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EXHIBIT 10.6
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MASTER EQUIPMENT LEASE
This Master Equipment Lease ("Master Lease") is entered into as of August 16,
1996 by and between THE FIFTH THIRD LEASING COMPANY, an Ohio corporation
("Lessor"), ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ RESEARCH
ASSOCIATES, INC., a (an) Ohio S Corporation ("Lessee"), ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ &
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
TERMS AND CONDITIONS OF LEASE
In consideration of the premises and of the rentals and the covenants
hereinafter mentioned to be kept and performed by Lessee, Lessor hereby leases
the equipment (including all replacement parts, repairs, additions and
accessories thereto) listed on Equipment Schedule A attached hereto on the date
hereof or as attached hereto at any time in the future or listed or described in
any other document which refers to and incorporates the terms of this Agreement
(collectively "Equipment"), upon the following terms and conditions:
SECTION 1. ACQUISITION AND LEASE OF EQUIPMENT.
(a) Lessor will, subject to the terms of this Master Lease, purchase
the Equipment set forth in Schedule A and simultaneously lease such Equipment to
Lessee. The approximate purchase price for each unit of Equipment is as set
forth in Schedule A. Lessee shall provide a security deposit (the "Security
Deposit") in the amount, if any, specified in Schedule A to be paid to Lessor
prior to the commencement of the Master Lease. Lessee acknowledges either:
(i) that Lessee has approved any written Supply Contract as
defined by the uniform version of the Uniform Commercial Code (UCC)
Section 2A-103(y) as adopted in the state of Lessor's principle place
of business covering the Equipment purchased from the "Supplier" (as
defined by UCC Section 2A-103(x)) thereof for lease to Lessee; or
(ii) that Lessor has informed or advised Lessee, in writing,
either previously or by this Master Lease of the following:
(1) the identity of the Supplier;
(2) that the Lessee may have rights under the
Supply Contract; and
(3) that the Lessee may contact the Supplier
for a description of any such rights Lessee
may have under the Supply Contract.
(b) Lessor hereby authorizes Lessee to accept delivery of the Equipment
from the manufacturer or the Supplier. Upon delivery and installation of each
item of Equipment, if such Equipment is in good working order, and complies with
the specifications of the purchase order, Lessee shall execute and deliver to
Lessor a Certificate of Acceptance in form acceptable to Lessor. Lessor shall be
under no obligation to purchase the Equipment until it has received the
Acceptance Certificate executed by Lessee.
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(c) Lessor shall be under no obligation to purchase any item of
Equipment if there shall exist an Event of Default or any condition, event or
act which, with notice or lapse of time or both, would become an Event of
Default.
SECTION 2. TERM AND RENT.
(a) This Master Lease shall commence on the date set forth above and
shall continue in effect thereafter so long as any Equipment Schedule A entered
into pursuant to this Master Lease remains in effect. The term of each Equipment
Schedule A shall commence upon the Effective date specified in each Schedule and
shall continue for the term specified unless earlier terminated pursuant to the
terms hereof. Unless otherwise stated in schedule each Schedule A term shall be
automatically extended for successive monthly periods until terminated by either
party giving to the other not less than ninety (90) days prior written notice of
termination. Any such termination shall be effective only on the last day of the
term specified in Schedule A or any successive period.
(b) As rent for the Equipment, Lessee agrees to pay to Lessor the rent
specified in Schedule A. All payments provided for in this Master Lease shall be
made to the Lessor at the address of the Lessor set forth above, or at such
other place as the Lessor, or its assigns, shall specify in writing. The rent
specified in Schedule A shall be adjusted for any errors, increase or decrease
in the purchase price of the Equipment. The payment of the rent specified in
Schedule A also shall be secured by any presently existing or hereafter acquired
property pledged to Lessor or any affiliate of Fifth Third Bancorp for any
indebtedness of Lessee owed to Lessor and all affiliates of Fifth Third Bancorp,
whether direct or contingent, due or to become due, provided, however, that this
provision shall not apply to a "consumer credit transaction" as defined in Title
I, Consumer Credit Protection Act 15 U.S. C.A. Sections 1601 et. seq., as
amended or any applicable state statute containing similar provisions.
(c) This Master Lease is a net lease and Lessee acknowledges and agrees
that Lessee's obligation to make all payments hereunder, and the rights of
Lessor in and to all such payments, shall be absolute and unconditional and
shall not be subject to any abatement of rent or reduction thereof, including
but not limited to, abatements or reductions due to any present or future claims
of Lessee against Lessor, the manufacturer of the Equipment, the Supplier, or
any party under common ownership or affiliated with Lessor, by reason of any
defect in the Equipment, the condition, design, operation or fitness for use
thereof, or by reason of any failure of Lessor to perform any of its obligations
hereunder, or by reason of any other cause. It is the intention of the parties
hereto that the rent payable by Lessee hereunder shall continue to be payable in
all events and in the manner and at the times herein provided unless the
obligation to pay shall be terminated pursuant to the provisions of this Lease.
SECTION 3. TAX INDEMNIFICATION.
(a) The terms of this Master Lease, including payment amounts, have
been made in reliance on the fact that Lessor, its successors and assigns, shall
be entitled to such deductions,
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credits and other benefits (the "Tax Benefits") as are provided to an owner of
property, to the extent permitted under applicable law and provisions of the
Internal Revenue Code of 1986 (the "Code"), as amended, including but not
limited to depreciation and amortization deductions allowable under Sections
167, 168 and 169 of the Code and any amendments or additions thereto relating to
the leased property (the "Deductions").
(b) If the Lessor or its successor or assigns shall lose, during the
term of this Master Lease, its right to claim all or any part of such Tax
Benefits or Deductions or any part of such Tax Benefits or Deductions is
disallowed, the rental set forth in Schedule A shall be increased by an amount
which, in the reasonable opinion of Lessor, will cause Lessor's total net return
(after all taxes) to be equal to the net return which Lessor would have received
had such Tax Benefits or Deductions not been disallowed.
(c) In the event Lessor's claim of all or any part of such Tax Benefits
or Deductions with respect to the Equipment is disallowed or lost after the term
of the Lease, Lessee shall pay Lessor a lump sum which, in the reasonable
opinion of Lessor will cause Lessor's total net return (after all taxes) to be
equal to the net return Lessor would have received had such Tax Benefits or
Deductions not been disallowed.
(d) In the event that this Master Lease is, for any reason, canceled or
prepaid prior to the expiration of its term the Lessee agrees to pay to Lessor,
in addition to all other amounts payable under this Master Lease, a lump sum
amount which, in the reasonable opinion of Lessor, will cause Lessor's net
return (when combined with all other payments hereunder but excluding any
prepayment penalties and after all taxes) to be equal to the net return Lessor
would have received had this Master Lease not been terminated prior to the
expiration of its term.
(e) The rent shall not be so increased (or the lump sum payment shall
not be due) if and to the extent that the Lessor shall have lost the right to
claim such a Tax Benefit or Deduction as a direct result of any one of the
following events:
(i) a casualty occurrence with respect to the Equipment if
Lessee shall have paid the Lessor pursuant to the provisions of Section
13 hereof;
(ii) the failure of Lessor to claim the Tax Benefit or
Deduction on its income tax return for the appropriate year; or
(iii) the failure of Lessor to have sufficient tax liability
to fully use such Tax Benefits or Deductions.
(f) Lessee agrees that neither it nor any corporation controlled by it,
in control of it, or under common control with it, directly or indirectly, will
at any time take any action or file any returns or other documents inconsistent
with the foregoing and that each of such corporations will file such returns,
take such action and execute such documents as may be reasonable and necessary
to facilitate accomplishment of the intent thereof. Lessee agrees to copy and
make available for
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inspection and copying by Lessor such records as will enable Lessor to determine
whether it is entitled to the benefit of any amortization or depreciation
deduction or tax credit which may be available from time to time with respect to
the Equipment.
(g) If, under any circumstances or for any reasons whatsoever, except
for acts of the Lessor:
(i) Lessor shall become liable for additional tax as a
result of Lessee having added an attachment or made
an alteration to the Equipment which would increase
the productivity or capability of the Equipment so as
to violate the provisions of Rev. Proc. 75-21, 1975-1
C.B. 715, as modified by Rev. Proc. 79-48, 1979-2
C.B. 529 (and as either or both may hereafter be
modified or superseded);
(ii) the statutory full-year marginal federal tax rate for
corporations with a December 31 tax year-end is
different than the statutory tax rate in effect on
the date of this Master Lease; or
(iii) Lessor shall not have or shall lose the right to
claim or there shall be disallowed or recaptured all
or any portion of the Federal tax depreciation
deductions with respect to any item of Equipment
based on depreciation of the Lessor's full cost of
such item of Equipment and computed on the basis of a
method of depreciation provided by the Code as Lessor
in its complete discretion may select; then Lessee
agrees to pay Lessor upon demand an amount which,
after deduction of all taxes required to be paid by
Lessor in respect of the receipt thereof under the
laws of any federal, state or local government or
taxing authority of the United States or of any
taxing authority or government subsidiary of any
foreign country, shall be equal to the sum of:
(1) an amount equal to the additional
income taxes which would be paid or
payable by Lessor in consequence of
the failure to obtain the benefit
of a depreciation deduction
calculated under the assumption
that Lessor's income is taxed at
the highest applicable rate
(without regard to the actual taxes
paid by Lessor), and
(2) any interest and/or penalty which
may be assessed in connection with
any of the foregoing.
(h) The provisions of this Section 3 shall survive the expiration or
earlier termination of this Master Lease.
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SECTION 4. ACCEPTANCE, USE AND MAINTENANCE OF EQUIPMENT.
(a) Lessor hereby authorizes Lessee to accept delivery of the Equipment
from the manufacturer or Supplier. Upon delivery and installation of each item
of Equipment, if such Equipment is in good working order, Lessee shall execute
and deliver to Lessor a Certificate of Acceptance in a form acceptable to
Lessor.
(b) Lessor shall have no obligation and assumes no liability for any
matter relating to the ordering, manufacture, shipment, installation, erection,
testing, adjusting or servicing of any item of Equipment, or for any failure or
delay in obtaining or delivering any item of Equipment. Lessee shall provide and
maintain a suitable installation environment for each item of Equipment with all
appropriate utilities, wiring and other facilities prescribed or recommended by
the appropriate manufacturer's installation and operating manuals.
(c) Lessee shall cause the Equipment to be operated by competent
employees and in accordance with the manufacturer's operating manuals and shall
pay all expenses of operating the Equipment. The Equipment shall be maintained
at the location(s) specified in Schedule A and shall not be removed from such
location(s) without the written consent of the Lessor. Lessor will have the
right, from time to time during reasonable business hours, to enter upon the
Lessee's premises or any other premises where the Equipment may be located, for
the purpose of confirming the existence, location, condition or proper
maintenance of the Equipment.
(d) Lessee, at its own cost and expense, shall keep all Equipment in
good repair, condition and working order and shall furnish all parts,
mechanisms, devices and servicing required therefor. All such parts, mechanisms,
and devices shall immediately become the property of Lessor and part of the
Equipment for all purposes.
(e) Lessee shall comply with and conform to all laws, ordinances and
regulations, present or future, in any way relating to the possession, use or
maintenance of the Equipment throughout the term of this Master Lease.
(f) Lessee shall pay or satisfy and discharge any and all claims
against, through or under Lessee and its successors and assigns, which, if
unpaid, might constitute or become a lien or a charge upon any of the Equipment,
and any liens or charges which may be levied against or imposed upon the
Equipment as a result of the failure of Lessee to perform or observe any of its
covenants or agreements under this Master Lease and any other liens or charges
which arise by virtue of claims against, through or under any other party other
than Lessor, but Lessee shall not be required to pay or discharge any such
claims so long as it shall, in good faith by any appropriate legal proceedings
contest the validity thereof in any reasonable manner which will not, in the
reasonable opinion of Lessor, affect or endanger the interest of Lessor or other
rights of any assignee under this Master Lease hereof in and to the Equipment or
diminish the value thereof. Lessee's obligations under this Section shall
survive the termination of this Master Lease.
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SECTION 5. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer, the Supplier, nor any salesman, representative, or other agent of
the manufacturer or Supplier, is an agent of Lessor. No salesman, representative
or agent of the manufacturer or Supplier is authorized to waive or alter any
term or condition of this Master Lease and no representation as to the Equipment
or any other matter by the manufacturer or Supplier shall in any way affect
Lessee's duty to pay rent and perform its obligations as set forth in this
Master Lease.
SECTION 6. DISCLAIMER OF WARRANTIES. LESSEE ACKNOWLEDGES THAT: LESSOR IS NOT THE
MANUFACTURER OF THE EQUIPMENT NOR THE MANUFACTURER'S AGENT NOR A DEALER THEREIN;
THE EQUIPMENT IS OF A SIZE, DESIGN, CAPACITY, DESCRIPTION AND MANUFACTURE
SELECTED BY LESSEE; LESSEE IS SATISFIED THAT THE EQUIPMENT IS SUITABLE AND FIT
FOR ITS PURPOSES; AND LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS
OR IMPLIED AS TO THE DESIGN, OPERATION OR CONDITION, OR AS TO THE QUALITY OF THE
MATERIAL, EQUIPMENT OR WORKMANSHIP IN THE EQUIPMENT LEASED HEREUNDER, AND LESSOR
MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY
PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, IT BEING
AGREED THAT ALL SUCH RISKS AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY
LESSEE AND THE BENEFITS OF ANY AND ALL IMPLIED WARRANTIES OF LESSOR ARE HEREBY
WAIVED BY LESSEE. LESSEE SHALL NOT BE RESPONSIBLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES. Lessor agrees that Lessee shall be entitled to the
benefit of any manufacturer's warranties on the Equipment to the extent
permitted by applicable law.
SECTION 7. IDENTIFICATION; PERSONAL PROPERTY. No right, title or interest in the
Equipment shall pass to Lessee other than the right to maintain possession and
use of the Equipment for the full lease term. Lessor may require plates or
markings to be conspicuously affixed to or placed on the Equipment indicating
Lessor is the owner. However, if any item of Equipment leased hereunder is to be
operated by the public, such plates or markings need not be placed in a
conspicuous part of the Equipment. The Equipment is, and shall at all times be
and remain, personal property even though the Equipment or any part thereof may
hereafter become affixed or attached to real property.
SECTION 8. QUIET ENJOYMENT. So long as Lessee is in compliance with the terms of
this Master Lease:
(a) Lessee's right of quiet enjoyment of the Equipment shall not be
impaired by the Lessor or anyone claiming through the Lessor; and
(b) Lessor shall not create any liens or encumbrances upon the
Equipment other than liens arising out of claims contested in good faith by
Lessor which will not in the reasonable opinion of Lessor affect or endanger the
interest of Lessee under this Master Lease.
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SECTION 9. ASSIGNMENT.
(a) LESSEE AGREES NOT TO SELL, ASSIGN, SUBLET, PLEDGE, HYPOTHECATE, OR
OTHERWISE ENCUMBER, SUFFER A LIEN UPON OR AGAINST ANY INTEREST IN THIS AGREEMENT
OR THE EQUIPMENT LEASED HEREUNDER.
(b) Lessor may assign, pledge, or in any other way transfer this Master
Lease either in whole or in part, without notice to Lessee. Should this Master
Lease or any interest therein be assigned or should the rentals hereunder be
assigned, no breach or default of this Master Lease by Lessor to its assignee
shall excuse performance by Lessee of any provision hereof. Upon receipt of
notice of assignment of this Master Lease or the rentals due hereunder, if so
directed by Lessor, Lessee shall pay the rentals hereunder as they become due to
any assignee without any set-offs, counterclaims or defense thereto.
SECTION 10. FEES - TAXES. Lessee agrees to pay and to indemnify and hold Lessor
harmless from all license and registration fees and all assessments, taxes and
impositions of whatever nature including income, franchise, sales, use,
property, excise and other taxes now or hereinafter imposed by any governmental
body or agency upon the Equipment, or the use thereof, including all interest
and penalties, but excluding any income taxes payable by Lessor on the receipt
of income under this Master Lease.
SECTION 11. LIMITATION OF LIABILITY; INDEMNIFICATION.
(a) Lessee agrees that Lessor shall not be responsible for any loss or
damage to Lessee, its customers or anyone else, caused by any failure or defect
of the Equipment, or otherwise.
(b) Lessee hereby assumes liability for, and hereby agrees to
indemnify, defend, protect, save and keep harmless Lessor, its successors and
assigns, from and against any and all claims, liabilities, judgments, suits,
obligations, losses, damages, expenses, penalties, and disbursements (including
reasonable attorneys' fees and expenses) of any kind and nature arising from or
pertaining to the use, possession, operation, manufacture, purchase, financing,
ownership, delivery, rejection, nondelivery, transportation, storage
maintenance, repair return or other disposition of the Equipment including but
not limited to liabilities resulting from strict liability in tort or a breach
of any law, regulation or ordinance of any federal, state or local government
agency.
SECTION 12. RETURN OF EQUIPMENT. Upon the expiration of the terms of this Master
Lease, unless the Equipment is sold to the Lessee, Lessee will at its own cost
and expense deliver possession of the Equipment to Lessor at a location
designated by the Lessor free and clear of all liens, charges, encumbrances, and
rights of others, in good working order and repair (except for ordinary wear and
tear resulting from proper use) and in the condition required hereby.
SECTION 13. CASUALTY LOSS. Lessee hereby assumes and shall bear the risk of
loss, damage to or theft of the Equipment from any and every cause whatsoever,
whether or not insured. No loss or damage to the Equipment or any part thereof
shall impair any obligation of Lessee under this Master
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Lease which shall continue in full force and effect. In the event that any item
of Equipment shall become damaged, worn out, destroyed, lost or stolen, or if
any item of the Equipment is requisitioned or taken by any governmental
authority under the power of eminent domain or otherwise. Lessee shall promptly
notify Lessor thereof at the option of Lessor, Lessee shall:
(a) Place the same in good repair, condition and working order; or
(b) Replace the same with the like property in good repair, condition
and working order which property shall be thereupon conveyed to Lessor free,
clear and unencumbered and thereupon be subject to this Master Lease; or
(c) On the Rental Payment date next following the date the Equipment
becomes damaged, worn out, destroyed, lost or stolen, pay Lessor in cash all of
the following:
(i) all amounts then owed by Lessee to Lessor under this
Master Lease;
(ii) an amount equal to the greater of the estimated fair
market value of the equipment at the end of lease term or 10% of the
actual cost of said Equipment; and
(iii) the unpaid balance of the total rent for the initial
term of this Master Lease attributable to such Equipment.
Upon Lessor's receipt of such payment, Lessee shall be entitled to whatever
interest Lessor may have in such Equipment, in its then condition and location
"AS IS" and "WHERE IS", without warranty express or implied.
SECTION 14. INSURANCE.
(a) Lessee at its expense will provide and maintain fire and extended
coverage insurance against loss, theft, damage or destruction of the Equipment
in an amount not less than 100% of the insurable value of the Equipment on a
replacement cost basis as determined by Lessor. Each policy will provide
expressly that such insurance, as to lessor and its assigns, will not be
invalidated by any act, omission or neglect of Lessee and will provide expressly
for at least thirty (30) days prior written notice to Lessor of alteration or
cancellation. The proceeds of such insurance will be applied first to any
obligations of Lessee under this Master Lease arising prior to the receipt of
the proceeds and then toward the restoration or repair of the Equipment or if
Lessor determines that any item of Equipment is lost, stolen, destroyed, or
damaged beyond repair toward payment of the amounts required by Section 13
above. Any excess proceeds remaining thereafter will be paid to Lessee, provided
Lessee is not then in default under this Master Lease.
(b) Lessee at its expense will carry public liability, property damage,
and if required by Lessor, collision insurance with respect to the Equipment and
the use thereof in amounts satisfactory to Lessor. Each such policy of insurance
will name Lessor as an additional insured thereon.
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(c) All policies relating to the insurance referred to in Subsections
14(a) and (b) above, will be in such form and with such companies as are
satisfactory to Lessor and will name Lessor as an additional insured and as an
additional loss payee. Lessee will furnish Lessor proof of such insurance.
Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make claim for,
adjust, settle, receive payment of and execute and endorse all documents, checks
or drafts for loss or damage under any such insurance policy.
(d) If Lessee fails to procure, maintain and pay for such fire and
extended coverage insurance or any such public liability, property damage or
collision insurance required by Lessor, Lessor will have the right, but not the
duty, to obtain such insurance on behalf of and at the expense of Lessee. In the
event Lessee does obtain and pay for such insurance, Lessee will reimburse
Lessor for the costs thereof no later than the date of the next scheduled rental
payment under this Master Lease.
SECTION 15. RIGHT OF LESSOR TO PERFORM. If the Lessee shall fail to comply with
any of its covenants herein contained, the Lessor (or, in the case of an
assignment by the Lessor pursuant to Section 9(b) hereof, as assignee), may, but
shall not be obligated to, make advances to perform the same and to take all
such action as may be necessary to obtain such performance. Any payment so made
by any such party and all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred in connection therewith shall
be immediately due and payable by the Lessee to the party making the same, as
additional rent hereunder.
SECTION 16. EVENTS OF DEFAULT. Any of the following events shall constitute an
Event of Default:
(a) The nonpayment by Lessee for ten (10) days of any rent or other
amount provided for herein after the same is due and payable;
(b) The failure of Lessee to observe, keep or perform any other
provisions of this Master Lease required to be observed, kept or performed by
Lessee, which failure is not cured ten (10) days after notice hereof by Lessor;
(c) The failure of Lessee to make any payment when due, or to observe
or perform any covenant or agreement contained in, or the occurrence of a
Default or Event of Default under any agreement evidencing, guarantying or
securing any other indebtedness or obligation of Lessee to Lessor, The Fifth
Third Bank, or any other affiliate of Fifth Third Bancorp of any kind or nature;
(d) The making of any representation or warranty by Lessee herein or in
any agreement, document or certificate delivered to Lessor in connection
herewith, or any financial statement furnished by Lessee to Lessor which, at any
time, proves to be incorrect in any material respect;
(e) Lessee or any guarantor makes an assignment for the benefit of
creditors or commits any other affirmative act of insolvency or bankruptcy,
files a petition in bankruptcy or for arrangement or reorganization or having
such a petition filed against it if such petition is not dismissed or withdrawn
within thirty (30) days;
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(f) The attachment of a substantial part of the property of Lessee or
appointment of a receiver for Lessee or any substantial part of Lessee's
property;
(g) Lessee ceases to do business as a going concern, or if there is a
change in the ownership of Lessee which changes the identity of any person or
persons having, directly or indirectly, more than 10% of either the legal or
beneficial ownership of Lessee;
(h) There shall occur, in Lessor's reasonable opinion, a deterioration
in the financial strength of the Lessee or any event occurs which might, in
Lessor's opinion, have an adverse effect on the Equipment or on Lessee's
financial condition, operations or prospects;
(i) The death or dissolution of Lessee or any guarantor, or any
guarantor of Lessee's obligations hereunder denies his or its obligations to
guarantee any obligations then existing or attempts to limit or terminate his or
its obligations to guaranty the Lessee's obligations hereunder.
Lessee also agrees upon any responsible officer of Lessee becoming aware of any
condition which constituted or constitutes an Event of Default under this Master
Lease or which, after notice or lapse of time, or both, would constitute such an
Event of Default, to promptly furnish to Lessor written notice specifying such
condition and the nature and status thereof. For purposes of this Section, a
"responsible officer" shall mean, with respect to the subject matter of any
covenant, agreement or obligation of Lessee contained in this Master Lease, any
corporate officer of Lessee who, in the normal performance of his operational
responsibilities, would or should have knowledge of such matter and the
requirements of this Master Lease with respect thereto.
SECTION 17. REMEDIES. Upon the occurrence of any Event of Default, and so long
as the same shall be continuing, Lessor shall have the right to declare this
Master Lease in default without notice to Lessee. Such declaration shall apply
to all schedules then in effect hereunder. Upon the making of any such
declaration, Lessor shall have the right to exercise any one or more of the
following remedies:
(a) To take possession of any and all items of Equipment without
further demand or notice wherever they may be located without any court order or
process of law (but if Lessor applies for a court order or the issuance of legal
process, Lessee waives any prior notice of the making of this application or the
issuance of such order of legal process) and Lessee hereby waives any and all
damages occasioned by such taking of possession; any such taking of possession
shall not constitute termination of this Master Lease as to any or all of
Equipment unless Lessor expressly so notified Lessee in writing;
(b) To terminate this Master Lease as to any or all items of
Equipment without prejudice to Lessor's rights in respect to
obligations then accrued and remaining unsatisfied;
(c) To recover from Lessee (and Lessee agrees to pay in cash the
following):
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(i) all amounts then owed by Lessee to Lessor under this
Master Lease;
(ii) the unpaid balance of the total rent for the initial term
of this Master Lease attributable to said Equipment.
(iii) an amount equal to the greater of the estimated fair
market value of the equipment at lease termination or 10% of the actual
cost of said Equipment; and
(iv) an amount equal to 10% of the original cost of the
Equipment as liquidated damages and not as a penalty.
(d) To sell any or all of the Equipment in public or private sale, in
bulk or in parcels, for cash or credit without having the Equipment present at
the place of sale and to recover from Lessee all costs of taking possession,
storing, repairing, and selling the Equipment (and Lessor may use Lessee's
premises for any or all of the foregoing without liability for rent, costs, or
damages or otherwise) or to otherwise dispose, hold, use, operate, lease to
others or keep idle such Equipment all as Lessor in its sole discretion may
determine and to apply the proceeds of any such action:
(i) to all costs, charges and expenses incurred in taking,
removing, holding, operating, repairing, and selling, leasing or
otherwise disposing of the Equipment; then
(ii) to the amounts set forth in Section (c)(i),(ii),(iii) and
(iv) above provided that Lessee shall pay any deficiency due Lessor;
and
(iii) any surplus shall be retained by Lessor.
(e) To pursue any other remedy provided for by statute or otherwise
available at law or in equity. Notwithstanding any repossession, or other action
which Lessor may take, the Lessee shall be remain liable for the full
performance of all obligations on the part of Lessee to be performed under this
Master Lease to the extent not paid or performed by Lessee. All such remedies
are cumulative and may be exercised concurrently or separately. In addition to
the foregoing, Lessee shall pay Lessor all costs and expenses, including
reasonable attorneys' fees and fees of collection agencies incurred by Lessor in
exercising any of its rights and remedies hereunder.
SECTION 18. REPAYMENT OF OTHER AMOUNTS. In addition to any other right granted
to Lessor hereunder to terminate this Master Lease, Lessor shall have the right
to terminate this Master Lease and collect all amounts due hereunder (including
any lump sum or other tax payments provided in Section 3 hereof) if Lessee,
whether at the direction or request of the Lessor or any affiliate of Lessor,
The Fifth Third Bank or The Fifth Third Bancorp, repays all or substantially all
other amounts and obligations owed by Lessee to the Lessor or any affiliate of
Lessor, The Fifth Third Bancorp.
SECTION 19. FURTHER ASSURANCES. Lessee will, upon request of Lessor, at Lessee's
sole cost and expense, do and perform any other act and will execute,
acknowledge, deliver, file, record and
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deposit (and will re-file, re-register, re-record, and re-deposit whenever
required) any and all further instruments required by law or Lessor including,
without limitation, financing statements or other documents needed for the
protection of Lessor's interest.
SECTION 20. NOTICES. Any notices and demands required to be given hereunder
shall be in writing and may be delivered personally or mailed by certified mail,
return receipt requested, to the respective addresses of the parties above set
forth, or to such other address as either party may hereinafter indicate by
written notice, as provided in this section.
SECTION 21. FINANCIAL STATEMENTS. Within sixty (60) days after the end of each
fiscal quarter and within ninety (90) days after the end of each fiscal year of
Lessee during the term of this Master Lease, Lessee shall deliver to Lessor
yearly Balance Sheets, Profit and Loss Statements and Source and Application of
Funds of Lessee certified by the independent public accountants of Lessee or if
unaudited, certified to be true and correct by the chief financial officer of
Lessee.
SECTION 22. FILINGS; POWER OF ATTORNEY. Lessee will execute and deliver to
Lessor at Lessor's request all financing statements, continuation statements,
and other documents that Lessor may reasonably request, in form satisfactory to
Lessor, to perfect and maintain Lessor's interest in the Equipment and to fully
consummate all transactions contemplated under this Agreement. Lessee hereby
irrevocably makes, constitutes and appoints Lessor (or any of Lessor's officers,
employees or agents designated by Lessor) as Lessee's true and lawful attorney
with power to sign the name of Lessee on any such documents. This power, being
coupled with an interest, is irrevocable until all obligations of Lessee to
Lessor have been fully satisfied.
SECTION 23. LATE PAYMENTS. Interest at the rate of 5% per month or the maximum
rate permitted by law, whichever is less, shall accrue on the amount of any
payment not made when due hereunder from the date thereof until payment is made,
and Lessee shall pay such interest to Lessor, on demand.
SECTION 24. ENTIRE AGREEMENT. THIS MASTER LEASE AND ASSOCIATED SCHEDULES
CONSTITUTES THE ENTIRE AGREEMENT BETWEEN LESSOR AND LESSEE AND EXCLUSIVELY AND
COMPLETELY STATES THE RIGHTS OF LESSOR AND LESSEE WITH RESPECT TO THE LEASING OF
THE EQUIPMENT AND SUPERSEDES ALL PRIOR AGREEMENTS, ORAL OR WRITTEN, WITH RESPECT
THERETO AND ANY COURSE OF DEALING OF THE PARTIES HERETO. The terms and
conditions of all Schedules, Addenda, and Exhibits which refer to this Master
Lease are hereby incorporated herein.
SECTION 25. FINANCE LEASE. The Lessor and Lessee hereby agree that this Master
Lease is a "finance lease" as that term is defined in Section 2A-103 of the
Uniform Commercial Code as adopted in the state of Lessor's principle place of
business and that Lessor shall be treated as a finance lessor entitled to the
benefits and releases from liability accorded to a finance lessor under the
Uniform Commercial Code.
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SECTION 26. MISCELLANEOUS. (a) This Master Lease shall inure to the benefit of
and be binding upon the successors and assigns of the respective parties hereto
provided, however, that nothing contained in this section shall impair any of
the provisions prohibiting assignment without the consent of Lessor;
(b) Any provision of this Master Lease which is unenforceable in any
jurisdiction shall not render unenforceable such provision in any other
jurisdiction and shall not invalidate the remaining provision of this Master
Lease.
(c) This Master Lease shall be governed by and construed under the laws
of the state of the Lessor's principal place of business without regard to its
conflicts of laws provisions.
(d) All covenants of Lessee herein shall survive the expiration or
termination of this Master Lease to the extent required for their full
observance and performance.
(e) No delay or omission to exercise any right, power or remedy
accruing to Lessor upon any breach or default of Lessee hereunder shall impair
any such right, power or remedy nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein or of any similar breach or
default thereafter occurring, nor shall any waiver of any single breach of
default be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of Lessor of any breach or default under this Master Lease
must be in writing specifically set forth.
(f) Lessee agrees that the state and federal courts in the county of
Lessor's principal place of business or any other court in which Lessor
initiates proceedings have exclusive jurisdiction over all matters arising out
of this Agreement and that service of process in any such proceeding shall be
effective if mailed to Lessee at its address described in the first paragraph of
this Master Lease. LESSOR AND LESSEE HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF
ANY MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
(g) No variation or modification or amendment of this Master Lease and
no waiver of any of its provisions or conditions shall be valid unless in
writing.
(h) Each and every Lessee hereunder authorizes any attorney of record
to appear for them in any court of record in the State of Ohio, after this
Master Lease is in default whether by its terms or otherwise, waive the issuance
and service of process, and release all errors and rights of appeal, and confess
a judgment against them in favor of the Lessor, for the principal amount of this
Master Lease plus interest at the Master Lease rate, together with court costs
and attorneys' fees. Lessee also agrees that the attorney acting for the
undersigned as set forth in this paragraph may be compensated by Lessor for such
services, and Lessee waives any conflict of interest caused by such
representation and compensation arrangement. Stay of execution and all
exemptions are hereby waived. If this Master Lease is referred to an attorney
for collection, and the payment is obtained without the entry of a judgment, the
Lessee shall pay to Lessor its attorney's fees.
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Lessor and Lessee have each caused this Master Lease to be duly executed as of
the date set forth on the first page hereof:
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL, IF YOU DO NOT PAY ON TIME A COURT JUDGEMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON ITS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
▇▇▇▇▇▇ RESEARCH ASSOCIATES, INC. THE FIFTH THIRD LEASING COMPANY
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/
----------------------------- -------------------------------
Title: President Title: Asst Cashier
----------------------------- -------------------------------
Lessee Lessor
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EQUIPMENT SCHEDULE A
EFFECTIVE DATE August 16, 1996
This Schedule A amends and supplements the terms and conditions of the MASTER
EQUIPMENT LEASE between THE FIFTH THIRD LEASING COMPANY, Lessor, and ▇▇▇▇▇▇
RESEARCH ASSOCIATES, INC., Lessee, dated August 16, 1996 ("Master Lease").
SECTION 1. EQUIPMENT. Pursuant to the terms of the Master Lease, Lessor agrees
to acquire and lease to Lessee the equipment listed below ("Equipment").
EQUIPMENT DESCRIPTION LOCATION SERIAL NUMBER COST
OFFICE FURNITURE 700 ▇▇▇▇▇ Tower, 5th & Vine $185,962.84
Streets,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
SEE ATTACHED EXHIBIT A FOR A
COMPLETE DESCRIPTION OF THE Total Cost $185,962.84
EQUIPMENT.
SECTION 2. BILLING ADDRESS. SAME
SAME
SECTION 3. TERM. IN MONTHS: 60 PAYMENT FREQUENCY: MONTHLY
SECTION 4. RENT. RENT SHALL BE PAYABLE IN ADVANCE. FIRST PAYMENT DATE:
AUGUST 16, 1996
Number of Payments Rent
60 $3,400.48
(B) MONTHLY PAYMENTS SHALL INCLUDE THE ABOVE RENT PLUS SALES USE TAX IF
APPLICABLE.
(C) FOR THIS SCHEDULE THERE SHALL BE ADDED TO THE FIRST INSTALLMENT OF
RENT A FURTHER SUM (INTERIM RENT) EQUAL TO THE PRODUCT RESULTING FROM
MULTIPLYING (I) THAT PART OF THE COST OF THE EQUIPMENT PAID BY LESSOR PRIOR TO
THE EFFECTIVE DATE OF THIS SCHEDULE BY (II) AN AMOUNT EQUAL TO PRIME % PER ANNUM
IN EACH CASE COMPUTED FROM THE RESPECTIVE DATES OF ANY SUCH PAYMENT BY LESSOR TO
THE EFFECTIVE DATE OF THIS SCHEDULE.
SECTION 5. TAX BENEFITS. (a) Depreciable Life: Lessor has assumed a depreciable
life of 7 years in computing the Rent listed above.
SECTION 6. END OF TERM FMV OPTIONS. At the end of the initial Term of this Lease
Schedule, so long as no Event of Default has occurred, Lessee shall exercise one
of the following options.
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(a) So long as no Event of Default has occurred and this Schedule has
not been earlier terminated, the Lessee may, at the expiration of the initial
Term, provided written notice has been given to Lessor at least ninety (90) days
but not more than one hundred eighty (180) days prior to the end of Term,
purchase all, but not less than all, of the Equipment in this Schedule on an "AS
IS, WHERE IS, BASIS" to be paid in cash in an amount equal to the fair market
value of the Equipment (plus all applicable taxes); or
(b) Lessee may return the Equipment in accordance with Section of the
Master Lease entitled "Return of Equipment"; or
(c) Lessee may renew the Master Lease at a term and rate to be
negotiated by the parties based on the fair market value of the Equipment.
SECTION 7. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule, the terms
of the Master Lease are hereby amended and supplemented as follows:
Subsection (c)(ii) of SECTION 13 of the MASTER LEASE entitled CASUALTY
LOSS and Subsection (c)(iii) of Section 17 of the Master Lease entitled REMEDIES
are each deleted in their entirety and are each replaced with the following:
"an amount equal to 15% of said Equipment cost; and"
SECTION 8. SPECIAL TERMS AND CONDITIONS. Provided no Event of Default (as
defined in the master Lease) has occurred, Lessee shall have the option to
purchase (the "Option"), after the payment of the 48th rental of this Master
Lease Schedule ("Early Purchase Date"), all, but not less than all, of the
Equipment described in the Schedule upon the following terms and conditions: If
Lessee desires to exercise the Option, it shall give Lessor written notice of
its intention to exercise the Option to purchase at least ninety (90) days
before the Early Purchase Date with respect to the Schedule subject to this
Addendum. Thereupon, at the Early Purchase Date, Lessee shall pay to Lessor, in
cash, the Purchase Price for the Equipment so purchased, determined as
hereinafter provided. The Purchase Price of the Equipment shall be an amount
equal to 31% of the Total Invoice Cost of the Equipment, together with all taxes
and charges payable in full upon sale. Lessor and Lessee agree that the Purchase
Price is a reasonable prediction of the Fair Market Value of the Equipment.
▇▇▇▇▇▇ RESEARCH ASSOCIATES, INC. THE FIFTH THIRD LEASING COMPANY
BY: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BY: /s/
-------------------------- ----------------------------
TITLE: President TITLE: Asst Cashier
----------------------- -------------------------
LESSEE LESSOR
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EXHIBIT A
This Exhibit A pertains to a Schedule A dated August 16, 1996 to a certain
Master Equipment Lease dated August 16, 1996 between THE FIFTH THIRD LEASING
COMPANY, Lessor, and ▇▇▇▇▇▇ RESEARCH ASSOCIATES, INC., Lessee.
Equipment Description Location Serial Number Cost
Office Furniture -see attached ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ & Vine $116,757.00
Exhibit ▇-▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(▇▇▇▇▇▇▇▇ County)
Office Furniture - See attached $69,205.84
Exhibit A-2 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(Ventura County)
Total Cost $185,962.84
▇▇▇▇▇▇ RESEARCH ASSOCIATES, INC.
BY: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
TITLE: President
--------------------------
LESSEE
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