Exhibit 10.4
FIFTH THIRD BANK
MASTER EQUIPMENT LEASE AGREEMENT
This Master Equipment Lease Agreement (this "Master Lease") dated as of
October 1, 2004 is made by and between THE FIFTH THIRD LEASING COMPANY, an Ohio
corporation, having an office at 00 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxx
00000 ("Lessor"), and DENTAL CARE PLUS, INC., a corporation organized under the
laws of the State of Ohio and having a principal place of business at 000 Xxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx Xxxxxx, XX 00000 ("Lessee").
TERMS AND CONDITIONS OF LEASE
1. Lease. Subject to the terms and conditions set forth herein, Lessor and
Lessee shall execute and deliver Equipment Schedules pursuant to this Master
Lease (each, an "Equipment Schedule") and pursuant to each Equipment Schedule
Lessor shall lease to Lessee the equipment and other property described on such
Equipment Schedule (together with all parts, additions and accessories
incorporated therein, and software incorporated therein, the "Equipment"). Each
Equipment Schedule will incorporate by reference this Master Lease and will
specify certain terms relating to the leasing of the Equipment (this Master
Lease as incorporated into each Equipment Schedule, a "Lease"). Each Equipment
Schedule, together with this Master Lease, shall constitute a separate and
enforceable Lease In the event that any term of any Equipment Schedule conflicts
with or is inconsistent with any term of this Master Lease, the terms of the
Equipment Schedule shall govern As used herein, the term "Item of Equipment," as
it relates to any Equipment, shall have the meaning specified in the Equipment
Schedule relating to such Equipment and if no such meaning is specified therein,
"Item of Equipment" shall mean the Equipment as a whole.
2. Term. With respect to any Item of Equipment, unless otherwise specified
on an Equipment Schedule, the initial term of lease shall commence on the
earlier of (a) the date an Acceptance Certificate (as defined in Section 5) is
executed with respect to such Item of Equipment, and (b) unless the Lessee
rejects such Item of Equipment in a written notice to Lessor, ten (10) days
after delivery of such Item of Equipment (the "Delivery and Acceptance Date")
and, unless earlier terminated as provided herein, shall expire on the
Expiration Date (as defined in the Equipment Schedule relating to such Item of
Equipment); provided, however, that the Base Lease Term or the then applicable
Renewal Term shall be automatically extended for successive one month periods
until either (a) the end of the Notice Period (as defined below) or (b) Lessor
demanding return of the Equipment. As used herein, "Notice Period" shall mean
the period ending on the latest of (i) the Expiration Date, (ii) one hundred
eighty (180) days after the delivery by Lessee of its final written notice of
its election to purchase or return the Equipment or to determine the Fair Market
Value or Fair Market Rental Value, as applicable, in accordance with the options
set forth in the Equipment Schedule and (iii) one hundred eighty (180) days
after the delivery by Lessee of its election to return the Equipment. Lessee
shall pay Basic Rent at the then current rate for each month during the
automatic renewal term. As used herein, "Term" shall mean, collectively, the
period from the Delivery and Acceptance Date to the Expiration Date and all
Renewal Terms (as defined in the Equipment Schedule relating to such Equipment);
provided, however, that this Master Lease shall be effective from and after the
date of execution hereof. All obligations of Lessee under Sections 17 and 18
hereof shall survive the expiration, cancellation or other termination of the
Term. Provided that no Default or Event of Default (each as defined in Section
16) has occurred and is continuing, neither Lessor nor anyone claiming by,
through or under Lessor, shall not interfere with Lessee's quiet use and
possession of the Equipment.
3. Rent. Lessee shall pay Lessor for the leasing of the Equipment hereunder
the periodic rental payments ("Basic Rent") on the dates (each a "Rent Payment
Date") and in the amounts set forth in the Equipment Schedule. Basic Rent
together with all other additional amounts as may from time to time be payable
under this Lease and the other Lease Documents (as defined in Section 4) is
referred to
herein as "Rent"). Rent shall be due whether or not Lessee has received any
notice that such payments are due. All Rent shall be paid to Lessor at its
address set forth in the Equipment Schedule, or as otherwise directed by Lessor
in writing. If any Rent is not paid when due (or within 10 days thereafter),
Lessee shall pay to Lessor a late payment fee equal to five percent (5%) of the
amount of such Rent.
4. Net Lease. Each Lease shall constitute a non-cancelable net lease, it
being the intention of the parties that all costs, expenses and liability
associated with the Equipment or its lease shall be borne by Lessee. Lessee's
obligation to pay Rent and otherwise to perform its obligations under this Lease
and each other document and agreement executed in connection with this Lease
(together with the Lease, collectively, the "Lease Documents") shall be
irrevocable, absolute and unconditional and shall not be subject to defense,
counterclaim, set-off, diminution, abatement or recoupment for any reason
whatsoever, and Lessee waives all rights to terminate or surrender this Lease
for any reason except as expressly set forth in this Lease, including, without
limitation, defect in the Equipment or non-performance by Lessor. All Rent shall
be paid without reduction or deduction whatsoever, including any reduction or
deduction for any Tax (as defined in Section 18).
5. Acceptance. Upon delivery of the Equipment, Lessee shall promptly
inspect and test such Equipment and, if acceptable to Lessee, accept such
Equipment and deliver to Lessor a certificate of acceptance, in form and
substance reasonably satisfactory to Lessor ("Acceptance Certificate"). Lessee
represents that it has selected both (a) the Equipment, and (b) the
manufacturer, vendor or other supplier of the Equipment (the "Supplier") without
assistance from Lessor and either is a party to, or has received a copy of, each
agreement and document by which Lessor acquired the Equipment or the right to
possession and use of the Equipment (including any documents or agreements with
the Supplier (collectively, the "Supply Contract")) prior to the Delivery and
Acceptance Date. Lessee hereby assumes the risks, burdens, and obligations to
any manufacturer or vendor of any Item of Equipment on account of nondelivery,
nonacceptance or nonperformance of the Equipment. Lessee's execution and
delivery of an Acceptance Certificate shall be conclusive evidence as between
Lessor and Lessee that the Items of Equipment referred to therein are acceptable
for all purposes hereof.
6. Disclaimer of Warranties. THE EQUIPMENT IS BEING LEASED TO THE LESSEE BY
THE LESSOR "AS IS, WHERE IS". LESSOR DOES NOT MAKE, HAS NOT MADE, SHALL NOT BE
DEEMED TO MAKE OR HAVE MADE, AND EXPRESSLY DISCLAIMS TO LESSEE ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT T THE
EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH ANY LAW, RULE
SPECIFICATION, OR CONTRACT PERTAINING THERETO, QUALITY OF MATERIALS OR
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION SAFETY,
PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE, IT BEING AGREED THAT ALL
SUCH RISKS, AS BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE.
Notwithstanding the foregoing, Lessee shall be entitled to the benefit of any
applicable manufacturer's warranties received by Lessor and, to the extent
assignable, such warranties are hereby assigned by Lessor to Lessee for the term
of the applicable Equipment Schedule.
7. Conditions Precedent. The obligation of Lessor to purchase the Equipment
and to lease the same to Lessee shall be subject to satisfaction (or waiver by
Lessor) of each of the following conditions, prior to the Delivery and
Acceptance Date with respect to such Equipment: (a) Lessor shall have received
each of the following documents, in form and substance satisfactory to Lessor:
(i) the Equipment Schedule relating to such Equipment duly executed by Lessee;
(ii) an Acceptance Certificate for each Item of Equipment duly executed by
Lessee; (iii) if requested by Lessor, an assignment Lessee's rights under the
Supply Contract in form and substance acceptable to Lessor and consent executed
by Lessee and the Supplier; (iv) the original bills of sale evidencing chain of
title from the manufacturer or supplier to the Lessor relating to the Equipment
to be leased hereunder; (v) a certificate of the secretary or assistant
secretary of Lessee dated the date of such Equipment Schedule certifying (A) the
incumbency of each of the officers executing the applicable Lease Documents, (B)
a copy of the articles or certificate of incorporation, by-laws or code of
regulations, and other applicable organizational documents of Lessee and (C)
copies of any other documents evidencing the authorization of the
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corporate officers on behalf of the Lessee to execute, deliver and perform this
Lease and each other Lease Document; (vi) a certificate dated the date of such
Equipment Schedule of the president or chief financial officer of Lessee
certifying that, to the best of Lessee's knowledge, no Default or Event of
Default has occurred and is continuing and no Event of Loss (as defined in
Section 11) has occurred with respect to any Equipment identified in such
Equipment Schedule; (vii) if requested by Lessor, an opinion of legal counsel to
Lessee in form and substance satisfactory to Lessor; and (viii) such other
documents or agreements as may be required by the terms of the Equipment
Schedule or as Lessor may reasonably request; (b) Lessor shall have the right
(by assignment or otherwise) to purchase the Equipment identified in the
applicable Equipment Schedule for a price not to exceed the Lessor's Capitalized
Cost (as identified in such Equipment Schedule) and on terms and conditions
otherwise reasonably satisfactory to the Lessor; (c) Lessor shall have received
evidence of the filing of Uniform Commercial Code financing statements or other
records relating to such Equipment in form and substance satisfactory to Lessor
in the jurisdiction in which Lessee is a registered organization and such other
jurisdiction as Lessor may reasonably request; (d) Lessor shall have received
evidence of insurance policies covering the Equipment which comply with the
requirements of Section 10, hereof; (e) the representations and warranties of
the Lessee contained herein and in each of the Lease Documents shall be true and
correct on and as of the Delivery and Acceptance Date both with and without
giving effect to the transactions contemplated by the applicable Lease; (f) no
Default or Event of Default shall have occurred and be continuing or result from
the transactions contemplated by the Lease; (g) Lessee shall have paid the fees
and reasonable out-of-pocket expenses of Lessor (including the fees and expenses
of counsel to the Lessor and any filing or recordation fees) incurred in
connection with the negotiation, execution and delivery of the Equipment
Schedule and other Lease Documents relating thereto; and (h) no material adverse
change in the existing or prospective financial condition or results of
operations of Lessee or any guarantor of Lessee's obligations hereunder (a
"Guarantor") which may affect the ability of Lessee to perform its obligations
under the Lease Documents, or the ability of any Guarantor to perform its
obligations under any Guaranty, shall have occurred since the date of the most
recent audited financial statements of Lessee delivered to Lessor.
8. Use and Maintenance; Alterations.
(a) Lessee covenants and agrees that it: (i) shall use the Equipment
solely in the conduct of its business, for the purpose, and in the manner, for
which the Equipment was designed; (ii) shall operate, maintain, service and
repair the Equipment, and maintain all records and other materials relating
thereto, (A) in accordance and consistent with (1) the Supplier's maintenance
and operating manuals or service agreements, whenever furnished or entered into,
including any subsequent amendments or replacements thereof, delivered by the
Supplier or other service provider to the Lessee (including requiring all
components, fuels and fluids installed in or used on the Equipment to meet the
standards specified by the Supplier from time to time), (2) the requirements of
all applicable insurance policies, (3) the Supply Contract, so as to preserve
all of Lessee's and Lessor's rights thereunder, including all rights to any
warranties, indemnities or other rights or remedies, and (4) all applicable
laws; and (B) without limiting the foregoing, so as to cause the Equipment to be
in good repair and operating condition and in at least the same condition as
when delivered to Lessee hereunder, except for ordinary wear and tear resulting
despite Lessee's full compliance with the terms hereof; (iii) shall not
discriminate against the Equipment with respect to scheduling of maintenance,
parts or service; (iv) shall not change the location of any Equipment as
specified in the Equipment Schedule without written notice to Lessor; and shall
not locate the Equipment outside of the United States without the prior consent
of Lessor and (v) to the extent requested by Lessor, shall cause each Item of
the Equipment to be continually marked, in a plain and distinct manner, with the
name of Lessor followed by the words "Owner and Lessor," or other appropriate
words designated by Lessor on labels furnished by Lessor. If the location for
any Equipment specified in the Equipment Schedule is a facility leased by Lessee
or owned by Lessee subject to one or more mortgage liens, upon the request of
Lessor, Lessee will obtain a real property waiver or waivers in form and
substance satisfactory to Lessor from the lessors or mortgagees of such
facility.
(b) Lessee, at its own cost and expense, will promptly replace all
parts, appliances, systems, components, instruments and other equipment
("Parts") incorporated in, or installed on, the
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Equipment which may from time to time become worn out, lost, stolen, destroyed,
seized, confiscated, damaged beyond repair or permanently rendered unfit for use
for any reason whatsoever; provided, however, that Lessee shall not be required
to replace any Part or Parts that are not material to the normal and customary
operation of the Equipment. In addition, in the ordinary course of maintenance,
service repair, overhaul or testing, Lessee may remove any Parts, whether or not
worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use, provided that Lessee shall replace such
Parts as promptly as practicable. All replacement Parts shall be free and clear
of all Liens (as defined in Section 8(c)) and shall be in as good an operating
condition as, and shall have a value and utility at least equal to, the Parts
replaced, assuming such replaced Parts were in the condition and repair required
to be maintained by the terms hereof. Any replacement Part installed, of
incorporated on, the Equipment shall be considered an accession to such
Equipment and title to such replacement Part shall immediately vest in Lessor
without cost or expense to Lessor.
(c) Lessee will keep the Equipment and its interest therein free and
clear of all liens, claims, mortgages, charges and encumbrances of any type
regardless of how arising ("Liens") other than any Lien arising out of claims
against Lessor not relating to the lease of the Equipment to Lessee ("Permitted
Liens"). Lessee will defend, at its own expense, Lessor's title to the Equipment
from all such Liens. If any Lien shall attach to any item of Equipment, Lessee
will provide written notification to Lessor within ten (10) days after Lessee
receives notice of any such attachment stating the full particulars thereof and
the location of such Equipment on the date of such notification. Notwithstanding
the foregoing, in the event that any Lien is released within thirty (30) days
after Lessee has been notified of the existence of the Lien, Lessee shall not be
in breach of this Section.
(d) At its sole option, Lessee may make any alteration, modification
or attachment to the Equipment deemed appropriate by Lessee, provided that such
alteration, modification, attachment is of a type which is readily removable
without damage to the Equipment, does not decrease the value, condition, utility
or useful life of the Equipment or cause such Equipment to become "limited use
property" (as defined in Revenue Procedure 2001-28, 2001-19 I.R.B. 1156 or any
successor publication or Treasury Regulation issued pursuant to the Internal
Revenue Code of 1986 (as amended, supplemented or modified from time to time,
the "Code")), a fixture (as defined in the Uniform Commercial Code as in effect
in any applicable jurisdiction), or real property or affect the insurability or
impair any manufacturer's warranty with respect to the Equipment. All
alterations, modifications and attachments of whatsoever kind or nature made to
any item of Equipment that cannot be removed without damaging or reducing the
functional capability, economic value or insurability of the item of Equipment
or impairing any manufacturer's warranty shall only be made with the prior
written consent of the Lessor and shall be deemed to be part of the Equipment.
Under no circumstance shall any non-severable alteration, modification or
attachment be subjected by Lessee to any encumbrance other than this Lease.
9. Assignment and Sublease. Lessee shall not sublease or otherwise
relinquish possession of any Item of Equipment, or assign, transfer or encumber
its rights, interests or obligations hereunder or under any Equipment Schedule
executed pursuant hereto unless expressly permitted pursuant to the terms of the
Equipment Schedule relating to such Equipment. No assignment, transfer or
sublease, in any event, shall relieve Lessee of, and Lessee shall remain
primarily liable for, its obligations under each Lease Document.
10. Insurance.
(a) Lessee shall provide, maintain and pay for insurance coverage with
respect to the Equipment, insuring against, among other things, the loss, theft,
damage, or destruction of the Equipment, in an amount not less than the
Stipulated Loss Value (as defined in the applicable Equipment Schedule) of such
Equipment at any time; and public liability and property damage with respect to
the use or operation of the Equipment, in the amounts set forth in the
applicable Equipment Schedule. All insurance against loss shall name Lessor as
the sole loss payee and all liability insurance shall name Lessor and its
Assignees (as defined in Section 20) and their subsidiaries and affiliated
companies, and their successors and assigns as additional insureds. All of such
insurance shall be in form (including all endorsements required by Lessor), and
with companies, reasonably satisfactory to Lessor.
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(b) All policies of insurance required hereunder shall (i) provide
that any cancellation, expiration, lapse, or material modification shall not be
effective as to the Lessor for a period of thirty (30) days after receipt by
Lessor of written notice thereof; (ii) provide that premiums may be paid by the
Lessor, but without liability on the part of the Lessor for such premiums; (iii)
be primary without any right of set-off or right of contribution from any other
insurance carried by the Lessor; (iv) contain breach of warranty provisions
providing that, in respect of the interests of the Lessor, the insurance shall
not be invalidated by any action, inaction or breach of warranty, declaration,
or condition by the Lessee or any other person or by any fact or information
known to Lessor; and (v) waive any right of subrogation against Lessor. Prior to
the Delivery and Acceptance Date for any Item of Equipment, and thereafter, not
less than 15 days prior to each renewal or replacement of such insurance, Lessee
will deliver to Lessor certificates issued by the insurance carriers thereunder
evidencing the insurance required to be maintained pursuant to this Lease.
(c) The proceeds (if any) of the insurance maintained by Lessee that
are received with respect to the loss or damage of any Equipment, shall be
applied and paid first, to Lessor for any amount then due and payable by Lessee
under this Lease, second, if an Event of Loss (as defined in, and subject to,
Section 11) has occurred, to Lessor for the payment of Stipulated Loss Value or,
otherwise, if such loss or damage does not constitute an Event of Loss, to
Lessee for its reasonable, documented, out-of-pocket costs to repair or replace
such item of Equipment pursuant to Section 11(b)(i), to the extent that such
repairs or replacements were necessitated by the occurrence of the loss for
which such proceeds were paid, third, to Lessee to reimburse Lessee for any
Stipulated Loss Value actually paid to, and retained by Lessor and fourth, any
excess to Lessor. Proceeds of any liability insurance shall promptly be paid to
the party entitled thereto.
11. Risk of Loss; Damage to Equipment.
(a) Lessee shall bear the entire risk of loss and damage to any and
all Items of Equipment from any cause whatsoever, whether or not insured
against, during the Term until the Equipment is returned to Lessor in accordance
with Section 14 hereof. No loss or damage shall relieve Lessee of the obligation
to pay Rent or of any other obligation under this Lease. An "Event of Loss"
shall be deemed to have occurred with respect to any Item of Equipment if such
Item of Equipment or any material part thereof has been lost, stolen,
requisitioned or condemned by any governmental authority, damaged beyond repair
or damaged in such a manner that results in an insurance settlement on the basis
of an actual or arranged total loss.
(b) Upon any loss or damage to any Item of Equipment not constituting
an Event of Loss, Lessee will promptly, and in any event within thirty (30) days
of such loss or damage (or such longer period as to which the parties shall
mutually agree), place such Item of Equipment in good condition and repair as
required by the terms of this Lease. If an Event of Loss to any Item of
Equipment has occurred, Lessee shall immediately notify Lessor of same, and at
the option of Lessee, Lessee shall: (i) not more than thirty (30) days following
such Event of Loss (or such longer period as Lessor shall determine in its sole
discretion) replace such Item of Equipment with replacement equipment
(acceptable to Lessor) in as good condition and repair, and with the same value
remaining useful economic life and utility, as such replaced Item of Equipment
immediately preceding the Event of Loss (assuming that such replaced Item of
Equipment was in the condition required by this Lease), which replacement
equipment shall immediately, and without further act, be deemed to constitute
Items of Equipment and be fully subject to this Lease as if originally leased
hereunder and shall be free and clear of all Liens; or (ii) pay to Lessor on the
next succeeding Rent Payment Date the sum of (A) all Rent due and owing
hereunder with respect to such Item of Equipment (at the time of such payment)
including all Basic Rent payable on such Rent Payment Date plus (B) the
Stipulated Loss Value as of such Rent Payment Date with respect to such Item of
Equipment. Upon Lessor's receipt of the payment required under subsection (ii)
above, Lessee shall be entitled to Lessor's interest in such Item of Equipment,
in its then condition and location "as is" and "where is", without any
representations or warranties, express or implied.
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12. Financial, Other Information and Notices.
(a) Lessee shall maintain a standard and modern system for accounting
and shall furnish to Lessor:
(i) Within sixty (60) days after the end of each quarter, a copy
of Lessee's internally prepared consolidated financial statements for that
quarter and for the year to date in a form reasonably acceptable to Lessor,
prepared and certified as complete and correct, subject to changes
resulting from year-end adjustments, by the chief financial officer of
Lessee.
(ii) Within one hundred twenty (120) days after the end of each
fiscal year, a copy of Lessee's consolidated year end financial statements
audited by a firm of independent certified public accountants acceptable to
Lessor (which acceptance shall not be unreasonably withheld) and
accompanied by an audit opinion of such accountants without qualification.
All such financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied.
(b) Lessee shall provide prompt written notice to Lessor (i) of any
Event of Default (ii) of any loss or damage to any Item of Equipment or any
Event of Loss with respect to any Item of Equipment, and (iii) any existing or
threatened investigation, claim or action by any governmental authority which
could adversely affect the Equipment or this Lease.
(c) Lessee shall furnish such other information as Lessor may
reasonably request from time to time relating to the Equipment, this Lease or
the operation or condition of Lessee including, without limitation, such
additional financial statements of the Lessee for such periods as Lessor may
request; provided that Lessee shall have a reasonable amount of time to have
such financial statements prepared.
13. Inspections. Lessor may from time to time during Lessee's normal
business hours, and, so long as no Default or Event of Default is continuing,
upon not less than five (5) days written notice to Lessee, inspect the Equipment
and Lessee's records with respect thereto. Lessee shall cooperate with Lessor in
scheduling such inspection and in making the Equipment available for inspection
by Lessor or its designee at a single location as reasonably specified by
Lessee. Lessee will, upon reasonable written request, provide a report on the
condition of the Equipment, a record of its maintenance and repair, a summary of
all items suffering an Event of Loss, a certificate of no Event of Default, or
such other information or evidence of compliance with Lessee's obligations under
the Lease as Lessor may reasonably request.
14. Condition Upon Return. At the expiration of the Term, unless Lessee has
elected to purchase the Equipment in accordance with the terms of the Equipment
Schedule, Lessee shall promptly, at its own cost and expense: (a) return the
Equipment in the condition required to be maintained under Section 8(a) hereof;
(b) if de-installation, disassembly or crating is required, cause such Items of
Equipment to be de-installed, disassembled and crated by an authorized
manufacturer's representative or such other service person as is reasonably
satisfactory to Lessor; and (c) return such Items of Equipment in the condition
and in the manner specified in the Equipment Schedule (collectively, the "Return
Condition"). The Equipment, as returned, will include related maintenance logs,
operating manuals, and other related materials. All operating manuals for the
Equipment must be returned to Lessor in a usable condition and containing all
pages. If lost or destroyed, Lessee shall, at its own expense, provide
replacement operating manuals. Lessor may, but is not required to, inspect the
Equipment prior to its return. If Lessor determines that the Equipment does not
conform to the Return Condition, Lessor will promptly notify Lessee of such
determination specifying the repairs or refurbishments needed to place the
Equipment in the Return Condition. Lessor may, at its option, either require
Lessee to effect such repairs or itself effect such repairs. In either case, all
costs associated with any repairs and inspections will be paid by Lessee. Until
Lessee has returned the Equipment in compliance with the requirements of this
Lease, the Lease shall continue in full force and effect and Lessee shall
continue to pay Rent
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notwithstanding any expiration or termination of the Term through and including
the date on which the Equipment is accepted for return by Lessor as conforming
with the Return Condition.
15. Lessee's Representations and Warranties. Lessee represents and warrants
as of the date of execution and delivery of this Master Lease and each Equipment
Schedule as follows: (a) Lessee is a corporation organized under the laws of the
State of Ohio, having a principal place of business at 000 Xxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx Xxxxxx, Xxxx, 00000, duly organized, validly existing under
the laws of the jurisdiction of its organization with full power to enter into
and to pay and perform its obligations under the Equipment Schedule and this
Lease as incorporated therein by reference, and is duly qualified or licensed in
all other jurisdictions where its failure to so qualify would adversely affect
the conduct of its business or its ability to perform any of its obligations
under or the enforceability of this Lease; (b) each Equipment Schedule, this
Master Lease and all other Lease Documents have been duly authorized, executed
and delivered by Lessee, are valid, legal and binding obligations of Lessee, are
enforceable against Lessee in accordance with their terms and do not and will
not contravene any provisions of or constitute a default under Lessee's
organization documents, any agreement to which it is a party or by which it or
any of its property is bound, or any applicable law, regulation or order of any
governmental authority; (c) Lessor's right, title and interest in and to the
Equipment and the Rent therefrom will vest in Lessor upon Lessee's acceptance of
the Equipment for lease hereunder and will not be affected or impaired by the
terms of any agreement or instrument by which Lessee or any of its property is
bound; (d) no approval of, or filing with, any governmental authority or other
person is required in connection with Lessee's entering into, or the payment or
performance of its obligations under, this Lease and the other Lease Documents;
(e) there are no suits or proceedings pending or, to the knowledge of Lessee,
threatened, before any court or governmental agency against or affecting Lessee
which, if decided adversely to Lessee, would adversely affect the conduct of its
business or its ability to perform any of its obligations under or the
enforceability of this Lease; (f) the financial statements of Lessee which have
been delivered to Lessor have been prepared in accordance with generally
accepted accounting principles consistently applied, and fairly present Lessee's
financial condition and the results of its operations as of the date of and for
the period covered by such statements (subject to customary year-end
adjustments), and since the date of such statements there has been no material
adverse change in such financial condition or operations; (g) Lessee's full and
correct legal name is set forth on the signature page hereof and Lessee will not
change its legal name or the location of its jurisdiction of organization
without giving to Lessor at least thirty (30) days prior written notice thereof;
(h) the Equipment will always be used for business or commercial, and not
personal, purposes; (i) Lessee is not in default under any obligation for
borrowed money, for the deferred purchase price of property or any lease
agreement which, either individually or in the aggregate, would have a material
adverse effect on the condition of its business or its ability to perform any of
its obligations under or the enforceability of this Lease; and (j) Lessee is,
and will remain, in full compliance with all laws and regulations applicable to
it including without limitation, (i) ensuring that no person who owns a
controlling interest in or otherwise controls Lessee is or shall be (A) listed
on the Specially Designated National and Blocked Person List maintained by the
Office of Foreign Assets Control ("OFAC"), Department of the Treasury and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute,
executive order or regulations or (C) a person designated under Section 1(b),
(c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar executive order and (ii) compliance
with all applicable Bank Secrecy Act ("BSA") laws, regulations and government
guidance on BSA compliance and on the prevention and detection of money
laundering violations.
Lessee's representations and warranties shall survive termination or expiration
of the Lease.
16. Events of Default and Remedies.
(a) Each of the following events constitutes an "Event of Default"
hereunder and any event that, with the passage of time or the giving of notice,
or both, would constitute an Event of Default shall constitute a "Default"
hereunder: (i) Lessee fails to pay any Rent when due under this Lease and such
failure continues for a period of ten (10) days; (ii) any representation or
warranty made by Lessee in the Lease or in any other Lease Document shall at any
time prove to have been incorrect in any material respect as and when made;
(iii) Lessee fails (A) to obtain and maintain the insurance coverage required
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herein; or (B) fails to materially observe or perform any other covenant,
condition or agreement under this Lease and, in the case of clause (B), such
failure continues unremedied for a period of fifteen (15) days after written
notice thereof by Lessor to Lessee; (iv) Lessee or any Guarantor shall have
consolidated with, merged with or into, or conveyed, sold or otherwise
transferred all or substantially all of its assets or shall have failed to
maintain its corporate existence; (v) Lessee or any Guarantor (A) ceases doing
business as a going concern; (B) makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts as they mature or
generally fails to pay its debts as they become due; (C) initiates any voluntary
bankruptcy, reorganization, insolvency or similar proceeding; (D) fails to
obtain the discharge of any bankruptcy, reorganization, insolvency or similar
proceeding initiated against it by others within sixty (60) days of the date
such proceedings were initiated; (E) requests or consents to the appointment of
a trustee, custodian or receiver or other officer with similar powers for itself
or a substantial part of its property; or (F) a trustee, custodian or receiver
or other officer with similar powers is appointed for itself or for a
substantial part of its property; (vi) Lessee fails to return the Equipment or
fails to return the Equipment in the required condition at the expiration of the
Term; or (vii) if Lessee's obligations are guaranteed by any other party, an
"Event of Default" (under and as defined in the Guaranty executed by such
Guarantor) shall occur.
(b) Upon the occurrence of an Event of Default, Lessor may exercise
any one or more of the following remedies and any additional rights and remedies
permitted by law (none of which shall be exclusive) and shall be entitled to
recover all its reasonable costs and expenses and attorneys' fees in enforcing
its rights and remedies:
(i) Lessee shall, upon demand, assemble or cause to be assembled
any o all of the Equipment at a location designated by Lessor; and/or to
return promptly, at Lessee's expense, any or all of the Equipment to Lessor
at such location, in the condition and otherwise in accordance with all of
the terms of Section 14 hereof; and/or
(ii) Lessor may itself or by its agents enter upon the premises
of Lessee or any other location where the Equipment is located and take
possession of and render unusable by Lessee any or all of the Equipment,
wherever it may be located, without any court order or other process of law
and without liability for any damages occasioned by such taking of
possession; and/or
(iii) Sell, re-lease or otherwise dispose of any or all of the
Equipment, whether or not in Lessor's possession, at public or private sale
with or without notice to Lessee, with the right of Lessor to purchase and
apply the net proceeds of such disposition, after deducting all costs of
such disposition (including but not limited to costs of transportation,
possession, storage, refurbishing, advertising and brokers' fees), to the
obligations of Lessee under this Lease, with Lessee remaining liable for
any deficiency and with any excess being retained by Lessor, or retain any
and all of the Equipment; and/or
(iv) Cancel such Equipment Schedule as to any or all of the
Equipment; and/or
(v) Proceed by appropriate court action, either at law or in
equity (including an action for specific performance), to enforce
performance by Lessee or to recover damages associated with such Event of
Default; or exercise any other right or remedy available to Lessor at law
or in equity; and/or
(vi) By offset, recoupment or other manner of application, apply
any security deposit, monies held in deposit or other sums then held by
Lessor or any affiliate of Lessor, and with respect to which Lessee has an
interest, against any obligations of Lessee arising under this Lease or any
other Lease Document, whether or not Lessee has pledged, assigned or
granted a security interest to Lessor in any or all such sums as collateral
for said obligations.
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(c) In addition to the foregoing, Lessee shall pay to Lessor on demand
the sum of (i) any and all Rent which is then due or which has accrued to the
date of demand and (ii) an amount equal to the Stipulated Loss Value (as set
forth in the related Equipment Schedule) as of the Rent Payment Date on or
immediately preceding the date of demand for the Items of Equipment as Lessor
shall specify. The Lessor and Lessee agree that Lessor shall be entitled to such
amount as damages for loss of bargain and not as a penalty and that such amount
is reasonable in light of the anticipated harm to Lessor caused by an Event of
Default.
(d) If Lessee pays the full amount referred to in Section 16(c) to
Lessor prior to the termination of this Lease as it relates to such Items of
Equipment, title to the relevant Equipment shall immediately vest in Lessee
without representation or warranty by Lessor. If Lessee fails to pay such amount
and Lessor subsequently sells, releases or otherwise disposes of such Items of
Equipment, the amount due from Lessee under Section 16(c) shall be reduced by an
amount equal to (i) the actual cash proceeds received and retained by Lessor
upon any sale or disposition or (ii) if Lessor leases such Equipment by a lease
agreement substantially similar to this Lease, the present value of the rents
(discounted at the Prime Rate as announced by Fifth Third Bank and in effect at
the time of demand plus 2.00%) payable under such subsequent Lease for the
remaining Term of this Lease (without regard to any Renewal Terms other than the
then current Renewal Term (if applicable)), in each case, net of all costs and
expenses incurred in connection with such sale, disposition or lease including
any incidental damages.
(e) A cancellation or termination hereunder shall occur only upon
written notice by Lessor to Lessee, and only with respect to such Items of
Equipment as Lessor specifically elects to cancel or terminate by such notice.
Except as to any such Items of Equipment with respect to which there is a
cancellation or termination, this Lease shall remain in full force and effect
and Lessee shall be and remain liable for the full performance of all its
obligations under this Lease.
(f) Lessee shall indemnify, defend and hold Lessor harmless for any
loss, personal injury (including death), or damage to property, suffered by
Lessor, its employees or any of its agents in connection with its entry onto the
premises of Lessee. Each of the rights and remedies of Lessor hereunder and
under the other Lease Documents is in addition to all of its other rights and
remedies hereunder, under the other Lease Documents and under applicable law and
nothing in this Lease or any other Lease Document shall be construed as limiting
any such right or remedy. Lessor's failure to exercise or delay in exercising
any right, power or remedy available to Lessor shall not constitute a waiver or
otherwise affect or impair its rights to the future exercise of any such right,
power or remedy. Waiver by Lessor of any Event of Default shall not be a waiver
by Lessor of any other or subsequent Events of Default.
17. General Indemnification. Lessee shall pay, and shall indemnify and hold
Lessor, its directors, officers, agents, employees, successors and assigns (each
an "Indemnitee") harmless on an after-tax basis from and against, any and all
liabilities, causes of action, claims, suits, penalties, damages, losses, costs
or expenses (including attorneys' fees), obligations, liabilities, demands and
judgments, and Liens, of any nature whatsoever (collectively, a "Liability")
arising out of or in any way related to: (a) the Lease Documents, (b) the
manufacture, purchase, ownership, title, selection, acceptance, rejection,
possession, lease, sublease, operation, use, maintenance, documenting,
inspection, control, loss, damage, destruction, removal, storage, surrender,
sale, use, condition, delivery, nondelivery, return or other disposition of or
any other matter relating to any Item of Equipment or any part or portion
thereof (including, in each case and without limitation, latent or other
defects, whether or not discoverable, any claim for patent, trademark or
copyright infringement) and any and all Liabilities in any way relating to or
arising out of injury to persons, properties or the environment or any and all
Liabilities based on strict liability in tort, negligence, breach of warranties
or violations of any regulatory law or requirement, (c) a failure to comply
fully with applicable law, (d) Lessee's failure to perform any covenant, or
Lessee's breach of any representation or warranty, hereunder and (e) the failure
of the Equipment under the laws of the jurisdiction(s) in which it is to be
located, to consist solely of personal property and not fixtures; provided, that
the foregoing indemnity shall not extend to the Liabilities to the extent
resulting from the gross negligence or willful misconduct of an Indemnitee.
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18. General Tax Indemnification. Lessee shall pay when due and shall
indemnify and hold each Indemnitee harmless from and against (on an after-tax
basis) any and all taxes, fees, withholdings, levies, imposts, duties,
assessments and charges of any kind and nature ("Taxes") arising out of or
related to this Lease or any other Lease Document, together with interest and
penalties thereon and including, without limitation, sales, use, gross receipts,
personal property, real property, real estate excise, ad valorem, business and
occupational, value added, leasing, leasing use, documentary, stamp or other
taxes imposed upon or against any Indemnitee, Lessee or any Equipment by any
governmental authority with respect to any Equipment or the manufacturing,
ordering, sale, purchase, shipment, delivery, acceptance or rejection,
ownership, titling, registration, leasing, subleasing, possession, use,
operation, removal, return or other dispossession thereof or upon the rents,
receipts or earnings arising therefrom or upon or with respect to this Lease,
whether payable at the inception of a Lease, during the Term thereof or at the
expiration thereof, excepting only all federal, state and local taxes on or
measured by Lessor's net income. Whenever this Lease or any other Lease Document
terminates as to any Item of Equipment, Lessee shall, upon written request by
Lessor, advance to Lessor the amount estimated by Lessor to be the personal
property or other taxes on such Item of Equipment which are not yet payable, but
for which Lessee is responsible. Lessor shall, at Lessee's request, provide
Lessee with Lessor's method of computation of any estimated taxes. Except as
otherwise provided in the Equipment Schedule relating to any Equipment, upon
receipt of any tax xxxx relating to such Equipment from a relevant taxing
authority, Lessor will pay the Tax identified on such tax xxxx. Lessee will, on
demand, (a) reimburse Lessor for the amount of such Tax paid to such taxing
authority and (b) pay to Lessor a fee (as identified by Lessor from time to
time) relating to the administration of such payment.
19. Ownership. Title to the Equipment shall at all times remain in Lessor,
and Lessee shall acquire no ownership, title, property, right, equity or
interest in the Equipment other than its leasehold interest solely as Lessee
subject to all the terms and conditions hereof. This Lease, is intended to be a
"finance lease" solely for the purposes of Article 2A of the Uniform Commercial
Code as that term is defined in Article 2A of the Uniform Commercial Code. To
the extent permitted by applicable law, Lessee (a) waives any and all rights and
remedies of Lessee under Sections 2A-508 through 2A-522 of the Uniform
Commercial Code and (b) any rights now or hereafter conferred by statute or
otherwise to recover incidental or consequential damages from Lessor for any
breach or any other reason whatsoever. If, notwithstanding the express intent of
the parties, a court of competent jurisdiction determines that any Equipment
Schedule is not a "finance lease", the parties agree that in such event (i) (A)
in order to secure the prompt payment of Rent under and with respect to this
Lease, and the performance and observant by Lessee of all the agreements,
covenants and provisions hereof (collectively, the "Obligations"), Lease hereby
grants to Lessor a first priority security interest in all of Lessee's right,
title and interest in the following (whether now existing or hereafter created
and whether now owned or hereafter acquired): (1) the Equipment (including,
without limitation, all inventory, equipment, fixtures or other property
comprising the same), and general intangibles relating thereto, (2) additions,
attachments, accessories and accessions thereto whether or not furnished by the
Supplier of such Equipment, (3) all subleases (including the right to receive
any payment thereunder and the right to make any election or determination or
give any consent or waiver thereunder), chattel paper, accounts, security
deposits and bills of sale relating thereto, (4) any and all substitutions,
replacements or exchanges for any such Equipment or other collateral, and (5)
any and all products and proceeds of any collateral hereunder (including all
insurance and requisition proceeds and all other payments of any kind with
respect to the Equipment and other collateral in and against which a security
interest is granted hereunder) and (B) Lessee agrees that with respect to the
Equipment, in addition to all of the other rights and remedies available to
Lessor hereunder upon the occurrence of an Event of Default, Lessor shall have
all of the rights and remedies of a secured party under the Uniform Commercial
Code; and (ii) the original principal amount of the obligations hereunder shall
be an amount equal to the Lessor's Capitalized Cost, and that such principal
amount shall accrue interest at the lesser of (x) the maximum lawful rate
permitted by applicable law or (y) the implicit interest rate reflecting
Lessor's financial assumptions at the time of the execution of the Lease
(including any assumed residual value at the end of the Term as determined by
Lessor). Lessee hereby authorizes Lessor to file, solely at the expense of
Lessee, any Uniform Commercial Code financing statements or other similar
documents that Lessor reasonably deems necessary or advisable to protect its
interest. Lessee agrees promptly to execute and deliver to Lessor such further
documents or other
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assurances, and to take such further action, including obtaining landlord and
mortgagee waivers, as Lessor may from time to time reasonably request.
20. Assignment by Lessor. Lessor may at any time assign, grant a security
interest in, or otherwise dispose of (individually or collectively, a
"transfer"), all or any portion of its rights, title or interests in, to and
under this Lease, any Equipment Schedule or any Item of Equipment, together or
separately, to one or more persons or entities (each, an "Assignee"). Upon any
such transfer, this Lease shall remain in full force and effect. If Lessee is
given notice of any such transfer, it shall acknowledge receipt thereof in
writing and execute, or otherwise authenticate, such further instruments as may
be reasonably requested by Assignee with respect to such transfer, including
without limitation, a consent certifying certain material facts and
circumstances related to this Lease and the Equipment. Unless otherwise
expressly agreed by Assignee, Assignee shall not assume any of the obligations
of Lessor under this Lease. Upon written notice to Lessee of an assignment,
Lessee agrees to pay the Rent with respect to the Items of Equipment covered by
such assignment to such Assignee in accordance with the instructions specified
in such notice and Lessee shall not assert against Assignee any defense,
counterclaim or offset that Lessee may have against Lessor. All obligations and
liabilities of Lessee to Lessor under this Lease (including, without limitation,
any schedules, exhibits, riders or other attachments attached hereto or
otherwise incorporated herein) are also hereby made for the express benefit of
Assignee.
21. Miscellaneous.
(a) Lessee shall pay all costs and expenses of Lessor, including,
without limitation, reasonable attorneys' and other professional fees, the fees
of any collection agencies and appraisers and all other costs and expenses
related to any sale or re-lease of the Equipment (including storage costs),
incurred by Lessor in the preparation, negotiation and execution of this Lease
or any amendment or supplement hereto, enforcing any of the terms, conditions or
provisions hereof and in protecting Lessor's rights hereunder.
(b) This Lease shall be governed by and construed in accordance with
the laws of the State of Ohio. Any judicial proceeding arising out of or
relating to this Lease may be brought in any court of competent jurisdiction in
Xxxxxxxx County, Ohio and each of the parties hereto (i) accepts the
nonexclusive jurisdiction of such courts and any related appellate court and
agrees to be bound by any judgment rendered by any such court in connection with
any such proceeding and (ii) waives any objection it may now or hereafter have
as to the venue of any such proceeding brought in such court or that such court
is an inconvenient forum. EACH OF THE LESSEE AND LESSOR HEREBY WAIVES THE RIGHT
TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING ARISING OUT OF OR IN AN WAY
RELATING TO THIS LEASE, ANY EQUIPMENT SCHEDULE, OR ANY OTHER LEASE DOCUMENT AND
ANY ASSIGNMENT, SUBLEASE OR OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH.
(c) All notices delivered hereunder shall be in writing (including
facsimile) and shall be delivered to the following addresses:
if to Lessee:
Dental Care Plus, Inc.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention:
-----------------------------
Facsimile:
-----------------------------
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if to Lessor:
The Fifth Third Leasing Co.
00 Xxxxxxxx Xxxxxx Xxxxx
XX00000X
Xxxxxxxxxx, Xxxx 00000
Attn: Sales Support Manager
Facsimile: (000) 000-0000
(d) Lessee acknowledges and agrees that time is of the essence with
respect to its performance under the Lease Documents. Any failure of Lessor to
require strict performance by Lessee or any waiver by Lessor of any provision
herein shall not be construed as a consent or waiver of any provision of this
Lease. This Lease shall be binding upon, and inure to the benefit of, the
parties hereto, their permitted successors and assigns.
(e) This Lease, together with all other Lease Documents, constitutes
the entire understanding or agreement between Lessor and Lessee with respect to
the leasing of the Equipment, and supercedes all prior agreements,
representations and understandings relating to the subject matter hereof.
Neither this Lease nor any other Lease Document may be amended except by a
written instrument signed by Lessor and Lessee.
(f) This Lease may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute but one and the
same instrument.
(g) Any provision of this Lease which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Captions are intended for convenience or reference only, and shall not be
construed to define, limit or describe the scope or intent of any provisions
hereof.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Master Lease as of
the day and year first above written.
LESSOR:
THE FIFTH THIRD LEASING COMPANY
By: /s/ Xxxxxxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxxxxxx X. Xxxx
Title: Assistant Vice President
LESSEE:
DENTAL CARE PLUS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President & CFO
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