PRODUCT LEASE AND SERVICE AGREEMENT
This Product Lease and Service Agreement (hereinafter referred to as
"Agreement") dated April 23, 1997 is made by and between COMPUTEL COMPUTER
SYSTEMS, INC. a computer leasing company having a place of business at EXECUTIVE
COURT II, 0000 XXXXXXXXX XXXX. XX, XXXX XXXXX, XXXXXXX 00000 (hereinafter
referred to as "CCS") and JANUS INDUSTRIES, INC. having a place of business 0000
XXXXXXXXX XXXX XX XXXX XXXXX, XX 00000 (hereinafter referred to as
"Subscriber"). Both parties desire to enter into an agreement to establish the
terms and conditions by which CCS will provide to Subscriber certain equipment,
software (Property Management System), communications, training and support
services (hereinafter referred to as "Product") described in detail hereafter at
hotel or motel facilities owned or managed by Subscriber, from time to time,
(each of which is hereinafter referred to as "Premises). In consideration of the
mutual covenants contained within the parties agree as follows:
I. PRODUCT
Pursuant to the terms and conditions described, CCS or its representative
will supply to Subscriber the Product described in attachment Schedule A. The
current Property Management System Services and the current charges therefore,
are set forth in the Computel Computer system Schedule of Services and Fees,
attached as Schedule A. As rental for the lease of the Product, Subscriber shall
pay to CCS the monthly rental fee established during the entire Term. In
addition, Subscriber shall pay all sales, use or other taxes on the Product and
services provided for in this agreement. All lease payment are due and payable
on the first day of each month during the Lease Term. Payments not received by
CCS by the due date shall bear interest at the rate of 1-1/2% per month from the
due date until paid.
A. Shipment and installation
The Subscriber shall be responsible for the installation of the
Product in accordance with CCS's installation schedule and recommendations or at
the expense of the Subscriber, CCS or its representative will install the
Product. CCS will give Subscriber reasonable notice of a scheduled installation
date. If said installation is delayed through he fault of the Subscriber,
however, any obligation on the part of the Subscriber to make rental or other
payments for Product shall commence as of the scheduled installation date.
Subscriber shall make available prior to any scheduled installation date, a
suitable location for installation of the Product, which must be readily
accessible to installation personnel. Subscriber shall furnish the electrical
connections and cable installation and shall perform all work, including
alterations which may be necessary to prepare the site for the installation and
operation of the Product and related equipment.
B. Maintenance
CCS or its equipment supplier has entered into maintenance agreements
with service organizations to maintain the Product described in Schedule A. In
the event maintenance of the Product is necessary, Subscriber will notify CCS
which in turn will notify the proper
service organization to dispatch a service representative. Subscriber shall be
responsible for additional maintenance charges for maintenance provided or for
maintenance services required due to the Subscriber's improper use of the
Product. Maintenance, whenever possible will constitute replacement of the
defective Product at the sole discretion of CCS. The replacement Product will be
delivered to the Subscriber via a courier service chosen by CCS, dependent upon
the urgency of need for the replacement Product. The Subscriber shall be
responsible for all expenses incurred by CCS for shipping and handling of the
replacement Product.
C. Use
Subscriber shall use the Product solely in the conduct of its business
and in careful and proper manner consistent with the requirements of all
applicable insurance policies relating to the Product and any instructions
issued by CCS. At no time shall the Subscriber have access to the operating
system, or have the ability to alter the software structure of the Product.
D. Operating Supplies
Subscriber shall purchase and replace, from any source of its
choosing, including CCS or suppliers recommended by CCS, paper, ribbons,
diskettes and such other operating supplies as shall be required for the
operation of the Product.
E. Product as Personal Property
Subscriber further agrees that it will not change, alter, relocate of
modify the physical nature of the Product in any manner without the prior
written consent of CCS, which consent may be withheld in CCS's sole discretion.
The Product is, and will be at all times, personal property which shall not, by
reason of connection to any realty, become a fixture or appurtenance to such
realty. Furthermore, the Product is severable from realty and remains the
property of CCS, free from claims of Subscriber or the holder of any lien or
encumbrance on the Premises. Subscriber will obtain any landlord's or mortgage's
consent and acknowledgment that the Product is and will remain personal property
subject to all provisions of this Agreement. Subscriber will obtain and record
such instruments and take such other steps as may be deemed necessary by CCS to
prevent any third person from acquiring rights in the Product paramount to those
of CCS. Upon discovery, Subscriber shall promptly notify CCS in writing of any
attempt by a third party to establish such rights.
F. Intent; Title
It is the express intent of the parties that this Agreement constitute
a true lease and in no event shall this Agreement be constructed as a sale of
the Product. Title to the Product shall at all times remain in CCS, and
Subscriber shall acquire no ownership, title, property, right, equity, or
interest in Product other than its leasehold interest solely as lessee subject
to all the terms an conditions hereof. Notwithstanding the express intent of the
parties, should a court of competent jurisdiction determine that this Agreement
not a true lease, but rather one intended as security, then solely in that event
and for the expressly limited purposes thereof, Subscriber shall be deemed to
have hereby granted CCS a security interest in this Agreement, the Product and
all
-2-
accessions thereto, substitutions and replacements therefore, and proceeds
(including insurance proceeds) thereof (but without power of sale); to secure
the prompt payment and performance as and when due of all obligations and
indebtedness of Subscriber to CCS.
G. Dedicated Telephone Line
Subscriber shall provide a dedicated telephone line into the Product
for updates to the Software, on-line support, date transfer, diagnostics. The
telephone line shall not be attached to any other answering device and must have
a separate telephone line number for access by CCS.
II. SOFTWARE
A. Title and Proprietary Rights
The parties agree that participation by Subscriber in the Property
Management System requires that CCS supply Subscriber with a computer software
package (hereinafter referred to as "Software") for use with the equipment
listed in Schedule A (hereinafter referred to as "Equipment"). Title and full
ownership rights to any such Software furnished under this Agreement remain with
CCS, or those entities (hereinafter referred to as "Licensers") that have
licensed CCS use of the Software. The Software is agreed to be CCS's or
Licensers' proprietary information and trade secrets, whether or not any portion
thereof is or may be licensed, copyrighted or patented. Subscriber agrees to
maintain the confidential nature of the Software and related materials provided
for its use under this Agreement and agrees to use the utmost care to protect
them. Subscriber shall maintain the Software in strict confidence, disclosure it
only to its employees requiring access and implement adequate procedures
controlling access to and use the Software.
B. Use of Software
The Software may only be used by the Subscriber, and only at the
Subscriber's Premises and only on the Equipment leased thereunder. Subscriber
shall not make or allow others to make copies or reproductions of the Software
in any form without prior written consent of CCS, which consent may be withheld
in CCS's sole discretion. Distribution by Subscriber of Software, including
derivative modifications or extensions, is expressly prohibited except for
distribution to the hotel facilities owned or managed by Subscriber from time to
time.
C. Termination of Default
In the event of the termination of this Agreement or in the event of a
default by Subscriber, it shall immediately return the Software unencumbered, or
certify in writing to CCS that all Copies have been destroyed. This provision
shall not be regarded as a waiver by CCS of any other rights or remedies to
which it may be entitled pursuant to this Agreement or otherwise. Default under
this paragraph is defined to include but not to be limited to any assignment or
transfer or any attempted assignment or transfer of the Software by Subscriber.
III. GENERAL PROVISIONS
-3-
A. Warranty and Disclaimer of Warranties
CCS warrants to Subscriber that, so long as Subscriber shall not be in
default of any of the provisions of this Agreement or except as otherwise
provided herein, CCS will not disturb Subscriber's quiet and peaceful possession
of the Product. CCS warrants to Subscriber that upon installation, and
subsequently thereafter, the Equipment and the Software will perform according
to their specifications and perform the functions necessary to operate within
the Product. This warranty shall not apply if Subscriber abuses the Product or
fails to comply with CCS's or manufacturer's installation and operation
instructions.
CCS MAKES NO OTHER WARRANT, EXPRESS OR IMPLIED, AS TO THE MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE
PRODUCT, ITS MERCHANTABILITY OR ITS FITNESS OR CAPACITY OR DURABILITY FOR ANY
PARTICULAR PURPOSE, THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF THE PRODUCT OR
CONFORMITY OF THE PRODUCT TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE
ORDER(S) RELATING THERETO. NEITHER CCS NOR ANY OF ITS RELATED ENTITLES SHALL BE
LIABLE FOR ANY CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF OR RELATED TO THE
SELECTION, INSTALLATION, USE, PRESENCE OR REMOVAL F THE PRODUCT AND/OR THE
PROPERTY MANAGEMENT SYSTEM.
B. Legal Expense and Insurance
Subscriber shall pay all costs, charges and expenses, including
reasonable attorney's fees incurred or paid at any time by CCS due to the
failure on the part of the Subscriber to promptly and fully perform, comply with
and abide by each and every stipulation, warranty, condition and covenant of
this agreement. Subscriber will maintain, during the term of this Agreement and
any extension thereof, fire, extended coverage, vandalism and malicious mischief
insurance on the Equipment in an amount not less than the replacement value of
the Equipment. CCS shall be named as an additional insured with respect to all
such insurance.
C. Taxes
Subscriber shall indemnify CCS for any federal, state or municipal
taxes, other than income taxes, including, but not limited to, sales, use or
property taxes that may be assessed against CCS for the Product, for use
thereof, or upon any payments made under this Agreement.
D. Term
This Agreement shall have a term of one year and shall automatically
renew for successive terms of one year each unless one party notifies the other
to the contrary at least three months prior to the termination date, provided,
however, upon any automatic renewal of this Agreement, CCS shall have the right
to adjust its fees hereunder commensurate with the fees paid by its subscribers
generally.
E. Access
-4-
Subscriber shall permit access by CCS, or its designee for inspection,
testing, maintenance or replacement of hardware and software provided under this
Agreement. Further, Subscriber agrees to permit access by CCS or its designee to
the telephone or other communication systems for testing, maintenance, data base
management, data loading and extraction's or collections at times which would
not interrupt a normal operation of the Subscriber's property.
F. Agreement Irrevocability and Other Covenants and Warranties of
Subscriber
Subscriber agrees that, except as provide herein, this Agreement is
irrevocable for its full term; that Subscriber's obligations thereunder are
absolute and shall continue without abatement, set off or demand, regardless of
any disability of the Subscriber to use the Product or any part thereof because
of any reason including, but not limited to, war, act of God, government
regulation, strike, loss, damage, destruction, obsolescence, failure of the
Equipment or Software to operate properly, termination by operation of law, or
any other cause except breach or default by CCS of its obligations thereunder.
Subscriber warrants that this Agreement has been duly authorized and that no
provision of this Agreement is inconsistent with Subscribers charter, bylaws, or
any loan, credit agreement or other instrument to which Subscriber is a party or
by which Subscriber or its property may be bound or affected.
G. Default
If any one of the following events (each of "Event of Default") shall
occur, then to the extent permitted by applicable law, CCS shall have the right
to exercise any one or more the remedies set forth in part III(H) below: (1)
Subscriber fails to pay any rental or any other payment thereunder when due and
such failure continues for ten (10) days after notice thereof; or (2) Subscriber
breaches any covenant, warranty or agreement thereunder, and such breach
continues for ten (10) days after written notice thereof; or (3) Subscriber
admits in writing its inability to pay debts as they become due; or (4)
Subscriber becomes insolvent or makes an assignment for the benefit of
creditors; or (5) a receiver, conservator or liquidator of Subscriber, or all or
any substantial part of its assets, is appointed with or without the application
or consent of Subscriber; or (6) a petition is filed by or against Subscriber
under bankruptcy laws providing for the relief of debtors; or (7) Subscriber is
in default of any of monetary payment obligations to CCS or to its related
entitles under the terms and conditions of any other agreement; or (8) through
the fault of the Subscriber, the Product is rendered inoperative; or (9
Subscriber assigns or transfers or attempts to assign or transfer the Software
supplied by CCS pursuant to the terms of this Agreement.
H. Remedies
If an Event of Default shall occur, CCS may, at its option: (1)
declare the entire amount of unpaid lease payments for the balance of the term
of this Agreement or any extension thereof immediately due and payable,
whereupon Subscriber shall become obligated to pay CCS present value amount of
the unpaid lease payments; (2) without demand or legal process, enter the
Premises where the Equipment may be found and take possession of and remove the
-5-
Equipment without liability for suit, action or other proceeding, and all rights
of Subscriber in the Equipment so removed shall terminate absolutely; and (3)
without demand or legal process enter the Premises where the Software may be
found and take possession of and remove the Software without liability for suit,
action or other proceedings, and all rights of Subscriber in the Software so
removed shall terminate absolutely. Subscriber hereby waives notice of, or
hearing with respect to, any such retaking. No failure on the part of CCS to
exercise and no delay in exercising any right or remedy shall operate as a
waiver thereof or modify the terms of this Agreement. (4) CCS without demand or
legal process, suspend the operation of the Product.
I. Removal Fee
In the event of termination of this Agreement, before the thirtieth
30th full day after this agreement became effective or if an Event of Default
shall occur, and CCS is requested to, required to, or elects to remove the
Product from Subscriber's Premises, Subscriber shall pay to CCS a Removal Fee
equal to the actual cost incurred by CCS for such removal. Such fee shall be
payable upon presentation of an invoice thereof.
J. Assignment
Subscriber shall not assign this Agreement or any part thereof nor any
right to, or interest in the Product without prior written consent of CCS which
consent may be withheld in CCS's sole desecration. CCS may at any time assign
any or all of its rights, obligations, title and interest thereunder, to any
other person. If Subscriber is given notice of such assignment. Subscriber shall
acknowledge receipt thereof in writing. In the event CCS retains the obligations
of the lessor thereunder in any such assignment, CCS's assignee shall not be
obligated to perform any duty, covenant or condition required to be performed by
CCS under the terms of this lease; and no breach or default by CCS thereunder of
pursuant to any other agreement between CCS and Subscriber shall excuse
performance by Subscriber of any provision hereof; it being understood that in
the event of a default or breach by CCS that Subscriber shall pursue any rights
on account thereof solely against CCS. Subject always to the foregoing, this
Agreement inures to the benefit of, and is binding upon, the successors and
assigns of the parties hereto.
K. Authorization
Each party will promptly and duly execute and deliver to the other
such further documents, instruments and assurances and take such further action
as either party from time to time reasonably request in order to carry out the
intent and purpose of this Agreement and to establish and protect the rights and
remedies created or intended to be created thereunder.
L. Applicable Law
This Agreement shall be governed and construed in accordance with the
laws of the State of Florida.
M. Waiver of Breach
-6-
Waiver by either party of nonperformance or any other breach of any
provision of this Agreement shall not operate as a waiver of any subsequent
nonperformance or other breach of the same or any other provision.
N. Obsolete Equipment and/or Software
If CCS determines, in its sole discretion at any time, that the
Product or any unit thereof has became obsolete, is no longer functioning
efficiently, or should be upgraded, CCS shall have the right to immediately
replace such Product or unit thereof with replacement Product. In such event,
all the terms and conditions of this Agreement shall remain in full force and
effect except that the relating to the replacement Product or the installation
thereof shall be reasonably determined by CCS after review by CCS with the Board
of Directors.
O. Notices
All notices required by this Agreement or deemed advisable by either
party shall be in writing and transmitted by certified US mail, return receipt
requested or overnight courier service shall be effective from the date of
mailing, and unless subsequently changed by either party in writing, shall be
addressed to the parties at the respective addresses set forth in the preamble
to this Agreement.
P. License and Permits
Subscriber shall obtain any and all licenses required by public
authorities for the installation of the Product. CCS assumes no responsibilities
for payment of licenses or permits or for prevention of the revocation thereof.
Q. Additional Terms
Additional terms and conditions governing the relationship established
by this Agreement are contained in Schedule A which is incorporated and made
part of this Agreement.
R. Right to Purchase
Upon the expiration of the full term hereof or any extension hereof
(but not upon termination of this Agreement prior to the expiration of the term
hereof as the same may be extended), Subscriber shall have the right,
exercisable upon written notice to CCS given thirty days prior to the expiration
of the Term hereof as aforesaid, to purchase the Equipment at its then fair
market value. Such fair market value shall be determined by an independent
appraiser selected by CCS whose valuation shall be final. Upon such purchase by
Subscriber, and upon notice form CCS, the Equipment shall be disconnected from
the Property Management System and all Software shall be returned forthwith to
CCS or Subscriber shall certify in writing to CCS that all copies have been
destroyed. Subscriber shall have no right at any time to purchase the Software.
S. Complete Agreement
-7-
This Agreement, together with any schedules listed in part III. above,
when executed by both parties, constitutes a final written expression of all the
terms to the Agreement between the parties, and is a complete and exclusive
statement of those terms. It supersedes all understandings and negotiations
concerning the matters specified in this Agreement. Any representations,
promises, warranties or other statements made by either party that differ in any
way from the terms of this written Agreement will be given no force or effect.
CCS and Subscriber specifically represent, each to the other, that there are no
additional or supplemental agreements between them related in any way to the
Product or services contemplated to be provided under this Agreement, unless
copies of the same are presently attached to and made a part of this Agreement.
No addition to or modification of any provision of this Agreement will be
binding to either party unless made in writing and signed by a duly authorized
representative of both parties. No course of dealing, usage of trade or course
of performance will be relevant to explain or supplement any term expressed in
this Agreement.
-8-
SCHEDULE A - PRODUCT LIST AND FEE SCHEDULE ADDENDUM
The Terms outlined below shall be construed and interpreted by reference as
part of the entire Agreement by and between CCS and Subscriber.
I. PRODUCT
CCS agrees to provide to Subscriber the Equipment, Communication and
Software (hereinafter Referred to as "Product") which constitutes a PROPERTY
MANAGEMENT SYSTEM at each of Subscriber's Premises, as selected by Subscriber:
DESCRIPTION OF PRODUCT
A. EQUIPMENT
[ ] IBM AT compatible CPU
[ ] Monitor
[ ] 6' parallel printer cable
[ ] 80 column printer
[ ] Uninterruptable Power Supply
[ ] 000 Xxx Xxxxxxxx
[ ] Internal Modem
[ ] Credit Card Reader
[ ] Monochrome Workstation - No Printer
[ ] Monochrome Workstation - With Printer
[ ] Color Workstation - No Printer
[ ] Interactive Cash Drawer
[ ] Non-Interactive Cash Drawer
[ ] Owned Workstation
B. SOFTWARE (monthly charges noted)
[ ] Base Property Management Software Package
(monthly charge of $275; each additional terminal is $75/month)
[ ] Software for Interface with a central office (N/C)
[ ] Software for remote diagnostics (N/C)
[ ] Guest Messaging Software ($10.00)
[ ] Call Accounting Interface ($75.00)
[ ] Pre-Printed Registration Card Option ($25.00)
[ ] Franchise Central Reservation Interface ($25.00)
[ ] Property-To-Property Reservation Software ($50.00)
[ ] Hotel Area Information (Included in Base Software)
[ ] Pre-Registration Printing Package ($25.00)
[ ] Movie Interface ($50.00)
CCS reserves the right to replace or substitute equipment of a similar
nature whenever required either prior to or subsequent to installation provided
such equipment maintains, improves or enhances the capability of the Property
Management System provided to the Subscriber under the terms of this Agreement.
Subscriber understands that the equipment be new equipment or used equipment
refurbished to a like new condition.
II. PRODUCT RENTAL CHARGE
Subscriber agrees during the term of the Agreement to pay to CCS a monthly
rental fee per Premises based upon the fee schedule set forth above and based
upon the additional optional Software and interfaces selected by Subscriber for
each of its Premises. Subscriber understands
-9-
that the equipment may be new equipment or used equipment refurbished to a like
new condition.
The monthly fees for the current premises of Subscriber is attached hereto
as Exhibit A.
III. MAINTENANCE SERVICES
CCS (for purposes hereof, "CCS" includes CCS's designees and third party
servicing agents), shall provide maintenance services to the Subscriber for the
Equipment (herein referred to as "Hardware") and Software provided under the
terms of the Agreement. The types of maintenance and extent of service to be
provided are set forth below:
A. Scheduled Remedial Software Maintenance
CCS shall provide remedial software maintenance. Such maintenance
service includes updates, patches, revisions or temporary bypass solutions to
software program errors and distribution to Subscriber of updates, revisions and
new releases of the Software as the same are made generally available from time
to time during the term of this agreement by CCS.
B. Scheduled Maintenance
CCS shall provide 24-hour per day emergency assistance for all
hardware or software problems via a telephone number answered by a support
person trained in the use, operation and maintenance of the hardware and
software.
C. Non Scheduled Software Maintenance
All software support will be free of charge to Subscriber provided
that the following provision has been met. A software back-up (transference of
live data files to a floppy disk for the sole purpose of restoration of data due
to a system failure) has been performed by each person at the close of their
shift and a back-up has been performed prior to printing the financial totals
for the day. If no such back-up has been performed then a fee of $100.00 per
hour, not to exceed $1000.00 per occurrence, will be charged to Subscriber.
Subscriber acknowledges that if a system backup has not been performed that all
prior data may be deemed unrecoverable and the Property Management System will
be reinstated with no prior information or history available. CCS shall not be
liable for any loss or damages to Subscriber either directly or indirectly that
may result.
D. Non-Scheduled Maintenance
In addition to the fees set forth in Section II above, Subscriber
agrees to pay any freight and/or shipping and handling costs for any emergency
hardware replacement that will require new Equipment to be sent by an overnight
package handler and shall also pay any and all charges to send the equipment
back to the manufacturer for repair. CCS shall be responsible for replacing or
repairing the Equipment leased by Subscriber. Subscriber shall be held
responsible for the costs of repairing or replacing of the Equipment when the
need for such service is a result of the following:
-10-
o Lack of suitable operating environment.
o Lack of adequate power or power failures.
o Failure to provide air conditioning or humidity control where
required.
o Damage caused by Subscriber alteration or modification unless
authorized in writing in advance by CCS.
o Use of hardware of software for purposes other than for which it
was designed.
o Accident, disaster, Subscriber negligence and/or misuse.
o Unauthorized maintenance, repair or adjustment.
o Transfer or movement of the system to another location.
o Failure to use the latest available release of the system
software support.
Additional maintenance fees assessed by CCS, or its designee, under the
terms of this provision will not exceed the actual cost incurred including
direct payroll, indirect payroll, service fees, travel, lodging and other
related expenses.
IV. TRAINING
If the Subscriber desires on site training the Subscriber shall pay to CCS
a fee of $200.00 per day for a representative of CCS for the sole purpose of
training the staff at the Subscribers location, plus all travel expenses,
including expenses incurred to and from destination for on-site training. If CCS
personnel are used to initiate the startup of the computer system Subscriber
shall pay to CCS a one time start-up fee of $200.00.
IN WITNESS WHEREOF, both parties have executed and agree to abide by all
sections of the Product Lease and Service Agreement and Product List and Fee
Addendum Schedule A.
COMPUTEL COMPUTER SYSTEMS, INC. JANUS INDUSTRIES, INC.
By:___________________________ By:__________________________
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxxxx
Title: Title: President
-11-
Exhibit A
Best Western Cambridge, Ohio $473.93
Days Inn Cambridge, Ohio $543.16
Comfort Suites Blue Ash, Ohio $540.60
Days Inn Sharonville, Ohio $646.60
Days Inn East Cincinnati, Ohio $498.20
Xxxxxx Xxxxxxx Juno Beach, Florida $471.70
Best Western Kings Island, Ohio $482.30
Days Inn Kings Island, Ohio $577.70
Knights Inn Lafayette, Indiana $601.65
Best Western Mansfield, Ohio $470.59
Knights Inn Michigan City, Indiana $627.90
Days Inn Pompano Beach, Florida $699.60
Days Inn RTP Raleigh, North Carolina $604.20
Days Inn Raleigh, North Carolina $577.70
Knights Inn Westerville, Ohio $605.95
Surrey Inn Ashland, Ohio $185.50
Days Inn Baltimore, Maryland $1,286.25
Xxxxxx X. Xxx Hotel North Fort Myers, Florida $561.80
Knights Inn Palm Harbour, Florida $564.96
Inn at Plymouth Mtg. Plymouth Meeting, Pennsylvania $503.50
-12-
