DCC
XXXX COMMERCIAL CREDIT
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MASTER LEASE AGREEMENT
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Master Lease Agreement Number 5002182 (the "Master Lease"), dated as of JANUARY
18, 1999, by and between XXXX COMMERCIAL CREDIT CORPORATION, a Delaware
corporation (the "Lessor," such term to include its successors and assigns),
having an office and place of business at 0000 Xxxxxxxx Xxxx, Xxxxxx, Xxxx 00000
and UNIVERSAL MONEY CENTERS, INC., a Kansas corporation (the "Lessee"), having
an office and place of business at 0000 Xxxxxx Xxxx, Xxxxxxx Xxxxxxx, Xxxxxx
00000.
1. LEASE OF EQUIPMENT. This Master Lease sets forth master terms and conditions.
Lessor shall have no obligation under this Master Lease until the execution and
delivery of a lease schedule ("Lease Schedule") executed by Lessee and Lessor.
Each Lease Schedule shall incorporate all of the terms and conditions of this
Master Lease as they may from time to time be amended and shall contain such
additional terms and conditions as Lessee and Lessor may agree from time to
time. Each Lease Schedule together with the terms and conditions of this Master
Lease shall constitute a separate and distinct lease (the "Lease") between
Lessor and Lessee. Each Lease shall be enforceable according to the terms and
conditions contained therein without regard to any other Lease Schedule. In the
event of a conflict between the provisions of this Master Lease and any Lease
Schedule, the provisions of the Lease Schedule shall prevail in respect to that
Lease Schedule. Lessor agrees to lease to Lessee, and Lessee agrees to lease
from Lessor, in accordance with the terms and conditions of the applicable Lease
Schedule, certain items of machinery, equipment and other personal property
identified in each Lease Schedule, together with all replacements, parts,
additions, accessories thereto and any intangibles (collectively, the
"Equipment"). Lessee authorizes Lessor to insert in the Lease Schedule the
serial numbers and other identification data pertaining to the Equipment when
delivered. The parties agree that each Lease Schedule and this Master Lease is a
"Finance Lease" as defined by ss.2A-103(g) of the Uniform Commercial Code
("UCC").
2. DELIVERY, ACCEPTANCE AND INSTALLATION. Lessee shall be responsible to select
the type, quantity and vendor or manufacturer ("Supplier") of the Equipment, and
in reliance thereon, the Equipment will then be ordered by Lessor from such
Supplier, or Lessor may at its option elect to accept an assignment of any
existing purchase order from Lessee. The Equipment is to be delivered and
installed at the location specified on the applicable Lease Schedule. The
Equipment shall be deemed to have been accepted by Lessee for all purposes under
the Lease Schedule upon Lessor's receipt of a certificate in a form acceptable
to Lessor, executed by Lessee (the "Acceptance Certificate"). Lessee will sign
the Acceptance Certificate authorizing Lessor to pay for the Equipment only
after Lessee has received and accepted the Equipment as fully operable for
Lessee's purposes. Lessee shall be responsible for all transportation, packing,
installation, testing and other charges in connection with the delivery,
installation and use of the Equipment.
3. TERM. This Master Lease shall commence upon execution by the Lessee and
Lessor and continue until full performance of all of its terms. The lease term,
as to all Equipment designated on any Lease Schedule ("Lease Term") shall
commence upon acknowledgment of the Acceptance Certificate by Lessor, effective
the date of the Acceptance Certificate ("Acceptance Date") with respect to such
Equipment and shall continue for the number of months, and any proration
thereof, specified in the applicable Lease Schedule. Delivery of the Equipment
does not constitute acceptance by Lessor of this Master Lease.
4. RENT AND OTHER CHARGES. Lessee shall pay Lessor rent for the Equipment,
without any deduction or set off and without prior notice or demand, in the
amounts as and when specified in the applicable Lease Schedule and Lessee shall
also pay, upon demand by Lessor, all other charges incurred in connection with
the Equipment, and any other charge or payment due hereunder. LESSEE AGREES THAT
TIME IS OF THE ESSENCE TO LESSOR AND LESSEE AGREES TO MAKE THE PAYMENTS WHEN DUE
UNDER THE MASTER LEASE AND ANY LEASE SCHEDULE. Without Lessor's prior written
consent, any payment to Lessor of a smaller sum than due at any time under any
Lease Schedule shall not constitute a release or an accord or satisfaction for
any greater sum due, or to become due, regardless of any endorsement
restriction. If any rent or other amount payable hereunder shall not be paid
when due, Lessee shall pay Lessor: (a) a one-time late charge in the stipulated
and liquidated amount of $.05 per dollar of the amount not paid or $5.00, if
greater; (b) a late charge during every month after the first month in which the
sum is late computed daily on the amounts then due and unpaid at a rate of
1-1/2% per month, or, if less, the highest applicable rate permitted by law, and
(c) all collection costs and expenses. All payments shall be made to Lessor at
the address shown above, or at such other place as Lessor shall specify in
writing.
5. NET LEASE. All Lease Schedules and this Master Lease shall be noncancellable
by Lessee. THIS MASTER LEASE AND EACH LEASE SCHEDULE IS A NET LEASE AND LESSEE
SHALL NOT BE ENTITLED TO ANY ABATEMENT OR REDUCTION OF RENTS OR OF ANY OTHER
AMOUNTS PAYABLE HEREUNDER OR THEREUNDER FOR ANY REASON. LESSEE'S OBLIGATION TO
PAY ALL RENT AND ANY OTHER AMOUNTS DUE UNDER THE MASTER LEASE OR ANY LEASE
SCHEDULE SHALL BE ABSOLUTE AND UNCONDITIONAL UNDER ALL CIRCUMSTANCES. Lessee
hereby waives any and all existing or future claims to any offset against the
rent payments due hereunder, and agrees to make the rent payments regardless of
any offset or claim which may be asserted against the Lessor.
6. RENT ADJUSTMENT. The rent payments in each Lease Schedule have been
calculated on the assumption (which, between Lessor and Lessee, is mutual) that
the maximum effective corporate income tax rate (exclusive of any minimum tax
rate) for calendar-year taxpayers ("Effective Rate") will be 35% throughout the
Lease Term. If, solely as a result of any new law (including, without
limitation, any modification of, or amendment or addition to, the Internal
Revenue Code of 1986 ("Code")), the Effective Rate is higher than 35% for any
year during the Lease Term, then Lessee shall pay to Lessor as additional rent a
lump sum equal to the amount necessary to enable the Lessor to receive the same
actual net after-tax economic and accounting yields and net after-tax cash flow
over the Lease Term that Lessor would have
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realized had such tax law change not occurred. Lessee shall pay to Lessor the
full amount of the additional rent payment on the later of receipt of notice or
the first day of the year for which such adjustment is being made. Lessee's
obligations under this Section 6 shall survive any expiration or termination of
the Master Lease or the Lease Schedules.
7. DISCLAIMER OF WARRANTIES AND LESSEE WAIVERS. Lessee leases the Equipment from
Lessor "AS IS/WHERE IS". IT IS SPECIFICALLY UNDERSTOOD AND AGREED THAT (A)
EXCEPT AS TO QUIET ENJOYMENT, LESSOR MAKES ABSOLUTELY NO WARRANTIES, EXPRESS OR
IMPLIED; (B) LESSOR EXPRESSLY DISCLAIMS ANY WARRANTY OR REPRESENTATION AS TO ANY
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE OF THE EQUIPMENT, ITS DESIGN OR CONDITION, ITS
QUALITY, CAPACITY OR WORKMANSHIP, THE CONFORMITY OF THE EQUIPMENT TO ANY LAW,
RULE, REGULATION, SPECIFICATION OR CONTRACT OR PURCHASE ORDER RELATING THERETO,
OR PATENT INFRINGEMENT; (C) NO REPRESENTATION OR WARRANTY BY THE SUPPLIER OR
SALESPERSON IS BINDING ON LESSOR NOR SHALL BREACH OF SUCH WARRANTY RELIVE LESSEE
OF LESSEE'S OBLIGATION TO LESSOR HEREUNDER. IT IS FURTHER AGREED BY LESSEE THAT
ALL RISKS RELATING TO THE EQUIPMENT AND ITS USE ARE, AS BETWEEN LESSOR AND
LESSEE, TO BE BORNE BY LESSEE AND THAT LESSOR SHALL HAVE NO LIABILITY TO LESSEE,
LESSEE'S CUSTOMERS, OR ANY THIRD PARTIES FOR (A) ANY LOSS, DAMAGE, OR EXPENSE OF
ANY KIND OR NATURE ARISING OUT OF THE MASTER LEASE, ANY LEASE SCHEDULE OR ANY
EQUIPMENT; (B) ANY LOSS OF BUSINESS OR SPECIAL, DIRECT, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY CHARACTER; OR (C) ANY DAMAGES BASED ON STRICT OR
ABSOLUTE TORT LIABILITY OR LESSOR'S NEGLIGENCE. LESSEE HEREBY WAIVES ANY CLAIM
AGAINST LESSOR IN CONNECTION WITH OR ARISING OUT OF THE OWNERSHIP, LEASING,
FURNISHING, PERFORMANCE OR USE OF THE EQUIPMENT AND THE BENEFITS OF ANY AND ALL
IMPLIED WARRANTIES AND REPRESENTATIONS OF LESSOR, AND LESSEE EXPRESSLY WAIVES
ANY AND ALL RIGHTS OR REMEDIES AGAINST LESSOR PROVIDED UNDER THE UNIFORM
COMMERCIAL CODE (the "UCC"). To the extent permitted by applicable law, Lessee
hereby waives any rights Lessee may otherwise have to: 1) cancel or repudiate
any Lease Schedule or this Master Lease; 2) revoke acceptance of or reject the
Equipment; 3) claim a security interest in the Equipment; 4) accept partial
delivery of the Equipment; 5) sell or dispose of the Equipment upon rejection or
revocation; 6) seek "cover" in substitution for any Lease Schedule from Lessor;
and 7) claim an agency relationship between Supplier and Lessor. All warranties
from the Supplier to Lessor are, to the extent they are assignable, hereby
assigned to Lessee for the Lease Term or until an Event of Default occurs, for
Lessee's exercise at Lessee's expense.
8. LESSEE'S WARRANTIES, REPRESENTATIONS AND COVENANTS. Lessee represents,
warrants and covenants to Lessor, and Lessor relies on, the fact that: (a)
Lessee has read and understood this Master Lease and each Lease Schedule before
it was signed; (b) LESSEE HAS SELECTED THE EQUIPMENT BASED ON ITS OWN JUDGMENT,
IS
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FULLY SATISFIED WITH BOTH THE EQUIPMENT AND THE SUPPLIER OF THE EQUIPMENT, AND
HAS REVIEWED AND APPROVED THE SUPPLIER'S PURCHASE ORDER OR AGREEMENT COVERING
THE EQUIPMENT PURCHASED FOR LEASE TO LESSEE; (c) Lessee shall provide to Lessor
within one hundred twenty (120) days after the close of each of Lessee's fiscal
years, and, within forty-five (45 days of the end of each quarter of Lessee's
fiscal year, a copy of its financial statements which will be, (i) accurate and
correct in all material respects, and (ii) prepared in accordance with generally
accepted accounting principles consistently applied; (d) the Equipment is leased
exclusively for Lessee's established business purposes; (e) Lessee has the form
of business organization indicated, and is duly organized, validly existing and
in good standing under the laws of the state of its incorporation or
organization and is duly qualified to do business wherever necessary to carry on
its present business and operations and to own its property; (f) Lessee has the
power and authority to enter into the Master Lease, all Lease Schedules and all
other related instruments or documents hereunder ("Documents"), and such
Documents (i) have been duly authorized by all necessary action on the part of
Lessee consistent with its form of organization and duly executed and delivered
by authorized officers or agents of Lessee, whose signatures hereon are, in all
respects, authentic, (ii) do not require the approval of, or the giving notice
to, any federal, state, local or foreign governmental authority, (iii) do not
contravene any law binding on Lessee or any certificate or articles of
incorporation or by-laws or partnership certificate or agreement, (iv) do not
violate, result in any breach of, or constitute a default under, or result in
the creation of any lien, charge or security interest or other encumbrance upon
any assets of Lessee or on the Equipment pursuant to any agreement, indenture,
or other instrument to which Lessee is a party or by which it or any of its
assets may be bound, and (v) constitute legal, valid and binding obligations of
Lessee enforceable in accordance with their terms; (g) Lessee has experienced no
material adverse change in its financial condition or operations since the date
of its financial statements provided to Lessor nor does there exist any pending
or threatened actions or proceedings before any court or administrative agency
which might materially adversely affect Lessee's financial condition or
operations; and (h) the address indicated by Lessee is the chief place of
business and chief executive office of Lessee. Lessee shall be deemed to have
reaffirmed the foregoing warranties each time it executes a Lease Schedule.
9. TAXES, ASSESSMENTS AND FEES. Lessee agrees to pay when due and does hereby
indemnify Lessor against, and hold Lessor harmless from, all licensing, filing
and registration fees, franchise, sales, use, personal property, ad valorem,
value added, leasing, stamp or other taxes, levies, import duties, charges or
withholdings of any nature, including but not limited to all federal, state, and
local taxes, however designated, levied or assessed, together with any
penalties, fines or interest thereon (a) arising out of the transactions
contemplated by this Master Lease, any Lease Schedule or relating in any manner
to the Equipment and imposed against Lessor, Lessee, or the Equipment, (b) upon
the sale, purchase, possession, lease, ownership, use, operation, shipment,
transportation or delivery or other disposition thereof, or (c) upon the lease
payments, excepting only income taxes levied on the rental payments made to
Lessor. If any report or return for personal property tax is required by law to
be filed by Lessor, Lessee shall so notify Lessor prior to the assessment date,
and Lessee shall promptly reimburse Lessor for personal property taxes paid,
including any interest, fines or penalties incurred as a result of late filing
if Lessee fails to provide Lessor with the notice required hereby. Lessee shall
promptly provide Lessor with a copy of any and all filings and tax assessment
notices with
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respect to personal property tax and, if Lessee fails to do so, Lessor has the
right to charge Lessee an assessment of an appropriate amount to insure against
any tax liability. The Lessee agrees to comply with all state and local laws
requiring the filing of ad valorem tax returns relating to the Equipment. Any
statements for taxes received by the Lessor shall be promptly forwarded to the
Lessee. Lessee agrees to reimburse Lessor for reasonable costs incurred in
collecting taxes, assessments, or fees for which Lessee is liable and any
collection charge attributable thereto, including reasonable attorney fees.
LESSEE AGREES TO SHOW THE EQUIPMENT AS "LEASED EQUIPMENT" ON TAX RETURNS, AND
FILE, WHEN ALLOWED BY LAW, ALL PERSONAL PROPERTY TAX RETURNS.
10. INDEMNIFICATION. (a) Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold Lessor and its affiliates harmless from and against
any and all liabilities (including, but not limited to, negligence, tort, and
strict liability), obligations, losses, damages, injuries, claims, demands,
penalties, actions, costs and expenses, including reasonable attorneys' fees, of
whatsoever kind and nature (including without limitation, claims of injury,
death, or property damage), arising out of or related to (i) this Master Lease,
each Lease Schedule, or the Equipment, including, but not limited to, the
manufacture, purchase, financing, installation, use, condition (including, but
not limited to, latent and other defects and whether or not discoverable by
Lessee or Lessor), operation, ownership, selection, delivery, leasing, removal,
return, or other disposition of any Equipment, (ii) a breach by Lessee or any
guarantor of any representations or warranties under this Master Lease, any
Lease Schedule or guaranty, or failure by Lessee or any guarantor to perform or
observe any covenant or agreement to be performed by it under this Master Lease,
any Lease Schedule or any guaranty, or (iii) a violation of or non-compliance
with any law, including environmental laws.
(b) Lessee acknowledges that the rent payable under the applicable Lease
Schedule has been calculated in part based on the assumption that the Lessor
will be entitled to claim cost recovery deductions with respect to its entire
purchase price for the Equipment under the method specified in section 168(b)(1)
of the Internal Revenue Code of 1986 (the "Code") and over the period specified
in Code section 168(c)(1) for 5-year or 7-year property within the meaning of
Code section 168(e)(1) (the "Tax Benefits"). In furtherance thereof, Lessee
represents, warrants and covenants that (i) the Equipment is 5-year or 7-year
property as set forth in the Lease Schedule within the meaning of Code section
168(e)(1), (ii) as of the delivery date, the Equipment will be placed in service
for federal income tax purposes and (iii) the fair market value of the Equipment
is equal to the Lessor's purchase price therefor. If as a result of any act,
omission or misrepresentation of Lessee, Tax Benefits are lost, disallowed,
eliminated, reduced, deferred, recaptured, compromised or are otherwise
unavailable to Lessor (any of the foregoing being a "Tax Loss"), Lessee shall
promptly pay to Lessor on demand, as additional rent, such amount or amounts
which will, after deduction therefrom of all taxes required to be paid in
respect of the receipt thereof, enable Lessor to receive the same actual net
after-tax economic and accounting yields and net after-tax cash flow over the
Lease Term that Lessor would have realized had such Tax Loss not occurred, with
such computations to be made on the assumption that the Lessor is subject to tax
at the Effective Rate as defined in, and subject to increase as provided in,
Section 6 hereof, together with any interest, penalties or additions to the tax.
Any event which by the terms of the Lease Schedule requires payment by Lessee to
Lessor of the Stipulated Loss Value of the Equipment, shall not constitute the
act of Lessee for purposes of the foregoing sentence.
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Lessor hereby agrees to exercise in good faith its reasonable best efforts
(determined in the sole discretion of Lessor's tax counsel to be reasonable,
proper and consistent with the overall tax interest of Lessor) to avoid
requiring Lessee to pay the tax indemnity referred to in this Section 10(b);
provided, however, Lessor shall have the sole discretion to determine whether or
not to undertake or continue judicial or administrative proceedings beyond the
level of an Internal Revenue Service auditing agent; and provided, further, that
Lessor shall not be required to take any action pursuant to this sentence unless
and until Lessee shall have agreed to indemnify Lessor for any and all expenses
(including attorneys' fees), liabilities or losses which Lessor may incur as a
result of taking such action. For purposes of this Section 10, the term "Lessor"
shall include the entity or entities, if any, with which Lessor consolidates its
tax return.
(c) The amount payable pursuant to the preceding paragraphs shall be payable
upon demand of the Lessor accompanied by a statement describing in reasonable
detail such loss, liability, injury, claim, expense or tax and setting forth the
computation of the amount so payable, which computation shall be binding and
conclusive upon Lessee, absent manifest error. The indemnities and assumptions
of liabilities and obligations contained in this Section and in Section 9 shall
continue in full force and effect notwithstanding the expiration or other
termination of the Master Lease or any Lease Schedule.
11. ASSIGNMENT. LESSOR MAY, WITHOUT LESSEE'S CONSENT, ASSIGN OR TRANSFER THIS
MASTER LEASE, ANY LEASE SCHEDULE OR ANY EQUIPMENT, ANY RENT, OR ANY OTHER SUMS
DUE OR TO BECOME DUE HEREUNDER AND IN SUCH EVENT LESSOR'S ASSIGNEE OR TRANSFEREE
SHALL HAVE ALL THE RIGHTS, POWERS, PRIVILEGES AND REMEDIES OF LESSOR HEREUNDER.
LESSEE HEREBY ACKNOWLEDGES NOTICE THAT LESSOR MAY ASSIGN THIS MASTER LEASE, ANY
LEASE SCHEDULE OR ANY EQUIPMENT AND UPON SUCH ASSIGNMENT LESSEE AGREES NOT TO
ASSERT, AS AGAINST LESSOR'S ASSIGNEE, ANY DEFENSE, SETOFF, RECOUPMENT, CLAIM OR
COUNTERCLAIM, WHETHER ARISING UNDER THIS MASTER LEASE, ANY LEASE SCHEDULE OR
OTHERWISE. LESSEE AGREES THAT ANY SUCH ASSIGNMENT SHALL NOT MATERIALLY CHANGE
LESSEE'S DUTIES OR OBLIGATIONS UNDER THE LEASE NOR MATERIALLY INCREASE LESSEE'S
RISKS OR BURDENS. In the event this Master Lease or any Lease Schedule is
assigned by Lessor, Lessee shall: (a) promptly execute a Notice of Assignment
for the applicable Lease (to be provided to Lessee by Lessor) and promptly
return the same to Lessor; (b) pay all amounts due under the applicable Lease
Schedule to the applicable assignee ("Assignee") notwithstanding any defense,
setoff or counterclaim whatsoever that Lessee may have against Lessor or
Assignee; (c) not permit the applicable Lease Schedule to be amended or the
terms thereof waived without the prior written consent of the Assignee; and (d)
not require the Assignee to perform any obligations of Lessor. It is further
agreed that (x) any Assignee may reassign its rights and interest under the
applicable Lease Schedule with the same force and effect as the assignment
described herein; (y) any payment received by the Assignee from Lessee with
respect to the assigned Lease Schedule shall, to the extent thereof, discharge
the obligations of Lessee to Lessor with respect to the assigned Lease Schedule;
and (z) Lessor shall not be relieved of any of its obligations by such
assignment unless expressly assumed by the Assignee. LESSEE SHALL NOT SUBLEASE,
ASSIGN, TRANSFER OR DISPOSE OF ANY OF ITS RIGHTS OR INTERESTS IN THIS MASTER
LEASE, ANY
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LEASE SCHEDULE OR ANY OF THE EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR WHICH SHALL NOT BE UNREASONABLY WITHHELD, INCLUDING, WITHOUT LIMITATION,
ANY ASSIGNMENT FOR SECURITY PURPOSES, AND ANY ATTEMPTED ASSIGNMENT, SUBLEASE OR
TRANSFER BY LESSEE SHALL BE VOID AND SHALL NOT RELEASE LESSEE OF ITS OBLIGATIONS
UNDER THIS MASTER LEASE OR ANY LEASE SCHEDULE.
12. LIENS AND ENCUMBRANCES; TITLE; PERSONAL PROPERTY. Lessor is sole owner of
the Equipment and no right, title or interest in the Equipment shall pass to
Lessee other than, conditioned upon Lessee's compliance with and fulfillment of
the terms and conditions of this Lease, the right to maintain possession and use
of the Equipment for the Lease Term (provided no Event of Default has occurred)
free from interference by any person claiming by or through Lessor. At its
option, Lessor may require Lessee to affix plates, markings or other notices on
the Equipment indicating Lessor is the owner. Lessee agrees to give and record
such notices, obtain such waivers and take such other action at its own expense
as may be necessary to prevent any third party (other than an assignee of
Lessor) from acquiring or having the right under any circumstances to acquire
any interest in the Equipment or this Lease and Lessee shall, at its cost and
expense, defend Lessor's title against, and keep all of the Equipment, this
Master Lease, any Lease Schedule and any of Lessor's interests thereunder free
of all liens, claims and encumbrances of any kind. The Equipment shall at all
times remain personal property, notwithstanding, the Equipment or any part
thereof may be (or become) affixed or attached to real property or any
improvements thereon.
13. OPERATION AND MAINTENANCE; INSPECTION. Lessee shall be solely responsible
for the installation, operation, and maintenance of the Equipment, and Lessee,
at its own cost and expense, shall (a) keep the Equipment in good repair,
condition and working order, in accordance with any applicable manufacturer's
manuals, instructions or requirements, (b) furnish all parts, mechanisms,
devices and servicing required therefor, (c) make all replacements, alterations
or additions to the Equipment that may be required by the Supplier or legally
necessary by parts that are free and clear of all liens and have a value,
utility and remaining useful life at least equal to the parts replaced, and (d)
make no other alterations or additions to the Equipment without Lessor's prior
written consent. Title to all parts that Lessee replaces and any alterations or
additions that Lessee makes to the Equipment shall immediately vest in Lessor
without cost to Lessor, or any further action, and such parts, alterations or
additions shall be deemed incorporated into the Equipment and subject to the
terms of the Lease Schedule as if originally leased thereunder. Lessee shall use
and operate the Equipment by competent and duly qualified personnel, and for
business purposes only in compliance with applicable law, applicable
manufacturer's manuals, instructions or warranty requirements and all insurance.
Lessee, at its own cost and expense, shall enter into and maintain in full force
and effect throughout the Lease Term, including any renewals, with the
manufacturer or such other party as may be acceptable to Lessor, a maintenance
agreement covering the Equipment. Lessee shall not move the Equipment from the
location specified in the Lease Schedule without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, and, if granted,
without executing financing statements and completing filings or taking such
other actions as Lessor may reasonably request to protect Lessor's interest in
the Equipment. Lessee agrees never to abandon or relinquish possession of the
Equipment except to Lessor or its agent. Lessor may enter the
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premises where the Equipment is located during normal business hours and subject
to Lessee's standard security procedures for the purpose of inspecting the
Equipment and, during the last six (6) months of the Lease Term, for the purpose
of showing the Equipment to prospective purchasers or lessees of the Equipment.
14. TERMINATION, RETURN. Lessee shall give Lessor one hundred twenty (120) days'
written notice prior to the expiration of the Lease Term, and sixty (60) days'
written notice prior to the expiration of any renewal term, of its intent to
return the Equipment. Upon expiration of the Lease Term, renewal term or other
termination pursuant to the terms of the Lease Schedule unless Lessee purchases
the Equipment pursuant to Section 19 hereof. Lessee shall, at its expense,
immediately return to Lessor the Equipment and all related accessories, (a) free
of all advertising or insignia placed thereon by Lessee (other than advertising
or insignia placed upon the Equipment by Lessee at the request of Lessor), (b)
free and clear of all liens or encumbrances, and (c) in such condition, repair
and working order as when delivered to Lessee, reasonable wear and tear excepted
and reflecting Lessee's full compliance with Section 13. Upon return, if the
Equipment does not satisfy the conditions set forth in the preceding sentence,
or is not eligible for the manufacturer's standard maintenance contract without
incurring any expenses to repair or rehabilitate the Equipment, Lessee shall be
liable for and reimburse Lessor for all reasonable expenses incurred by Lessor
to place the Equipment in such condition. The Equipment shall, at Lessee's sole
cost and expense, be crated and shipped in accordance with the manufacturer's
specifications, freight prepaid and properly insured to such place within the
continental United States as is designated by Lessor. If Lessee fails to give
the notice required herein or fails to return the Equipment as required herein,
then the Lease Schedule except to the extent Lessee purchases the Equipment
pursuant to Section 19 hereof, shall automatically be extended on a
month-to-month basis, for a period not to exceed twelve (12) months. The
extension period may be terminated by either party by giving thirty (30) days'
prior written notice. Upon such termination or at the end of the twelfth month
of the extension, Lessee shall return the Equipment as provided above. Until the
Equipment is returned to Lessor, Lessee shall continue to pay rent in an amount
equal to the monthly average rent during the Lease Term, on the same due date
set forth in the Lease Schedule.
15. RISK OF LOSS. Lessee hereby assumes and shall bear all risk of loss, theft,
damage or destruction of the Equipment by any cause whatsoever including,
without limitation, economic loss through extraordinary or premature wear, or
condemnation, confiscation, seizure or requisition of the title or use of any of
the Equipment by any government entity and whether or not such Loss is covered
by insurance (collectively, "Loss") from and after the earlier of the date (a)
on which the Equipment is ordered, or (b) Lessor pays the purchase price of the
Equipment, and continuing until such Equipment is returned to, and accepted by,
the Lessor or such other entity designated in writing by Lessor. Lessor shall
not be liable or responsible for any loss or damage occasioned by any cause,
circumstance or event of any nature relating to the Equipment, including,
without limitation, loss or damage arising by reason of any failure or delay in
the delivery of the Equipment to Lessee for whatever reason. No Loss shall
impair any obligation of Lessee under the Master Lease or any Lease Schedule
which shall continue in full force and effect. In the event of Loss, Lessee
shall promptly notify Lessor in writing of the Loss and all related details and
any action related thereto, and shall, within thirty (30) days of the Loss, at
Lessor's option, (a) repair the Equipment and restore it to the same good
condition and working
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order as it was immediately prior to the Loss (assuming the Equipment was in the
condition required by the terms of Section 13); (b) replace the Equipment
affected by the Loss with like personal property with equivalent value, useful
life and utility, in good repair, condition and working order and transfer clear
title to such replacement property to Lessor whereupon such property shall be
subject to this Master Lease and the applicable Lease Schedule and be deemed the
Equipment for purposes hereof; or (c) pay Lessor an amount equal to the sum of
(i) all rent and other amounts accrued through the next regular payment date
following the Loss, plus (ii) the Stipulated Loss Value as of the next regular
payment date as set forth in the Lease Schedule, whereupon such Lease Schedule,
except for Lessee's duties under Sections 9 and 10, shall terminate with respect
to the items of Equipment for which such payment is received by Lessor. Upon
payment of the amount set forth in (c), the rent for such Lease Schedule shall
be reduced proportionately. Any insurance proceeds received with respect to the
Loss shall be applied, if option (c) is elected, in reduction of the then unpaid
obligations, including the Stipulated Loss Value, of Lessee to Lessor, if not
already paid by Lessee or, if already paid by Lessee, to reimburse Lessee for
such payment, or, if option (a) or (b) is elected, to reimburse Lessee for the
costs of repairing, restoring or replacing the Equipment affected by the Loss
upon receipt by Lessor of evidence, satisfactory to Lessor, that such repair,
restoration or replacement has been completed, and an invoice therefor.
16. INSURANCE. Lessee shall procure and maintain during the Lease Term, at
Lessee's expense, the following minimum insurance coverages: (a) Workers'
Compensation as required by law and Employer's Liability Insurance $1,000,000
limit; (b) Comprehensive General Liability Insurance including product/completed
operations and contractual liability coverage with minimum limits of $1,000,000
each occurrence, and Combined Single Bodily Injury and Property Damage,
$1,000,000 aggregate, where applicable; and (c) All Risk Physical Damage
Insurance, including earthquake and flood, on each item of Equipment, in an
amount not less than the greater of the replacement cost, new or the Stipulated
Loss Value of the Equipment. Lessor will be included under such policies as an
additional insured and loss payee, and each such policy shall be endorsed to
provide that the coverage afforded to Lessor shall not be rescinded, impaired or
invalidated by any act or neglect of Lessee or any other person. Under the
policies required in clauses (a) and (c) above, Lessee agrees to waive its right
of subrogation and cause its insurance carrier to waive its right of
subrogation, in each instance as such right may exist against Lessor and for any
and all loss and damage. All policies shall contain a clause requiring the
insurer to furnish Lessor with at least thirty (30) days' prior written notice
of any material change, cancellation or non-renewal of coverage. Upon execution
of this Master Lease, Lessee shall furnish Lessor with a certificate of
insurance or other evidence satisfactory to Lessor that such insurance coverages
are in effect; provided, however, that Lessor shall be under no duty to (a)
ascertain the existence of, (b) examine such insurance coverage, or (c) advise
Lessee in the event such insurance coverage should not comply with the
requirements hereof. Lessee shall also furnish Lessor with a copy of the
certificate of insurance annually thereafter. If Lessee fails to procure or
maintain insurance or to comply with any other provision of this Master Lease or
any Lease Schedule, Lessor shall have the right, but shall not be obligated, to
effect such insurance or compliance on behalf of Lessee. In that event, all
costs and expenses of Lessor in effecting such insurance or compliance shall be
deemed to be additional rent, and shall be paid by Lessee to Lessor upon demand.
The proceeds of insurance payable as a result of a Loss shall be applied as set
forth in Section 15. Lessee appoints Lessor as attorney-in-fact to make any
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claim for, receive payment of, or execute or endorse all documents, checks or
drafts for loss or damage or return of premium under all such insurance and
otherwise in respect of all awards or other compensation payable in respect of
any condemnation, confiscation, seizure or requisition of any Equipment.
17. DEFAULT. If any one or more of the following events (an "Event of Default")
shall occur, then Lessor shall have the right to exercise any one or more of the
remedies set forth in Section 18: (a) Lessee fails to make any payment, of rent
or other payment when due as provided in this Master Lease or any Lease
Schedule; or (b) Lessee or any guarantor breaches any of its warranties,
representations, or other obligations under this Master Lease or any Lease
Schedule, or any other agreement with Lessor, and fails to cure such breach
within ten (10) days after Lessor sends Lessee notice of the existence of such
breach; or (c) Lessee shall default on any other indebtedness obligation or
agreement of any kind with Lessor, or related thereto and shall not have cured
such default within a period of grace provided by such other agreement or
instrument; or (d) any execution or writ of process is issued in any action or
proceeding to seize or detain any of the Equipment; or (e) Lessee fails to
return any Equipment when required under Section 14; or (f) Lessee or any
guarantor shall commence, or take corporate action to authorize, a voluntary
case or other proceeding seeking liquidation, reorganization, or other relief
with respect to itself or its debts; or seek the appointment of a trustee,
receiver, liquidator, custodian, or other similar official; or consent, or fail
to object, to any such relief or to the appointment of any such official or to
the taking of possession of any of its property or to the commencement of an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of its creditors; or (g) Lessee becomes
insolvent or fails generally to pay its debts as they become due; or (h) any
guarantor revokes a guaranty provided to Lessor under this Master Lease or any
Lease Schedule or breaches any of its obligations under such guaranty. Lessee
shall promptly notify Lessor of the occurrence of any Event of Default or the
occurrence or existence of any event or condition which, upon the giving of
notice or lapse of time, or both, may become an Event of Default. In the event
Lessee fails to comply with any provision of this Master Lease or any Lease
Schedule, Lessor shall have the right, but shall not be obligated, to effect
such compliance on behalf of Lessee. In such event, all monies expended by and
all expenses of Lessor in effecting such compliance shall be deemed to be
additional rent, and shall be paid with interest at the overdue rate set forth
in Section 4 to Lessor at the time of the next rent payment.
18. REMEDIES. If an Event of Default occurs, Lessor may, in its sole discretion,
exercise any or all of the following remedies: (a) cause Lessee, upon written
demand of Lessor and at Lessee's expense, to promptly return any or all
Equipment on any or all of the Lease Schedules, to such location as Lessor may
designate or to immediately retake possession of the Equipment without any court
order or other process of law (and for such purpose Lessor may enter upon any
premises where the Equipment may be and remove the same); and Lessor may dispose
of any or all of the Equipment in good faith and recover from Lessee as damages
all charges, expenses or commissions incurred by Lessor in the transportation,
care, custody or disposition of such Equipment after the occurrence of the Event
of Default or otherwise resulting by reason of such default; (b) whether Lessor
has recovered the Equipment, or if so recovered, has elected to retain any or
all of the Equipment, or dispose of the Equipment by sale, lease or otherwise,
to recover as liquidated damages from Lessee for the loss of a bargain due to
Lessee's Event of Default and
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not as a penalty, the sum of the following: (i) all accrued and unpaid rent and
other amounts then due, plus (ii) the higher of fair market value or the
Stipulated Loss Value of the Equipment; all of the foregoing amounts shall
become immediately due and payable to Lessor, to the extent permitted by UCC-2A,
or any other provision of the UCC or other applicable law and taking into
account all applicable discounting (using a per annum interest rate of 6%) and
credits (Lessee in all cases being liable for any deficiencies) required
thereby; (c) recover from Lessee all reasonable costs and expenses including
without limitation any incidental expenses and legal fees and expenses incurred
by Lessor as a result of the Event of Default, less any credits due Lessee
pursuant to applicable law; (d) with or without notice to Lessee, cancel the
Master Lease or any Lease Schedule without prejudice to Lessor's rights in
respect of obligations then accrued and remaining unsatisfied; and (e) exercise
any remedy at law or equity, notice thereof being expressly waived by Lessee,
including any right or remedy which may otherwise be available to it under the
UCC. Lessee shall pay all collection costs and reasonable attorney fees as
damages and not costs in all proceedings arising under or connected with the
Master Lease or any Lease Schedule or Lessor's enforcement of any of their
terms, including without limitation, arbitrations, civil actions, bankruptcy
proceedings, mediations, and post-judgment actions or appeals. Lessor's action
or failure to act on one remedy constitutes neither (a) an election to be
limited thereto, (b) a waiver of any other remedy nor (c) a release of Lessee
from the liability to return the Equipment or for any loss or claim with respect
thereto. Nothing herein shall be deemed to prejudice Lessor's right to recover
or prove damages for unpaid rent accrued prior to default, or bar an action for
a deficiency as herein provided. The bringing of an action with an entry of
judgment against Lessee shall not bar the Lessor's right to repossess any or all
of the Equipment. Lessor's remedies shall be available to Lessor's successors
and assigns, shall be in addition to all other remedies provided by law, and may
be exercised concurrently or consecutively. Lessee agrees that with respect to
any notice of a sale required by law to be given, ten (10) days' notice shall
constitute reasonable notice. No waiver of an Event of Default under this Master
Lease or any Lease Schedule shall constitute a waiver of any other Event of
Default, or a waiver of any right, power, privilege, or remedy hereunder.
19. PURCHASE OPTION. (a) If no Event of Default exists, no event has occurred
and is continuing which with notice or the lapse of time or both would
constitute an Event of Default, Lessee has complied with all of the terms and
conditions of the Master Lease and the Lease Schedule and Lessee delivers to
Lessor an irrevocable written notice at least one hundred twenty (120) days
prior to the expiration of the Lease Term of the first Lease Schedule scheduled
to expire, Lessee shall have the option to purchase all, but not less than all,
of the Equipment at the end of the Lease Term at the Purchase Option Price (as
defined below). Lessee's election of the purchase option shall operate as
Lessee's election of the purchase option for each and every Lease Schedule.
(b) The "Purchase Option Price" of the Equipment shall be an amount equal to the
Fair Market Value (as defined below) of such Equipment, as agreed upon by Lessor
and Lessee or, failing such agreement, as determined by an appraisal, at
Lessee's expense, from an independent qualified appraiser selected by Lessor,
plus an amount equal to all sales, use, property or excise taxes, on or measured
by the sale of the Equipment to Lessee, plus any other expenses of transfer.
"Fair Market Value" is the selling price that would be obtained in an
arm's-length transaction between an informed and willing buyer and an informed
and willing seller, each
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under no compulsion to buy or sell; provided, however, such values shall be
determined on the basis that the Equipment conforms to all conditions specified
in the applicable Lease Schedule and is installed and/or in service. In
determining Fair Market Value, the costs of removing the Equipment shall not be
deducted from its value.
(c) If Lessee elects to purchase the Equipment, Lessee shall pay Lessor the
Purchase Option Price on or before the last day of the Lease Term in immediately
available funds and the sale of the Equipment by Lessor to Lessee shall be on an
AS-IS, WHERE-IS basis, without recourse to, or warranty by Lessor and the LESSOR
SHALL NOT BE DEEMED TO HAVE MADE, AND THE LESSOR HEREBY EXPRESSLY DISCLAIMS, ANY
REPRESENTATION OR WARRANTY, EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE
EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR USE OR FOR ANY PARTICULAR
PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE EQUIPMENT, ITS VALUE
OR CONFORMITY TO ANY SPECIFICATIONS OR AGREEMENTS RELATING THERETO, NOR SHALL
THE LESSOR BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR STRICT OR
ABSOLUTE LIABILITY IN TORT. The Purchase Option Price shall bear finance charges
for the period, if any, from the expiration of the Lease Term to the date of
payment, at the rate set forth in the Master Lease for payment of overdue rent.
(d) Notwithstanding any election of Lessee to purchase, the provisions of the
Master Lease and the Lease Schedule shall continue in full force and effect
until passage of ownership of the Equipment upon the date of purchase.
20. DISPUTE RESOLUTION. In furtherance of the resolution of any disputes
hereunder, the parties agree and stipulate that, at Lessor's election, the
parties shall submit any matter arising out of this transaction, including any
claim, counterclaim, setoff, or defense, to binding arbitration by the American
Arbitration Association. The decision and award of the arbitrator(s) shall be
final and binding and may be entered as rendered in any court having
jurisdiction thereof.
21. ADDITIONAL SECURITY, INTEREST RATE PROVISION. Lessee and Lessor acknowledge
and agree that this Master Lease and each Lease Schedule (a) shall be construed
to be a "true" lease and not a "lease intended as security" within the meaning
of Section 1-201(37) of the UCC, and (b) is not subject to Article 9 of the UCC.
Despite the express intent of the parties, in the event that this Master Lease
or any Lease Schedule is not deemed to be a true lease, then solely in that
event and for that limited purpose, it shall be deemed a security agreement and,
in that regard, Lessee hereby grants Lessor a purchase money security interest
in the Equipment, and all accessions, substitutions and replacements thereto,
and all interests of Lessee therein, and all proceeds (including insurance
proceeds) and products thereof, to secure Lessee's prompt payment and
performance as and when due of all obligations and indebtedness to Lessor
hereunder. Without prejudicing the generality of this Section, Lessor and Lessee
intend to conform strictly to the usury law applicable to this transaction.
Accordingly, it is agreed that the aggregate of all interest and any other
charges or consideration constituting
12
interest under applicable law that is contracted for, charged or received under
this Master Lease, any Lease Schedule or otherwise shall under no circumstances
exceed the maximum amount of interest allowed by applicable law. If any usurious
interest in such respect is provided for in this Master Lease, any Lease
Schedule or otherwise, or if the acceleration or prepayment of any indebtedness
results in Lessee having paid any interest in excess of that permitted by
applicable law, then in such event, (a) Lessee shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the maximum amount
of interest allowed by applicable law, (b) any excess shall be deemed a mistake
and cancelled automatically and, if theretofore paid, shall be credited on any
such indebtedness by Lessor, (c) the effective rate of interest shall be
automatically reduced to the maximum legal rate of interest allowed by
applicable law, and (d) all interest shall be allocated and spread throughout
the full term of any such indebtedness until paid in full so that the rate or
amount of interest does not exceed the applicable usury ceiling.
22. NOTICES. Any notices and demands required or permitted to be given under
this Master Lease or any Lease Schedule shall be given in writing by regular
mail and shall become effective when deposited in the United States mail with
postage prepaid at the address provided herein or to such other address as the
party to receive the notice hereafter designates in writing.
23. FURTHER ASSURANCES. Lessee shall promptly execute and deliver to Lessor such
further documents and take such further action as Lessor may require in order to
more effectively carry out the intent and purpose of this Master Lease and any
Lease Schedule, including, upon Lessor's request, executing and delivering any
and all financing statements which may be required to evidence the interest of
Lessor in the Equipment. Upon demand, Lessee will promptly reimburse Lessor for
any filing or recordation fees or expenses (including legal fees and costs)
incurred by Lessor in perfecting or protecting its interests in the Equipment
and under this Master Lease or any Lease Schedule. Lessee authorizes Lessor and
its agents to file, at Lessor's option, any such financing statements without
Lessee's signature and, if Lessee's signature is required, Lessee agrees Lessor
or its agent may execute the same for and on behalf of Lessee.
24. ENTIRE AGREEMENT. This Master Lease, together with all Lease Schedules,
Acceptance Certificates, addendums and riders attached hereto from time to time,
or by reference hereto made a part hereof, constitute the entire agreement
between the parties with respect to the subject matter hereof and merges any
other understanding. The term "Lessee" as used herein shall mean and include any
and all Lessees who sign hereunder, each of whom shall be jointly and severally
bound thereby.
25. WAIVER OF JURY TRIAL. LESSEE HEREBY EXPRESSLY WAIVES ANY RIGHT TO DEMAND A
JURY TRIAL WITH RESPECT TO ANY ACTION OR PROCEEDING INSTITUTED BY LESSOR OR
LESSEE IN CONNECTION WITH THIS MASTER LEASE OR ANY LEASE SCHEDULE.
26. CHOICE OF LAW AND FORUM. THIS MASTER LEASE HAS BEEN AND EACH LEASE SCHEDULE
WILL BE EXECUTED AND DELIVERED IN THE STATE OF OHIO AND THIS MASTER LEASE AND
EACH LEASE SCHEDULE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO (OTHER
THAN THE
13
CONFLICTS OF LAW PROVISIONS). THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS MASTER LEASE OR ANY LEASE SCHEDULE MAY BE
COMMENCED IN THE STATE OF FEDERAL COURTS IN OHIO AND LESSEE SUBMITS TO SUCH
JURISDICTION AND AGREES THAT, IN ADDITION TO ANY OTHER MANNER OF SERVICE
PRESCRIBED BY LAW OR RULE OF COURT, A SUMMONS AND COMPLAINT COMMENCING AN ACTION
OR PROCEEDING IN EITHER SUCH COURT SHALL BE PROPERLY SERVED UPON LESSEE AND
SHALL CONFER PERSONAL JURISDICTION IF SERVED PERSONALLY OR BY UNITED STATES
REGISTERED MAIL, RETURN RECEIPT REQUESTED, TO THE LESSEE AT THE ADDRESS
INDICATED ON THE FIRST PAGE OF THIS MASTER LEASE.
27. MISCELLANEOUS. This Master Lease, any Lease Schedule and any amendment
hereto or modification hereof, and any waiver of any condition or provision
contained herein, shall not be valid unless in writing and signed by an
authorized officer of each party hereto. No failure to exercise, or delay in
exercising, any right, power, privilege or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power,
privilege or remedy preclude any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. The headings of
sections in this Master Lease are for convenience only and shall not be
considered in construing the meaning of the contents of such section. This
Master Lease and any Lease Schedule shall be binding upon and inure to the
benefit of the respective parties hereto, and upon and to their successors and
permitted assigns. Any provision of this Master Lease or any Lease Schedule
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof, and any such unenforceability in any jurisdiction
shall not render unenforceable such provisions in any other jurisdiction. To the
extent permitted by applicable law, Lessee hereby waives any provisions of law
which render any provision hereof unenforceable in any respect.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS MASTER LEASE AS OF THE
DATE FIRST ABOVE PROVIDED.
XXXX COMMERCIAL CREDIT CORPORATION UNIVERSAL MONEY CENTERS, INC.
Lessor Lessee
By: /s/ Xxxx Commercial Credit: By: /s/ Xxxxx X. Xxxxxx, CEO
------------------------------- ----------------------------------
Title: Title: CEO
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