EXHIBIT 10.6
PAY TELEPHONE SERVICES AGREEMENT
THIS AGREEMENT, made this ____ day of _________________, ______, by and
between the undersigned designated parties
____________________________________________________ (hereafter referred to as
"Owner") and Paystar Communications, Inc., a Nevada Corporation (hereafter
referred to as "Company").
WITNESSETH:
WHEREAS, Owner owns and operates the private pay telephone(s)
(collectively, the "Telephone(s)") at the locations set forth in Exhibit A
attached hereto; and
WHEREAS, the Owner desires to utilize the services of Company in connection
with the operation of the Telephone(s) and Company desires to render such
services, upon the terms and conditions hereinafter set forth: and
NOW, THEREFORE, in consideration of the foregoing recitals, all of which
are incorporated herein by reference, and of the mutual covenants herein
contained, the Owner and Company agree as follows:
SECTION I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the
respective meanings indicated below:
(a) Capital Improvements: any alteration or addition to, or rebuilding
or renovation of, the Telephone(s) the cost of which is not charged to repairs,
maintenance or other operating expenses.
(b) Gross Revenues: all receipts of a Telephone from all sources,
except the proceeds from the sale of such Telephone.
(c) Legal Requirements: all laws, statutes ordinances, orders, rules,
regulations, permits, licenses, authorizations, directions and requirements of
all governments and governmental authorities, which now or hereafter, may be
applicable to the Telephone(s), or any Telephone and the operation thereof.
(d) Operating Vendors: Vendors of all services required in the
operation of the Telephone(s), including all lessors, local and long distance
carriers, operator service providers and other carriers.
(e) Net Revenues: Gross Revenues, less the payment of all vendor
invoices
relating to telephone usage, including, but not limited to, all fees and taxes
due and owing to local and long distance telephone carriers, site owners, and
operator service providers, the cost of ordinary and necessary new or
serviceable parts not covered by the manufacture's warranty required to repair
the Telephone, and the cost of all ordinary and necessary service calls to
repair the Telephone at a rate of $20 each occurrence.
(f) Sites: The physical location upon which each Telephone is in
operation.
SECTION II
TERM
2.1 Term. The term of the Agreement shall be one (1) year and commence on
the date hereof and end at midnight on the first (1st) anniversary of the date
hereof. Unless terminated by ninety (90) days written notice prior to the
anniversary date. This Agreement shall extend annually 1 year at a time.
2.2 Termination. Anything contained in this Agreement to the contrary
notwithstanding, Owner, at its sole discretion, shall have the right to
terminate this Agreement, without default by Company, as herinafter defined in
Section 9.2, after sixty (60) days written notice of termination to Company at
which time this Agreement shall be defined null and void.
2.3 Acquisition. Owner will be solely responsible for the acquisition or
lease of each of the Telephone(s), including the purchase of Capital
Improvements required for the Telephone(s), and the acquisition or lease of the
Sites.
SECTION III
OPERATION OF THE TELEPHONES
3.1 Company's Duties and Responsibilities. During the Operating Period,
Company, on behalf and at the sole expense of Owner, in accordance with the
standards set forth in Section 3.2 is hereby authorized to and shall perform the
services indicated in Exhibit B, and with respect to the services described in
Sections L1-L4, as expressly authorized by Owner.
3.2 Owner's Release Option. Provided that the Agreement shall remain in
effect through the fifth anniversary of the date of the Agreement (the
"Termination Date"), and ninety (90) days notice given to Company with first
right of refusal, then Owner shall have the option to require the Company to
Purchase from Owner any Telephone(s) upon the following terms and conditions
(the "Option"):
a. Sales Price. The value of any Telephone, the "Sales Price", shall
be six thousand dollars ($6,000.00) or fair market value (which
ever is higher). Payment of the Sales Price shall be made within
thirty (30) days of the Termination Date.
b. Conveyance of the Telephone(s). Concurrently upon receipt of the
cash proceeds described in Section a above, Owner shall deliver
to Company, at the address provided in Section XI of the
Agreement or at such other address as Company may designate in
writing, title to the Telephone(s) at current locations, with all
taxes, direct or indirect, attributable to the transfer of the
Telephone(s) paid and shall take such other steps as may be
necessary to convey the Telephone(s) to Company free and clear of
all liens, claims and encumbrances, as contemplated in the
Agreement. The date of such conveyance shall be deemed the
"Closing Date".
3.3 Company's Release Purchase Option. During the term of the Agreement and
after the initial period of twelve (12) months, the Company may, by giving 90
days notice to the Owner, elect to purchase from Owner the Telephone(s) and site
agreement(s) (to include all owned telephones) for the sum of six thousand five
hundred dollars ($6500.00) each. The Owner may, by giving 90 days notice with
first right of refusal to the Company and after said Company's refusal, retain
the right to sell the Telephone(s) and site agreement(s) to a third party.
3.4 Standard of Services. Company agrees that its services hereunder shall
be performed by competent personnel. All obligations of Company hereunder shall
be subject to and contingent upon (a) the provision by Owner of sufficient funds
(if not otherwise available from the operations of the Telephone(s)) to permit
Company to comply with, and (b) the commission by Owner of no act which prevents
Company from complying with such obligations. At the request of either, Company
and Owner shall meet to discuss any aspect of the operation of the Telephone(s)
or any operating problem which warrants a modification of any operating policy
or procedure. Owner acknowledges and agrees that Company is not a guarantor of
the financial success of the Telephone(s).
3.5 Funding. From time to time throughout the term hereof as and when
requested by Company upon at least fifteen (15) days prior written notice, Owner
shall provide working capital by way of cash or through bank credit, such
working capital to be in amounts sufficient to constitute normal working capital
for Company to perform the services described in Sections L1-L3 of Exhibit B, to
the extent such services are authorized by Owner. Company shall in no event be
required to advance any of its own funds for the operation of the Telephone(s).
Not applicable if Level four (4) services are selected.
SECTION IV
REMUNERATION AND REIMBURSEMENT OF COMPANY
4.1 Monthly Fee. During the Operating Period, Owner shall pay to Company
with respect to each Telephone a monthly fee (the "Monthly Fee") as set forth in
Exhibit B attached hereto.
4.2 Payment of Telephone Revenue and Monthly Fees. All Telephone(s)
revenues collected by the Company shall be mailed by the 10th day of the second
month based upon the Gross Revenues of the relevant Telephone.
4.3 At any time during the term of the agreement, Owner may request that
Company pay
to Owner all Telephone revenues collected by Company by the last day of each
quarter or semi-annual period instead of on the 10th day of the second month as
set forth within 4.2 above. Such request shall be in writing.
SECTION V
COMPANY TO ACT SOLELY AS AGENT FOR OWNER
5.1 In the performance of its duties hereunder, Company shall act solely as
agent of Owner. Nothing herein shall constitute or be construed to be or create
a partnership or joint venture between Owner and Company, nor shall the
execution and delivery of this Agreement by Company constitute the offer or sale
to Owner of an investment contract or other security. As to debts and
liabilities of Owner, Company shall not be liable for any such debts or
liabilities by reason of its maintenance, supervision, direction or operation of
the Telephone(s) for Owner. Company may so inform third parties with whom it
deals on behalf of Owner and may take any other reasonable steps to carry out
the intent of this Section. Owner agrees that it shall provide sufficient funds
to enable Company to promptly pay or discharge all obligations and debts of the
Telephone(s). Owner further agrees to indemnify, defend and hold Company and its
officers, employees, shareholders and affiliates harmless from any and all
liabilities, debts, claims or expenses (including reasonable attorney's fees and
other expenses in connection with the defense of same) of the Telephone(s)
incurred in accordance herewith.
SECTION VI
BOOKS AND RECORDS AND REPORTS
6.1 Books and Records. Company shall keep complete and accurate books of
account and other records on an accrual basis reflecting the results of
operation of the Telephone(s). Books of account and all other records relating
to or reflecting the operation of the Telephone(s) shall be available to Owner
and its representatives at the office of Company at all reasonable times for
examination, audit, inspection and copying. Such books and records shall not be
removed from the office of Company (other than temporarily for examination or
use by accountants employed to examine such books and records or prepare
financial statements or reports with respect to the Telephone(s)) without
Owner's prior written approval.
6.2 Reports. Within forty-five (45) days after the end of each month,
Company shall prepare and furnish to Owner financial statements for each
Telephone for such month and, the Operating Year. Such statements shall include
a report of income or loss for the month, a balance sheet as of the end of the
month and an inventory report. The statements for the Operating Year shall be
prepared by Company and may be reviewed by an accounting firm retained by Owner,
which firm may also review the Monthly Fees for such year.
SECTION VII
INSURANCE AND LOSSES
7.1 Owner acknowledges and agrees that it shall be solely responsible for
obtaining and keeping in force with respect to the Telephone(s), in amounts
determined by Owner: (a) fire and
extended coverage and business interruption insurance; (b) liability and excess
liability insurance for loss, damage or injury to property or persons which
might arise out of the operation of the Telephone(s); (c) any workmen's
compensation and employer liability coverage as required by statute; and (d) any
other coverage desired by Owner. Not applicable if Level four (4) services are
selected.
SECTION VIII
INDEMNIFICATION
8.1 Owner and Company agree to protect, indemnify and hold each other
harmless from and against any and all losses, costs, expenses, claims, demands,
judgments, orders, decrees, damages or liabilities (including without
limitation, costs of litigation and reasonable attorneys' fees) arising out of
any tortuous conduct on the part of the indemnifying party or related in any way
to the failure or refusal of the indemnifying party to comply timely and fully
with each of its obligations, promises and covenants set forth herein.
SECTION IX
DEFAULT
9.1 Default by Owner. Owner shall be in default hereunder if any one or
more of the following shall occur or exist: (a) Owner shall fail to provide
funds, after request by Company pursuant to Section 3.4, sufficient to permit
timely payment of any amount due to Company hereunder and such failure shall
continue for seven (7) days after written notice thereof has been given to Owner
by Company; or (b) Owner shall neglect or fail to perform any of its duties or
obligations hereunder or shall neglect or fail to comply with any of the
provisions hereof (other than as referred to in subsection (a) of this Section
9.1) and shall fail to remedy the same within fourteen (14) days after Company
shall have given Owner written notice specifying such neglect or failure or if
such failure cannot reasonably be cured within said fourteen (14) days and Owner
shall not have commenced to cure such failure within such period and shall not
thereafter with reasonable diligence and good faith cure such failure.
9.2 Default by Company. Company shall be in default hereunder if Company
shall neglect or fail to perform any of its duties or obligations hereunder or
shall neglect or fail to comply with any of the provisions hereof and shall fail
to remedy the same within thirty (30) days after Owner shall have given Company
written notice specifying such neglect or failure or if such failure cannot
reasonably be cured within said thirty (30) days and Company shall not have
commenced to cure such failure within such period and shall not thereafter with
reasonable diligence and good faith cure such failure.
9.3 Remedies Upon Default. Upon the occurrence of any default under Section
9.1 or Section 9.2, the non-defaulting party may, in addition to and without
prejudice to any other right or remedy available to it at law or in equity,
terminate this Agreement by written notice of termination given to the
defaulting party.
SECTION X
ASSIGNMENT
10.1 Either Company or Owner may voluntarily, by operation of law or
otherwise, assign any of its rights or delegate any of its duties hereunder.
SECTION XI
NOTICES
11.1 All notices, statements, consents, approvals, requests and demands
shall be in writing, duly executed by an authorized officer or agent, and shall
be delivered personally or sent by certified or registered United States mail,
postage prepaid, return receipt requested, addressed to Owner as set forth in
the signature page of this Agreement and to Company as follows:
If to Company: Xxxx X. XxXxx, President
PAYSTAR COMMUNICATIONS, INC.
0000 X. Xxxxxxxxx Xx. #00
Xxxx, XX 00000
If to Owner:
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Any notice, statement, consent, approval, request, demand or other
communication, if delivered personally, shall be deemed to be given upon
delivery to the entities specified above; and, if sent by mail, shall be deemed
to have been given three (3) days after being deposited in the United States
mail, postage prepaid, properly addressed as provided above. Either party may
change either or both the address and person to which notices thereafter shall
be sent by giving notice to the other party in the manner provided above.
SECTION XII
MISCELLANEOUS
12.1 Copies of Notices. Owner and Company shall each promptly furnish the
other with copies of all notices received concerning a Telephone, and especially
notices relating to any claimed failure to perform obligations with respect to a
Telephone, including, without limitation, notices from governmental authorities
and from third parties asserting rights to recover damages for personal injury
or property damage, breach of contract or any other claim.
12.2 Headings. The headings to the articles and sections of this Agreement
are inserted for convenience of reference only and shall in no way affect the
interpretation of this Agreement.
12.3 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous negotiations, correspondence, memoranda
and agreements, whether oral or written.
12.4 Amendment. Except as specifically provided otherwise herein, this
Agreement may be amended, modified, altered or waived, in whole or in part, only
by a written instrument signed by the party to be bound by such amendment,
modification, alteration or waiver.
12.5 Waivers. The waiver of any of the terms and conditions of this
Agreement on any occasion shall not be deemed a waiver of such terms and
conditions on any future occasion.
12.6 Severability. If any term or provision of this Agreement or the
application of that term or provision to any person or circumstance is illegal,
invalid or unenforceable to any extent, then the remainder of the Agreement and
the application of that term or provision to persons or circumstances other than
those as to which it is held illegal, invalid or unenforceable, shall not be
affected thereby. It is also the intention of the parties to this Agreement that
in lieu of each term or provision of this Agreement that is illegal, invalid or
unenforceable, there be added as a part of this Agreement a term or provision as
similar in terms to such illegal, invalid or unenforceable term or provision as
may be possible and be legal, valid and enforceable.
12.7 Binding Effect. This Agreement shall bind and inure to the benefit of
Owner and Company and their respective successors and assigns.
12.8 Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California. If any suit or action
(including any appeal) is brought to enforce or interpret any one or more of the
terms and provisions of this Agreement, the prevailing party shall be entitled
to reasonable attorney fees and all costs of such action from the other party.
12.9 Impossibility of Performance. Neither Owner nor Company shall be
liable for loss or damage or deemed to be in breach of this Agreement if its
failure to perform its obligations results from: (1) the unavailability of
suitable Operating Vendors; (2) compliance with Legal Requirements; (3) acts of
God; (4) acts of omissions of the other party; (5) fires, strikes, embargoes,
war, or riot; or (6) any other similar event or cause beyond the control of the
non-performing party. Any delay resulting from any of said causes shall extend
performance accordingly or excuse performance, in whole or in part, as may be
reasonable, but with respect only to the relevant Telephone, except that said
causes shall not excuse payments of amounts owed at the time of such occurrence.
12.10 Personal Emergency. The Company will exercise the Owner's Release
Option (3.2) upon notice from Owner of a valid and documented personal
emergency. This request by Owner must be accompanied by a letter from a doctor
of a life threatening event or by an attorney or other qualified representative
of the Owner in the event of an emergency legal situation requiring the exercise
of 3.2.a of this Agreement. This request may not be unduly withheld by the
Company.
IN WITNESS WHEREOF, the Owner has duly executed this Agreement as of the
_______day of __________________, 19___.
OWNER: (COMPLETE ONE)
Business Entity Individual
------------------------------- -------------------------------
(Print Name) (Print Name)
------------------------------- -------------------------------
(Signature) (Signature)
------------------------------- -------------------------------
(Title) (Telephone)
------------------------------- -------------------------------
(Address) (SSN#)
-------------------------------
(City, State, Zip)
COMPANY ACCEPTANCE
-------------------------------
(Telephone)
Xxxx X. XxXxx, President
PAYSTAR COMMUNICATION, INC.
------------------------------- 0000 X. Xxxxxxxxx Xx. #00
(XXX/XXXX XX.) Xxxx, XX 00000
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(Signature)
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(Date)
Exhibit A
(Page___of___)
Telephone Equipment Business No.________
(Attach Extra copies for each Business to be purchased hereunder)
Site Address:
----------------------------------
(Location Name)
----------------------------------
(Address)
----------------------------------
(City, State, Zip)
Telephone Serial No.:
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Enclosure Type:
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Other Equipment:
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Geographic Location: General Location:
__________AL ___________Indoor
__________CA ___________Outdoor
__________NV ___________Either
__________IL
__________GA
__________MI
__________OH
__________TX
__________WA
__________Other
__________No Preference
Existing Long Distance Company OSP Services
____________Telco Communications ___________Opticom
____________US Long Distance ___________ILD Teleservices
____________ILD Teleservices ___________Other
____________Other
EXHIBIT B
PAY TELEPHONE SERVICES AGREEMENT
SELECT ONE
Service Levels and Fees
During the term of this Agreement, Owner shall pay to Company with respect to
each Telephone a monthly fee ("Monthly Fee*") based on the following level of
services provided by Company. Owners signature in the space provided indicates
Owners understanding and acceptance of the terms of the Service selected.
Xxxxx 0 Collect all monthly revenue generated by the
Telephone(s), and forward same to Owner in accordance
with Owner's written direction to Company, less the
Monthly Fee.
Monthly Service Fee $25.00 Signature
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Xxxxx 0 Xxxxx 0 Service PLUS at Owner's expense, pay
commissions and fees to operating Vendors.
Monthly Service Fee $35.00 Signature
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Xxxxx 0 Xxxxx 0 & 2 Services PLUS in consultation with
Owner, provide for the repair of the Telephone(s) and
maintain the Telephone(s) in a neat and clean
condition and in compliance with all Legal
Requirements, and with Owner's prior written
approval, make Capital Improvements, as necessary.
Monthly Service Fee $50.00 Signature
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Level 4 Shall perform all of the services indicated
within the above sections Level 1-3, PLUS a guarantee
against losses incurred by theft, vandalism, or
destruction. In the event Owner shall elect to
exercise the Release Purchase Option pursuant to
Section 3.2 of the Agreement and Exhibit A attached
thereto, then the Monthly Service Fee shall be 70% of
Net Revenues for each Telephone as set forth in
Exhibit A of the Agreement. In the event Gross
Revenues are equal to or less than the option Amount
for each month, then Owner shall be entitled to 100%
of such net Revenues, or $65.00 for each Telephone,
which ever is greater.
Signature
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*Such fees may be adjusted by Company with 90 days notice
(Level 4 (L4) Services will remain in effect for contract duration).
