SUMMIT LEASING, INC.
3901 Fairbanks Ave., Yakima, WA 98902
Mail: P.O. Box 7, Yakima, WA 98907-0007
(509) 575-4425 (800) 736-1530 Fax: (509)
453-3798 www.summitleasing.com
------------------------------------------------------------------------------
LEASE AGREEMENT
LEASE NO. 11333
EFFECTIVE DATE: 2/1/2005
LESSOR: SUMMIT LEASING INC.
LESSEE(S): HOMENET COMMUNICATIONS, INC.
Walter K. Ryan, Kevin Doherty, Michael W. Devine, Brian Potter,
Frank J. Gillen, Leroy W. Jackson, Shauna Badger, Rodney S.
Badger,
Robert B. Jones, Carol Jones
5252 North Edgewood Dr.
Provo, UT 84604
(801) 377-1360
1.0 LEASED PROPERTY: Subject to the terms
and conditions of this Lease
Agreement, Lessor hereby leases to
Lessee(s) the following described personal
property hereinafter referred to as "leased
property":
500 Set Top Boxes
500 Set Top Boxes with 32M RAM
2.0 TERM: The term of this lease shall be
for a period of 36 months and 0 days
commencing 2/1/2005 and terminating at
12:00 noon on 2/1/2008.
3.0 LOCATION OF LEASED PROPERTY: The leased
property shall be located and based
at the following location:
5252 North Edgewood Dr.
Provo, UT 84604
4.0 RENTAL: The rental for the leased
property, not including applicable sales
tax or use tax (or comparable tax),
hereinafter "tax", shall be payable as
follows:
Due
2/1/2005
First month's rental:
$4,605.01
Final 1 month(s) rental:
$4,605.01
Due 3/1/2005
and upon or before the first day of each month thereafter:
$4,605.01
THIS LEASE IS SUBJECT TO THE TERMS AND
CONDITIONS PRINTED HEREON AND ON THE
ACCOMPANYING PAGES, ALL OF WHICH ARE MADE A
PART HEREOF AND WHICH LESSEE
ACKNOWLEDGES HAVING READ. THIS LEASE IS NOT
BINDING UNTIL ACCEPTED BY LESSOR.
Page 1 of 4
Initial /s/ WKR
Lease Agreement No. 11333:MS/jj
<PAGE>
4.1 LATE CHARGE: If rental payments are not received within five
(5)
days of the due date, a late charge shall
be imposed, such amount being five
percent (5%) per month, or $5.00, whichever
is greater. Late charges shall be
payable by Lessee upon demand and failure
to pay the same shall constitute an
event of default under this Lease. The
right of Lessor to impose a late charge
shall not be considered as a waiver of
Lessor of the right to insist upon strict
performance of the terms of this Lease.
5.0 TITLE - LESSEE'S INTEREST- PROTECTION
OF THE LESSOR'S INTEREST: Title to the
leased property is now and shall remain at
all times during the term of this
Lease in the Lessor. It is understood that
this agreement creates a lease only
of Leased Property and not a sale thereof,
Lessee's rights hereunder being only
for the possession and use of the leased
property in accordance with the terms
of this Lease agreement. If requested by
Lessor, Lessee shall execute any and
all documents deemed necessary to protect
all of Lessor's rights under this
Lease agreement and Lessor's ownership of
the leased property. Without limiting
the generality of the foregoing, Lessee
agrees at Lessee's cost to mark, sign,
tag or otherwise cause the leased property
to be identified as property of the
Lessor. The marking, identification, or
signing shall be in such manner as
reasonably required by Lessor. Lessor
reserves the right and is hereby granted
authority to enter Lessee's property for
the purpose of marking, signing,
tagging, or otherwise identifying the
leased property as being owned by Lessor.
Notwithstanding the foregoing, in the event
this Lease is or shall be construed
as a "Lease intended as security," the
Lessee hereby grants to Lessor a security
interesting and to the leased property and
all proceeds thereof (including
insurance proceeds) as security for all of
Lessee's obligations to Lessor of
every kind and nature. Lessee authorizes
Lessor or its designee to file a
Uniform Commercial Code financing
statement, in form and content and from time
to time as Lessor deems proper, listing
Lessee as Lessee or Debtor.
6.0 SELECTION AND INSPECTION: It is
understood that Lessee has requested and
selected the leased property and the
supplier and/or vendor thereof; that Lessee
has either inspected the leased property or
has had an opportunity to inspect
the leased property and accepts the same in
its present condition. It is further
agreed and understood that Lessor makes and
has made no representations,
warranties or guarantees, except as
contained in this Lease, and specifically,
that Lessor makes no express nor implied
warranties as to any matter whatsoever,
including, without limitation, the
condition of the leased property, it's
merchantability, or it's fitness for any
particular purpose. Lessee agrees and
acknowledges that it is the intent of both
parties to this Lease that it qualify
as a statutory finance lease under article
2A of the Uniform Commercial Code.
Lessee acknowledges and agrees that Lessee
has selected both (1) the Leased
Property; and (2) the supplier from whom
the Lessor is to purchase the Leased
Property. Lessee acknowledges that Lessor
has not participated in any way in the
Lessee's selection of the Leased Property
or of the supplier, and that Lessor
has not selected, manufactured or supplied
the Leased Property. Lessee is
advised that it may have rights under the
contract evidencing to the Lessor's
purchase of the Leased Property from the
supplier chosen by the Lessee and that
the Lessee should contact the supplier of
the Leased Property for a description
of any such rights.
7.0 NO WARRANTY: Lessor, not being the
manufacturer or the manufacturer's agent,
MAKES NO WARRANTY OR REPRESENTATION, EITHER
EXPRESS OR IMPLIED, AS TO THE
FITNESS FOR A PARTICULAR USE OR OTHERWISE
QUALITY, DESIGN, CONDITION, CAPACITY,
SUITABILITY, MERCHANTABILITY OR PERFORMANCE
OF THE LEASED PROPERTY OR OF THE
MATERIAL OR WORKMANSHIP THEREOF, IT BEING
AGREED THAT THE LEASED PROPERTY IS
LEASED "AS IS" AND THAT AL SUCH RISKS, AS
BETWEEN THE LESSOR AND THE LESSEE, ARE
TO BE BORNE BY THE LESSEE AT ITS SOLE RISK
AND EXPENSE. Lessee accordingly
agrees not to assert any claim whatsoever
against the Lessor based thereon. In
addition, Lessee waives any and all rights
and remedies conferred by UCC 2A-508
through 2A-522, including, but not limited
to, the Lessee's right to (a) cancel
or repudiate the lease; (b) reject or
revoke acceptance of the Leased Property;
(c) deduct from rental payments all or any
part of any claimed damages resulting
from the Lessor's default under the Lease;
(d) recover from the Lessor any
general, special, incidental, or
consequential damages, for any reason
whatsoever.
8.0 NON-ASSIGNABILITY BY LESSEE: Neither
this Lease nor Lessee's rights
hereunder, including, but not limited to,
the possession and use of the leased
property, shall be assignable by Lessee
without the written consent of Lessor.
Further, Lessee shall not sublease nor
transfer in whole or in part the
possession of the leased property without
the written consent of Lessor. It is
understood that Lessee has no property
rights in the leased property, other than
the right to use the same in accordance
with the terms of this agreement, and
that Lessee shall not encumber the Leased
Property by either voluntary or
involuntary lien.
Page 2 of 4
Initial /s/ WKR
Lease Agreement No. 11333:MS/jj
<PAGE>
9.0 MAINTENANCE, USE AND RETURN
OF LEASED PROPERTY:
9.1 MAINTENANCE AND USE: Lessee shall maintain the leased property
in a
good and safe operating condition and
working order, using as a guide the
maintenance program prescribed in the
owner's manual, if any, for each item of
leased property, and shall perform, all
preventive maintenance reasonably
required, including but not limited to,
such preventive maintenance required to
insure full validation of a manufacturer's
warranty, if any, on the leased
property. In addition, Lessee shall repair
and provide replacement parts
necessary to keep the leased property in a
good and safe operating condition and
working order. All replacement parts, as
required hereunder, shall immediately
become the property of Lessor. It is
understood that this is a net lease and
Lessor assumes no obligation whatsoever for
the maintenance, repair or
replacement of the leased property or any
portion thereof. The Leased Property
shall be used solely in the conduct of
Lessee's business and Lessee warrants
that Leased Property is leased for
commercial or business purposes and not for
consumer, personal, home or family
purposes.
9.2 RETURN OF LEASED PROPERTY: When the leased property is returned
to
Lessor, at the expiration of the term of
this Lease, or as otherwise provided
for under the terms hereof, then the same
shall be returned in the same
condition as when the leased property was
delivered to Lessee under the terms of
this Lease, ordinary depreciation for
normal use excepted. Unless otherwise
agreed in writing, Lessee shall be
responsible for returning, at Lessee's
expense, the leased property to such
location in Yakima County, State of
Washington, or at such other location as
may be designated by Lessor. In the
event the leased property is not returned
in such condition and state of repair,
the costs incurred in replacing the same in
such condition and repair shall be
paid by Lessee to Lessor, upon demand.
WARNING: FAILURE TO PROMPTLY RETURN THE
LEASED PROPERTY MAY RESULT IN CRIMINAL
PROSECUTION.
10.0 RISK OF
LOSS-INSURANCE-INDEMNITY-LIABILITY INSURANCE:
10.1 RISK OF LOSS: Lessee hereby assumes and shall bear the entire
risk
of loss and damage to the leased property
from any cause whatsoever, regardless
of whether the loss is insured.
10.2
PROPERTY INSURANCE: During the term of this Lease, Lessee shall
cause the leased pr
