Document:

Exhibit 4.2

 

 

August 13, 2012

 

Global Axcess Corp. (Lessee)

Nationwide Money Services, Inc. (Lessee)

Nationwide Ntertainment Services, Inc.
(Lessee)

EFT Integration, Inc. (Guarantor)

225 S. Industrial Drive

Saline, MI 48176

 

RE: Waiver of Defaults: Debt Service
Coverage Ratio and Senior Funded Indebtedness to EBITDA

 

Ladies and Gentlemen:

 

Pursuant to the Master Equipment Lease
Agreement, dated June 18, 2010, Section 12 – Financial, Other Information and Notices and Amendment No. 001 to Master
Lease Equipment Agreement, dated June 6, 2011, subject to and effective upon the satisfaction of all conditions set forth in Amendment
to Master Lease Equipment Lease Agreement and Equipment Schedule – No. 002, dated August 13, 2012 and Amendment to Master
Lease Equipment Lease Agreement and Equipment Schedule – No. 001, dated August 13, 2012, the Lessor hereby waives the existing
Defaults of failure to maintain a Debt Service Coverage Ratio of at least 1.20:1:00 for the period ended June 30, 2012 and a Senior
Funded Indebtedness to EBITDA Ratio no greater than 3.00:1.00 for the period ended June 30, 2012.  This is a limited
waiver, and shall not be deemed to constitute a waiver of any other Events of Defaults, term, provision or condition of the Lease
Agreements or any other Lease Documents or to prejudice any right or remedy that Lessor may now have or may have in the future
under or in connections with the Lease Agreements or any other Lease Document.

 

EXCEPT AS MODIFIED HEREBY, ALL OF THE
TERMS, COVENANTS AND CONDITIONS OF THE MASTER EQUIPMENT LEASE AGREEMENT AND VARIOUS SCHEDULES THERETO SHALL REMAIN IN FULL FORCE
AND EFFECT AND ARE IN ALL RESPECTS HEREBY RATIFIED AND AFFIRMED.

 

{Signature page follows.  Remainder
of page intentionally left blank.}

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF, Lessee and Lessor have
caused this Amendment to the Master Equipment Lease Agreement to be executed by their duly authorized representatives as of the
date first above written.

 

	 	LESSEES:
	 	 
	 	GLOBAL AXCESS CORP.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE MONEY SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE NTERTAINMENT SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	Certification by Secretary:
	 	 	 
	 	/s/ Sharon M. Jackson
	 	Name:	Sharon M. Jackson
	 	Title:	Secretary
	 	 	 
	 	GUARANTORS (IF ANY):
	 	 
	 	EFT INTEGRATION, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO

 

	Accepted as of the Effective Date.
	 
	LESSOR:
	 
	FIFTH THIRD EQUIPMENT FINANCE COMPANY
	formerly known as THE FIFTH THIRD LEASING COMPANY
	 	 
	By:	/s/ Steven J. Englehart	 
	Name:	Steven J. Englehart	 
	Title:	Vice President	 

 

    	 

    	 

    

 

 

AMENDMENT TO MASTER EQUIPMENT LEASE
AGREEMENT

AND EQUIPMENT SCHEDULE – NO.
002

 

Master Equipment Lease Dated: June 18,
2012, (as amended, supplemented, or restated from time to time, together with the Equipment Schedule identified below, collectively,
the “Master Equipment Lease”)

 

Lessor: FIFTH THIRD EQUIPMENT FINANCE
COMPANY formerly known as THE FIFTH THIRD LEASING COMPANY (“Lessor”)

 

Lessees: GLOBAL AXCESS CORP., NATIONWIDE
MONEY SERVICES, INC., NATIONWIDE NTERTAINMENT SERVICES, INC.  (“Lessee”)

 

Guarantor(s), if any: EFT INTEGRATION,
INC.

 

Guaranty (ies) Dated: JUNE 18, 2010

 

Equipment Schedule Dated: MARCH 21,
2011

 

Effective Date of Amendment: AUGUST
13, 2012

 

1.          Amendments.
Notwithstanding anything to the contrary in the Master Equipment Lease, Lessee and Lessor hereby
amend the Master Equipment Lease as follows:

 

Original Terms:

 

	Lease Account Number:	045-9006855-026
	Rent Payment Start Date and on same date of the month during Term:	APRIL 1, 2011
	Expiration Date:	APRIL 1, 2015
	Rent Payment:	
        $0.00 for months one through twelve,

        $103,658.58 for months thirteen through twenty-four,

        $110,271.09 for months twenty-five through thirty-six,

        $117,460.83 for months thirty-seven and forty-seven,

        $117,305.73 for month forty-eight

	Rent Payment Date:	1st 
	# Rental Payments:	48
	Rate:	One-month LIBOR (London Interbank Offered Rate) plus 4.00%

 

Amended Terms:

 

	Lease Account Number:	045-9006855-026
	Rent Payment Start Date and on same date of the month during Term:	APRIL 1, 2011
	Expiration Date:	MAY 1, 2015
	Rent Payment Date:	1st 
	#
    Rental Payments:	49
	Rate:	One-month LIBOR (London Interbank Offered Rate) plus 7.50%

 

    	 

    	 

    

 

	Amended Number of Payments:	
        Amount of

        Principal Payment:
	
        First Payment

        Commencing on:
	
        Last Payment Due

        on:

	12	$0.00	May 1, 2011	April 1, 2012
	1	$103,658.58	May 1, 2012	May 1, 2012
	3	$0.00	June 1, 2012	August 1, 2012
	32	$80,684.84	September 1, 2012	April 1, 2015
	1	$1,290,957.40	May 1, 2015	May 1, 2015

 

2.          Representations.  To
induce Lessor to accept this Amendment, Lessee and the Guarantor(s), if any (each a “Transaction Party” and
collectively, “Transaction Parties”) hereby represent and warrant to Lessor as follows:

 

2.1           Each
Transaction Party has full power and authority to enter into, and to perform their respective obligations under, this Amendment
and the documents, instruments and agreements to be entered into in connection herewith (collectively with this Amendment, the
“Amendment Documents”), and the execution and delivery of, and the performance of their respective obligations
under and arising out of, the Amendment Documents have been duly authorized by all necessary action.

 

2.2           This
Amendment and the other Amendment Documents constitute the legal, valid and binding obligations of each Transaction Party enforceable
in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally.

 

2.3           The
respective representations and warranties of Lessee contained in the Master Equipment Lease and the documents, instruments and
agreements executed and delivered in connection therewith (collectively with the Master Equipment Lease, the “Lease Documents”)
and of Guarantor(s), if any, contained in the Guaranty (ies), if any (collectively with the Lease Documents, the “Transaction
Documents”) are complete and correct as of the Effective Date (other than a representation or warranty that is stated
to relate solely to an earlier date) with the same effect as though such representations and warranties had been made again on
and as of the Effective Date, subject to those changes as are not prohibited by, or do not constitute a default under the respective
Transaction Document.

 

2.4           No
default under any of the Transaction Documents has occurred and is continuing.

 

3.          Release.  Each
Transaction Party hereby releases Lessor and each other affiliate of Fifth Third Bancorp from any and all liabilities, damages
and claims arising from or in any way related to each of the Transaction Documents and/or the Obligations (as defined below), other
than such liabilities, damages and claims which arise after the Effective Date.  The foregoing release does not release
or discharge, or operate to waive performance by, Lessor of its express agreements and obligations stated in the Transaction Documents
arising on and after the Effective Date.

 

4.          Continuing
Effect of Master Equipment Lease.  Except as expressly amended hereby, all of the provisions of the Master Equipment
Lease and the other Transaction Documents are ratified and confirmed and remain in full force and effect.  

 

5.          One
Agreement; References; Fax Signature.  The Master Equipment Lease, as amended by this Amendment, will be construed
as one agreement.  All references to the Master Equipment Lease in any documents, instruments or agreements will be deemed
to be references to the Master Equipment Lease as amended by this Amendment.  This Amendment may be signed by facsimile
signatures or other electronic delivery of an image file reflecting the execution hereof, and if so signed, (i) may be relied on
by each party as if the document were a manually signed original and (ii) will be binding on each party for all purposes.

 

6.          Default.  Any
default by any Transaction Party in the performance of any of such Transaction Party’s obligations under this Amendment shall
constitute a default and an event of default under the Master Equipment Lease and the other Transaction Documents.

 

    	 

    	 

    

 

7.          Captions.  The
headings to the Sections of this Amendment have been inserted for convenience of reference only and shall in no way modify or restrict
any provisions hereof or be used to construe any such provisions.

 

8.          Counterparts.  This
Amendment may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute
one and the same instrument.

 

9.          Entire
Agreement.  This Amendment, together with the Master Equipment Lease and the other Transaction Documents, sets forth
the entire agreement of the parties with respect to the subject matter of this Amendment and supersedes all previous understandings,
written or oral, in respect of this Amendment.  Except to the extent that the terms of the Transaction Documents are
expressly amended by this Amendment, if there is any conflict, ambiguity, or inconsistency, in Lessor’s judgment, between
the terms of the Master Equipment Lease, this Amendment and/or any of the other Transaction Documents, then the applicable terms
and provisions, in Lessor’s judgment, providing Lessor with the greater rights and remedies will control.  

 

10.         Governing
Law.  This Amendment shall be governed by and construed in accordance with the laws of the state selected as the
governing law in the Master Equipment Lease (the “State”), without regard to the State’s conflicts of
law principles.

 

11.         Acknowledgment.  Each
Transaction Party acknowledges and confirms that: (i) the indebtedness, liabilities and obligations of Lessee under and in connection
with the Master Equipment Lease and the other Transaction Documents (collectively, the “Obligations”) are valid,
enforceable and existing indebtedness, liabilities and obligations payable by Lessee to Lessor and (ii) no Transaction Party has
any counterclaims, set-offs, offsets or defenses or any rights of set-off, offsets, or defense of any kind or nature whatsoever
with respect to the Obligations or the Transaction Documents.  

 

12.         Ratification
of Documents and Security.  Each Transaction Party hereby ratifies and reaffirms all terms, conditions and obligations
of the Transaction Documents to which such Transaction Party is a party and acknowledges that the Transaction Documents remain
in full force and effect except as expressly amended hereby or in connection herewith.  Each Transaction Party hereby
expressly intends that this Amendment shall not in any manner: (a) constitute the refinancing, refunding, payment or extinguishment
of the existing Obligations; (b) be deemed to evidence a novation of the outstanding balance of the Obligations; or (c) affect,
replace, impair, or extinguish the creation, attachment, perfection or priority of any security interests, assignments or other
liens (collectively, the “Liens”) on any collateral or security held by Lessor for the Obligations (collectively
with any collateral, if any, in which a security interest is granted in this Amendment or the other Amendment Documents, the “Transaction
Collateral”).  Without limiting the generality of the immediately preceding sentences, each Transaction Party
ratifies and reaffirms any and all grants to Lessor in the Transaction Documents or otherwise, of the security interests, assignments,
and other Liens on the Transaction Collateral as security for the Obligations, and Lessee acknowledges and confirms that the grants
of the Liens to Lessor on the Transaction Collateral: (i) represent continuing security interests in and other Liens on all of
the Transaction Collateral, (ii) secure all of the Obligations, and (iii) represent valid, first and best security interests in
and other Liens on all of the Transaction Collateral except to the extent of any Liens expressly permitted pursuant to the Transaction
Documents.

 

13.         Certifications
by Secretaries.  By signing below, each of the undersigned Secretary of Lessee and the undersigned Secretary of Guarantor,
as applicable, does hereby certify that in accordance with the laws of the state of such Transaction Party’s organization
in a unanimous written action of the Board of Directors/Managers/Members of such Transaction Party, resolutions, in form and substance
satisfactory to Lessor, were adopted authorizing the execution of this Amendment and the other Amendment Documents by a duly authorized
officer, manager or member of such Transaction Party; and such resolutions are now in full force and effect, have not been rescinded
or modified, and that there is nothing in the articles, certificates, regulations, by-laws, operating agreement, or directors’,
managers’, members’ or stockholders’ resolutions which in any way limits, restricts or conflicts with said resolutions.

 

    	 

    	 

    

 

14.         WAIVER
OF JURY TRIAL.  LESSOR AND THE TRANSACTION PARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING
OUT OF THE MASTER EQUIPMENT LEASE, THIS AMENDMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR BY
ANY OF THE OTHER TRANSACTION DOCUMENTS.

 

15.         Reaffirmation
of Guaranty.  Guarantor(s) hereby each reaffirm the Guaranty (ies) and acknowledge and agree that none of the Guarantor(s)
is released from their respective obligations under the Guaranty (ies) by reason of this Amendment and that the obligations of
the Guarantor(s) under the Guaranty (ies) extend to the Master Equipment Lease as amended by this Amendment and to the other Transaction
Documents.  This reaffirmation of Guaranty (ies) shall not be construed, by implication or otherwise, as imposing any
requirement that Lessor notify or seek the consent of any of the Guarantor(s) relative to any past or future extension of credit,
or modification, extension or other action with respect thereto, in order for any such extension of credit or modification, extension
or other action with respect thereto to be subject to the Guaranty (ies), it being expressly acknowledged and reaffirmed that the
Guarantor(s) have under the Guaranty(ies) consented, among others things, to modifications, extensions and other actions with respect
thereto without any notice thereof or right to consent thereto.

 

17.         Cross-Default.  Notwithstanding
anything to the contrary contained in any of the Transaction Documents, the occurrence of a default or an event of default under
any Fifth Third Indebtedness which is not cured within any applicable time period, if any, permitted pursuant to the terms thereof
shall be considered an immediate and uncured default and event of default under the Master Equipment Lease and the other Transaction
Documents.

 

[Remainder of this Page Left Intentionally
Blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the undersigned have executed this Amendment to be effective as of the Effective Date.

 

	 	LESSEES:
	 	 
	 	GLOBAL AXCESS CORP.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE MONEY SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE NTERTAINMENT SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	Certification by Secretary:
	 	 
	 	Certification by Secretary:
	 	 
	 	/s/ Sharon M. Jackson
	 	Name:	Sharon M. Jackson
	 	Title:	Secretary
	 	 	 
	 	GUARANTORS (IF ANY):
	 	 
	 	EFT INTEGRATION, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO

 

	Accepted as of the Effective Date.
	 
	LESSOR:
	 
	FIFTH THIRD EQUIPMENT FINANCE COMPANY
	formerly known as THE FIFTH THIRD LEASING COMPANY
	 	 
	By:	/s/ Steven J. Englehart	 
	Name:	Steven J. Englehart	 
	Title:	Vice President	 

 

    	 

    	 

    

 

 

AMENDMENT TO MASTER EQUIPMENT LEASE
AGREEMENT

AND EQUIPMENT SCHEDULE – NO.
002

 

Master Equipment Lease Dated: June 18,
2012, (as amended, supplemented, or restated from time to time, together with the Equipment Schedule identified below, collectively,
the “Master Equipment Lease”)

 

Lessor: FIFTH THIRD EQUIPMENT FINANCE
COMPANY formerly known as THE FIFTH THIRD LEASING COMPANY (“Lessor”)

 

Lessees: GLOBAL AXCESS CORP., NATIONWIDE
MONEY SERVICES, INC., NATIONWIDE NTERTAINMENT SERVICES, INC.  (“Lessee”)

 

Guarantor(s), if any: EFT INTEGRATION,
INC.

 

Guaranty (ies) Dated: JUNE 18, 2010

 

Equipment Schedule Dated: NOVEMBER 21,
2011

 

Effective Date of Amendment: AUGUST
13, 2012

 

1.          Amendments.
Notwithstanding anything to the contrary in the Master Equipment Lease, Lessee and Lessor hereby
amend the Master Equipment Lease as follows:

 

Original Terms:

 

	Lease Account Number:	045-0084574-059
	Rent Payment Start Date and on same date of the month during Term:	JANUARY 1, 2012
	Expiration Date:	DECEMBER 1, 2014
	Rent Payment:	$6,944.44
	Rent Payment Date:	1st 
	#
    Rental Payments:	36

 

Amended Terms:

 

	Lease Account Number:	045-0084574-059
	Rent Payment Start Date and on same date of the month during Term:	JANUARY 1, 2012
	Expiration Date:	DECEMBER 1, 2014
	Rent Payment Date:	1st 
	#
    Rental Payments:	36
	Amended Number of Payments:	
        Amount of

        Principal Payment:
	
        First Payment

        Commencing on:
	
        Last Payment Due

        on:

	7	$6,944.44	January 1, 2012	July 1, 2012
	1	$0.00	August 1, 2012	August 1, 2012
	27	$6,944.44	September 1, 2012	November 1, 2014
	1	$13,888.88	December 1, 2014	December 1, 2014

 

    	 

    	 

    

 

2.          Representations.  To
induce Lessor to accept this Amendment, Lessee and the Guarantor(s), if any (each a “Transaction Party” and
collectively, “Transaction Parties”) hereby represent and warrant to Lessor as follows:

 

2.1           Each
Transaction Party has full power and authority to enter into, and to perform their respective obligations under, this Amendment
and the documents, instruments and agreements to be entered into in connection herewith (collectively with this Amendment, the
“Amendment Documents”), and the execution and delivery of, and the performance of their respective obligations
under and arising out of, the Amendment Documents have been duly authorized by all necessary action.

 

2.2           This
Amendment and the other Amendment Documents constitute the legal, valid and binding obligations of each Transaction Party enforceable
in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally.

 

2.3           The
respective representations and warranties of Lessee contained in the Master Equipment Lease and the documents, instruments and
agreements executed and delivered in connection therewith (collectively with the Master Equipment Lease, the “Lease Documents”)
and of Guarantor(s), if any, contained in the Guaranty (ies), if any (collectively with the Lease Documents, the “Transaction
Documents”) are complete and correct as of the Effective Date (other than a representation or warranty that is stated
to relate solely to an earlier date) with the same effect as though such representations and warranties had been made again on
and as of the Effective Date, subject to those changes as are not prohibited by, or do not constitute a default under the respective
Transaction Document.

 

2.4           No
default under any of the Transaction Documents has occurred and is continuing.

 

3.          Release.  Each
Transaction Party hereby releases Lessor and each other affiliate of Fifth Third Bancorp from any and all liabilities, damages
and claims arising from or in any way related to each of the Transaction Documents and/or the Obligations (as defined below), other
than such liabilities, damages and claims which arise after the Effective Date.  The foregoing release does not release
or discharge, or operate to waive performance by, Lessor of its express agreements and obligations stated in the Transaction Documents
arising on and after the Effective Date.

 

4.          Continuing
Effect of Master Equipment Lease.  Except as expressly amended hereby, all of the provisions of the Master Equipment
Lease and the other Transaction Documents are ratified and confirmed and remain in full force and effect.  

 

5.          One
Agreement; References; Fax Signature.  The Master Equipment Lease, as amended by this Amendment, will be construed
as one agreement.  All references to the Master Equipment Lease in any documents, instruments or agreements will be deemed
to be references to the Master Equipment Lease as amended by this Amendment.  This Amendment may be signed by facsimile
signatures or other electronic delivery of an image file reflecting the execution hereof, and if so signed, (i) may be relied on
by each party as if the document were a manually signed original and (ii) will be binding on each party for all purposes.

 

6.          Default.  Any
default by any Transaction Party in the performance of any of such Transaction Party’s obligations under this Amendment shall
constitute a default and an event of default under the Master Equipment Lease and the other Transaction Documents.

 

7.          Captions.  The
headings to the Sections of this Amendment have been inserted for convenience of reference only and shall in no way modify or restrict
any provisions hereof or be used to construe any such provisions.

 

    	 

    	 

    

 

8.          Counterparts.  This
Amendment may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute
one and the same instrument.

 

9.          Entire
Agreement.  This Amendment, together with the Master Equipment Lease and the other Transaction Documents, sets forth
the entire agreement of the parties with respect to the subject matter of this Amendment and supersedes all previous understandings,
written or oral, in respect of this Amendment.  Except to the extent that the terms of the Transaction Documents are
expressly amended by this Amendment, if there is any conflict, ambiguity, or inconsistency, in Lessor’s judgment, between
the terms of the Master Equipment Lease, this Amendment and/or any of the other Transaction Documents, then the applicable terms
and provisions, in Lessor’s judgment, providing Lessor with the greater rights and remedies will control.  

 

10.         Governing
Law.  This Amendment shall be governed by and construed in accordance with the laws of the state selected as the
governing law in the Master Equipment Lease (the “State”), without regard to the State’s conflicts of
law principles.

 

11.         Acknowledgment.  Each
Transaction Party acknowledges and confirms that: (i) the indebtedness, liabilities and obligations of Lessee under and in connection
with the Master Equipment Lease and the other Transaction Documents (collectively, the “Obligations”) are valid,
enforceable and existing indebtedness, liabilities and obligations payable by Lessee to Lessor and (ii) no Transaction Party has
any counterclaims, set-offs, offsets or defenses or any rights of set-off, offsets, or defense of any kind or nature whatsoever
with respect to the Obligations or the Transaction Documents.  

 

12.         Ratification
of Documents and Security.  Each Transaction Party hereby ratifies and reaffirms all terms, conditions and obligations
of the Transaction Documents to which such Transaction Party is a party and acknowledges that the Transaction Documents remain
in full force and effect except as expressly amended hereby or in connection herewith.  Each Transaction Party hereby
expressly intends that this Amendment shall not in any manner: (a) constitute the refinancing, refunding, payment or extinguishment
of the existing Obligations; (b) be deemed to evidence a novation of the outstanding balance of the Obligations; or (c) affect,
replace, impair, or extinguish the creation, attachment, perfection or priority of any security interests, assignments or other
liens (collectively, the “Liens”) on any collateral or security held by Lessor for the Obligations (collectively
with any collateral, if any, in which a security interest is granted in this Amendment or the other Amendment Documents, the “Transaction
Collateral”).  Without limiting the generality of the immediately preceding sentences, each Transaction Party
ratifies and reaffirms any and all grants to Lessor in the Transaction Documents or otherwise, of the security interests, assignments,
and other Liens on the Transaction Collateral as security for the Obligations, and Lessee acknowledges and confirms that the grants
of the Liens to Lessor on the Transaction Collateral: (i) represent continuing security interests in and other Liens on all of
the Transaction Collateral, (ii) secure all of the Obligations, and (iii) represent valid, first and best security interests in
and other Liens on all of the Transaction Collateral except to the extent of any Liens expressly permitted pursuant to the Transaction
Documents.

 

13.         Certifications
by Secretaries.  By signing below, each of the undersigned Secretary of Lessee and the undersigned Secretary of Guarantor,
as applicable, does hereby certify that in accordance with the laws of the state of such Transaction Party’s organization
in a unanimous written action of the Board of Directors/Managers/Members of such Transaction Party, resolutions, in form and substance
satisfactory to Lessor, were adopted authorizing the execution of this Amendment and the other Amendment Documents by a duly authorized
officer, manager or member of such Transaction Party; and such resolutions are now in full force and effect, have not been rescinded
or modified, and that there is nothing in the articles, certificates, regulations, by-laws, operating agreement, or directors’,
managers’, members’ or stockholders’ resolutions which in any way limits, restricts or conflicts with said resolutions.

 

14.         WAIVER
OF JURY TRIAL.  LESSOR AND THE TRANSACTION PARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING
OUT OF THE MASTER EQUIPMENT LEASE, THIS AMENDMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR BY
ANY OF THE OTHER TRANSACTION DOCUMENTS.

 

    	 

    	 

    

 

15.         Reaffirmation
of Guaranty.  Guarantor(s) hereby each reaffirm the Guaranty (ies) and acknowledge and agree that none of the Guarantor(s)
is released from their respective obligations under the Guaranty (ies) by reason of this Amendment and that the obligations of
the Guarantor(s) under the Guaranty (ies) extend to the Master Equipment Lease as amended by this Amendment and to the other Transaction
Documents.  This reaffirmation of Guaranty (ies) shall not be construed, by implication or otherwise, as imposing any
requirement that Lessor notify or seek the consent of any of the Guarantor(s) relative to any past or future extension of credit,
or modification, extension or other action with respect thereto, in order for any such extension of credit or modification, extension
or other action with respect thereto to be subject to the Guaranty (ies), it being expressly acknowledged and reaffirmed that the
Guarantor(s) have under the Guaranty(ies) consented, among others things, to modifications, extensions and other actions with respect
thereto without any notice thereof or right to consent thereto.

 

17.         Cross-Default.  Notwithstanding
anything to the contrary contained in any of the Transaction Documents, the occurrence of a default or an event of default under
any Fifth Third Indebtedness which is not cured within any applicable time period, if any, permitted pursuant to the terms thereof
shall be considered an immediate and uncured default and event of default under the Master Equipment Lease and the other Transaction
Documents.

 

[Remainder of this Page Left Intentionally
Blank]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the undersigned have executed this Amendment to be effective as of the Effective Date.

 

	 	LESSEES:
	 	 
	 	GLOBAL AXCESS CORP.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE MONEY SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	NATIONWIDE NTERTAINMENT SERVICES, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO
	 	 	 
	 	Certification by Secretary:
	 	 
	 	Certification by Secretary:
	 	 
	 	/s/ Sharon M. Jackson
	 	Name:	Sharon M. Jackson
	 	Title:	Secretary
	 	 	 
	 	GUARANTORS (IF ANY):
	 	 
	 	EFT INTEGRATION, INC.
	 	 	 
	 	By:	/s/ Lock Ireland
	 	Name:	Lock Ireland
	 	Title:	CEO

 

	Accepted as of the Effective Date.
	 
	LESSOR:
	 
	FIFTH THIRD EQUIPMENT FINANCE COMPANY
	formerly known as THE FIFTH THIRD LEASING COMPANY
	 	 
	By:	/s/ Steven J. Englehart	 
	Name:	Steven J. Englehart	 
	Title:	Vice Presidentf8k1207_x101-cmgo.htm

ROYALTY AGREEMENT

This Royalty Agreement (the “Agreement”) is made and entered into as of August 15, 2012 by and between CMG Holdings Group, Inc., a Nevada corporation (“CMGO”) and Audio Eye, Inc., a Delaware corporation (“AE”) with reference to the following:

 

A. Pursuant to a Master Agreement dated as of June 22, 2011 as amended (the “Master Agreement”) between CMGO and AudioEye Acquisition Corp. (“AEAC”), a newly formed corporation, CMGO and AEAC agreed, among other things, that AEAC will receive from CMGO 80% of the capital stock of AE and CMGO will distribute to its shareholders in the form of a dividend 5% of the capital stock of AE (collectively, the “Separation”).  Pursuant to the Master Agreement, CMGO will retain approximately 15% of the outstanding capital stock of AE as of the closing.

 

B. As a condition to the closing of the Separation (the “Closing”), AE and CMGO are required to enter into an agreement pursuant to which AE will pay to CMGO a royalty based on cash received by AE or its affiliates from the exploitation of AE’s technology as described below.

 

NOW, THEREFORE, in consideration of the mutual covenants and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, CMGO and AE agree as follows:

 

ARTICLE ONE

 

PAYMENT OF ROYALTIES

 

Effective as of the Closing, AE shall pay to CMGO 10% of cash or other forms of payment or compensation received as income earned or settlements on claims, suits or judgments directly resulting from AE’s patent enforcement and licensing strategy, whether received by AE or any of its affiliates, net in either case of any direct costs incurred in pursuit of such strategy as they relate to the following: (1) United States Patent Number #7,653,544 and all continuations and continuations in-part, (2) Patent Number 7966184 and all continuations and continuations in part, and (3) Patent Number 7653544.  Without limiting the generality of the foregoing, direct costs shall include attorneys’ fees and costs incurred by AE in obtaining or attempting to obtain settlement or judgments as a result of patent enforcement regardless of whether the results therefrom are successful. Said direct costs shall be calculated as to each settlement or judgment obtained and shall be deducted from the gross proceeds obtained from the specific claim, suit or judgment in which they were incurred. Amounts due hereunder shall be payable on a quarterly basis commencing with the calendar quarter in which the Closing occurs with respect to amounts collected, costs incurred or taxes accrued in such quarter.  Payment shall be made within fifteen business days from the end of a calendar quarter and shall be accompanied by a statement from AE stating in reasonable detail the calculation of amounts payable.

 

  

  

  

ARTICLE TWO

 

REPORTS, BOOKS AND RECORDS; AUDIT; LATE PAYMENTS AND TAXES 

 

2.1. Reports. Within thirty (30) days after the last day of each quarter subsequent to the Closing Date, AE shall submit to CMGO written statement (the “Quarterly Reporting Statement”) detailing with respect to the preceding quarterly period: (a) all Gross Revenue; and (b) the amount to be paid to CMGO under this Agreement based on such Gross Revenue.

 

2.2. Adjustments.  If AE has to reverse previously recognized Gross Revenue reported under a previous Quarterly Reporting Statement, AE can claim credit on a subsequent Quarterly Reporting Statement for the same quarter it reverses the previously recognized Gross Revenue in AE’s income statement.  Such credit will not exceed the amount to be paid in the then-current quarter, but the unused credit may be carried over to succeeding quarters within the same contract year.

 

2.3. Payment Timing.  AE shall pay CMGO, on a quarterly basis, the amounts reported in the Quarterly Reporting Statement for such quarter not later than thirty (30) days after the end of such quarter.

 

2.4. Books and Records. AE shall maintain appropriate books of account and records with respect to Gross Revenue in accordance with generally accepted accounting principles and shall make complete and accurate entries concerning all transactions relevant to this Agreement. All such books of account and records shall be kept available by AE for no less than three (3) years after the end of each calendar year, or, in the event of a dispute between the parties involving in any way those books of accounts and records, until such time as the dispute will have been resolve, whichever is later.

 

2.5. Audit. CMGO shall have the right during the Term and for a period of three (3) years after the end of the calendar year, or, in the event of a dispute concerning the accuracy and/or correctness of a Quarterly Reporting Statement or any other payment made under this Agreement, until the dispute is resolved, whichever is later, through an independent public accountant or other qualified expert selected by CMGO and reasonably acceptable to AE, in inspect and examine AE’s relevant books of accounts and records, server log files and other documents (including, without limitation, vouchers, records, purchase orders, sales orders, re-orders, agreements and technical information) relating to the subject matter of this Agreement. Such inspection and examination shall be done to confirm that appropriate payments have been under this Agreement. Any such audit shall take place upon reasonable prior written notice to AE and during AE’s regular business hours. Except as set forth in Section 2.6, the cost of such audit shall be borne by CMGO.

 

2.6. Late Payments. CMGO shall be entitled to charge, and AE shall pay, interest on any overdue amounts under this Agreement at the rate of one percent (1%) per month (or part thereof), or at such lower rate as may be the maximum rate allowed under applicable law. In the event that an audit reveals any undisputed underpayment, AE shall, within thirty (30) days after written notice from CMGO, make up for such underpayment by paying the difference between amounts the audits reveals and the amounts AE actually paid, together with such interest on such difference. If the underpayment is more than five percent (5%), AE shall pay the reasonable cost of the audit.  If any amount is overdue by more than ninety (90) days, in addition to any other remedies CMGO may have under this Agreement, CMGO may turn over the right to collect such overdue amounts to a collection agency. AE shall be responsible for any reasonable costs incurred by CMGO or such collection agency in collecting any amount that is overdue by more than ninety (90) days including, but not limited to, reasonable attorney’s fees.

 

  

  

  

2.7. Taxes. AE shall pay all taxes, duties and levies imposed by all national, state, province and local authorities (including, without limitation, export, sales, use and excise) based on the transactions or payments under this Agreement. Amounts payable by AE hereunder shall be paid without deduction or withholding for or on account of any present or future tax, levy, impost, fee, assessment, deduction or charge by any taxing authority except the withholding tax deductible on any tax based CMGO income.

 

ARTICLE THREE

 

DURATION

 

This Agreement shall be effective as of the date of this Agreement and remain in force and effect until the fifth anniversary of the Closing.  At the end of such five (5) year period, AE shall have no further obligation to CMGO. For purposes of this section, all income or other compensation from license agreements, claims, suits or actions entered into or initiated during the above described five (5) year period shall be subject to the terms of this agreement notwithstanding the fact that said income or compensation is received by AE after the expiration of the initial five year term hereof.

 

ARTICLE FOUR

 

GOVERNING LAW

 

This Agreement shall be governed by, and construed and interpreted in all respects in accordance with, the laws of the state of Delaware applicable to agreements made and to be performed entirely within such State, including all matters of construction, validity and performance.

 

ARTICLE FIVE

 

NOTICES

 

All notices pursuant to this Agreement shall be in writing and shall be deemed to have been given ten (10) days after the mailing thereof if sent by overnight courier, or on the day following the day on which it was so sent if sent by facsimile, addressed in the case of AE to its principal office at 9070 S. Rita Road, Suite 1450, Tucson, Arizona 85747 and in the case of CMGO to its principal office at 5601 Biscayne Boulevard, Miami, Florida 33137, or at such subsequent address as either party may designate to the other in writing for such purposes.

 

  

  

  

ARTICLE SIX

 

GENERAL

 

1. This Agreement shall be binding upon the parties hereto, and their respective successors and assigns.

 

2. This Agreement may be modified at any time or from time to time only by the written agreement of both parties.

 

3. The failure of either party to require performance by the other party of any provision hereof, or to enforce any remedies it may have against the other party, shall in no way affect the right thereafter to enforce this Agreement and require full performance by the other party.  The waiver by either party of any breach of any provision of this Agreement shall not constitute a waiver of any succeeding breach of that provision or of any other provision.

 

4. The parties agree that this is an independent contractor arrangement.  Under no circumstances shall either party be considered to be an agent, employee, partner or representative of the other party or otherwise have the authority or power to bind the other party.

 

5. Except as otherwise expressly, provided herein, if any provisions of this Agreement shall be adjudicated to be invalid or unenforceable in any action or proceeding whether in its entirety or in any portion, then such part shall be deemed amended, if possible, or deleted, as the case may be, from the Agreement in order to render the remaining of the Agreement and any provision thereof both valid and enforceable.  Any such deletion or amendment shall apply only where the court rendering the same has jurisdiction.

 

6. This Agreement cancels and supersedes all previous agreements, written or oral, between the parties hereto relating to the subject matter hereof and constitutes the entire agreement between the parties hereto, and there are no understandings, representations or warranties expressed or implied not specifically set forth herein.

 

7. This Agreement may be executed in any number of counterparts each of which shall be an original and taken together shall constitute one and the same instrument.

 

[Signature page follows]

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Royalty Agreement to be executed by their duly authorized officers.

	  	  
	  	
AUDIOEYE, INC.

	  	  
	  	  
	  	
By:    /s/ Nathan Bradley   

	  	
Name:  Nathaniel Bradley                                           

	  	
Title:    President                                           

	  	  
	  	  
	  	  
	  	
CMG HOLDINGS GROUP, INC.

	  	  
	  	  
	  	
By:      /s/ James Ennis

	  	
Name:  James Ennis                                           

	  	
Title:    Chief Financial Officer

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