EXHIBIT 10.4
------------
MASTER LEASE AGREEMENT
LESSOR: BSFS Equipment Leasing
LESSEE: Conference Source International, Inc.
Address: 100 Hartfield Centre Parkway, Suite 300
Atlanta, Fulton County, GA 30354
Contact: Duane Dobler
Tele No.: (404) 209-1400
Fax No.: (800) 343-9332
Master Lease Agreement No.:53716
TERMS AND CONDITIONS
--------------------
1. LEASE: Lessor shall purchase and lease to Lessee the equipment and
-----
associated items ("Equipment") described in any Equipment Schedule ("Schedule")
executed from time to time by Lessor and Lessee that makes reference to this
Master Lease Agreement ("Agreement"). This Agreement shall be incorporated into
each Schedule. When computer programs and related documentation are furnished
with the Equipment, and a non-exclusive license and/or sublicense (collectively,
"Software") is granted to Lessee in an agreement ("Supplier Agreement") with
the suppliers (collectively, "Supplier") identified on the Schedule, Lessor, to
the extent permitted, grants Lessee a similar non-exclusive sublicense to use
the Software only in conjunction with the Equipment for so long as the Equipment
is leased hereunder. The Equipment and Software include, but are not limited
to, all additions, attachments and accessions thereto and replacements therefore
(collectively, "System"). Any reference to "Lease" shall mean with respect to
each System, this Agreement, a Schedule, a Consent of Supplier, an Acceptance
Certificate, any riders, amendments and addenda thereto, any other documents as
may from time to time be made a part thereof.
As conditions precedent to Lessor's obligation to purchase any Equipment
and obtain any Software, not later than the Commitment Date set forth on the
applicable Schedule, (a) Lessee and Lessor shall execute this Agreement, a
Schedule, an Acceptance Certificate and other documentation contemplated herein,
and (b) there shall have been no material adverse change in Lessee's financial
condition. Upon Lessor's execution of a Schedule, Lessee assigns to Lessor its
rights to receive title to the Equipment and any non-exclusive sublicense to use
the Software described in the Supplier Agreement as of the day the System is
delivered to the Installation Site set forth in the applicable Schedule but no
other right or any warranty thereunder. In consideration of such an assignment
and subject to the terms and conditions herein, Lessor agrees to pay to the
Supplier the Price (as defined in Section 3 below) for the System pursuant to
the Supplier Agreement, but not to perform any other obligation thereunder.
Unless Lessee exercises its Purchase Option as set forth in the applicable
Schedule, Lessee hereby assigns to Lessor all of the Lessee's then-remaining
rights pursuant to the applicable Supplier Agreement
effective upon the termination or expiration of the Term (as set forth in the
applicable Schedule) for any reason.
2. TERMS, RENEWAL AND EXTENSIONS: If all other conditions precedent to a
-----------------------------
Lease have been met, the Lease Term for the System described on each Schedule
shall commence on the date of Lessee's execution of an Acceptance Certificate
("Commencement Date"), and continue for the number of whole months or other
periods set forth in such Schedule ("Initial Term"), the first such full month
commencing on the first day of the month following the Commencement Date (or
commencing on the Commencement Date if such date is the first day of the month).
If Lessee selects Purchase Option B or C in the applicable Schedule, on the
expiration date of the Initial Term, the Lease shall be automatically renewed
for a six-month period ("Renewal Term") unless, by giving written notice to
Lessor six (6) months prior to the expiration date, the Lessee elects to
terminate the Lease. After the Renewal Term, at Lessor's option, the Lease shall
be automatically extended on a month-to-month basis until either party gives the
other not less than thirty (30) days prior written notice of its intention to
terminate the Lease. Any renewals and extensions shall be on the same terms and
conditions as during the Initial Term. "Term" shall mean the applicable Initial
Term, the Renewal Term, if any, and any extension thereof as provided herein.
3. RENT AND PAYMENT: Lessee shall pay to Lessor all the rental payments
----------------
as shown in the applicable Schedule ("Rent") during the Term of the Lease,
except as such Rent may be adjusted pursuant to this Section and Sections 2 and
8 of a Schedule, plus such additional amounts as are due Lessor under the Lease.
Rent shall be paid as designated in the applicable Schedule in advance on the
first day of each Payment Period ("Rent Payment Date"). If the Commencement Date
is not the first day of a calendar month (or other Payment Period), Lessee shall
pay to Lessor, on demand, interim Rent prorated daily based on a 360-day year
for each day from and including the Commencement Date to and including the last
day of such month or other Payment Period.
The Rent is based upon the Price of the System and the acceptance of the
System by Lessee on or before the Commitment Date set forth in the applicable
Schedule. The "Price" of the System shall be as set forth in the Schedule, and
shall exclude all other costs, including sales or other taxes included in the
Supplier Agreement as part of the purchase price. If the Price is increased or
decreased as a result of a job change order ("JCO"), the Lessee authorizes
Lessor to adjust the Rent. If the Commencement Date occurs after the Commitment
Date, and Lessor waives the condition precedent that the Commencement Date occur
on or before the Commitment Date, Lessor's then-current Lease Rate Factor for
similar transactions shall apply and the Lessee authorizes Lessor to adjust the
Rent accordingly.
Whenever any payment of Rent or other amount is not made within ten (10)
days after the date when due, Lessee agrees to pay on demand (as a fee to offset
Lessor's collection and administrative expenses), the greater of twenty-five
dollars ($25.00) or ten (10%) of each such overdue amount, but not exceeding the
lawful maximum, if any. All payments shall be payable to Lessor in U.S. dollars
at Lessor's address set forth in Section 18 or such other place as Lessor
directs in writing. If Lessee requests changes or amendments to any Lease,
Lessor may charge
2
Lessee Lessor's reasonable costs and expenses of negotiation and documentation,
including fees of legal staff or outside counsel.
4. DELIVERY: All transportation, delivery and installation costs (unless
--------
included in the Price) are the sole responsibility of Lessee. Lessee assumes
all risk of loss and damage if the Supplier fails to deliver or delays in the
delivery of any System, or if any System is unsatisfactory for any reason.
5. NET LEASE: Lessee's obligations under each Lease are absolute,
---------
unconditional and non-cancelable and shall not be subject to any delay,
reduction, setoff, defense, counterclaim or recoupment for any reason including
any failure of any System, or any misrepresentations of any supplier,
manufacturer, installer, vendor or distributor. Lessor is not responsible for
the delivery, installation, maintenance or operation of any System.
6. WARRANTIES: Lessor agrees that third-party warranties, if any, inure
----------
to the benefit of Lessee during the Term and on exercise of the Purchase Option.
Lessee agrees to pursue any warranty claim directly against such third party and
shall not pursue any such claim against Lessor. Lessee shall continue to pay
Lessor all amounts payable under any Lease under any and all circumstances.
7. QUIET ENJOYMENT: Lessor shall not interfere with Lessee's quiet
---------------
enjoyment and use of the System during the Term if no Event of Default has
occurred and is continuing.
8. TAXES AND FEES: Lessee shall promptly reimburse Lessor, upon demand,
--------------
as additional Rent, or shall pay directly, if so requested by Lessor, all
license and registration fees, sales, use, personal property taxes and all other
taxes and charges imposed by any federal, state, or local government or taxing
authority, relating to the purchase, ownership, leasing, or use of the System or
the Rent excluding, however, all taxes computed upon the net income of Lessor.
9. DISCLAIMER OF WARRANTIES AND DAMAGES: LESSEE ACKNOWLEDGES THAT (a) THE
------------------------------------
SIZE, DESIGN, CAPACITY OF EACH SYSTEM AND THE MANUFACTURER AND SUPPLIER HAVE
BEEN SELECTED BY LESSEE; (b) LESSOR IS NOT A MANUFACTURER, SUPPLIER, DEALER,
DISTRIBUTOR OR INSTALLER OF ANY SYSTEM; (c) NO MANUFACTURER OR SUPPLIER OR ANY
OF THEIR REPRESENTATIVES IS AN AGENT OF LESSOR OR AUTHORIZED TO WAIVE OR ALTER
ANY TERM OR CONDITION OF ANY LEASE; AND (d) EXCEPT FOR LESSOR'S WARRANTY OF
QUIET ENJOYMENT SET FORTH IN SECTION 7, LESSOR HAS NOT MADE, AND DOES NOT HEREBY
MAKE, ANY REPRESENTATION, WARRANTY OR COVENANT, WRITTEN OR ORAL, STATUTORY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER INCLUDING, WITHOUT LIMITATION
THE DESIGN, QUALITY, CAPACITY, MATERIAL, WORKMANSHIP, OPERATION, CONDITION,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, HIDDEN OR LATENT DEFECTS,
OR AS TO ANY PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT. LESSEE LEASES EACH
SYSTEM "AS IS, WHERE IS".
3
LESSOR SHALL HAVE NO LIABILITY TO LESSEE OR ANY THIRD PARTY FOR ANY
SPECIAL, DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY SORT
INCLUDING, WITHOUT LIMITATION, DAMAGES FOR PERSONAL INJURY, LOSS OF PROFITS OR
SAVINGS, LOSS OF USE, OR ANY OTHER DAMAGES, WHETHER BASED ON STRICT LIABILITY OR
NEGLIGENCE, WHETHER RESULTING FROM USE OF A SYSTEM OR BREACH OF A LEASE OR
OTHERWISE, EXCEPT FOR DIRECT, SPECIFIC DAMAGES FOR PERSONAL INJURY OR PROPERTY
DAMAGE TO THE EXTENT CAUSED BY LESSOR'S ACTIVE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
LESSEE HAS ELECTED PURCHASE OPTION B OR C, ARTICLE 2A OF THE UCC MAY APPLY
TO THE LEASE AND LESSEE MAY HAVE CERTAIN RIGHTS THEREUNDER. IF SO, LESSEE
ACKNOWLEDGES THAT SUCH A LEASE IS A FINANCE LEASE AS DEFINED IN UCC (S)2A-103.
TO THE EXTENT PERMITTED BY LAW, LESSEE HEREBY WAIVES ANY RIGHTS OR REMEDIES
LESSEE MAY HAVE UNDER UCC (S)(S)2A-508-522 INCLUDING, WITHOUT LIMITATION, RIGHTS
OF REJECTION, REVOCATION, CANCELLATION, GRANTING OF SECURITY INTERESTS, AND
RECOVERY FOR BREACH OF WARRANTY.
10. INSURANCE: At its expense, Lessee shall keep each System insured
---------
against all risks of loss and damage for an amount equal to the installed
replacement cost of such System with Lessor named as a loss payee. Lessee shall
also maintain comprehensive general liability insurance with Lessor named as an
additional insured. All insurance policies shall be with an insurer having a
"Best Policy Holders" rating of "A-X" or better, and be in such form, amount and
deductibles as are satisfactory to Lessor. Each such policy must state by
endorsement that the insurer shall give Lessor not less than thirty (30) days
prior written notice of any amendment, renewal or cancellation. Lessee shall,
upon request, furnish to Lessor satisfactory evidence that such insurance
coverage is in effect. Lessee may self insure for such coverages only with
Lessor's prior written consent.
11. CASUALTY: If any System, in whole or in part, is lost, stolen,
--------
damaged or destroyed, or is taken in any condemnation or similar proceeding (an
"Event of Loss"), Lessee shall immediately notify Lessor. Lessee shall, at its
option (a) immediately place the affected Equipment and Software in good
condition and working order, (b) replace the affected item with like equipment
or software in good condition and transfer clear title and any sublicense to
Lessor, or (c) pay to Lessor, within thirty (30) days of the Event of Loss, an
amount equal to the Stipulated Loss Value ("SLV") as defined below, for such
affected Equipment or Software plus any other unpaid amounts then due under the
Lease. If an Event of Loss occurs as to part of a System for which the SLV is
paid, a pro rata amount of Rent shall abate from the date the SLV payment is
received by Lessor. Upon payment of the SLV, title to the applicable Equipment
and the sublicense to the applicable Software shall pass to Lessee with no
warranties, subject to the rights, if any, of the insurer.
The SLV shall be an amount equal to all future Rent from the last Rent
Payment Date for which Rent has been paid to the end of the Term with each such
payment discounted to present
4
value at a simple interest rate equal to five percent (5%) per annum or, if such
rate is not permitted by law, then at the lowest permitted rate, plus (a) if
Lessee selects Purchase Option B, twenty percent of the product obtained by
multiplying the total number of Rent payments shown on the Schedule for the
applicable Term by the then periodic Rent, or (b) if Lessee selects Purchase
Option C, the percent set forth in the Purchase Option C election in the
Schedule times the Price as it may have been adjusted ("Percent Option Amount").
If Lessor receives any insurance proceeds, Lessor shall apply such proceeds to
Lessee's outstanding obligations with any remaining sums to be delivered to
Lessee.
12. INDEMNITY: Lessee shall indemnify Lessor against, and hold Lessor
---------
harmless from, and covenants to defend Lessor against, any and all losses,
claims, liens, encumbrances, suits, damages, and liabilities (and all costs and
expenses including, without limitation, reasonable attorneys' fees) related to
the Lease including, without limitation, the selection, purchase, delivery,
ownership, condition, use, operation of a System, or violation of a Software
sublicense, or arising by operation of law (excluding any of the foregoing to
the extent caused by the active gross negligence or willful misconduct of
Lessor). Lessee shall assume full responsibility for or, at Lessor's sole
option, reimburse Lessor for the defense thereof. This Section shall survive the
termination of the Lease but not longer than the applicable statute of
limitations.
13. TAX INDEMNITY: If Lessee selects Purchase Option B, the Lease is
-------------
entered into based upon the assumptions ("Assumptions") that for federal, state,
and local income tax purposes, Lessor shall be entitled to deduct, at the
highest marginal rate of tax imposed on corporations, the maximum depreciation
or cost recovery allowances provided in the Internal Revenue Code of 1986, as
amended, and under state and local law in effect on the date Lessee executes the
applicable Schedule. If, in its reasonable opinion, Lessor determines that its
net after-tax economic yield or after-tax cash flow ("Net Economic Return") has
been adversely affected as a result of a change in the Assumptions (a "Loss"),
Lessee agrees to pay to Lessor, on demand, an amount which will cause Lessor's
then Net Economic Return to equal the Net Economic Return that Lessor would have
received had such Loss not occurred. Lessee shall have no right to inspect the
tax returns of Lessor.
14. DEFAULT: Any of the following shall constitute an Event of Default:
-------
(a) Lessee fails to pay when due any Rent or other amount payable under a Lease
that is not paid within ten (10) days of Lessee's receipt of written notice of
nonpayment; (b) Lessee fails to perform any other material term in any Lease or
other agreement given in connection with any Lease that continues uncured for
twenty (20) days after Lessee's receipt of written notice thereof; (c) the
inaccuracy of any material representation or warranty made by Lessee or any
guarantor in connection with any Lease and the continuation thereof for thirty
(30) days or more; (d) Lessee attempts to make a Transfer (as defined in Section
16) without Lessor's prior written consent; (e) Lessee dissolves or ceases to do
business as a going concern; (f) Lessee sells all or substantially all of its
assets, merges or consolidates with or into or reorganizes with any entity; (g)
Lessee becomes insolvent, makes an assignment for the benefit of creditors,
files a voluntary petition or has an involuntary petition filed or action
commenced against it under the United States Bankruptcy Code or any similar
federal or state law; (h) Lessee fails to perform its obligations
5
under any other Lease or agreement with Lessor; or (i) any partner of Lessee,
any guarantor takes any actions described in subsections (e), (f), or (g) above.
15. REMEDIES: If an Event of Default has occurred, Lessor shall have the
--------
right to exercise one or more of the following remedies set forth below. Lessor
may (a) terminate and/or declare an Event of Default under any Lease or other
agreement with Lessee; (b) recover from Lessee a Rent and any and all amounts
then due and unpaid, and (c) recover from Lessee a Rent and other amounts to
become due, by acceleration or otherwise (plus, if the System is not returned in
accordance with Section 9 of the applicable Schedule, an amount equal to (i)
Lessor's reasonable estimate of the fair market value of the System at the end
of the applicable Term if Lessee selects Purchase Option B in the Schedule, or
(ii) if Lessee selects Purchase Option C in the Schedule, Percent Option Amount.
The amounts described in subsection (c) shall be present valued using a five
percent (5%) simple interest rate per annum or, if such rate is not permitted by
law, then at the lowest permitted rate. The amounts set forth in subsections (b)
and (c) above shall be the agreed upon damages ("Lessor's Loss"). Lessor may
also charge Lessee interest on the Lessor's Loss from the date of the Event of
Default until paid at the rate of one and one-half percent (1 1/2%) per month,
but in no event more than the maximum rate permitted by law; demand the Lessee
return any System to Lessor in the manner provided in Section 9 of the Schedule;
and take possession of, render unusable, or disable any System wherever located,
with or without demand or notice or any court order or any process by law.
Upon repossession or return of a System, Lessor shall have the right to
sell, lease or otherwise dispose of the System, with or without notice and by
public or private bid, and shall apply the net proceeds thereof, if any, toward
Lessor's Loss but only after deducting (a) in the case of any reletting of the
System, the rent due for any period beyond the scheduled expiration of the
Lease; (b) in the case of sale, (i) if Lessee has elected Purchase Option B, the
estimated fair market value of the System as of the scheduled expiration of the
Term of the Lease, or (ii) if Lessee has elected Purchase Option C, an amount
equal to the Percent Option Amount, and (c) all expenses including, without
limitation, reasonable attorneys' fees incurred in enforcement of any remedy.
Lessee shall be liable for any deficiency if the net proceeds available after
the permitted deductions are less than Lessor's Loss. No right or remedy is
exclusive of any other provided herein or permitted by law or equity. All
rights and remedies shall be cumulative and may be enforced concurrently or
individually from time to time.
16. ASSIGNMENT: Lessor may, without notice to or the consent of Lessee,
----------
sell, assign, grant a security interest in, or pledge its interest in all or a
portion of a System and/or a Lease and any amounts payable hereunder to any
third party ("Assignee"). Lessee shall, if directed, pay all Rent and other
amounts due to Assignee free from any claim or counterclaim, defense or other
right which Lessee may have against Lessor. Lessor shall be relieved of its
future obligations under the Lease as a result of such assignment if Lessor
assigns to Assignee its interest in the System and Assignee assumes Lessor's
future obligations. WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, LESSEE SHALL NOT
ASSIGN, SUBLEASE, TRANSFER, PLEDGE, MORTGAGE OR OTHERWISE ENCUMBER ("TRANSFER")
ANY SYSTEM OR ANY LEASE OR ANY OF ITS RIGHTS THEREIN OR PERMIT ANY LEVY,
6
LIEN OR ENCUMBRANCE THEREON. Any attempted non-consensual Transfer by Lessee
shall be void ab initio. No Transfer shall relieve Lessee of any of its
obligations under a Lease.
17. ORGANIZATION AND AUTHORITY: Lessee is duly organized, validly
--------------------------
existing and in good standing under the laws of its State of formation and in
any jurisdiction where a System is located. Lessee has the power and authority
to execute, deliver and perform each Lease. The person executing this Agreement
and any Schedules on behalf of Lessee has been given authority to bind the
Lessee and each Lease constitutes or will constitute a legally binding and
enforceable obligation of the Lessee. The execution, delivery and performance of
each Lease is not and will not be in contravention of, or will not result in a
breach of, any of terms of Lessee's organizational documents, and any
agreements, contracts or instruments to which Lessee is a party or under which
it is bound.
18. NOTICES: Notices, demands and other communications shall be in
-------
writing and shall be sent by hand delivery, certified mail (return receipt
requested), or overnight courier service, or facsimile transmission (effective
upon transmission) with a copy sent by one of the foregoing methods, to Lessee
at the address or facsimile number stated above and to Lessor at 220 Athens Way,
Nashville, Tennessee 37228-1314, Attention: V.P. Finance, or facsimile no. (615)
734-5110. Notices shall be effective upon the earlier of actual receipt or four
days after the mailing date. Either party may substitute another address by such
written notice.
19. JURISDICTION AND GOVERNING LAW: EACH LEASE SHALL BE GOVERNED BY THE
------------------------------
LAWS OF THE STATE OF TENNESSEE AND THE LESSEE CONSENTS AND AGREES THAT, AT
LESSOR'S OPTION, PERSONAL JURISDICTION, SUBJECT MATTER JURISDICTION AND VENUE
SHALL BE WITH THE COURTS OF THE STATE OF TENNESSEE, OR THE FEDERAL COURT FOR THE
MIDDLE DISTRICT OF TENNESSEE.
20. MISCELLANEOUS: (a) Any failure of Lessor to require strict
-------------
performance by Lessee, or any waiver by Lessor of any provision of a Lease,
shall not be construed as a consent to or waiver of any other breach of the same
or of any other provisions. (b) If there is more than one Lessee, the
obligations of each Lessee are joint and several. (c) Lessee agrees to execute
and deliver, upon demand, any documents necessary, in Lessor's reasonable
opinion, to evidence the intent of a Lease, and/or to protect Lessor's interest
in a System. Lessee appoints Lessor as its attorney-in-fact for the sole purpose
of executing and delivering any UCC financing statements. Lessee agrees to pay
Lessor's out-of-pocket costs of filing and recording such documentation. (d)
Lessee shall deliver to Lessor such additional financial information as Lessor
may reasonably request. (e) If any provision shall be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired. (f) In the event Lessee fails to pay or
perform any obligations under a lease, Lessor may, at its option, pay or perform
such obligation, and any payment made or expense incurred by Lessor in
connection therewith shall be due and payable by Lessee upon Lessor's demand
with interest thereon accruing at the maximum rate permitted by law until paid.
(g) Time is of the essence in each Lease. (h) Lessee shall pay Lessor, on
demand, all costs and expenses, including reasonable attorneys' and collection
fees, incurred by Lessor in enforcing the terms and conditions of a
7
Lease or in protecting Lessor's rights and interests in a Lease or a System. (i)
LESSOR INTENDS TO COMPLY WITH ALL APPLICABLE LAWS, INCLUDING THOSE CONCERNING
THE REGULATION OF INTEREST. Therefore, no lease charge, late charge, fee or
interest, if applicable, is intended to exceed the maximum amount permitted to
be charged or collected by applicable law. If one or more of such charges exceed
such maximum, then such charges will be reduced to the legally permitted maximum
charge and any excess charge will be reduced to the legally permitted maximum
charge and any excess charge will be used to reduce the future Rent and/or the
Price of the System or refunded. (j) Each Lease may be executed by one or more
of the parties on any number of separate counterparts (which may be originals or
copies sent by facsimile transmission), each of which counterparts shall be an
original. (k) Each Lease constitutes the entire agreement between Lessor and
Lessee with respect to the subject matter thereof and supersedes all previous
writings and understandings of any nature whatsoever. (l) No agent, employee, or
representative of Lessor has any authority to bind Lessor to any representation
or warranty concerning any System and, unless such representation or warranty is
specifically included in a Lease, if shall not be enforceable by Lessee against
Lessor.
Except as otherwise provided in Section 3 of this Agreement and Sections 2,
3 and 8 of a Schedule, any modifications, amendments or waivers to a Lease shall
be effective only if mutually agreed upon in writing, duly executed by
authorized representatives of the parties.
BSFS EQUIPMENT LEASING
Division of General Electric Capital
Corporation
By: /s/ Susan L. Hodges
-------------------------------
Title: Ops, Team Leader
Date: April 11, 1996
CONFERENCE SOURCE INTERNATIONAL, INC.
By: /s/ Judy B. Crawford
-------------------------------
Title: President
Date: April 8, 1996
8
EXHIBIT 10.5
EQUIPMENT SCHEDULE
LESSOR: BSFS Equipment Leasing
LESSEE: Conference Source International, Inc.
Address: 100 Hartfield Centre Parkway, Suite 300
Atlanta, Fulton County, GA 30354
Attention: Duane Dobler
Installation Site: Same as above
Supplier Name: Multilink, Inc.
Agreement No./Schedule No. 53716/53716 Price: $411,827.00
Date of Schedule: 03/18/96 Initial Term (mons): 60
Commitment Date: 04/01/96 Payment Period: Monthly
Payment Nos.: 1-60 Lease Rate Factor: .021693
Rent: $8,933.76 Purchase Option: $1.00
Advance Payment: $8,933.76 The Advance Payment shall be applied
to the first (1) and last (0) Rent
payment(s)
TERMS AND CONDITIONS
--------------------
The terms and conditions of the Master Lease Agreement between Lessor and
Lessee referenced above are made a part of this Schedule. Lessor and Lessee
hereby agree to the terms defined above and further agree as set forth herein.
1. ADVANCE PAYMENT: Lessee shall pay to Lessor, upon the execution and
---------------
delivery of this Schedule, the advance payment set forth above ("Advance
Payment") in consideration of the Lessor holding funds available to purchase the
Equipment and obtain the Software and as compensation for Lessor's review of
Lessee's credit and document preparation. Upon Lessor's acceptance of the Lease,
the Advance Payment shall be applied to the payment of Rent as set forth above.
Any Advance Payment shall be non-refundable if Lessee fails to timely provide
all documentation or satisfy all conditions required by this Lease.
2. PURCHASE PRICE PAYMENTS: Lessee acknowledges that it has signed and
-----------------------
received a copy of the Supplier Agreement. If Lessee is required to make
payments to Supplier under the Supplier Agreement prior to the Commencement Date
("Purchase Price Payments"). Lessee requests Lessor to pay such payments subject
to the following terms and conditions. The Price will be increased by adding a
price adjustment for each Purchase Price Payment. Each such price adjustment
shall be computed by multiplying the Purchase Price Payment paid by Lessor to
Supplier by a rate equal to the "Base Lending Rate" from time to time designated
by Citibank N.A., NY, NY in effect on the date Lessor makes the first Purchase
Price Payment plus two and one-half percent, divided by 360, and multiplied by
the actual number of days elapsed
from the date of the Purchase Price Payment to the Commencement Date or, if the
Lease does not commence, to the date Lessee refunds the Purchase Price Payments
to Lessor in accordance with Section 3. In no event will all or any price
adjustment(s) exceed any limits imposed by applicable law. The periodic Rent
shall be increased as a result of adding to the Price of the System an amount
equal to the total price adjustment(s).
3. ACCEPTANCE: Lessee agrees to accept the System for purposes of this
----------
Lease by signing the Acceptance Certificate within ten (10) days after the
System has met the acceptance criteria specified in the Supplier Agreement. If
Lessee fails or refuses to sign the Acceptance Certificate within such (10) ten
day period, Lessor may declare Lessee's assignments and Lessor's agreement to
pay the Price set forth in Section 1 of the Agreement and Section 2 of this
Schedule to be null and void ab initio and thereupon the Lease shall terminate.
Lessor shall then have no obligations under the Lease and Lessee shall, within
ten (10) days of a demand therefore, immediately pay to Lessor all Purchase
Price Payments and all price adjustment(s) under Section 2 herein as well as
Lessor's out-of-pocket expenses.
4. MAINTENANCE, USE AND OPERATION: At all times during the Term, at its
------------------------------
sole cost and expense, Lessee shall maintain the System in good repair,
condition and working order, ordinary wear and tear excepted. Lessee shall use
the System and all parts thereof for its designated purpose and in compliance
with all applicable laws, shall keep the System in its possession and control
and shall not permit the System to be moved from the Installation Site set forth
above without Lessor's prior written consent.
5. PERSONAL PROPERTY: The System is, and shall at all times remain,
-----------------
personal property even if the Equipment is affixed or attached to real property
or any improvements thereon. At Lessor's request, Lessee shall, at no charge,
promptly affix to the System any tags, decals, or plates furnished by Lessor
indicating Lessor's interest in the System and Lessee shall not permit their
removal or concealment. At Lessee's expense, Lessee shall (a) at all times keep
the System free and clear of all liens and encumbrances, except those described
in Section 6 and those arising through the actions of Lessor, and (b) otherwise
cooperate to defend Lessor's interest in the System and to maintain the status
of the System and all parts thereof as personal property. If requested by
Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in
the System from any party having an interest in the real estate or building in
which the System is located. Lessor may inspect the System and any related
maintenance records at any time during Lessee's normal business hours.
6. TRUE LEASE AND SECURITY INTEREST: If Lessee has selected Purchase
--------------------------------
Option B, (a) Lessor holds title to the Equipment and the right to use the
Software and Lessor shall be entitled to all tax benefits resulting therefrom,
(b) Lessee shall have no right, title or interest therein, other than possession
and use as a lessee and non-exclusive sublicensee, and (c) Lessee and Lessor
intend the Lease to create a true lease and not a security interest, and the
provisions of this Section or the filing of any financing statements with
respect to the Lease shall not be deemed evidence of any contrary intent but of
an attempt to protect Lessor's rights and title. Regardless of the purchase
option selected, and without limiting or negating the foregoing sentence, to
secure the performance of Lessee's obligations under this Lease including,
without
2
limitation, the repayment of any Purchase Price Payments, price adjustments and
out-of-pocket expenses under Section 3 above, Lessee hereby grants to Lessor a
first priority security interest in Lessee's existing and future right, title
and interest in, to and under (i) the System including all additions,
attachments, accessions, and leased Modifications and Additions (as defined in
Section 7 below) thereto, and replacements therefore, (ii) the applicable
Supplier Agreement, and (iii) all products and proceeds of the foregoing
including, without limitation, insurance proceeds, rents and all sums due or to
become due to Lessee with respect to any of the foregoing, and all monies
received in respect thereof.
7. MODIFICATIONS, ADDITIONS AND ALTERATIONS: After the Commencement Date
----------------------------------------
of this Lease and without notice to Lessor, Lessee may, at Lessee's expense,
alter or modify any item of Equipment with an upgrade, accessory or any other
equipment that meets the specifications of the System's manufacturer for use on
or in connection with the System ("Modification") or with Software or other
associated items or materials that meet the specifications of such manufacturer
and are to be used on or in connection with such System ("Addition"). Any other
modification or addition ("Alteration") shall be permitted only upon written
notice to Lessor and at Lessee's expense and risk, and any such Alteration shall
be removed and the System restored to its normal, unaltered condition at
Lessee's expense prior to its return to Lessor. If not removed upon return of
the System, any Modification or Addition shall become, without charge, the
property of Lessor free and clear of all encumbrances. Restoration will include
replacement of any parts removed in connection with the installation of an
Alteration, Modification or Addition. Any Equipment or Software installed in
connection with warranty or maintenance service or manufacturer's upgrades
provided at no charge to Lessee shall be the property of Lessor.
8. LEASES FOR MODIFICATIONS AND ADDITIONS: During the Term of this Lease,
--------------------------------------
at Lessee's request, Lessor may elect to lease to Lessee Modifications and
Additions ("CSO Equipment") subject to the terms of this Lease. While the CSO
Equipment shall be added to and become a part of this Lease as of the CSO
Commencement Date (as defined below), the CSO Lease Addendum shall be assigned a
separate Schedule number. The lease for CSO Equipment shall expire at the same
time as this Lease. The applicable Lease Rate Factor shall be Lessor's then-
current Lease Rate Factor for similar transactions based upon the remaining
length of the Term. The rent for CSO Equipment shall be determined by Lessor who
shall adjust the then-current Rent and notify Lessee in writing of such
adjustment(s), which shall be effective as of the first day of the month
following the date of the notice (or the date of the notice if it is the first
day of the month) ("CSO Commencement Date"). Any adjustment notice shall be
added to and become a part of this Lease.
CSO Equipment must be ordered by Lessee from the Supplier. On the date any
CSO Equipment is delivered to Lessee, Supplier shall pass title to such CSO
Equipment (other than any Software which shall be licensed and/or sublicensed)
directly to Lessor. Such title shall be good and marketable and free and clear
of any and all liens and encumbrances of any nature whatsoever. Lessor shall
promptly pay to Supplier the appropriate price of the CSO Equipment after the
later of (a) the date the CSO Equipment is installed and functioning, or (b)
Lessor's receipt of a full and complete listing of the CSO Equipment and the
Supplier's invoice. No
3
interest shall be payable by Lessor to Supplier with respect to such payment.
Lessor's agreement to lease any CSO Equipment is subject to the condition that
the Price payable to Supplier with respect thereto shall not exceed $100,000.00
or be less than $1,000.00 and is subject to satisfactory credit review by Lessor
of Lessee's credit at the time of the CSO.
9. RETURN OF SYSTEM: (a) Upon any termination of this Lease pursuant to
----------------
the terms hereof prior to the end of the Term, (b) at Lessor's request upon the
occurrence of an Event of Default, or (c) if Lessee has not exercised its
Purchase Option set forth herein at the end of the applicable Term, Lessee
shall, at its own risk and sole expense, immediately return the System to Lessor
by properly removing, disassembling and packing it for shipment, loading it on
board a carrier acceptable to Lessor, and shipping the same to a destination in
the continental United States specified by Lessor, freight and insurance
prepaid. The returned System shall be in the same condition and operating order
as existed when received, ordinary wear and tear excepted. If the Lessee does
not immediately return the System to Lessor as required, Lessee shall pay to
Lessor, on demand, an amount equal to the then-current Rent prorated on a daily
basis for each day from and including the termination or expiration date of the
Lease through and including the day Lessee ships the System to Lessor in
accordance with this Section. Lessee shall pay to Lessor, upon written demand,
any amount necessary to place the System in good repair, condition and working
order, ordinary wear and tear excepted.
10. PURCHASE OPTION: At the expiration of the Initial Term or any Term,
---------------
if Lessee has performed all terms and conditions of the Lease, except the return
of the System pursuant to Section 9 herein, Lessee shall have the right to
purchase all, but not less than all, of the Equipment and all leased
Modifications and to receive an assignment of all, but not less than all, non-
exclusive sublicenses to use the Software and Additions, if any, for the
purchase price described below subject to the following terms and conditions:
If Lessee has elected Purchase Option B or C above, Lessee shall provide
written notice to Lessor at least six (6) months prior to such purchase that
Lessee has elected to exercise its Purchase Option. In any event, upon exercise
of its purchase option, Lessee shall purchase the Equipment and all leased
Modifications and obtain a non-exclusive sublicense to use the associated
Software and Additions AS-IS, WHERE-IS, WITH ALL FAULTS AND SUBJECT TO THE SAME
DISCLAIMERS OF WARRANTIES AND DAMAGES AS SET FORTH IN SECTION 9 OF THE
AGREEMENT. Lessee also shall be responsible for the payment of any sales tax or
other fees in connection with Lessee's exercise of this Purchase Option. The
purchase price shall be due and payable to Lessor by Lessee at the expiration of
the applicable Term.
Upon satisfaction by Lessee of the purchase conditions, Lessor's sole and
exclusive obligations under this Purchase Option shall be to deliver to Lessee
good title to such Equipment and leased Modifications such as Lessor received
from the Supplier, to assign to Lessee a non-exclusive sublicense, as described
in the Supplier Agreement, to use the associated Software and Additions, free
and clear of all liens, encumbrances and rights of others arising solely out of
or created by Lessor's actions. Lessor's assignment of the sublicense is
limited to such sublicense
4
as Lessor can assign without incurring further cost and is subject to all
applicable terms and conditions of the license and/or sublicense set forth in
the Supplier Agreement.
The purchase price shall be as follows:
A. Purchase Option A. If Lessee has selected Purchase Option A above, the
purchase price shall be $1.00.
B. Purchase Option B. If Lessee has selected Purchase Option B above, the
purchase price shall be the installed fair market value thereof
assuming the System is in good repair, condition and working order,
ordinary wear and tear excepted ("FMV"). The FMV shall be determined by
Lessor and Lessee. If Lessor and Lessee are unable to agree, the FMV
shall be determined by an independent appraiser selected by Lessor and
approved by Lessee which approval shall not be unreasonably withheld or
delayed. Lessee shall bear the fees of the appraiser.
C. Purchase Option C. If Lessor has selected Purchase Option C, the
purchase price shall be the product obtained by multiplying the Price,
as it may have been adjusted, by the percent set forth in Option C
above.
A complete description of the System is set forth on the Equipment and
Software Listing attached hereto and made a part hereof.
BSFS EQUIPMENT LEASING
Division of General Electric Capital
Corporation
By: /s/ Susan L. Hodges
----------------------------------
Title: Ops, Team Leader
Date: April 11, 1996
CONFERENCE SOURCE INTERNATIONAL, INC.
By: /s/ Judy B. Crawford
----------------------------------
Title: President
Date: April 8, 1996
5
EQUIPMENT AND SOFTWARE LISTING
Lessor: BSFS Equipment Leasing
Lessee: Conference Source International, Inc.
Agreement No./Schedule No. 53716
Lessor and Lessee agree that the following described Equipment and Software
are subject to the Master Lease Agreement and Schedule referenced above.
TWO (2) ONE HUNDRED FORTY-FOUR (144) PORT SYSTEM 70 EQUIPPED WITH EIGHT (8)
OPERATOR WORKSTATIONS EACH:
BASIC SYSTEM 70 CONFIGURED WITH 144 PORTS AND EIGHT OPERATOR WORKSTATION:
QUANTITY DESCRIPTION
486 DX2 CPU CARD WITH 16MB RAM
340 MB HARD DISK DRIVE
5.25" AND 3.5" COMBINATION FLOPPY DISK DRIVE
1 INTERNAL MODEM
6 DIGITAL SIGNAL PROCESSOR (DSP) CONFERNCING
CARDS, EACH WITH (4) DSP'S
3 DUAL T1 INTERFACE CARDS
24 CHANNEL ANALOG INTERFACE CARD
8-PORT SERIAL I/O CARD
8 CHANNEL ANNUNCIATOR FEATURE
CURRENT RELEASE OF SYSTEM SOFTWARE
EACH OPERATOR WORKSTATION INCLUDES:
14" WYSE 60 OPERATOR DISPLAY SCREEN
ASCII KEYBOARD
AUDIO CONSOLE
BINAURAL HEADSET
1 COMPLETE SET OF MANUALS (EACH)
ACCEPTANCE CERTIFICATE
Lessor: BSFS Equipment Leasing
Lessee: Conference Source International, Inc.
Agreement No./Schedule No.: 53716
This Acceptance Certificate is made with respect to that Master Lease
Agreement and Schedule referenced above. Capitalized terms used herein shall
have the same meanings assigned to them in the Agreement and Schedule.
On behalf of Lessee, I hereby certify that all of the System described in
the Schedule to the Agreement has been delivered to and received by the Lessee.
The System has been examined by the Lessee and is in good operating order and
condition and is satisfactory to the Lessee. Therefore, the System is
irrevocably accepted by the Lessee for all purposes under the Lease as of the
following date:
April 8, 1996
- -------------
By: /s/ Judy B. Crawford
--------------------
Title: President
--------------------
Date: April 8, 1996
--------------------
CERTIFICATE OF SECRETARY
Lessor: BSFS Equipment Leasing
Lessee: Conference Source International, Inc.
Agreement No.: 53716
1. I am the duly elected, qualified and acting Secretary or Assistant
Secretary of CONFERENCE SOURCE INTERNATIONAL, INC., a Georgia corporation
("Corporation"); and I am charged with maintaining records, minutes, and seal of
the Corporation.
2. The leasing of equipment and the sublicensing of associated software by
the Corporation from Lessor named above, the execution and delivery of a Master
Lease Agreement and Equipment Schedules thereto, whether executed now or in the
future, together with all related instruments and documents as they may be
amended from time to time (collectively, "Lease") have been duly authorized by
appropriate corporate action.
3. Pursuant to the By-laws and Certificate of Incorporation, and any other
documents of the Corporation as may be applicable ("Corporate Documents"), the
following named person has been properly designated and appointed to the office
indicated below, and that person continues to hold the office at this time.
Print Name of Officer
Executing Lease Title Signature of Officer
Judy B. Crawford President /s/ Judy B. Crawford
- ---------------- --------- --------------------
4. Pursuant to Corporate Documents, the person designated to serve in the
above-entitled capacity has been given sufficient authority to act on behalf of,
and to bind the Corporation with respect to the execution and delivery of the
Lease.
5. The Lease will constitute a valid, legal, binding and enforceable
obligation of the Corporation upon execution by the person whose name is set
forth in Section 3 above and by any other necessary party.
6. Pursuant to Corporate Documents, I have the power and authority to
execute this Certificate on behalf of the Corporation, and I have so executed
this Certificate and set seal of the Corporation, if applicable, on the 8 day of
April, 1996.
By: /s/ Owen E. Crawford
----------------------------------------
Print Name: Owen E. Crawford
--------------------------------
Title: Secretary
-------------------------------------
(SEAL) Date: April 8, 1996
--------------------------------------