Exhibit 10.18
HOTEL REVENUE SHARING LEASE AGREEMENT
THIS HOTEL REVENUE SHARING LEASE AGREEMENT (this "Agreement" or "Hotel
Revenue Sharing Lease Agreement") is dated *3 and entered into by and between
RoomSystem Technologies, Inc., ("RoomSystem") a Nevada corporation having its
principal office and place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ and *1 ("Hotel"), a *9 corporation, having its office
and place of business at *2.
IN CONSIDERATION of the mutual agreements set forth hereinafter, the
parties agree as follows:
1. Leased Equipment. This Agreement and each Equipment Schedule (as
defined below) entered into under this Agreement shall describe the equipment
leased under this Agreement and shall be subject to all terms and conditions of
this Agreement as such Agreement may from time-to-time be amended. Each
Equipment Schedule to be entered into between RoomSystem and Hotel pursuant to
this Agreement shall be in the form annexed hereto as Attachment I (the
"Equipment Schedule"). Each Equipment Schedule shall be enforceable according to
the terms and conditions contained therein and such terms and conditions are
incorporated into this Agreement. Capitalized terms not otherwise defined in
this Agreement shall have the meanings ascribed to such terms in each Equipment
Schedule. In the event of a conflict between the terms of this Agreement and any
Equipment Schedule, the terms of the Equipment Schedule shall prevail with
respect to that Equipment Schedule. RoomSystem agrees to place with Hotel, and
Hotel agrees to accept and lease from RoomSystem, in accordance with the terms
and conditions herein, the equipment and features together with all
replacements, parts, repairs, additions, attachments and accessories related
thereto (collectively called the "Equipment" and individually called a "Placed
Item") described in each executed Equipment Schedule. Hotel shall have no right,
title or interest in the Equipment, except as expressly set forth in this
Agreement. RoomSystem and Hotel shall have no obligation hereunder until the
execution and delivery of an Equipment Schedule by RoomSystem and Hotel.
2. Term Payments and Termination. The term (the "Term") of this Agreement
shall commence on the date set forth above and shall continue thereafter so long
as any Equipment Schedule entered into pursuant to this Agreement remains in
effect.
The lease term and lease payment for the Equipment shall be as stated
herein and in the respective Equipment Schedule(s). At the end of such lease
term provided no Event of Default has occurred and is continuing, Hotel shall
have the option exercisable on no less than 135 days prior written notice to
RoomSystem to (A) purchase the Equipment for its then Fair Market Value (as
hereinafter defined), or (B) renew the Equipment Schedule under mutually
acceptable terms, or (C) terminate the Equipment Schedule according to its
terms. Upon payment in full of the amount required to exercise Hotel's option to
purchase the Equipment, RoomSystem shall transfer its right, title and interest
in the Equipment to Hotel "AS-IS WHERE IS," without any express or implied
representations or warranties whatsoever concerning the condition of the
Equipment. If, upon the termination of the applicable Equipment Schedule as to
any Placed Item, Hotel fails or refuses to return and deliver possession of
Placed Item to RoomSystem pursuant to Section 15 hereof within ten (10) business
days after the expiration of the term of the Equipment Schedule, in addition to
all other rights and remedies available to RoomSystem, Hotel shall be liable to
RoomSystem for the Fair Market Value of such Placed Items until returned to
RoomSystem as well as all other damages incurred by RoomSystem.
All Payments (hereinafter defined) shall, unless otherwise directed by
RoomSystem in writing, be made to RoomSystem on the Payment Date (hereinafter
defined) by electronic transfer of funds, and Hotel shall execute all
authorizations necessary for such electronic transfers. If the Payment Date is
not a business day, Payments for such period shall be due on the next business
day. Any Payment not made by the related Payment Date shall be subject to a late
payment fee of ten percent (10%) of the outstanding Payment amount.
3. Acceptance, Warranties and Limitation of Liability. Hotel shall execute
and deliver to RoomSystem a certificate of acceptance (the "Certificate") in the
form of Exhibit A to the Equipment Schedule with respect to each Placed Item
installed at the Hotel, acknowledging its acceptance of each such Placed Item.
Hotel represents and agrees that, as of the date each Placed Item is accepted
pursuant to a Certificate ("Acceptance Date"), such Certificate shall be
conclusive evidence that each Placed Item is of a size, design, capacity and
manufacture selected by Hotel and that Hotel has inspected such Placed Item,
found it to be in good order, and unconditionally accepts such Placed Item(s),
subject to any right or remedy Hotel may have against the manufacturer or
supplier thereof. Notwithstanding any relationship between RoomSystem and any
manufacturer, supplier or Servicer of the Equipment, RoomSystem shall have no
liability to Hotel for any claim, loss or damage caused or alleged to be caused
directly, indirectly, incidentally or consequentially by the Equipment, by any
inadequacy or deficiency thereof or, defect therein, by any incident whatsoever
in connection therewith, or in any way related to or arising out of this
Agreement whether arising
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in contract, strict liability, negligence or otherwise. Hotel shall not assert
any claims, counterclaims, or defenses against RoomSystem for consequential,
special or indirect damages, or for loss of use or loss of profits. RoomSystem
makes no express or implied warranties of any kind, including those of
merchantability, durability, or fitness for a particular purpose or use with
respect to the Equipment and expressly disclaims the same. Hotel understands and
agrees that: (A) RoomSystem, Inc. is the supplier of the Equipment; (B) Article
2A of the Uniform Commercial Code (or any state law equivalent) entitles Hotel
to enforce against the supplier or manufacturer of the Equipment warranties made
about the Equipment to RoomSystem; and (C) That Hotel may communicate with the
supplier or manufacturer and receive a copy of the promises, warranties, or
disclaimers made. Hotel will be entitled to the benefit of any applicable
manufacturer's warranties, and to the extent assignable, such warranties are
hereby assigned by RoomSystem for the benefit of Hotel, and Hotel shall take all
reasonable action to enforce such warranties where available to Hotel.
4. Assignment, Obligation to Make Payments Unconditional. RoomSystem may
assign or sell all or a portion of its right, title and interest in and to the
Equipment, any Placed Item, this Agreement, and/or any Equipment Schedule,
and/or grant a security interest in the Equipment, any Placed Item, this
Agreement, and/or any Equipment Schedule, to any other party (any such party is
referred to herein as "Assignee"); provided, however, any such assignment or
sale shall not relieve RoomSystem of any of its obligations hereunder. Hotel
hereby: (A) Consents to such sales, assignments and/or grants; (B) Agrees to
execute promptly and deliver such further acknowledgments, agreements and other
instruments as may be reasonably requested by RoomSystem or any Assignee to
effect such assignments and/or grants; and (C) Agrees to comply fully with the
terms of any such assignments and/or grants. In the event of an assignment,
Assignee shall have all rights and benefits of RoomSystem under this Agreement,
but Assignee shall not be obligated to perform the obligations of RoomSystem
hereunder unless Assignee expressly agrees to do so in writing. Hotel agrees
that its obligation to pay all Payments and other sums payable hereunder and the
rights of RoomSystem and Assignee in and to such Payments, are absolute and
unconditional and are not subject to any abatement, reduction, set off, defense,
counterclaim or recoupment due or alleged to be due, to or by reason of, any
past, present or future claims which Hotel may have against RoomSystem,
Assignee, any manufacturer, supplier, seller or Servicer, defined hereinafter,
of the Equipment, or against any person for any reason whatsoever. Hotel shall
have no right to assign this Agreement, any Equipment Schedule, or the
Maintenance Agreement, or to sublease the Equipment without the express prior
written consent of RoomSystem, which consent shall not be unreasonably withheld.
5. Installation, Maintenance and Repair. Hotel, at its expense, shall be
responsible for the delivery, installation, de-installation, redelivery,
maintenance and repair of the Equipment, all of which shall be effected by the
Servicer (defined in this paragraph) or such other party acceptable to
RoomSystem. Hotel agrees, at all times during the Term of this Agreement, at its
sole expense, to keep the Equipment in good repair, condition and working order,
and to furnish all parts, mechanisms or devices which may be required in the
course of so doing. Hotel will at all times during the Term of this Agreement,
maintain in force a Hotel Installation, Maintenance and License Agreement (the
"Maintenance Agreement"), covering the Equipment with the manufacturer or
supplier of the Equipment, or such other party as may be acceptable to
RoomSystem (such party the "Servicer"). RoomSystem or Assignee will have the
right, but not the obligation, to inspect the Equipment during reasonable
business hours. Hotel shall provide Servicer access to the Equipment to install
at no charge to Hotel engineering changes which RoomSystem or Servicer deems
necessary to keep the Equipment at current engineering levels. As a material
inducement for RoomSystem to enter into this Agreement with Hotel on a "revenue
sharing basis" Hotel shall:
(A) Purchase and maintain an inventory level of Merchandise so as to
maximize the revenue generating capability of the Equipment;
(B) Review the "restocking report" and inspect each Placed Item which
has been used within one (1) day after a guest has checked out of the Hotel
premises and prior to allowing the room to be occupied by a new guest, but not
less than once every month;
(C) Determine during each such inspection whether: (i) such Placed Item
requires refilling of Merchandise to reach full capacity; (ii) such Placed Item
is ready for the next guest as outlined in the operation and procedures manual
provided by Servicer (the "Manual"); and/or (iii) any Merchandise is missing
from a Placed Item and not reported as a sale, and shall then record missing
Merchandise as a sale to any guest's folio as outlined in the Manual;
(D) Fully stock to at least minimum restock level each Placed Item with
Merchandise prior to allowing the room to be occupied by a new guest;
(E) Provide all point-of-sale and printed menus as required by
Servicer to maximize sales volumes;
(F) Provide and maintain the necessary dedicated telephone lines and
internet access, if available, at Hotel's sole expense, and to provide a MATV
and/or telephone system that meets the specifications of Servicer
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permitting communication of data between the Equipment, the required computer to
operate the Equipment (the "System") and Servicer's (or its affiliates) central
office;
(G) Provide grounded outlets within six feet (6'), and a MATV connector
or RJ-45 direct-connect socket within twelve feet (12') of the location of each
Placed Item in each guest room on the Hotel premises (the "Premises");
(H) Be responsible for the unloading of the Equipment upon delivery and
promptly placing the Equipment into the guest rooms upon arrival;
(I) Take all actions and pay all costs necessary to cause the System to
interface with Hotel's computer system;
(J) During the Term of this Agreement, permit the employees and/or
representatives of RoomSystem or Servicer to stay as a guest in the Hotel, in a
standard double occupancy room, free of charge for room and reasonable board,
for a total of three (3) days per Contract Year (as hereinafter defined) when
visiting the Hotel for the purpose of inspecting the Equipment, and at other
times for a total of five (5) days per Contract Year at a rate equal to fifty
percent of the corporate discount room rate, subject to availability, upon at
least one days' prior notice to Hotel; provided, however, such room and board
shall not include long distance phone calls, use of personal laundry valet,
in-room movies, gift shop purchases, alcoholic beverages, or any other charges
other than room and reasonable board;
(K) Remove all vending machines from the floors that might compete
with the Equipment; and
(L) Perform all of the above obligations in a manner satisfactory to
RoomSystem.
6. Representations and Warranties. Hotel represents and warrants for the
benefit of RoomSystem and any Assignee (as defined hereinafter) and if requested
by RoomSystem will provide an opinion of counsel and other supporting documents
reasonably requested by RoomSystem to the effect that, at the time of execution
of this Agreement and of each Equipment Schedule:
(A) Hotel is a legal entity, duly organized, validly existing and in
good standing under the law of the jurisdiction where the Equipment will be
located and has adequate power to enter into and perform this Agreement and each
Equipment Schedule and Maintenance Agreement executed hereinafter;
(B) This Agreement and each Equipment Schedule and Maintenance
Agreement executed hereinafter has been duly authorized, executed and delivered
by Hotel and together constitute a valid, legal and binding agreement of Hotel,
each enforceable in accordance with its terms;
(C) The entering into and performance of this Agreement and each
Equipment Schedule and Maintenance Agreement executed hereinafter will not
violate any provision of Hotel's articles of incorporation or bylaws, and to the
best of Hotel's knowledge, will not violate any judgment, order, or result in
any breach of, or constitute a default under, or result in the creation of any
lien, charge, security interest or other encumbrance upon any assets of Hotel or
on the Equipment of this Agreement pursuant to any instrument to which Hotel is
a party or by which it or its assets may be bound pursuant to any law or
regulation applicable to Hotel;
(D) To the best of Hotel's knowledge there are no actions, suits or
proceedings pending or, threatened, before any court, administrative agency,
arbitrator or government body which will, if determined adversely to Hotel,
materially adversely affect its ability to perform its obligations under this
Agreement, any Equipment Schedule or the Maintenance Agreement, executed
hereinafter or any related agreement to which Hotel is a party;
(E) To the best of Hotel's knowledge, Hotel is not in any material
default under any loan or lease agreement; and
(F) That all financial information and other information furnished to
RoomSystem or any other party in connection with this Agreement was, at the time
of delivery, true and correct in all respects; and that there has been no
material adverse change with respect to such financial information from the date
of delivery by the Hotel to the date of this Agreement.
7. Risk of Loss and Damage.
(A) Hotel agrees to bear the entire risk of loss with respect to any
damage, destruction, loss, or theft of the Equipment and any Placed Item,
whether insured or not, whether such loss is partial or complete and from any
cause at all, whether or not through any default or neglect of Hotel (except if
such damage, destruction, loss or theft arises from the gross negligence or
willful misconduct of RoomSystem) from the Acceptance Date, until the later of
the date such Placed Item is removed from the Hotel by RoomSystem or thirty (30)
days after such Placed Item is returned pursuant to Section 15 hereof. Except as
provided in this Section 7, no such event shall relieve Hotel of its obligation
to make Payments hereunder.
(B) If any Placed Item is damaged and capable of repair, Hotel must
promptly notify RoomSystem, and within sixty (60) days of such damage shall, at
Hotel's expense, cause such repairs to be made as are necessary to return such
Placed Item to its condition prior to such damage.
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(C) In the event any Placed Item is destroyed, damaged beyond repair,
lost or stolen, (an "Event of Loss"), Hotel must promptly notify RoomSystem and
Assignee and pay to RoomSystem or Assignee, as the case may be, on the second
Payment Date following the Event of Loss, an amount equal to the Manufacturer's
List Price (as defined in the relevant Equipment Schedule) and all Payments
accrued on any such Placed Item up to such second Payment Date. Upon payment of
such amounts in full, Hotel's obligation to pay any further Payments will cease
with respect to such Placed Item(s) (but not with respect to any of the
remaining Equipment) and Hotel will be entitled to receive any insurance
proceeds or other recovery received by RoomSystem or Assignee in connection with
such Event of Loss.
8. Insurance. Hotel, at its sole expense, shall insure the Equipment
against all risks and in such amounts as RoomSystem reasonably requires (but not
less than the aggregate Manufacturer's List Price, as defined in the relevant
Equipment Schedule), of all Placed Items set forth in the Equipment Schedule(s)
with carriers reasonably acceptable to RoomSystem and shall maintain a loss
payable endorsement in favor of RoomSystem and Assignee affording them such
additional protection as they reasonably require; and shall maintain liability
insurance reasonably satisfactory to RoomSystem. Such insurance policies shall
insure against, among other exposures, bodily and personal injury, property
damage liabilities, and other risks customarily insured against by Hotel on
equipment owned by Hotel. All such insurance policies must name RoomSystem,
Hotel and Assignee as insured and loss payees, and must provide that such
policies may not be canceled or altered without at least thirty (30) days prior
written notice to RoomSystem and Assignee. Each insurer is hereby authorized and
directed to make payment for any Loss directly to RoomSystem or its Assignee. If
Hotel does not provide RoomSystem or its Assignee evidence of insurance
acceptable to RoomSystem or its Assignees, RoomSystem has the right, but not the
obligation, to obtain insurance covering the Equipment from an insurer of
RoomSystem' choice. RoomSystem may add the costs of acquiring and maintaining
such insurance and all fees for RoomSystem' services in placing and maintaining
such insurance (collectively, "Insurance Charge") to the Payments due from Hotel
under this Agreement. Hotel will pay the Insurance Charge in equal installments
allocated to the remaining Payments (plus interest on such allocation at 1.5%
per month or, if less, the maximum rate allowed by law). If RoomSystem purchases
insurance, Hotel will cooperate with RoomSystem' insurance agent with respect to
the placement of insurance and the processing of claims. Nothing in this
Agreement will create an insurance relationship of any type between RoomSystem
or its Assignee and any other person. Hotel acknowledges that RoomSystem and its
Assignee are not required to secure or maintain any insurance, and RoomSystem
and its Assignee will not be liable to Hotel if RoomSystem or its Assignee
terminate any insurance coverage that RoomSystem or its Assignee arrange. If
RoomSystem or its Assignee replace or renew any insurance coverage, RoomSystem
or its Assignee are not obligated to provide replacement or renewal coverage
under the same terms, cost, limits or conditions of the previous coverage.
9. Indemnity. Hotel agrees to indemnify, hold harmless and defend,
RoomSystem, Assignee and Servicer and any of their officers, directors or
employees and their successors and assigns (all such parties the "Indemnified
Parties") from and against any and all claims, demands, actions, suits,
proceedings, costs, expenses, damages and liabilities, at law or in equity,
whether based on a theory of contract, negligence, strict liability or
otherwise, including reasonable attorneys' fees related thereto, arising out of,
connected with, or resulting from, this Agreement, any Equipment Schedule
executed hereunder, the Maintenance Agreement or the Equipment, including
without limitation, the manufacture, selection, purchase, delivery, possession,
condition, use, lease, operation or return thereof, or any defects in the
Equipment, except to the extent a claim has arisen from such Indemnified Party's
own gross negligence or willful misconduct (as opposed to any vicarious
liability). Hotel's obligations hereunder will survive the expiration of this
Agreement with respect to acts or events occurring or alleged to have occurred
prior to the return of the Equipment to RoomSystem at the end of the Term.
10. Liens and Taxes. RoomSystem owns and holds title to the Equipment.
Hotel will, at its sole expense, keep the Equipment free and clear of all
levies, liens and encumbrances. Hotel will declare and pay to the appropriate
governmental authorities when due all license fees, registration fees,
assessments, charges and taxes, whether municipal, state or federal (foreign and
domestic), including but not limited to, sales and excise taxes, and penalties
and interest with respect thereto, excluding, however, any use or property taxes
or any taxes measured solely by RoomSystem' net income. Hotel shall provide
evidence of any payment hereunder upon request of RoomSystem. Hotel's
obligations hereunder will survive the expiration of this Agreement with respect
to liens or taxes accruing or attaching or alleged to have accrued or attached
prior to the return of the Equipment to RoomSystem at the end of the term of the
applicable Equipment Schedule(s).
11. Hotel's Failure to Perform. After the occurrence of an Event of
Default (as described hereinafter), RoomSystem has the right, but not the
obligation, and without releasing Hotel from any obligation hereunder, to make
or do the same, to pay, purchase, contest or compromise any encumbrance, charge
or lien which, in the reasonable judgment of RoomSystem, appears to affect the
Equipment or this Agreement and, in exercising any such rights, incur
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any liability and expend whatever amount in RoomSystem' reasonable discretion
RoomSystem may deem necessary therefor. All sums so incurred or expended by
RoomSystem shall be, without demand, immediately due and payable by Hotel, shall
be considered Payments hereunder, and will bear interest at the lesser of 1.50%
per month or the highest interest rate legally permissible.
12. Equipment is Personal Property; Location of Equipment. Hotel covenants
and agrees that the Equipment is, and will at all times be and remain, personal
property of RoomSystem or Assignee. If requested by RoomSystem, Hotel will
obtain, prior to delivery of any Placed Item, a certificate in a form
satisfactory to RoomSystem from all parties with an interest in the Premises
wherein the Equipment may be located, waiving any claim with respect to the
Equipment and other items reasonably requested by RoomSystem or Assignee. Hotel
will neither move any Placed Item nor permit any Placed Item to be moved from
the address set forth in the applicable Equipment Schedule without RoomSystem'
advance written consent.
13. Designation of Equipment Ownership. If at any time during the term
hereof, Hotel is supplied with labels, plates or other markings stating that the
Equipment is owned by RoomSystem or is subject to any interest of Assignee,
Hotel agrees to affix and keep the same displayed on the Equipment, provided
however, that such placement shall not be obtrusive to users of the Equipment
while installed at the Hotel. Hotel agrees that this Agreement is a true lease.
However, as a precaution in the event (and only to the extent) the transactions
underlying this Agreement are deemed to be a lease intended for security, Hotel
hereby grants RoomSystem and Assignees a first priority purchase money security
interest in the Equipment. Hotel agrees to execute and file Uniform Commercial
Code financing statements and any and all other instruments necessary to perfect
(in RoomSystem' opinion) RoomSystem' or Assignee's interest in this Agreement,
any Equipment Schedule(s), the Equipment or the payments due hereunder.
RoomSystem may file a copy of this Agreement and appropriate Equipment
Schedule(s) as a financing statement.
14. Use. Hotel shall use the Equipment in a careful and proper manner in
conformance with RoomSystem', manufacturer's, supplier's and Servicer's
specifications and shall comply with, and conform to, all federal, state,
municipal and other laws, ordinances and regulations in any way relating to the
possession, use or maintenance of the Equipment.
15. Surrender of Equipment. Upon the expiration or earlier termination of
each Equipment Schedule with respect to any Placed Item, Hotel shall: (A) make
all Payments due to RoomSystem through and including such termination or
expiration date; and (B) unless Hotel has paid RoomSystem in cash the Fair
Market Value of the Equipment, return the same to RoomSystem in good repair,
condition and working order, ordinary wear and tear resulting from proper use
thereof alone excepted. Such return shall be effected promptly by making the
Equipment available to RoomSystem or such other party designated by RoomSystem.
Upon return, all components of the Equipment shall be clean, and shall include
all instruction manuals and operating software. All costs of replacing missing
components and repairing non-working components shall be borne by Hotel. At
Hotel's option, RoomSystem shall clean the returned equipment (or cause it to be
cleaned), the reasonable costs of which shall be paid by Hotel.
The deinstallation of the Equipment shall be done in a manner resulting in
no harm or damage to the Equipment. RoomSystem shall have the sole right to make
all the arrangements for (A) the transportation of each Placed Item to and the
deinstallation of each Placed Item at the equipment location stated in the
applicable Equipment Schedule, and (B) the discontinuance, disassembly, packing
and transportation of each Placed Item from the equipment location to a location
of RoomSystem' choice within the United States upon the termination of the
applicable Equipment Schedule (by expiration or otherwise) as to such Placed
Item. Hotel shall pay all costs of deinstallation, disassembly, packing and
transportation of the Equipment.
16. Default. The occurrence of any of the following events, among others,
shall constitute an event of default ("Event of Default"): (A) The failure of
RoomSystem to receive any Payment on the date on which it is due which failure
is not cured within five (5) days after notice thereof from RoomSystem or
Assignee; (B) The failure by Hotel to perform or observe any other term,
covenant or condition of this Agreement or any Equipment Schedule or any
Maintenance Agreement, which is not cured within thirty (30) days after notice
thereof from RoomSystem or Assignee; (C) Any affirmative act of insolvency by
Hotel, or the filing by Hotel of any petition or action under any bankruptcy,
reorganization, insolvency arrangement, liquidation dissolution or moratorium
law, or any other law or laws for the relief of, or relating to debtors; (D) The
filing of any involuntary petition against Hotel under any bankruptcy,
reorganization, insolvency arrangement, liquidation, dissolution or moratorium
law for the relief of or relating to debtors which is not dismissed within sixty
(60) days thereafter, or the appointment of any receiver, liquidator or trustee
to take possession of any substantial portion of the properties of Hotel, unless
the appointment is set aside or ceases to be in effect within sixty (60) days
from the date of said filing or appointment; (E) The subjection of a substantial
part of Hotel's property or any Placed Item to any levy, seizure, assignment or
sale for or by any creditor or governmental agency; (F) Any representation or
warranty made by Hotel in this Agreement or in any Equipment Schedule or in any
document furnished by Hotel to RoomSystem or Assignee in
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connection with this Agreement or any Equipment Schedule or with respect to the
acquisition or use of the Equipment shall be untrue in any material respect at
any time; (G) The default by Hotel under any other lease or loan agreement which
materially and/or adversely affects Hotel's ability to perform its obligations
under this Agreement; or (H) if any Placed Item is sold or has a lien or
encumbrance placed upon it by someone other than RoomSystem or Assignee.
17. Remedies. Upon the happening of any Event of Default, RoomSystem or
Assignee may do one or more of the following:
(A) Require Hotel, and Hotel shall, upon demand of RoomSystem, on the
next Payment Date following such demand, pay RoomSystem or Assignee, as
liquidated damages and not as a penalty, an amount equal to the Liquidated
Damage Value multiplied by 1.2, together with any Payments then due and owing by
Hotel hereunder, as well as all costs and expenses owed under this Agreement,
including commissions, legal fees and disbursements (in-house or otherwise) and
other expenses incurred by RoomSystem as a result of the Event of Default and
the exercise of RoomSystem' remedies with respect thereto (all such amounts
collectively the "Default Value"), plus interest on the Default Value at ten
percent (10%) (or such lesser amount allowed by law);
(B) RoomSystem (or its representative) may, without notice to or demand
upon Hotel, take possession of the Equipment and lease and/or sell the same, or
any portion thereof, in such manner or amount, and to such entity as RoomSystem,
in RoomSystem' discretion shall elect. If RoomSystem elects to sell or lease the
Equipment, RoomSystem may do so at a public or private sale or lease and upon
notice to Hotel, which notice will be deemed to be commercially reasonable if
the time and place of any public sale, lease or other intended disposition or
the time after which any private sale, lease or other intended disposition is to
be made shall be sent by first class, certified or registered mail to Hotel no
later than ten (10) days prior to such proposed sale, lease or other
disposition. The proceeds of such sale or lease will be applied by RoomSystem
(i) first, to pay RoomSystem an amount equal to the Default Value; and (ii)
second, to reimburse Hotel for the Default Value to the extent previously paid
by Hotel. Any surplus remaining thereafter will be retained by RoomSystem. Hotel
shall remain responsible for any outstanding balance of the Default Value after
application of any proceeds received from such sale or lease of the Equipment;
(C) Take possession of the Equipment and hold and keep idle the same or
any portion thereof;
(D) Convert the Equipment to a direct credit card billing system, or
disable the Equipment;
(E) Cancel or terminate this Agreement or any and all other agreements
between Hotel and RoomSystem (or its affiliates).
(F) RoomSystem (or its representative) may, without notice to or demand
upon Hotel, shut the system down until the default is cured. During the time the
system is shutdown, hotel shall pay downroom fees for all the installed
Equipment. Such payment shall be made even in the event of a dispute. In
addition, a return to service fee of $1,000 shall apply to turn system back on.
The exercise of any of the foregoing remedies by RoomSystem will not
constitute a termination of this Agreement or any Equipment Schedule unless
RoomSystem so notifies Hotel in writing. No remedy referred to in this Section
17 is intended to be exclusive, but each shall be cumulative and in addition to
any other remedy provided herein available to RoomSystem at law or in equity.
18. Miscellaneous.
(A) Effect of Waiver. No delay or omission to exercise any right or
remedy accruing to RoomSystem or any Assignee upon any breach or default of
Hotel will impair any such right or remedy or be construed to be a waiver of any
such breach or default; nor will a waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval on the part of RoomSystem or
any Assignee of any breach or default under this Agreement, any Equipment
Schedule or any Maintenance Agreement or of any provision or condition hereof or
thereof, must be in writing specifically set forth.
(B) Notices. Any notice required or permitted to be given by the
provisions hereof must be in writing and will be conclusively deemed to have
been received by a party hereto on the day it is delivered to such party at the
address indicated below (or at such other address as such party specifies to the
other party in writing) or, if sent by registered or certified U.S. mail, on the
fifth business day after the day on which mailed, addressed to such party at
such address:
If to RoomSystem: RoomSystem Technologies, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
If to Hotel: As set forth in the applicable Equipment Schedule
With a copy to: All parties listed in the Installation,
Maintenance and License Agreement
(C) Attorneys' Fees and Costs. In the event of any action at law or
suit in equity in relation to this Agreement, any Equipment Schedule or
Maintenance Agreement, the prevailing party will be entitled to recover from the
non-prevailing party attorneys' fees and costs.
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(D) Applicable Law, Jurisdiction and Venue. This Agreement and
Equipment Schedule(s) shall be governed by, and construed in accordance with,
the laws of the state of Nevada, without regard to principles of conflicts of
law. RoomSystem and Hotel hereby consent to jurisdiction and venue in any state
or federal court in the state of Nevada and hereby waive any objections that
jurisdiction or venue in any such court is not proper.
(E) Security Interest. No security interest in this Agreement, any
Equipment Schedule, or any Maintenance Agreement may be granted by Hotel without
RoomSystem' consent.
(F) Financial Statements. Hotel agrees to furnish promptly, or cause to
be furnished, to RoomSystem and Assignee within one hundred twenty (120) days of
the end of each fiscal year, financial statements of Hotel prepared in
accordance with generally accepted accounting principles, together with such
other financial and related information respecting the Hotel or the Equipment as
RoomSystem or Assignee may from time to time reasonably request.
(G) Entire Agreement. RoomSystem and Hotel acknowledge that there are
no agreements or understandings, written or oral, between RoomSystem and Hotel
with respect to the Equipment, other than as set forth herein and in each
Equipment Schedule and that this Agreement and each Equipment Schedule contain
the entire agreement between RoomSystem and Hotel with respect thereto. Neither
this Agreement, nor any Equipment Schedule may be altered, modified, terminated
or discharged except by a writing signed by the party against whom such
alteration, modification or discharge is sought.
(H) Severability. Any provision of this Agreement or any Equipment
Schedule prohibited by, or unlawful or unenforceable under, any applicable law
in any jurisdiction shall be ineffective as to such jurisdiction without
invalidating the remaining provisions of this Agreement; provided, however, that
to the extent that the provisions of any such applicable law can be waived, they
are hereby waived by Hotel and RoomSystem.
(I) Non-specified Features. If the Equipment delivered pursuant to any
Equipment Schedule contains any features not specified therein, Hotel grants
RoomSystem, at RoomSystem' option and RoomSystem' expense, the right to remove
or deactivate any such features. Such removal or deactivation shall be performed
by the RoomSystem or another party reasonably acceptable to RoomSystem, at a
time convenient to Hotel, provided that Hotel shall not unreasonably delay the
removal or deactivation of such features.
(J) Quiet Enjoyment. Provided that no Event of Default has occurred or
is continuing hereunder and except as provided herein or in the Maintenance
Agreement, RoomSystem, Assignee or their agents or assigns shall not interfere
with Hotel's right of quiet enjoyment and use of the Equipment.
(K) Alterations. Hotel shall be permitted with RoomSystem' prior
written consent and at Hotel's own expense to make alterations or improvements
to the Equipment which are readily removable without causing material damage to
the Equipment and do not adversely affect any manufacturer's warranties with
respect to such Equipment. In the event such alterations are not removed at the
end of the Term, such alterations shall become the property of RoomSystem.
(L) Headings. Section headings are for convenience only and shall not
be construed as part of this Agreement.
(M) Successors. This Agreement shall inure to and bind the permitted
successors and assigns of the respective parties.
(N) Usage. In this Agreement the singular includes the plural and the
plural the singular. References to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications and
supplements thereto, but only to the extent such amendments and other
modifications and supplements are not prohibited by the terms of this
Agreements. References to any entities include their respective permitted
successors and assigns.
(O) Finance Lease Status. Hotel and RoomSystem agree that this
Agreement is intended to be a "finance lease" as defined in Article 2A of the
Uniform Commercial Code (or any equivalent state law). HOTEL WAIVES ANY AND ALL
RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A.
(P) Counterparts. This Agreement may be signed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
19. Additional Definitions. The following terms shall have the meanings
set forth below:
(A) "Contract Year" means each successive twelve (12) calendar month
period following the Payment Commencement Date.
(B) "Fair Market Value" shall mean the in place value of the Equipment
to the user, as reasonably determined by RoomSystem, which would be obtained in
an arms-length transaction between an informed and willing buyer-user under no
compulsion to buy and an informed and willing seller under no compulsion to
sell, where the costs of installation, removal and advertising from the places
the Equipment is or will be located pursuant to this Equipment
7
Schedule during the Term shall not be a deduction from such value. In no event
will the Fair Market Value of the Equipment be less than the Liquidated Damage
Value.
(C) "Interim Payment" means all Lease Payments (as defined in the
Equipment Schedule) from and including the date any Equipment is activated and
operational to but excluding the Payment Commencement Date.
(D) "Lease Payment" has the meaning accorded to such term in the
Equipment Schedule.
(E) "Merchandise" means all goods sold and services provided in
connection with the Equipment.
(F) "Payments" means the Interim Payment, the Lease Payments, as
applicable, and all other amounts owed to RoomSystem under this Agreement.
(G) "Payment Commencement Date" means the first day of the calendar
month immediately following the Acceptance Date.
(H) "Payment Date" means the first day of each calendar month following
the Payment Commencement Date.
(I) "Revenue" means all sums received by Hotel or RoomSystem (excluding
sales tax actually collected), arising from or in connection with the sale of
Merchandise or usage from the Equipment.
(J) "Sales Reports" means the reports of sales activity of the
Equipment generated by the System's computerized sales tracking functions and
transmitted to Servicer by modem from Hotel.
(K) "Software" means the computer software and the related firmware
used for the operation of the System provided by Servicer in connection with the
Equipment.
(L) "System" means the Equipment and all related Software.
By signing this Agreement: (i) Hotel acknowledges that it has read and
understands all terms and conditions in this Agreement and all attachments and
exhibits to this Agreement, (ii) Hotel has an unconditional obligation to make
all Payments due under this Agreement, and that Hotel cannot withhold, set-off
or reduce such Payments for any reason, and (iii) Hotel is leasing the Equipment
solely for business purposes.
IN WITNESS WHEREOF, RoomSystem and Hotel have caused this Agreement to be
duly executed as of the date first above written
ROOMSYSTEM: HOTEL:
RoomSystem International Funding *1
Corporation a *9 corporation
a Nevada corporation
By: By:
--------------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Executive Officer Its:
--------------------------------
8
EQUIPMENT SCHEDULE NO. I
ATTACHMENT I
to
HOTEL REVENUE SHARING LEASE AGREEMENT (The "Hotel Agreement") dated as of *3
between
RoomSystem Technologies, Inc. and
*1.
ROOMSYSTEM: HOTEL:
RoomSystem Technologies, Inc. *1
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ *2
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel Attention: General Manager
Equipment Schedule Date: *3
Initial Term: 84 months from Payment Commencement Date.
Expected Delivery Date: 120 days from receipt of documentation
Location of Equipment: *2
Address for Notices: Same as above
Description of Equipment:
Manufacturer's
Quantity Manufacturer Model/Feature Description List Price
*4 RoomSystem, *5 *6 Selection Refreshment $*7
Inc. Center
*4 RoomSystem, *5 *6 RoomSafe $*7
1 RoomSystem, 586-133 RoomManagement Computer
Total Manufacturer's Price $*7
1. Lease Payment: Revenue Sharing. Hotel shall pay RoomSystem (or its
Assignees) as a monthly lease payment a portion of the Revenue (as defined in
section 19 (I) of the Hotel Agreement) determined in accordance with the revenue
sharing formula contained herein and all other amounts due hereunder or pursuant
to the Hotel Agreement (each such payment a "Lease Payment"). Revenue collected
from sales from the Equipment will be shared between RoomSystem and Hotel as
follows: (i) the first $0.*8 of Revenue collected (the "Threshold Amount") each
day, shall be divided 90% to RoomSystem and 10% to Hotel; and (ii) all Revenue
in excess of the Threshold Amount collected each day, shall be divided 15% to
RoomSystem and 85% to Hotel. Revenue sharing shall be reasonably determined by
RoomSystem pursuant to those certain Sales Reports provided by RoomSystem or
Servicer for each month during the term of this Equipment Schedule on an
annualized basis adjusted quarterly and such determination shall be binding upon
Hotel. RoomSystem or Servicer shall provide a copy of the Sales Reports to Hotel
monthly.
2. Hotel's Purchase Option. Provided no Event of Default has occurred and
is continuing, Hotel shall have the option, exercisable no later than ninety
(90) days after the Acceptance Date, and upon not less than fifteen (15) days
prior written notice to RoomSystem, to purchase all (but not less than all) of
the Equipment from RoomSystem for a price equal to the Fair Market Value (as
defined in section 19 (B) of the Hotel Agreement) of such Equipment or the
Liquidated Damage Value, as defined in Attachment II to the Hotel Agreement,
whichever is greater, and upon such other terms mutually acceptable to
RoomSystem and Hotel.
3. RoomSystem' Termination Option. At any time during the term of this
Agreement, Owner shall have the option, exercisable upon three months written
notice to Hotel, to terminate this Agreement if the following conditions occur:
9
(A) If the Equipment in the Hotel does not (i) generate from the Fee at
least $1.00 per room per day average for all installed Refreshment Centers for
an aggregate total of 60 days; or (ii) negative adjustments made by the Hotel
exceed 2% of the total sales for any given month.
4. Special Terms.
(A) Restocking. Hotel agrees to check (via computer or physical visit)
the stock in each Placed Item daily and to ensure that all Placed Items are kept
above the minimum restock level required by Servicer. In the event any Placed
Item falls below the minimum restock level and it is not restocked within
twenty-four (24) hours to bring the Placed Item(s) above the minimum restock
level, such Placed Item(s) will be considered a down room for the guest(s) and
the Hotel shall pay RoomSystem a down room fee ("Down Room Fee") of $0.*8 per
room per day for each day the Placed Item in the room remains below the minimum
restock level.
(B) Down Room Fee. The Down Room Fee will also accrue to any Placed
Item that the Hotel fails to follow the terms and conditions of Section 5 of the
Hotel Agreement.
5. Hotel Agreement. This Equipment Schedule No. I is executed pursuant
to the Hotel Agreement. All of the terms and conditions of the Hotel Agreement
are hereby incorporated herein and made a part hereof as if such terms and
conditions were set forth herein. By the execution and delivery of this
Equipment Schedule, the parties hereby reaffirm all of the terms and conditions
of the Hotel Agreement, except to the extent, if any, modified hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Equipment
Schedule No. I as of the day and year first set forth above.
ROOMSYSTEM: HOTEL:
RoomSystem Technologies, Inc. *1
a Nevada corporation a *9 corporation
By: By:
-------------------------------- -------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Executive Officer Its:
-------------------------------
10
Master Hotel Installation, Maintenance, License Agreement
HOTEL INSTALLATION, MAINTENANCE AND LICENSE AGREEMENT
to
HOTEL REVENUE SHARING LEASE AGREEMENT dated as of *3
between RoomSystems, Inc. and
*1.
THIS HOTEL INSTALLATION, MAINTENANCE AND LICENSE AGREEMENT (this
"Maintenance Agreement") is entered into as of *3, by and between ROOMSYSTEMS,
INC., a Nevada corporation, whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ hereinafter referred to as ("RSi"), and *1, a *9 corporation hereinafter
referred to as ("Hotel") whose address is *2.
WHEREAS, Hotel has entered into a Hotel Revenue Sharing Lease Agreement
dated as of *3 ("Hotel Agreement") with RoomSystem Technologies, Inc., a Nevada
corporation ("RoomSystem") which, among other things, provides financing of
certain equipment to store valuables and for the refrigeration and dispensing of
beverage and snack food items within the guest rooms of Hotel ("Equipment") and
which Equipment automatically records the sales and usage of merchandise in the
Hotel; and
WHEREAS, the Hotel Agreement, Equipment Schedule No. I dated as of *3
between RoomSystem and Hotel and all other Equipment Schedules issued from
time-to-time pursuant to the Hotel Agreement (collectively the "Documents")
require Hotel to install the Equipment and enter into a maintenance agreement;
and
WHEREAS, Hotel is satisfying its installation and maintenance obligations
under the Documents by entering into this Maintenance Agreement with RSi;
NOW, THEREFORE, in consideration of the premises and the terms, covenants,
and conditions hereinafter contained, the parties hereto agree as follows:
1. Delivery and Installation.
(A) The Equipment (such term and all capitalized terms not otherwise
defined in this Maintenance Agreement shall have the meanings ascribed to such
terms in the Documents) shall be programmed by RSi, placed in the guest rooms by
Hotel and installed in the Premises by RSi.
(B) In connection with the delivery and installation of the Equipment,
Hotel shall: (i) provide access to representatives of RSi to all areas of the
Premises necessary or appropriate in connection with the installation of the
Equipment; (ii) permit representatives of RSi to install such wires, and similar
items throughout the Premises as RSi deems necessary for the installation; (iii)
provide room and board on the Premises to employees or representatives of RSi
during the installation period of up to seven (7) days for each one-hundred
(100) Placed Items installed, such room and board (in Hotel's employee
cafeteria, if available) not to include long distance phone calls, use of
personal laundry, valet, in-room movies, gift shop purchases, alcoholic
beverages, or any other charges other than room or board; (iv) promptly, upon
delivery of the Equipment to the Premises, unload all such items and place them
in a storage area. In addition, Hotel shall supply adequate staff to stock and
place the Equipment in the guest rooms under the direction of RSi's employees.
If Hotel desires RSi to provide the services, RSi will hire, at Hotel's expense,
temporary labor; and (v) pay for an "interface" between the Equipment and
Hotel's property management system located on the Premises.
(C) If Hotel desires any Placed Item to be installed in any room in a
location where there are no grounded outlets within six feet (6'), and a MATV
connection or RJ-11 direct-connect socket within twelve feet (12') of the
location of any Placed Item, such Placed Item shall be relocated to a location
that meets the foregoing requirements, or Hotel shall remedy the problem by
providing adequate extension cords or installing new outlets, connections or
sockets as applicable, at Hotel's own expense. Such work shall be performed in
accordance with the applicable industry standards.
(D) Prior to RSi's obligation to install the System, Hotel shall
provide all necessary requirements for the installation of the System, including
but not limited to the following: (i) an adequate site for the Placed Items in a
dust free location in an air conditioned environment; (ii) two (2) telephone
extensions and a telephone set, at the sole expense of Hotel, adjacent to the
modem supplied by RSi hereunder for the sole use of RSi to monitor the
Equipment; (iii) if available, internet access through hotels provider of
choice; (iv) adequate ventilation for each Placed Item; and (v) a fixed grounded
electrical outlet to be used for each Placed Item in each room.
2. Acceptance.
(A) The installation of the Equipment (or any stage thereof), shall be
deemed to be complete when the Equipment (or any portion thereof designated to
be installed in any stage) is operational. Upon completion of the
1
installation, RSi will provide written notice of such completion ("Notice of
Completion") to Hotel. Immediately upon receipt of the Notice of Completion,
Hotel shall inspect the Equipment and, if the Equipment is in good working
order, Hotel shall execute and deliver to RoomSystem the certificate of
acceptance in the form of Exhibit A to the Equipment Schedule (the
"Certificate"), dated as of the date of such inspection, or Hotel shall provide
written notice to RSi specifying and describing in detail each item with respect
to which it is claiming that the installation is not complete. If the Hotel
fails to give such written notice or to execute the Certificate within five (5)
days following the Notice of Completion, it will be conclusively presumed that
the Equipment is in good working order and that the Equipment has been
irrevocably accepted by the Hotel as if the Hotel had executed the Certificate,
and the Hotel hereby agrees to be bound by the terms of the Certificate.
(B) If Hotel fails to promptly comply with any of its obligations in
sections 1 and 2 hereof, Hotel shall pay to RSi all costs and expenses incurred
by RSi with respect to the delay occasioned by such failure, including, without
limitation, storage, shipping costs, and per diem charges (including lodging,
meals and travel) for RSi's representatives.
(C) If RSi shall be unable to install the Equipment and make the
Equipment operational after reasonable efforts to do so other than as a result
of Hotel's failure to comply with its obligations under this Maintenance
Agreement and the Hotel Agreement, RSi shall so notify Hotel and shall remove
all of the Equipment from the Premises and this Maintenance Agreement "and all
right and obligations of the parties hereunder" shall terminate. Hotel and the
owner of the Premises shall provide to RSi and its agents and representatives
access to the Premises and facilities of the Hotel for such purposes for a
reasonable time and at any reasonable time to enable RSi to remove the Equipment
from the Premises.
3. Training. RSi shall provide basic training on site in the operation
of the Equipment for Hotel's personnel involved in operation and maintenance of
the Equipment. The training will be conducted at the Premises. RSi will provide
up to three (3) days of training without cost to Hotel. Hotel will provide room
and board at no cost for RSi personnel. If additional training is required, RSi
will provide it at no charge provided it is at the time of a scheduled visit as
set forth in section 4 below. If additional training is required by Hotel at a
time other than during a scheduled visit, RSi will perform the training at RSi's
then customary charge for such service.
4. Service. RSi and Hotel, as applicable, will each at their own
expense provide the following:
(A) RSi will provide twenty-four (24) hour telephone service and
maintenance to help maintain and keep the Equipment in normal working order
during the term of this Maintenance Agreement. RSi shall provide all necessary
parts to service the Equipment for the term of this Maintenance Agreement.
(B) Hotel shall provide maintenance personnel capable of removing and
replacing defective parts to the Equipment in a timely manner and provide such
service and maintenance that are necessitated by normal usage. RSi may, at its
option, elect to replace rather than repair any of the Equipment it is obligated
to maintain hereunder.
(C) The Hotel shall be responsible for purchasing and providing for use
with the Equipment all consumable items, including printed menus, printer paper,
diskettes and printer ribbons.
(D) The Hotel shall provide at no expense to RSi on an as needed basis
(generally semi-annually) room and board for the training, service, and
maintenance crew that will make follow up visits to the Premises.
(E) RSi will monitor the operations of the Placed Items, and will make
semi-annual visits to Hotel, to provide Hotel retraining, merchandising
recommendations, operational recommendations and software support.
5. Warranties, Disclaimer and Limitation of Remedies.
(A) RSi warrants that the Equipment will be installed in a
workmanlike manner and that the Equipment will be free from defects in
workmanship and materials for a period of three months from the Acceptance Date.
(B) Except as expressly provided herein, RSi expressly disclaims all
other warranties with respect to the Equipment, express and implied.
(C) The limited express warranty provided herein is for the benefit of
Hotel only and is not for the benefit of any other person.
(D) The limited express warranty provided herein is conditioned upon
proper use of the Equipment and Software (as defined in section 19 (K) of the
Hotel Agreement). No warranty shall apply to any item of Equipment or the
Software, (i) which has been modified in any respect without the express written
consent of RSi, (ii) which has been installed, serviced or repaired by or on
behalf of Hotel by any person other than an authorized agent of RSi, (iii) which
has been removed from the Premises, (iv) which has been subject to unusual
physical or electrical stress, or (v) which has been damaged by reason of
accident, neglect or misuse.
(E) In the event that any item of Equipment or the Software shall be
defective in workmanship of material within the term of this Maintenance
Agreement, RSi shall replace the item of Equipment with a new or reconditioned
component or components thereof, or make such modifications to the Software in
order to return it to good working order, subject to the following terms and
conditions: (i) Hotel shall give notice to RSi of the defect
2
within the term of this Maintenance Agreement; (ii) Hotel shall ship any
defective part or component to such location as RSi shall designate at Hotel's
expense; (iii) RSi may, at its sole discretion, provide a comparable substitute
part or component for any defective or failed part or component, which shall
fully discharge RSi's obligation to repair or replace such defective items; (iv)
Hotel is responsible for installing components on the Equipment and sending and
receiving the parts as necessary to and from RSi.
6. Software License Agreement.
(A) Subject to and on the terms and conditions hereof and for the term
of this Maintenance Agreement, RSi grants to Hotel a non-transferable and
non-exclusive license (the "License") to use the Software as installed by RSi on
the Equipment. The Software may be used solely by Hotel for the purpose and
subject to the limitations provided herein and Hotel shall not be entitled to,
(i) give, deliver, provide access to or authorize the use of the Software by any
person other than authorized employees of Hotel or (ii) give, sell, assign or
grant any rights with respect to the Software to any person. Hotel may assign
the License, subject to the prior written consent of RSi which shall not
unreasonably be withheld, to a person, firm, company, partnership or corporation
which shall succeed to the business of Hotel by means of merger, consolidation
or acquisition of substantially all of the property and assets of Hotel.
(B) RSi retains exclusive title to, and ownership in, the Software, as
installed on the Equipment or otherwise, and all copies thereof regardless of
the form or media in or on which the original or any copies may exist. All
rights with respect to the Software not expressly granted to Hotel hereunder are
reserved to RSi. The License does not and shall not be construed to give Hotel
any right, claim, title to or ownership interest in, the Software, any trade
secrets, patent, copyright, trade name, trademark or other proprietary right
owned, applied for or subsequently acquired by RSi.
(C) Hotel agrees that the Software will be used by Hotel solely at the
Premises and solely for the operation of the Equipment. Hotel shall not modify,
adapt, translate, reverse engineer, decompile or disassemble the Software or
create works based on the Software without the express prior written consent of
RSi. Any modification, enhancement, change in or addition to the Software
whether made by RSi, Hotel or otherwise shall be and remain the sole and
exclusive property of RSi.
(D) Hotel agrees that the Software and related materials provided by
RSi contain proprietary information and trade secrets of RSi. Hotel agrees that
it will authorize and permit the use by its employees of the Software and the
confidential information therein solely for the purpose and in accordance with
the provisions hereof and will not disclose, or authorize or permit disclosure
by its employees of any confidential information to any person other than
authorized employees of Hotel.
(E) The License granted herein shall be perpetual for the version
provided at installation if either the Equipment is purchased or leased. If the
Equipment is leased and not purchased at the end of the lease the License is
canceled. All new versions and support will be subject to the current purchase
price or fee at the time of installation and terminating on the date of
termination of this Maintenance Agreement.
7. Service and License Fees. Hotel shall pay to RSi a fee for the
services, License and materials provided by RSi pursuant to this Maintenance
Agreement in the amount of $0.08 per day per Placed Item. These payments may be
increased annually by a cost of living adjustment "COLA." These payments will be
made quarterly in advance. The total quarterly payment will be calculated by
multiplying the number of Placed Items times $0.08 times 91.25. Hotel shall not
have to make this payment so long as any Equipment is subject to the revenue
sharing arrangement of the Hotel Agreement and so long as no Event of Default
exists and is continuing under the Hotel Agreement.
8. Term of Maintenance Agreement. This Maintenance Agreement shall
become effective on the date of execution and shall remain in force and effect
until the term of all of the Documents have expired.
9. Liability for Damage to the Product. Hotel shall be responsible for
any damage to the Equipment which is caused by intentional or negligent conduct
of Hotel, its employees, agents, or representatives or Hotel guests while the
Equipment is in Hotel's possession. Hotel shall not be responsible for any
damages which are due to ordinary wear and tear, which Hotel could not
reasonably prevent, or damage caused by the intentional or negligent acts of
RSi.
10. Exclusive Dealing. During the term of this Maintenance Agreement,
RSi shall have the exclusive right to install and service the Equipment in
Hotel's guest rooms. Hotel shall not install any other products similar to the
Equipment in Hotel's guest rooms during this period without the prior written
consent of RSi.
11. Notice. All notice or other communications required or permitted to
be given hereunder shall be in writing and shall be (i) delivered personally,
(ii) mailed, postage prepaid, or (iii) faxed and a copy mailed to the parties,
as follows:
If to RSi: RoomSystems, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
3
If to Hotel: As set forth in the applicable Equipment Schedule.
With a copy to: RoomSystem Technologies, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. Miscellaneous Provisions. The following miscellaneous provisions
are an integral part of this Maintenance Agreement:
(A) Binding Obligation. This Maintenance Agreement shall inure to the
benefit of and constitute a binding obligation upon the contracting parties,
their respective heirs, legal representatives and permitted assigns.
(B) Modifications. This Maintenance Agreement may not be modified
except by an instrument in writing signed by the parties hereto.
(C) Headings. The headings used in this Maintenance Agreement are for
reference purposes only and shall not be deemed to limit or affect in any way,
the meaning or interpretation of any of the terms or provisions of this
Maintenance Agreement.
(D) Severability. The provisions of this Maintenance Agreement are
severable, and should any provision hereof be void, voidable, unenforceable, or
invalid, such a void, voidable, unenforceable or invalid provision shall not
affect any other portion or provision of this Maintenance Agreement.
(E) Waiver. Any waiver by any party hereto of any breach of this
Maintenance Agreement of any kind or character whatsoever by the other party,
whether such waiver is direct or implied, shall not be construed as a continuing
waiver or consent to any subsequent breach of this Maintenance Agreement on the
part of the other party.
(F) Applicable Law, Jurisdiction and Venue. This Agreement shall be
governed by, and construed in accordance with, the laws of the state of Nevada,
without regard to principles of conflicts of law. RSi and Hotel hereby consent
to jurisdiction and venue in any state or federal court in the state of Nevada
and hereby waive any objections that jurisdiction or venue in any such court is
not proper.
(G) Attorneys' Fees. In the event any action or proceeding is brought
by any party under this Maintenance Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs of court from the
non-prevailing party.
(H) Counterparts. This Maintenance Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(I) Confidentiality. The terms of this Maintenance Agreement shall be
confidential, and neither party shall reveal to any person, hotel, or other
entity the terms hereof and no copies shall be made of this Maintenance
Agreement except for the parties confidential records and except as necessary to
enforce its terms, without the prior written consent of the other party.
IN WITNESS THEREOF, the parties hereto have executed this Maintenance
Agreement the day and the year first named above.
RSI: HOTEL:
RoomSystems, Inc. *1
a Nevada corporation a *9 corporation
By: By:
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Chief Executive Officer Its:
--------------------------------
4
