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EXHIBIT 10.4
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MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT is made, entered and dated as of November
27, 1996 by and between LESSOR, BANC ONE LEASING CORPORATION, 0000 Xxxxxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000, and LESSEE, XXXXXX RESEARCH ASSOCIATES,
INC., 000 Xxxxx Xxxxx, Xxxxx xxx Xxxx Xxxxxxx, Xxxxxxxxxx, Xxxx 00000.
1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from
Lessor, all the property described in the Lease Schedules which are signed from
time to time by Lessor and Lessee.
2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by
Lessee and Lessor which incorporates the terms of this Master Lease Agreement,
together with all exhibits, riders, attachments and addenda thereto. "Equipment"
means the property described in each Schedule, together with all attachments,
additions, accessions, parts, repairs, improvements, replacements and
substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar
words mean this Master Lease Agreement and all Schedules, together with all
exhibits, riders, attachments and addenda to any of the foregoing, as the same
may from time to time be amended, modified or supplemented. "Prime Rate" means
the prime rate of interest announced from time to time as the prime rate by Bank
One, Columbus, NA; provided, that the parties acknowledge that the Prime Rate is
not intended to be the lowest rate of interest charged by said bank in
connection with extensions of credit. "Lien" means any security interest, lien,
mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ,
levy, other judicial process or claim of any nature whatsoever by or of any
person. "Fair Market Value" means the amount which would be paid for an item of
Equipment by an informed and willing buyer (other than a used equipment or scrap
dealer) and an informed and willing seller neither under a compulsion to buy or
sell. "Lessor's Cost" means the invoiced price of any item of Equipment plus any
other cost to Lessor of acquiring an item of Equipment. All terms defined in the
Lease are equally applicable to both the singular and plural form of such terms.
3. LEASE TERM AND RENT: The term of the lease of the Equipment
described in each Schedule ("Lease Term") commences on the date stated in the
Schedule and continues for the term stated therein. As rent for the Equipment
described in each Schedule, Lessee shall pay Lessor the rent payments and all
other amounts stated in such Schedule, payable on the dates specified therein.
All payments due under the Lease shall be made in United Stated dollars at
Lessor's office stated in the opening paragraph or as otherwise directed by
Lessor in writing.
4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an
event of default occurs or if for any reason Lessee does not accept, or revokes
its acceptance of, equipment covered by a purchase order or purchase contract or
if any commitment or agreement of Lessor to lease equipment to Lessee expires,
terminates or is otherwise canceled, then automatically upon notice from Lessor,
any purchase order or purchase contract an all obligations thereunder shall be
assigned to Lessee and Lessee shall pay and perform all obligations thereunder.
Lessee agrees to pay, defend, indemnify and hold Lessor harmless from
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any liabilities, obligations, claims, costs and expenses (including reasonable
attorney fees and expenses) of whatever kind imposed on or asserted against
Lessor in any way related to any purchase orders or purchase contracts. Lessee
shall make all arrangements for, and Lessee shall pay all costs of,
transportation, delivery, installation and testing of Equipment. The Equipment
shall be delivered to Lessee's premises stated in the applicable Schedule and
shall not be removed without Lessor's prior written consent. Lessor has the
right upon reasonable notice to Lessee to inspect the Equipment wherever
located. Lessor may enter upon any premises where Equipment is located and
remove it immediately, without notice or liability to Lessee, upon the
expiration or termination of the Lease Term.
5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense:
(a) repair and maintain the Equipment in good condition and working order and
supply and install all replacement parts or other devices when required to so
maintain the Equipment or when required by applicable law or regulation, which
parts or devices shall automatically become part of the Equipment; (b) use and
operate the Equipment in a careful manner in the normal course of its business
and only for the purposes for which it was designed in accordance with the
manufacturer's warranty requirements, and comply with all laws and regulations
relating to the Equipment, and obtain all permits or licenses necessary to
install, use or operate the Equipment; and (c) make no alterations, additions,
subtractions, upgrades or improvements to the Equipment without Lessor's prior
written consent, but any such alterations, additions, upgrades or improvements
shall automatically become part of the Equipment. The Equipment will not be used
or located outside of the United States.
6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease. Lessee's
obligation to pay all rent and all other amounts payable under the Lease is
absolute and unconditional under any and all circumstances and shall not be
affected by any circumstances of any character including, without limitation,
(a) any setoff, claim, counterclaim, defense or reduction which Lessee may have
at any time against Lessor or any other party for any reason, or (b) any defect
in the condition, design or operation of, any lack of fitness for use of, any
damage to or loss of, or any lack of maintenance or service for any of the
Equipment. Each Schedule is a noncancelable lease of the Equipment described
therein and Lessee's obligation to pay rent and perform all other obligations
thereunder and under the Lease are not subject to cancellation or termination by
Lessee for any reason.
7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS,
WHERE-IS, AND WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT
LIMITATION: ITS MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS
DESIGN, CONDITION, QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR
WORKMANSHIP; ITS NON-INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT,
TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE
WITH ANY LAW, RULE, SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING
THERETO. Lessor hereby assigns to Lessee the benefit of any assignable
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manufacturer's or supplier's warranties, but Lessor, at Lessee's written
request, will cooperate with Lessee in pursuing any remedies Lessee may have
under such warranties. Any action taken with regard to warranty claims against
any manufacturer or supplier by Lessee will be at Lessee's sole expense. LESSOR
MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND AS TO
THE FINANCIAL CONDITION OR FINANCIAL STATEMENTS OF ANY PARTY OR AS TO THE TAX OR
ACCOUNTING TREATMENT OR CONSEQUENCES OF THE LEASE, THE EQUIPMENT OR THE RENTAL
PAYMENTS.
8. INSURANCE: Lessee at its sole expense shall at all times keep each
item of Equipment insured against all risks of loss or damage from every cause
whatsoever for an amount not less than the greater of the full replacement value
or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall
at all times carry public liability and property damage insurance in amounts
satisfactory to Lessor protecting Lessee and Lessor from liabilities for
injuries to persons and damage to property of others relating in any way to the
Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall
deliver to Lessor satisfactory evidence of such coverage. Proceeds of any
insurance covering damage or loss of the Equipment shall be payable to Lessor as
loss payee and shall, at Lessor's option, be applied toward (a) the replacement,
restoration or repair of the Equipment, or (b) payment of the obligations of
Lessee under the Lease. Proceeds of any public liability or property insurance
shall be payable first to Lessor as additional insured to the extent of its
liability, then to Lessee. If an event of default occurs and is continuing, or
if Lessee fails to make timely payments due under Section 9 hereof, then Lessee
automatically appoints Lessor as Lessee's attorney-in-fact with full power and
authority in the place of Lessee and in the name of Lessee or Lessor to make
claim for, receive payment of, and sign and endorse all documents, checks or
drafts for loss or damage under any such policy. Each insurance policy will
require that the insurer give Lessor at least 30 days prior written notice of
any cancellation of such policy and will require that Lessor's interests remain
insured regardless of any act, error, omission, neglect or misrepresentation of
Lessee. The insurance maintained by Lessee shall be primary without any right of
contribution from insurance which may be maintained by Lessor.
9. LOSS AND DAMAGE (a) Lessee bears the entire risk of loss, theft,
damage or destruction of Equipment in whole or in part from any reason
whatsoever ("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee
from the obligation to pay rent or from any other obligation under the Lease. In
the event of Casualty Loss to any item of Equipment, Lessee shall immediately
notify Lessor of the same and Lessee shall, if so directed by Lessor,
immediately repair the same. If Lessor determines that any item of Equipment has
suffered a Casualty Loss beyond repair ("Lost Equipment"), then Lessee, at the
option of Lessor shall: (1) Immediately replace the Lost Equipment and similar
equipment in good repair, condition and working order free and clear of any
Liens and deliver to Lessor a xxxx of sale covering the replacement equipment,
in which event such replacement equipment shall automatically be Equipment under
the Lease; or (2) On the rent payment date which is at least 30 but no more than
60 days after the date of the Casualty Loss, pay to Lessor all amounts then due
and payable by Lessee under the Lease for the Lost Equipment plus the Stipulated
Loss Value for such Lost Equipment as of the date of the Casualty Loss. Upon
payment by Lessee of all amounts due under the above clause
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(2), the lease of the Lost Equipment will terminate and Lessor shall transfer to
Lessee all of Lessor's right, title and interest in such Equipment on an "as-is,
where-is" basis with all faults, without recourse and without representation or
warranty of any kind, express or implied.
"Stipulated Loss Value" of any item of Equipment during its Lease Term
equals the present value discounted in arrears to the applicable date at the
applicable SLV Discount Rate of (1) the remaining rents and all other amounts
[including, without limitation, any balloon payment and, as to a terminal rental
adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any
other payments required to be paid by Lessee at the end of the applicable Lease
Term] payable under the Lease for such item on and after such date to the end of
the applicable Lease Term and (2) an amount equal to the Economic Value of the
Equipment. For any item of Equipment, "Economic Value" means the Fair Market
Value of the Equipment at the end of the applicable Lease Term as originally
anticipated by Lessor at the Commencement Date of the applicable Schedule;
provided, that Lessee agrees that such value shall be determined by the books of
Lessor as of the Commencement Date of the applicable Schedule. After the payment
of all rent due under the applicable Schedule and the expiration of the Lease
Term of any item of Equipment, the Stipulated Loss Value of such item equals the
Economic Value of such item. Stipulated Loss Value shall also include any Taxes
payable by Lessor in connection with its receipt thereof. For any item of
Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in
effect on the Commencement Date of the Schedule for such item minus two
percentage points.
10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the
basis that Lessor shall be entitled to such deductions, credits and other tax
benefits as are provided by federal, state and local income tax law to an owner
of the Equipment (the "Tax Benefits") including, without limitation: (1)
modified accelerated cost recovery deductions on each item of Equipment under
Section 168 of the Code (as defined below) in an amount determined commencing
with the taxable year in which the Commencement Date of the applicable Schedule
occurs, using the maximum allowable depreciation method available under Section
168 of the Code, using a recovery period (as defined in Section 168 of the Code)
reasonably determined by Lessor, and using an initial adjusted basis which is
equal to the Lessor's Cost of such item; (2) amortization of the expenses paid
by Lessor in connection with the Lease on a straight-line basis over the term of
the applicable Schedule; and (3) Lessor's federal taxable income will be subject
to the maximum rate on corporations in effect under the Code as of the
Commencement Date of the applicable Schedule.
(b) If on any one or more occasions (1) Lessor shall lose, shall not
have or shall lose the right to claim all or any part of the Tax Benefits, (2)
there shall be reduced, disallowed, recalculated or recaptured all or any part
of the Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a
change in law or regulation (each of the events described in subparagraphs 1, 2
or 3 of this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30
days written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee
shall pay Lessor an amount which, in the reasonable opinion of Lessor and after
the deduction of all taxes required to be paid by Lessor with respect to the
receipt of such amount, will provide Lessor with the same after-tax net economic
yield
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which was originally anticipated by Lessor as of the Commencement Date of
the applicable Schedule.
(c) A Tax Loss shall occur upon the earliest of: (1) the happening of
any event (such as disposition or change in use of an item of Equipment) which
may cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority
of the tax increase resulting from such Tax Loss; or (3) the adjustment of
Lessor's tax return to reflect such Tax Loss.
(d) Lessor shall not be entitled to payment under this section for any
Tax Loss caused solely by one or more of the following events: (1) a
disqualifying sale or disposition of an item of Equipment by Lessor prior to any
default by Lessee; (2) Lessor's failure to timely or properly claim the Tax
Benefits in Lessor's tax return; (3) a disqualifying change in the nature of
Lessor's business or liquidation thereof; (4) a foreclosure by any person
holding through Lessor a security interest on an item of Equipment which
foreclosure results solely from an act of Lessor; or (5) Lessor's failure to
have sufficient taxable income or tax liability to utilize the Tax Benefits.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
For the purposes of this section 10, the term "Lessor" shall include any
affiliate group (within the meaning of section 1504 of the Code) of which Lessor
is a member for any year in which a consolidated income tax return is filed for
such affiliated group. Lessee's obligations under this section shall survive the
expiration, cancellation or termination of the Lease.
11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify
and hold Lessor harmless on an after-tax basis from, any and all Taxes (as
described below) and related audit and contest expenses on or relating to (a)
any of the Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease,
possession, use, operation, transportation, return or other disposition of any
of the Equipment, and (d) rentals or earnings relating to any of the Equipment
or the Lease. "Taxes" means present and future taxes or other governmental
charges that are not based on the net income of Lessor, whether they are
assessed to or payable by Lessee or Lessor, including, without limitation (i)
sales, use, excise, licensing, registration, titling, franchise, business and
occupation, gross receipts, stamp and personal property taxes, (ii) levies,
imposts, duties, assessments, charges and withholdings, (iii) penalties, fines,
and additions to tax and (iv) interest on any of the foregoing. Unless Lessor
elects otherwise, Lessor will prepare and file all reports and returns relating
to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee
will reimburse Lessor for all such payments promptly on request. On or after any
applicable assessment/levy/lien date for any personal property Taxes relating to
any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to
Lessor the personal property Taxes which Lessor reasonably anticipates will be
due, assessed, levied or otherwise imposed on any Equipment during its Lease
Term. If Lessor elects in writing, Lessee will itself prepare and file all such
reports and returns, pay all such Taxes directly to the taxing authority, and
send Lessor evidence thereof. Lessee's obligations under this section shall
survive the expiration, cancellation or termination of the Lease.
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12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and
shall defend, indemnify and keep Lessor harmless on an after-tax basis from, any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses, including reasonable attorney fees and expenses, of
whatsoever kind and nature imposed on, incurred by or asserted against Lessor,
in any way relating to or arising out of the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, any claim for latent or other defects,
whether or not discoverable by Lessee or any other person, any claim for
negligence, tort or strict liability, any claim under any environmental
protection or hazardous waste law and any claim for patent, trademark or
copyright infringement). Lessee will not indemnify Lessor under this section for
loss or liability arising from events which occur after the Equipment has been
returned to Lessor or for loss or liability caused directly and solely by the
gross negligence or willful misconduct of Lessor. In this section, "Lessor" also
includes any director, officer, employee, agent, successor or assign of Lessor.
Lessee's obligations under this section shall survive the expiration,
cancellation or termination of the Lease.
13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment
is, and shall at all times remain, separately identifiable personal property.
Upon Lessor's request, Lessee shall furnish Lessor a landlord's and/or
mortgagee's waiver and consent to remove all Equipment. Lessor may display
notice of its interest in the Equipment by any reasonable identification. Lessee
shall not alter or deface any such indicia of Lessor's interest.
14. DEFAULT: Each of the following events shall constitute an event of
default under the Lease: (a) Lessee fails to pay any rent or other amount due
under the Lease within ten days of its due date; or (b) Lessee fails to perform
or observe any of its obligations in Sections 8, 18, or 22 hereof; or (c) Lessee
fails to perform or observe any of its other obligations in the Lease for more
than 30 days after Lessor notifies Lessee of such failure; or (d) Lessee or any
Lessee affiliate defaults in the payment, performance or observance of any
obligation under any loan, credit agreement or other lease in which Lessor or
any subsidiary (direct or indirect) of Banc One Corporation (which is Lessor's
ultimate parent corporation) is the creditor or lessor; or (e) any statement,
representation or warranty made by Lessee in the Lease, in any Schedule or in
any document, certificate or financial statement in connection with the Lease
proves at any time to have been untrue or misleading in any material respect as
of the time when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee
admits its inability to pay its debts as they mature, or Lessee makes an
assignment for the benefit of creditors, or Lessee applies for, institutes or
consents to the appointment of a receiver, trustee or similar official for
Lessee or any substantial part of its property or any such official is appointed
without Lessee's consent, or Lessee applies for, institutes or consents to any
bankruptcy, insolvency, reorganization, debt moratorium, liquidation, or similar
proceeding relating to Lessee or any substantial part of its property under the
laws of any jurisdiction or any such proceeding is instituted against Lessee
without stay or dismissal for more than 30 days, or Lessee commences any act
amounting to a business failure or a winding up of its affairs, or Lessee ceases
to do business as a going concern; or (g) with respect to any guaranty, letter
of credit, pledge agreement, security agreement, mortgage, deed of trust,
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debt subordination agreement or other credit enhancement or credit support
agreement (whether now existing of hereafter arising) signed or issued by any
party in connection with all or any part of Lessee's obligations under the
Lease, the party signing or issuing any such agreement defaults in its
obligations thereunder or any such agreement shall cease to be in full force and
effect or shall be declared to be null, void, invalid or unenforceable by the
party signing or issuing it; or (h) there shall occur in Lessor's reasonable
opinion any material adverse change in the financial condition, business or
operations of Lessee.
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14. DEFAULT (CONTINUED): As used in this section 14, the term "Lessee"
also includes any guarantor (whether now existing or hereafter arising) of all
or any part of Lessee's obligations under the Lease and/or any issuer of a
letter of credit (whether now existing or hereafter arising) relating to all or
any part of Lessee's obligations under the Lease, and the term "Lease" also
includes any guaranty or letter of credit (whether now existing or hereafter
arising) relating to all or any part of Lessee's obligations under the lease.
15. REMEDIES. If any event of default exists, Lessor may exercise in
any order one or more of the remedies described in the lettered subparagraphs of
this section, and Lessee shall perform its obligations imposed thereby:
(a) Lessor may require Lessee to return any or all Equipment
as provided in the Lease.
(b) Lessor or its agent may repossess any or all Equipment
wherever found, may enter the premises where the Equipment is located
and disconnect, render unusable and remove it, and may use such
premises without charge to store or show the Equipment for sale.
(c) Lessor may sell any or all Equipment at public or
private sale, with or without advertisement or publication, may
re-lease or otherwise dispose of it or may use, hold or keep it
(d) Lessor may require Lessee to pay to Lessor on a date
specified by Lessor, with respect to any or all Equipment (i) all
accrued and unpaid rent, late charges and other amounts due under the
Lease on or before such date, plus (ii) as liquidated damages for loss
of a bargain and not as a penalty, and in lieu of any further payments
of rent, the Stipulated Loss Value of the Equipment on such date, plus
(iii) interest at the Overdue Rate on the total of the foregoing
("Overdue Rate" means interest rate per annum equal to the higher of
18% or 2% over the Prime Rate, but not to exceed the highest rate
permitted by applicable law). The parties acknowledge that the
foregoing money damage calculation reasonably reflects Lessor's
anticipated loss with respect to the Equipment and the related Lease
resulting from the event of default. If an event of default under
section 14(f) of this Master Lease Agreement exists, then Lessee will
be automatically liable to pay Lessor the foregoing amounts as of the
next rent payment date unless Lessor otherwise elects in writing.
(e) Lessee shall pay all costs, expenses and damages
incurred by Lessor because of the event of default or its actions
under this section, including, without limitation any collection
agency and/or attorney fees and expenses, any costs related to the
repossession, safekeeping, storage, repair, reconditioning or
disposition of the Equipment and any incidental and consequential
damages.
(f) Lessor may terminate the Lease and/or any or all
Schedules, may xxx to enforce Lessee's performance of its obligations
under the Lease and/or may exercise any other right or remedy then
available to Lessor at law or in equity.
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Lessor is not required to take any legal process or give Lessee any
notice before exercising any of the above remedies. None of the above remedies
is exclusive, but each is cumulative and in addition to any other remedy
available to Lessor. Lessor's exercise of one or more remedies shall not
preclude its exercise of any other remedy. No action taken by Lessor shall
release Lessee from any of its obligations to Lessor. No delay or failure on the
part of Lessor to exercise any right hereunder, shall operate as a waiver
thereof, nor as an acquiescence in any default, nor shall any single or partial
exercise of any right preclude any other exercise thereof or the exercise of any
other right. After any default, Lessor's acceptance of any payment by Lessee
under the Lease shall not constitute a waiver by Lessor of such default,
regardless of Lessor's knowledge or lack of knowledge at the time of such
payment, and shall not constitute a reinstatement of the Lease if the Lease has
been declared in default by Lessor, unless Lessor has agreed in writing to
reinstate the Lease and to waive the default.
If Lessor actually repossesses any Equipment, then it will use
commercially reasonable efforts under the then current circumstances to attempt
to mitigate its damages; provided, that Lessor shall not be required to sell,
re-lease or otherwise dispose of any Equipment prior to Lessor enforcing any of
the remedies described above. Lessor may sell or re-lease the Equipment in any
manner it chooses, free and clear of any claims or rights of Lessee and without
any duty to account to Lessee with respect thereto except as provided below. If
Lessor actually sells or re-leases the Equipment, it will credit the net
proceeds of any sale of the Equipment, or the net present value (discounted at
the then current Prime Rate) of the rents payable under any new lease of the
Equipment, against and up to (but not exceeding) the Stipulated Loss Value of
the Equipment and any other amounts (Lessee owes Lessor, or will reimburse
Lessee for and up to (but not exceeding) Lessee's payment thereof. The term
"net" as used above shall mean such amount after deducting the costs and
expenses described in clause (e) above of this section. If Lessor elects in
writing not to sell or re-lease any Equipment, it will similarly credit or
reimburse Lessee for Lessor's reasonable estimate of such Equipment's Fair
Market Value.
16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment
under the Lease or fails to perform any of its other agreements in the Lease
(including, without limitation, its agreement to provide insurance coverage as
stated in the Lease), Lessor may itself make such payment or perform such
agreement, and the amount of such payment and the amount of the expenses of
Lessor incurred in connection with such payment or performance shall be accrued
to be additional rent, payable by Lessee on demand.
17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual
financial statements setting forth the financial condition and results of
operation of Lessee (financial statements shall include the balance sheet,
income statement and changes in financial position and all notes thereto) within
120 days of the end of each fiscal year of Lessee; (b) quarterly financial
statements setting forth the financial condition and results of operation of
Lessee within 60 days of the end of each of the first three fiscal quarters of
Lessee; and (c) such other financial information as Lessor may from time to time
reasonably request including, without limitation, financial reports filed by
Lessee with federal or state regulatory agencies. All such financial information
shall be prepared in accordance with generally accepted accounting principles.
If
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Lessee fails to furnish the annual financial statements to Lessor within 30 days
of Lessor's written request, then Lessor may, at its option, charge Lessee a
non-performance fee equal to all the rentals due under the Lease for the then
current month (unless otherwise prohibited by law) and such fees that shall be
deemed to be additional rent, payable by Lessee on demand.
18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or
suspend business; (b) sell, transfer or otherwise dispose of all or a majority
of its assets, except that Lessee may sell its inventory in the ordinary course
of its business; (c) enter into any merger, consolidation or similar
reorganization unless it is the surviving corporation; (d) transfer all or any
substantial part of its operations or assets outside of the United States of
America; or (e) without 30 days advance written notice to Lessor, change its
name or chief place of business. Lessee shall at all times maintain a tangible
net worth which is no less than the greater of 75% of its tangible net worth as
of the date of the Master Lease Agreement or 75% of its highest tangible net
worth thereafter.
19. LATE CHARGES: If any rent or other amount payable under the Lease
is not paid when due, then as compensation for the administration and
enforcement of Lessee's obligation to make timely payments. Lessee shall pay
with respect to each overdue payment on demand an amount equal to the greater of
fifteen dollars ($15.00) or five percent (5%) of the each overdue payment (but
not to exceed the highest late charge permitted by applicable law) plus any
collection agency fees and expenses.
20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the
Lease shall be sufficient if given personally or couriered or mailed to the
party involved at its respective address set forth herein or at such other
address as such party may provide in writing from time to time. Any such notice
mailed to such address shall be effective three days after deposit in the United
States mail with postage prepaid. (b) With respect to any power of attorney
covered by the Lease, the powers conferred on Lessor thereby; are powers coupled
with an interest; are irrevocable; are solely to protect Lessor's interests
under the Lease; and do not impose any duty on Lessor to exercise such powers.
Lessor shall be accountable solely for amounts it actually receives as a result
of its exercise of such powers.
21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or
without notice to or consent of Lessee, may sell, assign, transfer or grant a
security interest in all or any part of Lessor's rights, obligations, title or
interest in the Equipment, the Lease, any Schedule or the amounts payable under
the Lease or any Schedule to any entity ("transferee"). The transferee shall
succeed to all of Lessor's rights in respect to the Lease (including, without
limitation, all rights to insurance and indemnity protection described in the
Lease). Lessee agrees to sign any acknowledgment and other documents reasonably
requested by Lessor or the transferee in connection with any such transfer
transaction. Lessee, upon receiving notice of any such transfer transaction,
shall comply with the terms and conditions thereof. Lessee agrees that it shall
not assert against any transferee any claim, defense, setoff, deduction or
counterclaim which Lessee may now or hereafter be entitled to assert against
Lessor. Unless otherwise agreed in writing, the transfer transaction shall not
relieve Lessor of any of its obligations to Lessee under the
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Lease and Lessee agrees that the transfer transaction shall not be construed as
being an assumption of such obligations by the transferee.
22. ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT, DIRECTLY
OR INDIRECTLY, (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE
LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b)
SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY PART
THEREFOR TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY
LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF.
23. EXPIRATION OF LEASE TERM: (a) At the end of 90 days (or earlier if
otherwise specified), but no more than 270 days prior to expiration of the Lease
Term of each Schedule, Lessee shall give Lessor written notice of its electing
one of the following options for some but not less than all) of the Equipment
covered by such Schedule: return the Equipment under clause (_) below; or
purchase the Equipment under clause (c) below. The election of an option shall
be irrevocable. If Lessee fails to give timely notice of its election, it shall
be deemed to have elected to return the Equipment.
(b) If Lessee elects or is deemed to have elected to return
the Equipment at the expiration of the Lease Term of a Schedule or if
Lessee is obligated at any time to return the Equipment, then Lessee
shall, at its sole expense and risk, deinstall, disassemble, pack,
crate, insure and return the Equipment to Lessor (all in accordance
with applicable industry standards) at any location in the continental
United States of America selected by Lessor. The Equipment shall be in
the same condition as when received by Lessee, reasonable wear, tear
and depreciation resulting from normal and proper use excepted (or, if
applicable, in the condition set forth in the Lease or the Schedule),
shall be in good operating order and maintenance as required by the
Lease, shall be certified as being eligible for any available
manufacturer's maintenance program, shall be free and clear of any
Liens as required by the Lease, shall comply with all applicable laws
and regulations and shall include all manuals, specifications, repair
and maintenance records and similar documents. Until Equipment is
returned as required above, all terms of the Lease shall remain in
full force and effect including, without limitation, obligations to
pay rent and insure the Equipment; provided, that after the expiration
of any Schedule and before Lessee has completed its return of the
Equipment or its purchase option (if elected), the term of the lease
of the Equipment covered by such Schedule shall be month-to-month or
such shorter period as may be specified by Lessor.
(c) If Lessee gives Lessor timely notice of its election to
purchase Equipment, then on the expiration date of the applicable
Schedule Lessee shall purchase all (but not less than all) of the
Equipment and shall pay to Lessor the Fair Market Value of the
Equipment plus all Taxes (other than income taxes on Lessor's gains on
such sale), costs and expenses incurred or paid by Lessor in
connection with such sale plus all accrued but unpaid amounts due with
resect to the Equipment and/or the Schedule. The Stipulated Loss Value
or Economic Value of any item of Equipment shall have no bearing or
influence on the determination of Fair Market Value under this clause
(c). Upon payment in full of the above amounts, and if no default has
occurred and is continuing under the Lease, Lessor shall transfer
title to such Equipment to Lessee "as-is, where-
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is" with all faults and without recourse to Lessor and without any
representation or warranty of any kind whatsoever by Lessor, express
or implied.
(d) For purposes of the purchase option of the Lease, the
determination of the Fair Market Value of any Equipment shall be
determined (1) without deducting any costs of dismantling or removal
from the location of use, (2) on the assumption that the Equipment is
in the condition required by the applicable return and maintenance
provisions of the Lease and is free and clear of any Liens as required
by the Lease, and (3) shall be determined by mutual agreement of
Lessee and Lessor or, if Lessor and Lessee are not able to agree on
such value, by the Appraisal Procedure. "Appraisal Procedure" means
the determination of Fair Market Value by an independent appraiser
acceptable to Lessor and Lessee, or, if the parties are unable to
agree on an acceptable appraiser, by averaging the valuation
(disregarding the one which differs the most from the other two) of
three independent appraisers, the first appointed by Lessor, the
second appointed by Lessee and the third appointed by the first two
appraisers. For purposes of the "Remedies" section of the lease, the
Fair Market Value shall be determined by Lessor in good faith and any
such valuation shall be on an "as-is, where is" basis without regard
to the first sentence of this clause (d) Lessee, at its sole expense,
shall pay all fees, costs and expenses of the above described
appraisers.
24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF
THE LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO
ANY ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE,
LESSEE HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR
FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO, WHERE LESSOR HAS ITS PRINCIPAL PLACE
OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE.
25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors and assigns. (b) This Master Lease
Agreement and each Schedule may be executed in any number of counterparts, which
together shall constitute a single instrument. Only one counterpart of each
schedule shall be marked "Lessor's Original" and all other counterparts shall be
marked "Duplicate". A security interest in any Schedule may be created through
transfer and possession only of the Counterpart marked "Lessor's Original". (c)
Section and paragraph headings in this Master Lease Agreement and the Schedules
are for convenience only and have no independent meaning. (d) The terms of the
Lease shall be severable and if any term thereof is declared unconscionable,
invalid, illegal or void, in whole or in part, the decision so holding shall not
be construed as impairing the other terms of the Lease and the Lease shall
continue in full force and effect as if such invalid, illegal, void or
unconscionable term were not originally included herein. (e) All indemnity
obligations of Lessee under the Lease and all rights, benefits and protections
provided to Lessor by warranty disclaimers shall survive the cancellation,
expiration or termination of the Lease. (f) Lessor shall not be liable to Lessee
for any indirect, consequential or special damages for any reason whatsoever,
(g) Each payment made by Lessee shall be applied by Lessor in such manner as
Lessor determines in its discretion which may
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include, without limitation, application as follows: first, to accrued late
charges; second, to accrued fees, and third, the balance to any other amounts
then due and payable by Lessee under the Lease. (h) If the Lease is signed by
more than one Lessee, each of such Lessees shall be jointly and severally liable
for payment and performance of all of Lessee's obligations under the Lease.
26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN
AGREEMENTS OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee agrees
that Lessor is not the agent of any manufacturers or supplier, that no
manufacturer or supplier is an agent of Lessor, and that any representation,
warranty or agreement made by a manufacturer, supplier or their employees, sales
representatives or agents shall not be binding on Lessor.
27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT.
BANC ONE LEASING CORPORATION XXXXXX RESEARCH ASSOCIATES, INC.
--------------------------------
(Name of Lessee)
Lessor
By: /S/ Xxxxxxx Xxxx By: /S/ Xxxxxxx X. Xxxxxx
--------------------- -----------------------
Title: Lending Authority Title: Vice President - Finance
------------------ ----------------------------
--------------------------------------------------------------------------------
Regardless of any prior, present or
future oral agreement or course of
dealing, no term or condition of the
Lease may be amended, modified, waived,
discharged, cancelled or terminated XXXXXX RESEARCH ASSOCIATES, INC.
except by a cancelled or terminated --------------------------------
except by a written instrument signed (Name of Lessee)
by the party to be bound; except
Lessee authorizes Lessor to complete
the Acceptance Date of each Schedule
and the serial numbers of the Equipment.
By: /S/ Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President - Finance
------------------------
14
ADDENDUM I TO MASTER LEASE AGREEMENT
Date:November 27, 1996
-----------------
Master Lease Agreement Dated:November 27, 1996
-----------------
Lessee: XXXXXX RESEARCH ASSOCIATES, INC.
Reference is made to the Master Lease Agreement identified above ("Master
Lease") by and between BANC ONE LEASING CORPORATION ("Lessor") and the Lessee
identified above ("Lessee"). This Addendum I modifies the terms and conditions
of the Master Lease. Unless otherwise defined herein, capitalized terms defined
in the Master Lease shall have the same meaning when used herein. As part of the
valuable consideration to induce the execution of the Master Lease, Lessor and
Lessee hereby agree as follows:
1. The fourth sentence of Section 4 of the Master Lease is amended and
restated as follows:
The Equipment shall be delivered to Lessee's premises stated
in the applicable Schedule and shall not be removed without
Lessor's prior written consent which consent shall not be
unreasonably withheld.
2. Notwithstanding the restrictions in Section 5 of the Master Lease,
Lessee may make Severable Improvements to the Equipment. "Severable
Improvements" shall mean alterations, additions, upgrades, and improvements to
the Equipment that: (a) are not required to make the Equipment usable as
intended by Lessee at the Commencement Date; (b) are separately identifiable
personal Property; and (c) are capable of being readily removed from the
Equipment without causing material damage to the Equipment and without
materially reducing the original functional utility or Fair Market Value of the
Equipment. Lessee shall not remove any Severable Improvement from the Equipment
unless Lessee returns the Equipment to its original condition and functional
utility.
3. Section 10(a) of the Master Lease is amended and restate as follows:
(a) The Lease has been entered into on the basis that Lessor
shall be entitled to such deductions, credits and other tax benefits as
are provided by federal and state income tax law to an owner of the
Equipment (the"Tax Benefits") including, without limitation: (1)
modified accelerated cost recovery deductions on each item of Equipment
under Section 168 of the Code (as defined below) in an amount
determined commencing with the taxable year in which the Commencement
Date of the applicable Schedule occurs, using the maximum allowable
depreciation method available under Section 168 of the Code, using a
recovery period (as defined in Section 168 of the Code) reasonably
determined by Lessor, and using an initial adjusted basis which is
equal to the Lessor's Cost of such item; (2) amortization of the
expenses paid by Lessor in connection with the Lease on a straight-line
basis over the term of the applicable Schedule; and (3) Lessor's
federal taxable income will be subject to
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the maximum rate on corporations in effect under the Code as of the
Commencement Date of the applicable Schedule.
4. Section 10(b) of the Master Lease is amended and restated as
follows:
(b) If on any one or more occasions (1) Lessor shall lose,
shall not have or shall not lose the right to claim all or any part of
the Tax Benefits, or (2) there shall be reduced, disallowed,
recalculated or recaptured all or any part of the Tax Benefits (each of
the events described in subparagraphs 1 or 2 or this paragraph (b) will
be referred to as a "Tax Loss"), then, upon 30 days written notice by
Lessor to Lessee that a Tax Loss has occurred, Lessee shall pay Lessor
an amount which, after the deduction of all taxes required to be paid
by Lessor with respect to the receipt of such amount, will provide
Lessor with the same after tax net economic yield which was originally
anticipated by Lessor as of the Commencement Date of the applicable
Schedule and which shall be disclosed to Lessee on or after the date of
the Tax Loss.
5. Section 10(c) of the Master Lease is amended and restated as
follows:
(c) A Tax Loss shall occur upon the earliest of: (1) the
happening of any event referred to in section (b), (1) or (2) above
(such as disposition or change in use of an item of Equipment) which
may cause such Tax Loss; (2) Lessor's payment to the applicable taxing
authority of the tax increase resulting from such Tax Loss; or (3) the
adjustment of Lessor's tax return to reflect such Tax Loss.
6. Section 11 of the Master Lease is amended and restated as follows:
11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend,
indemnify and hold Lessor harmless on an after-tax basis from, any and
all Taxes (as defined below) and related reasonable audit and contest
expenses on or relating to (a) any of the Equipment, (b) the Lease, (c)
purchase, acceptance, ownership, lease, possession, use, operation,
transportation, return or other disposition of any of the Equipment,
and (d) rentals or earnings relating to any of the Equipment or the
Lease. "Taxes" means present and future taxes or other governmental
charges that are not based on the net or gross income of Lessor,
whether they are assessed to or payable by Lessee or Lessor, including,
without limitation (i) sales, use, excise, licensing, registration,
titling, stamp and personal property taxes, (ii) levies, imposts,
duties, assessments, charges and withholdings, (iii) penalties, fines,
and additions to tax (unless caused by the negligence or misconduct of
Lessor) and (iv) interest on any of the foregoing. Unless Lessor elects
otherwise, Lessor will prepare and file all reports and returns
relating to any Taxes and will pay all Taxes to the appropriate taxing
authority. Lessee will reimburse Lessor for all such payments promptly
on request. On or after any
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applicable assessment/levy/lien date for any personal property Taxes
relating to any Equipment, Lessee agrees that upon Lessor's request
Lessee shall pay to Lessor the personal property Taxes which Lessor
reasonably anticipates will be due, assessed, levied or otherwise
imposed on any Equipment during its Lease Term. If Lessor elects in
writing, Lessee will itself prepare and file all such reports and
returns, pay all such Taxes directly to the taxing authority, and send
Lessor evidence thereof. Lessee's obligations under this section shall
survive the expiration, cancellation or termination of the Lease.
7. Section 12 of the Master Lease is amended and restated as follows:
12. GENERAL INDEMNITY: Except as otherwise expressly provided
in this section, Lessee assumes all risk and liability for, and shall
defend, indemnify and keep Lessor harmless on an after-tax basis from,
any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs and expenses, including reasonable
attorney fees and expenses, of whatsoever kind and nature imposed on,
incurred by or asserted against Lessor, in any way relating to or
arising out of the manufacture, purchase, acceptance, rejection,
ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any
part thereof (including, without limitation, any claim for latent or
other defects, whether or not discoverable by Lessee or any other
person, any claim for negligence, tort or strict liability, any claim
under any environmental protection or hazardous waste law and any claim
for patent, trademark or copyright infringement). Lessee will not
indemnify Lessor under this section for loss or liability arising from
events which occur after the Equipment has been returned to Lessor or
for loss or liability caused directly and soley by the negligence or
willful misconduct of Lessor. In this section, "Lessor" also includes
any director, officer, employee, agent, successor or assign of Lessor.
Lessee's obligations under this section shall survive the expiration,
cancellation or termination of the Lease.
8. The first paragraph of Section 14 of the Master Lease is amended and
restated as follows:
14. DEFAULT: Each of the following events shall constitute an
event of default under the Lease: (a) Lessee fails to pay any rent or
other amount due under the Lease within ten days of its due date; or
(b) Lessee fails to perform or observe any of its obligations in
sections (8), (18), or (22) hereof; or (c) Lessee fails to perform or
observe any of its other obligations in the Lease for more than 30 days
after Lessor notifies Lessee of such failure; or (d) Lessee or any
Lessee affiliate defaults in the payment, performance or observance of
any obligation under any loan, credit agreement or other lease in which
Lessor or any subsidiary (direct or indirect) of Banc One Corporation
(which is Lessor's ultimate parent corporation) is the creditor or
lessor; or (e) any statement, representation or warranty made by Lessee
in the Lease, in any Schedule or in any document, certificate or
financial statement in connection with the Lease proves at any time to
have been untrue or misleading in any material respect as of the time
when made; or (f) Lessee becomes insolvent or bankrupt, or
3
17
Lessee admits its inability to pay its debts as they mature, or Lessee
makes an assignment for the benefit of creditors, or Lessee applies
for, institutes or consents to the appointment of a receiver, trustee
or similar official for Lessee or any substantial part of its property
or any such official is appointed without Lessee's consent or Lessee
applies for, institutes or consents to any bankruptcy, insolvency,
reorganization, debt moratorium, liquidation or similar proceeding
relating to Lessee or any substantial part of its property under the
laws of any jurisdiction or any such proceeding is instituted against
Lessee without stay or dismissal for more than 30 days, or Lessee
commences any act amounting to a business failure or a winding up of
its affairs, or Lessee ceases to do business as a going concern; or (g)
with respect to any guaranty, letter of credit, pledge agreement,
security agreement, mortgage, deed of trust, debt subordination
agreement or other credit enhancement or credit support agreement
(whether now existing or hereafter arising) signed or issued by any
party in connection with all or any part of Lessee's obligations under
the Lease, the party signing or issuing any such agreement defaults in
its obligations thereunder or any such agreement shall cease to be in
full force and effect or shall be declared to be null, void, invalid or
unenforceable by the party signing or issuing it.
9. Section 17(a) of the Master Lease is amended and restated as
follows:
(a) annual audited financial statements setting forth the
financial condition and results of operation of Lessee
(financial statements shall include balance sheet, income
statement and changes in financial position and all notes
thereto) within 120 days of the end of each fiscal year of
Lessee;
10. Section 17(b) of the Master Lease is amended and restated as
follows:
(b) published quarterly financial statements setting forth the
financial condition and results of operation of Lessee within
90 days of the end of each of the first three fiscal quarters
of Lessee; and
11. Section 18 of the Master Lease is amended and restated as follows:
18. NO CHANGES ON LESSEE:
(a) Lessee shall not: (i) liquidate, dissolve or suspend
business; (ii) sell, transfer or otherwise dispose of all or a
majority of its assets, except that Lessee may sell its
inventory in the ordinary course of its business; (iii) enter
into any merger, consolidation or similar reorganization
unless it is the surviving corporation; (iv) transfer all or
any substantial part of its operations or assets outside of
the United States of America; or (v) without 30 days advance
written notice to Lessor, change its name or chief place of
business.
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18
(b) Lessee shall comply, as of each quarterly testing period,
with all of the covenants in this section 18(b), and that
unless otherwise defined below, all terms and ratios used
below shall be defined or determined in accordance with
generally accepted accounting principles ("GAAP"):
(1) As used in this section 18(b), "INDEBTEDNESS"
means any indebtedness in its broadest sense and includes,
without limitation, any indebtedness for borrowed money or the
deferred purchase price of property, any issue of or
assumption of any note, debenture, bond or other evidence of
indebtedness, any capitalized lease, any operating lease with
a term exceeding twelve (12) months, any contribution or
agreement to contribute or otherwise maintain or support the
capital requirements of another, or any guarantee of any of
the foregoing obligations of others.
(2) Lessee shall not permit its tangible capital base
to be less than $400,000 plus 50% of net income less any
S-Corporation tax distributions beginning with the quarter
ending December 31, 1996 and for each fiscal quarter
thereafter plus 90% of net proceeds from the public offering
of Lessee's stock. The remaining 10% shall be used for
distributions of previously taxed S-Corporation earnings.
"Tangible Capital Base" shall mean, as of any date, the sum of
Lessee's total equity plus debts subordinated to Lessor minus
any intangible assets.
(3) Lessee will maintain a Cash Flow Ratio for
Lessee's fiscal year to date that is equal to or greater than
Required Minimum Ratio. "Required Minimum Ratio" means 2.0 to
1.0 as of and for December 31, 1996 and each March 31st, June
30th, September 30th, and December 31st thereafter. "Cash Flow
Ratio" means the ratio of
(i) the aggregate of
(A) its net income for that quarter before
income taxes, plus
(B) its interest expense for that quarter,
plus
(C) its depreciation and amortization for
that quarter, plus
(D) operating lease payments for that
quarter
To (ii) the aggregate of
(A) its current maturities of long-term
Indebtedness for that quarter, plus
(B) operating lease payments for that
quarter, plus
(C) its interest expense for that quarter.
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19
(c) Xxxxxxx X. Xxxxx and Xxxxxxxxxxx Xxxxxx shall not cease to
own a majority of Lessee's outstanding capital stock or cease
to have the unconditional right to elect a majority of
Lessee's board or directors, except as a result of the initial
public offering being contemplated by Lessee.
(d) Lessee shall not be required to comply with the covenants
in 18(b), (2) and (3) and paragraph (c) above if Lessee is the
subject of a initial public offering that generates not less
than $15,000,000 of which 90% is retained by the Lessee.
12. Section 19 of the Master Lease is amended and restated as follows:
19. LATE CHARGES: If any rent or other amount payable under
the Lease is not paid when due, then as compensation for the
administration and enforcement of Lessee's obligation to make timely
payments, Lessee shall pay with respect to each overdue payment on
demand an amount equal to the greater of fifteen dollars ($15.00) or
two percent (2%) of the each overdue payment (but not to exceed the
highest late charge permitted by applicable law) plus any collection
agency fees and expenses.
13. The first sentence in Section 23(c) of the Master Lease is amended
and restates as follows:
If Lessee gives Lessor timely notice of its election to
purchase Equipment, then on the expiration date of the applicable
Schedule Lessee shall purchase all (but not less than all) of the
Equipment and shall pay to Lessor the Fair Market Value of the
Equipment plus all Taxes (other than income taxes on Lessor's gains on
such sale), and out-of-pocket costs and expenses incurred or paid by
Lessor in connection with such sale plus all accrued but unpaid amounts
due with respect to the Equipment and/or the Schedule.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum I as
of the date referenced above.
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XXXXXX RESEARCH BANC ONE LEASING CORPORATION
ASSOCIATES, INC. (Lessor)
(Lessee)
By: /s/ Xxxxxxx X. Xxxxxx By: /s/
------------------------------- ---------------------------------
Title: VP - Finance Title: VP - Lending Authority
---------------------------- -------------------------------
By: By:
------------------------------- ---------------------------------
Title: Title:
---------------------------- -------------------------------
Lessee's Witness: /s/ Xxxx X. Xxxxxxx
---------------------
7
