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EXHIBIT 10.7
LEASE AGREEMENT
[LOGO OF BALBOA CAPITAL CORPORATION APPEARS HERE]
TO OUR VALUED CUSTOMER: This Lease has been written in "Plain
English". When we use the words you and your in the Lease, we mean you, our
customer, which is the Lessee indicated below. When we use the words we, us, and
our in this Lease, we mean the Lessor, Balboa Capital Corporation. Our address
is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
CUSTOMER INFORMATION: Lessee Name Lessee #
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. 001-07458-01
Billing Street Address Tax ID #
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇-▇▇▇▇▇▇
92612
Equipment Location (if different from above) Lessee Phone #
▇▇▇-▇▇▇-▇▇▇▇
SUPPLIER INFORMATION: Company Name Contact
EIS Computers Inc. ▇▇▇▇▇ VanBeveron
Address Phone #
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇-▇▇▇-▇▇▇▇
93012
EQUIPMENT DESCRIPTION: Quantity Make/Model Serial Number
See exhibit "A" attached hereto and make a part hereof
END OF LEASE: [X] Fair Market Value Purchase Option (See Section 14)
TERM AND PAYMENT: Monthly Rent Base Term in Deposit Deposit Applied To
(Plus applicable taxes) Months
First & last monthly rentals;
$2,084.50 36 $4,169.00 Documentation Fees: $199.00
INSURANCE & TAXES: You are required to provide and maintain insurance
related to the Equipment, and to pay any property,
use and other taxes related to this Lease or the
Equipment. (See sections 6 and 8 on the back of this
Lease.) If you are tax-exempt, you agree to furnish
us with satisfactory evidence of your exemption. You
further agree to pay reasonable service fees assessed
for processing of insurance premiums and taxes.
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TERMS & CONDITIONS: BY SIGNING THIS LEASE: (i) YOU ACKNOWLEDGE THAT YOU
HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS ON
EACH PAGE OF THIS LEASE, (ii) YOU AGREE THAT THIS
LEASE IS A NET LEASE THAT YOU CANNOT TERMINATE OR
CANCEL, YOU HAVE AN UNCONDITIONAL OBLIGATION TO MAKE
ALL PAYMENTS DUE UNDER THIS LEASE, AND YOU CANNOT
WITHHOLD, SET OFF OR REDUCE SUCH PAYMENTS FOR ANY
REASON, (iii) YOU WILL USE THE EQUIPMENT ONLY FOR
BUSINESS PURPOSES, (iv) YOU WARRANT THAT THE PERSON
SIGNING THIS LEASE FOR YOU HAS THE AUTHORITY TO DO SO
AND TO GRANT THE POWER OF ATTORNEY SET FORTH IN
SECTION 9 OF THIS LEASE, (v) YOU CONFIRM THAT YOU
DECIDED TO ENTER INTO THIS LEASE RATHER THAN PURCHASE
THE EQUIPMENT FOR THE TOTAL CASH PRICE, AND (vi) YOU
AGREE THAT THIS LEASE WILL BE GOVERNED BY THE LAWS OF
THE STATE OF CALIFORNIA AND YOU CONSENT TO
JURISDICTION IN THE COUNTY OF ORANGE, YOU EXPRESSLY
WAIVE ANY RIGHTS TO A TRIAL BY JURY.
Lessor: Balboa Capital Corporation Lessee: ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
By: ________________________ By: /s/ ▇▇▇▇ ▇▇▇▇
Vice President
▇▇▇▇ ▇▇▇▇, President
Date: Date: March 25, 1999
THIS LEASE IS SUBJECT TO APPROVAL AND ACCEPTANCE BY US AND SHALL NOT
BECOME BINDING UNTIL SIGNED BY US.
1. LEASE; DELIVERY AND ACCEPTANCE. You agree to lease the equipment
described on the front of this lease agreement (collectively "Equipment") on the
terms and conditions shown on the front and back of this lease ("Lease"). You
agree to inspect the Equipment and execute a Delivery and Acceptance Certificate
after the Equipment has been delivered and after you are satisfied the Equipment
is satisfactory in every respect. If you fail to sign a Delivery and Acceptance
Certificate within 10 days of delivery of the Equipment, we have the option of
either beginning the Lease or terminating the Lease. If we begin the Lease you
shall be bound by all terms and conditions of the Lease and you will perform all
obligations as required. If we terminate the Lease, you shall pay us on demand
all sums paid or owing by us to the supplier(s) of the Equipment and you shall
indemnify and hold us harmless from any claims made by the supplier(s) arising
out of or relating to the Equipment or the Lease.
2. NO WARRANTIES. We are leasing the Equipment to you "AS-IS". YOU
ACKNOWLEDGE THAT WE DO NOT MANUFACTURE THE EQUIPMENT, WE DO
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NOT REPRESENT THE MANUFACTURER OR THE SUPPLIER AND YOU HAVE SELECTED THE
EQUIPMENT AND SUPPLIER BASED UPON YOUR OWN JUDGMENT. WE MAKE NO WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR OTHERWISE. YOU AGREE THAT REGARDLESS OF CAUSE, WE ARE NOT
RESPONSIBLE FOR AND YOU WILL NOT MAKE ANY CLAIM AGAINST US FOR ANY DAMAGES,
WHETHER CONSEQUENTIAL, DIRECT, SPECIAL OR INDIRECT.
YOU AGREE THAT NEITHER SUPPLIER NOR ANY SALESPERSON, EMPLOYEE OR AGENT
OF SUPPLIER IS OUR AGENT OR HAS ANY AUTHORITY TO SPEAK FOR US OR TO BIND US IN
ANY WAY. We transfer to you for the term of this Lease any warranties made by
the manufacturer of Supplier under any purchase or supply contract.
3. TERM. This Lease shall become effective upon acceptance by us by
signing and dating this Lease and the term for this Lease shall begin on the day
the Equipment has been delivered to and is usable by you ("Commencement Date").
The base term of this Lease shall begin on the first day of the month following
the Commencement Date and terminate upon the expiration of the number of months
stated under Lease Term.
4. LEASE PAYMENT. You shall pay to us the monthly Lease Payment, in
advance, for each month or any part thereof the Lease is in effect. The first
such payment shall be made on the first day of the month following the
Commencement Date. A prorata portion of the Lease Payment based on a daily
charge of one- thirtieth (1/30) of the Lease Payment calculated from the
Commencement Date to the end of the month shall be due and payable at the
Commencement Date. Lease Payments and other sums due which are not paid within
ten (10) days of their due date shall be subject to a late charge equal to ten
percent (10%) of each delayed payment (or such lesser rate as is the maximum
rate allowable under applicable law). You agree that if this Lease is not
commenced for any reason beyond our control, then we shall retain your deposit
to cover our expenses associated with approving this lease. We have the right,
but not the obligation, to electronically withdraw funds from your bank account
to pay for any unpaid lease payments, taxes, fees, charges and assessments. You
shall provide us with any bank account information we request in order to
process electronic payments. You may revoke our authorization to electronically
to withdraw funds by giving us 10 days written notice. You agree to pay us a fee
of $25.00 for each occurrence of a dishonored check or electronic payment.
5. EQUIPMENT LOCATION; USE AND REPAIR; RETURN. You will keep and use
the Equipment only at the Equipment Location shown on the front of this Lease.
You may not move the Equipment without our prior written consent. At your own
cost and expense, you will keep the Equipment eligible for any manufacturer's
certification, in compliance with all applicable laws and in good condition,
except for ordinary wear and tear. You will not make any alterations, additions
or replacements to the Equipment without our prior written consent. All
alterations, additions and replacements will become part of the Equipment and
our property at no cost or expense to us. We may inspect the Equipment at any
reasonable time. Unless you purchase the Equipment in accordance with this
Lease, at the end of this Lease you will immediately deliver the Equipment to us
in as good condition as when you received it, except for ordinary wear and tear,
to any place in the United States that we tell you. In the event the Equipment
is not in good working condition when you return it, you agree to pay for any
repairs, changes, alternations or upgrades necessary to return the Equipment to
good working
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condition. You will pay all expenses of deinstalling, crating and shipping, and
you will insure the Equipment for its full replacement value during shipping.
6. TAXES AND FEES. You will pay when due, either directly to us upon
our demand to any taxing authority, all taxes, fines and penalties relating to
this Lease or the Equipment that are now or in the future assessed or levied by
any state, local or other government authority. We will file all personal
property, use or other tax returns (unless we notify you otherwise in writing)
and you agree to pay us a fee for making such filings. We do not have to contest
any taxes, fines or penalties. You will pay estimated property taxes with each
Lease Payment, or annually, as invoiced. You will also pay any reasonable fees
associated with the inspection of the leased equipment.
7. LOSS OR DAMAGE. As between you and us, you are responsible for any
loss, theft or destruction of, or damage to, the Equipment (collectively "Loss")
from any cause at all, whether or not insured, until the equipment is delivered
to us at the end of this Lease. You are required to make all Lease Payments even
if there is a Loss. At time of Loss or Damage, at our option, you will either
(a) repair the Equipment so that the equipment is in good condition and working
order, eligible for any manufacturer's certification, or (b) pay us the amounts
specified in Section 11b.
8. INSURANCE. You will provide and maintain at your expense (a)
property insurance against the loss, theft or destruction of, or damage to, the
Equipment for its full replacement value, naming us as loss payee, and (b)
public liability and third party property insurance, naming us as an additional
insured. You will give us certificates or other evidence of such insurance when
requested. Such insurance will be in a form, amount and with companies
acceptable to us, and will provide that we will be given 30 days advance notice
of any cancellation or material change of such insurance. If you do not give us
evidence of insurance acceptable to us, we have the right, but not the
obligation, to obtain insurance covering our interest in the Equipment for the
term of this Lease, including any renewal or extensions, from an insurer of our
choice. We may add the costs of acquiring and maintaining such insurance and our
fees for our service in placing and maintaining such insurance (collectively,
"Insurance Charge") to the amounts due from you under this Lease. You will pay
the Insurance Charge in equal installments allocated to the remaining Lease
Payments. If we purchase insurance, you will cooperate with our insurance agent
with respect to the placement of insurance and processing of claims. Nothing in
this Lease will create an insurance relationship of any type between us and any
other person. You acknowledge that we are not required to secure or maintain any
insurance, and we will not be liable to you if we terminate any insurance
coverage that we arrange. If we replace or renew any insurance coverage, we are
not obligated to provide replacement or renewal coverage under the same terms,
costs, limits, or conditions as the previous coverage. If we replace or renew
any insurance coverage you agree to pay any reasonable fee assessed for the
processing, maintenance, billing and handling of the policy.
9. TITLE; RECORDING. We are the owner of and will hold title to the
Equipment. You will keep the Equipment free of all liens and encumbrances.
Unless the Purchase Option price shown on the front of this Lease is $101 or
less, you agree that this transaction is a true lease. However, if this
transaction is deemed to be a lease intended for security, you grant us a
purchase money security interest in the Equipment (including any replacements,
substitutions, additions, attachments and proceeds). You will deliver us signed
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financing statements or other documents we request to protect our interest in
the Equipment. YOU AUTHORIZE US TO FILE A COPY OF THIS LEASE AS A FINANCING
STATEMENT AND APPOINT US OR OUR DESIGNEE AS YOUR ATTORNEY-IN-FACT TO EXECUTE AND
FILE, ON YOUR BEHALF, FINANCING STATEMENTS COVERING THE EQUIPMENT.
INITIAL ________
10. DEFAULT. Each of the following is a "Default" under this Lease: (a)
you fail to pay any Lease Payment or any other payment, fee, charge, cost or
assessment within 10 days of its due date, (b) you do not perform any of your
other obligations under this Lease or under any other agreement with us and this
failure continues for 10 days after we have notified you of it, (c) you become
insolvent, you dissolve or are dissolve or are dissolved, or you assign your
assets for the benefit or are dissolved, or you assign your assets for the
benefit of your creditors, or enter (voluntarily or involuntarily) any
bankruptcy or reorganization proceeding; (d) any guarantor of this Lease dies,
does not perform their obligations under the guaranty, or becomes subject to one
of the events listed in clause (c) above.
11. REMEDIES. If a Default occurs, we may do one or more of the
following: (a) we may cancel or terminate this Lease or all other agreements
that we have entered into with you; (b) we may require you to immediately pay
us, as compensation for loss of our bargain and not as a penalty, a sum equal to
(i) the present value of all unpaid Lease Payments for the remainder of the term
plus the present value of our anticipated residual interest in the Equipment,
each discounted at 5% per year, compounded monthly, plus (ii) all other amounts
due or that become due under this Lease; (c) we may require you to deliver the
Equipment to us as set forth in Section 5; (d) we or our agent may peacefully
repossess the Equipment without court order and you will not make any claims
against us for damages or trespass or any other reason; and (e) we may exercise
any other right or remedy available at law or in equity. You agree to pay all of
our costs of enforcing our rights against you, including reasonable attorneys'
fees. If we take possession of the Equipment, we may sell or otherwise dispose
of it with or without notice, at a public or private sale, and apply the net
proceeds (after we have deducted all costs related to the sale or disposition of
the Equipment) to the amounts that you owe us. You agree that if notice of sale
is required by law to be given, 10 days' notice shall constitute reasonable
notice. You will remain responsible for any amounts that are due after we have
applied such net proceeds.
12. FINANCE LEASE STATUS. You agree that if Article 2A of the Uniform
Commercial Code applies to this Lease, this Lease will be considered a "finance
lease" as that term is defined in Article 2A. By signing this Lease, you agree
that either (a) you have reviewed, approved, and received, a copy of the Supply
Contract or (b) that we have informed you of the identity of the Supplier, that
you have rights under the Supply Contract, and that you may contact the Supplier
for a description of those right. TO THE EXTENT PERMITTED BY APPLICABLE LAW, YOU
WAIVE ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A.
13. ASSIGNMENT, YOU MAY NOT ASSIGN, SELL, TRANSFER OR SUBLEASE THE
EQUIPMENT OR YOUR INTEREST IN THIS LEASE. We may, with or without notifying you,
sell, assign, or transfer this Lease or our rights in the Equipment. You
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agree that the new owner will have the same rights and benefits that we have now
under this Lease but not our obligations. The rights of the new owner will not
be subject to any claim, defense or set-off that you may have against us.
14. PURCHASE OPTION; AUTOMATIC RENEWAL. If no Default exists under this
Lease, you will have the option at the end of the original or any renewal term
to purchase all (but not less than all) of the Equipment at the Purchase Option
price shown on the front of this Lease, plus any applicable taxes. Unless the
Purchase Option price is $101 or less, you must give at least 180 days prior
written notice via certified mail before the end of the original term that you
will purchase the Equipment or that you will deliver it to us. If you do not
give us such written notice or if you do not purchase or deliver the Equipment
in accordance with the terms and conditions of the Lease, this Lease will
automatically renew for a 12 month term and thereafter renew for successive one
month terms until you deliver the Equipment to us. During such renewal (s) the
Lease Payment will remain the same. We may cancel the automatic renewal by
sending you written notice 10 days prior to such renewal term. If the Fair
Market Value Purchase Option has been selected, we will use our reasonable
judgment to determine the Equipment's fair market value. Upon payment of the
Purchase Option price, and if no Default exists, we shall transfer our interest
in the Equipment to you "AS IS, WHERE IS" without any representation or warranty
whatsoever and this Lease will terminate. In the event the Purchase Option price
is $101 or less and you do not remit the full Purchase Option price and any and
all due taxes, fees, charges or assessments, this Lease will automatically renew
for a 3 month term and thereafter renew for successive one month terms until you
remit all amounts due.
15. INDEMNIFICATION. You are responsible for any losses, damages,
penalties, claims, suits and actions (collectively "Claims"), whether based on a
theory of strict liability or otherwise caused by or related to (a) the
manufacture, installation, ownership, use, lease, possession, or delivery of the
Equipment or (b) any defects in the Equipment. You agree to reimburse us for and
if we request, to defend us against, any Claims.
16. CREDIT INFORMATION, YOU AUTHORIZE US OR ANY OF OUR AFFILIATES TO
OBTAIN CREDIT BUREAU REPORTS, AND MAKE OTHER CREDIT INQUIRES THAT WE DETERMINE
ARE NECESSARY, ON YOUR WRITTEN REQUEST, WE WILL INFORM YOU WHETHER WE HAVE
REQUESTED A CONSUMER CREDIT REPORT AND THE NAME AND ADDRESS OF ANY CONSUMER
CREDIT REPORTING AGENCY THAT FURNISHED A REPORT. YOU ACKNOWLEDGE THAT WITHOUT
FURTHER NOTICE WE MAY USE OR REQUEST ADDITIONAL CREDIT BUREAU REPORTS TO UPDATE
OUR INFORMATION SO LONG AS YOUR OBLIGATIONS TO US ARE OUTSTANDING.
17. MISCELLANEOUS. You agree that the terms and conditions contained in
this Lease make up the entire agreement between you and us regarding the lease
of the Equipment. This Lease in not binding on us until we sign it. Any change
in the terms and conditions of this Lease must be in writing and signed by us.
You agree, however, that we are authorized without notice to you, to supply
missing information or correct obvious errors in this Lease. If we delay or fail
to enforce any of our rights under this Lease, we will still be entitled to
enforce those rights at a later time. All notices shall be given in writing by
the party sending the notice and shall be effective when deposited in the U.S
Mail and shall be made via certified mail where noted in this Lease, addressed
to the other party receiving the notice at its address shown
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on the front of this Lease (or to any other address specified by that party in
writing) with postage prepaid. All of our rights and indemnities will survive
the termination of this Lease. It is the express intent of the parties not to
violate any applicable usury laws or to exceed the maximum amount of time price
differential or interest, as applicable, permitted to be charged or collected by
applicable law, and any such excess payment will be applied to Lease Payments in
inverse order of maturity, and any remaining excess will be refunded to you. If
you do not perform any of your obligations under this Lease, we have the right,
but not the obligation, to take any action or pay any amount we believe are
necessary to protect our interest. You agree to reimburse us immediately upon
our demand for any such amounts that we pay. If more than one Lessee has signed
this Lease, each of you agree that your liability is joint and several.
18. This document was sent electronically. I hereby warrant that this
document has not been altered in any way. Any alteration or revision to any part
or this or any attached documents will make all documents non-binding and void.
INITIAL __________
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EXHIBIT 'A' EQUIPMENT DESCRIPTION
The following invoice(s) are referenced, and hereby incorporated, for
the purpose of describing the equipment subject to lease agreement #
001-07458-01. By signing below, I, the lessee, acknowledge that I chose to lease
the equipment listed on the invoice(s) per the payment schedule and the terms
and conditions set out in lease agreement # 001-07458-01, which is the governing
document to this lease regardless of the price and terms (if any) indicated on
the invoice(s).
EQUIPMENT INVOICE # DATE VENDOR
LA #: 001-07458-01
LESSEE: ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
By: _____________________________
▇▇▇▇ ▇▇▇▇, President
DATE: March 25, 1999