1
EXHIBIT 10.9
MASTER EQUIPMENT LEASE AGREEMENT
No
---------
This is a Master Equipment Lease Agreement between NATIONAL CITY LEASING
CORPORATION, a Kentucky corporation, whose principal office is located at 101
South Fifth Street, Louisville, Kentucky 40202 ("Lessor") and SMS GEOTRAC, INC.
a Delaware corporation, partnership, proprietorship [cross out inapplicable
clause] whose principal office is located at 3900 Laylin Road, Norwalk, OH 44857
("Lessee").
1. LEASE. Lessor agrees to lease to Lessee and Lessee agrees to lease from
Lessor, subject to the terms and conditions set forth herein, the items of
personal property (the "Equipment") described in each Equipment Supplement (a
"Supplement") executed and delivered by the parties hereto and incorporating the
terms of this Master Equipment Lease Agreement by reference therein (the
"Lease"). The terms "Agreement", "hereof", "herein", and "hereunder", when used
in this Lease, shall mean this Lease, each Supplement and any schedule thereto.
This Agreement constitutes an agreement of lease and nothing herein contained
shall be construed as conveying to Lessee any right, title, or interest in the
Equipment except as lessee only. The parties agree that this Lease is a "Finance
Lease" as defined in Section; 2A-103(q) of the Uniform Commercial Code ("UCC").
Lessee acknowledged either (a) that Lessee has reviewed and approved any written
Supply Contract (as defined in UCC Section 2A-103 (y) covering the Equipment
purchased from the Supplier (as defined in UCC Section 2A-103(x)) thereof for
lease to Lessee or (b) that Lessor has informed or advised Lessee, in writing,
either previously or by this Lease of the following: (i) the identity of the
Supplier: (ii) that the Lessee may have rights under the Supply Contract; and
(iii) that the Lessee may contact the Supplier for a description of any such
rights Lessee may have under the Supply Contract.
2. TERM; ACCEPTANCE; RENT; RETURN. The term of lease of each item of Equipment
shall commence on the date the Lessee accepts the Equipment (the "Commencement
Date") as evidenced by the Certificate of Delivery and Acceptance pertaining to
such Equipment and, unless earlier terminated pursuant to the provisions hereof,
shall continue for the term specified in each Supplement Lessee's execution and
delivery of a Certificate of Delivery and Acceptance shall constitute Lessee's
irrevocable acceptance of the Equipment covered thereby for all purposes of this
Agreement. Lessee shall pay to Lessor (at Lessor's office specified above, or as
Lessor may otherwise designate), rent as specified in each Supplement. Each date
on which an installment of rent is payable is hereinafter called a "Rent Payment
Date". As to each Supplement, the first Rent Payment Date shall be the Rent
Payment Date set forth therein, with the succeeding Rent Payment Dates on the
corresponding day of each month thereafter. In addition, if applicable, Lessee
shall pay interim rent for the period between the Commencement Date and the
first Rent Payment Date, based on a 30-day month and the number of days between
the Commencement Date and the first Rent Payment Date. Lessee shall also pay to
Lessor, on demand, a late payment charge of 5% of each installment of rent and
any other amount owing hereunder which is not paid when due. Upon the expiration
or earlier termination of the term of lease of each item of Equipment leased
hereunder, Lessee shall at its expense return such item to Lessor at such
location as Lessor may designate, in the condition required to be maintained by
Section 7 hereof.
3. NO WARRANTIES. Lessee acknowledges that Lessor is not the manufacturer of
the Equipment nor the manufacturer's agent nor a dealer therein, and LESSOR HAS
NOT MADE AND DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER, EITHER
EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS, CONDITION, DESIGN OR
OPERATION OF THE EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, THE QUALITY OR
CAPACITY OF THE MATERIALS IN THE EQUIPMENT OR WORKMANSHIP IN THE EQUIPMENT,
LESSOR'S TITLE TO THE EQUIPMENT NOR ANY OTHER REPRESENTATION OR WARRANTY OF ANY
KIND WHATSOEVER. Lessee confirms that it has made (or will make) the selection
of each item of Equipment on the basis of its own judgment and expressly
disclaims reliance upon any statements, representations or warranties made by
Lessor. Lessor shall not be liable to Lessee for any matter relating to the
ordering, manufacture, purchase, delivery, assembly, installation, testing,
operation or expense of any kind caused by the Equipment. Lessor shall not be
liable for any consequential damages as that term is used in UCC 2-719(3).
Lessor hereby assigns to Lessee all rights which Lessor has or may acquire
against any manufacturer, supplier, or contractor with respect to any warranty
and representation relating to the Equipment leased hereunder. Lessee
acknowledges that Lessee has reviewed and approved the Purchase Order, Supply
Contract or Purchase Agreement covering the Equipment purchase from the vendor
or Supplier thereof for lease to Lessee.
4. EQUIPMENT TO REMAIN PERSONAL PROPERTY; LOCATION; IDENTIFICATION; INSPECTION.
Lessee represents that the Equipment shall be and at all times remain separately
identifiable personal property Lessee shall, at its expense, take such action as
may be necessary to prevent any third party from acquiring any right to or
interest in the Equipment by virtue of the Equipment being deemed to be real
property or a part of other personal property and shall indemnify Lessor against
any loss which it may sustain by reason of Lessee's failure to do so. The
Equipment may not be removed from the location specified in the Supplement
pertaining thereto without Lessor's prior written consent and Lessee's provision
of reasonable documentation as requested by Lessor. If requested by Lessor,
Lessee shall attach to and maintain on the Equipment a conspicuous plate or
marking disclosing ownership therein. Lessor or its representatives may, at
reasonable times, inspect the Equipment.
5. TAXES; INDEMNITY. Lessee agrees to pay, and to indemnify and hold Lessor
harmless from, all license fees, assessments, and sales, use property, excise
and other taxes and charges(other than federal income taxes and taxes imposed by
any other jurisdiction which are based on, or measured by, the net income of
Lessor for reasons other than the owner ship or leasing of the Equipment in that
jurisdiction imposed upon or with respect to (a) the Equipment or any part
thereof arising out of or in connection with the shipment of Equipment or the
possession, ownership, use or operation thereof, or (b) this Agreement or the
consummation of the transaction herein contemplated. Lessor shall prepare and
file any and all returns required in connection with the obligations which
Lessee has assumed under this section except such filings as Lessor may, at its
option, direct Lessee to make. Each party shall upon request furnish the other a
copy of any such filing made or governmental invoice received covering such
obligations. Lessee further agrees to assume liability for, and to indemnify and
hold Lessor harmless against, all claims, costs, expenses, damages and
liabilities arising from or pertaining to the manufacture, assembly,
installation, ownership, use, possession and operation of the Equipment,
including without limitation, latent and other defects, whether or not
discoverable by Lessee or any other person, any expense, liability or loss
directly or indirectly related to or arising out of any injury to any person or
tangible or intangible property, whether arising from negligence or under any
theory of strict or absolute liability or any other cause, or any claim for
patent or copyright infringement, together with all legal fees and expenses
reasonably incurred by Lessor in connection with any liability asserted against
it, whether groundless or otherwise. The agreements and indemnities contained in
this section shall survive the expiration or earlier termination of the
Agreement.
6. ASSIGNMENTS; SUBLETTING; ENCUMBRANCES.
(a) LESSEE WILL NOT WITHOUT LESSOR'S PRIOR WRITTEN CONSENT ASSIGN OR
TRANSFER THIS LEASE OR ANY INTEREST HEREIN, OR SUBLEASE OR RELINQUISH
POSSESSION OF, OR CREATE OR SUFFER TO EXIST ANY LIEN MORTGAGE, SECURITY
INTEREST OR ENCUMBRANCE UPON THE EQUIPMENT.
(b) Lessor may assign or transfer this Lease or Lessor's interest in the
Equipment without notice to Lessee. Any assignee of Lessor shall have all the
rights, but none of the obligations, of Lessor under this Lease and Lessee
agrees that it will not assert against any assignee of Lessor any defense,
counterclaim, or offset that Lessee may have against Lessor. Lessee acknowledges
that any assignment or transfer by Lessor shall not materially charge Lessee's
duties or obligations under this Lease nor materially increase the burdens or
risks imposed on Lessee.
7. USE; REPAIRS; ETC. Lessee will cause the Equipment to be operated in
accordance with the manufacturer's or supplier's instructions or manuals by
competent and duly qualified personnel only and in compliance with all laws and
regulations and the insurance policies required to be maintained hereunder.
Lessee shall, at its own cost and expense, enter into and keep in force during
the term hereon a maintenance agreement with the manufacturer of the Equipment
or such other maintenance vendor as may be approved in writing, by Lessor, to
maintain, service an repair the Equipment so as to keep it in as good operating
condition as it was when it first became subject to this Lease, ordinary wear
and tear expected. Lessor shall have the right to approve such maintenance
agreement (which approval shall not be unreasonably withheld) and shall be
furnished with an executed copy thereof. Lessee shall, at its own cost and
expense, to the extent not covered by the aforesaid maintenance agreement,
maintain the Equipment in operating condition. Replacement parts shall be free
and clear of any mortgage, lien, charge, or encumbrance (and title thereto shall
best in Lessor immediately upon installation, attachment of incorporation of the
same in, on or into such Unit). Upon termination of this Lease, at the
expiration of the Lease Term or otherwise, the Equipment shall be returned to
the Lessor in as good operating condition as when it became subject to this
Lease, ordinary wear and tear excepted, and in such condition as to be
acceptable to the manufacturer for regular maintenance without any remedial
maintenance. Lessee will not alter or add to the Equipment without Lessor's
prior written consent. Lessee will remove any attachments, alterations or
accessories and return the Equipment in its original condition, normal wear and
tear excepted, at the termination of the Lease if Lessor shall so demand in the
absence of such demand, all attachments, alterations or accessories shall become
part of the Equipment at the time of the attachment thereto.
8. LOSS; DAMAGE. If any Equipment shall be lost, stolen, destroyed, damaged
beyond repair or rendered permanently unfit for normal use for any reason or in
the event of any condemnation, confiscation, seizure, or requisition of title to
or use of any Equipment (each of the foregoing being hereinafter called a
"Loss"). Lessee shall immediately pay to Lessor an amount equal to the sum of
(i) all rent and other amounts due and owning hereunder for such Equipment to
and including the date of Loss, plus (ii) all remaining unpaid rentals for such
Equipment of the term of the
2
related Supplement plus (iii) Lessor's anticipated residual interest in said
Equipment, plus (iv) interest at 18% per annum from the date of Loss to the
date of payment but in no event more than the maximum permitted by law,
whereupon Lessor will transfer to Lessee, without recourse or warranty, all of
Lessor's right, title and interest in such Equipment. Lessee agrees that
Lessor's residual interest is equal to an amount represented by the Fair Market
Sales Value of the Equipment immediately prior to the Loss, but in no event
less than 20% of the Equipment's original cost to Lessor. For purposes of this
section, the "Fair Market Sales Value" shall be determined on the basis of and
be equal in amount to the value that would be obtained in a transaction between
an informed and willing buyer and seller. If any Equipment is damaged as the
result of an event not constituting a Loss. Lessee shall, if requested by
Lessor, promptly cause such item to be repaired or replaced in accordance with
the provisions of Section 7 hereof.
9. INSURANCE. Lessee shall maintain at all times on the Equipment, at
Lessee's expense, property damage, direct damage and public liability insurance
in such amounts, against such risks and in such form and with such insurers as
shall be satisfactory to Lessor. The required insurance shall be specified in
the applicable Supplement; provided, that the amount of direct damage insurance
shall not on any date be less than the full replacement value of the Equipment
as of such date. Each public liability insurance policy will name Lessor as
additional named insured as its interests may appear and each damage insurance
policy will name Lessor as loss payee, and each insurance policy shall contain
a clause requiring the insurer to give to Lessor at least 30-days prior written
notice of any alteration of the terms or cancellation of such policy. Lessee
shall furnish to Lessor a certificate or other evidence satisfactory to Lessor
that such insurance coverage is in effect, provided, however, that Lessor shall
be under no duty to ascertain as to the existence or adequacy of such
insurance. Lessor makes no representation that the minimum insurance coverage
requirements in a Supplement will be adequate at all times to satisfy Lessee's
obligations hereunder. Lessee has the responsibility to provide additional
insurance coverage to maintain coverage hereunder in an amount adequate to
fulfill its obligation hereunder and is consistent with insurance coverage for
similar risks in Lessee's industry or line of business.
10. NONCANCELLABLE AGREEMENT; LESSEE'S OBLIGATIONS UNCONDITIONAL. This
Agreement cannot be cancelled or terminated except as expressly provided
herein. Lessee agrees that its obligation to pay all rent and other amounts
payable hereunder and to perform its duties with respect hereto shall be
absolute and unconditional under any and all circumstances, including, without
limitation, the following:
(a) any setoff, counterclaim, recoupment, defense or other right which
Lessee may have against Lessor, the manufacturer, or supplier of any Equipment
or anyone else for any reason whatsoever;
(b) any defect in the condition, design, title, operation or fitness for
use, or any to or loss of any Equipment;
(c) any insolvency, reorganization or similar proceedings by or against
Lessee, or
(d) any other event or circumstances whatsoever, whether or not similar
to the foregoing.
Each rent or other payment made by Lessee hereunder shall be final and Lessee
will not seek to recover all of any part of such payment from Lessor for any
reason whatsoever.
11. EVENTS OF DEFAULT AND REMEDIES. An Event of Default shall occur hereunder
if Lessee:
(a) shall fail to make any payment or rent or other amount owing
hereunder when due;
(b) shall fail to perform or observe any other covenant, agreement or
condition hereunder;
(c) shall make any representation or warranty to Lessor herein or in any
document or certificate furnished Lessor in connection herewith which shall
prove to be incorrect at any time.
(d) shall become insolvent or make an assignment for the benefit of
creditors or consent to the appointment of a trustee or receiver, or a trustee
or receiver shall be appointed for Lessee or for a substantial part of its
property or for the Equipment, or reorganization, arrangement, insolvency,
dissolution or liquidation proceedings shall be instituted by or against Lessee;
(e) shall suffer an adverse material change in its financial condition
from the date hereof, and as a result thereof Lessor deems itself or any of its
Equipment to be insecure, or
(f) shall be in default under any other agreement at any time executed
with Lessor or any affiliate or subsidiary of National City Corporation
then Lessor may declare this Agreement to be in default and may do one or more
of the following with respect to any or all of the Equipment as Lessor in its
sole discretion may elect, to the extent permitted by, and subject to
compliance with any mandatory requirements of applicable law then in effect
(a) demand that Lessee, and Lessee shall at its expense upon such demand,
return the Equipment promptly to Lessor in the manner and condition required by
and otherwise in accordance with the provisions of Section 2 hereof, as if the
Equipment were being returned at the expiration of its term of lease hereunder,
or Lessor, at its option, may enter upon the premises where the Equipment is
located and take possession of and remove the same by summary proceedings or
otherwise, all without liability to Lessee for damage to property or otherwise.
(b) re-lease or sell any or all of the Equipment at public or private
sale, with or without notice to Lessee or advertisement, or otherwise dispose
of any or all of the Equipment as Lessor may determine, and recover from Lessee
damages, for loss of a bargain and not as a penalty, in an amount equal to the
sum of (i) any accrued and unpaid rent as the later of (A) the date of default
or (B) the date that Lessor has obtained possession of the Equipment or such
other date as Lessee has made an effect tender of possession of the Equipment
back to Lessor ("Default Date"), plus rent (at the rate provided for in this
Agreement) for the additional period (but in no event longer than ninety (90)
days) that it takes Lessor to resell or re-let the Equipment, plus interest at
the rate of 18% per annum, or the highest rate permitted by law, whichever is
less; (ii) the present value of all future rentals reserved in the Lease and
contracted to be paid over the unexpired terms of the Lease discounted at a
rate equal to the discount rate of the Federal Reserve Bank of Cleveland as of
the Default Date, (iii) all commercially reasonable costs and expenses incurred
by Lessor in any repossession, recovery, storage, repair, sale, re-lease or
other disposition of the Equipment including reasonable attorney's fees and
costs incurred in connection with or otherwise resulting from the Lessee's
default; (iv) estimated residual value of the Equipment (which is defined as
the Fair Market Sales Value of the Equipment immediately prior to the Event of
Default, but in no event an amount less than 20% of the Equipment's original
cost to Lessor), and (v) any indemnity, if then determinable, plus interest at
18% per annum or the highest rate permitted by law, whichever is less; LESS the
amount received by Lessor upon such public or private sale or re-lease of such
items of Equipment, if any;
(c) declare immediately due and payable all sums due and to become due
hereunder for the full term of the Lease (including any renewal or purchase
options which Lessee has contracted to pay);
(d) with or without terminating this Lease, recover from Lessee
damages, as liquidated damages for loss or a bargain and not as a penalty, in
an amount equal to the sum of (i) any accrued and unpaid rent as of the date of
entry of judgment in favor of Lessor plus interest at the rate of 18% per annum
or at the highest rate permitted by law, whichever is less, (ii) the present
value of all future rentals reserved in the lease and contracted to be paid over
the unexpired term of the Lease discounted at a rate equal to the discount rate
of the Federal Reserve Bank of Cleveland; (iii) all commercially reasonable
costs and expenses incurred by Lessor in any repossession, recovery, storage,
repair, sale, re-lease or other disposition of the Equipment, including
reasonable attorney's fees and costs incurred in connection therewith or
otherwise resulting from Lessee's default; (iv) estimated residual value of the
Equipment (which is defined as the Fair Market Sales Value of the Equipment
immediately prior to the Event of Default, but in no event an amount less than
20% of the Equipment's original cost to Lessor); and (v) any indemnity, if then
determinable, plus interest at 18% per annum or the highest rate permitted by
law, whichever is less;
(e) if (i) Lessor elects not to sell, re-lease or otherwise dispose of
all or part of the Equipment or (ii) does so by re-lease which is not made in a
manner substantially similar to the applicable Supplement or (iii) the measure
of damages under clauses (b) and (d) above are not allowable under any
applicable law, Lessor may recover the market value, if any, as of the Default
Date of the rent reasonably estimated by Lessor to be obtainable for the
Equipment during the remaining Lease term or any renewal thereof then in
effect, plus any accrued and unpaid rent as of the Default Date, and
(f) Lessor may exercise any other right or remedy which may be available
to it under applicable law or proceed by appropriate court action to enforce
the terms hereof or to recover damages for the breach hereof or to rescind this
Agreement.
For the purpose of this section, the "Fair Market Sales Value" of any Equipment
shall mean such value to Lessor net of all expenses and costs whatsoever which
would be incidental to the reclamation of the Equipment and the sale thereof as
determined (at Lessee's expense) by an independent appraiser selected by
Lessor; provided, however, that (i) the "Fair Market Sales Value" of any
Equipment shall be zero if Lessor is unable to recover possession thereof in
accordance with the terms of clause (a) above, and (ii) if Lessor shall have
sold any Equipment prior to any notice given pursuant to clause (b) above, the
"Fair Market Sales Value" thereof shall be the net proceeds of such sale after
deducting all costs and expenses incurred by Lessor in connection therewith.
Except as expressly provided above, no remedy referred to in this section is
exclusive, but each shall be cumulative and in addition to any other remedy
referred to herein or otherwise available to Lessor at law or equity; and the
exercise or beginning of exercise by Lessor of any one or more of such remedies
shall not preclude the simultaneous or later exercise by Lessor of any other
remedies. No express or implied waiver by Lessor of an Event of Default shall
constitute a waiver of any other or subsequent Event of Default. To the extent
permitted by law, Lessee waives any rights now or hereafter conferred by
statute or otherwise which may require Lessor to sell, re-lease or otherwise
use the Equipment in mitigation of Lessor's damages or which may otherwise
limit or modify any of Lessor's rights or remedies.
3
12. INDEMNIFICATION FOR TAX BENEFITS.
(a) Lessor, as the owner of the Equipment, shall be entitled to such
deductions, credits and other benefits as are provided by the Internal Revenue
Code of 1986, as amended, (hereinafter called the "Code") to an owner of
property.
(b) Lessee agrees that neither it nor any corporation controlled by it, in
control of it, or under common control with it, directly or indirectly, will at
any time take any action or file any returns or other documents inconsistent
with the foregoing and that each of such corporations will file such returns,
take such action and execute such documents as may be reasonable and necessary
to facilitate accomplishment of the intent thereof. Lessee agrees to copy or
make available for inspection and copying by Lessor such records as will enable
Lessor to determine whether it is entitled to the benefit of any amortization or
depreciation deduction which may be available from time to time with respect to
the Equipment.
(c) If Lessor, under any circumstances or for any reason whatsoever,
except for acts of the Lessor or future changes in the Code, shall lose, shall
not have or shall lose the right to claim or there shall be disallowed or
recaptured all or any portion of the federal tax depreciation deductions with
respect to any item of Equipment based on depreciation or the Lessor's full cost
of such item of Equipment and computed on the basis of a method of depreciation
provided by the Code as Lessor in its complete discretion may select, then
Lessee agrees to pay Lessor upon demand an amount which, after deduction of all
taxes required to be paid by Lessor in respect to the receipt thereof under the
laws of any federal, state or local government or taxing authority of the United
States or of any taxing authority or governmental authority of any foreign
country, shall be equal to the sum of (i) an amount equal to the additional
income taxes paid or payable by Lessor in consequence of the failure to obtain
the benefit of a depreciation deduction, and (ii) any interest and/or penalty
which may be assessed in connection with any of the foregoing.
(d) The provisions of this Section 12 shall survive the expiration or
earlier termination of this Agreement.
13. LESSOR'S RIGHTS TO PERFORM. If Lessee fails to make any payment required
to be made hereunder or fails to comply with any other agreements contained
herein, Lessor may make such payment or comply with such agreements, and the
amount of such payment and the reasonable expenses of Lessor incurred in
connection with such payment or compliance, shall be payable by Lessee on
demand.
14. FURTHER ASSURANCES. Lessee will, at its expense, promptly and duly execute
and deliver to Lessor such further documents and assurances and take such
further action as Lessor may from time to time request in order to more
effectively carry out the intent and purpose of this Agreement so as to
establish and protect the rights, interest and remedies intended to be created
in favor of Lessor hereunder, including, without limitation, the execution and
filing of financing statements and continuation statements with respect to the
Equipment and this Agreement. Lessee authorizes Lessor to effect any such
filing (including the filing of any financing statements without the signature
of Lessee) and Lessor's expenses with respect thereto shall be payable by Lessee
on demand.
15. NOTICES. All notices and other communications required to be given to any
party hereunder shall be in writing and delivered or mailed by regular mail to
such party at the address set forth above or at such other address as it may
designate to other parties.
16. MISCELLANEOUS. Any provision of this Agreement 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 provision in any other jurisdiction. To the extent permitted by applicable
law, Lessee waives (a) any provision of law which renders any provision hereof
unenforceable in any respect; (b) any and all rights conferred upon a Lessee by
Article 2A of the UCC, including but not limited to Lessee's rights to (i)
cancel this Agreement; (ii) repudiate this Agreement; (iii) revoke acceptance of
the Equipment; (iv) recover damages from Lessor for any breaches of warranty or
for any other reason; (v) claim a security interest in the Equipment in Lessee's
possession or control for any reason; (vi) deduct all or any part of any claimed
damages resulting from Lessor's default, if any, under this Lease; (vii) accept
partial delivery of this Equipment; (viii) recover any general, special,
incidental or consequential damages, for any reason whatsoever; (ix) specific
performance, replevin, detinue, sequestration, claim and delivery of the like
for any Equipment identified to the Lease, or any substitutions or replacements
thereof; and (c) any rights now or hereafter conferred by statute or otherwise
which may require Lessor to sell, lease or otherwise use any Equipment in
mitigation of Lessee's damages. Provided the Lessee is not in default under any
provision of this Lease, the Lessor shall not interfere with Lessee's quiet
enjoyment of the use of the Equipment pursuant to the terms of this Agreement.
This Agreement and the provisions hereof shall inure to the benefit of Lessor
and its successors and assigns, and shall be binding on and inure to the benefit
of Lessee and its successors and assigns.
17. CONDITIONS PRECEDENT. The obligation of Lessor contained in Section 1
hereof shall be subject to the following conditions precedent (a) there shall
have occurred no material adverse change in the business or the financial
condition of Lessee from the date hereof until the Commencement Date of any
Supplement; (b) Lessee shall have furnished Lessor with a certificate or other
evidence satisfactory to Lessor that insurance coverage as required by Section 9
hereof is in effect as to the item of Equipment desired to be leased; (c) unless
specifically waived by Lessor, Lessee shall have furnished Lessor opinions of
counsel as this Agreement, in form and substance acceptable to Lessor; (d)
unless specifically waived by Lessor, Lessee shall have furnished Lessor
waivers, in form and substance acceptable to Lessor, of all rights in or to
Equipment of any landlord or mortgagee of any real property upon which the
Equipment is or is to be situated, and (e) all other instruments and legal and
corporate proceedings in connection with the transactions contemplated herein
shall be satisfactory in form and substance to Lessor, and counsel to Lessor
shall have received copies of all documents which it may have requested in
connection therewith. If any of the above conditions is not satisfied at the
time Lessee submits any Supplement, Lessor shall have no obligation under this
Agreement to lease the items of personal property covered thereby to Lessee.
18. FINANCIALS. Lessee agrees that for so long as any item of Equipment shall
be leased under this Agreement, Lessee will deliver or cause to be delivered to
Lessor (a) as soon as practicable, and in any event within sixty (60) days after
the end of each quarterly period (other than the fourth quarterly period) for
each fiscal year of Lessee, the balance sheet of Lessee as of the end of such
quarterly period together with the related statements of income and expenses for
such quarterly period all in reasonable detail prepared in accordance with
generally accepted accounting principles consistently applied throughout the
period involved and certified by Lessee's chief financial officer; and (b) as
soon as practicable, and in any event within one hundred twenty (120) days after
the close of each fiscal year of Lessee, the audited balance sheet of Lessee as
of the end of such fiscal year together with related statements of income and
surplus for such fiscal year all in reasonable detail prepared in accordance
with generally accepted accounting principles consistently applied throughout
the period involved and certified by an independent public accountant acceptable
to Lessor.
19. REPRESENTATION, WARRANTIES AND COVENANTS. Lessee represents, warrants and
covenants that (a) if Lessee is a corporation, Lessee is duly organized and
validly existing in good standing under the laws of the state of its
incorporation and is duly qualified and licensed to do business as a foreign
corporation in good standing in those jurisdictions where such qualifications
are necessary to authorize Lessee to carry on its present business and
operations and to own its properties or to perform its obligations hereunder;
(b) if Lessee is a partnership, Lessee is duly organized and validly existing
under the partnership laws of its state of domicile and is duly authorized in
any foreign jurisdiction where such qualification is necessary to authorize
Lessee to carry on its present business and operations and to own its properties
and to perform its obligations hereunder; (c) Lessee has full power, authority
and legal right to execute, deliver and carry out as Lessee the terms and
provisions of this Agreement and any other documents in connection with this
lease transaction; (d) if Lessee is a corporation, Lessee's execution, delivery
and performance of this Agreement and the other documents and agreements
referred to herein, and the performance of its obligations under this Agreement
have all been authorized by all necessary corporate action, do not require the
approval or consent of stockholders, or of any trustee or holders of any
indebtedness or obligation of Lessee and will not violate any law, governmental
rule, regulation or order binding upon Lessee or any provision of any indenture,
mortgage, contract or other agreement to which Lessee is a party or by which it
is bound or to which it is subject, and will not violate any provision of the
Certificate of Incorporation, By-laws or any preferred stock agreement of
Lessee; (e) if Lessee is a partnership, Lessee's execution, delivery and
performance of this Agreement and the other documents and agreements referred to
herein, and the performance of its obligations under this Agreement have all
been authorized by all necessary partnership actions; (f) there are no pending
or threatened investigations, actions or proceedings before any court or
administrative agency or other tribunal body, which seek to question or set
aside any of the transactions contemplated by this Agreement, or which, if
adversely determined, would materially affect the condition, business or
operation of Lessee; (g) Lessee is not in default in any material manner in the
payment or performance of any of its obligations or in the performance of any
contract, agreement or other instrument to which it is a party or by which it or
any of its assets may be bound; (h) the balance sheet of Lessee as of the end of
its most recent fiscal year and the related profit and loss statement of the
Lessee for the fiscal year ended on said date, including the related schedules
and notes, together with the report of an independent certified public
accountant, heretofore delivered to Lessor, are all true and correct and present
fairly (x) the financial position of Lessee as at the date of said balance sheet
and (y) the results of the operations of Lessee for said fiscal year; (i) all
proceedings required to be taken to authorize the lease of the Equipment from
Lessor and to protect Lessor's interest in such Equipment, free and clear of all
liens and encumbrances whatsoever, have been taken; (j) Lessee has no
significant liabilities (contingent or otherwise) which are not disclosed by or
reserved against the financial statements referred to in (h) above; (k) all the
financial statements referred to in (h) above have been prepared in accordance
with generally accepted accounting principles and practices applied on a basis
consistently maintained throughout the period involved; (l) there has been no
change which would have a material adverse effect on the business or financial
condition of Lessee from that set forth in the balance sheet referred to in (h)
above; (m) no authorization, consent, approval, license, exemption of or filing
or registration with court, governmental unit or department, commission, board,
bureau, agency, instrumentality or the like is required or necessary for the
valid execution and delivery of the Agreement, any bill of sale and the other
documents and agreements referred to herein; (n) this Master Lease Agreement,
the Supplements and any accompanying documents, having been duly authorized,
executed and delivered to Lessor, constitute legal, valid and binding
obligations of Lessee, enforceable against Lessee in accordance with the terms
thereof except as such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally; (o) the Equipment
is personal property and neither real property nor a fixture; (p) as of the
Commencement Date of each item of Equipment, a reasonable estimate of the
estimated fair market value of such item of Equipment at the end of the lease
term thereof will be at least 20% of the Lessor's cost thereof (without
including in such value any increase or decrease for inflation or deflation, and
after subtracting from such value any cost for removal and delivery of
possession of Equipment to Lessor at the end of the lease term thereof); and (q)
as of the
4
Commencement Date of each item of Equipment, a reasonable estimate of the
estimated useful life of such item of Equipment at the end of the original lease
term will be at least two years beyond the lease term thereof.
20. PURCHASE OPTION. Lessor and Lessee hereby agree that so long as no Event of
Default shall have occurred and be continuing, Lessee shall have the option to
purchase the Equipment at the expiration of the lease term for the purchase
price set forth in the Supplement. In order to exercise its option with respect
to any given item of Equipment, Lessee must give Lessor written notice at least
ninety (90) days prior to the expiration of the lease term with respect thereto,
and remit the purchase price in cash to Lessor or its assigns on or before said
expiration date. After receipt of the purchase price in accordance with this
section, Lessor will transfer to Lessee all of its right, title and interest in
the Equipment purchased as-is, where-is, without recourse, representation or
warranty of any kind, express or implied. Fair Market Sales Value for the
purpose of this section only shall be determined on the basis of and be equal in
the amount of the value that would be obtained in a transaction between an
informed and willing buyer and an informed and willing seller, and the cost of
moving the Equipment from the location of current use shall not be a deduction
from such value.
21. CHOICE OF LAW. The rights and liabilities of the parties to this Agreement
and each Supplement shall be interpreted, enforced and ???? respects by the laws
of the Commonwealth of Kentucky. Lessee ??? and subjects itself to the
jurisdiction of every local, state and federal court in the Commonwealth of
Kentucky, agrees that except as otherwise required Lessee shall never file or
maintain any action or proceeding in connection with this Agreement or any
Supplement in any court outside the Commonwealth of Kentucky waives personal
service, any and all process in connection therewith and consents to the service
??? upon Lessee in the manner provided in the Agreement for giving notice.
22. ATTORNEY. If Lessor commences any action to enforce or define any right or
obligation under this Agreement or any Supplement, the Lessee shall pay to
Lessor all reasonable attorney's fees and all other legal expenses (including
??? other witnesses) for preparation, negotiation, filing, maintenance, de???
and appeal of litigation paid or incurred by the Lessor.
23. HEADINGS. The headings in various sections of this Agreement are intended
solely for convenience and are not intended nor shall they be used to construe,
explain, modify meaning upon any provision hereof.
24. MODIFICATION. Neither ??? nor any Supplement can be modified or amended
except by ???? signed and currently dated by both signatories hereto. Lessee's
initials. /s/ DJW
---------------------------------
25. COUNTERPARTS: ORIGINALS. The parties may execute this Agreement and any
Supplement in any number of counterparts. All such counterparts of the
Agreement shall constitute one Agreement. One copy of the Agreement and each
Supplement shall be designated as the "Original" and all other copies shall be
"Duplicates". Only the "Original" shall constitute chattel paper.
26. LESSEE'S ACKNOWLEDGEMENT OF NO EXTRINSIC PROMISES LESSEE AGREES THAT THERE
HAVE BEEN NO REPRESENTATIONS, AGREEMENTS, STATEMENTS, PROMISE, UNDERSTANDINGS
OR INDUCEMENTS (COLLECTIVELY IN THIS SECTION "PROMISES") MADE TO LESSEE BY OR
ON BEHALF OF LESSOR OR ANY THIRD PERSON IN CONNECTION WITH THIS AGREEMENT ANY
SUPPLEMENT, ANY EQUIPMENT LEASED HEREUNDER, OR ANY PRESENT OR FUTURE
TRANSACTION OF WHICH THIS AGREEMENT AND/OR ANY SUPPLEMENT IS OR BECOMES A PART
OTHER THAN THOSE PROMISES. IF ANY EXPRESSLY IN WORDS MADE IN THIS AGREEMENT AND
EACH SUPPLEMENT
27. ENTIRE AGREEMENT. THIS AGREEMENT IS AN INTEGRATION AND EACH SUPPLEMENT IS
AN INTEGRATION AND RESPECTIVELY THE ENTIRE AGREEMENT BETWEEN THE PARTIES
RELATING TO THE SUBJECT MATTER OF EACH TRANSACTION EMBRACED THEREBY. ALL
AGREEMENTS, REPRESENTATIONS, PROMISES, INDUCEMENTS, STATEMENTS AND
UNDERSTANDINGS, PRIOR TO AN CONTEMPORANEOUS WITH THIS AGREEMENT AND PRIOR TO
AND CONTEMPORANEOUS WITH EACH SUPPLEMENT, WRITTEN OR ORAL, BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER OF EACH SUCH TRANSACTION, IF ANY, ARE AND
EACH IS SUPERSEDED BY THIS AGREEMENT AND BP? EACH SUPPLEMENT AS IT IS EXECUTED.
Executed as of the 15th day of May, 1995
?? hereof, the signor hereby certifies that he has read this Agreement and ???
duly authorized to execute this Master Equipment Lease Agreement to ??? Lessee
SMS Geotrac, Inc.
--------------------------------------------
By: /s/ Daniel J. White
-----------------------------------------
Title: President
-------------------------------------
LESSOR: NATIONAL CITY LEASING CORPORATION
By: [Illegible Signature]
-----------------------------------------
Title: V.P.
--------------------------------------