EXHIBIT 10.3
SCHEDULE TO MASTER LEASE AGREEMENT
Schedule Number 10809.002
THIS SCHEDULE made as of JUNE 4, 1998, by and between U.S. BANCORP LEASING
& FINANCIAL ("Lessor"), having its principal place of business at X.X. Xxx
0000, 0000 X.X. Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000-0000, and R. B. RUBBER
PRODUCTS, INC. ("Lessee"), having its principal place of business at 000 XXXX
XXXXX XXXXXX, XXXXXXXXXXX, XXXXXX 00000, to the Master Lease Agreement dated as
of OCTOBER 19, 1995 between the Lessee and the Lessor (the "Lease").
Capitalized terms used but not defined herein are used with the respective
meanings specified in the Lease.
LESSOR AND LESSEE HEREBY CONVENANT AND AGREE AS FOLLOWS:
(a) The following specified equipment (the "Property") is hereby made and
constituted Property for all purposes pursuant to the Lease:
One (1) US-15 Ultrasonic Cutting Systems #6358,
One (1) Compiling Station #5039,
Ten (10) US Knife Complete UK55C0.95 Matl #953393,
Ten (10) 1/2 x 41/4 Parabolt,
Two (2) 4x6 12ft. GR #2 & BTR Fir,
Three (3) 3/4 4x8 CDX Exterior Sheathing,
Two (2) 1/4" 4ft x 10ft Repro Ployrite,
One (1) Scissor Lift For Pallets-Lift Table,
Two (2) Presto Lift Table Model #X4W48-40, 4,000 lb. Capacity, Base Frame 48" x
64", Platform; 60" x 88" Push Button Controls 230/3P/60Hz Motor/Power,
One (1) 2YD Self-Dumping Xxxxxx Standard No Casters Model 220NC,
One (1) Vacu-Hoist #VH-180 Standard Unit W/5 Pad, H Frame Adjustable to 72'
Long with 2'-6' Long Extension Handle,
One (1) Ergo-Sys Floor Standing Bridge Crane Model #ESRFS250-15-43-12,
Each of the above items are complete as equipped including, but not limited to
all attachments, accessories, and replacements relating thereto.
(b) The cost of the Property is $247,118..35;
Please Initial Here:____
(c) The Schedule shall commence on June 10, 1998 and shall continue for
ninety-five (95) months thereafter.
(d) Lessee shall owe ninety-five (95) basic monthly rental payments in
arrears each in the amount of $2,224.00 (plus applicable sales/use
taxes). The first such payment shall be due on July 10, 1998 and shall
continue on the same day of each month thereafter until the end of the
term of this Schedule. In addition, Lessee shall pay daily pro rata
rental in the amount of $74.13 per day (plus applicable sales/use taxes)
from the date on which Lessee executes a Delivery and Acceptance
Certificate for the Property through June 9, 1998. Such daily pro rata
rental shall be due and payable upon execution by Lessee of a Delivery
and Acceptance Certificate with regard to the Property.
(e) The property will be installed or stored at the following address: 000
Xxxx Xxxxx Xxxxxx, XxXxxxxxxxx, Xxxxxx 00000, COUNTY: Yamhill;
(f) The record owner of the premises at which the Property will be installed
or stored is:;
1. LATE CHARGE. If any installment of Rent shall not be received by
Lessor or Lessor's Assignee within ten (10) days after such amount is due,
Lessee shall pay to Lessor a late charge equal to five percent (5.0%) of such
overdue amount.
2. TITLE PASSAGE. a. As long as no event of default has occurred under the
Lease, Lessee shall have the options, to purchase all, but not part, of the
Property at the end of sixty (60) months hereinafter called the "Mid-Term Option
Date", and "Mid-Term Option" or at the end of the Term or any renewal
thereof (hereinafter called the "End of Term Option Date" and "End
of Term Option").
b. The above Options may only be exercised by Lessee by written notice of
such exercise to Lessor, which notice must be received by Lessor not later
than one hundred eighty (180) days prior to: 1) the Mid-Term Option date
to exercise the Mid-Term Option; or 2) the End of Term Option Date to
exercise the End of Term Option. Payment of the purchase price must be
received by Lessor on or before the Mid-Term Option Date or the End of Term
Option Date as appropriate.
c. The Mid-Term Option purchase price for the Property shall be
$74,135.35. The End of Term purchase price for the Property shall be the fair
market value of the Property at the time of such exercise as mutually agreed
upon by Lessor and Lessee. If such parties cannot agree thereon after good
faith negotiation, the purchase price of the Property shall be the value
determined by an appraisal of the Property made by a reputable independent
equipment appraiser certified for the type of Property being appraised. The
appraiser shall be selected by Lessor and the cost of the appraisal shall be
paid by Lessee.
d. The Mid-Term Option purchase price shall only be applicable in the
event that the Mid-Term Option is exercised in accordance with its Terms.
Such purchase price shall not be deemed to be equal to the "anticipated
residual value" as such phrase is used in the Lease.
e. Upon receipt of payment of the purchase price together with any and
all applicable sales or other taxes due in connection therewith, and any and
all remaining sums or other amounts payable under this Schedule, Lessor shall
transfer all its right, title and interest in and to the Property to Lessee.
The Property shall be transferred "As Is" and "Where Is" without any express
or implied representations or warranties.
f. Should Lessee fail to either return the Property in accordance with
the Lease or exercise the End of Term Option in accordance with its terms, then
Lessor, at its sole option, shall have the right to: a) declare the End of Term
Option terminated and demand immediate return of the Property; or, b) extend the
Term for an additional six (6) months (the "Extended Term)". Should Lessor
elect to extend the Term, Lessee shall be irrevocably obligated to remit basic
monthly rent for the period beginning on the day immediately succeeding the last
day of the original Term (the "Holdover Date" ) and ending at the end of the
sixth (6) month thereafter. A payment of such rent being due on the Holdover
Date and on the same day of each consecutive month thereafter. Each payment of
such rent shall be in the amount of the basic
monthly rent for the last month of the Term in accordance with the provisions
of this Schedule. All Lessee's other obligations under the Lease shall
remain in full force and effect for so long as Lessee shall continue to
possess the Property. Upon the expiration of each Extended Term, Lessor, at
its sole option, shall have the right to: a) permit Lessee to exercise the
End of Term Option in accordance with its Terms; b) declare the End of Term
Option terminated and demand immediate return of the Property; or, c) extend
the Term for an additional six (6) month Extended Term). Any and all rental
payments pursuant to this Paragraph shall be deemed for all intents and
purposes to be payments for possession and use of the Property after the
expiration of the Term, and shall not be credited to any other obligation of
Lessee to Lessor. Lessor's invoicing and/or accepting any such payment shall
not give rise to any right, title or interest of Lessee other than to
possession and use of the Property during the period to which such rent
applies in accordance with this Paragraph. The aforsaid right to charge
Lessee rent for possession and use of the Property is not in limitation or
derogation of any of Lessor's rights pursuant to the Lease.
3. MAINTENANCE, USE, AND RETURN PROVISIONS. One hundred eighty (180) days
prior to return of the Property, and at any other time, in Lessor's discretion,
Lessee must be able to demonstrate that the Property can perform at its
performance specifications according to the manufacturer's standards. An
independent certified technician chose by Lessor shall demonstrate the
performance of the property and the Property's physical condition. If it is
determined that improvements are needed in order to meet the manufacturer's
performance standards, Lessee shall cause such improvements to be made at
Lessee's expense. A certification letter from such technician as to the working
condition and performance of the Property shall be provided to Lessor. The cost
of the technical inspection, assessment and certification shall be borne by
Lessee.
Any special transportation devices, such as metal skids, lifting slings,
brackets, etc., which were with the Property when it originally arrived must be
used to assist with deinstallation and delivery. Blocking of sliding members,
securing of swinging doors, pendants, and their swinging components, wrapping,
boxing, bending and labeling of all components and documents must be done in a
conscientious and meticulous manner to facilitate the efficient reinstallation.
At no time are materials which would be considered "Hazardous Waste" by any
regulatory authority to be shipped with the machinery. Replacement parts must
be purchased from sources approved by the original manufacturer. No components,
tools or attachments are to be removed from the Property.
4. DEPRECIATION. Lessor will be entitled to modified accelerated cost
recovery depreciation based on 100% of Property Cost using the 200% declining
balance method, switching to straight line, for five (5) year Property, and
zero salvage value.
5. TAX INDEMNITY. Lessee hereby represents, warrants, and covenants to Lessor
as follows:
(a) This Lease will be a lease for purposes of Oregon Revised Statutes
("ORS") 469.185-225. Lessor will be treated as the purchaser, owner, lessor,
and original user of the Property and Lessee will be treated as the Lessee of
the Property for such purposes.
(b) Lessor Shall be entitled to the Business Energy Tax Credit ("BETC")
with respect to each item of Property as provided by ORS 469.185-225. The
applicable BETC available to Lessor in connection with this Schedule is
$86,491.42.
(c) In the event that, pursuant to ORS 469.185-225, Lessee is deemed to
be the party eligible to receive the BETC, then Lessee irrevocably transfers
to Lessor all right, title and interest which Lessee has or may have to such
BETC and agrees to cooperate with Lessor in any manner necessary to ensure
that Lessor continue to receive the benefit of such BETC.
If for any reason whatsoever any of the representations, warranties, or
covenants of Lessee contained in any other agreement relating to the Property
shall prove to be incorrect and (i) Lessor shall determine that it is not
entitled to claim all or any portion of the BETC in the amount specified (b)
above, or (ii) such BETC is disallowed, adjusted, recomputed, reduced, or
recaptured, in whole or in part, by the
Director of the Oregon Department of Energy or his designee (such
determination, disallowance, adjustment, recomputation, reduction, or
recapture being herein called a "Loss"), then Lessee shall pay to Lessor as
an indemnity and as additional rent such amount as shall, in the reasonable
opinion of Lessor, cause Lessor's after-tax economic yield (the "Net Economic
Return") to equal the Net Economic Return that would have been realized by
Lessor if such Loss had not occurred. The amount payable to Lessor pursuant
to this section shall be payable on the next succeeding rental payment date
after written demand therefor from Lessor, accompanied by a written statement
describing in reasonable detail such Loss and the computation of the amount
so payable.
Further, in the event (i) there shall be any change, amendment, addition,
or modification of any provision of Oregon law or regulations thereunder or
interpretation thereof with respect to the matters set forth in this section
effective prior to the commencement date of the term of this Lease with respect
to any Property or (ii) if at any time there shall be any change, to the maximum
applicable BETC which results in a decrease in lessor's Net Economic Return,
then Lessor shall recalculate and submit to Lessee the modified rental rate
required to provide Lessor with the same net Economic Return as it would have
realized absent such change and the lease shall thereupon automatically be
deemed to be amended to adopt such rental rate and values.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Schedule to be duly executed as of the day and year first above written.
R-B RUBBER PRODUCTS, INC.
By:
-----------------------------
XXXXXX X. XXXX
PRESIDENT
U.S. BANCORP LEASING & FINANCIAL
By:
-----------------------------
An Authorized Officer Thereof
ADDRESS FOR ALL NOTICES
U.S. BANCORP LEASING & FINANCIAL
X.X. XXX 0000, 0000 X.X. XXXXXX XXXXXX
TUALATIN, OREGON 97062-2177
MACHINE TOOL FINANCE GROUP GENERAL EQUIPMENT GROUP
(000)000-0000 (000)000-0000 (000)000-0000 (000)000-0000
