EXHIBIT 10.6
LEASE
Dated as of October 22, 1996 Lease No. 322
LESSOR:
APPLIED TELECOMMUNICATIONS
TECHNOLOGIES, INC.
00 Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
LESSEE:
DATAWAVE SERVICES (US) INC.
0000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
COUNTY: CONTRA COS FEDERAL ID NO.: EIN 000000000, Nevada
ATTENTION: PHONE NO: 000-000-0000
1. DEFINITIONS AND RULES OF CONSTRUCTION. Unless the context shall
otherwise require, capitalized terms used herein, but not otherwise defined
herein, shall have the respective meanings specified in Section 20 hereof.
2. LEASE. (a) Lessee hereby agrees to lease from the Lessor, and
Lessor, by acceptance of this Lease and any applicable Rental Schedule, agrees
to lease to Lessee, the Equipment. Lessee agrees that it shall, pursuant to the
terms hereof, comply with all of the terms and conditions herein and in any such
Rental Schedule.
(b) This Lease is a Master Lease which sets forth the terms and
conditions that govern the lease by Lessor to Lessee of items of Equipment
specified on Rental Schedules executed and delivered by Lessor and Lessee from
time to time a form of which is attached hereto as Exhibit 1. Each Rental
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Schedule incorporates by reference this Lease and specifies the Term, the amount
of Interim Rent and Basic Rent, the Payment Dates on which such Interim Rent and
Basic Rent is due, and such other information and provisions as Lessor and
Lessee may agree. In the event of a conflict between the provisions of a Rental
Schedule and any of the provisions of this Lease, the provisions of the Rental
Schedule shall govern but only with respect to the leasing of the items of
Equipment listed on such Rental Schedule. References to "the Lease" or "this
Lease" shall mean one or more applicable Rental Schedules, as the case may be,
incorporating by reference this Master Lease. Each Rental Schedule constitutes a
separate and independent lease.
3. TERM AND RENT; OBLIGATIONS UNCONDITIONAL. (a) The Equipment is
leased for the Term, unless and until the Term of this Lease shall sooner
terminate pursuant to the terms hereof. The Term shall commence on the date of
acceptance of such Equipment as set forth on the applicable Rental Schedule and
shall expire at midnight on the date set forth on the applicable Rental Schedule
as the "Primary Term Expiration Date."
(b) Lessee shall pay to Lessor or an agent designated by Lessor or
any Transferee in writing, in lawful money of the United States of America, on
the Interim Term Commencement Date the Interim Rent and on each Basic Rent
Payment Date as fixed rent of the Equipment during the Term, the Basic Rent Per
Month, in each case by wire transfer to Lessor's account as set forth in each
Rental Schedule, or at such other address or to such other Person as Lessor,
from time to time, may designate in writing.
(c) Lessee shall also pay to Lessor or an agent designated by
Lessor or any Transferee in writing, in lawful money of the United States of
America, all Supplemental Rent. Supplemental Rent shall be paid when due or
within 30 days following Lessor's demand therefore if there is no due date
therefor. If Lessee shall fail to pay any Supplemental Rent, Lessor shall have
the right to pay the same and shall have all rights, powers and remedies for
reimbursement from Lessee with respect thereto as are provided herein
(including, without limitation, Section 14 and 15 hereof) or by Law in the case
of non-payment of Basic Rent. Lessee shall also pay to Lessor the Excess Use
Fee on all overdue Rent from the due date thereof until paid. Lessee shall
perform all of its obligations under this Lease at its sole cost and expense,
and shall pay all Rent when due, without further notice or demand.
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(d) This Lease is a net lease and Lessee acknowledges and agrees that
Lessee's obligation to pay all Rent and other sums payable hereunder, and the
rights of Lessor in and to such payments, shall be absolute and unconditional
and shall not be subject to any abatement, reduction, setoff, defense,
counterclaim or recoupment due to or alleged to be due to, or by reason of, any
past, present or future claims that Lessee may have against Lessor, any
Transferee, the manufacturer or Supplier of the Equipment or any Person for any
reason whatsoever.
(e) All Rent and other amounts payable under this Lease including all
amounts payable under Section 18 hereof shall be payable notwithstanding the
fact that an item of Equipment shall have suffered a Total Loss unless, pursuant
to the provisions of Section 13 hereof, Lessor shall have received the
Stipulated Loss Value with respect to any such item of Equipment.
4. PERSONAL PROPERTY; SECURITY INTEREST AND LIENS. Lessee covenants and
agrees that: (a) the Equipment is, and shall at all times be and remain,
personal or movable property. If requested by Lessor, Lessee shall obtain prior
to delivery of any item of Equipment or at any other time reasonable requested
by Lessor, a certificate in form satisfactory to lessor from all parties with a
real property interest in the premises where the Equipment may be located
waiving any claim with respect to the Equipment.
(b) During the Term of this Lease and until (i) Lessee acquires such
Equipment pursuant to Section 18 hereof or (ii) Lessee returns the Equipment to
Lessor in compliance with Section 16 hereof, Lessor shall retain title to such
Equipment; provided, however, that Lessee and Lessor acknowledge that
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transactions documented hereunder shall not constitute a "lease" or a "true
lease," and instead shall constitute a "lease intended as security, " or
"security interest," as the case may be, under Applicable Law (including under
Section 1-201 (37) of the UCC). In furtherance thereof, in order to secure the
prompt payment and performance as and when due of all of Lessee's obligations
hereunder, Lessee hereby grants to Lessor a first priority security interest in
the Equipment leased hereunder and all replacements, substitutions, accessions
thereto, and proceeds (cash and non-cash) thereof, including the proceeds of all
insurance policies on the Equipment. Lessee agrees that, with respect to the
Equipment, Lessor shall have all of the rights and remedies of a first priority
secured party under the UCC. Lessee may not dispose of any of the Equipment
except to the extent expressly provided herein.
(c) Lessee shall not directly or indirectly create, incur, assume
or suffer to exist any Lien on or with respect to any of the Equipment, title
thereto or any interest therein, except Permitted Liens. Lessee shall notify
Lessor immediately in writing upon receipt of notice of any Lien affecting the
Equipment in whole or in part, and shall, at its own cost and expense, defend
Lessor's title therein against all Persons holding or claiming to hold such a
Lien on the Equipment; and any losses, expenses or costs suffered by Lessor as a
result thereof shall be covered by the Lessee's indemnity in Section 17 hereof.
(d) Lessee shall not move any item of Equipment leased hereunder from
the address set forth in any applicable Rental Schedule without prior written
notice to Lessor; Lessee
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shall not move any item of Equipment outside of the United States of America
without the prior written consent of Lessor.
5. INSTALLATION, DEINSTALLATION, MAINTENANCE AND REPAIR. At all
times during the Term of this Lease, Lessee shall be solely responsible, at its
own expense, for the delivery, installation, maintenance, repair, use,
possession, operation, storage, deinstallation, and drayage of the Equipment by
a party reasonably acceptable to Lessor, and shall keep the Equipment in good
repair, condition and working order, and shall furnish any and all parts,
mechanisms and devices required to keep the Equipment in good repair, condition
and working order, all at the expense of Lessee. Lessee shall not make or
suffer to be made alterations to the Equipment which materially reduce its
value. All parts furnished and all additions made to and all substitutions and
replacements for the Equipment shall immediately upon the installation thereof
be deemed part of the Equipment and become the property of Lessor subject to the
terms of this Lease. At all times during the Term of this Lease, Lessee shall
maintain at its own cost and expense in effect a comprehensive maintenance and
servicing agreement with respect to each item of the Equipment with the
manufacturer or Supplier thereof or such other party as may be acceptable to
Lessor. Lessor shall be entitled to inspect the Equipment at the location
thereof during normal business hours.
6. USE. Lessee shall use the Equipment in a careful and proper manner
and shall comply with and conform to all Applicable Laws, insurance requirements
and the operating and maintenance instructions of the manufacturer or Supplier
thereof.
7. QUIET ENJOYMENT. So long as no Event of Default has occurred and is
continuing hereunder and subject to Section 6 hereof, Lessor warrants peaceful
and quiet use and enjoyment of the Equipment by Lessee against acts of Lessor.
8. ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY.
LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT: THE EQUIPMENT, AND THE RIGHTS, TITLE
AND INTEREST BEING CONVEYED HEREIN WITH RESPECT THERETO, ARE BEING CONVEYED AND
DELIVERED TO LESSEE "AS IS" AND "WHERE IS" WITHOUT ANY RECOURSE TO LESSOR AND
LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS, LIABILITY FOR, AND LESSEE HEREBY
WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES,
GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT THERETO,
EITHER EXPRESS OR IMPLIED OR ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING
(A) ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, REPRESENTATIONS OR
OBLIGATIONS OF, ARISING FROM OR IN (1) MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE, (2) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE
OF TRADE, (3) QUALITY OF WORKMANSHIP OR THE PROVISIONS OF ANY SUPPLY CONTRACT
WITH SUPPLIER OR (4) TORT (WHETHER OR NOT ARISING FROM THE ACTUAL, IMPLIED OR
IMPUTED NEGLIGENCE OF LESSOR OR STRICT LIABILITY) OR UNDER THE UCC OR OTHER
APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING TITLE THERETO (INCLUDING
ANY WARRANTY OF GOOD OR
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MARKETABLE TITLE OR FREEDOM FROM LIENS), FREEDOM FROM TRADEMARK, PATENT OR
COPYRIGHT INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT DISCOVERABLE),
CONDITIONS, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND
(B) ALL OBLIGATIONS, LIABILITY, RIGHTS AND REMEDIES, HOWSOEVER ARISING UNDER ANY
APPLICABLE LAW WITH RESPECT TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING FOR
LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY
OF LESSEE OR LESSOR TO ANY THIRD PARTY, OR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE USED IN SECTION 2-719(3) OF THE UCC, OR
OTHER APPLICABLE LAW); all such risks, as between Lessor and Lessee, are to be
borne by Lessee; Lessee acknowledges and agrees that the Equipment has been
selected by Lessee on the basis of its own judgment, and Lessee has not asked
for, been given or relied upon the skill or opinion of, or any statements,
representations, guaranties or warranties by, Lessor or its agents or
representatives in relation thereto. Lessee understands and acknowledges that
Lessor is not in the business of manufacturing, assembling or supplying
Equipment or otherwise in the business of being a vendor but is instead solely
providing financial accommodations, including lease financing. The Equipment is
not to be used, and is not being acquired hereby, for use in any respect for
Lessee's or any other Person's personal or family purposes and, as such, the
Equipment does not constitute "consumer goods" as such term is defined under
Applicable Law. Lessor's agreement to enter into this Lease is in reliance upon
the freedom from liability or responsibility for the matters waived and
disclaimed herein. THE PROVISIONS OF THIS SECTION 8 HAVE BEEN NEGOTIATED BY
LESSOR AND LESSEE AND EXCEPT FOR THE WARRANTY MADE BY LESSOR IN SECTION 7
HEREOF, ARE INTENDED TO CONSTITUTE A COMPLETE EXCLUSION AND NEGATION OF ANY
REPRESENTATIONS, GUARANTIES, OBLIGATIONS OR WARRANTIES OR LESSOR, EXPRESS OR
IMPLIED, WITH RESPECT TO THE EQUIPMENT AND THE RIGHTS, TITLE AND INTEREST BEING
CONVEYED HEREIN WITH RESPECT THERETO THAT MAY ARISE PURSUANT TO ANY APPLICABLE
LAW NOW OR HEREAFTER IN EFFECT. (LESSEE'S INITIALS /s/ ).
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(b) Lessee agrees that the only representations, warranties,
guaranties or indemnities made with respect to the Equipment are those made by
the Supplier thereof. Lessor and Lessee furthermore understand and agree that
the Equipment shall at all times constitute personal property and not fixtures.
Provided that no Default or Event of Default has occurred and is continuing
hereunder, Lessor: (i) shall cooperate fully with Lessee with respect to the
resolution of any claims by Lessee against Supplier with respect to an item of
Equipment, in good faith and by appropriate proceedings at Lessee's expense,
(ii) subject to the initial proviso of this sentence, hereby assigns to Lessee,
for and during the Term of this Lease, any applicable warranties, indemnities or
other rights under any Supply Contracts (excluding any refunds or other similar
payments reflecting a decrease in the value of any such Equipment, which amount
shall be received by and paid to Lessor, and applied by Lessor to reduce
Lessee's obligations to pay Rent for such Equipment), and (iii) hereby
authorizes Lessee to obtain all services, warranties or amounts from the
Supplier of such Equipment to be used to repair such Equipment (and such amounts
shall be used by Lessee to repair such Equipment). Lessee understands,
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acknowledges and agrees that neither Supplier nor its salesmen or agents is an
agent of Lessor or authorized to waive, alter or add to any provision of this
Lease.
9. REPRESENTATION AND WARRANTIES. Lessee represents and warrants for the
benefit of Lessor as of the date of acceptance of any item of Equipment for
lease under this Lease:
(a) Lessee is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and is
duly qualified to do business and is in good standing in the jurisdiction(s) and
in every jurisdiction where the failure to so qualify would materially and
adversely affect Lessee; Lessee has adequate corporate power and authority to
enter into and perform this Lease.
(b) This Lease has been duly authorized, executed and delivered by
Lessee and constitutes a valid, legal and binding agreement of Lessee
enforceable in accordance with its terms.
(c) The entering into and performance of this Lease by Lessee shall
not violate any Applicable Law or any provision of Lessee's charter or bylaws or
result in any breach of, or constitute a default under, or result in the
creation of any Lien upon any assets of Lessee leased hereunder or on the
Equipment pursuant to any instrument or Applicable Law to which Lessee is a
party or by which it or its assets may be bound.
(d) There are no pending or threatened actions or proceedings to
which Lessee is a party, or otherwise affecting Lessee, before any Government
Authority, which if determined against Lessee, either individually or in the
aggregate, would adversely affect the financial condition of Lessee, or the
ability of Lessee to perform its obligations under, or comply with the terms of,
the Lease Documents.
(e) Lessee is not in default under any obligation for the payment of
borrowed money, for the deferred purchase price of property or for the payment
of any rent under any lease agreement which, either individually or in the
aggregate, would adversely affect the financial condition of Lessee, or the
ability of Lessee to perform its obligations under, or comply with the terms of,
the Lease Documents.
(f) No consent, approval or other authorization of or by any
Governmental Authority is required in connection with the consummation by Lessee
of the transactions contemplated by, this Lease.
(g) With respect to the Equipment, under the Applicable Law of the
state(s) in which such Equipment is to be located, such Equipment consists
solely of personal property and not fixtures.
(h) The financial statements of Lessee that have been provided to
Lessor have been prepared in accordance with GAAP, and fairly present Lessee's
financial condition and the
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results of its operations as of the date of and for the period covered by such
statements, and since the date of such statements there has been no material
adverse change in such conditions or operations.
(i) The address of Lessee as set forth on the cover page hereof is
the chief place of business and chief executive office (which terms shall have
the meanings ascribed therefor in Article 9 of the UCC) of Lessee; and Lessee
does not conduct business under any trade, assumed or fictitious name.
(j) With respect to the Equipment, no filing, recordation or
registration of any Financing Statement or other document or instrument was or
is necessary in order to cause Lessor to have good, valid and enforceable title
with respect thereto.
(k) For purposes of federal, state and local income tax laws; (i)
Lessee (and not Lessor or an Transferee) will be treated as the owner of the
Equipment; and (ii) all payments made by Lessee to Lessor or any Transferee will
constitute returns of capital and/or payments for the use or forbearance of
money.
(l) Lessee has obtained all Permits necessary to possess and use the
Equipment in compliance with and as contemplated by this Lease.
(m) If requested by Lessor, Lessee shall provide an opinion of
counsel and other supporting documents with respect to the matters set forth
above in this Section 9 and with respect to such other legal matters as Lessor
may reasonably request and as related to the purposes of this Lease.
10. COVENANTS OF LESSEE. Lessee covenants and agrees as follows:
(a) Lessee shall furnish Lessor (i) within one hundred twenty (120)
days after the end of each fiscal year of Lessee, a balance sheet of Lessee as
at the end of such year, and the related statements of income and retained
earnings and cash flows of Lessee for such fiscal year, prepared in accordance
with GAAP, all in reasonable detain and certified by independent certified
public accountants of recognized standing selected by Lessee; (ii) within
thirty (30) days after the end of each quarter of Lessee's fiscal year a balance
sheet of Lessee as at the end of such quarter, and the related statement of
income and retained earnings and cash flows of Lessee for such quarter, prepared
in accordance with GAAP. Lessee may discharge its obligations under this
Section 10(a) by furnishing to Lessor within thirty (30) days after the date on
which they are filed, all regular periodic reports, forms and other filings
required to be made by Lessee and including its financial statements to any
governmental agency or instrumentality under Applicable Law.
(b) Upon Lessor's request, Lessee shall promptly execute and deliver
to Lessor consents to assignment, certificates of no default and such further
documents, instruments and assurances reasonably requested by Lessor to
establish and protect its rights in the Equipment and to assure that this Lease
remains in full force and effect.
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(c) Lessee shall provide written notice to Lessor: (i) within
thirty (30) days prior to any change in the name or address of Lessee; (ii)
promptly upon the occurrence of any Default or Event of Default; (iii) of the
commencement of proceedings under Federal bankruptcy laws, those of Canada or
any Province thereof, or any other insolvency laws (as now or hereafter in
effect ) involving Lessee or any Person (other than as the Lessor) holding an
interest in the Equipment or related property as the debtor; (iv) promptly upon
Lessee becoming aware of (1) any alleged material violation of Applicable Law,
or (2) any threatened or actual suspension, revocation or rescission of any
Permit necessary for Lessee to be in compliance with the terms hereof; and (v)
promptly after any of the Equipment becomes lost, stolen, destroyed, materially
damaged or worn out.
(d) Lessee shall not attach or incorporate the Equipment to or in any
other item of equipment or any realty in such a manner that the Equipment may be
deemed to have become an accession to or a part of such other item of equipment
or realty.
(e) Lessee shall cause each principal item of the Equipment to be
marked at all times, in a plain, distinct and legible manner, with the name of
Lessor or its designee followed by the words "Lessor and Secured Party," or
other appropriate words designated by Lessor on labels furnished by Lessor.
(f) Lessee will not take any action or suffer any omission that is
inconsistent with the representations and warranties of Lessee set forth in
Section 9(k), and will (i) refrain from withholding, from payments made by
Lessee to Lessor or any Transferee under any Lease Document, any Federal income
tax under any section of the Code (including, without limitation, Section 1442)
provided that Lessee receives from any Transferee that is a foreign corporation
(and from Lessor, if Lessor is a foreign corporation) the statement described in
Section 881( c ) (2)(B)(ii) of the Code, and (ii) timely file all required
information and other returns required under Federal income tax regulations
implementing and interpreting Section 881 ( c ) of the Code.
11. ASSIGNMENT AND TRANSFER. (a) WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR, LESSEE SHALL NOT ASSIGN ANY OF ITS RIGHTS NOR DELEGATE ANY OF ITS
OBLIGATIONS HEREUNDER, SUBLEASE THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT
TO BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANY
PERSON BUT LESSEE, provided, however, so long as no Event of Default has
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occurred and is continuing, Lessee may assign its rights and obligations
hereunder to a corporation wholly owned by it or Guarantor. No assignment or
sublease, whether authorized in this Section 11 or in violation of the terms
hereof, shall relieve Lessee of its obligations hereunder and Lessee shall
remain primarily liable hereunder.
(b) Lessor may transfer its rights, obligations, title and/or
interest in the Equipment and this Lease to one or more Transferees as
collateral security or otherwise. Lessee hereby acknowledges and agrees that in
the event Lessor or such other Transferee has transferred its interest herein
(i) no Transferee(s) shall be obligated to perform any duty, covenant or
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condition required to be performed by lessor under the terms of this Lease and
(ii) all notices or other communications shall be given to, and made by, Lessor
or its designee.
(c) Upon written notice from Lessor of a Transfer of an interest
herein, Lessee shall promptly record such Transfer in its books and records,
including the name(s) and address(es) of the Transferee (s) and Lessee agrees to
deliver all consents, certificates, opinions of counsel and other documents
Lessor may reasonably request in connection with such Transfer. Lessee
acknowledges and agrees that (i) its failure to record such Transfer within
thirty (30) days after delivery of such notice shall be an Event of Default
pursuant to Section 16 (a) (ii) hereof and (ii) Lessor's obligations to any
Transferee (s) may be secured by Lessor's interest in the Lease and the
Equipment.
(d) PROVIDED TRANSFEREE IS NOT IN VIOLATION OF ITS OBLIGATIONS UNDER
SECTION 7 HEREOF, LESSEE HEREBY WAIVES AS AGAINST ANY SUCH TRANSFEREE (S) OF
LESSOR, ITS SUCCESSORS AND ASSIGNS, ANY CLAIM OR DEFENSE THAT LESSEE MAY NOW OR
HEREAFTER HAVE AS AGAINST LESSOR, WHETHER FOR BREACH OF THIS LEASE, BREACH OF
WARRANTY OR OTHERWISE.
12. INSURANCE. At all times during the Term of this Lease, Lessee, at its
own expense, shall maintain insurance on each item of Equipment against all
risks and in such amounts as Lessor shall reasonable require (but not less than
the then Stipulated Loss Value of such item with carriers acceptable to Lessor,
and shall maintain a loss payable endorsement in favor of Lessor and its
successors and assigns affording to Lessor and its successors and assigns such
additional protection as Lessor and its successors and assignees shall
reasonably require (such as a breach of Lessee's warranty clause), and Lessee
shall maintain public liability and property damage insurance with respect to
each item of Equipment in amounts satisfactory to Lessor for both personal and
property damage. Lessee shall be liable for any deductibles contained in such
insurance policies. All such insurance policies shall name Lessor and its
successors and Transferees as insureds and shall provide that all amounts
payable by reason of loss, theft or damage to the Equipment shall be payable
only to lessor or its designees and that such policies may not be canceled or
altered without at least thirty (30) days' prior written notice to lessor or its
successors and Transferees. Lessee shall furnish Lessor with certificates or
other satisfactory evidence of the maintenance of the insurance required
hereunder not less frequently than annually on the anniversary of the Lease.
13. LOSE AND DAMAGE. Lessee hereby assumes and shall bear the entire
risk of loss, damage, theft or destruction, partial or complete, whether or not
insured against, of the Equipment from any and every cause whatsoever from the
date of delivery of the Equipment to Lessee. No loss, damage, theft or
destruction of the Equipment or any part thereof shall relieve Lessee of any
obligation under this Lease, which shall continue in full force and effect. In
the event that an item of Equipment shall become subject to Total Loss, Lessee
shall inform Lessor in writing in regard thereto within ten (10) days after such
Total Loss and Lessee shall pay to Lessor, in cash, an amount equal to the then
Stipulated Loss Value thereof; provided, however, that such amount shall be
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reduced if and to the extent that Lessor or any Transferee has received proceeds
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from the insurance required to be maintained by Lessee pursuant to Section 12
hereof as a result of such Total Loss, and Lessor agrees that if such insurance
proceeds are paid to Lessor after Lessee has paid the Stipulated Loss Value in
full, Lessor shall within ten (10) days thereafter reimburse to Lessee the
proceeds thereof, such reimbursement not to exceed the Stipulated Loss Value
amount paid by Lessee related to such Total Loss. Where a single amount for the
payment of Basic Rent is set forth on an applicable Rental Schedule for more
than one item of Equipment, and less than all such items are subject to a Total
Loss, such Basic Rent due thereafter shall be apportioned among such items in
accordance with their portion of the Total Equipment Cost on such Rental
Schedule, and the Stipulated Loss Value payable shall be equal on a percentage
basis to such apportioned Basic Rent. Upon such payment of the Stipulated Loss
Value for any item(s) leased hereunder, this Lease shall terminate with respect
to such item(s) and Basic Rent shall thereafter xxxxx proportionately.
14. TAXES AND FEES. (a) Lessee shall file any necessary reports and
returns for, shall pay promptly when due, shall otherwise be liable to reimburse
Lessor for, and agrees to indemnify and hold Lessor harmless from, all
impositions.
(b) If any report, return or property listing relating to any
Imposition is, by Law, required to be filed by, assessed or billed to or paid
by, Lessor, Lessee shall do all things required to be done by Lessor (to the
extent permitted by Law) in connection therewith and is hereby authorized by
Lessor to act on behalf of Lessor in all respects in relation thereto, including
the contest or protest, in good faith and by appropriate proceedings, of the
validity of any Imposition, or the amount thereof; provided, however, that
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Lessor hereby unconditionally reserves the right to revoke such authorization
and such revocation shall not affect Lessee's indemnity or other obligations
under this Lease, including, without limitation, this Section 14 and Section 17
hereof. Lessor agrees fully to cooperate with Lessee in any such contest, and
Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred
by Lessor in the course of such cooperation. An Imposition or claim therefor
shall be paid by Lessee, subject to refund proceedings, if failure to pay would
adversely affect the title or rights of Lessor in the Equipment or otherwise
hereunder. Provided that no Default or Event of Default has occurred and is
then continuing, if Lessor obtains a refund of any Imposition that has been paid
(by Lessee, or by Lessor and for which Lessor has been fully reimbursed by
Lessee), Lessor shall promptly pay to Lessee the amount of such refund actually
received. Lessee shall cause all xxxxxxxx of such charges to Lessor to be made
to Lessor in care of Lessee and shall, in preparing any report or return
required by Law, show the ownership of the Equipment in Lessor, and shall send a
copy of any such report or return to Lessor. If Lessee fails to pay any such
charges when due, except any Imposition being contested in good faith and by
appropriate proceedings (as above provided) for a reasonable period of time,
Lessor at its option may do so pursuant to Section 15, in which event the amount
so paid shall be payable by Lessee as Supplemental Rent as provided in Section
15.
(c) The provisions of this Section 14 shall not apply to any
Impositions (i) that Lessee is contesting in good faith, by appropriate
proceedings and as otherwise permitted pursuant to the provisions of this Lease
until the conclusion of such contest; except that Lessee's right to contest any
Imposition is conditioned upon the existence of such Imposition during any
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such contest not causing any material danger, as determined by Lessor in its
reasonable discretion, of the sale, forfeiture or loss of the Equipment.
15. LESSEE'S FAILURE TO PAY TAXES, INSURANCE, ETC. Should Lessee fail to
make any tax, insurance or other payment or do any act required to be performed
by Lessee as herein provided, Lessor shall have the right, but not the
obligation and without releasing Lessee from any obligation hereunder, to make
or do the same, and to pay, purchase, contest or compromise any Imposition that
in the judgment of Lessor affects the Equipment, and, in exercising any such
rights, incur any liability and expend whatever amounts in its reasonable
discretion Lessor may deem necessary therefor. All sums so incurred or expended
by Lessor (including any penalty incurred as a result of Lessee's failure to
perform such obligation or make such payment) shall be due and payable by Lessee
within 30 days of Lessor's demand therefor and shall be payable as Supplemental
Rent.
16. DEFAULT AND REMEDIES. (a) The occurrences of any of the following
events shall constitute an Event of Default hereunder, and shall permit Lessor
to exercise the remedies provided in Section 16(b) below, including the
termination of Lessee's right to possession of the Equipment:
(i) The non-payment when due of any installment of Rent or any other sum
required hereunder to be paid by Lessee;
(ii) The failure by Lessee to perform any other term, obligation, covenant
or condition of this Lease that is not cured within ten (10) days
after such failure;
(iii) The subjection of a substantial part of Lessee's property or any part
of the Equipment to any Lien other than Permitted Lien;
(iv) Lessee shall be in default under the terms of any contract with any
Person requiring the payment of money by Lessee in an amount greater
than $10,000;
(v) In the event that (A) Lessee shall (1) authorize or agree to the
commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency, corporation, receivership
or other similar Law now or hereafter in effect that authorized the
reorganization or liquidation of such party or its debt or the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, (2)
make a general assignment for the benefit of its creditors, (3) fail
generally or admit in writing its inability to pay its debts as they
become due, (4) take any corporate action to authorize any of the
foregoing or (5) have an involuntary or other proceeding commenced
against it seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar Law now or hereafter in effect, and such involuntary case or
other proceeding shall remain undismissed and
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unstayed for a period exceeding 60 days; or (B) an order for relief
pursuant to such applicable debtor/creditor law shall have been
entered against Lessee.
(vi) If any representation or warranty made by Lessee herein, or made by
Lessee in any statement or certificate furnished by the Lessee in
connection with the execution of this Lease or the delivery of any
items of Equipment hereunder or furnished by the Lessee pursuant
hereto, proves untrue in any material respect as of the date of the
issuance or making thereof;
(vii) The issuance of any writ or order of attachment or execution or other
legal process against any Equipment which is not discharged or
satisfied within fifteen (15) days;
(viii) The occurrence of any event or condition described in subsections
(iii), (iv), (v) or (vi) hereof with respect to any guarantor or any
other party liable, in whole or in part, for performance of any of
Lessee's obligations under this Lease.
(b) Upon the happening of any of the above Events of Default, Lessor
may declare this Lease in Default. Such declaration shall be by written notice
to Lessee and if so stated in such notice shall apply to all Equipment leased
hereunder. Lessee hereby authorizes Lessor at any time thereafter to enter with
or without legal process any premises where the Equipment may be and take
possession thereof. Lessee shall, without further demand, forthwith pay to
lessor an amount that is equal to any unpaid Rent due on or before Lessor has
declared this Lease to be in Default plus, as liquidated damages for loss of a
bargain and not as a penalty, an amount equal to the Stipulated Loss Value of
the Equipment on the date the Lessor shall declare this Lease in Default (in
each case together with any Excess Use Fee measured from the date the Lease is
declared to be in Default to the date payment is received by Lessor). After
Default, as and to the extent requested by Lessor, Lessee shall return the
Equipment to Lessor in good repair, condition and working order, ordinary wear
and tear resulting from permitted use thereof under the terms of this Lease
alone excepted, to a location within or outside of the continental United States
of America specified by Lessor. Such Equipment shall be carefully crated and
shipped, freight, drayage and re-assembly costs prepaid and properly insured, by
Lessee, and Lessee shall bear all risk of loss until the Equipment is delivered
to Lessor or its designee. Lessor shall be entitled to sell the Equipment at
private or public sale within or without the United States of America, in bulk
or in parcels with or without notice, without having the Equipment present at
the place of sale, with the privilege of becoming the purchase thereof; and
Lessor shall be entitled to lease, otherwise dispose of or keep idle all or any
part of the Equipment, and Lessor may use Lessee's premises for any or all of
the foregoing without liability for rent, costs, damages or otherwise. Lessor
shall also be entitled to draw on any letter of credit or take any deposit, in
either case theretofore provided by Lessee to secure its obligations hereunder.
The proceeds of sale, lease or other disposition of the Equipment, if any, or
the proceeds of any letter of credit or deposit, if any, shall be applied (1) to
all of Lessor's costs, charges and expenses incurred in taking, removing,
holding, repairing and selling, leasing or otherwise disposing of the Equipment
(including, without limitation, reasonable attorneys' fees, costs and
disbursements); then, (2) to the extent not previously paid by Lessee, to pay
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Lessor the Stipulated Loss Value for the Equipment as set forth above and all
other sums then payable by Lessee hereunder, including any unpaid Rent; then,
(3) any remaining amounts shall be paid to Lessee. Lessee shall pay any
deficiency for amounts described in clauses (1) and (2) above forthwith. The
exercise of any of the foregoing remedies by Lessor shall not constitute a
termination of this Lease unless Lessor so notifies Lessee in writing.
No remedy referred to in this Section 16 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to above
or otherwise available to Lessor at law or in equity.
17. INDEMNITY. Lessee agrees to indemnify, defend, and hold harmless,
Lessor, and any Transferee and their respective officers, directors, partners,
agents and employees, from and against any and all Claims (other than such as
may directly and proximately result from the gross negligence or willful
misconduct of Lessor, and Transferee or their respective, agents or employees),
by paying (on an after-tax basis) or otherwise discharging same, when any such
Claims shall become due, including, without limitation, Claims arising on
account of (a) this Lease or any other Lease Documents, or (b) the Equipment, or
any item or part thereof, including, without limitation, the selection,
ordering, acquisition, delivery, installation, return, rejection, abandonment or
other disposition of any item of Equipment, the possession, maintenance,
leasing, use, condition, ownership, operation or control of any item of
Equipment by whosoever owned, used or operated during the Term of this Lease or
the existence of latent and other defects (whether or not discoverable or
discovered by Lessor or Lessee). Lessor shall give Lessee prompt notice of any
Claim or liability hereby indemnified against and Lessee shall be entitled to
control the defense thereof.
18. PURCHASE AND SALE OPTIONS. At the expiration of the Primary Term,
Lessee may, and upon written notice Lessor shall have the unqualified right to
require Lessee to purchase all of the Equipment from Lessor for a sales price
equal to 7.5% of the Total Equipment Cost set forth on the Rental Schedule in
question. Upon such payment in full in cash and payment of any other amounts
then due hereunder (including the costs and expenses of Lessor, if any, and
applicable Impositions, if any, in connection with such sale or transfer),
Lessor will transfer to Lessee, without recourse or warranty and on a "WHERE IS,
AS IS" basis, all of Lessor's right, title and interest in and to the Equipment
by delivery of a duly executed xxxx of sale. If Lessee fails to pay such
purchase price and such other amounts then due hereunder, Lessor may, without
prejudice to its rights under Section 16 hereof, abandon such Equipment where
such Equipment is located without liability of any kind to Lessee.
19. MISCELLANEOUS. (a) Any notice required or permitted to be given by
the provisions hereof shall be conclusively deemed to have been received by a
party hereto on the day it is delivered by hand or by facsimile transmission to
such party at the address as set forth on the cover page hereof (or at such
other address as such party shall specify to the other party in writing) or, if
sent by registered or certified mail, on the date on which mailed, addressed to
such party at the address set forth above, postage prepaid.
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(b) No delay or omission to exercise any right or remedy accruing to
Lessor upon any breach or default of Lessee shall impair any such right to
remedy or be construed to be a waiver of any such breach or default; nor shall
any waiver of any single breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval on the part of Lessor of any breach or
default under this Lease or, of any provision or condition hereof, must be in
writing and shall be effective only to the extent in such writing specifically
set forth. All remedies, either under this Lease or by Law or otherwise
afforded to Lessor, shall be cumulative and not exclusive.
(c) Lessee agrees to reimburse Lessor on demand for any and all
costs and expenses incurred by Lessor in enforcing its rights hereunder,
including without limitation, reasonable attorneys' fees and costs of
repossession, storage, insuring , releasing and selling of all Equipment
together with the Excess Use Fee with respect to all such amounts from Lessor's
payment thereof until its receipt of reimbursement from Lessee.
(d) The obligations of Lessor hereunder shall be suspended to the
extent that it is hindered or prevented from complying therewith because of
labor disturbances, including strikes and lockouts, acts of God, fires, storms,
accidents, failure of the manufacturer or Supplier to deliver any item of
Equipment, commercial frustration, Laws or interference of any cause whatsoever
not within the sole control of Lessor.
(e) THIS AGREEMENT MAY NOT BE TERMINATED EXCEPT AS EXPRESSLY PROVIDED
HEREIN. This Lease may be modified only by a written agreement duly signed by
Persons authorized to sign agreements on behalf of Lessor and Lessee, and any
variance from the terms and conditions of this Lease in any order or other
notification form Lessee, written or oral, shall be of no effect. LESSEE
ACKNOWLEDGES THAT IT HAS READ THIS LEASE, UNDERSTANDS IT, AND AGREES TO BE BOUND
BY ITS TERMS AND CONDITIONS. FURTHER, LESSEE AGREES THAT THIS LEASE IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE LEASE BETWEEN THE PARTIES, WHICH
SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN,
AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
OF THIS LEASE.
(f) 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 its successors and permitted assigns.
(g) The headings of the sections hereof 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.
(h) THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. LESSOR AND LESSEE HEREBY
IRREVOCABLY SUBMIT TO THE
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NON-EXCLUSIVE JURISDICTION OF THE MASSACHUSETTS STATE AND FEDERAL COURTS LOCATED
IN MIDDLESEX COUNTY, MASSACHUSETTS, FOR ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THE OVERALL TRANSACTION EVIDENCED BY THE LEASE DOCUMENTS, LESSOR
AND LESSEE HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDINGS MAY BE HEARD AND DETERMINED IN SUCH MASSACHUSETTS STATE
COURTS, OR TO THE EXTENT PERMITTED BY LAW, SUCH FEDERAL COURTS. LESSOR AND
LESSEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO
SO, THE DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR
PROCEEDING, LESSOR AND LESSEE HEREBY WAIVE ANY RIGHTS EITHER OF THEM MAY HAVE TO
A TRIAL BY JURY IN ACTIONS OR PROCEEDINGS BROUGHT IN RESPECT OF THE LEASE
DOCUMENTS.
(i) Should any Section or any part of a Section within this Lease be
rendered void, invalid or unenforceable by any court or Law for any reason, such
invalidity or unenforceability shall not void or render invalid or unenforceable
any other Section or part of a Section in this Lease.
(j) Lessee agrees to execute such documents and take such further
actions as Lessor may reasonably request in order to assure Lessor the full
benefit of the rights granted Lessor hereunder.
20. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following terms when
capitalized as below, have the following meanings:
"Amortization Expense": that portion of Basic Rent applied to the
amortization over the Term of the invoice cost to the Lessor of the Equipment as
set forth on Schedule C to each rental Schedule for each payment of Basic Rent.
----------
"Applicable Law": any Law that may apply to (i) Lessee or its properties
and operations, (ii) the operations, modification, maintenance, ownership,
leasing or use of the Equipment, or (iii) any transaction contemplated under any
Lease Document, including in each case any environmental Law, federal or state
securities Law, commercial Law (pertaining to the rights and obligations of
sellers, purchasers, debtors, secured parties, or to any other pertinent
matter), zoning, sanitation, sitting or building Law, energy, occupational
safety and health practices Law or the Employee Retirement Income Security Act
of 1974, as amended, and any regulations promulgated thereunder.
"Basic Rent": the rental installments due from Lessee pursuant to Section
3(b) hereof for the Primary Term in the amounts and on the dates as provided in
the applicable Rental Schedule.
"Basic Rent Per Day": one thirtieth (1/30/th/) of the Basic Rent Per
Month.
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"Basic Rent Payment Date: as set forth in a Rental Schedule with respect
to the items of Equipment set forth therein.
"Basic Rent Per Month": as set forth on a Rental Schedule with respect to
the items of Equipment set forth therein.
"Business Day": any day, other than a Saturday, Sunday or legal holiday
for commercial banks under the laws of the Commonwealth of Massachusetts (or
such other jurisdictions in the United States as Lessor specifies to Lessee by
at least thirty (30) days' prior written notice).
"Capitalized Lessor's Cost": the amount specified in the Rental Schedule
under the heading "Capitalized Lessor's Cost" which shall equal the Total
Equipment Cost set forth therein unless otherwise specified.
"Claims": as set forth in Section 17 of the Lease.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Commencement Date": shall mean the date of the commencement of the
Interim Term or Primary Term, as the case may be, as set forth on the Rental
Schedule.
"Default": except when inconsistent with the context of any provision
hereof, an event that, but for the lapse of time or the giving of notice or
both, would constitute an Event of Default.
"Dollars or $": United States of America dollars.
"Equipment": with respect to each Rental Schedule, the property described
therein, together with all appliances, parts, instruments, accessories and
furnishings that are from time to time incorporated in the Equipment, or having
been so incorporated, are later removed therefrom, unless title thereto is
expressly released by Lessor, and all replacements of, and additions,
improvements and accessions to any and all of the foregoing, and all books,
records, maintenance logs and general intangibles (including all patents,
copyrights and trade secrets) relating thereto; and, when used in the context of
Lessor's title to the Equipment (whether relating to the creation, grant,
perfection, release, priority, enforcement or application of proceeds thereof),
shall also include all other property in which Lessor is granted a security
interest hereunder or under the Rental Schedule.
"Event of Default": any event of default as specified in Section 16(a) of
the Lease.
"Excess Use Fee": the fee payable by Lessee for the continued use or
possession of the Equipment by the Lessee, which is payable if Lessee has not
paid Rent when due and which shall equal 1-1/2% per month, or the highest rate
permitted by law, whichever is lower, on all overdue Rent from the due date
thereof until paid.
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"Federal": shall mean the Federal government of the United States of
America.
"Financing Statement": a Uniform Commercial Code financing statement on
Form UCC-1 pursuant to the UCC.
"Fixture Filing Office": as set forth in Schedule B to each Rental
----------
Schedule.
"GAAP": generally accepted accounting principles, applied consistently.
"Guarantor": means Data Wave Vending, Inc., a British Colombian
corporation.
"Guaranty": that certain Guaranty dated as of October 22, 1996 pursuant to
which Guarantor is guaranteeing the obligations of Lessee hereunder.
"Governmental Authority": any federal, state, provincial, county,
municipal, regional or other governmental authority, agency board, body,
instrumentality or court, in each case of the United States of America, Canada
or some other country.
"Imposition": any title, recordation, documentary stamp or other fees,
taxes, assessments, charges or withholdings of any nature (together with any
penalties or fines thereon) arising at any time upon or relating to the
Equipment or to the Lease, or the delivery, acquisition, ownership, use,
operation, leasing or other disposition of such Equipment or upon the Rent
payable thereunder, whether the same be assessed to Lessor (or any Transferee)
or Lessee.
"Interim Term": the period from the Interim Term Commencement Date but not
including the Primary Term Commencement Date.
"Interim Term Rent": as set forth in a Rental Schedule.
"Interim Term Commencement Date": the date on which Lessee accepts the
Equipment as set forth in a Rental Schedule.
"Law": any law, rule, regulation, ordinance, order, code, common law,
interpretation, judgment, directive, decree, treaty, injunction, writ,
determination, Permit or similar norm or decision of any Governmental Authority.
"Lease": this Master Equipment Lease Agreement as incorporated by
reference by an applicable Rental Schedule.
"Lease Documents": collectively, the Lease, the Rental Schedule (s) and
any and all instruments, documents, certificates and agreements delivered
pursuant hereto.
"Lessee": Data Wave Services (US), Inc., a Nevada corporation, its
successors and permitted assigns.
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"Lessor": Applied Telecommunications Technologies, Inc., a Delaware
corporation, its successors and assigns.
"Lessor's Cost": with respect to each item of the Equipment set forth on a
Rental Schedule, the amount specified as such thereon.
"Lien": any mortgage, pledge, lease, sublease, security interest,
attachment, charge, encumbrance or right or claim of others whatsoever
(including any conditional sale or other retention agreement).
"Master Lease": This Lease Agreement.
"Permit": any action, approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license,
or other form of legally required permission, of or from a Governmental
Authority.
"Permitted Lien": (a) Lessor's and Lessee's respective rights, titles and
interests in the Equipment, (b) Liens for the benefit of mechanics, materialmen,
laborers, employees or suppliers and similar Liens arising by operation of Law
and incurred by Lessee in the ordinary course of business for sums that are not
yet delinquent or are being contested in good faith by negotiations or by
appropriate proceedings that suspend the collection and enforcement thereof
(provided that the existence of such Lien while such negotiations or proceedings
are pending does not involve any substantial risk (as determined by Lessor in
its discretion) of the sale, forfeiture or loss of the Equipment or any therein,
and for which adequate reserves have been provided in accordance with GAAP), and
( c ) Liens arising out of any judgments or awards against Lessee that have been
adequately bonded to protect Lessor's interest or with respect to which a stay
of execution has been granted pending an appeal or a proceeding for review.
"Person": any individual, corporation, partnership, joint venture, or
other legal entity or a Governmental Authority.
"Primary Term": as set forth in the Rental Schedule.
"Primary Term Commencement Date": as set forth in the Rental Schedule.
"Rent": collectively, the Interim Term Rent, Basic Rent and the
Supplemental Rent.
"Rental Schedule": a document in the form of Schedule A hereto evidencing
----------
the agreement by Lessor and Lessee to lease the Equipment listed thereon
pursuant to the Rent, terms and conditions set forth thereon and incorporating
this Agreement by reference.
"Stipulated Loss Value': with respect to each item of Equipment, the
product of the Capitalized Lessor's Cost of such item and the applicable
percentage set forth on the Schedule of Stipulated Loss Value attached as
Schedule B to the applicable Rental Schedule.
----------
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"Supplemental Rent": all amounts, liabilities and obligations (other than
Basic Rent) that Lessee assumes or agrees to pay to Lessor, including, without
limitation, Stipulated Loss Value, and payments constituting indemnities,
reimbursements, expenses, Excess Use Fee and other charges payable pursuant to
the terms of this Lease.
"Supplier": the person from whom Lessor is purchasing or has purchased the
Equipment.
"Supply Contract": any written contract from the Supplier of the Equipment
or any item thereof, pursuant to which Lessor has purchased such Equipment (or
item thereof) for lease to Lessee under a Rental Schedule.
"Term": the period for which Equipment is leased under the Lease,
including the Interim Term and the Primary Term.
"Term Commencement Date": as set forth on the applicable Rental Schedule.
"Term Expiration Date": as set forth on the applicable Rental Schedule.
"Total Equipment Cost": as set forth in the Rental Schedule.
"Total Loss": for any item of Equipment, the occurrence of any of the
following: (i) the actual or constructive total loss of such item of Equipment;
or (ii) the loss, disappearance, theft or destruction of such item of Equipment;
or (iii) damage to such item of Equipment to such extent as shall make repair
thereof uneconomical, or shall render any item of Equipment permanently unfit
for normal use, for any reason whatsoever; or (iv) the condemnation,
confiscation, requisition, seizure, forfeiture or other taking of title to or
use of such item of Equipment.
"Transfer": any transfer or other agreement pursuant to which Lessor or
Transferee has transferred or agreed to pay any Person the Rent, or a portion
thereof, received from Lessee pursuant to the Lease, which obligation may be
secured by Lessor's interest in the Lease and the Equipment.
"Transferee": any Person to whom Lessor or any subsequent transferee
thereof has assigned any or all of its rights, obligation, title and/or interest
under the Lease.
"Uniform Commercial Code" or "UCC": the Uniform Commercial Code as in
effect in the Commonwealth of Massachusetts or in any other pertinent
jurisdiction; and any reference to an article or section thereof shall mean the
corresponding article or section (however named) of any such other applicable
version of the Uniform Commercial Code.
(b) Any defined term used in the singular preceded by "any" indicates
any number of the members of the relevant class. Any Lease Document or other
agreement or instrument referred to herein means such agreement or instrument as
supplemented and amended from time to time. Any reference to Lessor or Lessee
shall include their permitted successors and assigns. Any reference to a Law or
Permit shall also mean such Law or Permit as amended,
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superseded or replaced from time to time. Unless otherwise expressly provided to
the contrary in the Lease, all actions that Lessee takes or is required to take
under this Lease or any other Lease Document shall be taken at Lessee's sole
cost and expense.
21. ADDITIONAL PROVISIONS. The schedules and exhibits attached hereto and
any riders signed by the parties hereto and attached hereto are hereby
incorporated by reference.
22. LESSOR FUNDING COMMITMENT. Lessor agrees to purchase and place under
schedules to this Lease not less than $US3,000,000 of Lessee-manufactured
equipment, provided no Lessee event of default has occurred and is continuing,
and provided that from and after the date hereof there is no material adverse
change in Lessee's business or financial condition; and on the following terms
and conditions:
(i) equipment will consist of new DTMS and Swipe Card units located
in the United States.
(ii) schedules will be funded monthly, in a minimum amount of
$US100,000 (interim fundings with a minimum of $US20,000).
(iii) lease term of each schedule will be 42 months, commencing on
the first of the calendar quarter following the funding.
(iv) monthly lease rate factor will be 3.05% of the Equipment Cost
per month, in advance.
(v) payments to Lessor will be by wire transfer on the first of each
month.
(vi) at the end of the lease term, Lessee will purchase the
Equipment for 7.5% of its Lessor's Cost.
(vii) Lessor will deduct from the first schedule due diligence and
legal expenses not to exceed $30,000 (and no expenses shall be deducted from
any other schedule).
(viii) concurrently with the first funding, Lessee will provide Lessor
with its warrant to purchase 400,000 common shares of Lessee, which shall be
immediately effective as to all shares covered thereby.
(ix) with respect to each schedule, two-thirds of the Lessor's Cost
of Equipment thereon shall be paid to Lessee as seller and one-third shall be
paid into an interest-bearing U. S. checking account maintained in Lessor's
name (being a separate account from any other account of Lessor). All amounts
in such account shall be owned by and belong to Lessor without restriction.
Lessor agrees that from its general funds or from such account, it shall pay
semiannually on the 15th of each January and June, beginning January 15, 1997,
to Lessee an amount equal to the excess of (X) the total deposits made into
such account (whether or not thereafter withdrawn by Lessor), less any prior
payments from Lessor to
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Lessee under this sentence, over (Y) one-third of the principal balance
outstanding under all Schedules to the Lease in force on the date of such
semiannual computation. In addition, a similar computation and payment shall
be made on the Expiration Date of the last schedule (i. e. the schedule which
next precedes December 31, 1997). In the event the above payments are not
made, lessee will have the right to offset any amounts due against the lease
amounts outstanding at that time.
(x) documentation will be satisfactory to Lessor in its reasonable
discretion, it being understood that the form of schedule and warrant attached
to this Lease as Attachments 1 and 2, respectively, are satisfactory to
Lessee.
This commitment expires, as to any available amount not drawn down, on December
31, 1997.
IN WITNESS WHEREOF. Lessor and Lessee have caused this Agreement to be duly
executed, all as of the date first above written.
LESSOR;
Applied Telecommunications Technologies, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxx
President
LESSEE:
Data Wave Services (US) Inc.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Title: V.P. and Director
---------------------------------------
Date: Oct 22/96
----------------------------------------
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