Hotel Revenue Sharing Lease Agreement - eRoomSystem Technologies Inc.
HOTEL REVENUE SHARING LEASE AGREEMENT
THIS HOTEL REVENUE SHARING LEASE AGREEMENT ("AGREEMENT" or "HOTEL
REVENUE SHARING LEASE AGREEMENT") is dated *3 and entered into by and between
EROOMSYSTEM TECHNOLOGIES, INC., ("EROOM") a Nevada corporation having its
principal office and place of business at 3770 Howard Hughes Parkway, Suite 175,
Las Vegas, Nevada, 89109 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
hereunder. Each Equipment Schedule to be entered into between eRoom 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.
eRoom agrees to place with Hotel, and Hotel agrees to accept and lease
from eRoom, 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 referred to as the
"EQUIPMENT" and individually as 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. eRoom and Hotel
shall have no obligation hereunder until the execution and delivery of an
Equipment Schedule by eRoom and Hotel. Hotel agrees that eRoom will be the
exclusive provider of the Equipment during the term of this Agreement.
2. TERM: PAYMENTS AND TERMINATION. The term ("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 (as hereinafter defined) has occurred and is
continuing, Hotel shall have the option exercisable on no less than 135 days
prior written notice to eRoom to (A) purchase the Equipment for its then Fair
Market Value (as hereinafter defined), (B) renew the Equipment Schedule(s) under
mutually acceptable terms, or (C) terminate the Equipment Schedule(s) according
to its terms. Upon payment in full of the amount required to exercise Hotel's
option to purchase the Equipment, eRoom 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 eRoom 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 eRoom, Hotel shall be liable to eRoom for
the Fair Market Value of such Placed Items until returned to eRoom as well as
all other damages incurred by eRoom.
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All Payments (as hereinafter defined) shall, unless otherwise directed
by eRoom in writing, be made to eRoom on the Payment Date (as 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 eRoom a certificate of acceptance (the "CERTIFICATE") in
the form of Exhibit A to the Equipment Schedule hereto 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 (the "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 each
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 eRoom
and any manufacturer, supplier or Servicer of the Equipment, eRoom 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 in contract, strict liability, negligence or
otherwise. Hotel shall not assert any claims, counterclaims, or defenses against
eRoom for consequential, special or indirect damages, or for loss of use or loss
of profits. eRoom 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.
4. ASSIGNMENT, OBLIGATION TO MAKE PAYMENTS UNCONDITIONAL. eRoom 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 third party (hereinafter,
"ASSIGNEE"); provided, however, any such assignment or sale shall not relieve
eRoom 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 eRoom 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 eRoom under this Agreement, but Assignee shall not be obligated to
perform the obligations of eRoom 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 eRoom 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 eRoom, Assignee, any manufacturer, supplier, seller or Servicer (as
hereinafter defined) 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 eRoom, which consent shall not be unreasonably
withheld.
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5. INSTALLATION, MAINTENANCE AND REPAIR. Hotel, at its expense, shall
be responsible for the delivery, installation, deinstallation, redelivery,
maintenance and repair of the Equipment, all of which shall be effected by the
Servicer (defined in this paragraph) or such other third party acceptable to
eRoom. Hotel agrees, at all times during the Term, 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, maintain in force an Installation,
Co-Maintenance and Software License and Upgrade Agreement (the "MAINTENANCE
AGREEMENT"), covering the Equipment with the manufacturer or supplier of the
Equipment, or such other third party as may be acceptable to eRoom (any such
party, the "SERVICER"). eRoom 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 eRoom or Servicer deems necessary to keep the
Equipment at current engineering levels. As a material inducement for eRoom to
enter into this Agreement with Hotel on a "revenue sharing basis" Hotel shall:
(A) Purchase and maintain a sufficient inventory level of
merchandise for sale in the Equipment ("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
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;
(I) Take all actions and pay all costs necessary to cause the
System to interface with Hotel's computer system;
(J) During the Term, permit the employees and/or representatives
of eRoom or Servicer to stay as guests in the Hotel, in a standard double
occupancy room, free of charge for room and reasonable board when visiting the
Hotel for the purpose of inspecting and performing maintenance on the Equipment;
provided, however, such room and board shall not include long
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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 eRoom.
6. REPRESENTATIONS AND WARRANTIES. Hotel represents and warrants for
the benefit of eRoom and any Assignee (as hereinafter defined) and if requested
by eRoom will provide an opinion of counsel and other supporting documents
reasonably requested by eRoom 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 eRoom 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 eRoom) from the Acceptance Date, until the later of the
date such Placed Item is removed from the Hotel by eRoom 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 eRoom, 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 eRoom
and Assignee and pay to eRoom 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 eRoom 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 eRoom 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 insurance carrier(s) reasonably acceptable to eRoom and shall maintain a
loss payable endorsement in favor of eRoom and Assignee affording them such
additional protection as they reasonably require; and shall maintain liability
insurance reasonably satisfactory to eRoom. 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 eRoom, 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
eRoom and Assignee. Each insurer is hereby authorized and directed to make
payment for any Loss directly to eRoom or Assignee. If Hotel does not provide
eRoom or Assignee evidence of insurance acceptable to eRoom or Assignees, eRoom
has the right, but not the obligation, to obtain insurance covering the
Equipment from an insurer of eRoom's choice. eRoom may add the costs of
acquiring and maintaining such insurance and all fees for eRoom's 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 eRoom purchases insurance, Hotel will cooperate with eRoom's 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 eRoom or Assignee, and any other person. Hotel acknowledges that eRoom
and Assignee are not required to secure or maintain any insurance, and eRoom and
Assignee will not be liable to Hotel if eRoom or Assignee terminate any
insurance coverage that eRoom or Assignee procure. If eRoom or Assignee replace
or renew any insurance coverage, eRoom or 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,
eRoom, 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,
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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 eRoom at the end of the Term.
10. LIENS AND TAXES. eRoom 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 eRoom's net income. Hotel shall provide evidence
of any payment hereunder upon request of eRoom. 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 eRoom 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 hereinafter described), eRoom 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 eRoom, appears to affect the Equipment or
this Agreement and, in exercising any such rights, incur any liability and
expend whatever amount in eRoom's reasonable discretion eRoom may deem necessary
therefor. All sums so incurred or expended by eRoom 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 eRoom or Assignee. If requested by eRoom, Hotel will
obtain, prior to delivery of any Placed Item, a certificate in a form
satisfactory to eRoom 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 eRoom or Assignee. All data and
information collected by or residing in the Equipment, at all times during the
term and thereinafter, is the property of eRoom. In addition, the Software and
all modifications, enhancements, and improvements thereto installed as part of
the Equipment is the property of eRoom and is provided for use only in
accordance with the Maintenance Agreement. 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 eRoom's 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 eRoom 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
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deemed to be a lease intended for security, Hotel hereby grants eRoom 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 eRoom's opinion)
eRoom's or Assignee's interest in this Agreement, any Equipment Schedule(s), the
Equipment or the payments due hereunder. eRoom 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 eRoom's, 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 eRoom through and including such termination or
expiration date; and (B) return the same to eRoom in good repair, condition and
working order, ordinary wear and tear resulting from proper use thereof alone
excepted, unless Hotel has paid eRoom in cash the Fair Market Value of the
Equipment. Such return shall be effected promptly by making the Equipment
available to eRoom or such other party designated by eRoom. 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,
eRoom 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. eRoom 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 eRoom's 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 shall
constitute an event of default ("EVENT OF DEFAULT"): (A) failure of eRoom to
receive any Payment on the date on which it is due which failure is not cured
within five (5) calendar days after notice thereof from eRoom or Assignee; (B)
failure by Hotel to perform or observe any other term, covenant or condition of
this Agreement, any Equipment Schedule or any Maintenance Agreement, which is
not cured within thirty (30) days after notice thereof from eRoom 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
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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 eRoom or Assignee in 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 eRoom or Assignee.
17. REMEDIES. Upon the occurrence of an Event of Default, eRoom or
Assignee may do one or more of the following:
(A) Require Hotel, and Hotel shall, upon demand of eRoom, on the
next Payment Date following such demand, pay eRoom or Assignee, as liquidated
damages and not as a penalty, an amount equal to the Liquidated Damage Value (as
set forth in Attachment II hereto), 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 eRoom as a
result of an Event of Default and the exercise of eRoom's remedies with respect
thereto (all such amounts collectively the "DEFAULT VALUE"), plus interest on
the Default Value at ten percent (10%), or the highest rate legally permissible;
(B) eRoom (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 eRoom, in
eRoom's discretion shall elect. If eRoom elects to sell or lease the Equipment,
eRoom 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 eRoom (i) first, to pay eRoom 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 eRoom. 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 eRoom (or its affiliates).
(F) eRoom (or its representative) may, without notice to or demand
upon Hotel, shut the Equipment down until the default is cured. During the time
the Equipment is shut down, Hotel shall pay down room fees (as defined in the
Equipment Schedules(s)) 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 eRoom will not
constitute a termination of this Agreement or any Equipment Schedule unless
eRoom 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 eRoom at law or in equity.
18. MISCELLANEOUS.
(A) EFFECT OF WAIVER. No delay or omission to exercise any right
or remedy accruing to eRoom 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
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occurring. Any waiver, permit, consent or approval on the part of eRoom 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 eRoom: eRoomSystem Technologies, Inc.
3770 Howard Hughes Parkway, Suite 175
Las Vegas, NV 89109
Attn: General Counsel
If to Hotel: *1
*2
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.
(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. eRoom 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.
(F) FINANCIAL STATEMENTS. Hotel agrees to furnish promptly, or
cause to be furnished, to eRoom 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
eRoom or Assignee may from time to time reasonably request.
(G) ENTIRE AGREEMENT. eRoom and Hotel acknowledge that there are
no agreements or understandings, written or oral, between eRoom 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 eRoom 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 eRoom.
(I) NON-SPECIFIED FEATURES. If the Equipment delivered pursuant to
any Equipment Schedule contains any features not specified therein, Hotel grants
eRoom, at eRoom's option and eRoom's expense, the right to remove or deactivate
any such features. Such removal or deactivation shall be performed by the eRoom
or another party reasonably acceptable to eRoom, at
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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, eRoom, 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 eRoom's 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 eRoom.
(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 eRoom 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 eRoom, 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
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 eRoom under this Agreement.
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(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 eRoom (excluding
sales tax actually collected), arising from or in connection with the sale of
Merchandise from or usage of 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: (1) HOTEL ACKNOWLEDGES THAT IT HAS READ AND
UNDERSTANDS ALL TERMS AND CONDITIONS IN THIS AGREEMENT AND ALL ATTACHMENTS AND
EXHIBITS TO THIS AGREEMENT, (2) 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, eRoom and Hotel have caused this Agreement to be
duly executed as of the date first above written
eROOM: HOTEL:
eROOMSYSTEM TECHNOLOGIES, INC. *1
a Nevada corporation a *9 corporation
By:
---------------------------------- By:
Steven L. Sunyich --------------------------------
Its: Chief Executive Officer
Its:
--------------------------------
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