Form of Lease Agreement

EXHIBIT 10.27


LEASE AGREEMENT


LEASE #074-18000-0-18


AGREEMENT made December 3, 1996, by and between Berthel Fisher & Company Leasing, Inc., agent for Telecommunications Income Fund IX, L.P. ("Lessor"), located at 425 Second Street SE, Suite 600, Cedar Rapids, IA 52401, and Murdock Communications Corporation ("Lessee"), located at 1112 29th Avenue SW, Cedar Rapids, IA 52404.


WHEREAS, Lessee desires to lease from Lessor the telephone equipment specified on Schedule "A" ("Equipment") and Lessor desires to lease the Equipment to Lessee.


THEREFORE, Lessor leases to Lessee, and Lessee leases from Lessor, the Equipment (and such other equipment as the parties may agree upon in the future), subject to and upon the terms and conditions appearing herein.


1. TERM; RENTAL PAYMENTS; SECURITY DEPOSIT. (a) TERM. The term of the Lease (the "Term") shall commence on December 3, 1996, and shall terminate after the expiration of Five years from such date.


(b) RENTAL PAYMENTS. Total rental for the Equipment shall be $415,048.20, payable in 60 monthly installments of $6,917.47 each, plus applicable sales tax, beginning on the first day of the Term, with payments due on the 30th day of each successive month. Lessor acknowledges receipt of the first rental payment.


(c) LATE PAYMENTS. In addition to Lessor's rights under this Lease as to Defaults, Lessee agrees to pay Lessor an amount equal to five percent (5%) (or the maximum amount provided by law if five percent (5%) is in excess of the amount Lessor is entitled to receive under any applicable law) of any rental payment not received by Lessor by the end of the tenth (10th) day following the due date of such rental payment.


(d) PLACE OF PAYMENT. All payments called for under this Lease to be made to Lessor (or any assignee of Lessor pursuant to Section 12 (f)) shall be made as designated by Lessor or assignee.


(e) LEASE NONCANCELLABLE; PAYMENTS TO BE NET. Lessee agrees that all rental payments or other sums payable by Lessee hereunder shall be the unconditional obligation of Lessee and shall be made without abatement, reduction or setoff of any nature, including any thereof arising out of any present or future claim that Lessee may have against Lessor or any of Lessor's assignees or the manufacturer or vendor of the Equipment. This lease shall not be cancelable or terminable by Lessee prior to the end of the Term except as herein expressly provided.


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(f) SECURITY DEPOSIT. Lessor acknowledges the receipt of $6,917.47 from Lessee as security for the faithful performance by Lessee of all of the terms, covenants and conditions of this Lease. Lessor agrees to hold said deposit until the expiration of the Term provided herein and agrees to repay said deposit to the Lessee if the Lessee has fully complied with all of the terms, covenants and conditions of this Lease. The Lessor, however, may apply the security deposit, or such part thereof as may be necessary, toward the payment of all rents, obligations, and other charges due hereunder, or any expenses or damages incurred by the Lessor on account of the Lessee's breach of any of Lessee's obligations contained in this Agreement. The security deposit shall not be construed as pre-payment of the last month's rent.


2. TAXES; INDEMNITY. Lessee agrees to pay, promptly when due, all license fees and assessments, and all excise, income, and other taxes or charges (including any interest and penalties), now or hereafter imposed by any governmental body or agency upon any Equipment or the purchase, ownership, possession, leasing, operation, use, or dispositions thereof hereunder, or the rentals or other payments hereunder, (excluding taxes on or measured by the net income of Lessor) and prepare and file promptly with the appropriate offices any and all tax and other similar returns required to be filed with respect thereto (sending copies thereof to Lessor upon request). Lessee further agrees to assume all risks of liability arising from or pertaining to the purchase, delivery, ownership, possession, leasing, operation, use, condition, transportation or disposition of any Equipment or the return of any Equipment to Lessor and to indemnify and save Lessor, its servants and agents, harmless from and against, and to defend them against, any and all claims, costs, expenses, attorneys fees, fines, damages and liabilities, arising therefrom or pertaining thereto (including, without limitation, any thereof arising out of injury to persons or property). Any amounts required to be paid by Lessee under this, Section 2, which Lessee fails to pay, may be paid by Lessor and shall, at Lessor's option, become immediately due from Lessee to Lessor. Lessee's obligations contained in this, Section 2, shall survive the termination of this Agreement.


3. ACCEPTANCE. Lessee hereby accepts the Equipment as is and where currently located.


4. LESSOR'S PROTECTION. (a) INSURANCE. Lessee hereby warrants and agrees that Lessee does not carry public liability insurance for personal injury and property damage, but is self-insured. Lessee further warrants and agrees that it will provide proof of any fund or assets which Lessee has established or set aside for the payment of any losses sustained with regard to the Equipment. Lessee continues to bear the entire risk of loss for destruction of or damage to the Equipment as set forth in the Lease and Lessee's obligation to indemnify Lessor continues as set forth in the lease. If Lessee shall obtain insurance coverage on the Equipment from an outside insurance company the Lessee shall name Lessor as Loss Payee


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under the property damage provisions and Additional Named Insured under the liability provisions where applicable, and provide evidence of this insurance to Lessor.


(b) RISK OF LOSS. The Equipment, until returned to Lessor, shall be held at all times at the sole risk of Lessee for injury, damages (including damage to third parties and their property), loss, destruction, theft, expropriation, or requisition (as to either title or use). In case the Equipment or any of it shall be destroyed, lost, stolen, damaged beyond repair, or permanently rendered unfit for normal use for any reason whatsoever, or is expropriated or requisitioned, before return to Lessor, Lessee agrees promptly to notify Lessor and within thirty (30) days of such occurrence, replace such Equipment with similar Equipment acceptable to Lessor, in which event this Lease shall continue unabated with respect to such Equipment. If Lessee chooses not to replace the Equipment or fails to replace such Equipment, Lessee shall pay Lessor on demand the unpaid rentals hereunder for the balance of the entire original term allocable to such Equipment, as reimbursement to Lessor for such occurrence. Payment of the amount determined pursuant to this paragraph shall relieve Lessee from any further liability with respect to the Equipment involved except for any taxes and indemnifications which may be required.


5. EQUIPMENT.


(a) IDENTIFICATION. The Equipment shall be as identified and listed on Schedule "A", which shall be attached to and made a part hereof.


(b) TITLE; PERSONAL PROPERTY; ENCUMBRANCES; LOCATION. Lessee covenants that the ownership of the Equipment is and at all times shall remain with Lessor and that the Equipment is and shall remain personal property and shall not be permanently attached to any realty so that it becomes a fixture; and that it shall be installed and used at its current location or at locations set forth in Site Leases approved by Lessor and that it shall not be removed therefrom without the consent of Lessor. Lessor agrees to give its consent if Lessee provides Lessor with an acceptable replacement location agreement which will then become a Site Lease. Further, Lessee shall not sell, secrete, mortgage, assign, transfer, lease, sublet, loan, part with possession of, or encumber the Equipment, or permit any liens or charges to become effective thereon or permit or attempt to do any of the acts aforesaid. Lessee agrees, at Lessee's own expense, to take such action as may be necessary (1) to remove any such encumbrance, lien or charge and (2) to prevent any third party from acquiring any other interest in any Equipment (including, without limitation, by reason of such Equipment being deemed to be a fixture or a part of any realty).


Upon request, Lessee shall, at its expense, affix and maintain on the Equipment, a sticker provided by Lessor indicating Lessor's


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ownership thereof, provided such sticker does not unreasonably detract from the appearance of the Equipment.


(c) MAINTENANCE; ACCESSIONS; INSPECTION; ALTERATIONS. Lessee agrees at Lessee's own expense, to take good care of the Equipment and to make all repairs and replacements necessary to maintain, preserve, and keep the Equipment in good order and condition. All replacements or substitutions of the parts of, or in, any of the Equipment shall constitute accessions thereto and shall become part of the Equipment owned by Lessor. Lessee shall make no material alterations in the Equipment without the prior written consent of Lessor. Lessee will permit the Equipment to be operated and repaired only by qualified personnel.


Upon Lessor's request, Lessee will permit Lessor to have access to the Equipment at all reasonable times for the purpose of inspection and examination. Lessee agrees to pay not more than Five Hundred Dollars ($500.00) each year in nonaccountable expenses incurred by Lessor for the purpose of inspecting the leased Equipment and conducting Equipment and records audits.


(d) USE OF EQUIPMENT. Lessee shall be entitled to the right to possession and control of the Equipment and the use thereof during the Term of this Lease, so long as Lessee is not in default of this Agreement. Lessee will comply with all laws, regulations, and ordinances, and all applicable requirements of the manufacturer of the Equipment, applicable to the physical possession, operation, condition, use and maintenance of the Equipment. Lessee agrees to obtain all permits and licenses necessary for the operation of the Equipment.


(e) DENIAL OF WARRANTIES. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE DESIGN OR CONDITION OF, OR AS TO THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN THE EQUIPMENT DELIVERED TO LESSEE HEREUNDER, AND LESSOR MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PAR ...