Master Equipment Lease Agreement

MASTER EQUIPMENT LEASE AGREEMENT


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LESSOR LESSEE - -------------------------------------------------------------------------------- Myo Diagnostics Inc. Medical Consulting Imaging Co. 3710 S. Robertson Blvd., #212 1621 Euclid Ave., Ste. 1620 Culver City, CA 90232 Cleveland, OH 44115 - --------------------------------------------------------------------------------


THIS LEASE CANNOT BE CANCELLED EXCEPT AS EXPRESSLY PROVIDED. THIS LEASE SHALL BECOME EFFECTIVE UPON SIGNING BY LESSOR AND LESSEE.


THIS MASTER EQUIPMENT LEASE AGREEMENT is executed on this 1st day of March, 1996, by and between Lessor and Lessee as indicated above.


1. TERMS AND CONDITIONS - The term of each Scheduled Equipment Lease Agreement ("Scheduled Lease") under this Master Equipment Lease Agreement (the "Master Lease") will be for 2 years (the "Original Term") commencing on the date indicated on each Scheduled Lease attached hereto (the "Commencement Date") and ending on the date indicated on each Scheduled Lease attached hereto (the "Expiration Date"). In addition, Lessor and Lessee, upon mutual agreement, will have the option to extend each Scheduled Lease for an additional 4 years (the "Option Period") ending on the date indicated on each Scheduled Lease attached hereto (the "Final Expiration Date") upon expiration of the Original Term. Lessor agrees to lease and Lessee leases from Lessor the equipment described on each Scheduled Lease and on any attached Schedule (the "Equipment") in accordance with the terms and conditions stated in this Master Lease Agreement. Lessee authorizes Lessor to insert in this Master Lease the appropriate equipment lease addenda when determined by Lessor. This Master Lease is concurrent with the Distribution Agreement between Lessor and Lessee and, with the Distribution Agreement, constitutes the full and entire agreement between the Lessor and Lessee in connection with the Equipment and merges any and all other understandings. Neither party relies on any other statement or representation made by the other or any third party. This Master Lease can neither be cancelled nor modified except by written agreement signed by both Lessor and Lessee and except as set forth in Section 7 of this Lease Agreement. In the event the Distribution Agreement is terminated by either the Lessor or Lessee, as allowed solely by the Distribution Agreement, such termination shall act as proper written notice of termination of the Master Lease Agreement. Lessee's acceptance of the Equipment shall be irrevocable unless Lessor receives Lessee's written notice of substantial non-conformance of the Equipment within ten (10) days after acceptance of the Equipment.


2. PAYMENT - The Monthly Lease Payment is indicated in Table 2 in each Scheduled Lease. Lessee agrees to make all monthly Lease payments in advance on the 1st day of each and every month commencing with the first full month after delivery of the Leased Equipment, and to pay such other charges as provided in this Agreement. Each payment


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received will be applied to the oldest charge due under this Lease. Lessee agrees to make payments regardless of any problems Lessee might or may have with the Equipment and its operations regardless of any claim, set-off, counterclaim or defense Lessee might or may have against the Vendor or Manufacturer (the "Supplier"), Salesperson or other Third Party. Without Lessor's prior written consent, any payment to Lessor of a smaller sum than due at any time under this Agreement shall not constitute release or an accord or satisfaction for any greater sum due or to become due regardless of any restrictive endorsement. Lessee shall be solely responsible for any filing and payment due for property tax associated with the possession of the Equipment.


3. LESSEE'S AND GUARANTOR'S WARRANTIES TO LESSOR - Lessee and any guarantor expressly warrant to Lessor and Lessor relies on the fact that Lessee and any guarantor: (a) have read and understood this Master Lease before it was signed; (b) have selected and are fully satisfied with the Leased Equipment for the purposes set forth in this Master Lease; (c) freely acknowledge that neither the manufacturer nor the supplier of the Equipment nor any of its salespersons are, or have acted as, Lessor's agents or employees; (d) have provided accurate and correct financial information and other statements and same will be updated upon Lessor's request during the term of the Master Lease; (e) are currently meeting all debts as such come due;(f) will use the Equipment exclusively for Lessee's business purposes and not for personal, family or household purposes; (g) have unrestricted power to enter into this Master Lease, have duly authorized the person executing it and certify that all signatures are authentic.


4. LESSEE'S WAIVER OF DAMAGES AND WARRANTIES FROM LESSOR - Lessee acknowledges that: (a) Lessee shall hold Lessor harmless and shall be responsible for any loss, damage or injury to persons or property caused by the Equipment; (b) no representation or warranty by the manufacturer, supplier or salesperson is binding on Lessor nor shall breach of such warranty relieve Lessee of Lessee's obligations to Lessor; and (c) in no case shall Lessor be liable to Lessee for special, indirect or consequential damages.


5. OWNERSHIP AND TITLE - Lessor is the sole owner of the Equipment, has sole title to the Equipment, has the right to inspect the Equipment and has the right to affix and display notice of Lessor's ownership thereon subject to 24 hour notice given by Lessor to Lessee. The Equipment shall remain Lessor's personal property whether or not affixed to realty and shall not be part of any real property on which it is placed. All additions, attachments and accessories placed on the Equipment become part of the Equipment and Lessor's property. Lessee agrees to maintain the Equipment so that it may be removed from the property or building where located without damage.


6. OPERATION AND TERMINATION - Lessee shall be solely responsible for the operation and day to day handling of the Equipment, shall keep it in good condition and running order and shall use and operate the Equipment in compliance with applicable law. Lessee shall be responsible for securing maintenance service from Lessor or from an independent party as determined by Lessor and shall be responsible for repair and/or


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replacement costs that may be necessary as a result of improper or negligent use and/or handling of the Equipment or loss the Equipment. Lessor will be responsible for the cost of any upgrade of Equipment, as may be required from time to time by a change in system specifications, and Equipment repair due to mechanical failure. Lessee agrees to keep and use the Equipment only at the Domicile Location specified above ("Equipment Location") and to never relinquish possession of the Equipment except to Lessor's agent. At the end of the Master Lease Term, Lessee must contact Lessor who will designate the return location within the continental United States, and Lessee shall, at Lessee's expense, immediately crate, insure and return the Equipment to the designated location in as good a condition as when Lessee received it, excepting only reasonable wear and tear. Until Lessor actually receives the Equipment at the return location, the Master Lease renews automatically from month to month and Lessee agrees to continue to make lease payments at the last effective rate under the Master Lease.


Upon early termination of the Distributor Agreement by Company without cause or by Distributor for cause and upon receipt by Company of all Scheduled Equipment in good repair, this lease shall be terminated at no additional cost to Distributor. Upon early termination of the Distributor Agreement by the Company for cause or by the Distributor without cause, and upon receipt by Company of all Scheduled Equipment in good repair, the Company will use its best efforts to lease all of the Scheduled Equipment under all addenda to current or new Distributors so as to relieve Distributor of further lease schedule payments. If the Distributor requests in writing, early termination of one or more schedules, the Company will use its best efforts to re-lease the equipment as indicated above. The Company makes no promise or guarantee that the aforementioned best efforts will be successful and Distributor unconditionally agrees to continue making scheduled lease payments according to this Master Lease until notified by Company that such payments shall be terminated.


7. RISK OF LOSS AND INSURANCE - Until Lessee has returned the Equipment to the designated location, Lessee bears the entire risk of loss or damage to the Equipment regardless how arising. Lessee shall immediately notify Lessor of the occurrence of any loss or other occurrence affecting Lessor's interests and shall make repairs or corrections at Lessee's expense. In such event, Lessee agrees to continue to meet all payment and other obligations under the Master Lease. Lessee agrees to keep the Equipment insured at Lessee's expense against risk of loss or damage from any cause whatsoever. Lessee agrees that such insurance shall be not less than $50.000. Lessee also agrees that the insurance shall be in such additional amount as is reasonable to cover Lessor for public liability and property damage arising from the Equipment or Lessee's use of it. Lessee agrees to name Lessor as the loss payee. Each policy shall provide that the Insurance cannot be cancelled without thirty (30) days prior written notice to Lessor. Upon request by Lessor, Lessee agrees to furnish proof of each insurance policy including a certificate of insurance and a copy of the policy. The proceeds of such insurance shall be applied at Lessor's sole election toward the replacement or repair of the Equipment or payment towards Lessee's obligations. Lessee appoints Lessor as attorney-in-fact to make any claim for, receive payment of, or execute or


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endorse all documents, checks or drafts for loss or damage or return of premium under such insurance.


8. INDEMNITY - Lessee agrees to indemnify and hold Lessor harmless from and against any and all losses, damages, injuries, demands and expense (a "Claim"), including any and all attorneys' fees and legal expenses, arising from or caused directly or indirectly by any actual or alleged use, possession, maintenance, condition (whether or not latent or discoverable), operation, location, delivery or transportation of any item of Equipment. Should Lessee be entitled under applicable law to revoke its acceptance of the Equipment, Lessee agrees to pay and indemnify Lessor for any payment by Lessor to the manufacturer or supplier of the Equipment.


9. COLLECTION CHARGES AND ATTORNEYS' FEES - If any part of any sum due to Lessor is not received by Lessor within ten (10) days of the due date or if any sum paid by check shall be dishonored or returned to Lessor on account of uncollected funds or for insufficient funds, Lessee agrees to pay Lessor an interest charge for every month after the first month in which the sum is late to compensate Lessor for the Inability to reinvest the sum, such interest charge to be stipulated and liquidated at 1 1/2% per month or the maximum allowed by applicable law, whichever is less.


10. LESSEE AND ANY GUARANTOR AGREE TO PAY LESSOR'S REASONABLE ATTORNEYS' FEES AS DAMAGES AND NOT COSTS - In all proceedings arising under this Master Lease, such proceedings including any arbitration, bankruptcy proceeding, civil action, mediation or counterclaim on which Lessor prevails seeking relief from stay in bankruptcy or post-judgment action or appeal with respect to any of the foregoing, Lessor shall be granted reasonable attorneys' fees.


11. DEFAULT - Lessee shall be in default of this Master Lease on any of the following events: (a) Lessee fails to pay any month's rent within ten (10) days after it first becomes due; (b) Lessee assigns, pledges, subleases, sells or relinquishes possession of the Equipment or attempts to do so, without Lessor's prior written authorization; (c) Lessee breaches any of its warranties or other obligations under this Master Lease or any other agreement with Lessor and fails to cure such breach within ten (10) days after Lessor sends Lessee a notice of the existence of such breach; (d) any execution or writ of process is issued in any action or proceeding to seize or detain the Equipment; (e) Lessee or any guarantor gives Lessor reasonable cause to be insecure about Lessee's willingness or ability to perform obligations under the Master Lease or any other agreement with Lessor; (f) Lessee or any guarantor dies, becomes insolvent or unable to pay debts when due, stops doing business as a going concern, consolidates, merges, transfers all or substantially all of its assets, makes an assignment for the benefit of creditors, appoints a trustee or receiver or undergoes a substantial deterioration of financial health; or (g) Lessor or any guarantor fails to reaffirm this lease obligation within thirty (30) days of the filing of any petition for protection under the United States Bankruptcy Code.


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12. REMEDIES - Should Lessee default, Lessor has the right to exercise any or all of the following: Lessor may without notice accelerate all sums under the Master Lease and require Lessee to immediately pay Lessor all sums that are already due and the discounted value of those that will become due and require the immediate return of the Equipment to Lessor. Lessor has the right to immediately retake possession of the Equipment without any court or other process of law and for such purpose may enter upon any premises where the Equipment may be and remove the same. Lessor has the right to exercise any remedy at law or equity, notice thereof being expressly waived by Lessee and any guarantor. Lessor's action or failure to act on any one remedy constitutes neither an election to be limited thereon nor a waiver of any other remedy nor a release of Lessee from the liability to return the Equipment or for any Loss or Claim with respect thereto. The provisions of this Master Lease are severable and shall not be affected or Impaired if any one provision is held unenforceable, invalid or illegal. Any provision held in conflict with any statute or rule of law shall be deemed inoperative only to the extent of such conflict and shall be modified to conform with such statute or rule.


13. ARBITRATION - Lessor or Lessee may, at its option, submit any matter arising out of this Master Lease Agreement, including any claim, counterclaim, setoff or defense to binding arbitration by the American Arbitration Association in the City of Los Angeles, State of California. Irrespective of the fact that neither the Lessee, any guarantor or the Equipment may be located in that City now or then. The decision and award of the arbitrator(s) shall be final and binding and may be entered as rendered in any court having jurisdiction thereof.


14. CONSENT TO JURISDICTION, VENUE AND NON-JURY TRIAL - Lessee and any guarantor consent, agree and stipulate that: (a) this Master Lease shall be deemed fully executed and performed in the State of California and shall be governed by and construed in accordance with the laws thereof; and (b) in any action, proceeding, or appeal on any matter related to or arising out of this Master Lease, Lessor, Lessee and any guarantor: (i) shall be subject to the personal jurisdiction of the State of California including any state or federal court sitting therein and all court rules thereof; (ii) shall accept venue in any federal or state court in California; and (iii) expressly waive any right to a trial by jury so that trial shall be by and only to the court. Nothing contained herein is intended to preclude Lessor from commencing any action hereunder in any court having jurisdiction thereof.


15. CONSENT TO SERVICE OF PROCESS - Lessee and any guarantor agree that any process served for any action or proceeding shall be valid if mailed by Certified Mail, return receipt requested, with delivery restricted to either the addressee, its registered agent or any agent appointed in writing to accept such process.


16. SCHEDULED LEASE ADDENDA - Lessee may, from time to time, wish to lease additional equipment as described in subsequent Scheduled Leases. Such Scheduled Leases shall be attached as additional addenda in the same format as the Scheduled Lease 1-040596 attached hereto and shall be subject to all of the terms and conditions of this Master Lease.


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The parties hereto have executed this Master Lease on the dates specified next to their respective signatures.


ACCEPTED BY LESSEE:


/s/ Ian C.P. Woodburn Dated: April 5, 1996 - ------------------------------- by Ian C.P. Woodburn its President


ACCEPTED BY LESSOR:


/s/ Gerald D. Appel Dated: April 5, 1996 - ------------------------------- by Gerald D. Appel, its President


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ADDENDUM 1
SCHEDULED EQUIPMENT LEASE 1-040596


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TABLE 1 - LEASED EQUIPMENT - -------------------------------------------------------------------------------- QTY DESCRIPTION SERIAL NO(S). - -------------------------------------------------------------------------------- 1 Myo D 1600T Data Collector See Attached Schedule 1A 1 Futrex Adipose Measuring Device See Attached Schedule 1A - --------------------------------------------------------------------------------


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TABLE 2- LEASE PAYMENT SCHEDULE - --------------------------------------------------------------------------------
PERIOD MONTHLY LEASE PAYMENT - -------------------------------------------------------------------------------- ORIGINAL TERM Months 1-24 $1,500 OPTION PERIOD Months 25-36 $1,500
Months 37-72 $ 500 - --------------------------------------------------------------------------------


SECURITY DEPOSIT: An advance payment of $3,000 (the "Security Deposit") shall be held by Lessor as a security deposit for the faithful performance of this Lease. Upon termination of this Lease Addendum 1 and upon receipt of the Leased Equipment, this Security Deposit shall be returned less any cost for non warranted repairs required to bring the Leased Equipment to first class running order.


ADVANCE LEASE PAYMENT: An advance payment of $3,000 constituting the first month and the last months lease payment has been paid by Lessee and receipt is acknowledged by Lessor.


RESIDENT EQUIPMENT LOCATION: Domicile For Use: CLEVELAND OHIO


SCHEDULE 1A - SCHEDULE OF LEASED EQUIPMENT - --------------------------------------------------------------------------------
DESCRIPTION SERIAL NO. - -------------------------------------------------------------------------------- MYO D 1600 DATA COLLECTOR
- Computer Docking Station w/ MPI DSP Board*
(including 2x10' Fiber Optic Cables)
- Sensor Amplifiers w/ Cords and Other Accessories
- Calibration Box w/Battery and Charger


OTHER
- Futrex Adipose Measuring Device - -------------------------------------------------------------------------------- The Myo D 1600T Data Collector system must be integrated with a compatible laptop


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computer (the "Laptop"). Lessor will purchase the Laptop on behalf of Lessee and integrate it with the Myo D 1600T Data Collector system. The Laptop is not included as part of the Leased Equipment. Lessee will be invoiced for the cost of the Laptop and will be required to reimburse Lessor according to the terms of the invoice. Lessee will assume all costs and responsibilities associated with the maintenance and ownership of the Laptop.


Lessee acknowledges that all of the items set forth in the above Table 1 - Leased Equipment, and Schedule 1A - Schedule of Leased Equipment as itemized above have been received by Lessee; that all required installation, preparation, set-up and other work has been performed; and that in all respects, the Lease Equipment is satisfactory and is hereby accepted by Lessee.


The parties hereto have executed this Scheduled Lease 1-040596 and agree to the terms, Security Deposit and Lease Payment Schedule as outlined above and which Scheduled Lease shall be effective on the dates specified next to their respective signatures. The parties agree that this Scheduled Lease shall be affixed to the Master Lease as Addendum 1 and shall be subject to all the terms and conditions of the Master Lease.


ACCEPTED BY LESSEE:


BY /s/ Ian C. P. Woodburn Dated: April 5, 1996 --------------------------
Ian C.P. Woodburn
its President


ACCEPTED BY LESSOR:


BY /s/ Gerald D. Appel Dated: April 5, 1996 --------------------------
Gerald D. Appel
its President


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DISTRIBUTION AGREEMENT


THIS AGREEMENT, effective as of the 1st day of March, 1996, by and between Myo Diagnostics Inc., a California Corporation (hereinafter called "Company") and Medical Consultants Imaging Co., an Ohio Partnership a ...