EXHIBIT 10.38
(Translated from German to English)
PHILIPS PHILIPS
PHILIPS MIETSYSTEM GmbH
LEASING CONTRACT NO.: 05 02219 097 PMG
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 04109 Leipzig
Prodac
Prozessdatentechnik GmbH
Max-▇▇▇▇▇▇-Str. [unclear]
[unclear] Cologne
(Customer) (PMG)
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By jointly signing this document, the parties enter into a leasing contract
concerning the products listed herein. The leasing terms attached to this
contract shall apply (3rd + 7th pages of the form). The prevailing statutory
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value-added tax shall be added to all of the listed sums.
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Pos. Qty. Product No./title Use
DM/MO.
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[illegible]
One-time costs (payable Total sum for the use
in addition to first monthly ------- (payable monthly in advance) [sum unclear]
payment) DM:
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Imputed term: 34 months System: 3.0 Tentative delivery date: [illegible]
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Location: see side agreement
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UNTIL REVOCATION, THE CUSTOMER HEREBY AUTHORIZES PMG TO CHARGE THE COMPENSATION
PAYABLE PURSUANT TO THE LEASE CONTRACT--PLUS THE PREVAILING STATUTORY VALUE-
ADDED TAX--FROM THE ACCOUNT DESIGNATED BELOW.
IN THE ABSENCE OF A DEBIT AUTHORIZATION, WE WILL TAKE THE LIBERTY OF INCREASING
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THE USE CHARGE BY DM 7.00.
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Exact name of bank, bank wire number, account number:
[illegible] AG Cologne, bank wire no. [illegible]
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[stamp]
Prodac Date: [illegible]
Prozessdatentechnik GmbH
- Electronicsysteme - Philips Mietsysteme GmbH
▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Company stamp and legally binding
signature of the customer
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Management: ▇▇▇▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇▇▇▇▇ branch
Wilhelm [illegible] 20099 Hamburg Bruhl 76
▇▇▇▇ [illegible] Telephone: (040) ▇▇▇ ▇▇-▇ ▇▇▇▇▇ Leipzig
Fax: (▇▇▇) ▇▇▇ ▇▇-▇▇▇ Telephone: (▇▇▇▇) ▇ ▇▇ ▇▇ ▇▇
Chairman of the Supervisory Board Telegram: [illegible] (▇▇▇▇) ▇ ▇▇ ▇▇ ▇▇
[illegible] Fax: (▇▇▇▇) ▇ ▇▇ ▇▇ ▇▇
Corporate domicile: [illegible] Bank connection: Bank connection:
[illegible]: HRB [illegible] Hamburgische Landesbank BW Bank Leipzig
PHILIPS PHILIPS
PHILIPS MIETSYSTEM GmbH
LEASING CONTRACT NO.: 95 02219 097
Prodac
Prozessdatentechnik GmbH
▇▇▇-▇▇▇▇▇▇-▇▇▇. ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
LEASE TERMS
I. SUBJECT MATTER OF CONTRACT: 1. Pursuant to this contract, PMG shall permit
the customer to engage in paid use of the products listed on the front page.
2. The customer is aware that PMG acquires the products specifically for the
individual contract in order to make them available for use by the customer for
the term of the contract in exchange for payment of monthly compensation.
II. DELIVERY: 1. The delivery of the operationally ready products shall be
defined in a delivery protocol, of which the customer shall receive a copy.
2. The delivery period shall be extended in a reasonable manner, if PMG is
prevented from performing this contract in a timely manner due to strike, lock-
out, Act of God or delivery disruptions with the manufacturer, supplier or
subcontractor. The customer may terminate the contract if PMG is in default and
does not perform within a reasonable grace period. Deadline imposition and
notice of termination must be in writing. If PMG is in default with respect to
a portion of the delivery, and the customer is able to use the other products
independently, the customer shall be solely entitled to a corresponding partial
termination of the contract.
3. If it is impossible for PMG to perform the contract in whole or in part due
to the reasons stated in section 2, PMG shall be released from its duty to
deliver and the customer shall be released from its duty to pay.
4. PMG shall be entitled to make partial deliveries and render partial
services.
5. As long as the customer is in default with respect to payment of the monthly
compensation or payment on a delivery or service which PMG provided pursuant to
this contract, PMG shall be entitled to withhold deliveries or services without
incurring an obligation to make compensation
for any damages which arise.
III. CONTRACT TERM: 1. The use relationship shall begin on the date of
delivery of the operationally ready products. If PMG makes partial deliveries
which can be used by the customer independent of the still outstanding
deliveries, and pro rata compensation can be seen from the contract or delivery
protocol, the use period shall begin separately for each sub-product upon
operationally ready delivery.
2. The contract is entered into for an indefinite term.
3. The customer may terminate the use relationship or the individual sub-use
relationships upon notice of 6 months no earlier than the end of the imputed
term. The imputed term (in months) shall begin at the beginning of contractual
payment.
4. PMG hereby irrevocably offers the customer the opportunity to rescind the
contract on a mutually agreeable basis in exchange for a compensation payment.
The customer may accept this offer upon declaration notice of 6 months effective
no earlier than the end of the month following the respective beginning of
contractual payment which corresponds to half of the stipulated imputed term--
rounded up to full months. This offer shall only apply if 40% of the ordinary
operational useful life has been fulfilled.
A settlement payment shall be due upon acceptance of the contract. It shall be
calculated based on the total of the compensation still outstanding through the
expiration of the imputed term. Upon acceptance of this offer, the remaining
sum shall accrue interest at the prevailing Bundesbank discount rate at the time
of premature end of the contract. The sum, plus the prevailing value-added tax,
shall be due without deduction on the date of the premature end of the
contractual relationship. (In addition, the costs of return pursuant to section
XV shall be due).
In the event of the sale of the products returned to PMG within 90 days, 90% of
the net sales proceeds--but not more than the amount of the compensation payment
therefor--shall be credited to the customer.
IV. PAYMENT: 1. The customer shall pay compensation [underlined by hand] on a
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monthly basis in advance starting from the first day of the month following
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delivery of the operationally ready products. The compensation shall not
include any fees payable to the Deutsche Bundespost or other agency.
2. If the customer defaults on a payment, PMG shall be entitled to charge
interest in the amount of [circled by hand] 3% above the respective [underlined
by hand] discount rate of the Deutsche Bundesbank.
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3. The customer may only assert a right of retention if said right is based on
claims arising from this leasing contract. He shall be entitled to an offset
against the claims of PMG if PMG has acknowledged the customer's counter claim
or if said counter claim has been established by final judicial determination.
V. CHANGE IN COMPENSATION: 1. The monthly compensation may be adjusted
accordingly if the delivery of products pursuant to the agreement takes place
more than 4 months following the
conclusion of the contract and the sales prices for the products charged by the
suppliers changes during this period.
2. If the cost factors which influence the compensation change following
conclusion of the contract, or if the taxes payable in connection with this
contract are changed, revoked or reintroduced, the monthly compensation may be
adjusted in accordance with the changed circumstances.
3. The adjustment shall be made in writing and shall include communication of
the amount and the point in time from which the change of compensation shall
apply.
4. If, as a result of the adjustment pursuant to section 2--in relation to
the overall leasing period to date--the compensation increases by more than an
annual average of 5%, the customer shall be entitled to terminate the contract
within a period of 4 weeks following receipt of the written notice of
modification; said termination shall be effective on the date on which the new
compensation would become effective in the absence of termination. Said
termination right on the part of the customer shall not exist if new or modified
taxes were the reason for the increase of compensation.
VI. LIST, DELIVERY: PMG hereby assumes all transport of the products. The
customer shall bear the expense of installation. The customer shall establish
empty pipes, line networks and rooms intended for setting up the products in a
timely manner at its own expense in accordance with the regulations of the
manufacturer or supplier.
VII. GUARANTEE/ASSIGNMENT OF CLAIMS: PMG hereby extends to the customer a
guarantee against material and legal defects on the part of the products in such
a manner that it assigns to the customer all claims, particularly guarantee,
remedial measures, guarantee and compensatory damage claims under its contract
with the supplier. The user hereby accepts said assignment and waives the
assertion of such claims against PMG.
With regard to the product, the customer shall therefore hold claims solely
against the supplier; specifically, the customer shall not be entitled to reduce
or withhold compensation payable to PMG by asserting defects with respect to the
product.
VIII. OWNERSHIP AND POSSESSION: 1. The products shall remain the property of
PMG.
2. The customer may not move the products or portions thereof [underlined by
hand] to a location other than that stated in the contract without the prior
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written consent of PMG. The customer shall cause Philips experts to perform (at
the customer's expense) the transport and installation work necessary in
connection with the change in location.
The foregoing shall not apply to products which are intended for mobile use. In
this instance, the consent of PMG shall be required if said products are to be
removed from the territory of the Federal Republic of Germany.
3. The customer [underlined by hand] shall not permit third parties to use
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the products without the prior written consent of PMG. The customer shall not be
entitled to terminate the (sub)contract if PMG refuses to give its permission.
4. [underlined by hand] The customer shall keep the products free from
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encumbrances of any kind. The customer shall notify PMG promptly of any third-
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party seizure of the products and shall provide PMG with all necessary
information. The customer shall bear the costs in connection with all measures
which are necessary in order to prevent third-party seizure and shall assist PMG
in every way in securing PMG's ownership.
IX. LIABILITY OF THE CUSTOMER FOR DAMAGE TO THE PRODUCT:
1. The customer shall treat the products in a careful manner, store them in a
secure manner in order to prevent damage and theft and only use them in
accordance with the intended use.
2. The customer shall bear the risk of all damage to the products.
[underlined by hand] At the request of PMG, the customer shall enter into
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appropriate insurance contracts and document the conclusion of such contracts.
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3. In the event of loss, the customer shall, according to his election,
- return the affected portions to their contractual condition at his own
expense,
- replace the products with products of equivalent value or replace the
affected parts, with the replacement parts taking the place of the original
products.
The occurrence of damage shall not release the customer from his obligation to
pay compensation or from his other contractual obligations.
4. The customer shall report the loss event to PMG promptly. He shall
simultaneously report fire, explosion and theft damages to the police
authorities.
X. LIABILITY OF PMG: Compensatory damage claims of the customer, regardless
of the type and legal basis, shall be barred [underlined by hand] unless PMG is
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charged with intentional conduct or gross negligence, is mandatorily liable on
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the grounds of the absence of promised characteristics or violates a contractual
duty which is substantial for purposes of achieving the contractual purpose.
XI. TENDER TO PURCHASE: 1. If the contract is terminated by the customer in a
timely manner or if he accepts the offer of mutually agreeable premature
contractual rescission (III. 4), the customer, at PMG's request, shall be
obligated to purchase the products without any guarantee in the condition in
which they existed at the end of the contract.
2. The purchase price shall be a monthly payment plus the prevailing value-
added tax and, if applicable, a settlement payment pursuant to section III. 4.
XII. TERMINATION BY PMG: PMG may notice regular termination of the (sub-)use
relationship no earlier than the first possible date of mutually agreeable
contractual recession (III. 4) following the respective beginning of contractual
payment; in the event of ordinary termination by PMG, the customer shall have no
obligation to make a compensation payment.
XIII. EXTRAORDINARY TERMINATION: 1. The contract may be terminated without
notice by either party for good cause.
2. Good cause shall specifically exist for PMG if:
- the customer violates the provisions of this contract in a substantial
manner or continues his [underlined by hand] contractually violative
conduct or maintains the contractually violative condition despite having
been warned by PMG;
- the customer is in default on his [underlined by hand] payment for more
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than two months;
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- the asset situation of the customer deteriorates, specifically, if
insolvency proceedings are opened or forced execution measures are
introduced against him;
- the customer moves his place of business/residence [underlined by hand]
abroad;
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- the customer, or an unauthorized third party directed by the customer,
makes unauthorized [underlined by hand] maintenance or repair work or
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other operations on the products.
3. If the grounds for termination relate only to a part of the product, and
the other products are usable independently therefrom, the customer shall be
solely entitled to corresponding partial termination.
4. If the customer ends a portion of the contract, and the products from the
remaining portions of the contract become unusable for the customer as a result
of the return of the products in question, the customer shall not be entitled to
extraordinary termination of the remaining portions of the contract. The
customer shall be free to accept the respective offer for mutually agreeable
contractual recision in this connection in exchange for a settlement payment.
The same shall apply in the case of the end of an independent contract
concerning products which are related to the products under this contract.
5. The offer of early mutually agreeable contractual rescission may be
accepted at any time by the heirs of the customer. Their right to early
termination shall be barred. In the case of multiple customers, this shall also
apply to the heirs of each individual customer.
XIV. COMPENSATORY DAMAGES IN THE EVENT OF EXTRAORDINARY TERMINATION: If the
contract is ended in whole or in part by extraordinary termination declared by
PMG, the customer shall compensate PMG for all damage which is incurred as a
result of or in connection with the early end of the contractual relationship.
Interest accruing on the statement of damages shall be computed at an interest
rate of 3% above the prevailing Bundesbank discount rate at the time of
termination.
XV. RETURN OF THE PRODUCTS: 1. The customer shall return the products to PMG
in an orderly condition at his own expense. The customer shall order
disassembly by Philips experts at his own expense.
2. If the customer uses a product after expiration of his right to do so, he
shall--without prejudice to further claims--owe a sum in the amount of the
monthly compensation for each month of use which is started.
XVI. DATA CONFIDENTIALITY PROTECTION: THE PERSONAL DATA OF THE CUSTOMER
OBTAINED IN CONNECTION WITH THE BUSINESS RELATIONSHIP SHALL BE PROCESSED AT PMG
OR THE ENTERPRISES AFFILIATED THEREWITH IN COMPLIANCE WITH THE STATUTORY
PROVISIONS.
XVII. FINAL PROVISIONS: 1. PMG shall have the right to delegate to third
parties the performance of the contractual duties which it owes to the customer,
specifically the transport of the products.
2. Ancillary agreements, modifications and/or addenda to the contract,
termination declarations etc., must be in writing in order to be effective. The
formal requirements may only be waived by written agreement.
3. If one of the foregoing provisions is or should become invalid--regardless
of the legal
ground--the validity of the remaining provisions shall not be affected thereby.
4. The place of venue shall be Hamburg, if the customer is a statutory
"merchant," a legal entity organized under public law or a public law special
fund.
5. The law of the Federal Republic of Germany shall apply.