1
EXHIBIT 10.18
LEASE AGREEMENT
This LEASE AGREEMENT, is effective on April 6, 1995 between
TELECOMMUNICATIONS FINANCE GROUP (hereinafter "Lessor"), and STAR VENDING, INC.,
a Nevada corporation with its principal office located at 000 Xxxxx Xxxxxx,
Xxxxx 000, Xxxxx Xxxxxxx, XX 00000, (hereinafter "Lessee").
1. Lease.
Lessor, subject to the conditions set forth in Section 25
hereof, agrees to lease to Lessee and Lessee agrees to lease from Lessor
hereunder, those items of personal property (the "Equipment") which are
described on Schedule 1 of Exhibit A hereto. Lessee agrees to execute and
deliver to Lessor a certificate of delivery and acceptance in substantively the
form of Exhibit A hereto (a "Delivery Certificate") immediately after Turnover
of the Equipment, and such execution shall constitute Lessee's irrevocable
acceptance of such items of Equipment for all purposes of this Lease. The
Delivery Certificate shall constitute a part of this Lease to the same extent as
if the provisions thereof were set forth herein.
2. Definitions.
"Amortization Deductions" as defined in Section
11(b)(i) hereof.
"Appraisal Procedure" shall mean the following procedure for
determining the Fair Market Sale Value of any item of
Equipment. If either Lessor or Lessee shall request by notice
(the "Appraisal Request") to the other that such value be
determined by the Appraisal Procedure, (i) Lessor and Lessee
shall, within 15 days after the Appraisal Request, appoint an
independent appraiser mutually satisfactory to them, or (ii)
if the parties are unable to agree on a mutually acceptable
appraiser within such time, Lessor and Lessee shall each
appoint one independent appraiser (provided that if either
party hereto fails to notify the other party hereto of the
identity of the independent appraiser chosen by it within 30
days after the Appraisal Request, the determination of such
value shall be made by the independent appraiser chosen by
such other party), and (iii) if such appraisers cannot agree
on such value within 20 days after their appointment and if
one appraisal is not within 5% of the other appraisal, Lessor
and Lessee shall choose a third independent appraiser mutually
satisfactory to them (or, if they fail to agree upon a third
appraiser within 25 days after the appointment of the first
two appraisers, such third independent appraiser shall within
20 days thereafter be appointed by the American Arbitration
Association), and such value shall be determined by such third
independent appraiser within 20 days after his appointment,
after consultation with the other two independent appraisers.
If the first two appraisals are within 5% of each other, then
the average of the two appraisals shall be the Fair Market
Sale Value. The fees and expenses of all appraisers shall be
paid by Lessee.
"Business Day" shall mean a day other than a Saturday, Sunday
or legal holiday under the laws of the State of Florida.
"Code" shall mean the Internal Revenue Code of 1954, as
amended, or any comparable successor law.
"Commencement Date" as defined in Section 3 hereof.
"Default" shall mean any event or condition which after the
giving of notice or lapse of time or both would become an
Event of Default.
"Delivery Certificate" as defined in Section 1 hereof.
1
2
"Equipment" as defined in Section 1 hereof.
"Event of Default" as defined in Section 18 hereof.
"Event of Loss" shall mean, with respect to any item of
Equipment, the actual or constructive total loss of such item
of Equipment or the use thereof, due to theft, destruction,
damage beyond repair or rendition thereof permanently unfit
for normal use from any reason whatsoever, or the
condemnation, confiscation or seizure of, or requisition of
title to or use of, such item of Equipment.
"Fair Market Sale Value" shall, at any time with respect to
any item of Equipment, be equal to the sale value of such item
of Equipment which would be obtained in an arm's-length
transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer-user
(other than a lessee currently in possession or a used
equipment or scrap dealer). For purposes of Section 7(b)
hereof, Fair Market Sale Value shall be determined by (i) an
independent appraiser (at Lessee's expense) selected by Lessor
or (ii) by the Appraiser Procedure if the Appraisal Request is
made at least 90 days (but not more than 360 days) prior to
the termination or expiration of the Lease Term, as the case
may be, which determination shall be made (a) without
deduction for any costs or expenses of dismantling or removal;
and (b) on the assumption that such item of Equipment is free
and clear of all Liens and is in the condition and repair in
which it is required to be returned pursuant to Section 7(a)
hereof. For purposes of Section 19(c) hereof, Fair Market Sale
Value shall be determined (at Lessee's expense) by an
independent appraiser selected by Lessor, on an "as-is,
where-is" basis, without regard to the provisions of clauses
(a) and (b) above; provided that if Lessor shall have sold any
item of Equipment pursuant to Section 19(b) hereof prior to
giving the notice referred to in Section 19(c) hereof, Fair
Market Sale Value of such item of Equipment shall be the net
proceeds of such sale after deduction of all costs and
expenses incurred by Lessor in connection therewith; provided
further, that if for any reason Lessor is not able to obtain
possession of any item of Equipment pursuant to Section 19(a)
hereof, the Fair Market Sale Value of such item of Equipment
shall be zero.
"Imposition" as defined in Section 11(a) hereof.
"Indemnitee" as defined in Section 17 hereof.
"Late Charge Rate" shall mean an interest rate per annum equal
to the higher of two percent (2%) over the Reference Rate or
eighteen percent (18%), but not to exceed the highest rate
permitted by applicable law.
"Lease" and the terms "hereof," "herein," "hereto" and
"hereunder," when used in this Lease Agreement, shall mean and
include this Lease Agreement, Exhibits and the Delivery
Certificate hereto as the same may from time to time be
amended, modified or supplemented.
"Lease Term" shall mean, with respect to any item of
Equipment, the term of the lease of such item of Equipment
hereunder specified in Section 3 hereof.
"Lessee" as defined in the introductory paragraph to
this Lease.
"Lessor" as defined in the introductory paragraph of
this Lease.
"Lessor's Value" shall mean, with respect to any item of
Equipment and installation if applicable, the total amount set
forth in Schedule 1 of Exhibit A hereto.
2
3
"Lessor's Liens" shall mean (i) any mortgage, pledge, lien,
security interest, charge, encumbrance, financing statement,
title retention or any other right or claim of any person
claiming through or under Lessor, not based upon or relating
to ownership of the Equipment or the lease thereof hereunder
and (ii) any mortgage, pledge, lien, security interest,
charge, encumbrance, financing statement, title retention or
any other right or claim of Owner (other than Lessor) claiming
through or under Lessor in connection with the transactions
described in Section 21(b) hereof.
"Liens" shall mean any mortgage, pledge, lien, security
interest, charge, encumbrance, financing statement, title
retention or any other right or claim of any person, other
than any Lessor's Lien.
"Loss Payment Date" shall mean with respect to any item of
Equipment the date on which payment, as described in Section
16(b) hereof, is made to the Lessor by the Lessee as the
result of an Event of Loss with respect to such item. The Loss
Payment Date shall be within ninety (90) days of the said
Event of Loss.
"Owner" shall mean the entity or person having ownership
interest to the Equipment as contemplated by the provisions of
Section 21(b) hereof and may be a person other than Lessor.
"Owner's Economics" shall mean the after-tax yield and
periodic after-tax cash flow anticipated by Owner as of the
date of this Lease, in connection with the transactions
contemplated by this Lease as determined by Owner unless
Lessor shall have transferred its interest in the Equipment to
another person as contemplated by the provisions of Section
21(b) hereof in which case "Owner's Economics" shall mean the
after-tax yield and periodic after-tax cash flow anticipated
by such person as of the date of the lease between such person
and Lessor contemplated by said provisions, in connection with
the transactions contemplated by such lease as determined by
such person.
"Recovery Deductions" as defined in Section 11(b)(i)
hereof.
"Reference Rate" shall mean the rate of interest
publicly announced by Citibank, N.A. in New York, New
York from time to time as its prime rate.
The reference rate is not intended to be the lowest rate of
interest charged by Citibank, N.A. in connection with
extensions of credit to debtors. The Reference Rate shall be
determined at the close of business on the 15th day of each
calendar month (if the 15th day is not a Business Day, then on
the first preceding Business Day) and shall become effective
as of the first day of the calendar month succeeding such
determination and shall continue in effect to, and including,
the last day of said calendar month.
"Rent Payment Date" shall mean each date on which an
installment of rent is due and payable pursuant to Section
5(a) hereof.
"Stipulated Loss Value" shall mean, with respect to any item
of Equipment, the amount determined by multiplying the Lessors
Value of such item of Equipment by the percentage set forth in
Schedule A hereto opposite the applicable Rent Payment Date;
provided, that for purposes of Sections 16(b) and 19(c)
hereof, any determination of Stipulated Loss Value as of a
date occurring after the final Rent Payment Date with respect
to such item of Equipment, shall be made as of such final Rent
Payment Date.
"Tax Benefits" shall mean the right to claim such deductions,
credits, and other benefits as are provided by the Code to an
owner of property, including the Recovery Deductions and
Amortization Deductions.
3
4
"Turnover" shall mean that point in time when the equipment
installation personnel complete testing of the equipment, or
when the equipment is placed into service, whichever first
occurs.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting
principles.
3. Lease Term.
The term of the lease of the Equipment hereunder shall
commence on the Commencement Date specified in the Delivery Certificate
("Commencement Date") and, unless earlier terminated pursuant to the provisions
hereof or at law or equity, shall continue for a term of sixty (60) months from
such Commencement Date. The Commencement Date specified in the Delivery
Certificate shall be the date on which Turnover occurs at a site provided by
Lessee in accordance with the provisions of Section 4 hereof.
4. Installation.
Lessor shall arrange for installation of the Equipment, the
cost of which installation shall be deemed to be part of Lessor's Value. Exhibit
A hereto shall indicate whether such cost is included or excluded from the
monthly rent payments due in accordance with Section 5(a) hereof. If excluded
from such monthly rent payments, Lessor shall separately invoice Lessee for such
installation upon completion thereof and Lessee shall pay such invoice within
thirty (30) days from the date thereof. Lessee shall be obligated to timely
provide a suitable site for the installation of the Equipment in accordance with
the Equipment manufacturer's practices attached hereto as Exhibit C. Lessee
shall be responsible for compliance with environmental requirements and central
office grounding procedures specified in Exhibit C hereto and for providing
adequate space, lighting, heating, air-conditioning and A/C power at the
installation site. Unavailability of Lessee furnished facilities shall be cause
for adjustments to the installation price set forth in Schedule 1 of Exhibit A
hereto.
5. Rent; Unconditional Obligations.
(a) Lessee agrees to pay to Lessor, at the address specified
in Section 24 hereof or at such other address as Lessor may specify, rent for
the Equipment at a rate not to exceed $22.498 per $1,000 of the total Lessor's
Value of such items of Equipment, as set forth in Schedule 1 of Exhibit A dated
April 6, 1995, or as Schedule 1 of Exhibit A to the Certificate of Delivery and
Acceptance is from time to time amended, (plus applicable sales or use taxes)
per month, in sixty (60) consecutive monthly installments, with the first
installment of rent being due on the Commencement date unless the Commencement
Date is other than the first day of a calendar month, in which event the first
installment of rent shall be due on the first day of the month following the
Commencement Date, and succeeding installments being due on the same date of
each month thereafter.
(b) Lessee shall also pay to Lessor, on demand, interest at
the Late Charge Rate on any installment of rent and on any other amount owing
hereunder which is not paid on its due date, for any period for which the same
shall be overdue. Each payment made under this Lease shall be applied first to
the payment of interest then owing and then to rent or other amounts owing
hereunder. Interest shall be computed on the basis of a 360-day year and actual
days elapsed.
(c) This Lease is a net lease, and Lessee's obligation to pay
all rent and all other amounts payable hereunder is ABSOLUTE AND UNCONDITIONAL
under any and all circumstances and shall not be affected by any circumstances
of any character whatsoever, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense, abatement or reduction or any right which
Lessee may have against Lessor, the manufacturer or supplier of any of the
Equipment or anyone else for any reason whatsoever; (ii) any defect in the
title, condition, design, or operation of, or lack of fitness for use of, or any
damage to, or loss of, all or any part of the Equipment from any cause
whatsoever; (iii) the existence of any Liens with respect to the Equipment; (iv)
the invalidity, unenforceability or disaffirmance of this Lease or any other
document related hereto; or (v) the prohibition of or interference with the use
or possession by Lessee of all or any part of the Equipment, for any reason
whatsoever, including without limitation, by reason of (1) claims for patent,
trademark or copyright
4
5
infringement; (2) present or future governmental laws, rules or orders; (3) the
insolvency, bankruptcy or reorganization of any person; and (4) any other cause
whether similar or dissimilar to the foregoing, any present or future law to the
contrary notwithstanding. Lessee hereby waives, to the extent permitted by
applicable law, any and all rights which it may now have or which may at any
time hereafter be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender the lease of any Equipment. If for any reason
whatsoever this Lease or any Supplement, other than pursuant to Section 16(b)
hereof, shall be terminated in whole or in part by operation of law or
otherwise, Lessee will nonetheless pay to Lessor an amount equal to each
installment of rent at the time such installment would have become due and
payable in accordance with the terms hereof. Each payment of rent or other
amount paid by Lessee hereunder shall be final and Lessee will not seek to
recover all or any part of such payment for Lessor for any reason whatsoever.
6. WARRANTY DISCLAIMER; ASSIGNMENT OF WARRANTIES.
(a) LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND
LESSEE HEREBY EXPRESSLY WAIVES ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE, FREEDOM
FROM INTERFERENCE OR INFRINGEMENT OR THE LIKE, OR AS TO THE TITLE TO OR LESSOR'S
OR LESSEE'S INTEREST IN THE EQUIPMENT OR AS TO ANY OTHER MATTER RELATING TO THE
EQUIPMENT OR ANY PART THEREOF.
LESSEE CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT AND EACH
PART THEREOF ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE
UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY LESSOR.
LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE ACCORDED TO THE
TRANSACTIONS CONTEMPLATED BY THIS LEASE OR AS TO ANY TAX CONSEQUENCES AND/OR TAX
TREATMENT THEREOF.
(b) LESSOR HEREBY ASSIGNS TO LESSEE SUCH RIGHTS AS LESSOR MAY
HAVE (TO EXTENT LESSOR MAY VALIDLY ASSIGN SUCH RIGHTS) UNDER ALL MANUFACTURERS'
AND SUPPLIERS' WARRANTIES WITH RESPECT TO THE EQUIPMENT; PROVIDED, HOWEVER, THAT
THE FOREGOING RIGHTS SHALL AUTOMATICALLY REVERT TO LESSOR UPON THE OCCURRENCE
AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT HEREUNDER, OR UPON THE RETURN
OF THE EQUIPMENT TO LESSOR. LESSEE AGREES TO SETTLE ALL CLAIMS WITH RESPECT TO
THE EQUIPMENT DIRECTLY WITH THE MANUFACTURERS OR SUPPLIERS THEREOF, AND TO GIVE
LESSOR PROMPT NOTICE OF ANY SUCH SETTLEMENT AND THE DETAILS OF SUCH SETTLEMENT.
HOWEVER, IN THE EVENT ANY WARRANTIES ARE NOT ASSIGNABLE, THE LESSOR AGREES TO
ACT ON BEHALF OF THE LESSEE IN SETTLING CLAIMS ARISING UNDER THE WARRANTY WITH
THE MANUFACTURER OR SUPPLIER.
(c) IN NO EVENT SHALL LESSOR BE LIABLE FOR LOSS OF REVENUE OR
PROFITS, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR
FROM ANY CAUSE EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
7. Disposition of Equipment.
(a) Return.
Lessee shall, upon the expiration of the Lease Term of each
item of Equipment, subject to paragraph (b) below, return such item of Equipment
to Lessor at such place within the continental United States of America as
Lessor shall designate in writing to Lessee. Until such item of Equipment is
returned to Lessor pursuant to the provisions of this Section , all of the
provisions of this Lease with respect thereto shall continue in full force
5
6
and effect. Lessee shall pay all the costs and expenses in connection with or
incidental to the return of the Equipment, including, without limitation, the
cost of removing, assembling, packing, insuring and transporting the Equipment.
At the time of such return, the Equipment shall be in the condition and repair
required to be maintained by Section 12 hereof and free and clear of all Liens.
(b) Purchase Option.
So long as no Default or Event of Default shall have occurred
and be continuing, Lessee may, by written notice given to Lessor at least 120
days (but not more than 360 days) prior to the expiration date of the Lease Term
of any item of Equipment (which notice shall be irrevocable), elect to purchase
such item of Equipment on such expiration date for a cash purchase price equal
to the Fair Market Sale Value of such item of Equipment determined as of such
expiration date, plus an amount equal to all taxes (other than income taxes on
any gain on such sale), costs and expenses (including legal fees and expenses)
incurred or paid by Lessor in connection with such sale. Upon payment by Lessee
of such purchase price, and of all other amounts then due and payable by Lessee
hereunder, Lessor shall transfer title to such items of Equipment to Lessee on
an "as-is, where-is" basis, without recourse and without representation or
warranty of any kind, express or implied, other than a representation and
warranty that such item of Equipment is free and clear of any Lessor's Liens.
8. Representation and Warranties.
In order to induce Lessor to enter into this Lease and to
lease the Equipment to Lessee hereunder, Lessee represents and warrants that:
(a) Organization.
Lessee is duly organized, validly existing and in good
standing under the laws of the State of Nevada and is duly qualified to do
business and is in good standing in the State in which the Equipment will be
located.
(b) Power and Authority.
Lessee has full power, authority and legal right to execute,
deliver and perform this Lease, and the execution, delivery and performance
hereof has been duly authorized by Lessee's governing body or officer(s).
(c) Enforceability.
This Lease has been duly executed and delivered by Lessee and
constitutes a legal, valid and binding obligation of Lessee enforceable in
accordance with its terms.
(d) Consents and Permits.
The execution, delivery and performance of this Lease does not
require any approval or consent of any trustee, shareholder, partner, sole
proprietor, or holders of any indebtedness or obligations of Lessee, and will
not contravene any law, regulation, judgment or decree applicable to Lessee, or
the certificate of partnership or incorporation or by-laws of Lessee, or
contravene the provisions of, or constitute a default under, or result in the
creation of any Lien upon any property of Lessee under any mortgage, instrument
or other agreement to which Lessee is a party or by which Lessee or its assets
may be bound or affected; and no authorization, approval, license, filing or
registration with any court or governmental agency or instrumentality is
necessary in connection with the execution, delivery, performance, validity and
enforceability of this Lease.
(e) Financial Condition of the Lessee.
The financial statements of Lessee heretofore furnished to
Lessor are complete and correct and fairly present the financial condition of
Lessee and the results of its operations for the respective periods covered
6
7
thereby, there are no known contingent liabilities or liabilities for taxes of
Lessee which are not reflected in said financial statements and since the date
thereof, there has been no material adverse change in such financial condition
or operations.
(f) No Litigation.
There is no action, suit, investigation or proceeding by or
before any court, arbitrator, administrative agency or other governmental
authority pending or threatened against or affecting Lessee (A) which involves
the transactions contemplated by this Lease or the Equipment; or (B) which, if
adversely determined, could have a material adverse effect on the financial
condition, business or operations of Lessee.
(g) United States Source Income.
No items of Equipment shall be used in a way that results in
the creation of an item of income to Lessor, the source of which for Federal
Income Tax purposes is without the United States.
9. Liens.
Lessee will not directly or indirectly create, incur, assume,
suffer, or permit to exist any Lien on or with respect to the Equipment.
10. Insurance.
Lessee shall maintain at all times on the Equipment, at its
expense, property damage, direct damage and liability insurance in such amounts,
against such risks, in such form and with such insurers as shall be reasonably
satisfactory to Lessor and any other Owner; provided, that the amount of direct
damage insurance shall not on any date be less than the greater of the full
replacement value or the Stipulated Loss Value of the Equipment as of such date.
Each insurance policy will, among other things, name Lessor and any other Owner
as an additional insured or as loss payee (as the case may be) as their
interests may appear, require that the insurer give Lessor and any such Owner at
least thirty (30) days prior written notice of any alteration in or cancellation
of the terms of such policy, and require that the interest of Lessor and any
such Owner be continued insured regardless of any breach of or violation by
Lessee of any warranties, declarations or conditions contained in such insurance
policy. Lessee shall furnish to Lessor and such Owner a certificate or other
evidence satisfactory to Lessor that such insurance coverage is in effect
provided, however, that Lessor and such Owner shall be under no duty to
ascertain the existence or adequacy of such insurance.
11. Taxes.
(a) General Tax Provisions.
Lessee shall pay, and shall indemnify and hold Lessor harmless
from and against, all fees, taxes (whether sales, use, excise, personal property
or other taxes), imposts, duties, withholdings, assessments and other
governmental charges of whatever kind or character, however designated (together
with any penalties, fines or interest thereon), all of the foregoing being
herein collectively called "Impositions," which are at any time levied or
imposed against Lessor, Lessee, this Lease, the Equipment or any part thereof by
any Federal, State, or Local Government or taxing authority in the United States
or by any foreign government or any subdivision or taxing authority thereof
upon, with respect to, as a result of or measured by (i) the Equipment (or any
part thereof), or this Lease or the interests of the Lessor therein; or (ii) the
purchase, ownership, delivery, leasing, possession, maintenance, use, operation,
return, sale or other disposition of the Equipment or any part thereof; or (iii)
the rentals, receipts or earnings payable under this Lease or otherwise arising
from the Equipment or any part thereof; excluding, however, taxes based on or
measured by the net income of Lessor that are imposed by (1) the United States
of America, or (2) the State of Florida or any political subdivision of the
State of Florida, or (3) any other State of the United States of America or any
political subdivision of any such State in which Lessor is subject to
Impositions as the result (whether solely or in part) of business or
transactions unrelated to this Lease. In case any
7
8
report or return is required to be filed with respect to any obligation of
Lessee under this Section or arising out of this Section , Lessee will notify
Lessor of such requirement and make such report or return in such manner as
shall be satisfactory to Lessor; provided, that the payment of any use taxes
shall be made in such manner as specified by Lessor in writing to Lessee; or
(iv) The provisions of this Section shall survive the expiration or earlier
termination of this Lease.
(b) Special Tax Provisions.
(i) The Owner of the items of Equipment, shall be
entitled to take into account in computing its Federal income tax liability,
Current Tax Rate and such deductions, credits, and other benefits as are
provided by the Code to an owner of property, including, without limitation:
(A) Recovery deductions ("Recovery
Deductions") under Section 168(a) of the Code for each item of Equipment in an
amount determined, commencing with the 1995 taxable year, by multiplying the
Owner's Cost of such item of Equipment by the percentages applicable under
Section 168(b) of the Code with respect to "(5)-year property" within the
meaning of Section 168(c)(2) of the Code;
(B) Amortization of expenses ("Amortization
Deductions") paid or to be paid by Owner in connection with this Lease at a rate
no less rapid than straight line over the Lease Term.
(ii) For the purposes of this Subsection 11 (b)
only, the term "Owner" shall include the "common parent" and all other
corporations included in the affiliated group, within the meaning of Section
1504 of the Code (or any other successor section thereto), of which Owner is or
becomes a member.
12. Compliance with Laws; Operation and Maintenance.
(a) Lessee will use the Equipment in a careful and proper
manner, will comply with and conform to all governmental laws, rules and
regulations relating thereto, and will cause the Equipment to be operated in
accordance with the manufacturer's or supplier's instructions or manuals.
(b) Lessee will, at its own expense, keep and maintain the
Equipment in good repair, condition and working order and furnish all parts,
replacements, mechanisms, devices and servicing required therefor so that the
value, condition and operating efficiency therefor will at all times be
maintained and preserved, reasonable wear and tear excepted. All such repairs,
parts, mechanisms, devices and replacements shall immediately, without further
act, become the property of Lessor and part of the Equipment.
(c) Lessee will not make or authorize any improvement, change,
addition or alteration to the Equipment (i) if such improvement, change,
addition or alteration will impair the originally intended function or use of
the Equipment or impair the value of the Equipment as it existed immediately
prior to such improvement, change, addition or alteration; or (ii) if any parts
installed in or attached to or otherwise becoming a part of the Equipment as a
result of any such improvement, change, addition or alteration shall not be
readily removable without damage to the Equipment. Any part which is added to
the Equipment without violating the provisions of the immediately preceding
sentence and which is not a replacement or substitution for any property which
was a part of the Equipment, shall remain the property of Lessee and may be
removed by Lessee at any time prior to the expiration or earlier termination of
the Lease Term. All such parts shall be and remain free and clear of any Liens.
Any such part which is not so removed prior to the expiration or earlier
termination of the Lease Term shall, without further act, become the property of
Lessor.
13. Inspection.
Upon prior notice, Lessor or its authorized representatives
may at any reasonable time or times inspect the Equipment when it deems it
necessary to protect its interest therein.
8
9
14. Identification.
Lessee shall, at its expense, attach to each item of Equipment
a notice satisfactory to Lessor disclosing Owner's ownership of such item of
Equipment.
15. Personal Property.
Lessee represents that the Equipment shall be and at all times
remain separately identifiable personal property. Lessee shall, at its expense,
take such action (including the obtaining and recording of waivers) 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 real property or a part of other personal property, and if at any time
any person shall claim any such right or interest, Lessee shall, at its expense,
cause such claim to be waived in writing or otherwise eliminated to Lessor's
satisfaction within 30 days after such claim shall have first become known to
Lessee.
16. Loss or Damage.
(a) All risk of loss, theft, damage or destruction to the
Equipment or any part thereof, however incurred or occasioned, shall be borne by
Lessee and, unless such occurrence constitutes an Event of Loss pursuant to
paragraph (b) of this Section , Lessee shall promptly give Lessor written notice
hereof and shall promptly cause the affected part or parts of the Equipment to
be replaced or restored to the condition and repair required to be maintained by
Section 12 hereof.
(b) If an Event of Loss with respect to any item of Equipment
shall occur, Lessee shall promptly give Lessor written notice thereof, and
Lessee shall pay to Lessor as soon as it receives insurance proceeds with
respect to said Event of Loss but in any event no later than 90 days after the
occurrence of said Event of Loss an amount equal to the sum of (i) the
Stipulated Loss Value of such item of Equipment computed as of the Rent Payment
Date with respect to such item of Equipment on or immediately preceding the date
of the occurrence of such Event of Loss, and (ii) all rent and other amounts due
and owing hereunder for such item of Equipment on or prior to the Loss Payment
Date. Upon payment of such amount to Lessor, the lease of such item of Equipment
hereunder shall terminate, and Lessor will transfer within forty days to Lessee,
Lessor's right, title and interest in and to such item of Equipment, on an
"as-is, where-is" basis, without recourse and without representation or
warranty, express or implied, other than a representation and warranty that such
item of Equipment is free and clear of any Lessor's Liens.
(c) Any payments received at any time by Lessor or Lessee from
any insurer with respect to loss or damage to the Equipment shall be applied as
follows: (i) if such payments are received with respect to an Event of Loss they
shall be paid to Lessor, but to the extent received by Lessor, they shall reduce
or discharge, as the case may be, Lessee's obligation to pay the amounts due to
Lessor under Section 16 (b) hereof with respect to such Event of Loss: or (ii)
if such payments are received with respect to any loss of or damage to the
Equipment other than an Event of Loss, such payments shall, unless a Default or
Event of Default shall have occurred and be continuing, be paid over to Lessee
to reimburse Lessee for its payment of the costs and expenses incurred by Lessee
in replacing or restoring pursuant to Section 16(a) hereof the part or parts of
the Equipment which suffered such loss or damage.
17. General Indemnity.
Lessee assumes liability for, and shall indemnify, protect
save and keep harmless Lessor and its agents, servants, successors and assigns
(an "Indemnitee") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs and expenses, including
reasonable legal expenses, of whatsoever kind and nature, imposed on, incurred
by or asserted against any Indemnitee, in any way relating to or arising out of
this Lease or the enforcement hereof, or the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, latent or other defects, whether or not
discoverable by Lessee or any
9
10
other person, any claim in tort for strict liability and any claim for patent,
trademark or copyright infringement); provided, however, that Lessee shall not
be required to indemnify any Indemnitee for loss or liability arising from acts
or events which occur after the Equipment has been returned to Lessor in
accordance with the Lease, or for loss or liability resulting solely from the
willful misconduct or gross negligence of such Indemnitee. The provisions of
this Section shall survive the expiration or earlier termination of this Lease.
18. Events of Default.
The following events shall each constitute an event of default
(herein called "Event of Default") under this Lease:
(i) Lessee shall fail to execute and deliver to
Lessor (or Lessor's agent) the "Delivery Certificate" within twenty-four (24)
hours of Turnover of the Equipment to Lessee.
(ii) Lessee shall fail to commence lease payments on
the first day of the month following the Commencement Date, or such other
initiation of lease payments as specified in Section 5 of this Lease.
(iii) Lessee shall fail to make any payment of rent
or other amount owing hereunder after notice has been given that payment is past
due; or
(iv) Lessee shall fail to maintain the insurance
required by Section 10 hereof or to perform or observe any of the covenants
contained in Sections 21 or 22 hereof; or
(v) Lessee shall fail to perform or observe any other
covenant, condition or agreement to be performed or observed by it with respect
to this Lease and such failure shall continue unremedied for 30 days after the
earlier of (a) the date on which Lessee obtains, or should have obtained
knowledge of such failure; or (b) the date on which notice thereof shall be
given by Lessor to Lessee; or
(vi) Any representation or warranty made by Lessee
herein or in any document, certificate or financial or other statement now or
hereafter furnished Lessor in connection with this Lease shall prove at any time
to have been untrue, incomplete or misleading in any material respect as of the
time when made; or
(vii) The entry of a decree or order for relief by a
court having jurisdiction in respect of Lessee, adjudging Lessee a bankrupt or
insolvent, or approving as properly filed a petition seeking a reorganization,
arrangement, adjustment or composition of or in respect of Lessee in an
involuntary proceeding or case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of Lessee or of any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 30 days; or
(viii) The institution by Lessee of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the commencement by Lessee
of a voluntary proceeding or case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or the consent by it to the filing of any such
petition or to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other similar
official) of Lessee or of any substantial part of its property, or the making by
it of any assignment for the benefit of creditors or the admission by it of its
inability to pay its debts generally as they become due or its willingness to be
adjudicated a bankrupt or the failure of Lessee generally to pay its debts as
they become due or the taking of corporate action by Lessee in furtherance of
any of the foregoing.
10
11
19. Remedies. If an Event of Default specified in Subsection 18(vii) or
(viii) above shall occur, then, and in any such event, Lessor shall not be
obligated to purchase or lease any of the Equipment and this Lease shall,
without any declaration or other action by Lessor, be in default. If an Event of
Default, other than an Event of Default specified in Subsection 18(vii) or
(viii) above, shall occur, Lessor may, at its option, declare this Lease to be
in default. At any time after this Lease is in default under the first sentence
of this Section 19, Lessor has declared this Lease to be in default under the
second sentence of this Section 19, Lessor and/or its representative may do any
one or more of the following with respect to all of the Equipment or any part
thereof as Lessor in its sole discretion shall elect, to the extent permitted by
applicable law then in effect:
(a) demand that Lessee, and Lessee shall at its expense upon
such demand, return the Equipment promptly to Lessor at such place in the
continental United States of America as Lessor shall specify, or Lessor and/or
its agents, at its option, may with or without entry upon the premises where the
Equipment is located and disable the Equipment, or make the Equipment inoperable
permanently or temporarily in Lessor's sole discretion, and/or take immediate
possession of the Equipment and remove the same by summary proceedings or
otherwise, all without liability for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by such
taking or for disabling or otherwise;
(b) sell the Equipment at public or private sale, with or
without notice, advertisement or publication, as Lessor may determine, or
otherwise dispose of, hold, use, operate, lease to others or keep idle the
Equipment as Lessor in its sole discretion may determine, all free and clear of
any rights of Lessee and without any duty to account to Lessee with respect to
such action or inaction or for any proceeds with respect thereto;
(c) by written notice to Lessee specifying a payment date
which shall be not earlier than 20 days after the date of such notice, demand
that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the payment date
specified in such notice, as liquidated damages for loss of a bargain and not as
a penalty, all accrued and unpaid rent for the Equipment due on all Rent Payment
Dates up to and including the payment date specified in such notice plus an
amount (together with interest on such amount at the Late Charge Rate, from the
payment date specified in such notice to the date of actual payment) equal to
the excess, if any, of the Stipulated Loss Value of the Equipment as of the
payment date specified in such notice over the Fair Market Sale Value of the
Equipment as of such date;
(d) 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 Lease. Lessor is entitled to recover any amount that fully
compensates the Lessor for any damage to or loss of the Lessor's residual
interest in the leased property caused by the Lessee's default.
In the event any present value discounting is applied, the
discount rate used shall be the Federal Reserve Board Discount Rate.
In addition, Lessee shall be liable for any and all unpaid
rent and other amounts due hereunder before or during the exercise of any of the
foregoing remedies and for all reasonable legal fees and other costs and
expenses incurred by reason of the occurrence of any Event of Default or the
exercise of Lessor's remedies with respect thereto, including all reasonable
costs and expenses incurred in connection with the placing of the Equipment in
the condition required by Section 12 hereof.
No remedy referred to in this Section 19 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to herein or otherwise available to Lessor at law or in 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 or all
such other remedies. No express or implied waiver by Lessor of an Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default. To the extent permitted by applicable law, Lessee
hereby waives any rights now or hereafter conferred by statute or otherwise
which may require Lessor to sell or lease or otherwise use the Equipment in
mitigation of Lessor's damages or losses or which may otherwise limit or modify
any of Lessor's rights or remedies under this Lease.
11
12
20. Lessor's Right to Perform. If Lessee fails to make any payment
required to be made by it hereunder or fails to perform or comply with any of
its other agreements contained herein, Lessor may itself make such payment or
perform or comply with such agreement, and the amount of such payment and the
amount of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the case may
be, together with interest thereon at the Late Charge Rate, shall be deemed to
be additional rent, payable by Lessee within 30 days of notice.
21. LOCATION; ASSIGNMENT OR SUBLEASE; TITLE TRANSFER.
(a) LESSEE WILL NOT REMOVE THE EQUIPMENT FROM THE LOCATION
SPECIFIED IN SCHEDULE 1 OF EXHIBIT A WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD, EXCEPT REMOVAL OUTSIDE THE
CONTINENTAL U.S. IS NOT PERMITTED. THE EQUIPMENT SHALL AT ALL TIMES BE IN THE
SOLE POSSESSION AND CONTROL OF LESSEE AND LESSEE WILL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR, SUCH CONSENT NOT TO BE UNREASOANBLY WITHHELD, ASSIGN
THIS LEASE OR ANY INTEREST HEREIN OR SUB LEASE OR OTHERWISE TRANSFER ITS
INTEREST IN ANY OF THE EQUIPMENT, AND ANY ATTEMPTED ASSIGNMENT, SUBLEASE OR
OTHER TRANSFER BY LESSEE IN VIOLATION OF THESE PROVISIONS SHALL BE VOID.
(b) LESSOR AND LESSEE ACKNOWLEDGE THAT LESSOR (i) MAY TRANSFER
ITS INTEREST IN THE EQUIPMENT TO AN OWNER OTHER THAN LESSOR. LESSOR MAY
CONTEMPORANEOUSLY THEREWITH LEASE THE EQUIPMENT BACK FROM SUCH OWNER, AND (ii)
MAY ASSIGN THIS LEASE. LESSEE HEREBY CONSENTS TO EACH OF THE ABOVE-DESCRIBED
TRANSACTIONS. FURTHER LESSEE DOES HEREBY ACKNOWLEDGE (i) THAT ANY SUCH
ASSIGNMENT BY LESSOR DOES NOT MATERIALLY CHANGE LESSEE'S DUTIES AND OBLIGATION
HEREUNDER, (ii) THAT SUCH ASSIGNMENT DOES NOT MATERIALLY INCREASE THE BURDEN OR
RIGHT IMPOSED ON THE LESSEE, AND (iii) THAT THE ASSIGNMENT IS PERMITTTED EVEN IF
THE ASSIGNMENT COULD BE DEEMED TO MATERIALLY AFFECT THE INTEREST OF THE LESSEE.
22. Status Changes in Lessee. Lessee will not without thirty (30) days
prior written notice to Lessor, (a) enter into any transaction of merger or
consolidation unless it is the surviving corporation or after giving effect to
such merger or consolidation its net worth equals or exceeds that which existed
prior to such merger or consolidation; or (b) change the form of organization of
its business; or (c) change its name or its chief place of business. Lessee must
obtain Lessor's prior written concurrence, such concurrence not to be
unreasonably withheld, before Lessee may undertake any actions to (a) liquidate
or dissolve or similar action of the Lessee's organization, or (b) sell,
transfer or otherwise dispose of all or any substantial part of Lessee's assets.
23. Further Assurances; Financial Information.
(a) 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 reasonably request in order to establish
and protect the rights, interests and remedies created or intended to be created
in favor of Lessor hereunder, including, without limitation, the execution and
filing of Uniform Commercial Code financing statements covering the Equipment
and proceeds therefrom in the jurisdictions in which the Equipment is located
from time to time. To the extent permitted by applicable law, Lessee hereby
authorizes Lessor to file any such financing statements without the signature of
Lessee.
(b) Lessee will qualify to do business and remain qualified in good
standing, in each jurisdiction in which the Equipment is from time to time
located.
(c) Lessee will furnish to Lessor as soon as available, but in any
event not later than 90 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as at the end of such fiscal year, and
consolidated statements of income and changes in financial position of Lessee
for such fiscal year, all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a basis
12
13
consistently maintained throughout the period involved. These reports will not
be disclosed to anyone other than the Lessor and/or the Owner as provided in
Section 21(b).
24. Notices. All notices, demands and other communications hereunder
shall be in writing, and shall be deemed to have been given or made when
deposited in the United States mail, first class postage prepaid, addressed as
follows or to such other address as any of the authorized representatives of the
following entities may from time to time designate in writing to the other
listed below:
Lessor: Telecommunications Finance Group
000 Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Lessee: STAR VENDING, INC.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
25. Conditions Precedent:
(a) Lessor shall not be obligated to lease the items of Equipment
described herein to Lessee hereunder unless:
(i) Such Uniform Commercial Code financing statements
covering Equipment and proceeds therefrom and landlord and/or mortgagee waivers
or disclaimers and/or severance agreements with respect to the items of
Equipment covered by this Lease as Lessor shall deem necessary or desirable in
order to perfect and protect its interests therein shall have been duly executed
and filed, at Lessee's expense, in such public offices as Lessor shall direct;
(ii) All representations and warranties of Lessee
contained herein or in any document or certificate furnished Lessor in
connection herewith shall be true and correct on and as of the date of this
Lease with the same force and effect as if made on and as of such date; no Event
of Default or Default shall be in existence on such date or shall occur as a
result of the lease by Lessee of the Equipment specified in Schedule 1 of
Exhibit A;
(iii) In the sole judgment of Lessor, there shall
have been no material adverse change in the financial condition or business of
Lessee;
(iv) All proceedings to be taken in connection with
the transactions contemplated by this Lease, and all documents incidental
thereto, shall be satisfactory in form and substance to Lessor and its counsel;
(v) Lessor shall have received from Lessee, in form
and substance satisfactory to it, such other documents and information as Lessor
shall reasonably request;
(vi) All legal matters in connection with the
transactions contemplated by this Lease shall be satisfactory to Lessor's
counsel; and
(vii) No Change in Tax Law, which in the sole
judgment of Lessor would adversely affect Lessor's Economics, shall have
occurred or shall appear, in Lessor's good faith judgment, to be imminent.
26. Software License. Reference is made to the form of DCO Software
Product License Agreement attached hereto as Exhibit B (the "License Document").
Lessor has arranged for the Equipment manufacturer to grant Lessee a license to
use the Software as defined in the License Document in conjunction with the
equipment leased hereunder in accordance with the terms of the License Document.
The original license fee is contained in the
13
14
lease rate. To avail itself of the license grant, Lessee must execute the
License Document, upon Commencement of the Lease. The option to obtain a fully
paid up license as provided in Article 2 of the License Document shall be
exercised by the Lessee and the payment made directly to the equipment
manufacturer named in the License Document and must be exercised in conjunction
with the option provided in Section 7(b) of the Lease, to purchase the
Equipment. "Buyer" and "Licensee" as used in the License Document are synonymous
with Lessee.
27. LIMITATION OF LIABILITY.
LESSOR SHALL NOT BE LIABLE FOR LOST PROFITS OR REVENUE, SPECIAL,
INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE OR FROM
ANY CAUSE WHETHER BASED IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR OTHER
LEGAL THEORY EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
LESSEE HEREBY AGREES THAT LESSOR WILL NOT BE LIABLE FOR ANY LOST PROFITS OR
REVENUE OR FOR ANY CLAIM OR DEMAND AGAINST LESSEE BY ANY OTHER PARTY.
28. Miscellaneous.
(a) Any provision of this Lease which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in any
other jurisdiction. To the extent permitted by applicable law, Lessee hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
(b) No terms or provisions of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which the enforcement of the change, waiver, discharge or
termination is sought. No delay or failure on the part of Lessor to exercise any
power or right hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof, or the exercise
of any other power or right. After the occurrence of any Default or Event of
Default, the acceptance by Lessor of any payment of rent or other sum owed by
Lessee pursuant hereto shall not constitute a waiver by Lessor of such Default
or Event of Default, regardless of Lessor's knowledge or lack of knowledge
thereof at the time of acceptance of any such payment, and shall not constitute
a reinstatement of this Lease, if this Lease shall have been declared in default
by Lessor pursuant to Section 18 hereof or otherwise, unless Lessor shall have
agreed in writing to reinstate the Lease and to waive the Default or Event of
Default.
In the event Lessee tenders payment to Lessor by check or draft
containing a qualified endorsement purporting to limit or modify Lessee's
liability or obligations under this Lease, such qualified endorsement shall be
of no force and effect even if Lessor processes the check or draft for payment.
(c) This Lease with exhibits contains the full, final and exclusive
statement of the agreement between Lessor and Lessee relating to the lease of
the Equipment.
(d) This Lease shall constitute an agreement of an operating lease,
and nothing herein shall be construed as conveying to Lessee any right, title or
interest in the Equipment except as Lessee only.
(e) This Lease and the covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, Lessor and its successors
and assigns and Lessee and, to the extent permitted by Section 21 hereof, its
successors and assigns.
(f) The headings of the Sections are for convenience of reference
only, are not a part of this Lease and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.
14
15
(g) This Lease may be executed by the parties hereto on any number
of separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
(h) This Lease is deemed made and entered into in the State of
Florida and shall be governed by and construed under and in accordance with the
laws of the State of Florida as if both parties were residents of Florida.
(i) Lessee hereby irrevocably consents and agrees that any legal
action, suit, or proceeding arising out of or in any way in connection with this
Lease shall be instituted or brought in the courts of the State of Florida, or
the United States Court for the District of Florida, and by execution and
delivery of this Lease, Lessee hereby irrevocably accepts and submits to, for
itself and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of any such court, and to all proceedings in such
courts. Lessee irrevocably consents to service of any summons and/or legal
process by registered or certified United States mail, postage prepaid, to
Lessee at the address set forth in Section 24 hereof, such method of service to
constitute, in every respect, sufficient and effective service of process in any
legal action or proceeding. Nothing in this Lease shall affect the right to
service of process in any other manner permitted by law or limit the right of
Lessor to bring actions, suits or proceedings in the court of any other
jurisdiction. Lessee further agrees that final judgment against it in any such
legal action, suit or proceeding shall be conclusive and may be enforced in any
other jurisdiction, within or outside the United States of America, by suit on
the judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and the amount of the liability.
15
16
IN WITNESS WHEREOF, Lessor and Lessee have each caused this
Lease to be duly executed as of the day and year first above written and by its
signature below Lessee expressly acknowledges that this Lease may not be
modified unless done so in a writing signed by each of the parties hereto or
their successors in interest.
STAR VENDING, INC. (Lessee)
By:____________________________
_______________________________
(Name & Title)
Date Signed:___________________
TELECOMMUNICATIONS FINANCE GROUP
By:____________________________
_______________________________
Authorized
Representative of
Telecommunications Finance Group
Date Signed:___________________
16
17
STAR VENDING, INC.
SITE: LOS ANGELES, CALIFORNIA
0.010416 SCHEDULE A - ORIGINAL LEASE VALUE
STIPULATED LOSS VALUE
The Stipulated Loss Value of any item of Equipment as of any Rent Payment Date
with respect of such item of Equipment shall be determined by multiplying the
Lessor's Value of such item of Equipment by the percentage set forth below for
such Rent Payment Date; provided that, any determination of Stipulated Loss
Value as of a date occurring after the final Rent Payment Date with respect to
such item of equipment, shall be made as of such final Rent Payment Date.
After Rent
Payment Number Percentage
0 105.0000
1 104.1252
2 103.2378
3 102.3378
4 101.4248
5 100.4989
6 99.5598
7 98.6075
8 97.6418
9 96.6626
10 95.6697
11 94.6630
12 93.6423
13 92.6076
14 91.5586
15 90.4952
16 89.4173
17 88.3247
18 87.2173
19 86.0948
20 84.9571
21 83.8041
22 82.6355
23 81.4514
24 80.2514
25 79.0354
26 77.8032
27 76.5548
28 75.2899
29 74.0085
30 72.7102
31 71.3949
32 70.0622
33 68.7124
34 67.3449
35 65.9599
36 64.5568
37 63.1357
38 61.6964
39 60.2383
18
Continue........
STAR VENDING, INC.
SITE: LOS ANGELES, CALIFORNIA
0.010416 SCHEDULE A - ORIGINAL LEASE VALUE
STIPULATED LOSS VALUE
40 58.7618
41 57.2665
42 55.7523
43 54.2187
44 52.6655
45 51.0926
46 49.4999
47 47.8873
48 46.2547
49 44.1846
50 42.0939
51 39.9824
52 37.8495
53 35.6952
54 33.5196
55 31.3223
56 29.1030
57 26.8613
58 24.5972
59 22.3105
60 20.0000
19
SCHEDULE B
AMENDMENT TO LEASE AGREEMENT DATED April 6, 1995 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
STAR VENDING, INC. (LESSEE) FOR A DCO-CS
TO BE LOCATED IN LOS ANGELES, CALIFORNIA
A DEPOSIT EQUAL TO 5% OF LESSOR'S VALUE IS REQUIRED BY LESSOR PRIOR TO SHIPMENT,
WHICH WILL BE APPLIED FIRST TO THE FIRST INSTALLMENT OF LEASE RENT AND THEN TO
SUCCEEDING INSTALLMENTS OF LEASE RENT UNTIL FULLY UTILIZED.
IN THE EVENT OF EARLY TERMINATION OF THE LEASE DUE TO DEFAULT BY LESSEE, ANY
UNAPPLIED PORTION OF THE 5% DEPOSIT IS NON-REFUNDABLE AND WILL BE RETAINED BY
LESSOR.
IN THE EVENT LESSEE HAS MORE THAN ONE LEASE WITH LESSOR, AN EVENT OF DEFAULT FOR
ONE LEASE WILL, IN ITSELF, BE AN EVENT OF DEFAULT ON ALL OTHER LEASES IN THE
NAME OF THE LESSEE.
TELECOMMUNICATIONS FINANCE GROUP STAR VENDING, INC.
By:_____________________________ By:__________________________
________________________________ _____________________________
AUTHORIZED REPRESENTATIVE OF (Name & Title)
TELECOMMUNICATIONS FINANCE GROUP
Date Signed:____________________ Date Signed:_________________
19
20
SCHEDULE C
AMENDMENT TO LEASE AGREEMENT DATED April 6, 1995 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
STAR VENDING, INC. (LESSEE) FOR A DCO-CS
TO BE LOCATED IN LOS ANGELES, CALIFORNIA
LESSEE AFFIRMS TO THE FOLLOWING:
ALL THIRD PARTY VENDOR EQUIPMENT TO BE ADDED TO THE LEASE MUST BE PURCHASED OR
APPROVED BY THE SIEMENS XXXXXXXXX-XXXXXXX PURCHASING DEPARTMENT. THE CUMULATIVE
TOTAL OF THIRD PARTY VENDOR EQUIPMENT WHICH MAY BE ADDED TO THE LEASE CANNOT
EXCEED 20% OF THE VALUE OF THE EQUIPMENT PROVIDED BY SIEMENS XXXXXXXXX-XXXXXXX.
SUBJECT TO THE 20% CAP, THE ONLY THIRD PARTY VENDOR EQUIPMENT WHICH MAY BE ADDED
TO A LEASE ARE APPROVED BILLING EQUIPMENT AND SYSTEMS AND OAS (OPERATOR ASSISTED
SYSTEM) EQUIPMENT AND SYSTEMS. OTHER ITEMS MAY BE ADDED IF THE SIEMENS
XXXXXXXXX-XXXXXXX OCC SENIOR PROGRAM MANAGER CONFIRMS THAT IT IS NECESSARY AS AN
ADDITION TO ONE OF THE APPROVED SYSTEMS.
A DEPOSIT EQUAL TO 5% OF THE THIRD PARTY VENDOR EQUIPMENT (WHICH IS SUBJECT TO
THE 20% CAP ABOVE) IS REQUIRED BY LESSOR PRIOR TO ISSUING A PURCHASE ORDER TO
THE THIRD PARTY VENDOR. THIS DEPOSIT WILL BE APPLIED FIRST TO THE FIRST
INSTALLMENT OF LEASE RENT IN WHICH THE VENDOR EQUIPMENT IS INCLUDED, AND THEN TO
SUCCEEDING INSTALLMENTS OF LEASE RENT UNTIL FULLY UTILIZED.
IN THE EVENT OF EARLY TERMINATION OF THE LEASE DUE TO DEFAULT BY LESSEE, ANY
UNAPPLIED PORTION OF THE 5% DEPOSIT IS NON-REFUNDABLE AND WILL BE RETAINED BY
LESSOR.
TELECOMMUNICATIONS FINANCE GROUP STAR VENDING, INC.
By:_____________________________ By:__________________________
________________________________ _____________________________
AUTHORIZED REPRESENTATIVE OF (Name & Title)
TELECOMMUNICATIONS FINANCE GROUP
Date Signed:____________________ Date Signed:_________________
20
21
EXHIBIT A
CERTIFICATE OF DELIVERY AND ACCEPTANCE
Commencement Date:__________
THIS CERTIFICATE OF DELIVERY AND ACCEPTANCE is executed and delivered to
Telecommunications Finance Group ("Lessor") by STAR VENDING, INC. ("Lessee")
pursuant to and in accordance with the Lease Agreement dated: April 6, 1995
between Lessor and Lessee (the "Lease", the defined terms therein being used
herein with their defined meanings).
1. The Equipment covered by this Certificate consists of the items
described in Schedule 1 of Exhibit A of the Lease.
2. Lessee confirms that the items of Equipment covered hereby have been
delivered to it in good working order and condition, and have been
inspected and accepted by Lessee as of the Commencement Date set forth
above. Lessee hereby waives any right it may have under Section 2A-517
of the Uniform Commercial Code or otherwise to revoke this acceptance
for any reason whatsoever, including but not limited to, (i) any
assumption by Lessee that a nonconformity would be cured, (ii) any
inducement of acceptance by the Lessor's assurances or any difficulty
to discover a nonconformity before acceptance, or (iii) any Lessor
default under the Lease. Lessee further hereby waives its rights under
Sections 2A-401 and 2A-402 of the Uniform Commercial Code to suspend
performance of any of its obligations under the Lease with respect to
the Equipment hereby accepted.
3. Lessee confirms that such items of Equipment have been installed at:
Los Angeles, California
4. The Lessor's value of the items of Equipment covered hereby is set
forth in the Schedule 1 of Exhibit A. Lessee confirms that each
installment of rent payable is as defined by the rental rate factor per
thousand dollars as specified in Section 5 of the Lease.
5. Lessee hereby: (a) confirms that the items of Equipment covered
hereby have been inspected by Lessee, have been delivered in good
working order and condition and are of the size, design, capacity and
manufacture selected by it and meet the provisions of the purchase
order(s) with respect thereto; and (b) irrevocably accepts said items
of Equipment "as-is, where-is" for all purposes of the Lease as of the
Commencement Date set forth above and shall pursue remedies to correct
deficiencies, if any, in said items of equipment under the
manufacturer's warranty provisions only.
6. Lessee hereby confirms: (i) that no Default or Event of default is in
existence as of the Commencement Date set forth above, nor shall any
Default or Event of Default occur as a result of the lease by Lessee of
the Equipment specified here-in; and (ii) that all representations and
warranties of Lessee contained in the Lease or in any document or
certificate furnished Lessor in connection herewith, are true and
correct as of the Commencement Date set forth above with the same force
and effect as if made on such date.
7. Lessee assumes sole responsibility for ensuring that the billing center
can correctly read call records. Lessee's responsibility includes
reading daily the automatic message/ticketing accounting system and/or
polling systems tape(s) by the billing system to ensure all ticket
information is present. Risk of loss for any revenue or profit
associated therewith passes to Lessee upon cutover of any hardware or
software.
8. All of the terms, provisions and conditions of the Lease are hereby
incorporated herein and made a part hereof as if such terms, provisions
and conditions were set forth in full in this Certificate. By their
execution and delivery of this Certificate, the parties hereto reaffirm
all of the terms, provisions and conditions of the Lease.
21
22
IN WITNESS WHEREOF, Lessee has caused this Certificate to be executed
by its duly authorized officer as of the Commencement Date set forth above.
Refer S.O.#066739 STAR VENDING, INC.
________________________________ By:______________________________
_________________________________
(Name & Title)
Date Signed:_____________________
ACCEPTED BY:
TELECOMMUNICATIONS FINANCE GROUP AS OF
THE _____ DAY OF _______________ 19___.
By:_____________________________
________________________________
Authorized Representative of
Telecommunications Finance Group
22
23
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
-1-
Line Trunk Frame (LTF)
----------------------
OCCSLTFFRM Line Trunk Frame 2
814742-566 Diagnostic Test Gen/Monitor 1
LTFDOORS LTF Doors, Front & Rear 2
LINGRPCUA Line Group CUA (LTF) 1
SLTFUTSCUA Trk/Svc Ckt CUA Grp 1
SLTFUSCUA Svc Ckt CUA Grp 10
814571-706 Digital TMF Rcv. (2/PWBA) 59
*814572-576 Digital Sender (TMF/SATT) 16
814695-556 Digital DTMF Sender 12
814643-596 Digital DTMF Receiver 41
814742-576 (FOC) Digital DTMF Receiver 12
814574-936 2-Wire E&M Trunk PWBA 2
814574-932 Loop Trunk, Reverse Batt PWBA 0
Digital Trunk Frame (DTF)
OCCSDTFFRM Digital Trunk Frame 4
DTFDOORS DTF Doors, Front & Rear 4
SDS1HSTCUA DS1 Host Ckt CUA 24
817560-626A T1 Interface PWBA 192
817577-917A Blower Assembly w/fan Alarm 4
-1-
24
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
Control & Maintenance Frame (CMF)
---------------------------------
SCMFOCC12.1 Control & Maint Frame OCC 12.1 1
CMFDOORS CMF Doors, Front & Rear 1
822068-819 DLI Transfer 1
814635-086 PWBA Ring (N+1) 1
814721-666 Serial Line Xxxx XXXX 0
000000-000 Xxxx Xxxxx Assy 2
822010-656 Tape Drive 1
817702-556 Traffic Measurement/Rec 1
817620-556 MSA PWBA 1
814727-626 J2 Maintenance Processor 1
822010-606 Power & Alarm PWBA 1
817680-606A BMUX PWBA 1
822222-606A DLI-II 1
TSIPWB17 TSI PWBA 16
822702-536A PXAM II - 4MB 2
822727-696A J8 Call Processor 2
814770-656 PXA Memory PWBA 1/Mbyte 1
TPP0PWB17 TPP PWBA (Sectors 0,1,2,3) 1
XXXX0XXXXX XXX0 Basics 1
OCCSNCS Sync Network Clock (Slave) 1
822718-596 Feature Processor (PWBA) 2
814095-626 Service Group Diag PWBA 3
-2-
25
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
OCCTAPE Tape Control PWBAs 1
814722-216A RS232 Interface Module 6
Power & Test Frame (PRT)
------------------------
SPRTFOCC12.1 Power Ringing & Tst Fr OCC12.1 1
PRTDOORS PRT Doors, Front & Rear 1
817576-938 Circuit Breaker 100 Amp 4
814475-036 Alarm Sender PWBA 1
817576-912 Basic Cabinets & MTG for N+1) 1
814629-904 Ringing Generator (20 Hz) 1
817576-934 200VA DC/AC Non-Redund. Invtr 1
814215-820 Xxxx 4 Xxxx Announcer (NT5M) 1
203352-681 4 Channel Announcer 1
Automatic Message Accounting
----------------------------
SAMAFRM AMA Frame 1
AMADOORS AMA Doors Xxxx 0
000000-000 Xxxx 0000 XXX Tape Drives (2) 2
814421-909 Xxxx 1600 BPI Strapping 2
Miscellaneous
-------------
0-00000-0000 DSX Pnl-ADC DSX-DR 19 w/cord 7
-3-
26
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
PJ716 Bantam Patch Cord 28
2200B Channel Access Xxxx 0
000000-000 0000 Xxxx Xxxxxx Modems 1
202975-592 7' x 19" Relay Rack 1
207800-284 Installation Material 1
200110-119 Fuse 1 1/3 amp 20
200110-129 Fuse 3 amp 10
200110-429 Fuse 10 amp 5
200110-139 Fuse 5 amp 10
SD0000 Std System Documentation 1
D0001 Specifications, Paper 3
D0002 Site Drawings, Paper 3
203352-600 Xxxxxx Filtered Fuse Panel 1
207630-911 Xxxxx Xxxxxxxxx XXX 0
000000-000 XXX Assy/Modem Elimator 4
Superstructure & Cabling 1
Battery Distribution Frame
--------------------------
814053-043A 7 ft Battery Discharge Frame 1
207521-733 Shield 1
Power Equipment
---------------
202975-593 7' x 23" Relay Rack 1
BATRACKW/BRC Battery Rack - with Bracing 1
-4-
27
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
4DD-85-29 Exide DD Battery 1215 AH 1
203352-588 Charger/Lorain/200A RHM200D50 3
Distribution Frame Equipment
----------------------------
5065-8 Term Blocks Xxxxxx 8 x 26 4
5054 Newton Bracks (1 per 2 blks) 2
Maintenance & Administration Equipment
--------------------------------------
202958-464 Tape Cartridge 1
000000-000 Xxxxx Xxxx Xxxxx Cleaning Kit 1
203352-283 Genicom 2120 Keyboard/Printer 1
7271-964 Box, Teleprinter Paper 1
Spare Circuit Packs
-------------------
200110-099 Fuse -1/2 Amp 1
207630-042 Shield Assembly 1
555020-125 Fuse, 3AG, 3A 1
555366-001 Switch, SPST 1
814288-526 Tape Diagnostic PWBA 1
Spare Circuit Packs (Cont.)
-------------------
814291-546 Tape Motion Cont. PWBA 1
814298-526 Tape Buffer PWBA 1
814439-056 PGC-1 PWBA 1
-5-
28
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
814440-076 PGC-2 PWBA 1
814441-056 MUX/DEMUX PWBA 1
814462-036A Power Supply PWBA 1
814463-026A Power Supply PWBA 1
814539-026 CMOS Codec Comm. PWBA 1
814727-626 J2 Maintenance Processor 1
817113-086 Power Supply PWBA 1
817524-066A LTC Interconnect PWBA 1
817560-626A T1 Interface PWBA 1
817561-526 T1 I/F Control 1 PWBA 1
817562-566 T1 I/F Control 2 PWBA 1
817564-026A Power Supply PWBA 1
817581-026 DS1 Terminator PWBA 1
817702-556A TMRS Processor 1
822010-656 Tape Drive PWBA 1
822010-666 Tape Drive PWBA 1
822015-536 Synchronous Clock PWBA 1
822024-036A Power Monitor PWBA 1
822033-596A MCG - II PWBA 1
822034-536A Master Clock Dist. PWBA 1
822289-566A TBI II PWBA 1
822723-556A Data Link III PWBA 1
822726-526A HD MSA/SL PWBA 1
-6-
29
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
ITEM 01
PART NUMBER DESCRIPTION QTY
----------- ----------- ---
IN-PLACE
Switching Equipment
822010-606A XXXX Xxx & Xxxxx 0
000000-000 Xxxx Xxxxx Assy 1
822222-606A DLI-II 1
-7-
30
SIEMENS Proposal No.: XXX-000000
XXXXXXXXX-XXXXXXX Issue No. 1
Date: February 10, 1995
Installation Site: Garden Grove, California
DESCRIPTION QTY
==========================================================================
ITEM 02 DUPLEX MP'S
--------------------------------------------------------------------------
814727-626 J Processor MP 2/MB PWBA 1
814770-656 PXA 1/Mbyte Memory PWBA 1
814621-804 Power Supply Duplex Mode 1
814721-666 Serial Line Unit PWBA 1
817680-606 BMUX PWBA 1
817620-556 MSA PWBA 1
822621-807 Mass Storage CUA Subsystem 1
822621-808 Mass Storage PWBAs 1
020089 Maintenance Processor, Duplex 1
ITEM 03A DEBIT CARD FEATURE
---------------------------------------------------------------------------
824420 Debit Card COS 1
ITEM 03B INTERNATIONAL OPERATOR FEATURE
---------------------------------------------------------------------------
000000 International Operator Service 1
-22-
31
SCHEDULE 1 OF EXHIBIT A
(CERTIFICATE OF DELIVERY AND ACCEPTANCE)
EQUIPMENT DESCRIPTION
The items of personal property to be leased pursuant to this Lease Agreement,
dated as of April 6, 1996 between Telecommunications Finance Group, as Lessor,
and STAR VENDING, INC., as Lessee, are described below and in the attached
equipment list(s):
Equipment List
--------------
Number Description Amount
------ ----------- ------
DCO-581065 A Used Siemens Xxxxxxxxx-Xxxxxxx DCO-CS Equipped and Wired for 4608 $664,000.00
Digital Ports Per DCO-581065, Issue 1, Dated 02/10/95 With Basic
Release 14, CMF Spares, AMA Frame, SS7 w/ 3 Access Links (With
Billing System) Including Installation
The above described equipment installed at:
Los Angeles, California
BY:_______________________
DATE:_____________________
32
SECRETARY'S CERTIFICATE
I, Xxxx Xxxxx, do hereby certify that I am the Secretary of STAR
VENDING, INC., a corporation duly organized and existing under the laws of the
State of Nevada ("Corporation"); that I am the keeper of the seal of the
corporation and corporate records, including, without limitation, the Charter,
By-Laws and the minutes of the meeting of the Board of Directors of the
Corporation; that the following is an accurate and compared transcript of the
resolutions contained in the minute book of the Corporation, which resolutions
were duly adopted and ratified at a meeting of the Board of Directors of the
Corporation duly convened and held in accordance with the By-Laws and Charter of
the Corporation on the 30th day of Sept, 1996, at which time a quorum was
present and acted throughout; and that said resolutions have not in any way been
modified, repealed or rescinded, but are in full force and effect:
"RESOLVED, that any officer of the Corporation be and is
hereby authorized and empowered in the name and on behalf of this
Corporation to enter into one or more lease agreements with
Telecommunications Finance Group ("hereinafter called "LESSOR")
concerning personal property leased to the Corporation; from time to
time to modify, supplement or amend any such agreements; and to do and
perform all other acts and things deemed by such officer to be
necessary, convenient or proper to carry out any of the foregoing; and
be it
FURTHER RESOLVED, that all that any officer shall have done or
may do in the premises is hereby ratified and approved; and be it
FURTHER RESOLVED, that the foregoing resolutions shall remain
in full force and effect until written notice of their amendment or
recission shall have been received by LESSOR and that receipt of such
notice shall not effect any action taken or loans or advances made by
LESSOR prior thereto and LESSOR is authorized to rely upon said
resolutions until receipt by it of written notice of any change; and be
it
FURTHER RESOLVED, that the Secretary be and is hereby
authorized and directed to certify to LESSOR that the foregoing
resolutions and provisions thereof are in conformity with the Charter
and By-Laws of this Corporation."
I do further certify that the Lease Agreement entered into by the
Corporation and LESSOR concerning the following items of personal property:
Siemens Xxxxxxxxx-Xxxxxxx Digital Central Office Carrier Switch plus Peripheral
Equipment
is one of the agreements referred to in said resolutions and was duly executed
pursuant thereto and there are no restrictions imposed by the Charter or By-Laws
of the Corporation restricting the power or authority of the Board of Directors
of the Corporation to adopt the foregoing resolutions or upon the Corporation or
its officers to act in accordance therewith.
I do further certify that the following are names and specimen signatures of
officers of the Corporation empowered and authorized by the above resolutions,
each of which has been duly elected to hold and currently holds the office of
the Corporation set opposite his name:
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxxxxxxx Xxxxxxxx President
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Corporation this 12th day of _________, 1995.
_______________________________
Secretary of STAR VENDING, INC.
(SEAL)
33
SIEMENS SOFTWARE
XXXXXXXXX-XXXXXXX LICENSE
AGREEMENT
000 Xxxxxxxx Xxxx XXXXXXX X
Xxxx Xxxx, Xxxxxxx 00000
(000) 000-0000
To:
THIS LICENSE AGREEMENT IS EFFECTIVE ON THE 6th day of April, 1995; by and
between Siemens Xxxxxxxxx-Xxxxxxx with offices at 000 Xxxxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxx ("SSC" or "Licensor") and STAR VENDING, INC. , WITH OFFICES AT 000 XXXXX
XXXXXX, XXXXX 000, XXXXX XXXXXXX, XXXXXXXXXX 00000
("Buyer" or "Licensee")
SOFTWARE LICENSEE AGREEMENT
Under this Agreement, Buyer (hereinafter referred to as "Licensee") will acquire
from Siemens Xxxxxxxxx-Xxxxxxx (hereinafter referred to as "Licensor") the
"Designated DCO" (defined below), which includes being furnished the "Software
Product" (defined below) and rights to use it in the operation of the Designated
DCO under the following terms and conditions.
1. In addition to definitions contained elsewhere herein, certain terms
shall have meanings as follows:
a. "Affiliated Corporation" means a subsidiary, parent, or sister
subsidiary either directly or indirectly controlling or
controlled by the party hereto or directly or indirectly
controlled by a common parent of the affiliate and the party.
b. "Derivative Work" means computer program instructions which
incorporate all or portions of a Software Product directly or
through linking and locating.
c. "Designated DCO" means the Digital Central Office system
equipment supplied to the Licensee by the Licensor for which the
site dependent data base questionnaire submitted by Licensee to
the Licensor is applicable.
d. "Generic Computer Program" means a software computer program in
which there subsides a set of computer instruction steps which
are generic to more than the specific version of the computer
program which is furnished under this license. (For the Software
Products furnished under a given license, only the applicable
computer program steps necessary to provide the licensed feature
are enabled.)
e. "Improvement/Enhancement" means any improvements or enhancements
to the Software Product, or to the composite hardware and
software design of the Designated DCO which includes an
improvement or enhancement to the Software Product.
f. "Improvements/Enhancements Grant-Back Rights" means royalty-free
worldwide, nonexclusive rights to make, have made, sell
(including disposition to an end-user) and use under copyrights
to software patents, copyrights to firmware and semiconductor
mask registration rights in and to Improvements/Enhancements,
with the right to sublicense to Affiliated Corporations (such
sublicense to survive any subsequent termination of the
affiliation).
g. "Software Product" means the software computer program, which is
tailored for use in the operation of the Designated DCO (in
accordance with the site dependent data base questionnaire
submitted by the Licensee to the Licensor) and which includes the
following materials:
(1.0) a set of machine readable computer program instructions recorded
on magnetic disks or other storage media; and;
(2.0) a source code listing of the data base portion of the computer
program instructions, augmented by the programmer's annotations;
and
(3.0) all releases, issues or short sequences of computer program
instruction modifications ("patches") furnished by the Licensor
to the Licensee as a replacement for or for the modification of
previously furnished materials; and
(4.0) all Derivative Works or modifications, by whomever made, of any
of the foregoing; and
(5.0) all copies of any of the foregoing, in whole or in part, by
whomever made.
2. In consideration of the right-to-use fee, stated in the Licensor's
invoice for the Designated DCO equipment, the Licensor grants under its
proprietary rights (including copyrights) and the Licensee accepts, in
accordance with the law of New York, an indivisible, nonexclusive and
nontransferable (except as provided in Section 2.m.) license in each
Software Product furnished hereunder to use the Software Product on the
Designated DCO subject to the following terms:
a. The Licensee Agrees:
(1.0) It shall limit its use of each Software Product solely to the
operation of the applicable Designated DCO and no other purpose;
and
(2.0) It shall limit its making of copies of the Software Product, in
whole or in part, to copies reasonably necessary for the
operation of the Designated DCO and shall make none other; and
(3.0) It shall reproduce all proprietary notices, including the
copyright notices of the Licensor, which appear on or are encoded
within the Software Product in the form or forms in which the
Software Product is received from the Licensor, upon all copies,
Derivative Works or other modifications which the Licensee shall
make; and
(4.0) The Software Product (physical materials, including all copies by
whomever made) shall be the property of the Licensor.
(5.0) The Licensee recognizes that the Software Product is a Generic
Computer Program, and shall not do, or cause to be done, anything
to activate any of the subsisting non-enabled computer
instruction steps therein. Further, the Licensor reserves to
itself the exclusive right to cause the subsiding non-enabled
program instruction steps to be activated (by the issuance under
this license of a version of Software Product having the
applicable additional computer instruction steps enabled)
pursuant to standard right-to-use software license upgrade Fees
or, in the absence of a standard upgrade _______________ to be
negotiated.
b. As an additional fee required hereunder for the Software Product,
the Licensee shall further pay to the Licensor any state or local
taxes, however designated, levied against and paid by the
Licensor, based upon this transaction, or based upon Licensor's,
or the Licensee's interests in the Software
34
Product, including sales, privilege, use, personal property or
intangible property taxes, exclusive, however, of taxes based
upon net income.
c. Notwithstanding any other provision hereof, in the event Licensor
develops improvements or enhancements to the Software Product
which represent significant "value added" to the Designated DCO
or which represent a significant improvement of performance of
the Designated DCO, the Licensor reserves the right to market the
improvement or enhancement as a separate offering (requiring
payment of an additional right-to-use fee, and which at the
Licensor's option may require the Licensee to execute a new
Software Product License).
d. The License hereby grants and agrees to grant to the Licensor, to
the extent it lawfully may, the Improvements/Enhancements
Grant-Back Rights related to any development whether made by the
Licensor, Licensee, or agents of the Licensee, of all or any
portion of any Software Product furnished hereunder pursuant to
any request or specifications by the Licensee for a design
different from Licensor's design, and regardless of whether or
not the Licensee has compensated the Licensor for its performance
of such development. Title to patents, copyrights, trade secrets
and mask registrations developed by Licensor pursuant to any
request or specifications by the Licensee and regardless of
whether the Licensee has compensated the Licensor for its
performance of such development shall vest in Licensor; Licensee,
however, is to get Improvements/Enhancements Grant-Back Rights.
e. The Licensee shall not merge any Software Product with other
software computer program materials to form a Derivative Work or
otherwise modify or alter a Software Product in any manner
whatsoever, unless prior thereto the Licensee shall execute a
written grant-back, in a form satisfactory to the Licensor,
granting to the Licensor the Improvements/Enhancements Grant-Back
Rights in and to the merged, modified or altered Software
Product. However, nothing in this subsection 2.e. shall be
interpreted or construed as entitling the Licensee to access to
the source code version of the Software Product, or to receive
any manner of support of the Licensee's efforts to merge, modify
or alter Software Product from Licensor.
f. The Licensee agrees that any communication or other disclosure of
information it makes to the Licensor related to a
request/specification for an improvement, enhancement, or
modification to Licensor's design of the Software Product shall
be made upon a nonconfidential basis without any manner of
restriction of the Licensor in its use or dissemination of
received information.
g. Five (5) year initial term; option for fifty (50) year extension
term; and requirement for notice:
(1.0) The term of this License shall be five (5) years from and after
the date of turnover to the Licensee of the Designated DCO; and
the Licensee's rights-to-use the Software Product and this
License shall terminate upon the expiration of such term, unless
the Licensee has exercised its option to acquire a license
extension term, pursuant to Subsection 2.g.(2.0), following.
(2.0) The Licensor hereby grants Licensee an option whereby in return
for the payment of the then current right-to-use renewal fee, the
Licensee shall acquire a paid-up license extension for a term of
fifty (50) years starting immediately upon expiration of the
initial five (5)-year term.
(3.0) The foregoing notwithstanding, the Licensee's failure to exercise
the foregoing option by the date of expiration of the initial
five (5) year term shall not bring about the termination of the
Licensee's rights-to-use the Software Product and termination of
this License, unless the Licensor has provided the Licensee with
six (6) months advanced written notice advising the Licensee of
such impending termination (See also Subsection 2.1, hereinafter,
pertaining to notices.)
h. Default Termination:
(1.0) The Licensor and the Licensee shall have the right to terminate
this License in the event of any default by the other party which
the defaulting party fails to correct within a period of sixty
(60) days after the receipt of notice thereof from the
non-defaulting party, or immediately and without notice in the
event that any bankruptcy, arrangement for the benefit of
creditors or insolvency proceedings are commenced by or against
the Licensee, or in the event of the appointment of an assignee
for the benefit of creditors or a receiver of the Licensee or its
properties.
(2.0) However in the event at the time the Licensor shall be entitled
to exercise the foregoing right, to immediately and without
notice terminate this License, such termination would cause
interruption of service to governmentally franchised telephone
common carrier subscribers, the Licensor agrees in good faith
(but with due regard to the protection of licenses interests), to
provide its best efforts to cooperate with the enfranchising
authority to avoid disruption of common carrier.
(3.0) No termination hereunder shall prejudice any of the
non-defaulting party's rights arising prior thereto, or shall
limit in any way the other remedies available to the
non-defaulting party.
i. Upon any expiration or other termination of this License, whether
within the initial five (5)-year term or within any fifty
(50)-year extension term, the Licensee shall, as instructed by
the Licensor, either return to the Licensor or destroy the
Software Product. The Licensee may, in its discretion, destroy
replaced releases, issues, or "patches" of the Software Product.
Upon expiration of the fifty year term of the license extension,
all title and rights of ownership in tangible materials in the
Software Product shall vest in the Licensee; and all use,
proprietary treatment or other types of restrictions which this
license imposes upon the Licensee in relation to such materials
shall terminate.
j. Should any obligation of either party under this License be found
illegal or unenforceable in any respect, such illegality or
unenforceability shall not affect any other provision of this
License, all of which shall remain enforceable in accordance with
their terms. Should any obligations of either party under this
License be found illegal or unenforceable by reason of being
excessive in extent or breadth with respect to duration, scope or
subject matter, such obligations shall be deemed and construed to
be reduced to the maximum duration, to the end that such
obligations shall be and remain enforceable to the maximum extent
allowable.
k. This License constitutes the entire understanding of the parties
hereto and supersedes all previous communications,
representations and understandings between the parties with
respect to the subject matter of this License.
l. Any notice or other communication required or permitted to be
made or given hereunder to either party hereto shall be
sufficiently made or given on the date of mailing if sent to such
party by certified mail, postage prepaid, addressed to it at its
address set forth in this Agreement.
m. Assignment:
(1.0) The Licensee's rights hereunder are assignable, but only as part
of a transaction in which ownership of the Designated DCO is also
transferred.
(2.0) It is agreed that as a condition to the exercise of the
Licensee's right to assign this License: the Licensee shall
obtain for the Licensor a written assignment by which the
assignee agrees to undertake all of the obligations of assignor
which identifies and incorporates by reference this License, and
intermediate assignments, prior to any physical
35
transfer or turnover of the Software Product to such assignee.
3. Patent of Copyright or Trademark Infringement
Licensor agrees, at its expense, to defend and indemnify Licensee in
any suit, claim or proceeding brought against Licensee alleging that
any Software Product licensed hereunder directly infringes any U.S.
Letters Patent, U.S. Copyright, or U.S. Trademark provided Licensor is
promptly notified, given assistance required, and permitted to direct
the defense. Further, Licensor agrees to pay any judgment based on
infringement rendered in such suit by final judgment of a court of last
resort, but Licensor shall have no liability for settlements or costs
incurred without its consent. Should the use of the Software Product by
Licensee be enjoined, or in the event that Licensor desires to minimize
its liability, hereunder, Licensor may fulfill its obligations
hereunder by either substituting noninfringing equivalent software, or
modifying the infringing Software Product or portion thereof so that it
no longer infringes but remains functionally equivalent, or obtain for
Licensee, at the expense of Licensor the right to continue use of such
Software Product, or if none of the foregoing is feasible, Licensor may
take back the Software Product and refund to Licensee the undepreciated
amount of any paid-up fee that has been paid to Licensor. The foregoing
states the entire liability of Licensor for patent, copyright or
trademark infringement or for any breach of warranty of
noninfringement, express or implied. The foregoing indemnity shall not
apply to any suit, claim or proceedings based upon allegations that a
process or method claim of a patient is infringed, nor to infringements
arising from modification of the Software Product by anyone other than
Licensor, nor to allegations of infringement based on the combination
of the Software Product with software or products supplied by Licensee
or others, nor to infringements arising from Software Products made to
the specification or design of Licensee; and Licensee agrees to
indemnify Licensor to an extent equivalent to that provided to the
Licensee hereinabove in the event any suit, claim, or proceedings is
brought against Licensor based upon any of the foregoing infringement
circumstances which are excluded from the Licensor's indemnification to
the Licensee.
4. Warranty and Disclaimer of Warranty
a. Licensor warrants that the Software Products other than the data
base portion of the Software Product covered by this Agreement
will, at the time of turnover, substantially conform to its
functional description in Licensor's technical proposal.
Licensor's sole obligation shall be to deliver any amendments or
alterations required to correct any such nonconforming Software
which is found to be defective within a period of one (1) year
after turnover and which significantly affects its performance.
b. Licensor warrants that the data base portion of the Software
Product covered by this license shall substantially conform to
the Licensee's executed data base questionnaire.
Licensor's sole obligation shall be to correct any nonconforming
data base which is found to be defective within a period of
ninety (90) days after turnover.
c. The foregoing warranties do not extend to:
(1.0) defects or nonconformities from any cause including but not
limited to abuse, acts of God, improper installation,
modifications, or maintenance (if performed by other than
Licensor), and other defects traceable to Licensee's acts or
omissions; or
(2.0) defects or nonconformities in software, firmware or data base
traceable to Licensee's errors, modifications or system changes.
d. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. BUYER FURTHER AGREES THAT LICENSOR WILL NOT BE LIABLE
FOR ANY LOSS OF DATA OR USE, LOST PROFITS OR REVENUE, OR FOR ANY
CLAIM OR DEMAND AGAINST BUYER BY ANY OTHER PARTY. IN NO EVENT
WILL LICENSOR BE LIABLE FOR CONSEQUENTIAL DAMAGES EVEN IF
LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
5. Limitation of Liability
a. LICENSOR SHALL NOT BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE AND FROM ANY CAUSE WHETHER
BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), INFRINGEMENT OF
STATUTORY PROPRIETARY RIGHTS INCLUDING PATENT, COPYRIGHT OR
TRADEMARK (EXCEPT AS EXPRESSLY PROVIDED IN SECTION 3. ABOVE), OR
ANY OTHER LEGAL THEORY, EVEN IF LICENSOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. LICENSEE FURTHER AGREES THAT
LICENSOR WILL NOT BE LIABLE FOR ANY LOSS OF DATA OR USE, LOST
PROFITS OR REVENUE, OR FOR ANY CLAIM OR DEMAND AGAINST LICENSEE
BY ANY OTHER PARTY.
b. LICENSEE ASSUMES SOLE RESPONSIBILITY FOR ENSURING THAT THE
BILLING CENTER CAN CORRECTLY READ CALL RECORDS. LICENSEE'S
RESPONSIBILITY INCLUDES READING DAILY THE AMA FRAME AND/OR
POLLING SYSTEM TAPE(S) BY THE BILLING SYSTEM COMPUTER TO ENSURE
ALL TICKET INFORMATION IS PRESENT. RISK OF LOSS FOR ANY DATA,
USE, REVENUE OR PROFIT ASSOCIATED THEREWITH PASSES TO LICENSEE
UPON CUTOVER OF ANY HARDWARE OR SOFTWARE.
WHEREFORE the parties hereto manifest their agreement to the terms and
conditions hereinabove, effective on the date first above written, by affixing
hereto the signatures of their respective authorized representatives
hereinbelow.
SIEMENS XXXXXXXXX-XXXXXXX STAR VENDING, INC.
Licensor _______________________
Licensee
By:_______________________________ By:_______________________________
(signature) (signature)
__________________________________ __________________________________
(name & title) (name & title)
Date:_____________________________ Date:_____________________________
SIEMENS
36
ASSIGNMENT OF PURCHASE ORDER
This Assignment between STAR VENDING, INC. ("Company") and
Telecommunications Finance Group ("Lessor")
WHEREAS, the Company and Lessor have, or will shortly, execute a Lease
Agreement ("Lease"); and
WHEREAS, the Company has executed and delivered a certain purchase
contract covering the property described therein (the "Equipment"), a copy of
which purchase contract is attached hereto as Attachment A ("Purchase Order");
and
WHEREAS, the Company desires to assign to Lessor all of its rights and
interests under the Purchase Order for that equipment listed on Schedule 1, as
amended from time to time, of Exhibit A of the Lease so that Lessor might
purchase and take title to such equipment in the Company's stead.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. This Assignment shall be effective as of the date the Company executes
Exhibit A entitled "Certificate of Delivery and Acceptance" of the Lease.
2. The Company (a) represents and warrants that the Purchase Order constitutes
the entire understanding of the parties thereto with respect to the purchase and
sale of the Equipment covered thereby; (b) hereby assigns to Lessor all of its
rights under the Purchase Order as to the equipment listed on Schedule 1, as
amended from time to time, of Exhibit A of the Lease; (c) hereby assigns to
Lessor and Lessor hereby assumes and agrees, so long as a Company complies with
the provisions of the Lease and otherwise performs its obligations under the
Purchase Order, to perform Company's obligation under the Purchase Order to pay
the price of the equipment listed on Schedule 1, as amended from time to time,
of Exhibit A of the Lease; and (d) represents and warrants that neither notice
to nor consent from the respective vendor is required in connection with the
execution, delivery and performance of this Assignment or for the validity or
enforceability of this Assignment.
3. Pursuant to this Assignment, the Company hereby agrees with Lessor that the
Company shall continue to be responsible for the performance of all obligations
under the Purchase Order, except for, subject to the condition provided in
Paragraph 1 above, the obligation to pay the price as provided in Paragraph 2
above, and the Company agrees to hold harmless and indemnify Lessor from all
liability, loss, damage, and expense arising from or directly or indirectly
attributable to such obligations.
IN WITNESS WHEREOF, the parties have duly executed this Assignment
under seal by their authorized representatives as of the date opposite their
respective signatures.
TELECOMMUNICATIONS FINANCE GROUP STAR VENDING, INC.
By: ____________________________ By:__________________________
________________________________ _____________________________
AUTHORIZED REPRESENTATIVE OF (Name & Title)
TELECOMMUNICATIONS FINANCE GROUP
Date signed:____________________ Date Signed:_________________
37
STAR VENDING, INC.
SITE: XXX XXXXXXX, XXXXXXXXXX #0
LEASE PAYMENTS
ADDENDUM TO LEASE AGREEMENT DATED April 6, 1995 BETWEEN
TELECOMMUNICAITONS FINANCE GROUP AND
STAR VENDING, INC.
EFFECTIVE OCTOBER 1, 1996 (60 MONTHLY LEASE PAYMENTS)
ORIGINAL VALUE OF EQUIPMENT $ 664,000.00
RATE FACTOR PER $1,000 $ 22.498
ORIGINAL MONTHLY LEASE PAYMENT $ 14,938.67
EFFECTIVE JANUARY 1, 1996 (57 MONTHLY LEASE PAYMENTS REMAINING)
ADDITION I $ 224,050.69
RATE FACTOR PER $1,000 $ 23.353
ADDITION I MONTHLY LEASE PAYMENT $ 5,232.26
TOTAL MONTHLY LEASE PAYMENT $ 20,170.93
============
TOTAL VALUE OF EQUIPMENT $ 888,050.69
------------
SUMMARY OF TOTAL LEASE PAYMENTS:
3 @ $14,938.67 = $ 44,816.01
57 @ $20,170.93 = $1,149,743.01
-- -------------
60 $1,194,559.02
ACCEPTED BY:_______________________
DATE:______________________________
38
(CERTIFICATE OF DELIVERY AND ACCEPTANCE)
EQUIPMENT DESCRIPTION
The items of personal property to be leased pursuant to this Lease Agreement,
dated as of April 6, 1995 between TELECOMMUNICATIONS FINANCE GROUP, as Lessor,
and STAR VENDING, INC., as Lessee, are described below and in the attached
equipment list(s):
Equipment List
--------------
Number Description Amount
------ ----------- ------
DCO-581065 A USED SIEMENS XXXXXXXXX-XXXXXXX DCO-CS EQUIPPED AND WIRED FOR 4608 $664,000.00
DIGITAL PORTS PER DCO-581065, ISSUE 1, DATED 02/10/95 WITH BASIC
RELEASE 14, CMF SPARES, AMA FRAME, SS7 W/ 3 ACCESS LINKS (WITH
BILLING SYSTEM) INCLUDING INSTALLATION
TFG-95073 ADDITION I 224,050.69
----- ----------
TOTAL $888,050.69
===========
The above described equipment installed at:
One Wilshire Building, 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000
BY:_______________________
DATE:_____________________
Dated: April 6, 1995
Revised: November 9, 1995
39
Alta Computer Corporation
140 Natoma, Suite 140 Date Invoice
Xxxxx Xxxxxxx, XX 00000
000 000-0000 FAX 962-742 26 Jun 95 6689
Xxxx To: Telecom Finance Group Ship To: TFG
000 Xxxxxxxx Xxxx c/o STAR Vending, Inc.
Xxxx Xxxx, XX 00000 000 Xxxxx Xxxxxx, Xxxxx 000
Attn: Mail Zone A-5 Santa Barbara, CA 93101
------------------------------------------------------------------------------------------------------------------------
PO Number Terms Rep Ship Date Ship Via F.O.B. Project
------------------------------------------------------------------------------------------------------------------------
TFG618 Due on receipt CRM 26 Jun 95 Best Way Santa Xxxxxxx Software
------------------------------------------------------------------------------------------------------------------------
Quantity Item Code Description Price Each Amount
------------------------------------------------------------------------------------------------------------------------
SOFTWARE
----------------
2 EICONOSIGN EICON OSI/PC Gateway for DOS & Windows P/N: 185.00 370.00
315-397
S/N: 0416972-2, 0417085-1
1 EICONDEVKT EICON x .25 Network Level Development Kit for 920.00 920.00
OS/2 P/N: 315603-7 S/N: GEIB528090696
1 CLOSEUP 60 Xxxxxx-Xxxxxx Close-Up Remote Dial-Up Software 145.00 145.00
Dual Pack v6.0 P/N: 272790
1 MCAFEENETS McAfee NetShield NLM Virus Monitor v2.0 25-user 375.00 375.00
P/N: 297464
Subtotal 1,810.00
-----------------------------------------------------------------------------------------------------------------------
Please remit to above address. TOTAL: 1,810.00
------------------------------------------------------------------------------------------------------------------------
BALANCE DUE: 1,810.00
------------------------------------------------------------------------------------------------------------------------
