEHICLE
LEASING ACT APPLIES
("You" refers to the lessee in contrast to the rest of the lease where "you"
refers to the lessor):
(a) Notice to the lessee: (1) Do not sign this agreement before you read it
or if it contains any blank spaces to be filled in; (2) You are entitled
to a completely filled in copy of this agreement; (3) If you default in
the performance of your obligations under this agreement, the vehicle
may be repossessed and you may be subject to suit and liability for the
unpaid indebtedness evidenced by this agreement.
B.C.
/X/ /X/
(b) Warning - Unless a charge is included in this agreement for public
liability or property damage insurance, payment for such coverage is not
provided by this agreement.
B.C.
/X/ /X/
(c) Lessee has the right to return the vehicle and receive a refund of any
payments made if the credit application is not approved, unless
non-approval results from an incomplete application or from incorrect
information provided by the lessee.
B.C.
/X/ /X/
(d) California law does not provide for a "cooling-off" or other
cancellation period for vehicle leases. Therefore, you cannot later
cancel this lease simply because you change your mind, decide the
vehicle costs too much, or wish you had acquired a different vehicle.
You may only cancel this lease with the agreement of the lessor or for
legal cause, such as fraud.
B.C.
/X/ /X/
I HAVE READ BOTH SIDES OF THIS LEASE AND RECEIVED A COMPLETELY FILLED IN
COPY BEFORE SIGNING BELOW
DATE March 18, 1996 Boyd's Wheels, Inc.
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NAME OF COMPANY (IF APPLICABLE)
LESSOR Eldorado Bank Leasing LESSEE Boyd Coddington
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BY Michael Robbins
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TITLE Vice-President LESSEE TITLE
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DELIVERY RECEIPT
I acknowledge that I have received and examined the vehicle described at the
beginning of this lease, that the vehicle is equipped as described and is in
good operating order and condition and that I accept the vehicle for all
purposes of the lease.
Boyd's Wheels, Inc.
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NAME OF COMPANY (IF APPLICABLE)
DATE March 18, 1996 LESSEE: Boyd Coddington
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STARTING MILEAGE ON ODOMETER LESSEE: TITLE
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