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Exhibit 10.8
EQUIPMENT LEASE AGREEMENT
THIS EQUIPMENT LEASE AGREEMENT
("Agreement") is entered into by and between
FortuNet, Inc., a Nevada Corporation
("Lessor"), and K & B Sales, Inc., d/b/a
Goodtime Bingo, an Oklahoma Corporation
("Lessee").
RECITALS
A. Lessee is an authorized, Texas licensed
distributor of bingo equipment.
B. Lessor is a Texas licensed manufacturer
of bingo equipment and has developed
bingo gaming systems which have been
approved by the Texas Lottery Commission.
Definitions:
(a) "System" denotes the equipment and
software supplied by FortuNet, Inc. and
more fully described on attached Exhibit
"A".
(b) "Equipment" includes, but is not
limited to, computers, portable units,
stationary units, transmitters, battery
chargers, ticket printers, log printers,
furniture and any other supplies and
personal property supplied by FortuNet for
operation of the System.
(c) "Delivery" occurs when the System is
delivered to Lessee's place of business
or End User's facility.
(d) "Install", "installed" or
"installation" occurs when the End User starts to
derive revenue from the use of the
System.
(e) "End User" is the party identified as
the User or End User in the Placement
Agreement used by Lessee.
NOW, THEREFORE,
in consideration of the recitals and the mutual covenants
contained in this Agreement to be performed
by Lessor and Lessee, and for other
valuable consideration, Lessor and Lessee
agree as follows:
1. LEASE OF EQUIPMENT.
(a) Lease and Delivery. Lessor agrees to
lease to Lessee, and Lessee agrees to
lease from Lessor a System and Equipment
(collectively referred to as "System").
If the order submitted by
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Lessee for an End User location is accepted
by Lessor, meets or exceeds the
minimum criteria established by the
parties, Lessor shall ship the System to the
address identified by Lessee.
January 4, 1999
by:
Date of Acceptance
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on behalf of FortuNet
EXISTING INSTALLATIONS - EXHIBIT A
On or Before Date to Ship System
2. AUTHORIZATION TO SUBLEASE.
Lessee is hereby
given express and written permission to sublease the
System to an End User.
3. LEASE TERM.
(a) Term of Lease: The Term of this Lease
shall commence on the date of
execution. The Agreement shall continue for
a period of one year, (the "Term")
unless the Term is extended and the Term
shall automatically extend for
additional one year periods unless Lessee
provides written notice to Lessor of
Lessee's intention not to extend this
Agreement. Such notice must be provided
not less than thirty (30) days before the
expiration of the Term or any
extension. Lessor shall have the right to
terminate this Lease at the end of the
primary Term or any extension by giving
written notice to Lessee of its
intention not to renew this Lease for
another term at least thirty days prior to
the expiration of the Term or any
extension.
4. INSTALLATION AND TRAINING. Lessor
recognizes and accepts the full
responsibility for installing the System
and initial training of the End User.
Ongoing training shall be provided by
Lessee.
5. LEASE RENTS AND PAYMENTS.
(a) Lessee shall pay Lessor rent for the
System as follows: a percentage of the
collected revenues received from the End
User for subleasing the System from
Lessee based on the schedule in Exhibit "B"
attached hereto. The per unit
average weekly revenue shall be calculated
and paid based on each hall's
revenues instead of an aggregate
calculation.
(b) Lessee's rental payments shall be made
on a weekly basis (Monday through
Sunday) and shall be paid in lawful money
of the United States. Lessee shall
deposit rent payments to Lessor by
depositing same in the U.S. Postal Service,
with payments due on Wednesday of the
following week commencing the Wednesday of
the week after installation of the
System.
(c) Delinquent Payments. If Lessee fails to
pay to Lessor any portion of any
rental payment or any other sum required to
be paid by Lessee to Lessor under
this Lease within fifteen (15) days
after
LEASE AGREEMENT PAGE 2
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the date the payment or sum was due, Lessee
shall pay interest on such
delinquency to Lessor from the date such
payment was due until the date such
payment is made at the rate of ten percent
(10%) per annum. Any delinquent
payment shall be paid by Lessee upon demand
by Lessor.
6. LESSOR'S OWNERSHIP OF THE SYSTEM.
(a) Title. Lessee acknowledges and agrees
that Lessor is the sole owner of the
System, and that by executing this Lease,
Lessee shall not possess or obtain any
ownership interest, legal or equitable, in
(i) the System or (ii) Lessor's
intellectual property pertaining to the
System. Lessee shall execute such
supplemental instruments as Lessor may
reasonably deem necessary or advisable
and shall otherwise cooperate to protect
and defend the right and title of
Lessor to the System. The System is, and
shall at all times be and remain, the
personal property of the Lessor, FortuNet,
Inc., of Las Vegas, Nevada,
notwithstanding that the Equipment or any
part of it may now be, or hereafter
become, in any manner affixed or attached
to real property.
(b) Equipment Labels. Lessee agrees that
Lessor may place such labels, plates,
or other markings on the Equipment as
Lessor, in Lessor's discretion, deems
appropriate to identify its interest in the
Equipment. Lessee agrees to use its
best efforts to not allow or to permit the
removal or concealment of any such
labels, plates, or markings.
7. TAXES.
In addition to
the weekly rental set forth in this Agreement, Lessee shall
pay all sales and use taxes required to be
collected by the State of Texas that
are levied or based upon the leasing of the
System, excluding, however, all
taxes on or computed by reference to
Lessor's income and personal property taxes
and similar obligations for which Lessor is
primarily liable.
8. REPAIRS AND MAINTENANCE.
Lessor shall provide Lessee with technical
support by telephone twenty-four (24)
hours per day, seven (7) days per week,
during the Term or extension. Upon
receipt in Las Vegas, Nevada, by the Lessor
of a shipment of the System or any
part thereof from the Lessee, Lessor will
promptly repair or replace at its
discretion the System or parts thereof, and
re-ship the repaired or replaced
equipment to Lessee'
