Exhibit 10.21
MASTER EQUIPMENT LEASE
This Master Equipment Lease dated as of NOVEMBER 15,
2002 (“Master Lease”) between FIFTH THIRD BANK,
INDIANA (CENTRAL) , a (an) INDIANA corporation
(hereinafter called together with its successors and assigns, if
any, “Lessor”), 251 N. ILLINOIS ST., STE 1000,
INDIANAPOLIS, IN 46204 and BIOANALYTICAL SYSTEMS, INC. a (an)
INDIANA CORPORATION (hereinafter called
“Lessee”), 2701 KENT AVENUE, WEST LAFAYETTE, IN
47906-1382.
TERMS AND CONDITIONS OF LEASE
In consideration of the premises and of the rentals and the
covenants hereinafter mentioned to be kept and performed by Lessee,
Lessor hereby leases the equipment (including all replacement
parts, repairs, additions and accessories thereto) listed on
Equipment Schedule A attached hereto on the date hereof or as
attached hereto at any time in the future or listed or described in
any other document which refers to and incorporates the terms of
this Master Lease (collectively “Equipment”), upon the
following terms and conditions:
Section 1. Acquisition and Lease
of Equipment .
| (a) |
Lessor will, subject to the terms of this Master Lease,
purchase the Equipment set forth in Equipment Schedule A and
simultaneously lease such Equipment to Lessee. The approximate
purchase price for each unit of Equipment is as set forth in
Equipment Schedule A. Lessee acknowledges either:
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(i) |
that Lessee has approved any written Supply Contract (as
defined by the uniform version of the Uniform Commercial Code (UCC)
Section 2A-103 (y) as adopted in the state of Lessor’s
principle place of business) covering the Equipment purchased from
the “Supplier” (as defined by UCC Section 2A-103(x))
thereof for lease to Lessee; or
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(ii) |
that Lessor has informed or advised Lessee, in writing,
either previously or by this Master Lease of the
following:
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(1) |
the identity of the Supplier;
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(2) |
that the Lessee may have rights under the Supply Contract;
and
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(3) |
that the Lessee may contact the Supplier for a description
of any such rights Lessee may have under the Supply
Contract.
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| (b) |
Lessor hereby authorizes Lessee to accept delivery of the
Equipment from the manufacturer or the Supplier. Upon delivery and
installation of each item of Equipment, if such Equipment is in
good working order, and complies with the specifications of the
purchase order, Lessee shall execute and deliver to Lessor a
Certificate of Acceptance in form acceptable to Lessor. Lessor
shall be under no obligation to purchase the Equipment until it has
received the Acceptance Certificate executed by
Lessee.
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| (c) |
Lessor shall be under no obligation to purchase any item
of Equipment if there shall exist an Event of Default or any
condition, event or act which, with notice or lapse of time or
both, would became an Event of Default.
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Section 2. Term and Rent
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| (a) |
This Master Lease shall commence on the date set forth
above and shall continue in effect thereafter so long as any
Equipment Schedule A entered into pursuant to this Master Lease
remains in effect. The term of each Equipment Schedule A shall
commence upon the Effective Date specified in each Schedule and
shall continue for the term specified unless earlier terminated
pursuant to the terms hereof. Unless otherwise stated in Equipment
Schedule A, each Equipment Schedule A term shall be automatically
extended for successive monthly periods until terminated by either
party giving to the other not less than ninety (90) days prior
written notice of termination. Any such termination shall be
effective only on the last day of the term specified in Equipment
Schedule A or any successive period.
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| (b) |
As rent for the Equipment, Lessee agrees to pay to Lessor
the rent specified in Equipment Schedule A. All payments provided
for in this Master Lease shall be made to the Lessor at the address
of the Lessor set forth above, or at such other place as the
Lessor, or its assigns, shall specify in writing. The rent
specified in Equipment Schedule A shall be adjusted for any errors,
increase or decrease in the purchase price of the Equipment. The
payment of the rent specified in Equipment Schedule A also shall be
secured by any presently existing or hereafter acquired property
pledged to Lessor or any affiliate of Fifth Third Bancorp for any
indebtedness of Lessee owed to Lessor and all affiliates of Fifth
Third Bancorp, whether direct or contingent, due or to become due;
provided, however, that this provision shall not apply to a
“consumer credit transaction” as defined in Title I,
Consumer Credit Protection Act 15 U.S. C.A. Sections 1601 et.
seq., as amended or any applicable state statute containing similar
provisions.
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| (c) |
This Master Lease is a net lease and Lessee acknowledges
and agrees that Lessee’s obligation to make all payments
hereunder, and the rights of Lessor in and to all such payments,
shall be absolute and unconditional and shall not be subject to any
abatement of rent or reduction thereof, including but not limited
to, abatements or reductions due to any present or future claims of
Lessee against Lessor, the manufacturer of the Equipment, the
Supplier, or any party under common ownership or affiliated with
Lessor, by reason of any defect in the Equipment, the condition,
design, operation or fitness for use thereof, or by reason of any
failure of Lessor to perform any of its obligations hereunder, or
by reason of any other cause. It is the intention of the parties
hereto that the rent payable by Lessee hereunder shall continue to
be payable in all events and in the manner and at the times herein
provided unless the obligation to pay shall be terminated pursuant
to the provisions of this Lease.
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Section 3. Tax
Indemnification .
| (a) |
The terms of this Master Lease, including payment amounts,
have been made in reliance on the fact that Lessor, its successors
and assigns, shall be entitled to such deductions, credits and
other benefits (the “Tax Benefits”) as are provided to
an owner of property, to the extent permitted under applicable law
and provisions of the Internal Revenue Code of 1986 (the
“Code”), as amended, including but not limited to
depreciation and amortization deductions allowable under Sections
167, 168 and 169 of the Code and any amendments or additions
thereto relating to the leased property (the
“Deductions”).
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| (b) |
If the Lessor or its successor or assigns shall lose,
during the term of this Master Lease, its right to claim all or any
part of such Tax Benefits or Deductions or any part of such Tax
Benefits or Deductions is disallowed, the rental set forth in
Equipment Schedule A shall be increased by an amount which, in the
reasonable opinion of Lessor, will cause Lessor’s total net
return (after all taxes) to be equal to the net return which Lessor
would have received had such Tax Benefits or Deductions not been
disallowed.
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| (c) |
In the event Lessor’s claim of all or any part of
such Tax Benefits or Deductions with respect to the Equipment is
disallowed or lost after the term of the Lease, Lessee shall pay
Lessor a lump sum which, in the reasonable opinion of Lessor will
cause Lessor’s total net return (after all taxes) to be equal
to the net return Lessor would have received had such Tax Benefits
or Deductions not been disallowed.
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| (d) |
In the event that this Master Lease is, for any reason,
canceled or prepaid prior to the expiration of its term the Lessee
agrees to pay to Lessor, in addition to all other amounts payable
under this Master Lease, a lump sum amount which, in the reasonable
opinion of Lessor, will cause Lessor’s net return (when
combined with all other payments hereunder but excluding any
prepayment penalties and after all taxes) to be equal to the net
return Lessor would have received had this Master Lease not been
terminated prior to the expiration of its term.
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| (e) |
The rent shall not be so increased (or the lump sum
payment shall not be due) if and to the extent that the Lessor
shall have lost the right to claim such a Tax Benefit or Deduction
as a direct result of any one of the following events:
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(i) |
a casualty occurrence with respect to the Equipment if
Lessee shall have paid the Lessor pursuant to the provisions of
Section 13 hereof;
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(ii) |
the failure of Lessor to claim the Tax Benefit or
Deduction on its income tax return for the appropriate year;
or
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(iii) |
the failure of Lessor to have sufficient tax liability to
fully use such Tax Benefits or Deductions.
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| (f) |
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 and 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 or tax credit which may be available from time to time
with respect to the Equipment.
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| (g) |
If, under any circumstances or for any reason whatsoever,
except for acts of the Lessor,
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(i) |
Lessor shall become liable for additional tax as a result
of Lessee having added an attachment or made an alteration to the
Equipment which would increase the productivity or capability of
the Equipment so as to violate the provisions of Rev. Proc. 75-21,
1975-1 C.B. 715, as modified by Rev. Proc. 79-48, 1979-2 C.B. 529
(and as either or both may hereafter be modified or
superseded);
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(ii) |
the statutory full-year marginal federal tax rate for
corporations with a December 31 tax year-end is different than the
statutory tax rate in effect on the date of this Master Lease;
or
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(iii) |
Lessor 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 of 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 of 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 government subsidiary
of any foreign country, shall be equal to the sum of:
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(1) |
an amount equal to the additional income taxes which would
be paid or payable by Lessor in consequence of the failure to
obtain the benefit of a depreciation deduction calculated under the
assumption that Lessor’s income is taxed at the highest
applicable rate (without regard to the actual taxes paid by
Lessor), and
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(2) |
any interest and/or penalty which may be assessed in
connection with any of the foregoing.
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| (h) |
The provisions of this Section 3 shall survive the
expiration or earlier termination of this Master
Lease.
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Section 4. Acceptance, Use and
Maintenance of Equipment .
| (a) |
Lessor hereby authorizes Lessee to accept delivery of the
Equipment from the manufacturer or Supplier. Upon delivery and
installation of each item of Equipment, if such Equipment is in
good working order, Lessee shall execute and deliver to Lessor a
Certificate of Acceptance in a form acceptable to
Lessor.
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| (b) |
Lessor shall have no obligation and assumes no liability
for any matter relating to the ordering, manufacture, shipment,
installation, erection, testing, adjusting or servicing of any item
of Equipment, or for any failure or delay in obtaining or
delivering any item of Equipment. Lessee shall provide and maintain
a suitable installation environment for each item of Equipment with
all appropriate utilities, wiring and other facilities prescribed
or recommended by the appropriate manufacturer’s installation
and operating manuals.
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| (c) |
Lessee shall cause the Equipment to be operated by
competent employees and in accordance with the manufacturer’s
operating manuals and shall pay all expenses of operating the
Equipment. The Equipment shall be maintained at the location(s)
specified in Equipment Schedule A and shall not be removed from
such location(s) without the written consent of the Lessor. Lessor
will have the right, from time to time during reasonable business
hours, to enter upon the Lessee’s premises or any other
premises where the Equipment may be located, for the purpose of
confirming the existence, location, condition or proper maintenance
of the Equipment.
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| (d) |
Lessee, at its own cost and expense, shall keep all
Equipment in good repair, condition and working order and shall
furnish all parts, mechanisms, devices and servicing required
therefor. All such parts, mechanisms, and devices shall immediately
become the property of Lessor and part of the Equipment for all
purposes.
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| (e) |
Lessee shall comply with and conform to all laws,
ordinances and regulations, present or future, in any way relating
to the possession, use or maintenance of the Equipment throughout
the term of this Master Lease.
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| (f) |
Lessee shall pay or satisfy and discharge any and all
claims against, through or under Lessee and its successors and
assigns, which, if unpaid, might constitute or become a lien or a
charge upon any of the Equipment, and any liens or charges which
may be levied against or imposed upon the Equipment as a result of
the failure of Lessee to perform or observe any of its covenants or
agreements under this Master Lease and any other liens or charges
which arise by virtue of claims against, through or under any other
party other than Lessor, but Lessee shall not be required to pay or
discharge any such claims so long as it shall, in good faith and by
appropriate legal proceedings contest the validity thereof in any
reasonable manner which will not, in the reasonable opinion of
Lessor, affect or endanger the interest of Lessor or other rights
of any assignee under this Master Lease hereof in and to the
Equipment or diminish the value thereof. Lessee’s obligations
under this Section shall survive the termination of this Master
Lease.
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Section 5. No Agency .
Lessee acknowledges and agrees that
neither the manufacturer, the Supplier, nor any salesman,
representative, nor other agent of the manufacturer or Supplier, is
an agent of Lessor. No salesman, representative or agent of the
manufacturer or Supplier is authorized to waive or alter any term
or condition of this Master Lease and no representation as to the
Equipment or any other matter by the manufacturer or Supplier shall
in any way affect Lessee’s duty to pay rent and perform its
obligations as set forth in this Master Lease.
Section 6. Disclaimer of
Warranties . LESSEE ACKNOWLEDGES
THAT: LESSOR IS NOT THE MANUFACTURER OF THE EQUIPMENT NOR THE
MANUFACTURER’S AGENT NOR A DEALER THEREIN; THE EQUIPMENT IS
OF A SIZE, DESIGN, CAPACITY, DESCRIPTION AND MANUFACTURE SELECTED
BY LESSEE; LESSEE IS SATISFIED THAT THE EQUIPMENT IS SUITABLE AND
FIT FOR ITS PURPOSES; AND LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED AS TO THE DESIGN,
OPERATION OR CONDITION, OR AS TO THE QUALITY OF THE MATERIAL,
EQUIPMENT OR WORKMANSHIP IN THE EQUIPMENT LEASED HEREUNDER, AND
LESSOR MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE
EQUIPMENT FOR ANY PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, IT BEING AGREED THAT ALL SUCH RISKS AS BETWEEN
LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AND THE BENEFITS OF
ANY AND ALL IMPLIED WARRANTIES OF LESSOR ARE HEREBY WAIVED BY
LESSEE. LESSOR SHALL NOT BE RESPONSIBLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES. Lessor agrees that Lessee shall be
entitled to the benefit of any manufacturer’s warranties on
the Equipment to the extent permitted by applicable law.
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Section 7. Identification;
Personal Property . No right,
title or interest in the Equipment shall pass to Lessee other than
the right to maintain possession and use of the Equipment for the
full lease term. Lessor may require plates or markings to be
conspicuously affixed to or placed on the Equipment indicating
Lessor is the owner. However, if any item of Equipment leased
hereunder is to be operated by the public, such plates or markings
need not be placed in a conspicuous part of the Equipment. The
Equipment is, and shall at all times be and remain, personal
property even though the Equipment or any part thereof may
hereafter become affixed or attached to real property.
Section 8. Quiet Enjoyment
. So long as Lessee is in compliance
with the terms of this Master Lease: Lessee's right of quiet
enjoyment of the Equipment shall not be impaired by the Lessor or
anyone claiming through the Lessor
Section 9. Assignment
.
| (a) |
LESSEE AGREES NOT TO SELL, ASSIGN, SUBLET, PLEDGE,
HYPOTHECATE, OR OTHERWISE ENCUMBER, SUFFER A LIEN UPON OR AGAINST
ANY INTEREST IN THIS MASTER LEASE OR THE EQUIPMENT LEASED
HEREUNDER.
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| (b) |
Lessor may assign, pledge, or in any other way transfer
this Master Lease either in whole or in part, without notice to
Lessee. Should this Master Lease or any interest therein be
assigned or should the rentals hereunder be assigned no breach or
default of this Master Lease by Lessor to its assignee shall excuse
performance by Lessee of any provision hereof. Upon receipt of
notice of assignment of this Master Lease or the rentals due
hereunder, if so directed by Lessor, Lessee shall pay the rentals
hereunder as they become due to any assignee without any set-off,
counterclaims or defense thereto.
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Section 10. Fees - Taxes.
Lessee agrees to pay and to indemnify and
hold Lessor harmless from all license and registration fees and all
assessments, taxes and impositions of whatever nature including
income, franchise, sales, use, property, excise and other taxes now
or hereinafter imposed by any governmental body or agency upon the
Equipment, or the use thereof, including all interest and
penalties, but excluding any income taxes payable by Lessor on the
receipt of income under this Master Lease.
Section 11. Limitation of
Liability; Indemnification .
| (a) |
Lessee agrees that Lessor shall not be responsible for any
loss or damage to Lessee, its customers or anyone else, caused by
any failure or defect of the Equipment, or otherwise.
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| (b) |
Lessee hereby assumes liability for, and hereby agrees to
indemnify, defend, protect, save and keep harmless Lessor, its
successors and assigns, from and against any and all claims,
liabilities, judgments, suits, obligations, losses, damages,
expenses, penalties, and disbursements (including reasonable
attorneys’ fees and expenses) of any kind and nature arising
from or pertaining to the use, possession, operation, manufacture,
purchase, financing, ownership, delivery, rejection, non-delivery,
transportation, storage maintenance, repair return or other
disposition of the Equipment including but not limited to
liabilities resulting from strict liability in tort or a breach of
any law, regulation or ordinance of any federal, state or local
government agency.
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Section 12. Return of
Equipment . Upon the expiration of
the term of this Master Lease, unless the Equipment is sold to the
Lessee, Lessee will at its own cost and expense deliver possession
of the Equipment to Lessor at a location designated by the Lessor
free and clear of all liens, charges, encumbrances, and rights of
others, in good working order and repair (exc
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