-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EMX7nBWbUQf1csc64p83+BTXM/KHarMBL+snh4A8cJ27PJEl8J14Ys26kKiKZeqH 9U0SKFuC5Wx/Xuvsrc8abA== 0000950110-99-001575.txt : 19991206 0000950110-99-001575.hdr.sgml : 19991206 ACCESSION NUMBER: 0000950110-99-001575 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991220 FILED AS OF DATE: 19991203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLF ENTERTAINMENT INC CENTRAL INDEX KEY: 0000849354 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER RENTAL & LEASING [7377] IRS NUMBER: 112990598 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-18303 FILM NUMBER: 99768381 BUSINESS ADDRESS: STREET 1: 6540 S PECOS ROAD STREET 2: SUITE 103 CITY: LAS VEGAS STATE: NV ZIP: 89120 BUSINESS PHONE: 7024547900 MAIL ADDRESS: STREET 1: 6540 S PECOS RD STREET 2: SUITE 103 CITY: LAS VEGAS STATE: NV ZIP: 89120 FORMER COMPANY: FORMER CONFORMED NAME: LEC TECHNOLOGIES INC DATE OF NAME CHANGE: 19970604 FORMER COMPANY: FORMER CONFORMED NAME: LEASING EDGE CORP DATE OF NAME CHANGE: 19950718 FORMER COMPANY: FORMER CONFORMED NAME: TJ SYSTEMS CORP DATE OF NAME CHANGE: 19920703 DEF 14A 1 GOLF ENTERTAINMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 FILED BY THE REGISTRANT |X| FILED BY A PARTY OTHER THAN THE REGISTRANT |_| CHECK THE APPROPRIATE BOX: | | Preliminary Proxy Statement |_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |X| Definitive Proxy Statement |_| Definitive Additional Materials |_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 Golf Entertainment, Inc. ---------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) ----------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): |_| No fee required. |_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: Common Stock $0.01 par value per share Series A Convertible Preferred Stock $0.01 par value per share (2) Aggregate number of securities to which transaction applies: ------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------- (5) Total fee paid: $NONE ------------------------------------- |_| Fee paid previously with preliminary materials. |_| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------- (3) Filing Party: ------------------------------------- (4) Date Filed: ------------------------------------- December 1, 1999 Dear Stockholder: You are cordially invited to attend the Annual Meeting of the Stockholders of Golf Entertainment, Inc., a Delaware corporation (the "Company"), to be held at 10:00 a.m. on December 27, 1999 at 2500 Northwinds Parkway, Three Northwinds Center, Alpharetta, Georgia 30004, including any adjournment or postponement thereof (the "Annual Meeting"). At the Annual Meeting, you will be asked: 1. To consider and vote upon a proposal to approve and adopt a Purchase and Sale Agreement dated as of September 24, 1999 between the Company and Somerset Capital Group, Ltd., a Connecticut corporation, by which the Company proposes to sell for $3,559,500 in cash, a Promissory Note and assumption of certain debt, substantially all of the Company's business equipment leases and its equipment that has been subject to those leases and the assumption of approximately $12,500,000 of debt associated with such leases (the "Proposed Sale"), and to authorize the Company's chief executive officer to enter into such a transaction, or to make such modifications to the Proposed Sale, subject to applicable law, as are necessary to accomplish the sale of the Company's lease portfolio and the equipment that was and is subject to those leases. A copy of the Agreements related to the Proposed Sale is attached hereto as Exhibit A.; 2. To elect three (3) directors for the Company; 3. To consider and act upon a proposal to amend the Company's 1997 Stock Option Plan to increase the number of shares issuable under the Company's 1997 Stock Option Plan; 4. To approve a change to the Company's Certificate of Incorporation to provide for a staggered board of directors by dividing the directors of the Company into three classes, the term of office of those of the first class to expire at the next annual meeting, the second class one year thereafter, and the third class two years after the next annual meeting, and at each annual election held after such classification and election, directors will be chosen for the full term of their class of director; 5. To approve Goldstein Golub Kessler LLP as independent auditors for the Company for the year ended December 31, 1999 and 6. Such other business as may properly come before the Annual Meeting or any adjournment or adjournments thereof. YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE SLATE OF DIRECTORS BEING PROPOSED SHOULD BE ELECTED, AND RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE PROPOSED DIRECTORS. YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE PROPOSED SALE IS FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED AND ADOPTED THE PROPOSED SALE (SUBJECT TO STOCKHOLDER APPROVAL) AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE PROPOSED SALE. In arriving at its recommendation, the Board gave careful consideration to a number of factors, as described in the Proxy Statement, including the opinion of its financial adviser, J.P. Turner & Company ("J.P. Turner"), to the effect that the consideration to be received by the Company is fair, from a financial point of view, to the Company's stockholders. The written opinion of J.P. Turner is attached as Exhibit B to the enclosed Proxy Statement. You are urged to read the opinion in its entirety for a description of the assumptions made, the matters considered and the procedures followed by J.P. Turner. DETAILS OF THE PROPOSED SALE APPEAR IN THE ACCOMPANYING PROXY STATEMENT. PLEASE GIVE THIS MATERIAL YOUR CAREFUL ATTENTION. YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE INCREASE OF SHARES AVAILABLE UNDER THE STOCK OPTION PLAN IS IN THE BEST INTERESTS OF THE BOARD, AS IS THE INSTITUTION OF A STAGGERED BOARD OF DIRECTORS, AND RATIFICATION OF GOLDSTEIN GOLUB KESSLER LLP AS THE COMPANY's AUDITORS FOR THE YEAR ENDED DECEMBER 31, 1999. Election of the Directors requires a plurality of the shares of common stock, $0.01 par value per share (the "Common Stock") present in person or by proxy at the Annual Meeting and entitled to vote thereat. Approval of the amendment to the Company's Certificate of Incorporation requires the affirmative vote of a majority of the Company's issued and outstanding shares of Common Stock. Approval of the other items, except the Proposed Sale, requires the affirmative vote of a majority of the shares of Common Stock present in person or by proxy at the Annual Meeting and entitled to vote thereat. Approval of the Proposed Sale requires the affirmative vote of a majority of the Company's issued and outstanding shares of Common Stock voting separately as a class, and the affirmative vote of at least a majority of the issued and outstanding shares of the Company's Series A Preferred Stock (the "Preferred Stock") voting separately as a class. It is important that your shares of Common Stock or Preferred Stock be represented at the Annual Meeting. Whether or not you plan to attend the Annual Meeting in person, please complete, sign and date the enclosed proxy card and mail it promptly using the enclosed, pre-addressed, postage-paid, return envelope. If you attend the Annual Meeting in person, you may revoke the proxy given and vote in person if you wish, even if you have previously returned your proxy card. Your prompt attention will be greatly appreciated. Sincerely, Ronald G. Farrell Chief Executive Officer YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY RETURN YOUR PROXY. GOLF ENTERTAINMENT, INC. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 27, 1999 TO THE STOCKHOLDERS OF GOLF ENTERTAINMENT, INC. NOTICE IS HEREBY GIVEN that an Annual Meeting (the "Annual Meeting") of Stockholders of Golf Entertainment, Inc., (the "Company"), will be held at 10:00 a.m. on December 27, 1999, at 2500 Northwinds Parkway, Three Northwinds Center, Alpharetta, GA 30004. At the Annual Meeting, you will be asked: 1. To consider and vote upon a proposal to approve and adopt a Purchase and Sale Agreement dated as of September 24, 1999 between the Company and Somerset Capital Group, Ltd., a Connecticut corporation (the ("Buyer"), by which the Company proposes to sell for $3,559,500 in cash, a Promissory Note and assumption of certain debt, substantially all of the Company's business equipment leases and the equipment that has been and is subject to those leases and the assumption of approximately $12,500,000 of debt associated with such leases (the "Proposed Sale"), and to authorize the Company's chief executive officer to enter into such a transaction, or to make such modifications to the Proposed Sale, subject to applicable law, as are necessary to accomplish the sale of the Company's lease portfolio and the equipment it has leased. A copy of the Agreements related to the Proposed Sale is attached hereto as Exhibit A.; 2. To elect three (3) directors for the Company; 3. To consider and act upon a proposal to amend the Company's 1997 Stock Option Plan to increase the number of shares issuable under the Company's 1997 Stock Option Plan; and 4. To approve a change to the Company's Certificate of Incorporation to provide for a staggered board of directors by dividing the directors of the Company into three classes, the term of office of those of the first class to expire at the next annual meeting, the second class one year thereafter, and the third class two years after the next annual meeting, and at each annual election held after such classification and election, directors will be chosen for the full term of their class of director; 5. To approve Goldstein Golub Kessler LLP as independent auditors for the Company for the year ended December 31, 1999; and 6. Such other business as may properly come before the Annual Meeting or any adjournment or adjournments thereof. The Board of Directors has fixed the close of business on November 15, 1999 as the record date (the "Record Date") for the determination of the holders of its Common Stock and its Series A Preferred Stock entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof. Only stockholders of record at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting.. The stock transfer books will not be closed. A list of stockholders entitled to vote at the Annual Meeting will be available for examination at the offices of the Company for ten days prior to the Annual Meeting. EACH STOCKHOLDER IS CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. TO ASSURE REPRESENTATION AT THE ANNUAL MEETING, HOWEVER, STOCKHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE POSTAGE PRE-PAID ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE HAD PREVIOUSLY RETURNED A PROXY CARD. By Order of the Board of Directors Ronald G. Farrell Chief Executive Officer Alpharetta, Georgia December 1, 1999 GOLF ENTERTAINMENT, INC. THREE NORTHWINDS CENTER, SUITE 175 2500 NORTHWINDS PARKWAY ALPHARETTA, GEORGIA 30004 ------------------------- PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS The Annual Meeting TIME, DATE AND PLACE OF ANNUAL MEETING This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Golf Entertainment, Inc. (the "Company") for use at the Annual Meeting of Stockholders to be held at 10:00 a.m. E.S.T. on December 27, 1999 at 2500 Northwinds Parkway, Three Northwinds Center, Alpharetta, GA 30004, and at any meeting held upon adjournment or postponement thereof (the "Annual Meeting"). Copies of this Proxy Statement, the attached Notice of Annual Meeting of Stockholders, and the enclosed form of proxy are first being mailed to the Company's stockholders on or about December 2, 1999. PURPOSE OF THE ANNUAL MEETING; RECOMMENDATION OF THE BOARD OF DIRECTORS At the Annual Meeting, holders of the Company's common stock, $0.01 par value per share (the "Common Stock") will elect directors for the Company to serve until the next annual meeting and until their successors have been duly elected and qualified. The holders of Common Stock will also vote on the increase of shares available pursuant to the Company's 1997 Stock Option Plan, the institution of staggered terms for the board of directors, and the ratification of independent auditors. Also, the holders of the Company's Common Stock, voting as a class, and holders of the Company's Class A Preferred Stock (the "Preferred Stock") voting as a class, will consider and vote upon a proposal to approve and adopt the Purchase and Sale Agreement dated as of September 24, 1999 and attendant documents (the "Agreements") between the Company and Somerset Capital Group, Ltd., a Connecticut corporation (the "Buyer") by which the Company proposes to sell (the "Proposed Sale") for up to $3,559,500 in cash, a Promissory Note and assumption of debt, the business equipment leases of the Company (the "Lease Portfolio") and the equipment that is now, and has been subject to such leases, and the assumption of approximately $12,500,000 of debt associated with such leases. 1 IF THE PROPOSED SALE IS APPROVED AND COMPLETED, THE COMPANY WILL NO LONGER BE IN THE BUSINESS OF LEASING EQUIPMENT. IF THAT OCCURS, THE COMPANY EXPECTS TO CONTINUE TO PURSUE THE BUSINESS OF OWNING AND MANAGING GOLF ENTERTAINMENT FACILITIES. IF THE PROPOSED SALE IS NOT APPROVED, THE COMPANY EXPECTS TO SEARCH FOR OTHER PURCHASERS FOR THE COMPANY'S LEASE BUSINESS, OR LIQUIDATE THAT LINE OF BUSINESS. The Stockholders will also be asked to approve allowing the chief executive officer of the Company to have discretion to alter the terms of the Proposed Sale if, in his discretion, such changes would be necessary to accomplish the sale of the Lease Portfolio. If the Proposed Sale is approved, Excel Bank, N.A. and Finova Capital Corporation (collectively, the "Lenders") have agreed to simultaneously release the Company from certain guarantees that the Company has previously give to those two Lenders for their loans to LEC Leasing, Inc. and another subsidiary of the Company. A copy of the Agreements, has been attached as Exhibit A to this Proxy Statement. Pursuant to the applicable provisions of the Delaware General Corporation Law (the "DGCL"), the Company is required to obtain the affirmative vote of a majority of the outstanding shares of Common Stock prior to the Proposed Sale. The Company must also obtain approval by a majority of shares of Preferred Stock outstanding. The Company expects to continue to engage in its golf entertainment line of business, assuming the Proposed Sale is completed. 1. THE BOARD OF DIRECTORS HAS APPROVED THE PROPOSED SALE (SUBJECT TO STOCKHOLDER APPROVAL) AND RECOMMENDS A VOTE FOR THE PROPOSED SALE. 2. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THE DIRECTORS NOMINATED. 3. THE BOARD OF DIRECTORS HAS APPROVED THE INCREASE IN THE NUMBER OF SHARES ISSUABLE PURSUANT TO THE COMPANY'S 1997 STOCK OPTION PLAN AND RECOMMENDS A VOTE FOR THAT PROPOSAL. 4. THE BOARD OF DIRECTORS HAS APPROVED THE INSTITUTION OF STAGGERED TERMS FOR THE DIRECTORS, AND RECOMMENDS A VOTE FOR THAT PROPOSAL. 5. THE BOARD OF DIRECTORS HAS APPROVED GOLDSTEIN GOLUB KESSLER LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDED DECEMBER 31, 1999, AND RECOMMENDS A VOTE FOR THAT PROPOSAL. 2 RECORD DATE AND OUTSTANDING SHARES The Board of Directors of the Company has fixed the close of business on November 15, 1999 as the record date (the "Record Date") for the determination of stockholders entitled to notice of, and vote at, the Annual Meeting or any adjournment thereof. Accordingly, only holders of record of the Company's Common Stock and Preferred Stock at the close of business on the Record Date will be entitled to vote at the Annual Meeting, either by proxy or in person. As of the Record Date, there were approximately 200 holders of record of the Common Stock of the Company and approximately 27 holders of record of the Preferred Stock of the Company, and 2,641,711 shares of Common Stock and 228,516 shares of the Preferred Stock were issued and outstanding. INTENTIONS AND AGREEMENT TO VOTE The members of the Board of Directors of the Company, who beneficially hold or have been granted proxies to vote an aggregate of 45.4% of the outstanding shares of Common Stock of the Company, have agreed to vote their shares for the election of each of the Directors nominated, and for the Proposed Sale, and for the other Proposals. As of the Record Date, the total number of shares of Common Stock which the Directors have indicated their intention to vote equal 1,198,443 shares of Common Stock. In addition, certain members of management of the Company holding an additional 44,000 shares of Common Stock (1.7%) have indicated their intention to vote their shares for the election of the nominated Directors and for the Proposed Sale and the Agreements, and for each of the other Proposals. Accordingly, approval of the election of the nominated Directors and approval of the Proposed Sale by the Company's stockholders and approval of each of the other Proposals is likely. See "Ownership of Common Stock by Management." QUORUM AND VOTING OF PROXIES; REVOCATION The presence at the Annual Meeting, in person or by proxy of the holders of a majority of the Company's aggregate shares of issued and outstanding Common Stock on the Record Date will constitute a quorum at the Annual Meeting. Shares of Common Stock and Preferred Stock which are represented by properly executed proxy cards received by the Company at or prior to the Annual Meeting, and not duly and timely revoked, will be voted according to the instructions indicated on the proxy card. Unless contrary instructions are given, the proxies will be voted FOR the election of all nominees named on this Proxy Statement and FOR the Proposed Sale and FOR approval of each of the other Proposals set forth in the Notice of Meeting. Any holder of Common Stock or Preferred Stock has the power to revoke his or her proxy at any time before it is voted at the Annual Meeting by delivering a written notice of revocation to the Secretary of the Company, by a duly executed proxy bearing a later date, or by voting by ballot at the Annual Meeting. 3 Shares represented by proxies that reflect abstentions or include "broker non-votes" will be treated as shares that are present and entitled to vote for purposes of determining the presence or absence of a quorum. In the event that a quorum is not present at the Annual Meeting, it is expected that the meeting will be adjourned or postponed to solicit additional proxies. The persons named as proxies with respect to the Annual Meeting may propose and vote for one or more adjournments of the Annual Meeting to permit further solicitation of proxies in favor of the proposals. VOTING RIGHTS Each share of Common Stock is entitled to one vote on each matter to be acted upon or which may properly come before the Annual Meeting. Each share of Preferred Stock is entitled to one vote on the Proposed Sale, which is one of the Proposals being considered at the Annual Meeting. The shares of Preferred Stock are considered separately, as a class for purposes of obtaining approval by a majority of holders of the Preferred Stock to approve and adopt the Proposed Sale. VOTE REQUIRED Directors are elected by a plurality of the shares of Common Stock present in person or by Proxy and entitled to vote. Only those votes actually cast will be counted for the purpose of determining whether a particular nominee received sufficient votes to be elected. Accordingly, abstentions and broker non-votes, which occur when a broker submits a Proxy card without exercising discretionary voting authority on a non-routine matter, will not be included in vote totals and will not be considered in determining the outcome of the vote. The affirmative vote of the holders of a majority of the issued and outstanding shares of Common Stock and Preferred Stock on the Record Date, voting separately in separate classes, is required to approve the Proposed Sale. This will require the affirmative vote of the holders of a majority of the issued and outstanding shares of Common Stock on the Record Date, voting as a class, and a majority of the issued and outstanding shares of Preferred Stock on the Record Date, voting as a class. Abstentions and "broker non-votes" will have the effect of votes against approval of the Proposed Sale. A broker non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a proposal because the nominee does not have discretionary voting power and has not received instructions from the beneficial owner. Approval of the Proposal that amends the Certificate of Incorporation to implement a staggered board of directors requires the affirmative vote of a majority of the issued and outstanding shares of Common Stock, whether or not such shares are voted at the Annual Meeting. The Proposals amending the 1997 Stock Option Plan and ratifying the selection of the independent auditors requires the affirmative vote of a majority of the shares of Common Stock present in person or by proxy at the Annual Meeting and entitled to vote on that Proposal. Abstentions will be counted 4 in determining the minimum number of votes required for approval and will, therefore, have the effect of negative votes. Broker non-votes will not be counted as votes for or against approval of any other Proposal. NO DISSENTERS' RIGHTS Stockholders of the Company who do not approve of the Proposed Sale are not entitled to appraisal or any other rights with respect to the Proposed Sale under Delaware law or the Company's Restated Certificate of Incorporation or Bylaws. PROXY SOLICITATION AND EXPENSES The accompanying proxy is being solicited on behalf of the Board of Directors of the Company. All expenses of this solicitation, including the cost of preparing, assembling, and mailing this proxy soliciting material and Notice of Annual Meeting of Stockholders, will be paid by the Company. Additional solicitation of holders of Common Stock or Preferred Stock by mail, telephone, facsimile or by personal solicitation may be done by directors, officers and regular employees of the Company, for which they will receive no additional compensation. Brokerage houses and other nominees, fiduciaries and custodians nominally holding shares of Common Stock and Preferred Stock as of the Record Date will be requested to forward proxy soliciting material to the beneficial owners of such shares, and will be reimbursed by the Company for their reasonable out-of-pocket expenses. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OWNERSHIP OF COMMON STOCK BY MANAGEMENT The following table sets forth, as of October 15, 1999, certain information concerning those persons known to the Company, based on information obtained from such persons, with respect to the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of shares (the "Common Stock") of common stock, $0.01 par value, of the Company by (i) each person known by the Company to be the owner of more than 5% of the outstanding Common Stock, (ii) each Director of the Company and the nominee for Director, (iii) each executive officer of the Company earning more than $100,000 during the year ended December 31, 1998 and (iv) all executive officers and Directors as a group: 5 Amount and Nature Name and Address of of Beneficial Own- Percentage of Beneficial Owner (1) ership (2) Class (3) -------------------- ------------------ ------------- LEC Acquisition LLC 749,599 (4) 28.4% Ronald G. Farrell 200,000 (5) 7.6% William J. Vargas 46,500 (6) 1.8% Larry M. Segall 78,844 (7) 3.0% Derrick Ashcroft 58,650 (8) 2.2% Richard Falcone 33,500 (9) 1.3% John Chiste _______ ____ Snow, Becker, Krauss, LLC 135,000 (10) 5.1% All Directors and Executive Officers as a Group (6 persons) 417,494 14.3% The address for all individuals identified herein is 2500 Northwinds Parkway, Three Northwinds Center # 175, Alpharetta, Georgia 30004. Unless otherwise noted, the Company believes that all persons named in the table have sole investment power with respect to all shares of common stock beneficially owned by them. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options or upon the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that options or warrants or shares of Series A Convertible Preferred Stock that are held by such person (but not those held by any other person) and which are exercisable or convertible within 60 days from the date hereof have been exercised or converted. Based on 2,641,711 shares of Common Stock outstanding as of October 15, 1999. The Company has granted LEC Acquisition LLC a warrant to purchase 6% Convertible Debentures of the Company in the principal amount of $1,429,170 which are convertible into shares of Common Stock. LEC Acquisition LLC has purchased 500,000 shares pursuant to such convertible debentures. The number of shares of Common Stock reflected in the Table does not include the remaining 4,263,901 shares which are issuable to holders of 6% Convertible Debentures upon conversion. Mr. Farrell, as the managing partner of LEC Acquisition LLC, exercises voting control over shares held by LEC Acquisition LLC. Additionally, pursuant to the terms of the operating 6 agreement of the LLC, RGF Investments, Inc., a member of the LLC, will receive and Mr. Farrell may receive shares of Common Stock at such time as the LLC distributes shares of Common Stock to its members. Mr. Farrell has disclaimed beneficial ownership of shares owned by LEC Acquisition, LLC. Includes options to purchase 200,000 shares of Common Stock granted to Mr. Farrell which are currently exercisable. Includes options to purchase 2,500 shares of Common Stock granted to Mr. Vargas which are currently exercisable. Includes options to purchase 25,000 shares of Common Stock granted to Mr. Segall which are currently exercisable. Includes options to purchase 25,000 shares of Common Stock granted to Mr. Ashcroft which are currently exercisable. Mr. Ashcroft has not been renominated as a director of the Company. However, he will remain a director through the end of the Annual Meeting. Includes options to purchase 30,000 shares of Common Stock granted to Mr. Falcone which are currently exercisable. Mr. Falcone has not been renominated as a director of the Company. However, he will remain a director through the end of the Annual Meeting. The Company has been informed that Snow Becker Krauss PC has granted a proxy to Mr. Farrell to vote such shares through July 7, 2000. 7 ACTIONS TO BE TAKEN AT THE MEETING PROPOSAL 1 THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT THE HOLDERS OF COMMON STOCK AND PREFERRED STOCK ADOPT AND APPROVE THE SALE OF THE LEASE PORTFOLIO AND RELATED EQUIPMENT PURSUANT TO THE PURCHASE AND SALE AGREEMENT, AND TO ALLOW THE CHIEF EXECUTIVE OFFICER DISCRETION TO ALTER OR AMEND THE TERMS, AS PERMITTED BY LAW. THE PROPOSED SALE GENERAL On September 24, 1999, the Company and Somerset Capital Group, Ltd., a corporation organized under the laws of the State of Connecticut (the "Buyer") entered into a Purchase and Sale Agreement (the "Purchase Agreement") for the sale to Buyer of substantially all of the Company's leases of business equipment (the "Lease Portfolio"), the business equipment which is subject to those leases and certain other business equipment (collectively, the "Purchased Assets"). The purchase price is $3,559,500, consisting of cash in the amount of $524,500, which will be paid at Closing, a promissory note in the amount of $400,000, the assumption of certain recourse debt, and the assumption or repayment of the outstanding indebtedness owed to Excel Bank, N.A. and Finova Capital Corporation (the "Lenders") up to a maximum amount of $2,635,000. The Buyer will also assume all non-recourse debt (approximately $12,500,000) which encumbers the Leases and Equipment. The purchase price may be reduced by the extent that the Company takes in new revenue from June 30, 1999 from leases that were not specifically excluded, and to the extent that revenue from June 30, 1999 from certain recurring sources exceeds the sum of $55,000 per month for two months, and fully for the months thereafter. In addition, on September 24, 1999, the Company engaged the Buyer as the managing agent of the Purchased Assets. See MANAGEMENT AGREEMENT below for a further description of that agreement. Also, on September 24, 1999, the Company entered into an agreement with the Buyer whereby the Buyer will assist the Company in disposing of certain leases of equipment to Net Grocer, Inc. in exchange for 25% of the proceeds from such sale. The Buyer has also agreed that, to the extent the proceeds of such sale are insufficient to payoff amounts owed with respect to such leases, the Buyer will pay 25% of such deficiency, up to $75,000. See AGREEMENT WITH RESPECT TO NET GROCER LEASES below for a further description of that agreement. 8 If the Proposed Sale is completed, the Company will cease its equipment leasing business. THE BUYER The Buyer is Somerset Capital Group, Ltd., based in Bridgeport, Connecticut. The Buyer is in the business of leasing business equipment, and it, or its affiliates, have been in that business for 10 years. The Buyer told the Company that it currently owns or manages on behalf of third parties, equipment with an original cost in excess of $125,000,000. Prior to entering into the Agreements, there were no contracts or other arrangements between the Company and the Buyer. No officer or director of the Buyer is an officer or director or employee of the Company or any of its subsidiaries and no officer or director of the Company is or will be after completion of the Proposed Sale an officer, director or employee of Buyer. ESTIMATED USE OF PROCEEDS The net proceeds to the Company from the Proposed Sale, after paying legal, accounting and other expenses associated with the Proposed Sale, are expected to be approximately $200,000 in cash and the $400,000 promissory note. The actual or net proceeds derived from the Proposed Sale may be more or less than this amount. The net proceeds will be used for general corporate purposes, including funding a certificate of deposit to Excel Bank, N.A. as collateral for certain recourse debt not being assumed by the Buyer. IF THE PROPOSED SALE IS NOT APPROVED If the Proposed Sale is not approved, the actions of the Company are expected to be limited by, among other things, the actions of the Lenders or the Company's other creditors. While the directors of the Company have not determined what actions the Company would take if the Proposed Sale is not approved, alternatives for the Company would include continuing its efforts to sell its Lease Portfolio, subcontracting the management of the Lease Portfolio to a third party, or ceasing business activities and liquidating the Leases in the Lease Portfolio and disposing of the equipment associated with the Lease Portfolio. There is no assurance that the Company will be able to consummate a disposition transaction with another buyer or that the Company will be able to consummate an agreement with a third party to manage the Lease Portfolio. In the interim, however, the Company will be delayed in fully implementing its golf entertainment line of business. 9 THE COMPANY EQUIPMENT LEASING AND RESALE BUSINESS SUBJECT TO THE PROPOSED SALE. The Company is in the process of entering the business of owning and operating golf entertainment facilities. Mr. Ronald G. Farrell introduced in late 1998 a plan to re-orient the Company from its existing equipment leasing business to one that owns and operates golf courses. On February 17, 1999, the stockholders of the Company approved the issuance of convertible debentures to an investment company managed by Mr. Farrell, as well as the change of the Company's name to Golf Entertainment, Inc. from LEC Technologies, Inc. The Company's existing, and traditional, line of business has been leasing business equipment. The equipment generally has been midrange computer systems, telecommunications systems, system peripherals (terminals, printers, communications controllers, etc.) and point-of-sale systems. The Company has provided customers with technical, financial and product alternatives, of various hardware platforms or manufacturers, and has assisted customers with equipment upgrades or selling used equipment. The Company's business has been diversified by customer, customer type, equipment type, equipment manufacturer, and geographic location of its customers and subsidiaries. The Company's customers have included "Fortune 1000" corporations or companies of similar size as well as smaller corporations. A significant portion of the Company's business has been with long-term, repeat customers. Three customers of the Company, Tiffany & Co., Bed, Bath & Beyond and The Hertz Corporation, respectively, accounted for approximately 17.2%, 7.6%, and 2.3% of consolidated revenues for the year ended December 31, 1998, 15.0%, 9.2% and 3.7% of consolidated revenues for the year ended December 31, 1997 and 25.0%, 12.8% and 7.4% of consolidated revenues for the year ended December 31, 1996. Unfortunately, the Company's business has not been profitable. For example, the Company lost $3,202,265 in the year ended December 31, 1998, recorded net income of $329,000 in the year ended December 31, 1997, and had a loss of $1,398,316 in the year ended December 31, 1996. (See "SELECTED FINANCIAL DATA" herein). The losses have generally been caused by the Company's inability to obtain sufficient capital needed to make the required equity investment in a sufficient number of leases to achieve profitability, and acquisitions that have not contributed to the Company's profitability. The Company could not foresee being able to prevent future losses in the lease business. PRIOR HISTORY OF THE COMPANY The Company was founded in 1980 under the name TJ Computer Services, Inc. ("TJ CS"). 10 In 1989, all of the outstanding common stock of TJ CS was acquired by Harrison Development, Inc., an inactive public corporation organized in Colorado, which then changed its name to TJ Systems Corporation. In October 1991, the Company reincorporated in the State of Delaware and in June 1995 changed its name to Leasing Edge Corporation. In March 1997, the Company's stockholders approved a change in the Company's name to LEC Technologies, Inc. to more accurately reflect the evolving nature of the Company's business. In February 1999, the Company's stockholders approved a change in the Company's name to Golf Entertainment, Inc. to reflect the re-orientation of the Company. The Company's principal address is currently 2500 Northwinds Parkway, Three Northwinds Center, Suite 175, Alpharetta, Georgia 30004 and its telephone number is (770) 667-9890. GOLF ENTERTAINMENT BUSINESS. The Company is proceeding with its announced intention to become involved in the golf entertainment business by purchasing or leasing existing golf facilities, and then enhancing value by adding amenities and improving management and operating systems. Golf Entertainment plans to develop new golf recreational facilities, and may acquire other golf related businesses. Facilities will be centered around a driving range and will provide a variety of golf practice areas for pitching, putting, chipping and sand play, and will be user-friendly for all levels of golfer and will appeal to the entire family. The driving range may permit night play and limited year round use. Each facility will offer instructional programs for men, women and juniors, and will be staffed with professional instructors. Most facilities will include a clubhouse that will house a full line pro shop and a snack bar, a miniature golf course(s) and batting cages. Where feasible, the facilities will include par-3 or executive-length (shorter than a regulation-length) golf courses. Golf Entertainment's revenues will be derived from selling balls to be used on the driving range, charging for rounds of miniature golf, charging for the use of the batting cages, selling golf equipment, golf apparel and related accessories through the pro shop, fees for instructional programs and from food and beverage sales. Golf Entertainment will seek to realize economies of scale at its facilities through centralized management information systems, accounting, cash management and purchasing programs. Golf Entertainment intends to purchase products from a number of suppliers, including Karsts Manufacturing Company (Ping), Tommy Armor Golf, Cobra Golf Company, Inc., Masan Golf Company, Callahan Golf Company, Titlest and Foot Joy. Golf Entertainment also may seek long-term management contracts to operate golf courses and golf related facilities. 11 STOCK MARKET PERFORMANCE The following table sets forth the high and low closing sales prices per share of the Company's Common Stock on the NASDAQ Stock Market's Small Cap Market for the quarterly periods presented. The quotations were retroactively adjusted to reflect the one-for-four reverse stock split that became effective on September 15, 1998. The Company has not paid cash dividends on shares of its Common Stock. 1999 1998 1997 Fiscal Quarter High Low High Low High Low - -------------- ---- --- ---- --- ---- --- First Quarter 1.19 0.69 3.63 1.88 5.00 3.52 Second Quarter 2.00 0.69 4.25 2.13 6.00 2.52 Third Quarter 0.97 0.75 2.00 0.63 5.76 3.00 Fourth Quarter -- -- 1.69 0.53 4.76 2.36 All figures in Dollars per share. The Proposed Sale was publicly announced on September 28 , 1999. The closing sales price on the business day before that announcement was $0.8125. SELECTED FINANCIAL DATA The following financial information is derived from the consolidated financial statements of the Company and its wholly owned subsidiaries for the periods indicated and should be read together with the financial statements and notes thereto contained in the Company's Report on Form 10-K, which is part of the Company's Annual Report to Shareholders. The information set forth in the following table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operation" appearing in the Company's Report on Form 10-K. All per share data has been retroactively adjusted to reflect the one-for-four reverse stock split which became effective on September 15, 1998 and the one-for-eight reverse stock split which became effective on February 24, 1994. 12 For the Year Ended December 31, and the six months ended June 30, 1999 (In thousands, except per share data)
Six Months Ended 1999 1998 1997 1996 1995 1994 ---------- ---- ---- ---- ---- ---- Revenues $ 2,990 $ 30,623 $ 30,715 $ 21,237 $ 18,150 $ 19,768 Net income(loss) (744) (3,202) 330 (1,398) 201 (4,129) Net income(loss) per common share (0.45) (2.63) 0.09 (1.80) (0.04) (12.48) Total assets 22,441 26,381 29,074 27,687 27,285 30,832 Discounted lease rentals 13,498 15,450 15,906 14,809 16,260 20,718 Total liabilities 20,364 23,929 23,595 22,449 21,410 26.630 Total stockholders' equity 2,077 2,452 5,478 5,238 5,875 4,202
For other Financial Data on the Company, please see the Company's Report on Form 10K. PRO FORMA FINANCIAL DATA PRO FORMA CONSOLIDATED SELECTED FINANCIAL DATA The following unaudited pro forma consolidated selected financial data for the three years ended December 31, 1998 were derived from the consolidated financial statements of the Company and its wholly owned subsidiaries for the periods indicated, adjusted to give pro forma effect to the Proposed Sale as if the transaction had occurred at the beginning of each period presented. All per share data has been retroactively adjusted to reflect the one-for-four reverse stock split which became effective on September 15, 1998. This pro forma consolidated selected financial data should be read in conjunction with the description of the Proposed Sale contained in this Proxy Statement and the pro forma financial data appearing elsewhere herein and the Company's consolidated financial statements included in the Company's Report on Form 10-K, submitted as part of the Company's Annual Report. GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES 13 UNAUDITED PRO FORMA CONSOLIDATED SELECTED FINANCIAL DATA For the Year Ended December 31, (In thousands, except per share data) 1998 1997 1996 ---- ---- ---- Revenues 18,316 17,647 7,044 (Loss) from continuing operations (3,339) (591) (454) (Loss) from continuing operations per common share (2.74) (0.70) (0.75) Total assets 6,294 9,252 8,494 Discounted lease rentals 678 116 0 Total liabilities 5,105 5,037 4,519 Total stockholders' equity 1,189 4,215 3,975 COMPARATIVE PER SHARE DATA The following table reflects the historical net income (loss) per share from continuing operations in comparison with the pro forma net income (loss) per share from continuing operations after giving effect to the Proposed Sale. This pro forma consolidated selected financial data should be read in conjunction with the description of the Proposed Sale contained in this Proxy Statement and the pro forma financial data appearing elsewhere herein and the Company's consolidated financial statements included in the Company's Report on Form 10-K, submitted as part of the Company's Annual Report. GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES PRO FORMA COMPARATIVE PER SHARE DATA 1998 1997 1996 ---- ---- ---- Net Income (loss) per share: Pro forma - basic and diluted (2.74) (0.70) (0.75) Historical - basic (2.63) 0.09 (1.80) Historical - diluted (2.63) 0.08 (1.80) PRO FORMA FINANCIAL DATA The following unaudited pro forma consolidated balance sheet as of June 30, 1999 reflects the historical accounts of the Company as of that date, adjusted to give pro forma effect to the Proposed Sale as if the transaction had occurred as of June 30, 1999. The following unaudited pro forma consolidated statements of operations for the six months ended June 30, 1999 and for the three fiscal years ended December 31, 1998 reflect the historical accounts of the Company for those periods, adjusted to give pro forma effect to the Proposed Sale as if the transaction had occurred at the beginning of each period presented. This pro forma consolidated financial data and accompanying notes should be read in conjunction with the description of the Proposed Sale contained in this Proxy Statement and the pro forma financial data appearing elsewhere herein and the Company's consolidated financial statements included in the Company's Report on Form 10-K, submitted as part of the Company's Annual Report. The Company believes that the assumptions used in the following statements provide a 14 reasonable basis on which to present the pro forma data. The pro forma financial data is provided FOR INFORMATIONAL PURPOSES ONLY and should not be construed as indicative of the Company's financial condition or results of operations had the Proposed Sale been consummated on the dates assumed and are not intended to project the Company's financial condition on any future date or results of operations for any future period. The information contained herein was not prepared with a view toward compliance with the published guidelines of the SEC or the American Institute of Certified Public Accountants regarding forward-looking information or generally accepted accounting principles and was not examined, reviewed or compiled by independent public accountants and, accordingly, the independent public accountants do not express an opinion or any other form of assurance with respect thereto. This section contains "forward looking statements" within the meaning of the PSLRA. GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 30, 1999 ------------------------------------------- Pro Forma Historical Adjustments Pro Forma ---------- ----------- --------- ASSETS: Cash 246,615 269,361 (2) 515,976 Cash - restricted 0 75,000 (2) 75,000 Receivables - net of allowance for doubtful accounts of $304,367 at June 30, 1999 584,625 584,625 Notes and accounts receivable - other 249,833 249,833 Note receivable - Somerset Capital Group 0 400,000 (2) 400,000 Inventory, net of reserve of $940,868 at June 30, 1999 1,574,916 1,574,916 Leased assets: Operating leases, net 10,492,615 (10,492,615)(1) 0 Sales-type and direct financing leases 7,968,162 (7,445,825)(1) 522,337 Furniture and equipment - net of accumulated depreciation of $481,832 at June 30, 1999 911,510 911,510 Other assets 412,288 (219,380)(1) 192,908 ---------- ----------- --------- TOTAL ASSETS 22,440,564 (17,413,459) 5,027,105 ========== =========== =========
GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 30, 1999 -------------------------------------------- Pro Forma Historical Adjustments Pro Forma ---------- ----------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Accounts payable 2,612,963 2,612,963 Accrued liabilities 430,654 (364,067)(1) 66,587 Notes payable and lines of credit 3,698,573 (2,815,139)(1) 883,434 Nonrecourse and recourse discounted lease rentals 13,498,144 (12,970,802)(1) 527,342 Other liabilities 123,506 123,506 ----------- ----------- ----------- TOTAL LIABILITIES 20,363,840 (16,150,008) 4,213,832 ----------- ----------- ----------- STOCKHOLDERS' EQUITY: Series A convertible preferred stock, $.01 par value; 1,000,000 shares authorized, 380,000 shares issued; 229,016 shares outstanding 2,290 2,290 Common stock, $.01 par value; 25,000,000 shares authorized, 2,641,492 shares issued and outstanding at June 30, 1999 26,415 26,415 Additional paid-in capital 10,711,004 10,711,004 Accumulated deficit (8,662,985) (1,263,451)(3) (9,926,436) ----------- ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 2,076,724 (1,263,451) 813,273 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 22,440,564 (17,413,459) 5,027,105 =========== =========== ===========
Notes to Unaudited Pro Forma Balance Sheet (1) To reflect the elimination of assets and liabilities relating to and resulting from the Proposed Sale of LEC Leasing, Inc.'s lease portfolio. (2) To reflect the net proceeds resulting from and related to the Proposed Sale of LEC Leasing, Inc.'s lease portfolio, calculated as follows: Gross proceeds from sale of net assets $ 3,559,500 Repayment of secured senior indebtedness (2,815,139) ----------- Net proceeds from sale 744,361 ----------- Promissory note $ 400,000 Restricted cash 75,000 Cash 269,361 ----------- Net proceeds from sale $ 744,361 ----------- (3) To reflect the estimated loss for financial statement purposes resulting from the Proposed Sale calculated as follows: Gross proceeds from sale of net assets $ 3,559,500 Netbook value of assets and liabilities related to and resulting from the Proposed Sale of LEC Leasing, Inc.'s lease Portfolio (4,822,951) ----------- Estimated loss on sale $(1,263,451) ----------- (4) Due to the Company's historical operating losses, the Company has not reflected a tax benefit related to the estimated loss on sale. GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1996 -------------------------------------------- Pro Forma Historical Adjustments Pro Forma ----------- ----------- ----------- Revenues: Operating leases 9,694,905 (9,694,905)(1) -- Sales-type leases 2,721,483 (2,721,483)(1) -- Finance income 285,121 (285,121)(1) -- Direct sales 1,137,686 (1,137,686)(1) -- Other 339,385 (339,385)(1) ----------- ----------- ----------- Total revenues from leasing operations 14,178,580 (14,178,580) -- Distribution sales 7,038,154 0 7,038,154 Other 20,666 (15,076)(1) 5,590 ----------- ----------- ----------- Total revenues 21,237,400 (14,193,656) 7,043,744 ----------- ----------- ----------- Costs and expenses: Operating leases 6,881,020 (6,881,020)(1) -- Sales-type leases 2,101,426 (2,101,426)(1) -- Interest expense 1,325,444 (1,325,444)(1) -- Direct sales 1,224,406 (1,224,406)(1) -- Write-down of inventory and residual values 1,099,089 (1,099,089)(1) -- ----------- ----------- ----------- Total costs from leasing operations 12,631,385 (12,631,385) -- Distribution cost of sales 6,190,582 0 6,190,582 S,G & A expenses 3,416,093 (2,179,690)(1) 1,236,403 Interest expense 397,656 (326,493)(2) 71,163 ----------- ----------- ----------- Total costs and expenses 22,635,716 (15,137,568) 7,498,148 ----------- ----------- ----------- Net income (loss) (1,398,316) 943,912 (454,404) =========== =========== ===========
GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1997 ------------------------------------------- Pro Forma Historical Adjustments Pro Forma ----------- ----------- ----------- Revenues: Operating leases 8,618,861 (8,618,861)(1) -- Sales-type leases 2,108,977 (2,108,977)(1) -- Finance income 475,140 (475,140)(1) -- Direct sales 1,882,638 (1,882,638)(1) -- Other -- ----------- ----------- ----------- Total revenues from leasing operations 13,085,616 (13,085,616) -- Distribution sales 17,612,586 0 17,612,586 Other 16,422 0 16,422 ----------- ----------- ----------- Total revenues 30,714,624 (13,085,616) 17,629,008 ----------- ----------- ----------- Costs and expenses: Operating leases 5,641,067 (5,641,067)(1) -- Sales-type leases 1,685,134 (1,685,134)(1) -- Interest expense 1,326,894 (1,326,894)(1) -- Direct sales 1,806,939 (1,806,939)(1) -- Write-down of inventory and residual values 75,331 (75,331)(1) -- ----------- ----------- ----------- Total costs from leasing operations 10,535,365 (10,535,365) -- Distribution cost of sales 14,686,695 0 14,686,695 S,G & A expenses 4,549,586 (1,167,313)(1) 3,382,273 Interest expense 613,447 (448,659)(2) 164,788 ----------- ----------- ----------- Total costs and expenses 30,385,093 (12,151,337) 18,233,756 ----------- ----------- ----------- Net income (loss) 329,531 (934,279) (604,748) =========== =========== ===========
GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1998 -------------------------------------------- Pro Forma Historical Adjustments Pro Forma ----------- ----------- ----------- Revenues: Operating leases 6,869,524 (6,869,524)(1) -- Sales-type leases 3,388,533 (3,388,533)(1) -- Finance income 792,499 (792,499)(1) -- Direct sales 1,350,945 (1,350,945)(1) -- Other -- ----------- ----------- ----------- Total revenues from leasing operations 12,401,501 (12,401,501) -- Distribution sales 18,214,475 0 18,214,475 Other 7,040 0 7,040 ----------- ----------- ----------- Total revenues 30,623,016 (12,401,501) 18,221,515 ----------- ----------- ----------- Costs and expenses: Operating leases 4,473,301 (4,473,301)(1) -- Sales-type leases 1,947,882 (1,947,882)(1) -- Interest expense 1,341,652 (1,341,652)(1) -- Direct sales 1,479,925 (1,479,925)(1) -- Write-down of inventory and residual values 1,205,029 (1,205,029)(1) -- ----------- ----------- ----------- Total costs from leasing operations 10,447,789 (10,447,789) -- Distribution cost of sales 15,330,762 0 15,330,762 S,G & A expenses 7,206,266 (1,348,716)(1) 5,857,550 Interest expense 840,464 (430,425)(2) 410,039 ----------- ----------- ----------- Total costs and expenses 33,825,281 (12,226,930) 21,598,351 ----------- ----------- ----------- Net income (loss) (3,202,265) (174,571) (3,376,836) =========== =========== ===========
GOLF ENTERTAINMENT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 ------------------------------------------ Pro Forma Historical Adjustments Pro Forma ---------- ----------- ---------- Revenues: Operating leases 2,990,097 (2,990,097)(1) -- Sales-type leases 303,712 (303,712)(1) -- Finance income 490,579 (490,579)(1) -- Direct sales 135,317 (135,317)(1) -- Other -- 0 ---------- ---------- ---------- Total revenues from leasing operations 3,919,705 (3,919,705) -- Distribution sales 1,327,113 0 1,327,113 Golf operations 125,676 125,676 Other (1,555) (1,555) ---------- ---------- ---------- Total revenues 5,370,939 (3,919,705) 1,451,234 ---------- ---------- ---------- Costs and expenses: Operating leases 1,599,700 (1,599,700)(1) -- Sales-type leases 193,160 (193,160)(1) -- Interest expense 626,577 (626,577)(1) -- Direct sales 136,285 (136,285)(1) -- Write-down of inventory and residual values -- 0 -- ---------- ---------- ---------- Total costs from leasing operations 2,555,722 (2,555,722) -- Distribution cost of sales 1,308,043 0 1,308,043 Golf operations 22,069 22,069 S,G & A expenses 1,971,429 (713,964)(1) 1,257,465 Interest expense 257,664 (241,725)(2) 15,939 ---------- ---------- ---------- Total costs and expenses 6,114,927 (3,511,411) 2,603,516 ---------- ---------- ---------- Net loss (743,988) (408,294) (1,152,282) ========== ========== ==========
Notes to Unaudited Pro Forma Statements of Operations (1) To reflect the elimination of lease revenues, lease expenses, and selling, general and administrative expenses related to the lease assets being sold. (2) To reflect the elimination of interest expense directly related to the lease operations of LEC Leasing, Inc. THE COMPANY'S REASONS FOR THE PROPOSED SALE BACKGROUND OF THE PROPOSED SALE In late 1998 Mr. Farrell was introduced to the Company. After preliminary discussions with the directors during which the directors indicated that they were considering possible alternatives with regard to the equipment leasing business, Mr. Farrell told the directors that he was interested in redirecting the Company into owning and operating golf entertainment facilities. The Company had experienced significant losses in its existing equipment leasing business since 1997. Mr. Farrell also indicated that he would be willing to invest capital in the Company's golf entertainment business. In 1998, Mr. Farrell was appointed a director of the Company and employed as the Chief Executive Officer of the Company. In December, 1998, the Company issued to a limited liability company managed by Mr. Farrell, a warrant to purchase convertible debentures of the Company convertible into shares of Common Stock of the Company, subject to shareholder approval, of the issuance of common stock upon exercise of the convertible debentures. On February 17, 1999, the stockholders of the Company approved the issuance of common stock to the limited liability company managed by Mr. Farrell upon conversion of the convertible debentures, and the change of the name of the Company to Golf Entertainment, Inc. from LEC Technologies, Inc. In January, 1999, the Company engaged J.P. Turner & Company, LLC to advise it concerning various strategic alternatives relating to its equipment leasing business. In early 1999, the Company negotiated a sale of its equipment leasing business to a company owned and controlled by Michael F. Daniels, a former chief executive officer and director of the Company. Mr. Daniels' company was subsequently unable to complete the sale. 15 The Company then re-opened its search for qualified purchasers. The Company entered into serious negotiations with two purchasers. Of those two purchasers, Somerset Capital Group, Ltd. (the "Buyer"), presented the strongest bid. The Buyer examined the Lease Portfolio, and agreed to purchase the Lease Portfolio as of June 30, 1999. The Agreements allocate the revenue, expenses and other economic incidents of the Leases in the Lease Portfolio as of June 30, 1999. THE BOARD OF DIRECTORS' DECISION The Company's Board has determined that the Proposed Sale is in the best interest of the Company and its Stockholders. Accordingly, the Board unanimously approved the Proposed Sale, and directed that the Proposed Sale be submitted to the stockholders of the Company for approval, with a recommendation to approve such Proposed Sale. As described herein, the board's decision to approve the Proposed Sale followed months of exploring and analyzing the advantages and disadvantages of redirecting the Company's focus. In making its recommendation to the stockholders of the Company, the Board considered a number of factors, including those material factors noted immediately below which were determined by the Board to favor a decision to consummate the Proposed Sale and those set forth in the subsequent paragraph which disfavored a decision to consummate the Proposed Sale. REASONS FOR THE PROPOSED SALE The Directors determined that, in light of the significant losses from the Company's equipment leasing business and the sizeable indebtedness of the Company form that business, that it was in the best interest of the Company that its equipment leasing business be sold and the Company should develop a golf entertainment business. As of June 30, 1999, the Company had an accumulated deficit of $8,662,985. For information regarding the Company's net income (loss) for the last five (5) fiscal years, see SELECTED FINANCIAL DATA above. In particular, in the fiscal year ended December 31, 1998 the Company lost $3,202,000, or $2.63 per share, on revenue of $30,623,000, and in the six months ended June 30, 1999, the Company lost $744,000, or $0.45 per share, on revenue of $5,371,000. The Directors believe that the Company will be unable to end the losses from the equipment leasing business. The Directors agreed to the Proposed Sale to repay indebtedness incurred in connection with the Company's equipment leasing business and to generate capital for the development of the golf entertainment business. The Proposed Sale will generate approximately $200,000 in cash (after 16 deducting estimated expenses of $315,000), plus $400,000 in payments from the Buyer over the next three (3) years. These funds will be used to pay ongoing expenses of the Company, including funding a certificate of deposit to Excel Bank, N.A. as collateral for certain recourse debt not being assumed by the Buyer. Furthermore, the Buyer is assuming approximately $12,500,000 of debt associated with the Company's business equipment leases and approximately $2,600,000 of senior secured debt. The Directors agreed to the Proposed Sale, and the attendant termination of the Company's guarantees, to reduce the Company's liabilities. As of June 30, 1999, the Company had guaranteed $1,366,725 of debt owed by its subsidiaries to Excel Bank, N.A. and $1,448,414 of debt owed by its subsidiaries to Finova Capital Corporation. That debt and the Company's guarantee will be eliminated, or at a minimum, substantially reduced by the Proposed Sale. As of September 30, 1999, the balance owed on that debt was approximately $2,600,000. The Proposed Sale will reduce the Company's liabilities by approximately $15,100,000. The Board of Directors agreed to the sale to Somerset Capital Group, Ltd. after contacting five prospective buyers, including a prospective buyer that was owned and operated by Michael Daniels, a former chief executive officer and director of the Company. The offer made by the Buyer is higher than any other firm offer received. The Board decided to accept the Buyer's offer because none of those other prospective buyers was able to demonstrate to the Board sufficient resources or commitment to completing a transaction to make a solid, binding, closable offer for the stock or assets of the Company on terms more beneficial to the Company than those contained in the Agreements. The Board of Directors believes that approval and consummation of the Proposed Sale will enhance shareholder value by reducing liabilities, raising capital for the Company's new business activities and terminating the Company's equipment leasing business that has proved unprofitable since inception. The Company's Board also considered the following potentially negative factors in its deliberations concerning the Proposed Sale: The Board of Directors considered as a negative factor the fact that the Buyer is not paying the entire purchase price in cash at closing. Instead, the Buyer is executing a $400,000 promissory note for a portion of the purchase price. To satisfy the Board of Directors' concern, the Board of Directors has relied on the Buyer's audited financial statements dated December 31, 1998 and various credit references, including those of Excel Bank, N.A. The board of directors did not quantify or assign any relative weight to the various factors considered. Ultimately, the Board of Directors felt that the risk of these negative factors was diminished by the specific language of the Agreements, and that the negative factors were substantially outweighed by the advantages of the Proposed Sale. 17 THE FAIRNESS OPINION J.P. Turner & Company has delivered to the Board of Directors its written opinion dated October 27, 1999 (the "Fairness Opinion"), to the effect that, based upon, and subject to various considerations set forth in the Fairness Opinion, as of such date, the Purchase Price to be received by the Company is fair, from a financial point of view, to the Company's stockholders. No limitations were imposed by the Company's Board of Directors with respect to the investigations made and the procedures followed by J.P. Turner in rendering the Fairness Opinion. In this regard, the Company has paid J.P. Turner $63,500 and 100,000 shares of the Company's Common Stock, which have certain restrictions regarding transfer. THE FULL TEXT OF THE FAIRNESS OPINION, WHICH SETS FORTH THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED, LIMITATIONS ON AND THE SCOPE OF THE REVIEW IN RENDERING SUCH OPINION, IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX B AND IS INCORPORATED BY REFERENCE HEREIN. THE FAIRNESS OPINION IS ADDRESSED TO THE COMPANY'S BOARD OF DIRECTORS AND ADDRESSES THE FAIRNESS OF THE PURCHASE PRICE TO THE COMPANY'S STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW AND IT DOES NOT ADDRESS ANY OTHER ASPECT OF THE AGREEMENT NOR DOES IT CONSTITUTE A RECOMMENDATION TO ANY HOLDER OF THE COMPANY'S CAPITAL STOCK AS TO HOW TO VOTE AT THE ANNUAL MEETING. THE SUMMARY OF THE FAIRNESS OPINION SET FORTH IN THIS PROXY STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION. HOLDERS OF THE COMMON STOCK AND PREFERRED STOCK ARE ENCOURAGED TO CAREFULLY READ THE FAIRNESS OPINION IN ITS ENTIRETY. In connection with the Fairness Opinion, J.P. Turner contracted with SLF Valuation Services, Inc. ("SLFV") to evaluate the Proposed Sale. Between them, they (i) reviewed certain internal financial statements and other financial and operating data pertaining to the Company's lease portfolio to be sold that were prepared by management, including such information contained in publicly available financial statements of the Company; (ii) discussed the past and current operations, financial condition and prospects of the Company's existing business with management; (iii) reviewed the financial performance of certain publicly traded companies deemed relevant; (iv) reviewed the Agreements; (v) discussed with experts in the industry the valuation and sale of comparable companies and (vi) performed such other analyses as was deemed appropriate. The Fairness Opinion was necessarily based on economic market and other conditions as in effect on, and the information made available as of June 30, 1999, and information on the 18 Transaction, Net Assets and Purchaser, as defined in the Fairness Opinion, through October 26, 1999. Although subsequent developments may affect the Fairness Opinion, no party has any obligation to update, revise or reaffirm the opinion. The following summarizes the material portions of the financial analyses performed in connection with the Fairness Opinion. Three valuation methods were initially consider, as follows: Adjusted Book Value Approach This method entails totaling the fair market value of the assets, and then subtracting liabilities. This method is primarily used where the underlying value of the tangible net assets constitute the prime determinant of corporate worth. Earnings/Cash Flow Technique This method entails estimating fair market value by considering some multiple of the Company's earnings, or the Company's net cash flow. This method is primarily used where the company being valued is a going concern with fairly regular after-tax earnings or cash flow. Value is effectively the present value of future expected after-tax earnings or cash flow. Market Comparison Technique This method compares other companies similar to the one being evaluated to determine the value that a purchaser might pay for the company being valued. This method is used where there is a market for comparable companies, and where it is difficult to find exactly comparable companies, this method is less useful. Selection of the Appropriate Approach The adjusted book value approach was selected to determine the fair market value of the Company, based on the Company's asset make-up, and its financial results. In particular, the Company's history of losses suggested that there was no justification for a positive outlook. For example, the Company relies too heavily on one customer (representing 43% of the Company's active lease business), and it has been unable to achieve a positive interest rate differential between its cost of borrowing and the rate of return on its equipment leases. These results made it difficult to use an earnings/cash flow valuation method. 19 Over fifty publicly traded companies that lease durable goods were analyzed, but none of those companies was comparable, either because of the equipment that they leased, or their size, structure or profitability. Because there were no adequate comparables, the market value approach could not work. The fairest valuation method was to analyze the adjusted book value of the Company. Calculation of Value The valuation was based on the adjusted book value of the Company. In so doing, extensive meetings were held with the Company's officers. The Company's lease portfolio was analyzed, specifically including the residual value of the equipment leased, and potential developments in the high technology equipment market that might effect the value of that equipment. It was determined that it was appropriate to reduce the value of the equipment for additional obsolescence and for the estimated return that an investor would require on assets of this nature, but did not otherwise adjust the value of the Company's assets or liabilities. General The foregoing approaches were considered, and consideration was given to various qualitative factors relating to the Company. Notwithstanding the general reliance on the adjusted book value method, the analysis must be looked at as a whole, and separating factors, without considering all factors, could create a misleading view of the process and analysis. THE AGREEMENTS The following is a brief summary of certain provisions of the Agreements. THIS DESCRIPTION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE COMPLETE TEXT OF THE AGREEMENT, A COPY OF WHICH IS ATTACHED TO THIS PROXY STATEMENT AS APPENDIX A AND INCORPORATED HEREIN BY REFERENCE. CAPITALIZED TERMS APPEARING BELOW AND ELSEWHERE IN THIS PROXY STATEMENT THAT ARE NOT OTHERWISE DEFINED HEREIN HAVE THE MEANINGS SET FORTH IN THE AGREEMENTS. ALL STOCKHOLDERS ARE URGED TO CAREFULLY READ THE AGREEMENT IN ITS ENTIRETY. WHENEVER PARTICULAR SECTIONS OR DEFINED TERMS ARE REFERRED TO, IT IS INTENDED THAT SUCH SECTIONS AND DEFINED TERMS SHALL BE INCORPORATED BY REFERENCE. 20 PURCHASE PRICE The Company expects to be paid $3,559,500 in cash, a Promissory Note and payoff and assumption of certain debt for the Proposed Sale. As currently structured, the Company will be paid by assumption of non-recourse debt totaling approximately $12,500,000; by delivery of a Promissory Note in the principal amount of up to $400,000 payable in 30 equal installments, with interest on the unpaid balance at the rate of 10% per annum (the "Promissory Note"); by cash proceeds of a loan from Excel Bank, N.A. in the amount of $2,635,000, which will be used entirely for paying obligations to Excel Bank, N.A. and Finova Capital Corporation; and by a payment of up to $524,500 in cash. It is possible that the purchase price will need to be adjusted downward at closing based on the status of the Lease Portfolio. The purchase price (cash portion first) would be adjusted downward if the Company used proceeds it received from the sale of lease portfolio assets subsequent to June 30, 1999 for any purpose other than reduction of debt owed Excel Bank, N.A. and/or Finova Capital Corporation. MANAGEMENT AGREEMENT As part of the Proposed Sale, the Buyer began managing the Lease Portfolio on October 1, 1999. Under the Management Agreement, the Buyer will collect payments on the leases and remit those payments to the Company's Lenders, and be paid 20% of the revenue generated from the Lease Portfolio during the term of the Management Agreement for these services, plus another 3% of the amount so paid. Notwithstanding the foregoing, the Buyer has further agreed that, if the Proposed Sale is consummated, the Buyer will not be entitled to any compensation under the Management Agreement. AGREEMENT WITH EXCEL BANK, N.A. As part of, and a condition to, the Proposed Sale, Excel Bank, N.A., currently a lender to the Company, will lend money on a secured basis to the Buyer to enable the Buyer to consummate the Proposed Sale. Excel Bank, N.A. also will require, among other things, that Finova Capital Corporation, another lender to the Company, be paid off, that Excel Bank, N.A. have a first position security interest in the leases and equipment sold, that the Company pledge to Excel Bank, N.A. a certificate of deposit in the amount of $75,000, which will later be increased to $300,000, and that Excel Bank, N.A. be paid $50,000 in fees plus its expenses, and receive warrants for the purchase of 35,000 shares of the Company's Common Stock. The certificate of deposit will secure repayment of debt associated with certain leases that are not being purchased by the Buyer. ASSUMPTION OF LIABILITIES 21 The Buyer will assume approximately $12,500,000 of non-recourse debt associated with the Lease Portfolio. These amounts represent discounted lease rentals owed by lease customers. SECURITY The Buyer is not giving security for its payments under the Promissory Note. REPRESENTATIONS AND WARRANTIES Pursuant to the Purchase Agreement, the Company represents and warrants to the Buyer, among other things, that the Company has the authority to enter into the Proposed Sale and that the Company is the owner of the Leases in the Lease Portfolio, and the Equipment subject to such leases, that there are no undisclosed liabilities or encumbrances affecting the Lease Portfolio, that the Company has been operated in the ordinary course of its business, and that there is no litigation that would affect the transaction. INDEMNIFICATION The Purchase Agreement provides that the Company will after the closing of the Proposed Sale indemnify, defend and hold harmless the Buyer, its successors and assigns and all directors, officers, employees and representatives of each of them from and against any and losses, damages, costs, liabilities and claims of any kind which such persons may at any time suffer or incur, or become subject to, as a result of or in connection with: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in or pursuant to the Purchase Agreement; (ii) any failure by the Company to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under the Purchase Agreement or under any of the documents and materials delivered by the Company pursuant to the Purchase Agreement; and (iii) the Company's rejection of any previous offer to sell its Lease Portfolio to any party other than the Buyer. In addition, the Buyer will after the closing of the Proposed Sale indemnify, defend and hold harmless the Company, its successors and assigns and all directors, officers, employees and representatives of each of them from and against any and losses, damages, costs, liabilities and claims of any kind which such persons may at any time suffer or incur, or become subject to, as a result of or in connection with: (i) any breach or inaccuracy of any of the representations and warranties made by the Buyer in or pursuant to the Purchase Agreement; (ii) any failure by the Buyer to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities 22 or obligations under the Purchase Agreement or under any of the documents and materials delivered by the Buyer pursuant to the Purchase Agreement; and (iii) the ownership or service of the Lease Portfolio by Buyer from and after the Closing Date. CONDITIONS OF THE PROPOSED SALE The Proposed Sale is conditioned upon, among other things, (i) receipt of the Fairness Opinion of J.P. Turner, (ii) approval of the Proposed Sale by the Company's Board of Directors, (iii) approval of the Proposed Sale by a majority of the outstanding shares of Common Stock voting as a class and a majority of the outstanding shares of Preferred Stock voting as a class, (iv) the Buyer obtaining approval for a loan for the Proposed Sale, and (v) the Buyer's satisfaction that all of the Seller's representations and warranties have been satisfied. COVENANT NOT TO COMPETE The Company has agreed for a period of 30 months after the closing that it will not, directly or indirectly or through any other entity, engage in the equipment leasing business or sell business equipment, except that the Company can complete sales of existing equipment not covered by the Purchase Agreement. TERMINATION The Purchase Agreement may be terminated if the conditions are not met prior to closing. Closing was originally scheduled for November 19, 1999, but the date of closing has been extended to no later than December 31, 1999. The Purchase Agreement does not provide for liquidated damages to either party if the Purchase Agreement is terminated without a closing. PAYOFF OF THE COMPANY'S LENDERS The Company expects that the proceeds from the Proposed Sale will be sufficient to payoff all, or substantially all, of the amount owed to Excel Bank, N.A., and Finova Capital Corporation (the "Lenders"), and that the Company will be released from its guarantees to those institutions. However, the Lenders have not provided the Company with final payoff amounts. If the proceeds from the Proposed Sale are insufficient to payoff the indebtedness to the Lenders (and other funds are not available to payoff the remaining amount due), the Lenders would retain first position liens on the equipment and the Lease Portfolio, in which case, unless the Lenders waive or release their liens, the Company would not be able to meet all conditions precedent for the Proposed Sale. Without a waiver of such conditions precedent by the Buyer, the Proposed Sale would not be consummated. If the Lenders are not paid in full, the Lenders might also waive or release their liens (allowing consummation of the Proposed Sale), but not release the Company from the unpaid 23 indebtedness and guarantees for that amount. Currently, the Company is in default of its obligations to the Lenders. Neither Lender has agreed with the Company to forebear enforcement of their rights or remedies under their respective loan agreements pending the Proposed Sale. It is anticipated that, if the Proposed Sale is not concluded, the Lenders will foreclose on the equipment and the Lease Portfolio, with no assurance that the proceeds from any liquidation sale would be sufficient to payoff the Lenders. OTHER ISSUES REGULATORY APPROVALS Consummation of the Agreement does not require any regulatory approvals other than the federal filings required under applicable U.S. securities laws in connection with this Proxy Statement. MATERIAL FEDERAL INCOME TAX CONSEQUENCES THIS SECTION IS A SUMMARY OF THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND THE STOCKHOLDERS OF THE COMPANY FROM THE PROPOSED SALE, EXCEPT WHERE SPECIFICALLY NOTED, THIS SUMMARY DOES NOT APPLY TO STATE OR LOCAL TAXES. THE SUMMARY IS BASED UPON THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, JUDICIAL DECISIONS, UNITED STATES TREASURY DEPARTMENT REGULATIONS PROMULGATED THEREUNDER, ADMINISTRATIVE RULINGS OF THE UNITED STATES TREASURY DEPARTMENT, AND OTHER INTERPRETATIONS THEREOF, ANY OF WHICH COULD BE CHANGED AT ANY TIME. NO RULING HAS BEEN OR WILL BE REQUESTED FROM THE INTERNAL REVENUE SERVICE WITH RESPECT TO ANY CONSEQUENCES RESULTING FROM THE PROPOSED SALE. The Proposed Sale will not have any federal income tax consequences to the Company's stockholders because no distributions of sale proceeds will be made to the stockholders. Upon consummation of the Proposed Sale, the Company will recognize taxable income of approximately $3,300,000. However, the Company expects that it will not have to pay federal income taxes due to available net operating loss carry forwards. ACCOUNTING TREATMENT The Proposed Sale will be treated as an asset sale, from an accounting point of view. 24 EXPENSES AND OTHER FEES Each party will bear its own expenses in respect of the Proposed Sale, whether or not consummated. CERTAIN CONSIDERATIONS The Company is refocusing its business to the golf entertainment business. Some of the relevant considerations associated with that business, and the Company's position in that business include the following: REMAINING LIABILITIES The Company believes that the Proposed Sale will result in the payoff or assumption of all, or substantially all of the Company's debt to Excel Bank, N.A. and Finova Capital Corporation, the Company's principal lenders. However, the Buyer has agreed to payoff or assume a maximum of $2,635,000 in liabilities to the Company's principal lenders. If such liabilities exceed that amount, the Company will have to pay such liabilities from other sources to consummate the Proposed Sale. Also, because the transaction is structured as an asset sale, and not a sale of stock, the Company remains liable to other creditors of the Company, and the Company's subsidiaries remain liable for their existing obligations. Also, the Company and its subsidiaries have other remaining creditors who will not be paid in full from the sale of the lease portfolio, and such creditors could seek payment from the Company or its subsidiaries. At least one such creditor has obtained a judgment against certain of the Company's subsidiaries that has not been paid. ADDITIONAL CAPITAL REQUIREMENTS To develop the Company's golf entertainment business it will need substantially more cash than it will receive from the Proposed Sale. The Company will have to obtain those funds from public or private sources of equity investment or debt issuances, or combinations thereof. Failure to raise additional capital will adversely affect the Company's fiscal strength. If the Company cannot raise additional funds, it will be limited in its ability to acquire or develop golf facilities, will have greater dependence on the performance of a lesser number of golf facilities and will have less capital to enable it to withstand economic downturns. BUSINESS STRATEGY; POSSIBLE LACK OF SUITABLE LOCATIONS 25 The Company's ability to generate revenue, net income and operating cash flow depends upon its success in acquiring or leasing and developing golf recreational facilities at suitable locations upon satisfactory terms. This in turn depends on a number of factors, including the availability and cost of suitable locations, the availability of adequate financing for the Company, the hiring, training and retention of skilled management and other personnel, the ability to obtain the necessary governmental permits and approvals and third party consents, the competitive environment and other factors, some of which are beyond the Company's control. There can be no assurance that suitable golf facility acquisition or lease opportunities will be available or that the Company will be able to consummate acquisition or leasing transactions on satisfactory terms. The development of golf recreational facilities is subject to all the delays and uncertainties associated with development and construction projects generally, such as the performance by construction contractors, costs of materials, labor and energy, inflation, adverse weather, adverse subsurface conditions and other factors that could cause construction and expansion and renovation costs to exceed estimates. If necessary, the Company will hire a construction manager to oversee construction activities at facilities acquired by the Company and on acquired sites. The acquisition and development of golf recreational facilities may become more expensive in the future to the extent that competition for sites increases. The future success and growth of this business will depend on, among other things, the ability to acquire suitable operating properties and development sites and to obtain required financing for future acquisitions and development of golf facilities. There can be no assurance that the Company will be able to acquire suitable sites or facilities or to obtain financing on favorable terms. COMPETITION The golf industry is highly competitive and includes competition from other golf facilities, traditional golf ranges and golf courses, as well as other recreational pursuits. Many potential competitors have considerably greater financial and other resources, experience and customer recognition than the Company will have. The golf entertainment business will also experience competition in its day-to-day operations from existing and newly constructed golf and recreational facilities. Such competition may adversely impact the cash flow from its golf facilities. DEPENDENCE ON DISCRETIONARY CONSUMER SPENDING The amount spent by consumers on discretionary items, such as family, leisure and entertainment activities, like those to be offered by golf recreational facilities acquired, developed and operated by the Company, have historically been dependent upon levels of discretionary income, which may be adversely affected by general economic conditions. A decrease in consumer spending on golf will have an adverse effect on the Company's financial condition and results of operations. 26 DEPENDENCE ON KEY EMPLOYEES; RECRUITMENT OF ADDITIONAL PERSONNEL The continuing services of Mr. Farrell are considered essential to the successful operation of the Company's golf entertainment business. Currently, the Company has an employment contract with Mr. Farrell through December, 2003. If Mr. Farrell should die or withdraw, or be removed from his position with the Company, there can be no assurance that a capable successor could be found. Accordingly, the Company will seek to hire a person with experience and knowledge in the golf entertainment business who will be responsible for the operation of the business. As golf centers are acquired and developed, those facilities will need to be staffed. There can be no assurances that the Company will be able to attract or retain persons to serve in such capacities. BOARD OF DIRECTORS' RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED SALE, AND AUTHORIZE THE COMPANY'S CHIEF EXECUTIVE OFFICER TO ALTER THE TERMS OF THE PROPOSED SALE AS MAY BE REQUIRED TO COMPLETE THE SALE OF THE COMPANY'S LEASE PORTFOLIO. PROPOSAL 2: ELECTION OF DIRECTORS NOMINEES TO THE BOARD OF DIRECTORS Three directors will be elected at the 1999 Annual Meeting to hold office for the term until the next Annual Meeting and until their successors are duly elected and qualified. However, if the stockholders approve Proposal 4 herein regarding institution of staggered terms for directors, Mr. Segall will be put in the first class of directors, and he will be elected for a term until the next annual meeting and until his successor is duly elected and qualified. Mr. Chiste will be put in the second class of directors, and he will be elected for a term until the annual meeting after the next annual meeting and until his successor is duly elected and qualified. Mr. Farrell will be put in the third class of directors, and he will be elected for a term until two annual meetings after the next annual meeting and until his successor is duly elected and qualified. The enclosed proxy provides a means for the holders of Common Stock to vote for all of the nominees listed therein, to withhold authority to vote for one or more of such nominees, or to withhold authority to vote for all of such nominees. Each properly executed proxy received on time for the Annual Meeting will be voted as specified therein, or if a stockholder does not specify how 27 the shares represented by his or her proxy are to be voted, such shares will be voted for the persons listed below. In the event that any nominee for Director should become unavailable to serve, it is intended that votes will be cast, pursuant to the enclosed form of proxy, for such substitute nominee as may be nominated by the Company. At this time, the Board of Directors knows of no reason why any nominee may be unable to serve. There is no arrangement or understanding between any director or nominee and any other person pursuant to which such person was selected as a director or nominee. NOMINEES FOR DIRECTORS The Nominees for Directors of the Company at November 1, 1999, their ages, their titles, their years of employment with the Company, and their principal occupations for the past five years are given bellow. The following table sets forth information concerning the nominees: Name Age Position - ---- --- -------- Ronald G. Farrell 56 Chairman of the Board, Chief Executive Officer and President John Chiste 43 Director Larry Segall 44 Director BIOGRAPHICAL INFORMATION ABOUT NOMINEES Ronald G. Farrell. Mr. Farrell, age 56, has served as the Chairman of the Board, and Chief Executive Officer of the Company since November 20, 1998, and as President since August 16, 1999. From July, 1992 through December, 1996, Mr. Farrell served as Chairman and CEO of Computer Integration Corp., a publicly traded company. Mr. Farrell is the founder, Chairman and President of R.G. Farrell, Inc. and RGF Investments, Inc., both founded in 1985. These companies are wholly owned by Mr. Farrell and are engaged in financial consulting in connection with private placements, public offerings, venture capital transactions and leveraged buyout and roll-up transactions. During the ten years from 1985 to 1995, Mr. Farrell directed the acquisition of fourteen companies and was instrumental in four public offerings. John Chiste. Mr. Chiste, age 43, is nominated for the first time to the Company's Board of Directors. Mr. Chiste has been the Treasurer and Chief Financial Officer Bluegreen Corp. since November, 1997. From May, 1994 to October, 1997, he was the Chief Financial Officer of Computer Integration Corp. Prior to that, Mr. Chiste was Chief Financial Officer of Sports/Leisure, Inc. from May, 1992 to December, 1992. Prior to his employment by Sports/leisure, Inc., Mr. Chiste was employed by Ernst & Young, LLP for 13 years, most recently as a Senior Manager. Mr. Chiste is a Certified Public Accountant. 28 Larry Segall. Mr. Segall, age 44, has served as a Director of the Company since November, 1989. Mr. Segall has been the Chief Financial Officer of Vitamin Shoppe Industries, Inc. since October, 1997, and the Chief Financial Officer, Secretary and Treasurer of its new e-commerce online subsidiary, Vitamin Shoppe.com, Inc. since June, 1999. From 1985 to 1996, Mr. Segall held a number of financial management positions and was Vice President, Treasurer and Controller of Tiffany & Co. In 1997, he was Senior Vice President - Merchandising Planning for Tiffany & Co. and was responsible for worldwide strategic sales, merchandising and product planning, including product development, product sourcing/replenishment, internal manufacturing, inventory management and distribution resource planning. From 1983 to 1985 he was the Controller of Murijani International Ltd. From 1977 to 1983 he was employed by Deloitte & Touche LLP. INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND EXECUTIVE OFFICERS MEETINGS OF THE BOARD OF DIRECTORS AND INFORMATION REGARDING COMMITTEES The Board of Directors of the Company held a total of thirteen meetings during the fiscal year ended December 31, 1998. From December 31, 1998 to September 30, 1999, the Board of Directors held another five meetings. All incumbent directors attended at least 85 percent of those meetings and of its committees of the Board on which they sit. The Board of Directors has the following committees: the Compensation Committee (to be comprised of Messrs. Chiste and Segall if they are elected); the Audit Committee (to be comprised of Messrs. Chiste and Segall if they are elected); and the Stock Option Plan Committee (comprised of Messrs. Chiste and Segall if they are elected). The Compensation Committee is charged with periodically reviewing the compensation of the Company's officers and employees and recommending appropriate adjustments. The Compensation Committee met one time during the fiscal year 1998, and once from the end of that year to September 30, 1999. During fiscal year 1998, Messrs. Segall, Ashcroft, and Falcone were members of the Compensation Committee. The Audit Committee recommends engagement of the Company's independent accountants and is primarily responsible for reviewing their performance and their fees and for reviewing and evaluating with the independent auditors and management the Company's accounting policies and its system of internal controls. The Audit Committee met once during fiscal year 1998, and once from the end of that year to September 30, 1999. During fiscal year 1998, Messrs. Segall and Ashcroft were members of the Audit Committee. 29 The Committee also recommends to the Board of Directors the appointment of the Company's independent auditors. At least annually, the Committee reviews the services performed and the fees charged by the independent auditors. The independent auditors have direct access to the Committee and may discuss any matters that arise in connection with their audits, the maintenance of internal controls and any other matters relating to the Company's financial affairs. The Committee may authorize the independent auditors to investigate any matters that the Committee deems appropriate and may present its recommendations and conclusions to the Board. The Stock Option Plan Committee administers the Company's Stock Option Plans and makes awards under such plans. The Stock Option Committee met once during fiscal year 1998. During fiscal year 1998, Messrs. Segall, Daniels and Ashcroft were members of the Stock Option Plan Committee. SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to section 16 of the Securities Exchange Act of 1934, the Company's Directors and executive officers and beneficial owners of more than ten percent of the Company's Common Stock are required to file certain reports, within specified time periods, indicating their holding of and transactions in the Common Stock and derivative securities. Based solely on a review of such reports provided to the Company and written representations from such persons regarding the necessity to file such reports, the Company is not aware of any failures to file reports or report transactions in a timely manner during the Company's fiscal year ended December 31, 1998. EXECUTIVE COMPENSATION EXECUTIVE COMPENSATION The following table sets forth information with respect to the compensation paid and/or accrued to each of the Company's executive officers for services rendered in all capacities to the Company during the three years ended December 31, 1998. No other executive officer received annual compensation in excess of $100,000 in any of the three fiscal years ended December 31, 1998. This information includes the dollar value of base salaries, bonuses, awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred. (A) SUMMARY COMPENSATION TABLE 30
Name of Individual and Other Annual Principal Position Fiscal Year Salary ($) Bonus ($) Compensation ($) - ------------------ ----------- ---------- --------- ---------------- Ronald G. Farrell 1998 -- -- -- Chairman & CEO Michael F. Daniels 1998 $326,385 -- $ 34,573 (2) President (1) 1997 $336,519 -- $181,653 (2) 1996 $273,077 -- $258,619 (2) William J. Vargas 1998 $123,417 -- -- CFO & Secretary 1997 $128,871 -- -- 1996 $115,341 -- --
(A) SUMMARY COMPENSATION TABLE (CONT'D) Restricted Securities All Other Name of Individual and Fiscal Stock Underlying Annual Principal Position Year Awards($) Options/SARs(#) Compensation - ------------------ ---- --------- --------------- ------------ Ronald G. Farrell 1998 -- -- -- Chairman & CEO Michael F. Daniels 1998 -- 200,000(4) 2,500(3) President 1997 -- --(4) 4,750(3) 1996 -- 62,500(4) 4,750(3) William J. Vargas 1998 -- 77,500(4) 1,825(3) CFO & Secretary 1997 -- --(4) 4,750(3) 1996 -- 17,500(4) 1,900(3) 31 (1) Michael F. Daniels served as the Company's Chairman & CEO during the period January 1, 1996 through November 20, 1998. Mr. Daniels resigned as President of the Company in March, 1999. (2) Consists of commission income based upon realization of excess residual values related to leases entered into prior to May 15, 1993. (3) Represents Company matching contribution to 401(k) Profit Sharing Plan. (4) In January of 1997, August of 1997 and January of 1998, Messrs. Daniels and Vargas were granted stock options to purchase an aggregate of 404,000 shares and 163,750 shares, respectively. On December 8, 1997, Messrs. Daniels and Vargas voluntarily rescinded their respective 1997 option grants, together with all grants received prior thereto, with the exception of 147,531 stock options received by Mr. Daniels during 1993. In October 1998, Messrs. Daniels and Vargas voluntarily rescinded their respective 1998 option grants, to the extent that they had not been exercised, except for 2,500 stock options received by Mr. Vargas. Messrs. Daniels and Vargas received no compensation for such rescissions. All share amounts have been retroactively adjusted to reflect the one-for-four reverse stock split that was effective September 15, 1998. (B) OPTION/SAR GRANTS IN LAST FISCAL YEAR Number of Percent of Securities Total Underlying Options/SAR's Exercise Options/SAR's Granted to or Base Expiration Name Granted (#) In Fiscal Year Price ($/Sh) Date - ---- ----------- -------------- ------------ ---------- Ronald G. Farrell -- -- -- -- Michael F. Daniels 200,000(1) 40.7% $ 0.10 1/30/03 William J. Vargas 77,500(1) 15.8% $ 0.10 1/30/03 32 (1) In October 1998, Messrs. Daniels and Vargas voluntarily rescinded any stock option grants made in 1998, to the extent that they had not been exercised, with the exception of 2,500 stock option grants made to Mr. Vargas. (C) AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION/SAR VALUES Number of Value of Securities Unexercised Underlying In-The-Money Options/SAR's Options/SAR's At Fiscal At Fiscal Shares Year End(#) Year End($) Acquired Value Exercisable/ Exercisable/ Name On Exercised Realized Unexercisable Unexercisable - ---- ------------ -------- ------------- ------------- Ronald G. Farrell N/A N/A N/A N/A Michael F. Daniels 100,000 $53,000 14,531/-- $5,340/-- 33 William J. Vargas 35,000 $18,550 2,500/-- $1,469/-- The last sales price for the Company's Common Stock on the Nasdaq SmallCap Market on December 31, 1998 was $0.6875. (D) DIRECTORS COMPENSATION Each non-employee director of the Company is paid $1,000 per month. In addition, each director is entitled to participate in the Company's stock option plans. The Company does not pay its directors any additional fees for committee participation. (E) EMPLOYMENT CONTRACTS Ronald G. Farrell serves as the Company's Chief Executive Officer under an employment agreement dated November 30, 1998 and effective January 1, 1999 through December 31, 2003, as amended. Mr. Farrell's compensation under such agreement was originally $240,000 through December 31, 1999, and increases by 10% per year thereafter, but was amended in May, 1999 to an annual salary of $360,000 through December 31, 1999, with annual 10% increases, due to increased responsibility associated with the Company's golf operations. In addition, Mr. Farrell is eligible to receive an annual bonus, payable quarterly, based on Company performance. Such bonus may not exceed Mr. Farrell's base salary for such respective fiscal year. Mr. Farrell was also granted the option to purchase a total of 300,000 shares of the Company's Common Stock, vesting in 100,000 share increments on each of December 31, 1999, December 31, 2000 and December 31, 2001. Pursuant to such employment agreement, if Mr. Farrell should die during the term thereof, a death benefit equal to eighteen months salary (currently $540,000) shall be paid to his estate. Mr. Farrell may be terminated for cause, and if so, the Company will pay ten (10) days' salary, and any amount that has already been accrued. Michael F. Daniels served as the Company's President under an employment agreement dated October 1, 1998 and initially set to expire September 30, 2001. Mr. Daniels resigned as President of the Company in March, 1999, and was terminated from all remaining positions with the Company and its subsidiaries in May, 1999. Mr. Daniels' compensation under his employment agreement was set at $350,000 per annum and he was eligible for a bonus based on company performance. In previous employment agreements, Mr. Daniels was entitled to receive commissions equal to 25% of the net proceeds realized by the Company in excess of the residual value of equipment subject to leases which commenced prior to May 15, 1993 and for which Mr. Daniels was the lead salesperson. Certain promissory notes executed by Mr. Daniels also provide that the 34 Company can offset against any amounts to be paid to Mr. Daniels any amount that Mr. Daniels owes the Company. The Company has not paid Mr. Daniels since his termination in May, 1999. Mr. Daniels has commenced an arbitration proceeding against the Company for payment of amounts allegedly due under his employment agreement, and the Company is vigorously defending that matter. William J. Vargas has served as the Company's Chief Financial Officer, Treasurer and Secretary under an employment agreement dated July 1, 1995 and originally expiring June 30, 2000. Mr. Vargas' compensation under such agreement is $135,000 per annum. Mr. Vargas has indicated his intention to resign from the Company effective December 1, 1999, and will remain on a contract basis thereafter, if necessary, to perform certain services for the Company. REPORT OF THE BOARD OF DIRECTORS. The Board of Directors is responsible for reviewing all elements of the total compensation program for all officers of the Company and sets compensation packages for each of the Company's officers. Although certain executive officers served on the Company's Board, they did not participate in any decisions regarding their own compensation as an executive officer. COMPENSATION POLICIES. The policy of the Company and the guidelines followed by the Board are intended to achieve the following objectives: Assist the Company in attracting and retaining talented and well-qualified executives; Reward performance and imitative; Be competitive with other companies in the Company's chosen field; Be significantly related to accomplishments and the Company's short-term and long-term successes, particularly measured in terms of growth in net operating income and cash flow from operations; and Encourage executives to achieve meaningful levels of ownership of the Company's stock. The Company's compensation practices embody the principles that compensation should be set to link management's interests to those of long-term stockholders and to encourage management to enhance shareholder value. Accordingly, the Company encourages meaningful stock ownership by management, including participation in various benefit plans providing for stock or stock options. 35 The Company's approach to base compensation levels is to offer competitive salaries in comparison with prevailing market practices. The Board examines market compensation levels and trends. Additionally, for this purpose, the Board also considers the pool of executives who are currently employed in similar positions in public companies in similar fields. At present, the compensation of the executive officers of the Company consists of salary, incentive bonuses, stock options and participation in medical benefit plans. The Company maintains five stock option plans covering an aggregate of 671,895 shares of Common Stock . In 1998, stock options for 511,250 shares of Common Stock were issued to its executive officers and directors. The Board has approved employment agreements with certain executive officers (see, Employment Agreements) establishing, among other things, future compensation. According to the agreements, compensation will be paid in cash, Common Stock, or a combination thereof, taking into account the Company's cash flow requirements and any other aspect of the Company's financial condition deemed relevant by the Chairman and Chief Executive Officer, or, in the case of the Chairman and Chief Executive Officer, by the Board. The Board annually evaluates executive officer salary levels. This annual review considers the prior year's performance, decision-making responsibilities of each position and the experience, and team-building skills of each incumbent. The Board views performance as the single most important measurement factor. Under Section 162(m) of the Internal Revenue Code of 1986, as amended, the Company may not deduct certain forms of compensation in excess of $1,000,000 paid to certain of the Company's highest paid executive officers. The Board believes that, while there may be circumstances in which the Company's interest are best served by maintaining flexibility whether or not the compensation is fully deductible under Section 162 (m), it is generally in the Company's best interest to comply with Section 162(m). CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S COMPENSATION. In determining the compensation of the Chairman and Chief Executive Officer, the Board takes into account various qualitative and quantitative indicators of corporate and individual performance in determining the level and composition of compensation. While the Board considers more or less equally such performance measures as growth in revenues, market capitalization, net operating income, cash flow from operations, and earnings, the Board does not apply any specific quantitative formula in making compensation decisions. The Board also values achievements that may be difficult to quantify and recognizes the importance of qualitative factors. The base salary for Ronald G. Farrell, the Company's Chairman and Chief Executive Officer, was originally $240,000, with 10% increases annually, to be paid in cash, Common Stock, or combination thereof, taking into account the Company's cash flow requirements and other aspects of the Company's financial condition. The base salary was amended in May, 1999 to $360,000 per 36 annum, with 10% annual increases to reflect Mr. Farrell's greater responsibility, particularly associated with the Company's golf business. In addition, Mr. Farrell was granted Common Stock and stock options as provided in his employment agreement (see, Employment Contracts). Mr. Farrell's base salary was established in light of his duties and the scope of his responsibilities in the context of the policies and guidelines enumerated above. In the Board's evaluation of total compensation for Mr. Farrell, appropriate weight will be given to his leadership in growth of the Company's revenues, in obtaining financing for such growth, in returning the Company to profitability, in increasing shareholder value and in accomplishing the Company's short-term and long-term objectives. By: The Board of Directors Ronald G. Farrell Larry M. Segall L. Derrick Ashcroft Richard D. Falcone PERFORMANCE CHART The following graph assumes an investment of $100 on December 31, 1993 and thereafter compares the yearly percentage change in cumulative total return to shareholders of the Company with an industry peer group (consisting of Amplicon, Inc., Condisco, Inc. and Electro Rent Corp.) and a broad market index (the CRSP Total Return Index for the Nasdaq Stock Market (U.S.)). The graph shows performance on a total return (dividend reinvestment) basis. The graph lines connect calendar year-end dates and do not reflect fluctuations between those dates. The following table was represented as a line graph in the printed material. 5-YEAR CUMULATIVE TOTAL RETURN SUMMARY Description 1993 1994 1995 1996 1997 1998 - ----------- ---- ---- ---- ---- ---- ---- Golf Entertainment, Inc. 100.00 74.54 46.35 29.30 18.64 4.88 CRSP Total Return Index 100.00 97.75 138.26 170.01 208.58 293.21 Peer Group Only 100.00 107.01 144.26 182.76 282.03 266.67 The Compensation Committee report on Executive Compensation and the Performance Graph above shall not be deemed "soliciting material" or incorporated by reference into any of the Company's filings with the Securities and Exchange Commission by implication or by any reference 37 in any such filing to this Proxy Statement. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Mr. Segall, a director of the Company, is currently the Chief Financial Officer of Vitamin Shoppe Industries, Inc. and was formerly an officer of Tiffany & Co., two of the Company's equipment leasing customers. Mr. Falcone, a director of the Company, was formerly Chief Operating Officer of NetGrocer, Inc., one of the Company's equipment leasing customers. Neither Mr. Segall nor Mr. Falcone receive any cash or other remuneration from the Company other than their fees as directors and participation in the Company's stock option plans. The Company believes that the terms of its lease arrangements with Vitamin Shoppe Industries, Inc. and Tiffany & Co. (which are subject to the Purchase Agreement) and its lease agreement with Netgrocer (which is subject to an agreement with the Buyer) are fair and have been reached on an arm's length basis. Mr. Falcone has not been renominated as a director of the Company. Mr. Daniels has borrowed as much as $250,000 from the Company, the repayment of which is to include payment of interest of at least 8% on the unpaid balance. The amounts owed became due upon his termination from the Company. Mr. Daniels is in default of his obligation to repay the Company. LEC Acquisition, LLC, a Company controlled by Mr. Farrell, has a warrant to purchase up to $1,429,170 of the Company's convertible debentures. The convertible debentures are convertible into shares of the Company's Common Stock at $0.30 per share. BOARD OF DIRECTORS' RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES. PROPOSAL 3 THE BOARD OF DIRECTORS PROPOSES THAT THE COMPANY AMEND ITS EXISTING 1997 STOCK OPTION PLAN TO INCREASE TO 1,250,000 THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THE 1997 STOCK OPTION PLAN. THE STOCK OPTION PLAN 38 The Company's 1997 Stock Option Plan allows the Company to issue up to 250,000 shares of Common Stock to qualified employees. The Board of Directors has decided that it is in the Company's best interests to authorize the Company to issue another 1,000,000 shares of Common Stock pursuant to the 1997 Stock Option Plan and has amended the 1997 Stock Option Plan accordingly, subject to stockholder approval. This amendment to the 1997 Stock Option Plan is being submitted for stockholder approval so that, stock options for all or a portion of the additional shares granted by the Company may be considered incentive stock options as defined in Section 422 of the Internal Revenue Code of 1986, as amended. The Board of Directors will consider including the stock options provided for in Mr. Farrell's Employment Agreement under the 1997 Stock Option Plan. THE PURPOSE FOR THE INCREASED AUTHORIZATION The Board of Directors expects to use the increased number of shares issuable pursuant to the Company's Stock Option Plan to attract and retain qualified personnel for the Company's golf entertainment business. BOARD OF DIRECTORS'S RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THE COMPANY'S 1997 STOCK OPTION PLAN. PROPOSAL 4 THE BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT THE HOLDERS OF COMMON STOCK ADOPT AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF THE COMPANY TO PROVIDE THAT THE DIRECTORS OF THE COMPANY BE DIVIDED INTO THREE CLASSES, THE TERM OF OFFICE OF THOSE OF THE FIRST CLASS TO EXPIRE AT THE ANNUAL MEETING NEXT ENSUING, THE TERM OF OFFICE OF THOSE OF THE SECOND CLASS TO EXPIRE AT THE ANNUAL MEETING THEREAFTER, AND THE TERM OF OFFICE OF THOSE OF THE THIRD CLASS TO EXPIRE AT THE ANNUAL MEETING TWO YEARS FROM THIS ANNUAL MEETING. AT EACH ANNUAL ELECTION HELD AFTER SUCH CLASSIFICATION AND ELECTION, DIRECTORS SHALL BE CHOSEN FOR A FULL TERM, AS THE CASE MAY BE, TO SUCCEED THOSE WHOSE TERMS EXPIRE. GENERAL 39 The Company's by-laws currently provide for the Company to have no less than three (3) and no more than seven (7) directors. Currently, directors are elected at Annual Meetings of Stockholders and serve until their successors are elected and qualified. If this Proposal is approved, the directors will be divided into three classes, each class containing as even of number of directors as is possible. The first class will be elected to serve until their successor is duly elected and qualified at the next annual meeting. The second class will be elected to serve until their successor is duly elected and qualified at the annual meeting after the next annual meeting. The third class will be elected to serve until their successor is duly elected and qualified at the second annual meeting after the next annual meeting. Thereafter, each director will be elected for a term of three (3) years. If this Proposal is not approved, all directors will continue to be elected for only a one year term. This Proposal, to be adopted, must be approved by the affirmative vote of a majority of the issued and outstanding shares of Common Stock of the Company, whether or not such shares are voted at the Annual Meeting or not. POTENTIAL POSITIVE AND NEGATIVE EFFECTS The effect of this Proposal will be to allow directors to serve for three (3) year terms. The board of directors believes that staggered terms for directors promotes continuity and stability in the Company's board of directors, since at any time a majority of the directors on the Board generally will have had previous experience as directors. Staggered terms have the effect, however, of making it more difficult to change the composition and obtain control of the Board in a relatively short time since, at least two annual meetings of the stockholders, instead of one annual meeting, is generally required to replace a majority of the directors on the Board. Since directors will serve for three-years, rather than one-year terms, stockholders will generally also have to wait longer to replace a director, even when the only reason for replacement is dissatisfaction with the director's performance. This will make it more difficult for a dissident shareholder, or acquirer to take over the Board, and may make the Company less attractive to any such acquirer. AS APPLIED THIS YEAR Mr. Segall will be elected in the first class of directors, to serve until his successor is elected and qualified at the next annual meeting of the board of directors. Mr. Chiste will be elected in the second class of directors, to serve until his successor is elected and qualified at the annual meeting following the next annual meeting of the board of directors. Mr. Farrell will be elected in the third class of directors, to serve until his successor is elected and qualified at the second annual meeting following next annual meeting of the board of directors. Therefore, Mr. Segall is expected to serve 40 one year after this annual meeting, with his successor to serve for three years. Mr. Chiste is expected to serve two years after this annual meeting, with his successor to serve for three years. Mr. Farrell is expected to serve for three years after this annual meeting, with his successor to serve for three years. BOARD OF DIRECTORS'S RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO DIVIDE THE BOARD OF DIRECTORS INTO THREE CLASSES, AND TO INSTITUTE STAGGERED THREE YEAR TERMS FOR DIRECTORS. PROPOSAL 5 RATIFICATION OF THE APPOINTMENT OF GOLDSTEIN GOLUB KESSLER LLP AS INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 1999. The Board of Directors of the Company has reappointed Goldstein Golub Kessler LLP as the Company's independent auditors to audit the Company's books and records for the year ended December 31, 1999, subject to ratification by the stockholders. Goldstein Golub Kessler LLP has completed the audit for the year ended December 31, 1998, and the results are included in the Company's Report on Form 10 - K, a copy of which is included as part of the Company's annual report. The Board of Directors has also asked Goldstein Golub Kessler LLP to assist in preparing the federal tax returns for the Company and its subsidiaries. Representatives of Goldstein Golub Kessler LLP are expected to be present at the Annual Meeting with the opportunity to make a statement if they so desire. Such representatives are expected to be available to respond to appropriate questions. BOARD OF DIRECTORS'S RECOMMENDATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF GOLDSTEIN GOLUB KESSLER LLP AS THE INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 1999. 41 OTHER MATTERS The Board of Directors is not aware of any business to be presented at the Annual Meeting except the matters set forth in the accompanying Notice and described in this Proxy Statement. Unless otherwise directed, all shares represented by Proxies will be voted in favor of the Proposals described in this Proxy Statement. If any other matters come before the Annual Meeting, the persons named in the accompanying Proxy will vote on those matters in accordance with their judgment on such matters. MISCELLANEOUS DEADLINE FOR STOCKHOLDER PROPOSALS The Company presently anticipates that its next Annual Meeting of Stockholders to shareholders, consisting of a letter to shareholders from the Chief Executive Officer of the Company and a copy of the Company's Annual Report on Form 10 - K will be held in fall of 2000. Any proposal by a Stockholder of the Company intended to be presented at the 2000 Annual Meeting of Stockholders is required to be received by the Company at its principal place of business not later than June 30, 2000 for inclusion in the Company's Proxy Statement and form of proxy relating to that meeting. ANNUAL REPORT Concurrently herewith, the Company is sending a copy of its Annual Report to Shareholders, consisting of a letter to shareholders from the Chief Executive Officer of the Company and a copy of the Company's Annual Report on Form 10-K to each stockholder entitled to vote at the Annual Meeting. A copy of the Annual Report on Form 10-K, filed with the Securities and Exchange Commission, may be obtained for nominal fee by writing to Stockholder Services, Golf Entertainment, Inc., 2500 Northwinds Parkway, Three Northwinds Center, Suite 175, Alpharetta, Georgia 30004. DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Proxy Statement contains forward-looking statements including statements containing the words "believes," "anticipates," "expects," "intends" and words of similar import. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Important factors that the Company believes might cause such differences include: (1) concentration 42 of the Company's assets into one industry segment, (2) the seasonal nature of the golf business and weather risks associated with the golf business; (3) actions of competitors, (4) the need for funding, and substantial leveraging of the Company; (5) restrictions that may be imposed by any lender to the Company; (6) environmental regulation; (7) the Company's dependence on key personnel; (8) control of the Company by existing shareholder(s); and (9) volatility of the stock price. There is no assurance that any assumption or projection will, in fact, be realized. In assessing forward-looking statements contained herein, stockholders are urged to read carefully all cautionary statements contained in this Proxy Statement and in those other filings with the Commission. By Order of the Board of Directors Ronald G. Farrell Chairman of the Board of Directors December 1, 1999 43 Exhibits - -------- Exhibit A - Purchase and Sale Agreement and Management Agreement and Agreement with Respect to Net Grocer, Inc. Leases dated September 24, 1999 by and between the Company and Somerset Capital Group, Ltd. Exhibit B - Fairness Opinion of J. P. Turner 44 EX-A PURCHASE AND SALE AGREEMENT PURCHASE AND SALE AGREEMENT by and among SOMERSET CAPITAL GROUP, LTD. and LEC LEASING, INC. and GOLF ENTERTAINMENT, INC. dated this 24th day of September, 1999 TABLE OF CONTENTS ARTICLE I.....................................................................1 DEFINITIONS...................................................................2 1.01 AGREEMENT...........................................................2 1.02 CLOSING DATE........................................................2 1.03 CUSTOMER............................................................2 1.04 EQUIPMENT...........................................................2 1.06 RESERVED............................................................2 1.07 LEASE OR LEASES.....................................................2 1.09 RESERVED............................................................3 1.10 PERSON..............................................................3 1.11 RESERVED............................................................3 1.12 PURCHASE PRICE......................................................3 1.13 RECORDS.............................................................3 1.14 RECURRING REVENUE...................................................3 1.15 REVENUE, GENERAL....................................................4 2.01 PURCHASE AND SALE...................................................4 2.02 PAYMENT ON CLOSING..................................................4 2.03 PAYMENT OF LOANS....................................................6 ARTICLE III...................................................................6 REPRESENTATION AND WARRANTIES OF SELLER AND OF GOLF...........................6 3.01 ORGANIZATION AND OWNERSHIP OF ASSETS................................6 3.02 AUTHORIZATION, ENFORCEABILITY.......................................7 3.03 NO ADVERSE CONSEQUENCES.............................................7 3.04 TITLE TO LEASE PORTFOLIO: LIENS AND ENCUMBRANCES....................8 3.05 THE LEASES AND LEASE PORTFOLIO......................................8 3.06 NO LITIGATION: LABOR DISPUTES, COMPLIANCE WITH LAWS.................8 3.07 NO BROKERS..........................................................9 3.08 BUSINESS IN THE ORDINARY COURSE.....................................9 3.09 REPRESENTATIONS AS OF THE CLOSING DATE..............................9 3.10 REPRESENTATIONS BY GOLF.............................................9 3.11 REPRESENTATIONS BY SELLER AND GOLF.................................10 ARTICLE IV...................................................................10 REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................10 4.01 ORGANIZATION.......................................................10 4.02 AUTHORIZATION: ENFORCEABILITY......................................10 4.03 BROKERS............................................................11 4.04 PURCHASER'S REPRESENTATIONS........................................11 4.05 REPRESENTATIONS AS OF THE CLOSING DATE.............................11 ARTICLE V....................................................................11 CERTAIN MATTERS PENDING THE CLOSING..........................................11 5.01 SELLER'S OBLIGATIONS PENDING CLOSING...............................11 5.02 EXCEPTION TO SELLER'S OBLIGATIONS PENDING CLOSING..................13 5.03 PURCHASER'S OBLIGATIONS PENDING CLOSING............................13 1 ARTICLE VI...................................................................13 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER.........................13 6.01 COMPLIANCE WITH AGREEMENT..........................................14 6.02 PROCEEDINGS AND INSTRUMENTS SATISFACTORY...........................14 6.03 REPRESENTATIONS AND WARRANTIES.....................................14 6.04 NO ADVERSE CHANGE..................................................14 6.05 DELIVERIES AT CLOSING..............................................14 6.06 LOAN CONTINGENCY...................................................14 ARTICLE VII..................................................................15 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER............................15 7.01 COMPLIANCE WITH AGREEMENT..........................................15 7.02 PROCEEDINGS AND INSTRUMENTS SATISFACTORY...........................15 7.03 REPRESENTATIONS AND WARRANTIES.....................................15 7.04 DELIVERIES AT CLOSING..............................................15 ARTICLE VIII.................................................................16 INDEMNIFICATION..............................................................16 8.01 INDEMNIFICATION BY SELLER..........................................16 8.02 INDEMNIFICATION BY PURCHASER.......................................16 8.03 NOTIFICATION OF CLAIMS.............................................17 ARTICLE IX...................................................................19 CLOSING......................................................................19 9.01 CLOSING............................................................19 9.02 CLOSING DATE DELIVERIES............................................19 ARTICLE X....................................................................20 COVENANTS NOT TO COMPETE.....................................................20 10.01 CONSIDERATION......................................................21 10.02 SELLER'S COVENANT..................................................21 10.03 PURCHASER'S COVENANT...............................................21 10.04 REMEDIES...........................................................21 ARTICLE XI...................................................................22 POST-CLOSING OBLIGATIONS.....................................................22 11.01 SELLER'S OBLIGATIONS...............................................22 ARTICLE XII..................................................................22 TERMINATION, MISCELLANEOUS...................................................22 12.01 CONFIDENTIALITY....................................................22 12.02 RESERVED...........................................................23 12.03 EXTENSION OF CLOSING...............................................23 12.04 FURTHER ASSURANCES.................................................23 12.05 SURVIVAL...........................................................23 12.06 ENTIRE AGREEMENT: AMENDMENT........................................23 12.07 NOTICES............................................................24 2 12.08 COUNTERPARTS, HEADINGS.............................................25 12.09 SEVERABILITY.......................................................25 12.10 NO RELIANCE........................................................25 12.11 TIME OF ESSENCE....................................................25 12.12 SINGULAR/PLURAL; GENDER............................................25 12.13 GOVERNING LAW......................................................26 12.14 LITIGATION.........................................................26 12.15 JOINT PREPARATION..................................................26 12.16 EXPENSES...........................................................27 12.17 ASSIGNMENT.........................................................27 12.18 INCOME TAX POSITION................................................27 3 PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT, made this 24th day of September, 1999, by and between LEC Leasing, Inc., a corporation organized and existing under the laws of the State of Nevada and having its principal office and place of business at Alpharetta, Georgia, (the "Seller") and Golf Entertainment, Inc., a corporation organized and existing under the laws of the State of ___________________ and having its principal office and place of business at _____________________, _______________, _______________ ("Golf") and Somerset Capital Group, Ltd., a corporation organized and existing under the laws of the State of Connecticut and having its principal office and place of business at 1087 Broad Street, Bridgeport, Connecticut ("Purchaser"). WITNESSETH: WHEREAS, the Seller is a wholly owned subsidiary of Golf; and WHEREAS, the Seller owns a portfolio of equipment leases; and WHEREAS, the Purchaser wishes to purchase the equipment that is being leased pursuant to the equipment leases in the portfolio from the Seller and assume those leases, and Seller wishes to sell the equipment that is being leased pursuant to the equipment leases in the portfolio to the Purchaser and assign those leases to Purchaser on the terms and conditions stated herein; NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed as follows: ARTICLE I DEFINITIONS When used in this Agreement, the following terms shall have the meanings specified: 1.01 AGREEMENT. "Agreement" shall mean this Purchase and Sale Agreement, together with the Schedules and Exhibits attached hereto, as the same shall be amended from time to time in accordance with the terms hereof. 1.02 CLOSING DATE. "Closing Date" shall mean the date the transactions contemplated under this Agreement are to be consummated as provided in the Agreement. 1.03 CUSTOMER. "Customer" shall mean an Person that leases equipment through a Lease with the Seller. 1.04 EQUIPMENT. "Equipment" shall mean all equipment shown and described in SCHEDULE 1.04 and all equipment which is or was subject to any one or more of the Leases and to any leases which were terminated prior to their original expiration date which was on June 30, 1999 or thereafter and the proceeds of the sale of any of the equipment hereinbefore described which took place on/or after June 30, 1999. 1.05 RESERVED 1.06 RESERVED 1.07 LEASE OR LEASES. "Lease" or "Leases" shall mean any agreement or agreements for the lease by the Seller of Equipment to any third party either shown or described in the Lease Portfolio or entered into 2 by the Seller after June 30, 1999 excepting and excluding, however, those leases shown on SCHEDULE 1.07. 1.08 LEASE PORTFOLIO. "Lease Portfolio" shall mean, all Leases shown or described in SCHEDULE 1.08. 1.09 RESERVED 1.10 PERSON. "Person" shall mean any natural person, partnership, corporation, association or other legal entity. 1.11 RESERVED 1.12 PURCHASE PRICE. "Purchase Price" shall mean that amount to be paid by the Purchaser to purchase the assets specified in this Agreement. 1.13 RECORDS. "Records" shall mean all files and records, including invoice and accounting records, correspondence with Customers and other written materials, of Seller relating to the Leases including, without limitation, as to each Lease, the documents shown on SCHEDULE 1.13. 1.14 RECURRING REVENUE. "Recurring Revenue" shall mean revenue that was received by the Seller on June 30, 1999 and thereafter, or that was received prior to June 30, 1999 but was not due until June 30, 1999 or thereafter, on account of regular periodic recurring payment obligations under any Lease during the term stated in the Lease, or during any extension of the term of the Lease or during any holdover period following expiration of the Lease term. 3 1.15 REVENUE, GENERAL. "Revenue, General" shall mean any revenue received by the Seller on June 30, 1999 and thereafter, or that was received prior to June 30, 1999 but was not due until June 30, 1999 or thereafter, derived from or with respect to any and all Leases, including, without limitation, any revenue from Lease renewals and any revenue from the sale of Equipment, excepting and excluding, however, any Recurring Revenue, and further excepting and excluding revenue generated from the transactions shown in SCHEDULE 1.15. ARTICLE II PURCHASE AND SALE 2.01 PURCHASE AND SALE. At the Closing and upon all of the terms and subject to all of the conditions of this Agreement, the Seller shall, upon performance by the Purchaser of its obligations hereunder including, without limitation, payment of the Purchase Price, sell, assign, convey, transfer and deliver to Purchaser, and Purchaser shall purchase and take possession of all Leases of the Lease Portfolio and Equipment and Seller shall assign to Purchaser and Purchaser shall assume all of the Leases in the Lease Portfolio, which shall entitle the Purchaser full right, title and ownership interest to the Equipment and the Leases and the Seller shall fulfill all of its other obligations hereunder. No sale or other transfer of any asset or liability of Seller or Golf, other than those specifically described in this Agreement, shall occur. 2.02 PAYMENT ON CLOSING. (a) At the Closing, the Purchaser shall pay the Seller the Purchase Price of $3,559,500.00 and an amount equal to the balance due on the non-recourse debt which 4 encumbers the Leases and Equipment as of the Closing Date, subject to adjustment as hereinafter provided to be paid as follows: i. The assumption by the Purchaser of all non-recourse debt which encumbers the Leases and Equipment on the Closing Date and recourse debt shown on SCHEDULE 2.02(a)i. ii. By delivery of a duly executed promissory note with interest at the rate of ten (10%) percent payable in thirty (30) consecutive equal monthly installments including both the principal and interest, otherwise in the form of Exhibit "A" attached: $400,000.00 iii. By cash to be borrowed from Excel Bank, N.A. ("Excel") or another financial institution acceptable to Purchaser in an amount required to discharge Seller's obligations, including those with Seller's affiliates as joint obligors, to Excel and to Finova Capital Corporation ("Finova") ("Seller's Obligations") estimated at, as of August 31, 1999, and not to exceed: 2,635,000.00 iv. By cash to be paid at Closing: 524,500.00 ------------- TOTAL $3,559,500.00 (b) The Purchase Price shall be: (i) reduced by the aggregate amount of all Recurring Revenue in excess of $55,000.00, if any, during each of the months of July and August, 1999 and all Recurring Revenue thereafter and until the Closing Date and shall, further, be reduced by all Revenue, General; (ii) the considerations to be paid at Closing shall be reduced by an amount equal to the reduction in the Purchase Price applied: (A) by a reduction in the cash paid to discharge Seller's Obligations pursuant to Section 2.02(a)iii hereof to the extent of any reduction of Seller's Obligations below $2,635,000.00 and (B) as to any excess by reduction in the amount of cash to be paid at Closing pursuant to Section 2.02(a)iv; and (C) if cash to be paid at Closing 5 is reduced to zero, by a reduction in the principal of the promissory note to be delivered at Closing pursuant to Section 2.02(a)ii. (c) If, during the period from June 30, 1999 to Closing Date Seller's Obligations is reduced by an amount greater than the reduction in the Purchase Price required by the provisions of Section 2.02(b), then the amount of cash to be paid by Purchaser related to Seller's Obligations pursuant to Section 2.02(a)ii shall be reduced by that excess amount and the promissory note pursuant to Section 2.02(a)i shall be increased by that excess amount. (d) All payments shall be in U.S. dollars, pursuant to Seller's wiring or other delivery instructions. 2.03 PAYMENT OF LOANS. It shall be the Seller's obligation to make, as required by applicable loan documents, all regular recurring and such other payments which are due on account of Seller's Obligations so that there is no default under any of said obligations between the date of this Agreement and the date of Closing. It is contemplated that the cash to be borrowed by the Purchaser for the purpose of the purchase shall be in an amount adequate to fully pay and discharge Seller's Obligations so that the Seller and Golf will, at the Closing, have a termination of all Seller's Obligations including, without limitation, any guaranty of Seller's Obligations by Golf. ARTICLE III REPRESENTATION AND WARRANTIES OF SELLER AND OF GOLF Seller and Golf represent and warrant to Purchaser the following: 3.01 ORGANIZATION AND OWNERSHIP OF ASSETS. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Seller has full corporate power to own the Equipment that is the 6 subject of the Lease Portfolio, and to conduct the business required of the Seller pursuant to the Leases in the Lease Portfolio. 3.02 AUTHORIZATION, ENFORCEABILITY. The execution, delivery and performance of this Agreement and all of the documents required hereby to be executed and delivered by Seller are or will at Closing be within the corporate power of Seller, and will have been duly authorized by all necessary action by Seller and, to the extent applicable, by Golf Entertainment, Inc. All Persons executing this Agreement and to execute all closing documentation are incumbent in the offices which such officers purport to hold. This Agreement is, and the other documents required will be, when executed and delivered to Purchaser, the valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms subject only to bankruptcy, insolvency, reorganization, moratoriums or similar laws in effect affecting the enforceability or rights of creditors generally and by general equitable principles which may limit the right to obtain equitable relief. 3.03 NO ADVERSE CONSEQUENCES. Except as listed on SCHEDULE 3.03, neither the execution, delivery or performance of this Agreement by Seller nor the consummation of the sale and purchase of the Lease Portfolio or the Equipment, or any other transaction contemplated by this Agreement by Seller, does or will, after the giving of notice, or the lapse of time, or otherwise: (a) conflict with, result in a breach of, or constitute a default under any Lease; (b) terminate or amend, or give any party the right to terminate or amend or refuse to perform, any Lease; 7 (c) accelerate or give any party the right to accelerate the time within which, or the terms under which, any duties or obligations are to be performed, or any rights or benefits are to be received, under any Lease; or (d) require the consent of any Person other than Seller. 3.04 TITLE TO LEASE PORTFOLIO: LIENS AND ENCUMBRANCES. Seller owns good and marketable title to all of the Leases in the Lease Portfolio free and clear of any and all mortgages, liens, encumbrances, pledges, or security interests except for security interests held by Excel and/or Finova which shall be released at Closing, and items set forth on SCHEDULE 3.04. 3.05 THE LEASES AND LEASE PORTFOLIO. Except as set forth in SCHEDULE 3.05: (a) no event of default exists under any of the Leases and no event has occurred under any of the Leases which would constitute a default thereunder but for the requirement, if any, that notice be given or time elapse or both; (b) the copies of the Leases previously furnished and to be furnished to Purchaser are true and complete copies and include any and all amendments thereto; (c) all Equipment has been paid for in full; and (d) all sales and personal property taxes due on the Equipment has been paid in full, or adequate reserves have been maintained to pay such amounts. 3.06 NO LITIGATION: LABOR DISPUTES, COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 3.06 there is no judgment, litigation, arbitration proceeding, or proceeding before or by any agency or other administrative or regulatory body, 8 authority or bankruptcy court, which, if concluded adversely to the Seller, would have a materially detrimental effect on the Lease Portfolio. 3.07 NO BROKERS. Neither this Agreement nor the sale and purchase of the Lease Portfolio or any other transaction contemplated by this Agreement was induced or procured through any Person acting on behalf of or representing Seller as broker, finder, investment, banker, financial advisor or in any similar capacity, except as identified in SCHEDULE 3.07. 3.08 BUSINESS IN THE ORDINARY COURSE. Seller represents and warrants that it has, since June 30, 1999 to the date hereof, serviced the Leases in the Lease Portfolio in the ordinary course of business in accordance with good practices, further, except as set forth in SCHEDULE 3.08 hereof, not entered into any agreements either extending the term of or renewing or modifying the terms of any of the Leases, and has not sold or disposed of any Equipment at less than reasonable fair market value. 3.09 REPRESENTATIONS AS OF THE CLOSING DATE. Seller's representations and warranties set forth in this Agreement shall be true and correct on the date of this Agreement and as of the Closing Date, as though such representations and warranties were made on and as of such time. 3.10 REPRESENTATIONS BY GOLF. Golf represents and warrants that all of Seller's and Golf's representations and warranties set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing Date, as though such representations and warranties were made on and as of such time. 9 3.11 REPRESENTATIONS BY SELLER AND GOLF. The representations and warrants of the Seller and Golf under this Article shall not, in any event, extend to any actions taken by the Purchaser in it's capacity as Asset Manager under that certain Asset Management Agreement by and between Seller and Purchaser of even date herewith with respect to any of the Assets that are the subject of this Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Seller as follows: 4.01 ORGANIZATION. Purchaser is a corporation duly organized and validly existing under the laws of the State of Connecticut. Purchaser has full corporate power to purchase the Lease Portfolio pursuant to this Agreement and to conduct the business required of the Purchaser pursuant to the Leases in the Lease Portfolio. 4.02 AUTHORIZATION: ENFORCEABILITY. The execution, delivery and performance of this Agreement and all documents required hereby to be executed and delivered by Purchaser are within the corporate power of Purchaser and have been duly authorized by all necessary corporate action by Purchaser. All persons executing this Agreement and to execute all closing documentation are incumbent in the offices which such officers purport to hold. This Agreement is, and the other documents required hereby will be, when executed and delivered by Purchaser, the valid and binding obligations of Purchaser, enforceable against Purchaser, in accordance with their respective terms subject only to bankruptcy, insolvency, reorganization, moratoriums or similar laws at the time in effect 10 affecting the enforceability or right of creditors generally and by general equitable principles which may limit the right to obtain equitable relief. 4.03 BROKERS. Neither this Agreement nor the sale and purchase of the Purchased Assets or any other transaction contemplated by this Agreement was induced or procured through any Person acting on behalf of or representing Purchaser as broker, finder, investment banker, financial advisor or in any similar capacity. 4.04 PURCHASER'S REPRESENTATIONS. Purchaser's representations and warranties set forth in this Agreement shall be true and correct on the date of this Agreement and as of the Closing Date. 4.05 REPRESENTATIONS AS OF THE CLOSING DATE. Purchaser's representations and warranties set forth in this Agreement shall be true and correct on the date of this Agreement and as of the Closing Date, as though such representations and warranties were made on and as of such time. ARTICLE V CERTAIN MATTERS PENDING THE CLOSING From and after the date of this Agreement and until the Closing Date: 5.01 SELLER'S OBLIGATIONS PENDING CLOSING. Seller and Golf do hereby covenant and agree that from the date hereof through the Closing Date, Seller shall: (a) service the Leases in the Lease Portfolio in the ordinary course of business in accordance with good practices, introduce representatives of Purchaser to Customers, and assist in the transfer of the Lease Portfolio; 11 (b) except with Purchaser's prior consent, not to be unreasonably withheld, not enter into, or become obligated under any Lease, or other agreement or commitment, relating to any of the assets which are the subject of this Agreement; (c) use it best efforts to obtain the consent of all Persons required in order to consummate the transactions contemplated by this Agreement prior to the Closing Date; (d) not issue any notices, releases, statements and communications to employees, Customers or other persons doing business with Seller and to the general public relating to the transactions covered by this Agreement except at such times and in such manner as may be approved by the Seller, approval not to be unreasonably withheld; (e) give the Purchaser notice on a periodic basis and not less than monthly of all Recurring Revenue and all Revenue, General, including a specific designation of the Lease or Equipment from which any such revenue is derived; (f) prepare and produce at the Closing a certified schedule of all Recurring Revenue and Revenue, General including as to each receipt a designation of the Lease and/or Equipment to which the receipt applies; (g) not, without written approval of the Purchaser, not to be unreasonably withheld, enter into any renewal, or other amendment, or modification of any one or more of the terms of any one or more of the Leases; and (h) procure from any lender holding a security interest not to be released at Closing on any of the Equipment and on any one or more of the Leases, a consent to the transfer of the Equipment and Leases and to the assignment and assumption agreement, and an affidavit indicating that there has not been any default on any of the obligations with respect to any such security interest. 12 5.02 EXCEPTION TO SELLER'S OBLIGATIONS PENDING CLOSING. Seller shall not be deemed to be in breach of any of its obligations pending Closing as set forth in Section 5.01 hereof to the degree that any such claimed breach of obligations either results from or arises out of any actions of the Purchaser in its capacity as Asset Manager under that certain Asset Management Agreement of even date herewith with respect to any of the Assets that are the subject of this Agreement. 5.03 PURCHASER'S OBLIGATIONS PENDING CLOSING. Purchaserdoes hereby covenant and agree that from the date hereof through the Closing Date, Purchaser shall: (a) use its best efforts to obtain the consent of all persons required in order to consummate the transactions contemplated by this Agreement prior to the Closing Date; (b) not issue any notices, releases, statements and communications to employees, Customers or other persons doing business with Purchaser and to the general public relating to the transactions covered by this Agreement except at such times and in such manner as may be approved by the Seller, approval not to be unreasonably withheld; and (c) use its best efforts to procure from Excel, and/or another qualified lending institution, financing necessary to pay and discharge the Seller's Obligations. ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER Each and every obligation of Purchaser to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing in all material respects of the following express conditions precedent. 13 6.01 COMPLIANCE WITH AGREEMENT. Seller shall have performed and complied in all respects with all of their obligations under this Agreement which are to be performed or complied with by them prior to or on the Closing Date. 6.02 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings, corporate and other, to be taken by Seller in connection with the performance of this Agreement, and all documents incident thereto, shall be complete in accordance with this Agreement. 6.03 REPRESENTATIONS AND WARRANTIES. The representations and warranties made by Seller in this Agreement shall be true and correct as of the Closing Date except to the degree that any default hereunder shall arise out of any actions taken by the Purchaser in it's capacity as Asset Manager under that certain Asset Management Agreement by and between Seller and Purchaser of even date herewith with respect to any of the Assets that are the subject of this Agreement. 6.04 NO ADVERSE CHANGE. Between the date of this Agreement and the Closing Date, there shall have been no adverse change in the financial condition or results or operation of the Lease Portfolio. 6.05 DELIVERIES AT CLOSING. Seller shall have delivered or cause to be delivered to Purchaser the documents, each properly executed and dated as of the Closing Date as required pursuant to this Agreement. 6.06 LOAN CONTINGENCY. The obligations of the Purchaser hereunder are subject to and conditioned on the Purchaser being able to procure, from Excel Bank, N.A. or another lender designated by the 14 Purchaser, on or before September 24, 1999 at 5:00 p.m., an unconditional and unqualified commitment for a loan in the amount adequate to satisfy Seller's Obligations and at an interest rate and on other terms and conditions reasonably acceptable to Purchaser. In the event that Purchaser is unable to procure such a commitment within the time limited, then it shall have the right to terminate its obligations under this Agreement by notice to the Seller given not later than forty-eight (48) hours after the expiration of the time limited for procuring the loan commitment. ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER Each and every obligation of Seller to be performed on the Closing Date shall be subject to the satisfaction prior to or at the Closing of the following express conditions precedent. 7.01 COMPLIANCE WITH AGREEMENT. Purchaser shall have performed and complied in all material respects with all of its obligations under this Agreement which are to be performed or complied with by it prior to or on the Closing Date. 7.02 PROCEEDINGS AND INSTRUMENTS SATISFACTORY. All proceedings, corporate and other, to be taken by Purchaser and Golf Entertainment, Inc. and its shareholders in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be complete in accordance with this Agreement. 7.03 REPRESENTATIONS AND WARRANTIES. The representations and warranties by Purchaser shall be true and correct as of the Closing Date. 7.04 DELIVERIES AT CLOSING. Purchaser shall have delivered or cause to be delivered to Seller the documents: 15 (a) required by this Agreement, each properly executed and dated as of the Closing Date, and also shall have made the payments described in Section 2.02(a), as adjusted; and (b) acknowledgement by each of Excel and Finova that Seller's Obligations have been paid and discharged. ARTICLE VIII INDEMNIFICATION 8.01 INDEMNIFICATION BY SELLER. If the transactions contemplated herein shall close, Seller and Golf shall indemnify and hold harmless Purchaser its successors and assigns and all directors, officers, employees and representatives of each of the foregoing and promptly defend such Persons from and against any and all losses, damages, costs, liabilities and claims of any kind which such Persons may at any time suffer or incur, or become subject to, as a result of or in connection with: (i) any breach or inaccuracy of any of the representations and warranties made by Seller in or pursuant to this Agreement; and (ii) any failure by Seller to carry out, perform, satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement or under any of the documents and materials delivered by Seller pursuant to this Agreement; (iii) Seller's rejection of any previous offer to sell its Lease Portfolio to any party other than Purchaser. 16 8.02 INDEMNIFICATION BY PURCHASER. If the transactions contemplated herein shall close, Purchaser shall indemnify and hold harmless Seller, its shareholder and affiliated entities, successors and all assigns and all directors, officers, employees and representatives of each of the foregoing from and against, and reimburse such Persons for, any and all losses, damages, costs, liabilities and claims of any kind which such Persons may at any time suffer or incur, or become subject to, as a result of or in connection with: (i) any breach or inaccuracy of any representations and warranties made by Purchaser in or pursuant to this Agreement; (ii) any failure by Purchaser to carry out, perform satisfy and discharge any of its covenants, agreements, undertakings, liabilities or obligations under this Agreement or under any of the documents and materials delivered by Purchaser pursuant to this Agreement; iii) the ownership or service of the Lease Portfolio by Purchaser from and after the Closing Date; 8.03 NOTIFICATION OF CLAIMS. (a) A party entitled to be indemnified pursuant to Section 8.01 or 8.02 hereof (the "Indemnified Party") shall notify the party liable for such indemnification (the "Indemnifying Party") in writing of any claim or demand which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement. Subject to the Indemnifying Party's right to defend in good faith third party claims as hereinafter provided, the Indemnifying Party shall satisfy its obligations under this Article within thirty (30) days after the receipt of written notice thereof from the Indemnified Party. 17 (b) If the Indemnified Party shall notify the Indemnifying Party of any claim or demand pursuant to Section 8.03(a), and if such claim or demand relates to a claim or demand asserted by a third party against the Indemnified Party which the Indemnifying Party acknowledges is a claim or demand for which it must indemnify or hold harmless the Indemnified Party under Section 8.01 or 8.02 hereof, the Indemnifying Party may elect to defend any such claim or demand asserted against the Indemnified Party. The Indemnified Party shall cooperate in the defense of any such claim or demand. The Indemnifying Party shall notify the Indemnified Party in writing, within fifteen (15) days after the date of the notice of claim given by the Indemnified Party to the Indemnifying Party under Section 8.03(a) of its election to defend in good faith any such third party claim or demand. So long as the Indemnifying Party is defending in good faith any such claim or demand asserted by a third party against the Indemnified Party, the Indemnified Party shall not settle or compromise such claim or demand. The Indemnified Party shall make available to the Indemnifying Party or its agents all Records and other materials in the Indemnified Party's possession reasonably required by it for its use in contesting any third party claim or demand. In the event that the Indemnifying Party shall elect not to defend, the Indemnified Party may, but shall not be obligated to, assume the defense of such claim at the cost and expense of the Indemnifying Party, subject to the right of the Indemnifying Party to assume the defense of such claim at any time prior to settlement, compromise or final determination thereof. Anything in this Section 8.03 to the contrary notwithstanding, (i) if there is a reasonable probability that a claim may materially and adversely affect the Indemnified Party other than as a result of money damages or other money payments, the Indemnified Party shall have the right, at its own cost and expense, to defend, compromise or settle such claim, and (ii) the Indemnifying 18 Party shall not, without the Indemnified Party's written consent, settle or compromise any claim or consent to entry of any judgment that does not include an unconditional term thereof giving by the claimant or the plaintiff to the Indemnified Party a release from all liability in respect to such claim. ARTICLE IX CLOSING 9.01 CLOSING. The closing of this transaction shall take place at 10:00 a.m. on November 19, 1999 or on such other time and date as may be agreed upon by the parties hereto at such place as may be designated by Excel, or if none is so designated, at such a place as may be agreed upon by the parties or, if there is no agreement, at the offices of Seller's attorneys, Harkleroad and Hermance in Atlanta, Georgia. 9.02 CLOSING DATE DELIVERIES. At the Closing on the Closing Date: (a) Seller shall deliver or cause to be delivered to Purchaser properly executed and dated as of the Closing Date: (i) all executed original Leases; (ii) all Records pertaining to the Leases; (iii) a Bill of Sale confirming the sale of the Equipment; (iv) an Assignment and Assumption Agreement assigning the Leases and the Lease Portfolio; (v) a certificate as to all Recurring Revenue and Revenue, General; 19 (vi) a certificate of incumbency as to any corporate officer executing any closing documents on behalf of the Seller. (vii) an opinion directed by its counsel to the Purchaser in form reasonably acceptable to the Purchaser, dated as of the Closing Date, confirming the matters set forth in Sections 3.01 and 3.02 hereof; and (viii) consents and affidavits required by Section 5.01(h); (ix) notices to all lessees of all Leases, duly executed by the Seller, of the transfer to Purchaser of Seller's interest in all Leases and Equipment, in form set forth on SCHEDULE 9.02 (ix); and (x) all other documents necessary or appropriate to complete the transaction contemplated by this Agreement. (b) Purchaser shall deliver, or cause to be delivered to Seller properly executed and dated as of the Closing Date: (i) the Cash Consideration; (ii) the Promissory Note; (iii) an Assignment and Assumption Agreement assigning the Lease Portfolio; (iv) an opinion directed by its counsel to the Seller, in form reasonably acceptable to the Seller, dated as of the Closing Date, confirming the matters set forth in Sections 4.01 and 4.02 hereof; and (vi) all other documents necessary or appropriate to complete the transaction contemplated by this Agreement. 20 ARTICLE X COVENANTs NOT TO COMPETE 10.01 CONSIDERATION. The parties acknowledges that the covenants provided for in this Article are an essential part of this Agreement and a material consideration for the undertakings of each party under this agreement. 10.02 SELLER'S COVENANT. The Seller and Golf agree that, for the period of three (3) years following the Closing Date that neither they, nor either of them will, directly or indirectly through the use of subsidiaries, affiliates or, as the subsidiary of a larger organization, negotiate, arrange for, enter into or in any other way be involved in any activities relating to or pertaining to the sale or leasing of personal property of any kind to any one or more of the persons who are lessees under any one or more of the Leases. There shall, however, be excepted and excluded from this covenant any of Seller's activities relating to or pertaining to any leases and/or equipment owned by Seller as of the date of Closing which are not included among the assets which are being sold and transferred under this agreement. 10.03 PURCHASER'S COVENANT. The Purchaser agrees that, in the event that the transactions contemplated hereby do not close for any reason, then the Purchaser will not, for a period of two years after the scheduled closing date, solicit leases from any existing customer of Seller excepting and excluding, however, Northrop/Grumman Corporation, Computer Sciences Corporation, and The Hertz Corporation. 21 10.04 REMEDIES. The parties hereto recognize that any remedy at law available for the breach of either of the covenants hereinbefore set forth will be inadequate and that offended party shall be entitled to injunctive relief, either temporary and/or permanent with respect to any violation of the covenant which shall be in addition to and not in limitation of any and all remedies that the offended party may have in either law or equity for the enforcement of this covenant. ARTICLE XI POST-CLOSING OBLIGATIONS 11.01 SELLER'S OBLIGATIONS. Seller will, after the Closing, with due diligence and in no event later than three (3) days after receipt, forward to the Purchaser by overnight mail directed to the address hereinafter given for notices to the Purchaser, all communications from any lessee under any Lease and all remittances or payments on account of any assets being sold and transferred under this Agreement. If any such remittances are by draft made payable to the Seller, then the Seller shall forward the same on to the Purchaser duly endorsed to the order of the Purchaser. ARTICLE XII TERMINATION, MISCELLANEOUS 12.01 CONFIDENTIALITY. Purchaser acknowledges that it has been given access to confidential information, including trade secrets and business and financial records of the Seller. If the transaction contemplate hereunder does not close, Purchaser shall return promptly all copies of all 22 confidential information, trade secrets, business or financial information or records of Seller to Seller, and Purchaser shall not disclose, nor use in its business in any way, and confidential information, trade secrets, or business or financial information or records of Seller. 12.02 RESERVED 12.03 EXTENSION OF CLOSING. In addition to any other provisions herein, Purchaser and Seller may elect to extend the Closing Date to any date to which such parties agree in writing. 12.04 FURTHER ASSURANCES. From time to time after the Closing Date, upon the reasonable request of Purchaser, Seller shall execute and deliver or cause to be executed and delivered such further instruments of conveyance, assignment and transfer and take such further action as Purchaser may reasonably request in order more effectively to perfect the sale, assignment, and transfer of the Lease Portfolio and the Equipment. Seller agrees to cooperate with Purchaser in all reasonable respects to assure to Purchaser the continued title to and possession of the Lease Portfolio and the Equipment. 12.05 SURVIVAL. The covenants and indemnities herein continue until all such covenants and indemnities are satisfied. The representations and warranties made in this Agreement or made pursuant hereto shall survive the Closing and the consummation of the transactions contemplated by this Agreement (except as otherwise provided herein) for a period of thirty (30) months. 12.06 ENTIRE AGREEMENT: AMENDMENT. This Agreement and the documents referred to herein and to be delivered pursuant hereto constitute the entire agreement between the parties pertaining to the subject matter hereof, and 23 supersede all prior and contemporaneous agreements, understandings, negotiations and discussions of the parties, whether oral or written, and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof, except as specifically set forth herein. No amendment, supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by both parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision of this Agreement, whether or not similar, unless otherwise expressly provided. 12.07 NOTICES. All notices shall be in writing and shall be deemed to have been properly given on the earlier of (i) when delivered in person, (ii) when deposited in the United States Mail, with adequate postage, and sent by registered or certified mail with return receipt requested, to the appropriate party at the address set out below, or (iii) when deposited with Federal Express, Express Mail or other overnight delivery service for next day delivery, addressed to the appropriate party at the address set out below. If to Purchaser: Somerset Capital Group, Ltd. 1087 Broad Street, Suite 201 Bridgeport, Connecticut 06604-4260 With a copy to: Bernard Green, Esq. Green and Gross, P.C. 1087 Broad Street Bridgeport, Connecticut 06604 If to Seller: LEC Leasing, Inc. Three Northwinds Center Road 2500 Northwinds Parkway, Suite 175 Alpharetta, Georgia 30004 24 With a copy to: Harkleroad & Hermance, P.C. Suite 2500 - International Tower 229 Peachtree Street, N.E. Atlanta, Georgia 30303 Rejection or other refusal by the addressee to accept, or the inability of the courier service or the United States Postal Service to deliver because of a changed address of which no notice was given, shall be deemed to be receipt of the notice sent. Any party shall have the right, from time to time, to change the address to which notices to it shall be sent by giving to the other party or parties at least ten (10) days prior notice of the changed address in the manner provided herein. 12.08 COUNTERPARTS, HEADINGS. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but such counterparts shall together constitute but one and the same agreement. Article and Section headings in this Agreement are inserted for convenience of reference only and shall not constitute a part hereof. 12.09 SEVERABILITY. If any provision, clause, or part of this Agreement or the application thereof under certain circumstances is held invalid, the remainder of this Agreement, or the application of such provision, clause or part under other circumstances shall not be affected thereby. 12.10 NO RELIANCE. (a) no third party is entitled to rely on any of the representations, warranties and agreements of Purchaser and Seller contained in this Agreement; and (b) Purchaser and Seller assume no liability to any third party because of any reliance on the representations, warranties and agreements of Purchaser and Seller contained in this Agreement. 25 12.11 TIME OF ESSENCE. Time if of the essence of this Agreement. 12.12 SINGULAR/PLURAL; GENDER. Where the context so requires or permits, the singular form includes the plural, and the use of the plural form includes the singular, and the use of any gender includes any and all genders. 12.13 GOVERNING LAW. All or part of this Agreement and the legal relations between the parties hereto has been negotiated in the State of Connecticut. This Agreement is to be governed by and construed in accordance with the laws of the State of Connecticut. The parties hereto consent to jurisdiction and venue in the Connecticut Courts of Fairfield County, Connecticut or in the courts of Fulton County, Georgia and in the United States District Court for the District of Connecticut or the Northern District of Georgia for all actions and proceedings relating to this Agreement and the transactions contemplated herein excepting and excluding however any actions brought with respect to Article XI. 12.14 LITIGATION. In any litigation arising out of or under this Agreement, the court deciding the matter shall have the right to award to any prevailing party or parties all reasonable and necessary expenses incurred in either the prosecution or defense of the litigation including, without limitation, reasonable attorneys' fees. 26 12.15 JOINT PREPARATION. This Agreement shall be deemed to have been jointly prepared, and no ambiguity herein shall be construed against any party based upon the identity of the author of this Agreement or any portion hereof. 12.16 EXPENSES. Each party shall bear its expenses incurred in connection with this Agreement and in connection with all things required to be done by each hereunder. 12.17 ASSIGNMENT. Neither party hereto may assign its rights or obligations hereunder without the written consent of the other party hereto until the closing occurs; thereafter, all rights and obligations that remain hereunder shall inure to and be binding upon the parties and their respective successors and assigns. 12.18 INCOME TAX POSITION. Neither Purchaser nor Seller shall take a position for income tax purposes which is inconsistent with this Agreement. 27 IN WITNESS WHEREOF, the parties have caused this Purchase and Sale Agreement to be duly executed and sealed as of the day and year first above written. SELLER: LEC LEASING, INC. By:/s/ Ronald G. Farrell --------------------------------- Title: President ----------------------------- Attest: /s/ William J. Vargas ----------------------------- Title: Chief Financial Officer ----------------------------- [CORPORATE SEAL] GOLF ENTERTAINMENT, INC. By:/s/ Ronald G. Farrell --------------------------------- Title: President ----------------------------- Attest: /s/ William J. Vargas ----------------------------- Title: Chief Financial Officer ----------------------------- [CORPORATE SEAL] PURCHASER: SOMERSET CAPITAL GROUP, LTD. By: /s/ Pedro Wasmer ----------------------------- Title: President -------------------------- Attest: [ILLEGIBLE] -------------------------- Title: V.P. & Corp. Secy. -------------------------- [CORPORATE SEAL] 28 EXHIBIT "A" PROMISSORY NOTE PROMISSORY NOTE $400,000 October ____, 1999 FOR VALUE RECEIVED, the undersigned, (hereinafter referred to as "Maker"), promises to pay to the order of LEC LEASING, INC., (hereinafter referred to as "Payee", which term shall include any holder hereof), at 9925 Haynes Bridge Road, Alpharetta, Georgia 30202, or at such other place as Payee may designate, the principal sum of Four Hundred Thousand Dollars ($400,000), together with all charges herein provided and interest thereon at the annual rate of ten percent (10%) on the unpaid balance from the date hereof, payable in immediately available U.S. funds or in other form reasonably satisfactory to Payee, at the rates and in the manner hereinafter set forth. On the first day of the first calendar month after the date of this Note, the Maker shall pay the interest accrued on this Note to the end of the prior month. Thereafter, this Note shall be due and payable in thirty (30) consecutive equal monthly payments, each in the amount of $14,999.57 to be applied first on account of interest accrued on the Note to the date of payment and, thereafter, in reduction of principal with the first such installment to be due and payable on the first day of the second calendar month following the month during which this Note is made. If not sooner paid, the entire balance of this Note shall be due and payable ___________, 2002. Maker may prepay all or any portion of the amount due hereunder without penalty, provided however that any prepayment of principal or reduction in the principal amount of this Note shall not reduce the principal amount due of any monthly payment, until this Note is paid in full. Upon the failure by Maker to make any payment of principal or interest or any combination thereof on this Note, when due or within any applicable cure period, at the option of Payee, the entire unpaid balance of principal and interest evidenced by this Note shall immediately become due and payable without demand made therefor and without notice to any person, notice of the exercise of said option being hereby expressly waived, and Payee shall have all remedies available under law and equity, time being of the essence of this Note. Upon the failure to make a payment when due, Payee may send notice of such failure by means permitted in the Purchase and Sale Agreement of even date herewith. Presentment for payment, notice of dishonor, protest, notice of protest and diligence in bringing suit against any party hereto are hereby waived by Maker. Neither any forbearance nor any delay of the Payee to exercise any right, remedy, power or privilege under this Note, nor any course of dealing between any of the Maker and the Payee, shall operate as a waiver hereof or impair any such right, remedy, power or privileges by Payee shall preclude further or other exercise thereof. This Note shall be governed by and interpreted in accord with the laws thereof. The Maker consents to jurisdiction and venue in the Georgia Courts of Fulton County, Georgia and in the United States District Court for the Northern District of Georgia. If this Note is not paid when due, Maker shall also be liable for reasonable legal fees relating to the collection hereof. The provisions of this Note are deemed to be severable, and the invalidity or unenforceability of any provision shall not affect or impair the remaining provisions, which shall continue in full force and effect and no modification of this Note shall be binding or enforceable unless in writing and signed by or on behalf of the party against whom enforcement is sought. All capitalized terms herein shall have the same meaning as such term has in the Purchase and Sale Agreement of even date herewith. This Note is subject to rights which the Maker has as Purchaser under said Purchase and Sale Agreement. IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby have caused this Note to be duly executed the day and year first above written under the undersigned's hand and seal. Somerset Capital Group, Ltd. By: ________________________________ Its: ________________________________ 2 EXHIBIT "B" BILL OF SALE BILL OF SALE This Bill of Sale is entered into under the following circumstances: Somerset Capital Group, Ltd., a Connecticut corporation ("Purchaser") and LEC Leasing, Inc. ("Seller"), a Nevada corporation have entered into an agreement this same date, (the "Agreement") for the sale by Seller to Purchaser of certain business equipment as set forth on SCHEDULE 1.04 to the Agreement, which equipment is currently being leased to various customers pursuant to Leases, as further defined in the Agreement, for consideration specified in the Agreement. In view of such Agreement, Seller, for good and valuable consideration paid, and pursuant to the Agreement, does hereby sell, assign, transfer and deliver to Purchaser the Equipment as set forth on SCHEDULE 1.04. This Bill of Sale is executed and delivered this ___ day of _________1999. LEC LEASING, INC. By: __________________ Title: _______________ Attest: ______________________ Title: _______________________ [CORPORATE SEAL] EXHIBIT "C" ASSIGNMENT AND ASSUMPTION AGREEMENT ASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement is entered into by and between Somerset Capital Group, Ltd. ("Purchaser") and LEC Leasing, Inc. ("Seller"), as of this ___day of ___________, 1999. In view of the fact that Seller and Purchaser have entered into an agreement (referred to as the "Agreement") this same day whereby Seller will assign, and Purchaser will assume, all rights and obligations of Seller under certain Leases, as listed on SCHEDULE 1.04, 1.08 and 3.04 of the Agreement, the parties agree as follows: Seller does hereby assign all of its right, title, interest and obligations pursuant to the Leases listed in the Agreement. Purchaser does hereby assume and agree to perform, discharge, pay, and fully satisfy, all of the obligations and commitments of Seller arising from the Leases listed in either SCHEDULE 1.04, 1.08 or SCHEDULE 3.04 of the Agreement, whether primary, secondary, matured or unmatured, fixed, absolute or contingent, including, all obligations, if any, of Seller with respect to repair or payment for the Equipment, and Purchaser shall all also assume all rights of Seller pursuant to such Leases, including but not limited to, the right, if any, to receive payments under such Leases. 1 This Assignment and Assumption Agreement is executed and delivered this ______ day of ________________, 1999. LEC LEASING, INC. By: __________________________ Title:________________________ Attest: ___________________________ Title: ____________________________ [CORPORATE SEAL] SOMERSET CAPITAL GROUP, LTD. By: __________________________ Title: _______________________ Attest: ___________________________ Title: ____________________________ [CORPORATE SEAL] GOLF ENTERTAINMENT, INC. By: __________________________ Title: _______________________ Attest: ___________________________ Title: ____________________________ [CORPORATE SEAL] 2 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1546 H-8250-A HERTZ CORP. 1588 AP-GRP-14 BED, BATH & BEYOND 5 IBM 4683 P41 REGISTERS 5 IBM 4683 002 REGISTERS 1597 TC-VM-SF TIFFANY & CO 1 AT&T 7056 ASD VOICE MAIL 1600 TC-PBX-GA TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1602 AP-GRP-15 BED, BATH & BEYOND 10 IBM 4683 P42 REGISTERS 8 IBM 4683 002 REGISTERS 1607 TC-PBX-VA TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1608 TC-PBX-BOS TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1610 AP-GRP-16 BED, BATH & BEYOND 14 IBM 4693 421 REGISTERS 1611 AP-087-01 BED, BATH & BEYOND 12 IBM 4693 421 REGISTERS 1617 NMM-002 NAT'L MERCHANTS MKTG 2 IBM 4693 421 REGISTERS 3 IBM 4693 541 REGISTERS 1618 TC-4683-MAD TIFFANY & CO 2 IBM 4693 541 REGISTERS 1619 TC-4693-HR TIFFANY & CO 8 IBM 4693 541 REGISTERS 1620 TC-4693-WP TIFFANY & CO 9 IBM 4693 541 REGISTERS 1621 TC-4693-LAB TIFFANY & CO 1 IBM 4693 541 REGISTERS 3 IBM 4019 039 PRINTERS 1622 TC-4693-SH TIFFANY & CO 8 IBM 4693 541 REGISTERS 1 IBM 4693 541 REGISTERS 1 IBM 9577 DNG CONTROLLER 1623 TC-4693-NY TIFFANY & CO 21 IBM 4693 541 REGISTERS 47 IBM 4693 541 REGISTERS 1624 TC-PBX-DAL TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1625 TC-PBX-CM TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1626 TC-PBX-BH TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1627 TC-PBX-TROY TIFFANY & CO 1 AT&T PBX TELEPHONE SYS 1629 HGC-TJLR HARTFORD GRAD CTR 1 IBM 9402 200 PROCESSOR 1631 AP-086-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1632 AP-088-01 BED, BATH & BEYOND 12 IBM 4693 421 REGISTERS 1637 NMM-003 NATIONAL BOOK 6 IBM 4693 421 REGISTERS 4 IBM 4693 741 REGISTERS
Schedule 1.04 Page 1 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1638 AP-093-01 BED, BATH & BEYOND 12 IBM 4693 421 REGISTERS 1639 HGC-007R HARTFORD GRAD CTR 1640 AP-096-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1641 TC-VM-CH TIFFANY & CO 1 AT&T 7056 PSD VOICE MAIL 1643 AP-090-01 BED, BATH & BEYOND 12 IBM 4693 421 REGISTERS 1644 TC-VM-SD TIFFANY & CO 1 AT&T 7056 ASD VOICE MAIL SYST 1645 AP-091-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1649 AP-089-01 BED, BATH & BEYOND 8 IBM 4693 421 REGISTERS 1650 AP-092-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1652 AP-097-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1655 AP-098-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1656 AP-094-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1658 TC-4693-MAD1 TIFFANY 2 IBM 4693 541 REGISTERS 1659 AP-099-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1660 AP-082-01 BED, BATH & BEYOND 12 IBM 4693 421 REGISTERS 1661 AP-100-01 BED, BATH & BEYOND 10 IBM 4693 421 REGISTERS 1666 TC-4693-NY1 TIFFANY & CO 13 IBM 4693 541 REGISTERS 1667 TC-4693-KOP TIFFANY & CO 8 IBM 4693 541 REGISTERS 1668 NNM-004 NATIONAL BOOK 4 IBM 4693 421 REGISTERS 1674 AP-031-01 BED, BATH & BEYOND 4 IBM 4693 421 REGISTERS 1676 NNM-005 NATIONAL BOOK 2 IBM 4693 741 REGISTERS 6 IBM 4693 421 REGISTERS 1681 ND-132 NEWSDAY 1 EMC 5500 9M42 TAPE ROBOTIC 1686 HGC-009R HARTFORD GRADUATE CENTER 1693 TC-VM-PB TIFFANY & CO AT&T 7056 ASN VOICE MAIL 1694 TC-VM-BAL TIFFANY & CO AT&T 7056 ASN VOICE MAIL 1695 TC-VM-OB TIFFANY & CO AT&T 7056 ASN VOICE MAIL 1696 TC-VM-HO TIFFANY & CO AT&T 7056 ASN VOICE MAIL 1698 ND-133 NEWSDAY 1 P120 CHATTERBOOK CD
Schedule 1.04 Page 2 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1700 TC-VM-TO TIFFANY & CO AT&T 63153P VOICE MAIL 1704 NNM-006 NATIONAL BOOK 4 IBM 4693 421 REGISTERS 1705 TC-4693-XTRA TIFFANY & CO 4 IBM 4693 741 REGISTERS 1706 TC-4693-BH TIFFANY & CO 12 IBM 4693 741 REGISTERS 1707 TC-4693-DC TIFFANY & CO 7 IBM 4693 741 REGISTERS 1708 TC-4693-CM TIFFANY & CO 8 IBM 4693 741 REGISTERS 1709 TC-4693-AT TIFFANY & CO 7 IBM 4693 741 REGISTERS 1710 TC-VM-PH TIFFANY & CO AT&T 7056 PSN VOICE MAIL 1712 NNM-007 NATIONAL BOOK 1 YALE FORKLIFT 1713 TC-4693-CC TIFFANY & CO 7 IBM 4693 741 REGISTERS 1715 ND-135 NEWSDAY 1 INNOVATIVE HASN 335 MAILING MACHINE 1718 TC-VIDEO-F TIFFANY & CO AT&T 3830 527 VIDEO CONFERENCE 1720 TIFFANY & CO 2 AT&T 3830 527 VIDEO CONFERENCE 1723 CASE CORP 2 MEMOREX 5600 SULTAN AUTO ROBOTIC LIBRARY 1724 TIFFANY & CO 10 IBM 5494 EXT CONTROLLER 10 IBM 5494 1100 TOKEN RING ADP 10 IBM 5494 1200 TWINAX EXP KIT 1726 CASE 13 HUGHES VSAT 1.2M SATTELITE DISH 1727 CASE 19 HUGHES VSAT 1.2M SATTELITE DISH 1728 CASE 24 HUGHES VSAT 1.2M SATTELITE DISH 1729 CASE 16 HUGHES VSAT 1.2M SATTELITE DISH 1731 HARTFORD GRAD 1 SUN X972A RACK MOUNT RAILS 4 SUN M1170 M1200 UPGRADE\ULTRA 2 5 SUN UBA1-92 128EB 167MHZ,128MB,2X2G 4 SUN X5501A 8.4G 5400PRM SCSI 1 SUN X1021A PRESTOSERVER NFS 13 SUN X1018A SBUS ADAPTER 5 SUN X6272A 16-32G 4MM TAPE AUTO 7 SUN X903A 50-68 1.2 METER EXT 5 SUN X904A 50-68 2.0 METER EXT 2 SUN UNFIR-MSC 2.0-P SPAC FIREWAL 2 SUN FIR-2.0-P FIREWALL-1.2 1 SUN X5161A INT DISKBD 4GB
Schedule 1.04 Page 3 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 SUN ENTCAB EXPANSION CABINET 1 SUN X5511A DISK 4.2GB/7200 1 SUN X5151A DISK 2GB/7200 2 SUN X7001A OPT MEMORY 32MB 3 SUN X765A INT DISK 2GB 1 SUN X5225A INT DISK 4GB/5400 2 SUN X907A CABLE 1 SUN ENT4000 4000 SERVER FAMIL 1 SUN X790A STORAGE ARRAY MD 1 SUN X1057A CHNL HOST ADAPT 2 SUN X6253A 4-8GB 4MM TAPE 2 SUN X6152A CD SPRCSTRG 1 SUN X5156A 644M INT CD 1 SUN X5153A 2G INT DISK 2 SUN X7001A 32M MEMEORY 1 SUN NETRA-I 1145 143MHZ 17" 2 CISCO VIP2-20 PROC. 2 MODEL 20 2 CISCO PA-FE-TX 1 PORT ADAPTER 1 CISCO PA-8E 8PORT ETHERNET 1 CISCO CAB-V35MT CABLE 1 CISCO 7507 7SLOT,2CYBUS 1 CISCO MEM-RSP FLC16M FLASH MEM 16MG 1 CISCO MEM-RSP 32 RSP1/2 DRAM 32MG 1 CISCO SF-G75BS 11.0.7 DESKTOP 1 CISCO 2511 COMSRV/RTR 2500 2 CISCO SF25E REM.ACCES SERVER 2 CISCO MEM-1X16D 16MB RAM SIMM 3 CISCO CAB-OCTAL KIT CABLE 1 CISCO 2509 COMSRV/RTR 2500 2 CISCO MEM-1X8F-U ADD'L 8MB FLASH 1 CISCO WS-C5001 CATALYST 500-SVR 2 CISCO WS-X5213 CATALYST 5K ETHER 1 CISCO WS-C2901 14 PORT SE SWITCH 2 CISCO WS-C3016A CATALYST 3000 2 CISCO WS-X3002 4 PORT 10-BASE-T 2 CISCO WS-X3001 100 BASE-T MODULE 1 CISCO FR-NF75 7500 SWITCHING LIC 2 CISCO WX-X3004 CAT\3000 STACKPORT 1 CISCO CWSI-1.0 SOLAR SOLARIS STANDALONE 1 QMS 2425EX PRT-SYS, 110V 1 QMS P550 DUPLEX KIT 1 QMS 2425 KIT,OPT,PRT-SYS 1 QMS 2600 433-103 KIT,OTRBD,MULTI 4 LEXMARK OPTRA LEXMARK PRINTER 4 LEXMARK DUPLEX OPTRA DUPLEXER 3 LEXMARK DUAL-R DUAL R FEEDER 4 LEXMARK 16MB MEMORY 2 LIGHTWAVE SCS RACK MOUNT 12 PRT 6 LIGHTWAVE DUAL 2 PORT SPOOLER MODULE 6 LIGHTWAVE CABLE RJ45 2 MET 6 LIGHTWAVE CABLE RJ45 5 MET 12 LIGHTWAVE RECEPTACL CONSOLE ADAPTER
Schedule 1.04 Page 4 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1732 PEROT 1 CISCO AS5200 ETHERNET AS5200 1 CISCO AS5200 2500 2500 SERIES IOS 1 CISCO AS5200 DRAM 12MG UPGRADE 1 CISCO AS5200 4MB BOOT FLASH 1 CISCO AS52 2CT1 DUAL T1/PRI CARD 1 CISCO AS52 24B-MCOM V.34 CARRIER CARD 1735 TIFFANY & CO 1 IBM 9406 500 LIC SYSTEM UNIT 1 IBM 9406 2612 EIA 232/V.24 ADP 1 IBM 9406 2142 12.6 RPR PROC 1 IBM 9406 2613 V.35 1-LINE ADP 1 IBM 9406 2619 16/4MBPS TKN RNG 1 IBM 9406 2621 MEDIA DEVICE 1 IBM 9406 2623 COMM CONTROLLER 2 IBM 9406 2644 3490 MAGNETIC TP 1 IBM 9406 2674 OPTICAL BUS ADP 1 IBM 9406 2686 OPTICAL (266MBPS) 2 IBM 9406 3184 32MB MAIN STORAGE 1 IBM 9406 5051 8 DISK UNIT STG 1 IBM 9406 5052 16 DISK UNIT 1 IBM 9406 5070 UNIT EXP TOWER 2 IBM 9406 5143 BULK 400 POWER 4 IBM 9406 6050 TWINAX WKST CTR 1 IBM 9406 6380 2.5GB CART TAPE 2 IBM 9406 6512 DISK UNIT CNTRL 25 IBM 9406 6606 1.96GB DISK UNIT 2 IBM 9406 8186 128MB MAIN STOR 52 IBM CABLES 1746 CASE 17 HUGHES VSAT 1.2M SATTELITE DISH 1747 CASE 8 HUGHES VSAT 1.2M SATTELITE DISH 1751 TIFFANY & CO 1 IBM 9406 6607 4.19GB DISK UNIT 1755 TIFFANY & CO 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 5494 1100 TOKEN RING ADP 1 IBM 5494 1200 TWINAX EXP KIT 1761 NORTHROP 1 IBM 7006 42T RISC/600 1 IBM 7006 3030 1080MB SCSI2 DISK 1 IBM 7006 2610 3.5-2.88MB DISK DR 1 IBM 7006 2643 GXT500 GRAPH ADAPT 1 IBM 7006 3107 SER PORT CONV CABLE 1 IBM 7006 3610 P70 MONITOR 19.1" 4 IBM PNY 32MB PYN MEMORY 1 IBM 7006 4043 5MB L2 CACHE 1 IBM 7006 9397 1080MB BSE SCSI DR 1 IBM 7006 9800 POWER CORD 4 IBM 7006 42T RISC/600 4 IBM 7006 3030 1080MB SCSI2 DISK 4 IBM 7006 2610 3.5-2.88MB DISK DR 4 IBM 7006 2643 GXT500 GRAPH ADAPT 4 IBM 7006 3107 SER PORT CONV CABLE 4 IBM 7006 3610 P70 MONITOR 19.1"
Schedule 1.04 Page 5 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 4 IBM 7006 3750 WRAP PLUG 4 IBM 7006 3751 DIAGNOSTIC MEDIA 16 SIMMS PNY 32MB MEMORY 4 IBM 7006 4043 5MB L2 CACHE 4 IBM 7006 9010 KEYBOARD 101 KEYS 4 IBM 7006 9041 3 BUTTON MOUSE 4 IBM 7006 9300 LANGUAGE GROUP 4 IBM 7006 9397 1080MB BASE SCSCI DR 4 IBM 7006 9800 POWER CORD 16 IBM 7006 42T RISC/600 16 IBM 7006 3030 1080MB SCSI2 DISK 16 IBM 7006 2610 3.5-2.88MB DISK DR 16 IBM 7006 2643 GXT500 GRAPH ADAPT 16 IBM 7006 3107 SER PORT CONV CABLE 16 IBM 7006 3610 P70 MONITOR 19.1 16 SIMMS PNY 32MB MEMORY 16 IBM 7006 4043 5MB L2 CACHE 16 IBM 7006 9010 KEYBOARD 101 KEYS 16 IBM 7006 9041 3 BUTTON MOUSE 16 IBM 7006 9300 LANGUAGE GROUP 16 IBM 7006 9397 1080MB SCSI2 DISK DR 16 IBM 7006 9800 POWER CORD 21 IBM 6094 020 LIGHT PGM K/B 21 IBM 6094 010 DIALS 21 IBM 6093 011 CURSOR PAD 1762 NORTHROP 1 IBM 7006 42T RISC/6000 1 IBM 7006 3030 1080MB SCSI2 DISK 1 IBM 7006 2610 3.5-2.88MB DISK DR 1 IBM 7006 2643 GXT500 GRAPH ADAPT 1 IBM 7006 3107 SER PORT CONV CABLE 1 IBM 7006 3610 P70 MONITOR 19.1" 4 SIMMS PNY 32MB MEMORY 1 IBM 7006 4043 5MB L2 CACHE 1 IBM 7006 9010 KEYBOARD 101 1 IBM 7006 9041 3 BUTTON MOUSE 1 IBM 7006 9300 LANGUAGE GROUP 1 IBM 7006 9397 1080MB SCSI2 DISK DR 1 IBM 7006 9800 POWER CORD 1 IBM 6094 020 LIGHT PGM K/B 1 IBM 6094 010 DIALS 1 IBM 6093 011 CURSOR PAD 1763 NORTHROP 5 IBM 7006 42T RISC 6000 5 IBM 7006 3030 1080MB SCSI2 DISK 5 IBM 7006 2610 3.5-2.88MB DISK DR 5 IBM 7006 2643 GXT500 GRAPH ADAPT 5 IBM 7006 3107 SER PORT CONV CABLE 5 IBM 7006 3610 P70 MONITOR 19.1" 20 SIMMS PNY 32MB MEMORY 5 IBM 7006 4043 5MB L2 CACHE 5 IBM 7006 9010 KEYBOARD 101 5 IBM 7006 9041 3 BUTTON MOUSE 5 IBM 7006 9300 LANGUAGE GROUP
Schedule 1.04 Page 6 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 5 IBM 7006 9397 1080MB SCSI2 DISK DR 5 IBM 7006 9800 POWER CORD 5 IBM 6094 020 LIGHT PGM K/B 5 IBM 6094 010 DIALS 5 IBM 6093 011 CURSOR PAD 1770 TIFFANY & CO 1 IBM 9406 500 LIC SYSTEM UNIT 1 IBM 9406 2142 500 PROCESSOR 1 IBM 9406 2612 EIA 232/V.24 ADP 1 IBM 9406 2619 16/4MBPS TOKEN 1 IBM 9406 5006 BACKUP TAPE 1 IBM 9406 5143 400W POWER SUPPLY 1 IBM 9406 6380 2.5GB 1/4" CART TP 1 IBM 9406 6512 DISK UNIT CNTRL/RAID 11 IBM 9406 6607 4.19GB DISK UNIT/A 2 IBM 9406 8186 4.19GB DISK UNIT/A 1771 TIFFANY & CO 1 IBM 7857 017 19.2 BAUD MODEM 1773 TIFFANY & CO 3 IBM 9406 6607 4.19GB DISK UNIT/A 1774 TIFFANY & CO 9 IBM 4693 741 BASE POS TERMINAL 9 IBM 4693 0149 TOKEN RING ADPT 9 IBM 4693 3324 KEYBOARD 9 IBM 4693 3326 DISTR K/B CABLE 9 IBM 4693 3330 KEYBUTTON KIT 9 IBM 4693 3360 CASH DRAW ASSEMBLY 9 IBM 4693 3365 DIST CASH DRAW CBL 9 IBM 4693 3390 TOKEN RING CABLE 9 IBM 4693 3879 TILL FOR CASH DRAW 9 IBM 4693 3924 MONO VIDEO DISPLAY 9 IBM 4693 4635 BATTERY 9 IBM 4693 4654 4MB MEMORY 9 IBM 4693 4800 MDL 4 PRINTER 9 IBM 4693 4922 PRINTER DIST CABLE 9 IBM 4693 4923 PRINTER RIBBON 9 IBM 4693 7429 MONITOR STAND 1 IBM 6887 750 CONTROLLER 1 IBM 6887 G40 14" MONITOR 1 IBM 6887 7632 TOKEN RING NETWORK 1 IBM 6887 7099 MULTI PROTOCOL ADP 1 IBM 6887 7498 POS EXPANSION CARD 1 IBM 6887 3111 DUAL STORE TAPE 1 IBM CABLE PRINTER 1 IBM HOST COMM CABLE 1 IBM 14.4 DATA MODEM 1 LEXMARK 4039 10T LASER PRINTER 1776 NEWSDAY 6 MICROAGE POWERCORD 166CLONE 6 MICROAGE 64MB MEMORY UPGRADE 6 MICROAGE INTERNAL ZIP DRIVE 1 MICROAGE HP LASERJET PRINTER 1779 NATIONSBANC 2 STORAGETEK SD 3H32 CARTRIDGE DRIVE 2 STORAGETEK 9415 OVERHEAD DISPLAY
Schedule 1.04 Page 7 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 STORAGETEK 2511 AUTO CARTRIDGE LIBR 2 STORAGETEK 3R13 RW,CTU,SCSI ADAPT 2 STORAGETEK 3R23 RW,CTU,SCSI ADAPT 1781 NAT'L MERCHANT 1 IBM 4693 741 POS TERMINAL 7 IBM 4693 421 POS TERMINAL 1 IBM V.3229 MODEM 1 IBM CABLE 10 IBM T/R CABLE 25' 1 IBM RJ45 MAY-8 PORT 1782 TIFFANY & CO 1 IBM 9406 6501 DASD CONTROLLER 1783 TC-4693-XTRAA TIFFANY & CO 1785 TIFFANY & CO 4 IBM 4693 741 BASE POS TERMINAL 4 IBM 4693 0149 TOKEN RING ADPT 4 IBM 4693 3324 KEYBOARD 4 IBM 4693 3326 DISTR K/B CABLE 4 IBM 4693 3330 KEYBUTTON KIT 4 IBM 4693 3360 CASH DRAW ASSEMBLY 4 IBM 4693 3365 DIST CASH DRAW CBLE 4 IBM 4693 3390 TOKEN RING CABLE 4 IBM 4693 3879 TILL FOR CASH DRAW 4 IBM 4693 3924 MONO VIDEO DISPLAY 4 IBM 4693 4635 BATTERY 4 IBM 4693 4654 4MB MEMORY 4 IBM 4693 4800 MDL 4 PRINTER 4 IBM 4693 4922 PRINTER DIST CABLE 4 IBM 4693 4923 PRINTER RIBBON 4 IBM 4693 7429 MONITOR STAND 1787 TIFFANY & CO 1 AT&T 2177 GEI DATAPORT EXTERNAL 3 AT&T 2178 001A DEFINITY MULTIMEDIA 1 AT&T 2565 B4S XSX4 BRI (PBX) 2 AT&T 27634 ABC DTE CABLE 1 AT&T 3830 088 MDL 650 DOC CAMERA 1 AT&T 3830 198 S4000 PFS OPTION 1 AT&T 3830 532 S4500 ZX W/32" MONT 1 AT&T 3835 211 APPL INTEG T1 1 AT&T 69770 NULL MODEM ADPT 3 AT&T 8302 901A POWERKIT FOR DEFIN 1788 TIFFANY & CO 1 IBM 9406 2644 3490 MAGNETIC TAPE 1790 NAT'L MERCHANT 2 IBM 4693 421 POS TERMINAL 2 IBM T/R 25' CABLE 1 IBM 4693 741 POS TERMINAL 1 IBM V.3229 MODEM 1 IBM MODEM CABLE 1791 PEROT 1 AMDAHL SP100 8121 SPECTRIS STORAGE 1794 PEROT 1 AMDAHL SP100 8121 SPECTRIS STORAGE
Schedule 1.04 Page 8 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1795 NATIONSBANC 1 STORAGETEK SD-3H32 3H34 MODEL UPGRADE 1796 BLUE CROSS 1 AMDAHL SP100 8121 SPECTRIS STRGE PROC 1798 LETHOFF 1 IBM 9406 D35 AS\400 3 IBM 9332 600 DISC STORAGE 1 IBM 4019 001 LASER PRINTER 1 IBM 9309 002 RACK ENCLOSURE 1 IBM 5853 002 MODEM 1 IBM 4234 002 DOT BAND PRINTER 1800 NATIONSBANC 1 STORAGETEK SD-3H32 3H34 MODEL UPGRADE 1806 CASE 8 SUTMYN 959361 001 ERSCON CHANNELS 8 SUTMYN 54942561 CABLE 1809 TIFFANY & CO 1 IBM 9348 001 MAGNETIC TAPE UNIT 1810 NEWSDAY 1 HP HP755CM COLOR PRNT-PLOTTER 1815 BLUE CROSS 1 AMDAHL HDS 7700 DISK ARRAY SUBSYS 1816 BLUE CROSS 12 CISCO WS-5020BF 5K START KIT-CHASSIS 2 CISCO WS-C5000 CATALYST 5000 CHAS 2 CISCO WS-5008A POWER SUPPLY 2 CISCO WSC5008A/2 DUAL POWER SUPPLY 2 CISCO WS-X5006 FX MULTI MODE FIBER 8 CISCO WS-X5213 5K 10/100 ETHERNET 24 CISCO WS-C5020 10BT GRP ETHERNET 12 CISCO WS-C0058A POWER SUPPLY 1818 CASE 70 HUGHES VSAT 11.2M SATTELITE DISH 1819 BED BATH & BEY 7 LEXMARK 15A1000 LASER PRINTER 7 LEXMARK I-DATA TWINAX CONVERTER 91 IBM 3488 V13 INFOWINDOW 91 IBM G41 14" MONITOR 1820 TC-AS400-1 TIFFANY & CO 1823 BLUE CROSS 2 STORAGETEK 9490 M34 CARTRIDGE SUBSYS 2 STORAGETEK 9311 001 LIBRARY CTL UNIT 2 STORAGETEK 9310 001 POWDERHORN 6000 CART 2 STORAGETEK 4420 001 PASS THRU PORT 1824 TIFFANY & CO 1 IBM 9406 510 UPGRADE TO 510 1 IBM 9406 6512 DISK UNIT CNTRLR 6 IBM 9406 6607 4.19GB DISK UNIT/A 2 IBM 9406 7255 OPT BASE 256MB 1 IBM 9406 5080 256MBPS STRGE UNIT 1 IBM 9406 2143 510 PROCESSOR 1 IBM 9406 3154 128MB MAIN STORAGE 1825 NEWSDAY 2 MICRON P150 LAPTOPS 1826 TIFFANY & CO 3 IBM 4694 244 POS TERMINAL
Schedule 1.04 Page 9 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 3 IBM 4694 3324 POS KEYBOARD 3 IBM 4694 3325 INTEGRATED K/B CBLE 3 IBM 4694 3330 KEYBUTTON KIT 3 IBM 4694 3360 CASH DRAW ASSEMBLY 3 IBM 4694 3364 INTEG CASH CABLE 3 IBM 4694 3390 TOKEN RING CABLE 3 IBM 4694 3879 TILL/CASH DRAW 3 IBM 4694 3920 VIDEO DISPLAY 3 IBM 4694 4800 MODEL 4 PRINTER 3 IBM 4694 4920 PRINTER INTEG CABLE 3 IBM 4694 4923 PRINTER RIBBON 3 IBM 4694 7462 TOKEN RING NETWORK 3 IBM 4694 7900 DUMP SWITCH 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1827 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEGRATED K/B CBLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 2 SUREMARK 4610 T12 POS PRINTER 2 4610 3455 INTEG PLATE 2 4610 4920 INTEG PART CABLE 1 IBM 6887 KAG 750 CONTROLLER 2 IBM 92G7632 NETWORK ADAPTER 2 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DR 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1828 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEY BOARD 2 IBM 4694 3325 INTEG K/B CABLE
Schedule 1.04 Page 10 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 244 POS TERMINAL 5 IBM 4694 3324 POS KEYBOARD 5 IBM 4694 3326 DISTR K/B CABLE 5 IBM 4694 3330 KEYBUTTON KIT 5 IBM 4694 3360 CASH DRAW ASSEMBLY 5 IBM 4694 3365 DISTR CASH CABLE 5 IBM 4694 3390 TOKEN RING CABLE 5 IBM 4694 3879 TILL/CASH DRAW 5 IBM 4694 3924 VIDEO DISPLAY 5 IBM 4694 4800 MODEL 4 PRINTER 5 IBM 4694 4922 PRINTER DISTR CABLE 5 IBM 4694 4923 PRINTER RIBBON 5 IBM 4694 7429 MONITOR STAND DIST 5 IBM 4694 7462 TOKEN RING NETWORK 5 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 9500 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92H7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CONTROLLER 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1829 TIFFANY & CO 1 IBM 4694 244 POS TERMINAL 1 IBM 4694 3324 POS KEYBOARD 1 IBM 4694 3325 INTEG K/B CABLE 1 IBM 4694 3330 KEYBUTTON KIT 1 IBM 4694 3360 CASH DRAW ASSEMBLY 1 IBM 4694 3364 INTEG CASH CABLE 1 IBM 4694 3390 TOKEN RING CABLE 1 IBM 4694 3879 TILL/CASH DRAW 1 IBM 4694 3920 VIDEO DISPLAY 1 IBM 4694 4800 MODEL 4 PRINTER 1 IBM 4694 4920 PRINTER INTEG CABLE 1 IBM 4694 4923 PRINTER RIBBON 1 IBM 4694 7462 TOKEN RING NETWORK 1 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 244 POS TERMINAL 5 IBM 4694 3324 POS KEYBOARD 5 IBM 4694 3326 DISTR K/B CABLE
Schedule 1.04 Page 11 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 5 IBM 4694 3330 KEYBUTTON KIT 5 IBM 4694 3360 CASH DRAW ASSEMBLY 5 IBM 4694 3365 DISTR CASH CABLE 5 IBM 4694 3390 TOKEN RING CABLE 5 IBM 4694 3879 TILL/CASH DRAW 5 IBM 4694 3924 VIDEO DISPLAY 5 IBM 4694 4800 MODEL 4 PRINTER 5 IBM 4694 4922 PRINTER DISTR CABLE 5 IBM 4694 4923 PRINTER RIBBON 5 IBM 4694 7429 MONITOR STAND DIST 5 IBM 4694 7462 TOKEN RING NETWORK 5 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 9500 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1830 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEG K/B CABLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 9 IBM 4694 244 POS TERMINAL 9 IBM 4694 3324 POS KEYBOARD 9 IBM 4694 3326 DISTR K/B CABLE 9 IBM 4694 3330 KEYBUTTON KIT 9 IBM 4694 3360 CASH DRAW ASSEMBLY 9 IBM 4694 3365 DISTR CASH CABLE 9 IBM 4694 3390 TOKEN RING CABLE 9 IBM 4694 3879 TILL/CASH DRAW 9 IBM 4694 3924 VIDEO DISPLAY 9 IBM 4694 4800 MODEL 4 PRINTER 9 IBM 4694 4922 PRINTER DISTR CABLE 9 IBM 4694 4923 PRINTER RIBBON 9 IBM 4694 7429 MONITOR STAND DIST 9 IBM 4694 7462 TOKEN RING NETWORK 9 IBM 4694 7900 DUMP SWITCH 9 IBM 4694 9500 FLAT TOP DISTR 1 IBM 6887 VAG PC 750
Schedule 1.04 Page 12 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1831 TIFFANY & CO 3 IBM 4694 244 POS TERMINAL 3 IBM 4694 3324 POS KEYBOARD 3 IBM 4694 3325 INTEG K/B CABLE 3 IBM 4694 3330 KEYBUTTON KIT 3 IBM 4694 3360 CASH DRAW ASSEMBLY 3 IBM 4694 3364 INTEG CASH CABLE 3 IBM 4694 3390 TOKEN RING CABLE 3 IBM 4694 3879 TILL/CASH DRAW 3 IBM 4694 3920 VIDEO DISPLAY 3 IBM 4694 4800 MODEL 4 PRINTER 3 IBM 4694 4920 PRINTER INTEG CABLE 3 IBM 4694 4923 PRINTER RIBBON 3 IBM 4694 7462 TOKEN RING NETWORK 3 IBM 4694 7900 DUMP SWITCH 8 IBM 4694 244 POS TERMINAL 8 IBM 4694 3324 POS KEYBOARD 8 IBM 4694 3326 DISTR K/B CABLE 8 IBM 4694 3330 KEYBUTTON KIT 8 IBM 4694 3360 CASH DRAW ASSEMBLY 8 IBM 4694 3365 DISTR CASH CABLE 8 IBM 4694 3390 TOKEN RING CABLE 8 IBM 4694 3879 TILL/CASH DRAW 8 IBM 4694 3924 VIDEO DISPLAY 8 IBM 4694 4800 MODEL 4 PRINTER 8 IBM 4694 4922 PRINTER DISTR CABLE 8 IBM 4694 4923 PRINTER RIBBON 8 IBM 4694 7429 MONITOR STAND DIST 8 IBM 4694 7462 TOKEN RING NETWORK 8 IBM 4694 7900 DUMP SWITCH 8 IBM 4694 9500 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1833 BED BATH & BEY 7 IBM 5494 EXT CONTROLLER 7 IBM 5494 1100 TOKEN RING ADPT 1839 TIFFANY & CO 3 IBM 4694 244 POS TERMINAL
Schedule 1.04 Page 13 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 3 IBM 4694 3324 POS KEYBOARD 3 IBM 4694 3325 INTEG K/B CABLE 3 IBM 4694 3330 KEYBUTTON KIT 3 IBM 4694 3360 CASH DRAW ASSEMBLY 3 IBM 4694 3364 INTEG CASH CABLE 3 IBM 4694 3390 TOKEN RING CABLE 3 IBM 4694 3879 TILL/CASH DRAW 3 IBM 4694 3920 VIDEO DISPLAY 3 IBM 4694 4800 MODEL 4 PRINTER 3 IBM 4694 4920 PRINTER INTEG CABLE 3 IBM 4694 4923 PRINTER RIBBON 3 IBM 4694 7462 TOKEN RING NETWORK 3 IBM 4694 7900 DUMP SWITCH 8 IBM 4694 244 POS TERMINAL 8 IBM 4694 3324 POS KEYBOARD 8 IBM 4694 3326 DISTR K/B CABLE 8 IBM 4694 3330 KEYBUTTON KIT 8 IBM 4694 3360 CASH DRAW ASSEMBLY 8 IBM 4694 3365 DISTR CASH CABLE 8 IBM 4694 3390 TOKEN RING CABLE 8 IBM 4694 3879 TILL/CASH DRAW 8 IBM 4694 3924 VIDEO DISPLAY 8 IBM 4694 4800 MODEL 4 PRINTER 8 IBM 4694 4922 PRINTER DISTR CABLE 8 IBM 4694 4923 PRINTER RIBBON 8 IBM 4694 7429 MONITOR STAND DIST 8 IBM 4694 7462 TOKEN RING NETWORK 8 IBM 4694 7900 DUMP SWITCH 8 IBM 4694 9500 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1840 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEG K/B CABLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER DISTR CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 2 IBM 6887 VAG PC 750
Schedule 1.04 Page 14 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 6 IBM 4694 244 POS TERMINAL 6 IBM 4694 3324 POS KEYBOARD 6 IBM 4694 3326 DISTR K/B CABLE 6 IBM 4694 3330 KEYBUTTON KIT 6 IBM 4694 3360 CASH DRAW ASSEMBLY 6 IBM 4694 3365 DISTR CASH CABLE 6 IBM 4694 3390 TOKEN RING CABLE 6 IBM 4694 3879 TILL/CASH DRAW 6 IBM 4694 3924 VIDEO DISPLAY 6 IBM 4694 4800 MODEL 4 PRINTER 6 IBM 4694 4922 PRINTER DISTR CABLE 6 IBM 4694 4923 PRINTER RIBBON 6 IBM 4694 7429 MONITOR STAND DIST 6 IBM 4694 7462 TOKEN RING NETWORK 6 IBM 4694 7900 DUMP SWITCH 6 IBM 4694 9500 FLAT TOP DISTR 1841 TIFFANY & CO 6 IBM 4694 244 POS TERMINAL 6 IBM 4694 3324 POS KEYBOARD 6 IBM 4694 3326 DISTR K/B CABLE 6 IBM 4694 3330 KEYBUTTON KIT 6 IBM 4694 3360 CASH DRAW ASSEMBLY 6 IBM 4694 3365 DISTR CASH CABLE 6 IBM 4694 3390 TOKEN RING CABLE 6 IBM 4694 3879 TILL/CASH DRAW 6 IBM 4694 3924 VIDEO DISPLAY 6 IBM 4694 4800 MODEL 4 PRINTER 6 IBM 4694 4922 PRINTER DISTR CABLE 6 IBM 4694 4923 PRINTER RIBBON 6 IBM 4694 7429 MONITOR STAND DIST 6 IBM 4694 7462 TOKEN RING NETWORK 6 IBM 4694 7900 DUMP SWITCH 6 IBM 4694 9300 FLAT TOP DISTR 6 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1842 BLUE CROSS 1 AMDAHL SP200 8121 SPECTRIS DASD 1 AMDAHL SP200 7085 3072MB CACHE+256MB
Schedule 1.04 Page 15 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 AMDAHL SP200 7043 8 SHA 2 AMDAHL SP200 8122 SPECTRIS STRGE UNIT 3 AMDAHL SP200 7112 A-GSI 4 RANKS 3 AMDAHL SP200 7116 A-GSI 4 RANKS 1843 BLUE CROSS 1 AMDAHL SP200 8888 SP100 UPGRADE 3 AMDAHL SP200 7089 256MB CACHE ADD-ON 1 AMDAHL SP200 7207 8 SHA TO 12 SHA 1 AMDAHL SP200 8122 SPECTRIS STRGE UNIT 2 AMDAHL SP200 7112 A-GSI 4 RANKS 2 AMDAHL SP200 7116 B-GSI 4 RANKS 1845 TIFFANY & CO 10 IBM 4694 244 POS TERMINAL 10 IBM 4694 3324 POS KEYBOARD 10 IBM 4694 3326 DISTR K/B CABLE 10 IBM 4694 3330 KEYBUTTON KIT 10 IBM 4694 3360 CASH DRAW ASSEMBLY 10 IBM 4694 3365 DISTR CASH CABLE 10 IBM 4694 3390 TOKEN RING CABLE 10 IBM 4694 3879 TILL/CASH DRAW 10 IBM 4694 3924 VIDEO DISPLAY 10 IBM 4694 4800 MODEL 4 PRINTER 10 IBM 4694 4922 PRINTER DISTR CABLE 10 IBM 4694 4923 PRINTER RIBBON 10 IBM 4694 7429 MONITOR STAND DIST 10 IBM 4694 7462 TOKEN RING NETWORK 10 IBM 4694 7900 DUMP SWITCH 10 IBM 4694 9300 FLAT TOP DISTR 10 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1847 TIFFANY & CO 1 IBM 3590 B11 TAPE DRIVE 1 IBM 9309 002 RACK ENCLOSURE 1848 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEG K/B CABLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK
Schedule 1.04 Page 16 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 IBM 4694 7900 DUMP SWITCH 1850 TIFFANY & CO 1 IBM 9406 6501 DASD CONTROLLER 1851 PEROT SYSTEMS 1 AMDAHL SP100 8121 SPECTRIS DASD 1 AMDAHL SP100 7051 768MB SHARED STORG 1 AMDAHL SP100 7043 8 SERIAL HOST ADAP 1 AMDAHL SP100 8122 SPECTRIS STORG UNIT 1 AMDAHL SP100 7112 A-GSI 4 RANKS 45.4GB 1 AMDAHL SP100 7116 B-GSI 4 RANKS 45.4GB 1852 PEACEHEALTH 1 DEC SW800 FA CABINET 1 DEC SW8XP AA 2ND POWER 2 DEC HSJ50 AF STORAGEWORKS CNTRL 15 DEC RZ29B VA 4.3GB DISK 3 DEC BA356 JC SHELF 6 DEVICES 3 DEC BA35X MG 8 BIT MODULE 3 DEC BN21H 01 SCSI CABLE 3 DEC BA35X HF 150 WATT POWER SUPP 1853 TIFFANY & CO 4 IBM 4694 244 POS TERMINAL 4 IBM 4694 3324 POS KEYBOARD 4 IBM 4694 3326 DISTR K/B CABLE 4 IBM 4694 3330 KEYBUTTON KIT 4 IBM 4694 3360 CASH DRAW ASSEMBLY 4 IBM 4694 3365 DISTR CASH CABLE 4 IBM 4694 3390 TOKEN RING CABLE 4 IBM 4694 3879 TILL/CASH DRAW 4 IBM 4694 3924 VIDEO DISPLAY 4 IBM 4694 4800 MODEL 4 PRINTER 4 IBM 4694 4922 PRINTER DISTR CABLE 4 IBM 4694 4923 PRINTER RIBBON 4 IBM 4694 7429 MONITOR STAND DIST 4 IBM 4694 7462 TOKEN RING NETWORK 4 IBM 4694 7900 DUMP SWITCH 4 IBM 4694 9300 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 1 IBM 4694 244 POS TERMINAL 1 IBM 4694 3324 POS KEYBOARD 1 IBM 4694 3325 INTEG K/B CABLE 1 IBM 4694 3330 KEYBUTTON KIT 1 IBM 4694 3360 CASH DRAW ASSEMBLY 1 IBM 4694 3365 DISTR CASH TABLE 1 IBM 4694 3390 TOKEN RING CABLE 1 IBM 4694 3879 TILL/CASH DRAW 1 IBM 4694 3924 VIDEO DISPLAY
Schedule 1.04 Page 17 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 4694 4800 MODEL 4 PRINTER 1 IBM 4694 4922 PRINTER INTEG CABLE 1 IBM 4694 4923 PRINTER RIBBON 1 IBM 4694 7429 MONITOR STAND DIST 1 IBM 4694 7462 TOKEN RING NETWORK 1 IBM 4694 7900 DUMP SWITCH 1854 TIFFANY & CO 6 IBM 4694 244 POS TERMINAL 6 IBM 4694 3324 POS KEYBOARD 6 IBM 4694 3326 DISTR K/B CABLE 6 IBM 4694 3330 KEYBUTTON KIT 6 IBM 4694 3360 CASH DRAW ASSEMBLY 6 IBM 4694 3365 DISTR CASH CABLE 6 IBM 4694 3390 TOKEN RING CABLE 6 IBM 4694 3879 TILL/CASH DRAW 6 IBM 4694 3924 VIDEO DISPLAY 6 IBM 4694 4800 MODEL 4 PRINTER 6 IBM 4694 4922 PRINTER DISTR CABLE 6 IBM 4694 4923 PRINTER RIBBON 6 IBM 4694 7429 MONITOR STAND DIST 6 IBM 4694 7462 TOKEN RING NETWORK 6 IBM 4694 7900 DUMP SWITCH 6 IBM 4694 9300 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEG K/B CABLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3365 DISTR CASH TABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3924 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 1855 TIFFANY & CO 5 IBM 4694 244 POS TERMINAL 5 IBM 4694 3324 POS KEYBOARD 5 IBM 4694 3326 DISTR K/B CABLE 5 IBM 4694 3330 KEYBUTTON KIT 5 IBM 4694 3360 CASH DRAW ASSEMBLY 5 IBM 4694 3365 DISTR CASH CABLE 5 IBM 4694 3390 TOKEN RING CABLE
Schedule 1.04 Page 18 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 5 IBM 4694 3879 TILL/CASH DRAW 5 IBM 4694 3924 VIDEO DISPLAY 5 IBM 4694 4800 MODEL 4 PRINTER 5 IBM 4694 4922 PRINTER DISTR CABLE 5 IBM 4694 4923 PRINTER RIBBON 5 IBM 4694 7429 MONITOR STAND DIST 5 IBM 4694 7462 TOKEN RING NETWORK 5 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 9300 FLAT TOP DISTR 1 IBM 6887 VAG PC 750 1 IBM 92G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRV 1 IBM 6542 103 14" COLOR MONITOR 1 LEXMARK 4039 10P LASER PRINTER 1 LEXMARK INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 4 IBM 4694 244 POS TERMINAL 4 IBM 4694 3324 POS KEYBOARD 4 IBM 4694 3325 INTEG K/B CABLE 4 IBM 4694 3330 KEYBUTTON KIT 4 IBM 4694 3360 CASH DRAW ASSEMBLY 4 IBM 4694 3364 INTEG CASH CABLE 4 IBM 4694 3390 TOKEN RING CABLE 4 IBM 4694 3879 TILL/CASH DRAW 4 IBM 4694 3920 VIDEO DISPLAY 4 IBM 4694 4800 MODEL 4 PRINTER 4 IBM 4694 4920 PRINTER INTEG CABLE 4 IBM 4694 4923 PRINTER RIBBON 4 IBM 4694 7462 TOKEN RING NETWORK 4 IBM 4694 7900 DUMP SWITCH 1857 IBM 1 JAPAN DIGITAL 3000E ENGNRG DOC. PLOTTER 1 JAPAN DIGITAL COLLATE OPTION 1 JAPAN DIGITAL NETWORK INTERFACE 1 JAPAN DIGITAL SCAN/COPY/PLOT SYS 1 JAPAN DIGITAL 3150 PRINTFOLD FOLDER 1859 CASE 21 HUGHES VSAT 1.2M SATTELITE DISH 1860 TIFFANY & CO IBM 9406 320 PROCESSOR 1861 BED BATH & BEY 16 IBM 4317 001 NETWORK PRINTER 16 IBM H2438 IPDS SIMMS 16 IBM H2439 POST SCRIPT LEVEL 2 16 IBM H2445 TWINAX SCS INTERFACE 4 IBM 5494 EXT REMOTE CONTROLLER 4 IBM 5494 1100 TOKEN RING ADAPTER 52 IBM 3488 V13 INFOWINDOW LOGIC 52 IBM G41 14" COLOR MONITOR 1862 TIFFANY & CO 11 IBM 5494 EXT CONTROLLERS 11 IBM 5494 1200 TWINAX EXPANSION
Schedule 1.04 Page 19 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 11 IBM 5494 1100 TOKEN RING 1865 TIFFANY & CO 16 IBM 9406 6607 4.19GB DISK UNIT 13 IBM 9406 6050 TWINAX WORKSTATION 1 IBM 9406 2617 ETHNT 802.3 ADPTR 2 IBM 9406 2609 EIA 232/V.24 1 IBM 9406 2623 SIX LINE COMM CONTRL 1 IBM 9406 5072 1063MBPS SYS UNIT 1 IBM 9406 2688 OPTICAL LINK 1868 BED BATH & BEY 28 IBM 3488 V13 INFOWINDOW LOGIC 28 IBM G41 14" COLOR MONITOR 38 IBM 4317 001 NETWORK PRINTER 38 IBM H2438 IPDS SIMMS 38 IBM H2439 POST SCRIPT LEVEL 2 38 IBM H2445 TWINAX SCS INTERFACE 2 IBM 5494 EXT REMOTE CONTROLLER 2 IBM 5494 1100 TOKEN RING ADAPTER 1869 BLUE CROSS BLUE 1 AMDAHL SP200 8121 SPECTRIS STOR PROC 1 AMDAHL SP200 7042 4 SHA 1 AMDAHL SP200 7053 1024MB CACHE 1 AMDAHL SU200 8122 STORAGE UNIT BASE 2 AMDAHL SU200 7112 A-GSI 4 RANKS 2 AMDAHL SU200 7116 B-GSI 4 RANKS 1870 TIFFANY & CO 1 IBM 9406 843875 OPTICAL LINK PROCESS 1871 BED BATH & BEY 35 IBM 4317 001 LASER PRINTER H2438 IPDS SIMMS H2439 POST SCRIPT LEVEL 2 H2445 TWINAX SCS INTERFACE 208 IBM 3488 V13 INFOWINDOW LOGIC 208 IBM G41 14" COLOR MONITOR 16 IBM 5494 EXT REMOTE CONTROLLER 18 IBM 5494 1100 TOKEN RING ADAPTER 1872 TIFFANY & CO 1 IBM 9406 2162 MODEL 530 PROC 2 IBM 9406 2688 2 IBM 9406 3165 1024MB MAIN STORAGE 2 IBM 9406 5072 1063MBPS SYS UNIT 1 IBM 9406 5082 1063MBPS SYS TOWER 1 IBM 9406 MODEL UPGRADE 2 IBM 9406 6512 DISK UNIT CONTROLLER 1 IBM 9406 6606 1.96GB DISK UNIT/A 1 IBM 9406 8052 STORAGE UNIT BASE 2 IBM 9406 8265 1024MB MAIN STORAGE 1874 CASE 9 HUGHES VSAT 1.2M SATTELITE DISH 1875 TIFFANY & CO 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE
Schedule 1.04 Page 20 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J1000 LEXMARK LASER PRNT 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 8 IBM 4694 244 POS TERMINAL 8 IBM 4694 3324 POS KEYBOARD 8 IBM 4694 3326 DISTRIBUTED CABLE 8 IBM 4694 3330 KEYBUTTON KIT 8 IBM 4694 3360 CASH DRAW ASSEMBLY 8 IBM 4694 3365 DISTRIB CASH CABLE 8 IBM 4694 3390 TOKEN RING CABLE 8 IBM 4694 3879 TILL/CASH DRAW 8 IBM 4694 3924 VIDEO DISPLAY 8 IBM 4694 4800 MODEL 4 PRINTER 8 IBM 4694 4922 PRINTER DISTR CABLE 8 IBM 4694 4923 PRINTER RIBBON 8 IBM 4694 7429 MONITOR STAND SWIVEL 8 IBM 4694 7462 TOKEN RING NETWORK 8 IBM 4694 7900 DUMP SWITCH 8 IBM 4694 8Q1588 FLAT TOP DISTR. 1876 TIFFANY & CO 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J1000 LEXMARK LASER PRNT 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 9 IBM 4694 244 POS TERMINAL 9 IBM 4694 3324 POS KEYBOARD 9 IBM 4694 3326 DISTRIBUTED CABLE 9 IBM 4694 3330 KEYBUTTON KIT 9 IBM 4694 3360 CASH DRAW ASSEMBLY 9 IBM 4694 3365 DISTRIB CASH CABLE 9 IBM 4694 3390 TOKEN RING CABLE 9 IBM 4694 3879 TILL/CASH DRAW 9 IBM 4694 3924 VIDEO DISPLAY 9 IBM 4694 4800 MODEL 4 PRINTER 9 IBM 4694 4922 PRINTER DISTR CABLE 9 IBM 4694 4923 PRINTER RIBBON 9 IBM 4694 7429 MONITOR STAND SWIVEL 9 IBM 4694 7462 TOKEN RING NETWORK 9 IBM 4694 7900 DUMP SWITCH 9 IBM 4694 8Q1588 FLAT TOP DISTR. 1877 TIFFANY & CO 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR
Schedule 1.04 Page 21 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 43J1000 LEXMARK LASER PRNT 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 14 IBM 4694 244 POS TERMINAL 14 IBM 4694 3324 POS KEYBOARD 14 IBM 4694 3326 DISTRIBUTED CABLE 14 IBM 4694 3330 KEYBUTTON KIT 14 IBM 4694 3360 CASH DRAW ASSEMBLY 14 IBM 4694 3365 DISTRIB CASH CABLE 14 IBM 4694 3390 TOKEN RING CABLE 14 IBM 4694 3879 TILL/CASH DRAW 14 IBM 4694 3924 VIDEO DISPLAY 14 IBM 4694 4800 MODEL 4 PRINTER 14 IBM 4694 4922 PRINTER DISTR CABLE 14 IBM 4694 4923 PRINTER RIBBON 14 IBM 4694 7429 MONITOR STAND SWIVEL 14 IBM 4694 7462 TOKEN RING NETWORK 14 IBM 4694 7900 DUMP SWITCH 14 IBM 4694 8Q1588 FLAT TOP DISTR. 1878 TIFFANY & CO 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J1000 LEXMARK LASER PRNT 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 6 IBM 4694 244 POS TERMINAL 6 IBM 4694 3324 POS KEYBOARD 6 IBM 4694 3326 DISTRIBUTED CABLE 6 IBM 4694 3330 KEYBUTTON KIT 6 IBM 4694 3360 CASH DRAW ASSEMBLY 6 IBM 4694 3365 DISTRIB CASH CABLE 6 IBM 4694 3390 TOKEN RING CABLE 6 IBM 4694 3879 TILL/CASH DRAW 6 IBM 4694 3924 VIDEO DISPLAY 6 IBM 4694 4800 MODEL 4 PRINTER 6 IBM 4694 4922 PRINTER DISTR CABLE 6 IBM 4694 4923 PRINTER RIBBON 6 IBM 4694 7429 MONITOR STAND SWIVEL 6 IBM 4694 7462 TOKEN RING NETWORK 6 IBM 4694 7900 DUMP SWITCH 6 IBM 4694 8Q1588 FLAT TOP DISTR. 1879 TIFFANY & CO 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J1000 LEXMARK LASER PRNT
Schedule 1.04 Page 22 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 17 IBM 4694 244 POS TERMINAL 17 IBM 4694 3324 POS KEYBOARD 17 IBM 4694 3326 DISTRIBUTED CABLE 17 IBM 4694 3330 KEYBUTTON KIT 17 IBM 4694 3360 CASH DRAW ASSEMBLY 17 IBM 4694 3365 DISTRIB CASH CABLE 17 IBM 4694 3390 TOKEN RING CABLE 17 IBM 4694 3879 TILL/CASH DRAW 17 IBM 4694 3924 VIDEO DISPLAY 17 IBM 4694 4800 MODEL 4 PRINTER 17 IBM 4694 4922 PRINTER DISTR CABLE 17 IBM 4694 4923 PRINTER RIBBON 17 IBM 4694 7429 MONITOR STAND SWIVEL 17 IBM 4694 7462 TOKEN RING NETWORK 17 IBM 4694 7900 DUMP SWITCH 17 IBM 4694 8Q1588 FLAT TOP DISTR. 1880 NEWSDAY 1 EMC 5500 9M14 DISK ARRAY 1881 TIFFANY & CO 2 IBM 4694 244 POS TERMINAL 2 IBM 4694 3324 POS KEYBOARD 2 IBM 4694 3325 INTEGRATED K/B CBLE 2 IBM 4694 3330 KEYBUTTON KIT 2 IBM 4694 3360 CASH DRAW ASSEMBLY 2 IBM 4694 3364 INTEG CASH CABLE 2 IBM 4694 3390 TOKEN RING CABLE 2 IBM 4694 3879 TILL/CASH DRAW 2 IBM 4694 3920 VIDEO DISPLAY 2 IBM 4694 4800 MODEL 4 PRINTER 2 IBM 4694 4920 PRINTER INTEG CABLE 2 IBM 4694 4923 PRINTER RIBBON 2 IBM 4694 7462 TOKEN RING NETWORK 2 IBM 4694 7900 DUMP SWITCH 1 IBM 6887 VAG PC 750 1 IBM 95G7632 NETWORK ADAPTER 1 IBM 42H4332 ADPT MULTIPROTOCAL 1 IBM 85H8101 ISA STORE CNTRLR 1 IBM 44H3111 800 INT TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J1000 LEXMARK LASER PRNT 1 IBM INTERFACE CABLE 1 IBM 28.8 DATA MODEM 1 IBM COMM CABLE 5 IBM 4694 244 POS TERMINAL 5 IBM 4694 3324 POS KEYBOARD 5 IBM 4694 3326 DISTRIBUTED CABLE 5 IBM 4694 3330 KEYBUTTON KIT 5 IBM 4694 3360 CASH DRAW ASSEMBLY 5 IBM 4694 3365 DISTRIB CASH CABLE 5 IBM 4694 3390 TOKEN RING CABLE 5 IBM 4694 3879 TILL/CASH DRAW 5 IBM 4694 3924 VIDEO DISPLAY
Schedule 1.04 Page 23 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 5 IBM 4694 4800 MODEL 4 PRINTER 5 IBM 4694 4922 PRINTER DISTR CABLE 5 IBM 4694 4923 PRINTER RIBBON 5 IBM 4694 7429 MONITOR STAND SWIVEL 5 IBM 4694 7462 TOKEN RING NETWORK 5 IBM 4694 7900 DUMP SWITCH 5 IBM 4694 8Q1588 FLAT TOP DISTR. 1883 TIFFANY & CO 8 IBM 9406 6607 4.19GB DISK UNIT 1884 TIFFANY & CO 8 IBM 9406 6607 4.19GB DISK UNIT 1885 TIFFANY & CO IBM 6887 VAG PC 750 IBM 95G7632 NETWORK ADAPTER IBM 42H4332 ADPT MULTIPROTOCAL IBM 85H8101 ISA STORE CNTRLR IBM 44H3111 800 INT TAPE DRIVE IBM 6540 00N 14" COLOR MONITOR IBM 43J1000 LEXMARK LASER PRNT IBM INTERFACE CABLE IBM 28.8 DATA MODEM IBM COMM CABLE 1887 BED BATH & BEY 84 IBM 3488 V13 INFOWINDOW LOGIC 84 IBM G42 14" COLOR MONITOR 6 IBM 4317 001 NETWORK PRINTER 6 IBM H2438 IPDS SIMMS 6 IBM H2439 POST SCRIPT LEVEL 2 6 IBM H2445 TWINAX SCS INTERFACE 6 IBM 5494 EXT REMOTE CONTROLLER 6 IBM 5494 1100 TOKEN RING ADAPTER 14 IBM 4312 001 LASER PRINTER TWINAX 1895 TIFFANY & CO 2 IBM 9406 3186 128MB MAIN STORAGE 1896 TC-259GM-4 TIFFANY & CO 1898 TC-DIAMOND-E TIFFANY & CO 1900 IA-980-35 BED, BATH & BEYOND 1901 TIFFANY & CO 4 IBM 5494 EXT REMOTE CONTROLLER 5494 1100 TOKEN RING ADAPTER 5494 1200 TWINAX EXPANSION KIT 1902 TC-259GM-5 TIFFANY & CO 1903 BLUE CROSS 1 HP 7700 ARRAY SUBSYSTEM 1905 CASE 6 HUGHES VSAT 1.2M SATTELITE DISH 1908 BLUE CROSS 1 AMDAHL SP200 8121 SPECTRIS STOR PROC 60 1 AMDAHL SP200 7043 8 SHA 1 AMDAHL SP200 7086 3072MBCACHE=2304MB 1 AMDAHL SU200 8122 SPECTRIS STOR UNIT BASE
Schedule 1.04 Page 24 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 AMDAHL SU200 8122 SPECTRIS STOR UNIT BASE 1 AMDAHL SU200 8122 SPECTRIS STOR UNIT BASE 4 AMDAHL SU200 7112 A-GS1 4 RANKS 2 AMDAHL SU200 7112 A-GS1 4 RANKS 1 AMDAHL SU200 7113 B-GS1 1 RANK 4 AMDAHL SU200 7116 B-GS1 4 RANK 1 AMDAHL SU200 7116 B-GS1 4 RANK 1909 VSI-009 VITAMIN SHOPPE 1910 TIFFANY & CO 1 IBM 9406 620 AS/400E SYSTEM UNIT 1 IBM 9406 0348 V.24/EIA232 PCI CABLE 1 IBM 9406 2180 MODEL 620 PROCESSOR 1 IBM 9406 2612 EIA 232/V.24 ONE-LINE 1 IBM 9406 2619 16/4MBPS TOKEN-RING 2 IBM 9406 2623 SIX LINE COMM CONTROLLER 1 IBM 9406 2626 16/4 MBPS TOKEN-RING 1 IBM 9406 2722 PCI TWINAXIAL WORKSTATION 1 IBM 9406 2726 PCI RAID DISK UNIT CTLR 2 IBM 9406 3002 128MB MAIN STORAGE 1 IBM 9406 6501 DASD CONTROLLER 1 IBM 9406 6512 DISK UNIT CNTLR 20 IBM 9406 6813 8.58GB DISK UNIT 2 IBM 9406 7128 DASD EXPANSION UNIT 1911 TIFFANY & CO 2 3610 024 PARADYNE 3610 DSU W/TDM 1912 TC-DIAMOND-F TIFFANY & CO 1913 TC-AS400-1A TIFFANY & CO 1914 TIFFANY & CO 4 PARADYNE 4 PORT TI DSU/CSU 1917 VITAMIN SHOPPE 10 IBM 4694 244 1.6GB HARD DRIVE 3324 2KEYBOARD W/3 TRACK 3328 KEYBOARD CABLE 3927 9" COLOR DISPLAY 3503 2X20 40 CHARACTER 3345 INTEGRATED CABLE 3360 F/S CASH DRAWER-NO TIL 3879 FIXED TILL-FULL SIZE 3364 INTEG CASH DRAWER 2 IBM 4694 9514 2.8M POWER CORD 0811 MONITOR FILLER PANEL 3 IBM 4694 SPECIFY LOCK FOR REGISTERS 4610 PRINTER/IMPACT W/MICR 4920 CABLE FOR 4/4R PRINTER 1150 THERMAL PRINTER 2 IBM 4694 9450 16MB RAM 1918 BED BATH & BEY 5 IBM 5494 EXT REMOTE CONTROLLER 5 IBM 1100 TOKEN RING 1 IBM 4317 001 LASER PRINTER 1 IBM 4141 TWINAX 1 IBM 4820 IPDS SIMM
Schedule 1.04 Page 25 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 4810 POST SCRIPT 1 IBM MEMORY 8MB MEMORY SIMM 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1919 BED BATH & BEY 50 IBM 3487 HC3 INFOWINDOW -COLOR 2 IBM 5494 1200 TWINAX EXPANSION KIT 1 IBM 5494 1100 TOKEN RING ADAPTER 1920 TIFFANY & CO 1 IBM 9406 2619 TOKEN RING ADAPTER 1921 TIFFANY & CO 1 IBM 6887 6AC STORE CONTROLLER 1 IBM 6540 00N COLOR MONITOR 1 IBM 43J 100 LEXMARK PRINTER 1 IBM PRINTER CABLE 1 IBM MODEM 1 IBM 4690 SYSTEM SALE SOFTWARE 1922 TIFFANY & CO 8 IBM 9406 6713 8GB DASD W/REGULATOR 1924 TIFFANY & CO 1 IBM 9406 620 AS/400E SYSTEM UNIT 1 IBM 0037 3590-811 LCL SRG RACK MNT 1 IBM 0044 DATA LOSS PROTECTION 1 IBM 0348 V.24/EIA232 PCI CABLE 1 IBM 2180 MODEL 620 PROCESSOR 1 IBM 2724 PCI 16/4NBPB TOKENRING 2 IBM 2726 PCI RAID DISK UNIT CTLR 1 IBM 2729 PCI MAGNETIC MEDIA 1 IBM 2809 PCI LAN/WAN/WORKSTA. 1 IBM 2924 ENGLISH 2 IBM 3002 128MG MAIN STORAGE 1 IBM 5000 TSP SPECIFY CODE 1 IBM 5023 SOFTWARE VERSION 1 IBM 5519 ALT IPL SPECIFY 3590 1 IBM 5520 COMPLETE SYSTEM ORDER 12 IBM 6813 8.5OB DISK UNIT 1 IBM 7128 DASD EXPANSION UNIT 1 IBM 8813 OPT BASE 8.5BGB DISK 1 IBM 9082 14 FOOT LINE CORD 1 IBM 9083 LOCKING LINE CORD PLUG 1 IBM 9329 BASE PCI INTERGRATED 1 IBM 9364 BASE SYSTEM UNIT EXP. 1 IBM 9720 BASE PCI WAN/TWINAXIAL 1 IBM 9309 002 RACK ENCLOSURE 1 IBM 9081 POWER CORD
Schedule 1.04 Page 26 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 9171 GENERAL PURPOSE 1 IBM 3590 811 TAPE DRIVE 1 IBM 5125 25 N SGSI CABLE 1 IBM 9221 FIRST B11 IN RACK 1 IBM 9590 NO DATA CARTRIDGES 1 IBM 7852 400 AS/400 TSP MODEL 1 IBM 5000 AS/400 TSP SPECIFY 1 IBM 3486 BO3 AS400 TSP MODEL 1 IBM 5000 AS/400 TSP SPECIFY 1 IBM 5900 AS400 TSP TWINX CABLE 1 IBM 9122 122-KEY TYPEWRITER 1 IBM 9203 TILT/SWIVEL STAND 1927 BED BATH & BEY 5 IBM 5494 EXT REMOTE CONTROLLER 5 IBM 1100 TOKEN RING CABLE 46 IBM 3488 V13 INFOWINDOW LOGIC 46 IBM 6540 00N G42 14" MONITOR 1928 TIFFANY & CO 1 IBM 6887 6AE PC 750 P/166 1. G/16 PAR 72H 3482 NETWORK ADAPTER 1 IBM 85H 8101 CONTROLLER ADAPTER 44H 3111 800 INTERNAL TAPE DRIVE 1 IBM 6540 00N 14" COLOR MONITOR 1 IBM 43J 100 LASER PRINTER 1 IBM PRINTER CABLE 1 IBM 33.6 DATA MODEM 1 IBM 43J 100 LASER PRINTER 1 IBM 33.6 DATA MODEM 1930 VITAMIN SHOPPE 10 IBM 4894 244 IBM 6X86-P166 20 IBM 4894 9450 8MB MEMORY MODULE 10 IBM 4894 3324 ANPOS/2 KEYBOARD W/MAG 10 IBM 4894 3326 PS/2 ALPHANUMERIC CABLE 10 IBM 4894 3927 9" COLOR DISPLAY ARTICULAT 10 IBM 4894 3503 2X20 40 CHARACTER LCD 10 IBM 4894 3345 INTEGRATED CABLE FOR LCD 10 IBM 4894 3360 FULL SIZE CASH DRAWER/NO TILL 10 IBM 4894 3879 FIXED TILL-FULL SIZE 10 IBM 4894 3364 INTEGRATED CASH DRAWER CABLE 20 IBM 4894 9514 2.8M POWER CORD/NON LOCK PLUG 10 IBM 4894 811 MONITOR FILLER PANEL WIDE CONFIG 30 IBM 4894 SPECIFY LOCK FOR POS REGISTERS 10 IBM 4894 4610 MODEL T12 TH 10 IBM 4894 4920 CALBE MODEL 4/4R PRINTER 10 IBM 4894 1150 FILLER PANEL FOR THERMAL PRINTER 10 IBM 4894 SYM-1908 SYMBOL SCANNER FOR 4594POS 1932 BED BATH & BEY 130 IBM 3488 V13 INFOWINDOW LOGIC 130 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 2 IBM 43J 2200 OPTRA 1620 LASER 2 IBM 44H 11 CX TX SCS ADAPTER 2 IBM 44H 40 IPDS SIMM
Schedule 1.04 Page 27 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1933 CASE CORP. 1 HUGHES 1.2M DEICE INSTALL PKG 1 HUGHES REMOTE INSTALLATION PKG 1 HUGHES SHIPPING CHARGES 1 HUGHES REMOTE INSTALLATION PKG 1 HUGHES 1.2M PES INSTALL PKG 1 HUGHES SHIPPING CHARGES 1 HUGHES REMOTE INSTALLATION PKG 1 HUGHES 1.2M PES INSTALL PKG 1 HUGHES SHIPPING CHARGES 1 HUGHES REMOTE INSTALLATION PKG 1 HUGHES 1.2M PES INSTALL PKG 1 HUGHES SHIPPING CHARGES 1934 VITAMIN SHOPPE 20 IBM 4694 244 IBM 6X86-P166 40 IBM 9450 8MB MEMORY MODULE 20 IBM 3324 ANPOS/2 KEYBOARD W/MAG 20 IBM 3328 PS/2 ALPHANUMERIC CABLE 20 IBM 3927 9" COLOR DISPLAY ARTICULAT 20 IBM 3503 2X20 40 CHARACTER LCD 20 IBM 3345 INTEGRATED CABLE FOR LCD 20 IBM 3360 FULL SIZE CASH DRAWER/NO TILL 20 IBM 3879 FIXED TILL-FULL SIZE 20 IBM 3364 INTEGRATED CASH DRAWER CABLE 40 IBM 9514 2.8M POWER CORD/NON LOCK PLUG 20 IBM 811 MONITOR FILLER PANEL WIDE CONFIG 60 IBM SPECIFY LOCK FOR POS REGISTERS
Schedule 1.04 Page 28 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 20 IBM 4610 MODEL T12 THERMAL PRINTER 20 IBM 4920 CABLE MODEL 4/4R PRINTER 20 IBM 1150 FILLER PANEL FOR THERMAL PRINTER 17 IBM SYM-1908 SYMBOL SCANNER FOR 4594POS 1935 BED BATH & BEY 43 IBM 3488 V43 14" COLOR MONITOR 6 IBM 5494 EXT CONTROLLER 1936 NETGROCER, INC. 1 RAYMOND MODEL 35 CSR30TT NARROW AISLE 1 RAYMOND MODEL 35 CSR30TT NARROW AISLE 1937 NEWSDAY, INC. 1 IMP A4 IMPRESSION A4 COMPUTER & VIDEO PROJ. 1 PADDING BAG W/WHEELS & TELESCOPING 1939 TIFFANY & CO 264 IBM INFOWINDOW-GREEN 1941 TC-PBX-TROY-A TIFFANY & CO 1942 TIFFANY & CO 1 IBM TN 746B ANALOG INTERFACE 1943 TC-2KPDM-A 1944 BED BATH & BEY 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 40 IPDS SIMM 1 IBM 44H 11 CX TX SCS ADAPTER 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 0 IBM MAINTENANCE CONTRACT SETUP 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM MAINTENANCE CONTRACT SETUP 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM
Schedule 1.04 Page 29 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 1200 TWINAX EXPANSION KIT 2 IBM 3488 V13 INFOWINDOW LOGIC 2 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR
Schedule 1.04 Page 30 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1945 TC-25F3D-A TIFFANY & CO 1950 VITAMIN SHOPPE 15 49694 244 IBM 6X86-P166 30 9450 8MB MEMORY MODULE 15 3324 ANPOS/2 KEYBOARD W/MAG 15 3328 PS/2 ALPHANUMERIC CABLE 15 3927 9" COLOR DISPLAY ARTICULATING ARM 15 3503 2X20 40 CHARACTER LCD DISPLAY 15 3345 INTEGRATED CABLE FOR LCD DISPLAY 15 3360 FULL SIZE CASH DRAWER/NO TILL 15 3879 FIXED TILL-FULL SIZE 15 3364 INTEGRATED CASH DRAWER CABLE 30 9514 2.8M POWER CORD/NON LOCK PLUG 15 811 MONITOR T12 THERMAL PRINTER 45 SPECIFY LOCK FOR POS REGISTERS 15 4610 MODEL T12 THERMAL PRINTER 15 4920 CABLE MODEL 4/4R PRINTER 15 1150 FILLER PANEL FOR THERMAL PRINTER 15 SYM 1908 SYMBOL SCANNER FOR 4694POS 1951 BLUE CROSS 1 7700E SCALABLE STORAGE SERVER 1 7700E SCALABLE STORAGE SERVER 1953 NEWSDAY,INC. 1 F230 NETAPP F230 FILLER MEMORY OR PROTOCOL 1 FNS NETAPP NFS SOFTWARE FOR F230 1 CIFS NET WINDOWS SOFTWARE FOR F230 1 X320 256MB SYSTEM MEMORY FOR C/F2XX/F3XX 1 X3113 NVRAM ADAPTER WITH 8MB 1 X615B STORAGE SHELF 2 W/O DISK DRIVES FW 7 X219 9.1 (8.6) GB WIDE ULTRASCSI DISK DRIVE 1 X1001 10/100 BASE T NETWORK ADAPTER 1 SK F230 BASIC SPARES KIT FOR F230 1 SK-SHELF 2B STORAGE SHELF 2 BASIC SPARES KIT 1954 TIFFANY & CO 8 IBM 4694 244 IBM 4694 POINT-OF-SALE TERMINAL DISTRIBUTED 2 IBM 4694 244 IBM 4694 POINT-OF-SALE TERMINAL INTEGRATED 1 IBM 6875 P5H IBM STORE CONTROLLER 1 IBM 6540 00N IBM COLOR MONITOR 1 IBM 43J 1000 LEXMARK PRINTER 1 IBM PRINTER CABLE 1 IBM MODEM & COMMUNICATION CABLE 1 IBM SOFTWARE FOR THE 4690 SYSTEM 1955 NEWSDAY,INC. 32 PC300 GL IBM PENT 2 300 SYS 128MB 32.XCD & SND 19 G72 17" MONITOR 32 3C905 3COM 101100
Schedule 1.04 Page 31 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 33 VIDEO CRD XPERT XL 4MB VIDEO 1 2.5GB 2.5GB HARD DRIVE INSTALLED 1 PC300 GL IBM PENT 2 300 SYS 128MB 32.XCD & SND WINNT 1 3C905 3COM 101100 1956 NEWSDAY,INC. 1 STK 4410 1 LBRY STOR MODULE 1 STK 4411 1 LBRY CNTL UNIT 1 STK 4430 1 LBRY MANGE UNIT 1 STK 4490 M30 STK CONTROLLER W/4 CHANNELS 2 STK 4490 M34 STK 36-TRACK 4 TRANSPORTS CORTRIDGE UNIT 1 STK 4490 M30 STK CONTROLLER W/2 CHANNELS 1 STK 4490 M34 STK 36-TRACK 4 TRANSPORTS CORTRIDGE UNIT 1 STK CC80 CLIPPER CAP DOOR 1958 TC-PBX-BOS-A TIFFANY & CO 1959 VITAMIN SHOPPE 20 4694 244 IBM 6X86-P166 40 4694 9450 8MB MEMORY MODULE 20 4694 3324 ANPOS/2 KEYBOARD W/MAG 20 4694 3328 PS/2 ALPHANUMERIC CABLE 20 4694 3927 9" COLOR DISPLAY ARM 20 4694 3503 2X20 40 CHARACTER LCD DISPLAY 20 4694 3345 INTEGRATED CABLE FOR LCD DISPLAY 20 4694 3360 FULL SIZE CASH DRAWER 20 4694 3879 FIXED TILL-FULL SIZE 20 4694 3364 INTEGRATED CASH DRAWER CABLE 40 4694 9514 2.8M POWER CORD/NON LOCK PLUG 20 4694 811 MONITOR FILLER PANEL 60 SPECIFY LOCK FOR POS REGISTERS 24 4694 4610 MODEL T12 THERMAL PRINTER 24 4694 4920 CABLE MODEL 4/4R PRINTER 24 4694 1150 FILLER PANEL FOR THERMAL 20 SYM 1908 SYMBOL SCANNER FOR 4694POS 1960 BLUE CROSS 1 7700E HDS UPGRADE SRAM RAID 5 ARRAY SUBSYSTEM 1961 BED BATH & BEY 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 1 IBM 1853 CABLE V.35 FOR 5494 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 3488 V13 INFOWINDOW LOGIC
Schedule 1.04 Page 32 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 6540 00N G42 14" MONITOR 3 IBM 5494 EXT REMOTE CONTROLLER 3 IBM 1100 TOKEN RING ADAPTER 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER IBM 44H 40 IPDS SIMM 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 1853 CABLE V.35 FOR 5494 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 1 MARKNET TOKEN RING ADAPTER 1 IBM 44H 40 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 6540 00N G42 14" MONITOR 1962 TIFFANY & CO 1 IBM 9406 2638 PCZ 100/10MBPS ETHERNET 10A 1964 TIFFANY & CO 1966 BED BATH & BEY 124 IBM 3488 V43 AS/400 TERMINALS 9 IBM 5494 EXT AS/400 REMOTE CONTROLLERS 1967 BED BATH & BEY 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS SIMM 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR
Schedule 1.04 Page 33 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 1100 TOKEN RING ADAPTER 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM PMCP PARALLEL 10'CABLE 5 IBM 3488 V13 INFOWINDOW LOGIC 5 IBM 6540 00N G42 14" MONITOR 8 IBM DECISION DATA LM-4880 LOGIC UNIT 8 IBM DECISION DATA MG05057A 14" SVGA 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2200 OPTRA 1620 LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 40 IPDS SIMM 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1968 TIFFANY & CO 1 63175A ATTENDANT CONSOLE E-BLACK 1 63176A ATTND SEL CONSOLE E-BLACK 1969 NEWSDAY,INC. 2 2645 51U THINKPAD 600 PII 266 32MB 4GB 24X CDROM 2 12J 2467 SELECTABASE 600 2 3547 3 SELECTADOCK 3 2 32IBM 600 32 MEG UPGRADE FOR TP600
Schedule 1.04 Page 34 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1970 TIFFANY & CO 8 4694 244 4694 BASE POS TERMINAL MODEL 244 8 2900 POWER SUPPLY 110-127V 8 3324 POS ALPHANUMERIC KEYBOARD 8 3326 DISTRIBUTED KEYBOARD CABLE 8 3330 KEYBUTTON KIT RETAIL FORMAT 8 3360 CASH DRAWER ASSEMBLY, NO TILL 8 3365 DISTRIBUTED CASH DRAWER CABLE 8 3390 TOKEN RING CABLE 8 3879 FIXED TILL FOR CASH DRAWER 8 3924 MONO VIDEO DISPLAY-DISTRIBUTED 8 4800 MODEL 4 PRINTER 8 4922 MODEL 4 PRINTER DISTIBUTED CABLE 8 4923 MODEL 4 PRINTER RIBBON/PAPER 8 7429 MONITOR TILT/SWIVEL STAND-DISTRIBUTED 8 7462 TOKEN RING NETWORK, 16/4 8 7900 4690 OS DUMP SWITCH FEATURE 32 9203 SYSTEM LOCK 8 8Q1588 FLAT TOP FOR DISTRIBUTED MODELS 8 9510 LINE CORD 4.3M NON-LOCK 8 9511 LINE CORD 1.8M NON-LOCK 8 9537 SOFTWARE USAGE-THIRD PARTY 1 4694 244 4694 BASE POS TERMINAL MODEL 244 1 2900 POWER SUPPLY 110-127V 1 3324 POS ALPHANUMERIC KEYBOARD 1 3325 INTEGRATED KEYBOARD CABLE 1 3330 KEYBUTTON KIT RETAIL FORMAT 1 3360 CASH DRAWER ASSEMBLY, NO TILL 1 3364 INTEGRATED CASH DRAWER CABLE 1 3390 TOKEN RING CABLE 1 3879 FIXED TILL FOR CASH DRAWER 1 3920 MONO VIDEO DISPLAY-DISTRIBUTED 1 4800 MODEL 4 PRINTER 1 4920 MODEL 4 PRINTER DISTIBUTED CABLE 1 4923 MODEL 4 PRINTER RIBBON/PAPER 1 7462 TOKEN RING NETWORK, 16/4 1 7900 4690 OS DUMP SWITCH FEATURE 4 9203 SYSTEM LOCK 1 9510 LINE CORD 4.3M NON-LOCK 1 9537 SOFTWARE USAGE-THIRD PARTY 1 43J 1000 LEXMARK LASER PRINTER 1 PRINTER INTERFACE CABLE 1 33.6 DATA MODEM 1 HOST COMMUNICATIONS INTERFACE CABLE 1971 TIFFANY & CO 12 IBM 9406 6813 8.5GB DASD (CC/M) FOR FC681 2 IBM 9406 7128 5 DISK EXPANSION UNIT 1972 NEWSDAY,INC. 2 ULTRA 10 300 MHZ 256MB 24XCD NO COUNTRY 2 17-IN ENTRY LEVEL COLOR MONITOR 2 UNIX COUNTRY KIT 2 SOLARIS 2.6HW 5/98 ENGLISH SERVER MEDIA 1973 TIFFANY & CO 1 IBM 9406 640 AS/400E SYSTEM UNIT 1 IBM 3 ORDER INSTALLED BY IBM 1 IBM 22 9348-001 LCL SRC RACK MNT
Schedule 1.04 Page 35 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 27 3490E C10,C11,C22 OTHER RACK 1 IBM 37 3590-B11 LCL CRC RACK MNT 1 IBM 43 MIRRORED SYSTEM BUS LEVEL 1 IBM 46 OPTICONNECTED SYSTEM 1 IBM 56 3590-B11 LCL SRC SIDE MNT 1 IBM 330 V.24/EIA232 20FT CABLE 1 IBM 2239 MODEL 640 4-WAY PROCESSOR 30 IBM 2609 EIA 232/V.24 TWO-LINE ADPT 1 IBM 2612 EIA 232/V.24 ONE-LINE ADPT 2 IBM 2619 16/4MBPS TOKEN-RING/HP 1 IBM 2621 REMOVABLE MEDIA DEVICE ATTCH 11 IBM 2623 SIX LINE COMM CONTROLLER 2 IBM 2644 3490 MAGNETIC TAPE ATTACH/HP 4 IBM 2688 OPTICAL LINK PROC(1063MBPS) 1 IBM 2695 OPTICAL BUS ADAPTER 1 IBM 2924 ENGLISH 1 IBM 2961 240 VOLT POWER CORD 2 IBM 3180 512MB MAIN STORAGE 1 IBM 5024 SOFTWARE VERSION V4R2 3 IBM 5052 16 DISK UNIT STORG EXPANSN 4 IBM 5072 1063MBPS SYS UNIT EXPAN TOWER 2 IBM 5082 1063MBPS STORAGE EXP TOWER 3 IBM 5143 BULK 400W POWER SUPPLY 1 IBM 5519 ALT IPL SPECIFY FOR 3590 1 IBM 5520 COMPLETE SYSTEM ORDER 1 IBM 5682 OPTICONNECT IN TOWER 10 IBM 6140 TWINAXIAL WKSTN CTLR 1 IBM 6141 ASCII WORKSTATION CONTROLLER 2 IBM 6501 DASD CONTROLLER 5 IBM 6512 DISK UNIT CNTLR FOR RAID 73 IBM 6607 4.19GB DISK UNIT/A 1 IBM 7607 OPTIONAL DISK UNIT(4.19GB) 2 IBM 8192 1024MB OPTIONAL BASE 61 IBM 9023 V.24 CABLE 20 FT ENHANCED 1 IBM 9082 14 FOOT LINE CORD 1 IBM 9083 LOCKING LINE CORD PLUG 1 IBM 9182 14FT LINE CORD SPECIFY 1 IBM 9183 LOCKING LINE CORD PLUG SPECIFY 1 IBM 9280 BASE TWINAXIAL WSC 1 IBM 9699 BASE TWO-LINE WAN 10 A 1 IBM 9754 BASE MFIOP WITH RAID 2 IBM 9980 3490-CXX EXT CABLE CONN 1974 TIFFANY & CO 1 IBM 9406 530 9406 SYSTEM UNIT 2 IBM 37 3590-B11 LCL SRC RACK MNT 1 IBM 43 MIRRORED SYSTEM BUS LEVEL 1 IBM 2153 MODEL 530 4-WAY PROCESSOR 21 IBM 2609 EIA 232/V.24 TWO LINE ADPT 2 IBM 2619 16/4MBPS TOKEN-RING/HP 1 IBM 2621 REMOVABLE MEDIA DEVICE ATTCH 7 IBM 2623 SIX LINE COMM CONTROLLER 2 IBM 2644 3490 MAGNETIC TAPE ATTACH/HP 2 IBM 2688 OPTICAL LINK PROC(1063MBPS) 1 IBM 2924 ENGLISH 1 IBM 2961 240 VOLT POWER CORD
Schedule 1.04 Page 36 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 IBM 3163 256MB MAIN STORAGE 1 IBM 4961 240 VOLT POWER CORD 1 IBM 5023 SOFTWARE VERSION V4R1 3 IBM 5052 16 DISK UNIT STORG EXPANSN 3 IBM 5072 1063MBPS SYS UNIT EXPAN TOWER 1 IBM 5082 1063MBPS STORAGE EXP TOWER 3 IBM 5143 BULK 400W POWER SUPPLY 1 IBM 5519 ALT IPL SPECIFY FOR 3590 1 IBM 5528 COMPLETE SYSTEM ORDER 1 IBM 5540 ATTACH TWINAXAL WKSTA CTRL 3 IBM 6050 TWINAX WKST CTRL-ENHANCED 2 IBM 6501 DASD CONTROLLER 2 IBM 6512 DISK UNIT CNTLR FOR RAID 2 IBM 6530 STORAGE DEVICE CONTROLLER 57 IBM 6607 4.19GB DISK UNIT/A 2 IBM 8265 OPT BASE 1024MB MAIN STORAGE 1 IBM 8587 OPT BASE 4.19GB DISK UNIT/A 13 IBM 9023 V.24 CABLE 20 FT ENHANCED 1 IBM 9051 BASE 8 DISK UNIT EXPANSION 1 IBM 9082 14 FOOT LINE CORD 1 IBM 9083 LOCKING LINE CORD PLUG 1 IBM 9149 TWINAXIAL PASSTHRU ADAPTER 1 IBM 9162 BASE MFIOP W/TWINAXIAL WSC 1 IBM 9182 14FT LINE CORD SPECIFY 1 IBM 9183 LOCKING LINE CORD PLUG SPECIFY 5 IBM 9240 STD 400W POWER SUPPLY 6 IBM 9243 STD FEATURE POWER SUPPLY 6 IBM 9245 STD BATTERY BACK-UP 1 IBM 9520 BASE CD-ROM 1 IBM 9612 STD EIA 232/V.24 1-LINE AD 1 IBM 9576 BASE OPTICAL BUS ADAPTER 30 IBM 9835 V.24 ENHANCED CABLE 50FT 2 IBM 9980 3490-CXX EXT CABLE CONN 1975 BED BATH & BEY 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT
Schedule 1.04 Page 37 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 13 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 5494 EXT REMOTE CONTROLLER 28 PORT 1 IBM 43J 2638 LASER PRINTER 16PPM 4MB 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 6540 00N G42 14" MONITOR 5 IBM 3488 V13 INFOWINDOW LOGIC 5 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1 IBM 44H 11 CX TX SCS ADAPTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 43J 2600 OPTRA S 1625 16PPM LASER 1976 TIFFANY & CO 3 IBM 4694 244 4694 BASE POS TERMINAL MODEL 244 3 IBM 2900 POWER SUPPLY 110-127V 3 IBM 3324 POS ALPHANUMERIC KEYBOARD 3 IBM 3326 DISTRIBUTED KEYBOARD CABLE 3 IBM 3330 KEYBUTTON KIT RETAIL FORMAT 3 IBM 3360 CASH DRAWER ASSEMBLY, NO TILL 3 IBM 3365 DISTRIBUTED CASH DRAWER CABLE 3 IBM 3390 TOKEN RING CABLE 3 IBM 3879 FIXED TILL FOR CASH DRAWER 3 IBM 3924 MONO VIDEO DISPLAY-DISTRIBUTED 3 IBM 4800 MODEL 4 PRINTER 3 IBM 4922 MODEL 4 PRINTER DISTIBUTED CABLE 3 IBM 4923 MODEL 4 PRINTER RIBBON/PAPER 3 IBM 7429 MONITOR TILT/SWIVEL STAND-DISTRIBUTED 3 IBM 7462 TOKEN RING NETWORK, 16/4 3 IBM 7900 4690 OS DUMP SWITCH FEATURE
Schedule 1.04 Page 38 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 12 IBM 9203 SYSTEM LOCK 3 IBM 9300 FLAT TOP DISTRIBUTED MODELS 3 IBM 9510 LINE CORD 4.3M NON-LOCK 3 IBM 9511 LINE CORD 1.8M NON-LOCK 3 IBM 9534 SOFTWARE USAGE-4690 OS 1977 TIFFANY & CO 1 IBM 4694 244 4694 BASE POS TERMINAL MODEL 244 1 IBM 2900 POWER SUPPLY 110-127V 1 IBM 3324 POS ALPHANUMERIC KEYBOARD 1 IBM 3325 INTEGRATED KEYBOARD CABLE 1 IBM 3330 KEYBUTTON KIT RETAIL FORMAT 1 IBM 3360 CASH DRAWER ASSEMBLY, NO TILL 1 IBM 3364 INTEGRATED CASH DRAWER CABLE 1 IBM 3390 TOKEN RING CABLE 1 IBM 3879 FIXED TILL FOR CASH DRAWER 1 IBM 3920 MONO VIDEO DISPLAY-DISTRIBUTED 1 IBM 4800 MODEL 4 PRINTER 1 IBM 4920 MODEL 4 PRINTER DISTIBUTED CABLE 1 IBM 4923 MODEL 4 PRINTER RIBBON/PAPER 1 IBM 7462 TOKEN RING NETWORK, 16/4 1 IBM 7900 4690 OS DUMP SWITCH FEATURE 4 IBM 9203 SYSTEM LOCK 1 IBM 9510 LINE CORD 4.3M NON-LOCK 1 IBM 9537 SOFTWARE USAGE-THIRD PARTY 1 IBM 43J 1000 LEXMARK LASER PRINTER 1 IBM PRINTER INTERFACE CABLE 1 IBM 33.6 DATA MODEM 1 IBM HOST COMMUNICATIONS INTERFACE CABLE 1978 TIFFANY & CO 1 IBM 9406 S20 AS/400E SYSTEM UNIT 1 IBM 3 ORDER INSTALLED BY IBM 1 IBM 37 3590-B11 LCL SRC RACK MNT 1 IBM 44 DATA LOSS PROTECTION 1 IBM 348 V.24/EIA232 20-FT PCI CABLE 6 IBM 1323 2-BYTE 1.96GB DISK UNIT KIT 7 IBM 1326 2-BYTE 1.96GB DISK UNIT KIT 6 IBM 1327 2-BYTE 4.19GB DISK UNIT KIT 1 IBM 1350 2.5GB 1/4-INCH TAPE KIT 1 IBM 2165 MODEL S20 2-WAY PROCESSOR 1 IBM 2724 PCI 16/4MBPS TOKEN RING 10A 1 IBM 2741 PCI RAID DISK UNIT CTLR 1 IBM 2862 128MB 10P MEMORY 1 IBM 2924 ENGLISH 2 IBM 3002 128MB MAIN STORAGE 2 IBM 3002 128MB MAIN STORAGE 10 IBM 3002 128MB MAIN STORAGE 1 IBM 5064 SYSTEM UNIT EXPANSION 1 IBM 5517 ALT IPL SPEC FOR QIC-2500 1 IBM 5520 COMPLETE SYSTEM ORDER 1 IBM 6501 DASD CONTROLLER 1 IBM 6512 DISK UNIT CNTLR FOR RAID 1 IBM 6617 INTEGRATED PC SERVER 6 IBM 6607 4.19GB DISK UNIT 3 IBM 7128 DASD CONTROLLER 1 IBM 9062 14 FOOT LINE CORD
Schedule 1.04 Page 39 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 9331 BASE PCI EXP UNIT FOR SPD CDS 1 IBM 9720 BASE PCI WAN/TWINAXIAL 10A 1 IBM 9724 BASE PCI TOKEN RING ADAPTER 1 IBM 7855 O1Z 12-192 KPS MODEM 1 IBM 3590 B11 TAPE DRIVE WITH RACL 1 IBM 5125 25 M SCSI CABLE 1 IBM 8130 30 DATA CARTRIDGES (PLANT) 1 IBM 9222 SECOND OR FOURTH B11 1 IBM 9400 ATTACHED TO AS/400 1 IBM 9410 INTERPOSER FOR AS/400 1 IBM 9309 2 RACK ENCLOSURE, 1.6 METER 1 IBM 9060 WATERTIGHT POWER CORD 1 IBM 9171 GENERAL PURPOSE I/O RACK 1979 BALLY NORTH 48 706 28157 COMPAQ DESKPRO 2000MT 48 550 353151 MAGNAVOX 15" SVGA COLOR DIGITAL MONITOR 48 1125 1 SPORTSTER WINMDM 28.8/33.6 48 706 990100 DESKPRO 3 YEAR ENHANCED WARRNTY 1980 BED BATH & BEY 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 5494 EXT REMOTE CONTROLLER 13 IBM G41 14" COLOR MONITOR 6542301 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 5494 EXT REMOTE CONTROLLER 13 IBM G41 14" COLOR MONITOR 6542301 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6546 0AN G54 15" SVGA MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6546 0AN G54 15" SVGA MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 1 IBM 3488 V13 INFOWINDOW LOGIC 1 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6546 0AN G54 15" SVGA MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER
Schedule 1.04 Page 40 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6540 00N G42 14" MONITOR 13 IBM 3488 V13 INFOWINDOW LOGIC 13 IBM 6546 0AN G54 15" SVGA MONITOR 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 43J 2638 LASER PRINTER 1 IBM 44H 50 IPDS OPTION FOR OPTRA S SERIES 1981 BED BATH & BEY 91 3488 V43 COLOR DISPLAY 5 5494 EXT CONTROLLER 1982 GRUMMAN DATA 1 7006 42T IBM RS6000 2397 1080 MB SCSI-2 DISK DRIVE 2610 3.5 IN 2.88MB DISK DRIVE 2643 POWER GXT500 GRAPH ADAPT SEL 3750 SERV PUBLICATION WRAP PLUGS 3751 DIAGNOSTIC MEDIA 4 4026 32NB SIMM MEM SELECT(128MB) 4043 .5MB L2 CACHE 9010 KEYBOARD 101 KEYS 101 US/ENGLISH 9041 3 BUTTON MOUSE SPECIFY 9300 LANGUAGE GROUP US ENGLISH 9397 1080 MB BASE SCSI-2 DISK DRIVE 9617 P70 MONITOR(15.9") 9800 POWER CORD US/CANADA 1983 TIFFANY & CO 1 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 1100 TOKEN RING ADAPTER 80 DEVICE 1 IBM 1200 TWINAX EXPANSION KIT 28 PORT 1984 TIFFANY & CO 8 4694 244 4694 BASE POS TERMINAL MODEL 244 8 2900 POWER SUPPLY 110-127V 8 3324 POS ALPHANUMERIC KEYBOARD 8 3326 DISTRIBUTED KEYBOARD CABLE 8 3330 KEYBUTTON KIT RETAIL FORMAT 8 3360 CASH DRAWER ASSEMBLY, NO TILL 8 3365 DISTRIBUTED CASH DRAWER CABLE 8 3390 TOKEN RING CABLE 8 3879 FIXED TILL FOR CASH DRAWER 8 3924 MONO VIDEO DISPLAY-DISTRIBUTED 8 4800 MODEL 4 PRINTER 8 4922 MODEL 4 PRINTER DISTRIBUTED CABLE 8 4923 MODEL 4 PRINTER RIBBON/PAPER 8 7429 MONITOR TILT/SWIVEL STAND-DISTRIBUTED
Schedule 1.04 Page 41 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 8 7462 TOKEN RING NETWORK, 16/4 8 7900 4690 OS DUMP SWITCH FEATURE 32 9203 SYSTEM LOCK 8 8Q1588 FLAT TOP FOR DISTRIBUTED MODELS 8 9510 LINE CORD 4.3M NON-LOCK 8 9511 LINE CORD 1.8M NON-LOCK 8 9537 SOFTWARE USAGE-THIRD PARTY 1 4694 244 4694 BASE POS TERMINAL MODEL 244 1 2900 POWER SUPPLY 110-127V 1 3324 POS ALPHANUMERIC KEYBOARD 1 3325 INTEGRATED KEYBOARD CABLE 1 3330 KEYBUTTON KIT RETAIL FORMAT 1 3360 CASH DRAWER ASSEMBLY, NO TILL 1 3364 INTEGRATED CASH DRAWER CABLE 1 3390 TOKEN RING CABLE 1 3879 FIXED TILL FOR CASH DRAWER 1 3920 MONO VIDEO DISPLAY-INTEGRATED 1 4800 MODEL 4 PRINTER 1 4920 MODEL 4 PRINTER DISTRIBUTED CABLE 1 4923 MODEL 4 PRINTER RIBBON/PAPER 1 7462 TOKEN RING NETWORK, 16/4 1 7900 4690 OS DUMP SWITCH FEATURE 4 9203 SYSTEM LOCK 1 9510 LINE CORD 4.3M NON-LOCK 1 9537 SOFTWARE USAGE-THIRD PARTY 1 43J 1000 LEXMARK LASER PRINTER 1 PRINTER INTERFACE CABLE 1 33.6 DATA MODEM 1 HOST COMMUNICATIONS INTERFACE CABLE 1985 TIFFANY & CO 8 4694 244 4694 BASE POS TERMINAL MODEL 244 8 2900 POWER SUPPLY 110-127V 8 3324 POS ALPHANUMERIC KEYBOARD 8 3326 DISTRIBUTED KEYBOARD CABLE 8 3330 KEYBUTTON KIT RETAIL FORMAT 8 3360 CASH DRAWER ASSEMBLY, NO TILL 8 3365 DISTRIBUTED CASH DRAWER CABLE 8 3390 TOKEN RING CABLE 8 3879 FIXED TILL FOR CASH DRAWER 8 3924 MONO VIDEO DISPLAY-DISTRIBUTED 8 4800 MODEL 4 PRINTER 8 4922 MODEL 4 PRINTER DISTRIBUTED CABLE 8 4923 MODEL 4 PRINTER RIBBON/PAPER 8 7429 MONITOR TILT/SWIVEL STAND-DISTRIBUTED 8 7462 TOKEN RING NETWORK, 16/4 8 7900 4690 OS DUMP SWITCH FEATURE 32 9203 SYSTEM LOCK 8 8Q1588 FLAT TOP FOR DISTRIBUTED MODELS 8 9510 LINE CORD 4.3M NON-LOCK 8 9511 LINE CORD 1.8M NON-LOCK 8 9537 SOFTWARE USAGE-THIRD PARTY 1 4694 244 4694 BASE POS TERMINAL MODEL 244 1 2900 POWER SUPPLY 110-127V 1 3324 POS ALPHANUMERIC KEYBOARD 1 3325 INTEGRATED KEYBOARD CABLE
Schedule 1.04 Page 42 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 3330 KEYBUTTON KIT RETAIL FORMAT 1 3360 CASH DRAWER ASSEMBLY, NO TILL 1 3364 INTEGRATED CASH DRAWER CABLE 1 3390 TOKEN RING CABLE 1 3879 FIXED TILL FOR CASH DRAWER 1 3920 MONO VIDEO DISPLAY-INTEGRATED 1 4800 MODEL 4 PRINTER 1 4920 MODEL 4 PRINTER DISTRIBUTED CABLE 1 4923 MODEL 4 PRINTER RIBBON/PAPER 1 7462 TOKEN RING NETWORK, 16/4 1 7900 4690 OS DUMP SWITCH FEATURE 4 9203 SYSTEM LOCK 1 9510 LINE CORD 4.3M NON-LOCK 1 9537 SOFTWARE USAGE-THIRD PARTY 1 43J 1000 LEXMARK LASER PRINTER 1 PRINTER INTERFACE CABLE 1 33.6 DATA MODEM 1 HOST COMMUNICATIONS INTERFACE CABLE 1986 GRUMMAN DATA 1 7006 42T RISC/6000 PNY 32MB MEMORY 1 6093 11 1 6094 10 1 6094 20 1987 TIFFANY & CO 2 IBM 9406 5052 STORAGE EXPANSION UNIT 2 IBM 9406 5143 400 WATT POWER SUPPLY 2 IBM 9406 6532 RAID DISK UNIT CONTROLLER 10 IBM 9406 6713 DASD W/REGULATOR 1988 BALLY, INC. 11 PTC 912 TELXON 912 SC 912 CHARGING CRADLES A3X681 5 Y CABLE STRPROM SOFTWARE 1989 TIFFANY & CO. 1 IBM 9406 5052 STORAGE EXPANSION UNIT 1 IBM 9406 5143 400 WATT POWER SUPPLY 1 IBM 9406 6532 RAID DISK UNIT CONTROLLER 10 IBM 9406 6713 8GB DASD W/REGULATOR 1990 IA-980-49 BED, BATH & BEYOND 56 IBM 3488 V13 INFOWINDOW LOGIC 39 IBM 6546 OAN 15" G54 SVGA MONITOR 5 IBM 5494 EXT REMOTE CONTROLLER 4 LEXMARK 43J 2638 LASER PRINTERS 8 LEXMARK 44H 0050 IPDS OPTION 6 LEXMARK 44H 0011 CX TX SCS ADAPTOR 6 LEXMARK 43J 2600 LASER PRINTERS 1 LEXMARK 44H 0001 TOKEN RING 14 IBM 6540 00N 14" G42 MONITOR 1 LEXMARK 43J 2200 LASER PRINTERS 1 LEXMARK 44H 0040 IPDS SIMM 3 IBM 6542 301 14" G41 COLOR MONITOR 9 LEXMARK EXTENDED WARRANTY 1991 BAL-003 BALLY NORTH AMERICA 12 MAGNAVOX PHL15C3220 15" .28MM MONITOR 12 COMPAQ 356050 002 COMPAQ DESKPRO CELARON 300A COMPTRS
Schedule 1.04 Page 43 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 12 COMPAQ 185894 003 EXTENDED WARRANTY 12 SPORTSTER MBUSR1125 MODEMS 12 NEWCOM MMNC 16X CD ROM 6 HP HPLJ6MP LASER PRINTER 6 6' PRINTER CABLE 1 24 PORT STACKABLE HUB 1 HUB CABLE 1992 VSI-008 VITAMIN SHOPPE INDUSTRIES 15 IBM 4694 244 BASE POS TERMINAL 30 IBM 4694 9450 8MB MEMORY MODULE 15 IBM 4694 3324 KEYBOARD 15 IBM 4694 3328 ALPHANUMERIC CABLE 15 IBM 4694 3927 9" COLOR DISPLAY ARTICULATING ARM 15 IBM 4694 3503 40 CHARACTER LCD DISPLAY 15 IBM 4694 3345 INTEGRATED CABLE FOR LCD DISPLAY 15 IBM 4694 3360 CASH DRAWER 15 IBM 4694 3879 FIXED TILL 15 IBM 4694 3364 CASH DRAW CABLE 30 IBM 4694 9514 2.8M POWER CORD 15 IBM 4694 811 MONITOR FILLER PANEL 45 IBM SPECIFY LOCK FOR POS REGISTERS 15 IBM 4694 4610 MODEL T12 THERMAL PRINTER 15 IBM 4694 4920 CABLE MODEL 4/4R PRINTER 15 IBM 4694 1150 FILLER PANEL FOR THERMAL PRINTER 15 IBM SYM 1908 SYMBOL SCANNER FOR 4694 POS TERMINAL 1993 VSI-007 VITAMIN SHOPPE INDUSTRIES 15 IBM 4694 244 BASE POS TERMINAL 30 IBM 4694 9450 8MB MEMORY MODULE 15 IBM 4694 3324 KEYBOARD 15 IBM 4694 3328 ALPHANUMERIC CABLE 15 IBM 4694 3927 9" COLOR DISPLAY ARTICULATING ARM 15 IBM 4694 3503 40 CHARACTER LCD DISPLAY 15 IBM 4694 3345 INTEGRATED CABLE FOR LCD DISPLAY 15 IBM 4694 3360 CASH DRAWER 15 IBM 4694 3879 FIXED TILL 15 IBM 4694 3364 CASH DRAW CABLE 30 IBM 4694 9514 2.8M POWER CORD 15 IBM 4694 811 MONITOR FILLER PANEL 45 IBM SPECIFY LOCK FOR POS REGISTERS 15 IBM 4694 4610 MODEL T12 THERMAL PRINTER 15 IBM 4694 4920 CABLE MODEL 4/4R PRINTER 15 IBM 4694 1150 FILLER PANEL FOR THERMAL PRINTER 15 IBM SYM 1908 SYMBOL SCANNER FOR 4694 POS TERMINAL 1994 TC-PBX-GA-B TIFFANY & COMPANY 1 LUCENT 1272 6US R6SI VAS RTU 2 LUCENT 1272 SSU SIZE SENS/100 PORTS 1 LUCENT 63552 DOCUMENTATION 1 LUCENT 6300 UEP S-1-S1386/R61RSC UP 1 LUCENT 63532 CALL CLASSIFIER PACK 1 LUCENT 63794 CDROM ADMIN DOCS 1995 TC-PBX-TROY-B TIFFANY & COMPANY 1 LUCENT 1272 6US R6SI VAS RTU 2 LUCENT 1272 SSU SIZE SENS/100 PORTS 1 LUCENT 63552 DOCUMENTATION 1 LUCENT 6300 UEP S-1-S1386/R61RSC UP
Schedule 1.04 Page 44 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 LUCENT 63532 CALL CLASSIFIER PACK 1 LUCENT 63794 CDROM ADMIN DOCS 1996 TC-PBX-VA-B TIFFANY & COMPANY 1 LUCENT 1272 6US R6SI VAS RTU 2 LUCENT 1272 SSU SIZE SENS/100 PORTS 1 LUCENT 63552 DOCUMENTATION 1 LUCENT 6300 UEP S-1-S1386/R61RSC UP 1 LUCENT 63532 CALL CLASSIFIER PACK 1 LUCENT 63794 CDROM ADMIN DOCS 1997 TC-PBX-DAL-A TIFFANY & COMPANY 1 LUCENT 1272 6US R6SI VAS RTU 2 LUCENT 1272 SSU SIZE SENS/100 PORTS 1 LUCENT 63552 DOCUMENTATION 1 LUCENT 6300 UEP S-1-S1386/R61RSC UP 1 LUCENT 63532 CALL CLASSIFIER PACK 1 LUCENT 63794 CDROM ADMIN DOCS 1998 TC-4694-NY TIFFANY & COMPANY 8 IBM 4694 244 BASE POS TERMINAL 8 IBM 4694 2900 POWER SUPPLY 110-127V 8 IBM 4694 3324 POS ALPHANUMERIC KEYBD W/ CD READER 8 IBM 4694 3325 INTEGRATED KEYBOARD CABLE 8 IBM 4694 3330 KEYBUTTON KIT RETAIL FORMAT 8 IBM 4694 3360 CASH DRAWER ASSEMBLY, NO TILL 8 IBM 4694 3364 INTEGRATED CASH DRAWER CABLE 8 IBM 4694 3390 TOKEN RING CABLE 8 IBM 4694 3879 FIXED TILL FOR CASH DRAWER 8 IBM 4694 3920 MONO VIDEO DISPLAY-INTEGRATED 8 IBM 4694 4800 MODEL 4 PRINTER 8 IBM 4694 4920 MODEL 4 PRINTER DISTRIBUTED CABLE 8 IBM 4694 4923 MODEL 4 PRINTER RIBBON/PAPER 8 IBM 4694 7462 TOKEN RING NETWORK, 16/4 32 IBM 4694 9203 SYSTEM LOCK 8 IBM 4694 9510 LINE CORD 4.3M NON-LOCK 8 IBM 4694 9537 SOFTWARE USAGE - THIRD PARTY 1999 TC-PBX-BOS-B TIFFANY & COMPANY 1 LUCENT 1272 6US R6SI VAS RTU 2 LUCENT 1272 SSU SIZE SENS/100 PORTS 1 LUCENT 63552 DOCUMENTATION 1 LUCENT 6300 UEP S-1-S1386/R61RSC UP 1 LUCENT 63532 CALL CLASSIFIER PACK 1 LUCENT 63794 CDROM ADMIN DOCS 1 LUCENT 1272 UDU UNIFORM DIAL SFW 2000 IA-980-50 BED, BATH & BEYOND 45 IBM 3488 V13 INFOWINDOW LOGIC BASE 45 IBM 6546 OAN 15" G54 SVGA MONITOR 13 IBM 5494 EXT IBM CONTROLLER 2 LEXMARK 43J 2600 LASER PRINTER 2 LEXMARK 44H 0011 CX TX SCS ADAPTOR 2 LEXMARK 44H 0050 IPDS OPTION 2 EXTENDED WARRANTY 2001 TC-2385D-B TIFFANY & COMPANY 1 IBM 6512 DASD CONTROLLER 2002 TC-OA81D-1 TIFFANY & COMPANY 6 IBM 6713 8.58GB DISK UNIT 1 IBM 5083 1063MBPS STORAGE EXPANSION TOWER
Schedule 1.04 Page 45 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM 6533 RAID DISK UNIT CONTROLLER 1 IBM 2688 OPTICAL LINK PROCESSOR 2003 TC-2385D-A TIFFANY & COMPANY 10 IBM 6907 4.19GB DASD 2004 TC-A1071-A TIFFANY & COMPANY 8 IBM 6907 4.19GB DASD 2005 TC-2KPDM-D TIFFANY & COMPANY 1 IBM SOFTWARE 2006 IA-980-51 BED, BATH & BEYOND 24 IBM 3488 V13 INFOWINDOW LOGIC BASE 24 IBM 6546 OAN 15" G54 SVGA MONITOR 7 IBM 5494 EXT REMOTE CONTROLLER 1 IBM 5494 1100 TOKEN RING ADAPTOR 1 IBM 5494 1200 TWINAX EXPANSION KIT 1 LEXMARK 44H 0001 TOKEN RING PRINT SERVER 1 LEXMARK 44H 0050 IPDS OPTION 1 LEXMARK 43J 2600 LASER PRINTER 1 EXTENDED WARRANTY 2007 TC-2385D-C TIFFANY & COMPANY 1 IBM 9406 650 9406-530 UPGADE TO 9406-650 W/ FEATURES 1 IBM 9406 2924 ENGLISH 84 IBM 9406 6907 4.19GB DISK UNIT 1 IBM 9406 9754 BASE MFIOP WITH RAID 1 IBM 9406 9280 BASE TWINAXIAL WSC 4 IBM 9406 8192 1024MB OPTIONAL BASE 4 IBM 9406 3189 128MB MAIN STORAGE 3 IBM 9406 0325 IPCS EXTENSION CABLES FOR NT 3 IBM 9406 1700 IPCS KEWBOARD/MOUSE FOR NT 3 IBM 9406 2724 PCI 16/4MBPS TOKEN RING IOA 12 IBM 9406 2862 128MB IOP MEMORY 3 IBM 9406 6617 INTEGRATED PC SERVER 1 IBM 9406 9699 BASE TWO-LINE WAN IOA 1 IBM 9406 0330 V.24/EIA232 20-FT CABLE 1 IBM 9406 9251 BASE I/O TOWER 1 IBM 9406 5057 STORAGE EXPANSION UNIT 2 IBM 9406 5058 STORAGE EXPANSION UNIT 3 IBM 9406 5083 1063MBPS STORAGE EXPANSION TOWER 5 IBM 9406 6533 RAID DISK UNIT CONTROLLER 2 IBM 9406 2688 OPTICAL LINK POC 1063MBPS 1 IBM 9406 2695 OPTICAL BUS ADAPTOR 1 IBM 9406 2240 MODEL 650 8-WAY PROCESSOR 1 IBM SOFTWARE & INSTALLATION 2008 IA-980-052 BED, BATH & BEYOND 2 IBM 5494 EXT REMOTE CONTROLLERS 2009 CAS-004-R4 CASE CORPORATION 1 HUGHES 5400 84B AUTO TAPE LIBRARY 4 HUGHES 5400 8211 BMC CHANNELS 2 HUGHES 5400 8212 GATE 2/5 CHANNELS 2010 CAS-005-R4 CASE CORPORATION 2 HUGHES 5491 9211 ESCON CHANNELS 2 HUGHES 5491 9212 GATE 2/5 CHANNELS 2011 IA-980-053 BED, BATH & BEYOND 1 LEXMARK 43J 2600 LASER PRINTER 1 LEXMARK 44H 0011 CX TX ADAPTOR 1 LEXMARK 44H 0060 IPDS SIMM
Schedule 1.04 Page 46 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 IBM 5494 EXT REMOTE CONTROLLER 1 LEXMARK 43J 2638 LASER PRINTER 1 LEXMARK 44H 0050 IPDS OPTION EXTENDED MAINTENANCE 2012 TC-3M2DM TIFFANY & COMPANY 1 IBM 9406 S20 AS-400E SYSTEM UNIT W/ FEATURES 1 IBM 9406 0040 DATA LOSS PROTECTION 1 IBM 9406 0056 3590-BII LCL SRC SIDE MOUNT 2 IBM 9406 0325 IPCS EXTENSION CABLE FOR NT 1 IBM 9406 0330 V.24/EIA232 20FT CABLE 1 IBM 9406 0348 V.24/EIA232 20FT PCI CABLE 1 IBM 9406 0421 JDE VALIDATE NO PRELOAD 2 IBM 9406 1700 IPGS KEYBD/MOUSE FOR NT 1 IBM 9406 2177 MODEL S-20 4-WAY ISV PROCESSOR 1 IBM 9406 2629 LAN/WAN/WORKSTATION IOP 1 IBM 9406 2688 1063MBPS OPTICAL LINK PROCESSOR 1 IBM 9406 2699 TWO-LINE WAN IOA 2 IBM 9406 2724 PCI 16/4MBPS TOKEN RING IOA 1 IBM 9406 2729 PCI MAGNETIC MEDIA CONTROLLER 2 IBM 9406 2741 PCI RAID DISK UNIT CONTROLLER 1 IBM 9406 2809 PCI LAN/WAN/WORKSTATION IOP 1 IBM 9406 2830 MAIN STORAGE EXPANSION 8 IBM 9406 2862 126MB IOP MEMORY 1 IBM 9406 2924 ENGLISH 1 IBM 9406 3002 128MB MAIN STORAGE 1 IBM 9406 5024 SOFTWARE VERSION V4R2 1 IBM 9406 5058 STORAGE EXPANSION UNIT 1 IBM 9406 5064 SYSTEM EXPANSION UNIT 1 IBM 9406 5073 1063MBPS SYSTEM UNIT EXPANSION TOWER 1 IBM 9406 5083 1063MBPS STORAGE EXPANSION TOWER 1 IBM 9406 5519 ALT IPL SPECIFY FOR 3590 1 IBM 9406 5520 COMPLETE SYSTEM ORDER 2 IBM 9406 6533 RAIN DISK UNIT CONTROLLER 2 IBM 9406 6617 INTEGRATED PC SERVER 23 IBM 9406 6713 8.58GB DISK UNIT 17 IBM 9406 6807 4.19GB DISK UNIT 2 IBM 9406 7128 DASD EXPANSION UNIT 1 IBM 9406 9082 14 FOOT LINE CORD 1 IBM 9406 9329 BASE PCI INTEGRATED EXPANSION UNIT 1 IBM 9406 9707 BASE 4.19GB DISK UNIT 1 IBM 9406 9720 BASE PCI WAN/TWINAX IOA 1 IBM 9406 9724 BASE PCI TOKEN RING ADAPTOR SOFTWARE 2013 VSI-009 VITAMIN SHOPPE INDUSTRIES 20 IBM 4694 244 BASE POS TERMINAL 20 IBM 4694 ANPS/2 KEYBOARDS W/ MSR US ENGLISH 20 IBM 4694 INTEGRATED PS/2 ALPHANUMERIC POS KEY 20 IBM 4694 INTEGRATED COLOR DISPLAY 20 IBM 4694 40-CHARACTER LIQUID CRYSTAL DISPLAY 20 IBM 4694 3360 CASH DRAWER ASSEMBLY, NO TILL 20 IBM 4694 3364 INTEGRATED CASH DRAWER CABLE 20 IBM 4694 APA/VF DISPLAY INTEGRATED CABLE ASSMBLY 20 IBM 4694 3879 FIXED TILL FOR CASH DRAWER 20 IBM 4694 4610 MODEL T12 THERMAL PRINTER W/ MICR 20 IBM 4694 INTEGRATED CABLE FOR MODEL 4 &
Schedule 1.04 Page 47 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- SUREMARK PRINTERS 40 IBM 4694 2.8M POWER CARD W/NON-LOCKING PLUG 20 IBM 4694 MONITOR FILLER PANEL FOR WIDE CONFIG 60 IBM 4694 9202 SYSTEM LOCK #9952 20 IBM 4694 FILLER PANEL FOR 4610 SUREMARK PRINTER 40 IBM 4694 32MB UPGRADE, RPQ ONLY 20 IBM 4694 LS 9100 PEARL WHITE/HH 20 IBM 4694 LS 9100 PRODUCT REFERENCE GUIDE 2014 BCBS-012 BLUE CROSS BLUE SHIELD 1 PERIPHONICS 204IS2 VPS/IS 2 MODEL 9500 VOICE RESPONSE SYSTEM 1 PERIPHONICS 204CPS VPS/CPS CALL PROCESSING SUBSYSTEM 2 PERIPHONICS 208.14F QUAD 10/100MBPS ETHERNET S-BUS MODULE 1 PERIPHONICS 204IS VPS/IS MODEL 9500 VOICE RESPONSE SYSTEM 2 PERIPHONICS 208.5.2 32MB EXPANSION RAM 1 PERIPHONICS 220.1 AUDIO TAPE INPUT FEATURE 2 PERIPHONICS 236.1 2-CHNL CONTINOUS SPEECH RECOGNITION MOD 6 PERIPHONICS 236.11 2-CHNL CONTINOUS SPEECH RECOGNITION MOD 1 PERIPHONICS 260.5 EXPANSION HOST PORT 2 PERIPHONICS 314.5 SNMP SOFTWARE LICENSE 3 PERIPHONICS 320.1 HOST INTERFACE SOFTWARE 1 PERIPHONICS 331 CALLER MSG RECORDING SOFTWARE LICENSE 2 PERIPHONICS 388 PERIVIEW CONSOLIDATION SFTWARE LICENSE 2 PERIPHONICS 301.5.3 BASIC SYSTEM SOFTWARE 5.3X 1 PERIPHONICS 401 VPS EQUIPMENT INSTALLATION 2015 TC-A1071-B TIFFANY & COMPANY 1 IBM SOFTWARE (AS-400 SERIAL # 1071) 2016 TC-2385D-D TIFFANY & COMPANY 1 IBM SOFTWARE (AS-400 SERIAL # 2385D) 2017 IA-980-054 BED, BATH & BEYOND 8 IBM 5494 EXT REMOTE CONTROLLER 2 IBM 5494 1500 IBM ETHERNET ADAPTOR 2 LEXMARK 43J 2200 OPTRA S 1625-16PPM PRINTER 2 LEXMARK 44H IPDS FEATURE 2 LEXMARK 44H ETHERNET FEATURE 26 IBM 3488 V43 TERMINAL W/ MONITOR 2019 TC-PBX-727 TIFFANY & COMPANY 2 LUCENT 6950 EA1 7' MODEM CABLE 2 LUCENT 6950 EP5 572 SERIAL PRINTER 2 LUCENT 6950 ET7 715BCS TERM WHITE 2 LUCENT 1227 333 CC DELUXE: 50 AGT 1 LUCENT 1264 AM1 AMW SOFTWARE-RTU-G3I 1 LUCENT 1264 ARS ARS SOFTWARE-RTU 1 LUCENT 1264 DCS G3I DCS SOFTWARE 1 LUCENT 1264 IS3 G3IV3 RTU SOFTWARE SFT 1 LUCENT 3204 W1B MDW9000 WIRELESS SET-BLK 1 LUCENT 3203 03B MDC9000 CORDLESS-BLK 245 LUCENT 3233 03B 8403 DIGITAL VT BLK 30 LUCENT 3234 04B 8410 DIGITAL VT-BLK 243 LUCENT 3235 05B 8410 DIGITAL VT W/ DISPLAY-BLK 7 LUCENT 3236 07B 8434 TERM W/ POWER-BLK 4 LUCENT 32318 DXS (BLACK) 4 LUCENT 3274 10B 302B1 CONSOLE (BLACK) 1 LUCENT 2171 ADM 7400A DATA MODULE 1 LUCENT 2172 101 7400B PLUS DATA MODULE 3 LUCENT 2725 18C CRD M25B RS232C-10FT
Schedule 1.04 Page 48 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 2 LUCENT 2750 D08 1030A CONN (BLACK) 1 LUCENT 2725 02S 4 CND-MTNG CRD-25FT 1 LUCENT 31019 EXTERNAL RINGER 3 LUCENT 24023 7 AH BATTERY CAB. 1 LUCENT 2403 208 8 KVA ENHANCED UPS 1 LUCENT 6300 59C G31 MCC 386 MODEL C 11 LUCENT 63010 SIZE SENSITIVE < 2300 1 LUCENT 63113 HYBRID LN INTERFACE 1 LUCENT 63114 DIGITAL LINE INTERFACE 7 LUCENT 63115 TRUNK LINE INTERFACE 5 LUCENT 63116 DID TRUNK INTERFACE 1 LUCENT 63118 AUX TRUNK INTERFACE CP 2 LUCENT 63123 TONE DETECTOR 21 LUCENT 63136 16 PORT ANALOG INTERFACE 1 LUCENT 63141 ANNOUNCEMENT BOARD 1 LUCENT 63150 UNIVERSAL COUPLER 3 LUCENT 63153 PROCESSOR INTERFACE 6 LUCENT 63156 DS1/DMI TRUNK INTERFACE 1 LUCENT 63185 120A1 CSU MODULE 118 LUCENT 63190 STANDARD CABLE 10-100 1 LUCENT 63202 EPN DUPLEX CONTROL 1 LUCENT 63203 PPN DUP G3I 386 4 LUCENT 63210 SWRM SNEAK FUSE 6 LUCENT 63212 SWRM 188B1 ADM FIELD 1 LUCENT 63213 SWRM AUXILIARY FIELD 5 LUCENT 63214 SWRM 1PR JUMPER WIRE 1 LUCENT 32036 BATTERY (BLACK) 120 LUCENT REMOTE ADMINISTRATIVE ASSISTANCE 250 LUCENT T&M ADJUNCT EQUIPMENT MAINTENANCE 1 LUCENT LABOR CHARGES FOR WIRE WORK 2,500 LUCENT PBX ENGINEER CONSULTANT TIME 1 LUCENT TECHNICIAN VISIT CHARGE 1 LUCENT MATERIAL SHIPPING CHARGE 1 LUCENT MISC WIRE MATERIAL 1 LUCENT DS1/ISDA-PRI INTERFACE CARD 2 LUCENT DS1 CABLE 12 LUCENT 3233 058A 8410 D VOICE TERM 20 LUCENT 3235 05BA 840D VOICE TERM 1 LUCENT 1335 STA T/NOVA ECS R5.0 STATION ADMIN 1 LUCENT 2161 PDMA PROCESSOR DATA UNIT 1 LUCENT 21611A RS232C INTERFACE 1 LUCENT 21702A TDALONE HSG MODULES 1 LUCENT 2177 GEI DATAPORT EXP-EXTERNAL 3 LUCENT 63185A 120A1 CHANNEL SERVICE UNIT 1 LUCENT 69770 NULL MODEM ADAPTOR 1 LUCENT 1470 010A DEF BCMS ADMIN TRNG CD-ROM 3 LUCENT 2178 001A DEFINIRTY MULTIMEDIA LINK 1 LUCENT 2565 B4S VSX4 BRI I/F (PBX) 2 LUCENT 27634 ABC DTE CABLES 1 LUCENT 3830 306 S4000ZX 30FPS OPTION 1 LUCENT 3835 010 PBX SW ENG G1/3-384A 1 LUCENT 3835 026 SOFTWARE ENG-VSX-8BRI/2T 1 LUCENT 3835 212 APPL INTEG T2 PVS/GVS 3 LUCENT 63114A DIGITAL LINE CIRCUIT CARD 3 LUCENT 8302 901A POWERKIT FOR DEFINITY D
Schedule 1.04 Page 49 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 4 LUCENT 63156A DS1/ISDA-PRI INTERFACE CARD 1 LUCENT 31932A 8102 & 8110 DSGTN STRP 1 LUCENT 32307A 8403 DESIG CARD (PKG 25 TF) 1 LUCENT 1264 PRIA G3I ISDN PRIMARY RATE INTF SFT 4 LUCENT 63123A TONE DETECTOR 2 LUCENT 63185 120A1 CHANNEL SERVICE UNIT 3 LUCENT B-LEVEL 3(p) LEVEL PLENUM 4PR CABLE 30 AT&T 530 AT&T 530 PHONE - BLACK 20 AT&T 548 12 12' PHONE CORD - BLACK 20 AT&T 548 6 6' PHONE CORD - BLACK 20 AT&T 548 25 25' BLACK COIL CORD 10 AT&T A-RJ45-15 15' RJ45 PATCH PANEL 10 AT&T A-RJ45-25 25' RJ45 PATCH PANEL 20 LUCENT 3235 05BA 8410 D VOICE TERM 5 LUCENT 3236 09BP 8434DX DCP TERMINAL W/ POWER 2 LUCENT 3235 RTB 8411 DIGITAL SET/DIS & POWER 4 LUCENT 3122 022A MOD BASE UNIT CALL CENTER 1 LUCENT 3122 050A MIRAGE HEADSET 1 LUCENT 32344A 10 BIN DSC CD-PKG 104 LASE 1 LUCENT 32311A 10BTN DESIG CARD (PKG 108) 1 LUCENT 3122 035A TRI-STAR HEADPIECE 2 LUCENT 34521 ADP-02 SUPRA ACCESSORY KIT 4 LUCENT 3236 11BA 8434DX TERM W/PWR+X-MODE (BLACK) 2021 VSI-011 VITAMIN SHOPPE INDUSTRIES 15 IBM 4694 244 6X86-P266 W/3.2GB AND 32MB RAM 30 IBM 4694 32MB MEMORY MODULE 15 IBM 4694 ANPOS/2 KEYBD W/3 TRACK MAG STRIPE RDR 15 IBM 4694 INTGRTD PS/2 ALPHANUMERIC POS KEYBD CABLE 15 IBM 4694 9" COLOR DIS W/INT'DARTICULATING ARM 15 IBM 4694 2X20 40 CHARACTER LCD DISPLAY 15 IBM 4694 INTEGRATED CABLE FOR LCD DISPLAY 15 IBM 4694 FULL SIZE CASH DRAWER, NO TILL 15 IBM 4694 FULL SIZE FIXED TILL 15 IBM 4694 INTEGRATED CASH DRAWER CABLE 30 IBM 4694 2.8M POWER CORD W/ NON-LOCKING PLUG 15 IBM 4694 MONITOR FILLER PANEL FOR WIDE CONFIG 45 IBM 4694 CASH DRAWER LOCKS 15 IBM 4610 MODEL T12 THERMAL/IMPACT W/MICR 15 IBM INTEGRATED CABLE FOR MODEL 4/4R PRINTER 15 IBM 4610 FILLER PANEL FOR THERMAL PRINTER 15 IBM OMNI-DIRECTIONAL SYMBOLS SCANNER FOR POS 15 IBM MULTITECH EXTERNAL 336 MODEM 2022 IA-980-055 BED, BATH & BEYOND 3 IBM 5494 EXT REMOTE CONTROLLER 3 IBM 5494 1100 ETHERNET ADAPTOR 3 IBM 3488 V13 INFOWINDOW LOGIC BASE 3 IBM 6546 OAN 15" G54 COLOR MONITOR 2026 TC-3M2D3-A TIFFANY & COMPANY 1 IBM SOFTWARE 2027 TC-3995 TIFFANY & COMPANY 1 IBM IBM OPTICAL LIBRARY DATASERVER 1 IBM 2)5.2GB MULTIF. OPTICAL DRIVES 1 IBM 10-PACK 5.2 GB WORM OPT. MEDIA 2 IBM 52-PACK 5.2 GB REWR. OPT MEDIA 1 IBM 5.2GB EXT MULTIF. LIB FEATURE
Schedule 1.04 Page 50 LEC LEASING, INC. SCHEDULE 1.04 EQUIPMENT UNDER LEASE AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- ACCT ACCOUNT LESSEE QTY MFR MACHINE MODEL DESCRIPTION # NAME - ---- ------------- ------------------------- ----- ------------- ---------- -------- ------------------------------------------- 1 IBM IBM CABLE FOR AS/400 PCI MAGNETIC 1 IBM 3995 IBM 3995 110/117/120V 50/60 HZ CABLE 1 IBM IBM ORDER INSTALL 1 IBM ENGLISH 1 IBM ULTRA SCSI ATTACH 3995-CXX 2028 TC-A1071-C TIFFANY & COMPANY 1 IBM 9406 640 IBM ORDER INSTALL 1 IBM 9406 2924 ENGLISH 1 IBM 9406 0009 ULTRA SCSI ATTACH 3995-CXX 1 IBM 9406 6534 MAGNETIC MEDIA CONTROLLER 2029 IA-980-56 BED, BATH & BEYOND 738 IBM 3487 HC3 14" COLOR MONITOR W/ FEATURES 9122 7 9201 2 IBM 5494 EXT REMOTE CONTROLLER 2 IBM 5494 1853 V.35 CABLE 26 IBM 3488 V43 MONITOR 2 IBM 5494 002 LIC REMOTE 1 IBM 3488 V13 INFOWINDOW II LOGIC BASE 10 IBM 5494 001 REMOTE CONTROLLER 2 IBM 5494 1200 TWINAX EXPANSION KIT 5 IBM 5394 01B 8/16 DEVICE 1 IBM 5494 1100 TOKEN RING
Schedule 1.04 Page 51 SCHEDULE 1.07 EXCLUDED LEASES o Newsday Leases upgraded/renewed in Acct #2033, ND-149 Acct # Acct Name ------ --------- 1681 ND-132 1880 ND-140 SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1979 BAL-001 BALLY NORTH AMERICA 09-98 36 08-01 1,512 1988 BAL-002 BALLY NORTH AMERICA 10-98 36 09-01 567 1991 BAL-003 BALLY NORTH AMERICA 11-98 36 10-01 743 1588 AP-GRP-14 BED, BATH & BEYOND MTM 2,805 1602 AP-GRP-15 BED, BATH & BEYOND MTM 2,111 1610 AP-GRP-16 BED, BATH & BEYOND 08-95 48 07-99 1,459 1611 AP-087-01 BED, BATH & BEYOND 08-95 48 07-99 1,442 1631 AP-086-01 BED, BATH & BEYOND 09-95 48 08-99 1,066 1632 AP-088-01 BED, BATH & BEYOND 09-95 48 08-99 1,258 1638 AP-093-01 BED, BATH & BEYOND 10-95 48 09-99 1,274 1640 AP-096-01 BED, BATH & BEYOND 10-95 48 09-99 1,082 1643 AP-090-01 BED, BATH & BEYOND 10-95 48 09-99 1,274 1645 AP-091-01 BED, BATH & BEYOND 10-95 48 09-99 1,082 1649 AP-089-01 BED, BATH & BEYOND 10-95 48 09-99 880 1650 AP-092-01 BED, BATH & BEYOND 11-95 48 10-99 1,081 1652 AP-097-01 BED, BATH & BEYOND 11-95 48 10-99 1,078 1655 AP-098-01 BED, BATH & BEYOND 11-95 48 10-99 1,078 1656 AP-094-01 BED, BATH & BEYOND 11-95 48 10-99 1,078 1659 AP-099-01 BED, BATH & BEYOND 11-95 48 10-99 1,078 1660 AP-082-01 BED, BATH & BEYOND 11-95 48 10-99 1,274 1661 AP-100-01 BED, BATH & BEYOND 12-95 48 11-99 1,078 1674 AP-031-01 BED, BATH & BEYOND 01-96 48 12-99 398 1819 IA-980-24 BED, BATH & BEYOND 04-97 36 03-00 2,308 1833 IA-980-25 BED, BATH & BEYOND 04-97 36 03-00 1,133 1861 IA-980-29 BED, BATH & BEYOND 07-97 36 06-00 2,568 1868 IA-980-32 BED, BATH & BEYOND 08-97 36 07-00 2,891 1871 IA-980-33 BED, BATH & BEYOND 09-97 36 08-00 8,841 1887 IA-980-34 BED, BATH & BEYOND 11-97 36 10-00 3,493 1900 IA-980-35 BED, BATH & BEYOND 01-98 36 12-00 621 1918 IA-980-38 BED, BATH & BEYOND 02-98 36 01-01 2,242 1927 IA-980-39 BED, BATH & BEYOND 03-98 36 02-01 1,769 1932 IA-980-40 BED, BATH & BEYOND 03-98 36 02-01 838 1935 IA-980-41 BED, BATH & BEYOND 05-98 24 04-00 1,693 1944 IA-980-42 BED, BATH & BEYOND 05-98 36 04-01 4,436 1961 IA-980-043 BED, BATH & BEYOND 07-98 36 06-01 2,322 1966 IA-980-44 BED, BATH & BEYOND 08-98 24 07-01 3,596 1967 IA-980-45 BED, BATH & BEYOND 08-98 36 07-01 3,068 1975 IA-980-46 BED, BATH & BEYOND 09-98 36 08-01 3,648 1980 IA-980-47 BED, BATH & BEYOND 09-98 36 08-01 4,251 1981 IA-980-48 BED, BATH & BEYOND 10-98 24 09-00 2,479 1990 IA-980-49 BED, BATH & BEYOND 10-98 36 09-01 2,374 2000 IA-980-50 BED, BATH & BEYOND 11-98 36 10-01 2,491 2006 IA-980-51 BED, BATH & BEYOND 12-98 36 11-01 1,440 2008 IA-980-052 BED, BATH & BEYOND 01-99 24 36861 201 2011 IA-980-053 BED, BATH & BEYOND 02-99 36 01-02 367 2017 IA-980-054 BED, BATH & BEYOND 03-99 36 02-02 1,619 2022 IA-980-055 BED, BATH & BEYOND 03-99 36 02-02 497 2029 IA-980-56 BED, BATH & BEYOND 05-99 24 04-01 13,700 1796 BCBS-001 BLUE CROSS BLUE SHIELD 02-97 36 01-00 5,554
SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1815 BCBS-002 BLUE CROSS BLUE SHIELD 04-97 36 03-00 9,064 1816 BCBS-003 BLUE CROSS BLUE SHIELD 03-97 36 02-00 7,922 1823 BCBS-004 BLUE CROSS BLUE SHIELD 05-97 36 04-00 18,784 1842 BCBS-006 BLUE CROSS BLUE SHIELD 09-97 36 08-00 5,880 1843 BCBS-005 BLUE CROSS BLUE SHIELD 07-97 31 01-00 3,650 1869 BCBS-007 BLUE CROSS BLUE SHIELD 10-97 36 09-00 3,674 1903 BCBS-008 BLUE CROSS BLUE SHIELD 01-98 36 12-00 4,159 1908 BCBS-009 BLUE CROSS BLUE SHIELD 01-98 36 12-00 9,817 1951 BCBS-010 BLUE CROSS BLUE SHIELD 06-98 36 05-01 24,600 1960 BCBS-011 BLUE CROSS BLUE SHIELD 07-98 35 05-01 1,846 2014 BCBS-012 BLUE CROSS BLUE SHIELD 05-99 36 04-02 6,155 1726 CAS-007 CASE CORPORATION 07-96 54 12-00 2,537 1727 CAS-008 CASE CORPORATION 07-96 55 01-01 3,631 1728 CAS-009 CASE CORPORATION 07-96 56 02-01 4,546 1729 CAS-010 CASE CORPORATION 07-96 57 03-01 3,051 1746 CAS-011 CASE CORPORATION 08-96 57 04-01 3,176 1747 CAS-012 CASE CORPORATION 08-96 58 05-01 1,528 1806 CAS-016 CASE CORPORATION 02-97 40 05-00 1,646 1818 CAS-014 CASE CORPORATION 04-97 51 06-01 14,554 1859 CAS-015 CASE CORPORATION 07-97 60 06-02 3,741 1874 CAS-016 CASE CORPORATION 10-97 60 09-02 1,521 1905 CAS-017 CASE CORPORATION 01-98 60 12-02 1,069 1933 CAS-018 CASE CORPORATION 04-98 60 03-03 678 2009 CAS-004-R4 CASE CORPORATION 03-99 12 02-00 3,215 2010 CAS-005-R4 CASE CORPORATION 03-99 12 02-00 167 1723 CAS-006 CASE CORPORATION 06-96 48 05-00 47,276 1761 GDS-42T-9 GRUMMAN 11-96 36 10-99 8,397 1762 GDS-42T-10 GRUMMAN 11-96 36 10-99 399 1763 GDS-42T-11 GRUMMAN 12-96 36 11-99 1,997 1982 GDS-42T-1R GRUMMAN 09-98 12 08-99 325 1986 GDS-42T-3R GRUMMAN 10-98 12 09-99 410 1629 HGC-TJLR HARTFORD GRADUATE CTR 09-95 48 08-99 755 1639 HGC-007R HARTFORD GRADUATE CTR MTM 11,240 1686 HGC-009R HARTFORD GRADUATE CTR MTM 3,580 1731 HGC-014 HARTFORD GRADUATE CTR 08-96 60 07-01 7,029 1546 H-8250-A HERTZ MTM 18,460 1857 IBM-001 INT'L BUSINESS MACHINE 08-97 36 07-00 2,477 1798 LI-001-R LETHOFF, INC. MTM 350 1779 NBS-001 NATIONSBANC SERVICES 12-96 36 11-99 6,320 1795 NBS-002 NATIONSBANC SERVICES 03-97 33 11-99 3,415 1800 NBS-003 NATIONSBANC SERVICES 03-97 33 11-99 3,415 1617 NMM-002 NAT'L MERCHANTS MKTG 08-95 48 07-99 832 1637 NMM-003 NAT'L MERCHANTS MKTG 09-95 48 08-99 1,271 1668 NNM-004 NAT'L MERCHANTS MKTG 12-95 48 11-99 770 1676 NMM-005 NAT'L MERCHANTS MKTG 01-96 48 12-99 998 1781 NMM-008 NAT'L MERCHANTS MKTG 12-96 48 11-00 956 1790 NMM-009 NAT'L MERCHANTS MKTG 01-97 48 12-01 365 1704 NMM-006 NAT'L MERCHANTS MKTG 05-96 48 04-00 457 1712 NMM-007 NAT'L MERCHANTS MKTG 06-96 60 05-01 431 1681 ND-132 NEWSDAY, INC. 03-96 60 02-01 17,370 1698 ND-133 NEWSDAY, INC. MTM 314 1715 ND-135 NEWSDAY, INC. MTM 594 1776 ND-137 NEWSDAY, INC. 12-96 36 11-99 795 1810 ND-138 NEWSDAY, INC. 03-97 36 02-00 255 1825 ND-139 NEWSDAY, INC. 05-97 36 04-00 285
SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1880 ND-140 NEWSDAY, INC. 10-97 64 01-03 12,445 1937 ND-143 NEWSDAY, INC. 04-98 24 36617 241 1953 ND-144 NEWSDAY, INC. 06-98 18 11-99 2,685 1955 ND-146 NEWSDAY, INC. 06-98 30 11-00 2,625 1956 ND-145 NEWSDAY, INC. 06-98 48 05-02 5,550 1969 ND-147 NEWSDAY, INC. 8-98 24 7-00 465 1972 ND-148 NEWSDAY, INC. 10-98 12 09-99 785 1852 PH-001 PEACEHEALTH 08-97 24 07-99 3,015 1732 PER-001 PEROT SYSTEMS 09-96 36 08-99 1,110 1791 PER-002 PEROT SYSTEMS 02-97 36 01-00 5,655 1794 PER-003 PEROT SYSTEMS 03-97 36 02-00 5,605 1851 PER-004 PEROT SYSTEMS 07-97 36 06-00 3,861 1597 TC-VM-SF TIFFANY & COMPANY 05-95 60 04-00 587 1600 TC-PBX-GA TIFFANY & COMPANY 05-95 60 04-00 1,488 1607 TC-PBX-VA TIFFANY & COMPANY 07-95 60 06-00 1,506 1608 TC-PBX-BOS TIFFANY & COMPANY 07-95 60 06-00 1,634 1618 TC-4683-MAD TIFFANY & COMPANY 09-95 60 08-00 311 1619 TC-4693-HR TIFFANY & COMPANY 09-95 60 08-00 897 1620 TC-4693-WP TIFFANY & COMPANY 09-95 60 08-00 1,193 1621 TC-4693-LAB TIFFANY & COMPANY 09-95 60 08-00 293 1622 TC-4693-SH TIFFANY & COMPANY 09-95 60 08-00 1,089 1623 TC-4693-NY TIFFANY & COMPANY 09-95 60 08-00 7,172 1624 TC-PBX-DAL TIFFANY & COMPANY 09-95 60 08-00 1,477 1625 TC-PBX-CM TIFFANY & COMPANY 09-95 60 08-00 664 1626 TC-PBX-BH TIFFANY & COMPANY 09-95 60 08-00 655 1627 TC-PBX-TROY TIFFANY & COMPANY 09-95 60 08-00 1,503 1641 TC-VM-CH TIFFANY & COMPANY 10-95 60 09-00 470 1644 TC-VM-SD TIFFANY & COMPANY 10-95 60 09-00 611 1658 TC-4693-MAD1 TIFFANY & COMPANY 12-95 57 08-00 200 1666 TC-4693-NY1 TIFFANY & COMPANY 12-95 57 08-00 1,297 1667 TC-4693-KOP TIFFANY & COMPANY 12-95 57 08-00 1,036 1693 TC-VM-PB TIFFANY & COMPANY 03-96 60 02-01 551 1694 TC-VM-BAL TIFFANY & COMPANY 03-96 60 02-01 601 1695 TC-VM-OB TIFFANY & COMPANY 03-96 60 02-01 587 1696 TC-VM-HO TIFFANY & COMPANY 03-96 60 02-01 594 1718 TC-VIDEO-F TIFFANY & COMPANY MTM 1,455 1720 TC-VIDEO-G TIFFANY & COMPANY MTM 1,846 1724 TC-5494-01 TIFFANY & COMPANY 07-96 36 06-99 2,236 1735 TC-GENESIS TIFFANY & COMPANY 09-96 36 08-99 5,450 1751 TC-GENESIS-A TIFFANY & COMPANY 09-96 36 08-99 385 1755 TC-5494-01A TIFFANY & COMPANY 10-96 33 06-99 261 1770 TC-DIAMOND TIFFANY & COMPANY 01-97 36 12-99 3,927 1771 TC-DIAMOND-A TIFFANY & COMPANY 01-97 36 12-99 41
SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1773 TC-GENESIS-B TIFFANY & COMPANY 11-96 34 08-99 295 1774 TC-4693-HAC TIFFANY & COMPANY 11-96 48 10-00 1,245 1782 TC-GENESIS-C TIFFANY & COMPANY 11-96 34 08-99 117 1783 TC-4693-XTRAA TIFFANY & COMPANY 12-96 42 05-00 35 1785 TC-4693-XB TIFFANY & COMPANY 12-96 42 05-00 712 1787 TC-VIDEO-I TIFFANY & COMPANY 12-96 36 11-99 1,644 1788 TC-DIAMOND-B TIFFANY & COMPANY 02-97 35 12-99 149 1809 TC-GENESIS-D TIFFANY & COMPANY 02-97 31 08-00 568 1820 TC-AS400-1 TIFFANY & COMPANY 04-97 29 08-99 133 1824 TC-GENESIS-E TIFFANY & COMPANY 05-97 28 08-99 5,833 1826 TC-4694-DMC TIFFANY & COMPANY 04-97 36 03-00 533 1827 TC-4694-LAB TIFFANY & COMPANY 04-97 36 03-00 565 1828 TC-4694-PB TIFFANY & COMPANY 04-97 36 03-00 1,080 1829 TC-4694-BAL TIFFANY & COMPANY 04-97 36 03-00 946 1830 TC-4694-MI TIFFANY & COMPANY 04-97 36 03-00 1,626 1831 TC-4694-SF TIFFANY & COMPANY 05-97 36 04-00 1,624 1839 TC-4694-PA TIFFANY & COMPANY 05-97 36 04-00 1,217 1840 TC-4694-MA TIFFANY & COMPANY 05-97 36 04-00 1,217 1841 TC-4694-HHI TIFFANY & COMPANY 07-97 36 06-00 947 1845 TC-4694-CA TIFFANY & COMPANY 06-97 36 05-00 1,622 1847 TC-GENESIS-F TIFFANY & COMPANY 06-97 27 08-99 1,520 1848 TC-4694-MHI TIFFANY & COMPANY 07-97 36 06-00 402 1850 TC-DIAMOND-C TIFFANY & COMPANY 07-97 29 11-99 199 1853 TC-4694-DTX TIFFANY & COMPANY 08-97 36 07-00 809 1854 TC-4694-HTX TIFFANY & COMPANY 08-97 36 07-00 1,217 1855 TC-4694-SD TIFFANY & COMPANY 08-97 36 07-00 1,350 1860 TC-ETOILE/BU TIFFANY & COMPANY 07-97 36 06-00 59,946 1862 TC-5494-02R TIFFANY & COMPANY 07-97 36 06-00 2,350 1865 TC-259GM-1 TIFFANY & COMPANY 09-97 34 06-00 3,838 1870 TC-2F81D-2 TIFFANY & COMPANY 11-97 32 06-00 84 1872 TC-2F81D TIFFANY & COMPANY 09-97 34 06-00 18,848 1875 TC-4694-HILL TIFFANY & COMPANY 11-97 36 10-00 1,349 1876 TC-4694-OH TIFFANY & COMPANY 11-97 36 10-00 1,488 1877 TC-4694-CH TIFFANY & COMPANY 11-97 36 10-00 2,044 1878 TC-4694-NC TIFFANY & COMPANY 11-97 36 10-00 1,070 1879 TC-4694-TR TIFFANY & COMPANY 11-97 36 10-00 2,369 1881 TC-4694-OB TIFFANY & COMPANY 09-97 36 08-00 1,085 1883 TC-259GM-2 TIFFANY & COMPANY 10-97 33 06-00 524 1884 TC-2F81D-1 TIFFANY & COMPANY 10-97 33 06-00 524 1885 TC-4694-TRI TIFFANY & COMPANY 12-97 36 11-00 246 1895 TC-DIAMOND-D TIFFANY & COMPANY 11-97 26 12-99 469 1896 TC-259GM-4 TIFFANY & COMPANY 11-97 32 06-00 861 1898 TC-DIAMOND-E TIFFANY & COMPANY 12-97 25 12-99 480 1901 TC-5494-03 TIFFANY & COMPANY 12-97 31 06-00 1,269 1902 TC-259GM-5 TIFFANY & COMPANY 12-97 31 06-00 2,299 1910 TC-25F3D TIFFANY & COMPANY 02-98 36 01-01 10,832 1912 TC-DIAMOND-F TIFFANY & COMPANY 01-98 24 12-99 493 1913 TC-AS400-1A TIFFANY & COMPANY 01-98 20 08-99 460 1920 TC-DIAMOND-G TIFFANY & COMPANY 02-98 23 12-99 154
SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1921 TC-4694-TR2 TIFFANY & COMPANY 02-98 33 10-00 399 1922 TC-GENESIS-H TIFFANY & COMPANY 02-98 19 08-99 1,671 1924 TC-2KPDM TIFFANY & COMPANY 03-98 36 02-01 7,571 1928 TC-4693-LAB1 TIFFANY & COMPANY 03-98 30 08-00 305 1939 TC-3486-4 TIFFANY & COMPANY 06-98 24 05-00 4,360 1941 TC-PBX-TROY-A TIFFANY & COMPANY 05-98 28 08-00 38 1942 TC-PBX-GA-A TIFFANY & COMPANY 05-98 24 04-00 191 1943 TC-2KPDM-A TIFFANY & COMPANY 05-98 34 02-01 366 1945 TC-25F3D-A TIFFANY & COMPANY 06-98 32 01-01 178 1954 TC-4694-MAN TIFFANY & COMPANY 06-98 36 05-01 1,619 1958 TC-PBX-BOS-A TIFFANY & COMPANY 06-98 25 06-00 65 1962 TC-2KPDM-B TIFFANY & COMPANY 07-98 32 02-00 56 1964 TC-GENESIS-I TIFFANY & COMPANY 07-98 14 08-99 2,311 1968 TC-PBX-VA-A TIFFANY & COMPANY 08-98 23 06-00 186 1970 TC-4694-DV TIFFANY & COMPANY 08-98 36 07-01 1,482 1971 TC-2KPDM-C TIFFANY & COMPANY 09-98 30 02-01 1,395 1973 TC-A1071 TIFFANY & COMPANY 09-98 36 08-01 49,585 1974 TC-2385D TIFFANY & COMPANY 09-98 36 08-01 37,381 1976 TC-4694-SF1 TIFFANY & COMPANY 09-98 20 04-00 858 1977 TC-4694-AZ TIFFANY & COMPANY 09-98 36 08-01 1,482 1978 TC-0A81D TIFFANY & COMPANY 09-98 36 08-01 5,800 1983 TC-5494-01B TIFFANY & COMPANY 10-98 9 06-99 995 1984 TC-4694-LV TIFFANY & COMPANY 10-98 36 09-01 1,482 1985 TC-4694-WA TIFFANY & COMPANY 10-98 36 09-01 1,482 1987 TC-259GM-6 TIFFANY & COMPANY 10-98 21 06-00 2,713 1989 TC-2F81D-4 TIFFANY & COMPANY 10-98 21 06-00 1,945 1994 TC-PBX-GA-B TIFFANY & COMPANY 11-98 18 04-00 884 1995 TC-PBX-TROY-B TIFFANY & COMPANY 11-98 22 08-00 722 1996 TC-PBX-VA-B TIFFANY & COMPANY 11-98 20 06-00 794 1997 TC-PBX-DAL-A TIFFANY & COMPANY 11-98 22 08-00 701 1998 TC-4694-NY TIFFANY & COMPANY 11-98 36 10-01 1,053 1999 TC-PBX-BOS-B TIFFANY & COMPANY 11-98 20 06-00 790 2001 TC-2385D-B TIFFANY & COMPANY 12-98 33 08-01 383 2002 TC-OA81D-1 TIFFANY & COMPANY 11-98 34 08-01 845 2003 TC-2385D-A TIFFANY & COMPANY 11-98 34 08-01 412 2004 TC-A1071-A TIFFANY & COMPANY 11-98 34 08-01 370 2005 TC-2KPDM-D TIFFANY & COMPANY 12-98 27 02-01 100 2007 TC-2385D-C TIFFANY & COMPANY 01-99 32 08-01 35,621 2012 TC-3M2DM TIFFANY & COMPANY 02-99 36 01-02 8,326 2015 TC-A1071-B TIFFANY & COMPANY 03-99 30 08-01 280 2016 TC-2385D-D TIFFANY & COMPANY 03-99 30 08-01 281 2019 TC-PBX-727 TIFFANY & COMPANY 04-99 42 09-02 14,000 2026 TC-3M2D3-A TIFFANY & COMPANY 04-99 34 01-02 260 2027 TC-3995 TIFFANY & COMPANY 04-99 36 03-02 1,799 2028 TC-A1071-C TIFFANY & COMPANY 04-99 29 08-01 105 1700 TC-VM-TO TIFFANY & COMPANY 03-96 60 02-01 506 1705 TC-4693-XTRA TIFFANY & COMPANY 06-96 48 05-00 444 1706 TC-4693-BH TIFFANY & COMPANY 06-96 48 05-00 1,479 1707 TC-4693-DC TIFFANY & COMPANY 06-96 48 05-00 912
SCHEDULE 1.08 LEASE PORTFOLIO AS OF JUNE 30, 1999
- ---- ------------- ------------------------- ----- ---- ----- -------- ACCT START END MONTHLY # ACCOUNT NAME CUSTOMER DATE TERM DATE PAYMENT - ---- ------------- ------------------------- ----- ---- ----- -------- 1708 TC-4693-CM TIFFANY & COMPANY 06-96 48 05-00 1,028 1709 TC-4693-AT TIFFANY & COMPANY 06-96 48 05-00 912 1710 TC-VM-PH TIFFANY & COMPANY 04-96 60 03-01 500 1713 TC-4693-CC TIFFANY & COMPANY 06-96 48 05-00 1,023 1909 VSI-001 VITAMIN SHOPPE INDUSTRIES 01-98 36 12-00 4,661 1917 VSI-002 VITAMIN SHOPPE INDUSTRIES 02-98 36 01-01 1,582 1930 VSI-003 VITAMIN SHOPPE INDUSTRIES 04-98 36 03-01 1,760 1934 VSI-004 VITAMIN SHOPPE INDUSTRIES 04-98 36 03-01 3,466 1950 VSI-005 VITAMIN SHOPPE INDUSTRIES 06-98 36 05-01 2,693 1959 VSI-006 VITAMIN SHOPPE INDUSTRIES 07-98 36 06-01 3,637 1992 VSI-008 VITAMIN SHOPPE INDUSTRIES 11-98 36 10-01 2,640 1993 VSI-007 VITAMIN SHOPPE INDUSTRIES 11-98 36 10-01 2,640 2013 VSI-009 VITAMIN SHOPPE INDUSTRIES 02-99 36 01-02 3,487 2021 VSI-011 VITAMIN SHOPPE INDUSTRIES 04-99 36 03-02 2,596 ======= 845,641 =======
SCHEDULE 1.13 DOCUMENTS o Lease Agreements o Lease Schedules o All Amendments to Leases and/or Schedules o Delivery and Acceptance Receipt o Consent and Agreement, if applicable o Secured Promissory Note (recourse), if applicable o Security Agreement and Assignment of Lease, if applicable o Promissory Note (nonrecourse), if applicable o Copies of Vendor Invoices o Assignments of Purchase Order to Vendors o Purchase Orders to Vendors o Bills of Sale o Certificates of Incumbencies o Copies of UCC filings o Purchase Orders from Lessees o Direct-Pay Permits o Sales Tax Exemptions o Copies Sales Tax Returns o Copies Property Tax Returns o Copies Cash receipts Journals o Copies Inventory Records SCHEDULE 1.15 EXCLUDED REVENUE o Newsday upgrade/renewal Acct # Acct Name ------ --------- 2033 ND-149 o Tiffany AS-400 sale proceeds Acct # Acct Name ------ --------- 1735 TC-GENESIS 1751 TC-GENESIS-A 1773 TC-GENESIS-B 1782 TC-GENESIS-C 1809 TC-GENESIS-D 1824 TC-GENESIS-E 1846 TC-GENESIS-F 1890 TC-GENESIS-G 1922 TC-GENESIS-H 1964 TC-GENESIS-I 1770 TC-DIAMOND 1771 TC-DIAMOND-A 1788 TC-DIAMOND-B 1850 TC-DIAMOND-C 1895 TC-DIAMOND-D 1898 TC-DIAMOND-E 1912 TC-DIAMOND-F 1920 TC-DIAMOND-G o Tiffany AS-400 remaining contractual lease payments Same as above o Tiffany 5494 controller proceeds Acct # Acct Name ------ --------- 1724 TC-5494-01 1755 TC-5494-01A 1983 TC-5494-01B SCHEDULE 1.15 [CONT.] EXCLUDED REVENUE o Peace Health DEC storage equipment sale proceeds Acct # Acct Name ------ --------- 1851 PH-001 o Blue Cross Blue Shield initial payment, due May 1, 1999, received July 12, 1999 Acct # Acct Name ------ --------- 2014 BCBS-012 o Any reimbursement by Purchaser of Seller's "equity investment" in leases entered into subsequent to June 30, 1999 SCHEDULE 2.02(A)I ASSUMED RECOURSE DEBT o All National Merchants Marketing leases, specifically Acct # Acct Name ------ --------- 1617 NMM-002 1637 NMM-003 1668 NMM-004 1676 NMM-005 1704 NMM-006 1712 NMM-007 1781 NMM-008 1789 NMM-009 SCHEDULE 3.03 DEFAULTS ARISING OUT OF TRANSFER o Finova Capital Corporation o Excel Bank, N.A. o Sterling Bank and Trust, FSB o Concord Commercial, Inc. o Although the Lease Agreements do not require the formal consent of the Lessee's prior to transfer, they do contain notification provisions which will be addressed via Schedules 9.02(ix) SCHEDULE 3.04 LIENS AND ENCUMBRANCES o Finova Capital Corporation o Excel Bank, N.A. o Sterling Bank and Trust, FSB o Concord Commercial, Inc. SCHEDULE 3.05 DEFAULTS; NON-PAYMENT To the best of Seller's knowledge, NONE SCHEDULE 3.06 LITIGATION To the best of Seller's knowledge, NONE SCHEDULE 3.07 NO BROKERS Excel Bank, N.A. has requested a finder's fee to be paid by Seller related to this transaction SCHEDULE 3.08 LEASE MODIFICATION o Newsday, Inc. leases ND-132 and ND-140 were consolidated into ND-149 o Certain expired leases have continued on a month-to-month basis SCHEDULE 9.02(viii) CONSENTS AND AFFIDAVITS To be provided at Closing from: o Excel bank, N.A. o Sterling Bank and Trust, FSB o Concord Commercial, Inc. SCHEDULE 9.02(ix) NOTICES OF TRANSFER (LEC LEASING, INC. LETTERHEAD) September _______, 1999 Dear _______________, LEC Leasing, Inc. ("LEC") is pleased to advise you that it has agreed to sell, transfer and assign all of its rights and obligations subject to the Leases between LEC and to Somerset Capital group, Ltd. ("Somerset"), a company with a strong presence in leasing high technology and capital equipment for almost twenty years. This sale, transfer and assignment will be effective upon its approval by the shareholders of LEC's parent company, Golf Entertainment, Inc., but no later than October 31, 1999. In anticipation of this event, LEC has entered into a Management Agreement with Somerset commencing October 1, 1999 and expiring on the effective date of the sale and formal transfer of yours Leases to Somerset. Therefore, as of October 1, 1999, all correspondence and remittances pertaining to your leases should be directed to: LEC Leasing, Inc. c/o Somerset Capital group, Ltd. 1087 Broad Street, Suite 201 Bridgeport, CT 06604 Phone: (203) 394-6182 Fax: (203) 394-6192 Attention: Pedro E. Wasmer LEC will make arrangements in the near future to introduce to Somerset. In the meantime, Somerset will forward you information on the company for your reference. Please feel free to contact Bob Garofalo at LEC's offices in Las Vegas or Pedro Wasmer, President of Somerset, with any questions. We at LEC appreciate your past confidence and support and are certain that your new relationship with Somerset will be mutually beneficial, and that it will be a continuation of the best aspects of your long relationship with LEC. Please acknowledge your receipt and understanding of this letter by signing one copy of it in the space below and returning same to the undersigned, directly to LEC, at the address in this letterhead. Very truly yours, Lessee: _________________________ By: _____________________________ Name: ___________________________ Title: __________________________ Date: ___________________________ ASSET MANAGEMENT AGREEMENT This Agreement is made and entered into as of the 24th day of September, 1999 by and between LEC LEASING, INC. (the "Owner"), a corporation organized and existing under the laws of the State of Nevada and having an office and place of business at 2500 Northwinds Parkway, Suite 175, Three Northwinds Center, Alpharetta, Georgia 30004 and SOMERSET CAPITAL GROUP, LTD. (the "Agent"), a Connecticut corporation having its principal office at 1087 Broad Street, Bridgeport, Connecticut 06604. RECITALS: WHEREAS, the parties hereto have entered into an agreement for the acquisition by the Agent from the owner of certain assets therein defined with closing scheduled for November 19, 1999; WHEREAS, the Agent is engaged in the business of and has expertise in the management of equipment leases, equipment lease portfolios and the management of equipment subject to such leases; and WHEREAS, the parties wish to enter into this Agreement both for the purpose of facilitating the closing of the purchase and sale agreement referred to and, for the more effective management of the seller's assets. NOW THEREFORE, in consideration of these presents and the mutual undertakings herein contained. The Owner hereby employs the Agent to serve as the managing agent of the Equipment, Lease and Lease Portfolio and the Agent hereby accepts such employment effective as of October 1, 1999 subject to the terms and conditions set forth. ARTICLE I DEFINITIONS The following terms in this agreement shall have meanings set forth as follows: 1.01 "Assets" shall mean Equipment, Leases and Lease Portfolio as defined in the Purchase Agreement. 1.02 "Closing Date" shall mean the Closing Date defined as such in the Purchase Agreement. 1.03 "Equipment" shall mean the equipment defined as such in the Purchase Agreement together with such additional equipment as may be assigned to the Agent hereunder. 1.04 "Leases" shall mean that term as defined in the purchase agreement together with such other leases as the owner may transfer to the Agent for management hereunder. 1.05 "Lease Portfolio" shall mean that term as defined in the purchase agreement together with such other leases as the owner may transfer to the Agent for management hereunder. 1.06 "Purchase Agreement" shall mean that certain agreement between the parties hereto realing to the sale of equipment leases and lease portfolio dated September 24, 1999. 1.07 "Records" shall mean that term as defined in the Purchase Agreement. 1.08 "Revenue" shall mean the aggregate of Recurring Revenue and Revenue, General as defined in the Purchase Agreement. 2 ARTICLE II TERM 2.01 The term of Agent's employment shall commence as of the date of transfer by the Owner to the Agent of Records pertaining to any such asset and notification to lessees and other interested parties of the appointment of the Agent hereby. 2.02 This Agreement shall terminate on the earlier of the Closing Date, or the end of the calendar month which is not less than six (6) months from the date hereof, or by notice given by either party, effective as of the date of a calendar month stated in the notice which shall, in any event, not be earlier than ten (10) days after the giving of notice. ARTICLE III OBLIGATIONS 3.01 Owner's Obligations: It shall be the obligation of the Owner hereunder to do all of the following with reasonable dispatch and due diligence: a. Transfer to the Agent all Records. b. Give notice to all lessees and such other persons as may be reasonably required by the Agent, in form designated by Agent, of Agent's appointment to manage the Assets. c. If required, from time to time, give to the Agent, in form reasonably required by the Agent, authorizations necessary to manage the Assets. d. Forward to Agent, by overnight mail, all receipts and remittances received from third parties with respect to the Assets and, if by check or draft, duly endorsed to the order of the Agent. e. Forward to the Agent by telecopier and by U.S. Mail all communications relating to or pertaining to the Assets. 3 3.02 Agent's Obligations: It shall be the obligations of the Agent in the management of the Assets to do the following: a. Send invoices with respect to all sums to become due with respect to the Assets. b. Collect all sums due from third parties with respect to the Assets. c. Provide for the management, sale or other distribution of all equipment, part of the Assets when the Equipment is no longer subject to any Lease. d. Negotiate early renewals, modifications or extensions of any leases which are part of the Assets. e. Keep owner informed of operations. f. Perform such other duties and take such other actions as are commercially reasonable and necessary with respect to the management of the Assets consistent with similar such activities taken by the Agent with respect to other Lease Portfolios under its management. g. In a timely fashion, prepare and forward to Owner for filing all state, federal and local sales and property tax returns with respect to the Assets and any sales thereof. ARTICLE IV FUNDS 4.01 All funds that come into the Agent's hands with respect to the Assets shall, as and when received, be put into an account to be established for the purpose with Chase Manhattan Bank at Bridgeport, Connecticut, to be designated Somerset Capital Group, Ltd. i/t/f LEC Leasing, Inc. 4.02 Somerset shall, periodically but not less than bi-weekly, remit all such funds received by it with respect to the Assets by wire transfer, to Excel Bank, N.A. at New York, New 4 York to be deposited into an account established for this purpose by LEC Leasing, Inc., each of which wire transmittals shall be accompanied by a statement of account showing the source of all funds transmitted. 4.03 A copy of the wire transfer and the accompanying statement shall be sent promptly to LEC Leasing, Inc. ARTICLE V COMPENSATION TO THE AGENT 5.01 The Owner shall pay the Agent all of its reasonable and necessary expenses and disbursements incurred in performing its duties hereunder, including but not limited costs directly related to the management of the Assets including, but not limited to, with respect to Equipment, refurbishing, storage, transportation, and the cost of features necessary to enhance value for sale purposes and, generally, commissions and property taxes, to be paid not later than ten (10) days after invoice or on the Closing Date, whichever is earlier. Expenses reimbursable under this Section shall not include any charges that are reimbursable under Section 5.02 hereof. 5.02 Owner shall pay Agent compensation to Agent for services hereunder twenty (20%) percent of the Revenues together with a sum equal to three (3%) percent of any such compensation on account of Connecticut's sales and use tax with payment to be due, with respect to Revenues received during any calendar month, on the tenth (10th) day of the following calendar month provided there shall be no payment due hereunder until ten (10) days after the Closing Date or any agreed adjournment of the Closing Date. The compensation hereunder shall be to the Agent on account of all of its overhead expenses, expenses of its regularly employed personnel, and all other expenses arising out of its regular recurring operations as well as any profits that may arise out of this Agreement. 5 5.03 The Agent agrees that, in the event that the closing of the Purchase Agreement takes place either on the Closing Date or any agreed upon adjournment date, then it shall not be entitled to any compensation whatsoever as provided in Section 5.02 or as provided in Section 5.01 hereunder, except to the extent that the Owner has recovered from any third party any of the expenses reimbursable under this Section 5.01. and it hereby, subject to the condition stated, waives any claim for any such compensation. ARTICLE VI ROBERT GAROFALO 6.01 Designation of Representative: Robert Garofalo shall serve as Owner's designated representative with respect to management of the Assets by the Agent and Agent shall consult with Garofalo with respect to discretionary actions to be taken on Asset management including new Leases, early Lease terminations, Lease extensions and disposition of Equipment. 6.02 Garofalo's Salary: Owner shall be responsible for paying Garofalo's salary and related taxes imposed on Owner with respect to the salary provided, however, if the closing of the Purchase Agreement occurs on the Closing Date or any adjourned Closing Date, then the Agent shall reimburse the Owner on the Closing Date for Garofalo's salary and related taxes imposed on the Owner with respect to the salary pro rated from the date of the commencement of the term of this Agreement to the Closing Date together with all reasonable and necessary out of pocket expenses incurred by Garofalo relating to marketing activities during this same period. 6.03 Discretionary Actions: The parties recognize that the activities of the Agent shall, in some respects, involve the exercise of discretion; among these matters are those relating to disposition of Equipment, negotiation of leases and negotiations pertaining to modification of existing leases. Notwithstanding the obligation to consult with Garofalo, the actions with respect to matters above stated, or similar such matters, shall be at Agent's discretion and it shall have 6 no liability hereunder with respect to any such discriminatory actions unless there has been an abuse by it in the exercise of this discretion. The parties hereto acknowledge that the Agent is acting as an independent contractor, and neither it nor any of its employees will be employees of the Owner. ARTICLE VII NOTICES 7.01 All notices shall be in writing and shall be deemed to have been properly given on the earlier of (i) when delivered in person, (ii) when deposited in the United States Mail, with adequate postage, and sent by registered or certified mail with return receipt requested, to the appropriate party at the address set out below, or (iii) when deposited with Federal Express, Express Mail or other overnight delivery service for next day delivery, addressed to the appropriate party at the address set out below. If to Purchaser: Somerset Capital Group, Ltd. 1087 Broad Street, Suite 201 Bridgeport, Connecticut 06604-4260 With a copy to: Bernard Green, Esq. Green and Gross, P.C. 1087 Broad Street Bridgeport, Connecticut 06604 If to Seller: LEC Leasing, Inc. 2500 Northwinds Parkway, Suite 175 Three Northwinds Center Alpharetta, Georgia 30004 With a copy to: Harkleroad & Hermance, P.C. Suite 2500 - International Tower 229 Peachtree Street, N.E. Atlanta, Georgia 30303 Rejection or other refusal by the addressee to accept, or the inability of the courier service or the United States Postal Service to deliver because of a changed address of which no notice was 7 given, shall be deemed to be receipt of the notice sent. Any party shall have the right, from time to time, to change the address to which notices to it shall be sent by giving to the other party or parties at least ten (10) days prior notice of the changed address in the manner provided herein. ARTICLE VIII MISCELLANEOUS 8.01 Governing Law: All or part of this Agreement and the legal relations between the parties hereto has been negotiated in the State of Connecticut. This Agreement is to be governed by and construed in accordance with the laws of the State of Connecticut. The parties hereto consent to jurisdiction and venue in the Connecticut Courts of Fairfield County, Connecticut or in the courts of Fulton County, Georgia and in the United States District Court for the District of Connecticut or the Northern District of Georgia for all actions and proceedings relating to this Agreement and the transactions contemplated herein excepting and excluding however any actions brought with respect to Article XI of the Purchase Agreement. 8.02 Litigation: In any litigation arising out of or under this Agreement, the court deciding the matter shall have the right to award to any prevailing party or parties all reasonable and necessary expenses incurred in either the prosecution or defense of the litigation including, without limitation, reasonable attorneys' fees. OWNER: LEC LEASING, INC. By: /s/ R.G. Farrell ---------------------------- Title: Pres. ------------------------- Attest: William J. Vargas ------------------------ Title: Chief Financial Officer ------------------------- [CORPORATE SEAL] 8 AGENT: SOMERSET CAPITAL GROUP, LTD. By: /s/ Pedro Wasmer ---------------------------- Title: President ------------------------- Attest: /s/ [ILLEGIBLE] ------------------------ Title: V.P. & Corp. Secy. ------------------------- [CORPORATE SEAL] 9 AGREEMENT WITH RESPECT TO NET GROCER LEASES This Agreement is entered into this 24th day of September, 1999, regarding matters related to the Closing of the transactions contemplated by the Purchase and Sale Agreement dated September 24, 1999(the "Purchase and Sale Agreement") between LEC Leasing, Inc., as Seller, and Somerset Capital Group, Ltd., as Purchaser. Net Grocer Lease. Notwithstanding anything to the contrary herein or in the Purchase and Sales Agreement, the parties agree that Purchaser shall not purchase from Seller and Seller will not sell to Purchaser any of the equipment subject to the Lease Agreement (the "Net Grocer Equipment") by and between Seller and Net Grocer, Inc. (the "Net Grocer Leases"), such Leases being excluded from the term "Leases" and "Lease Portfolio" as used in the Purchase and Sale Agreement and Seller shall not assign the Net Grocer Leases to Purchaser and Purchaser shall not assume the Net Grocer Leases. Upon the termination of the Net Grocer Leases, Seller shall retain all Net Grocer Equipment, and Seller shall retain all proceeds from the sale of the Net Grocer Equipment. Notwithstanding the foregoing, Purchaser shall use its best efforts to sell and assign or refinance the Net Grocer Equipment and the Net Grocer Leases to or with a third party. If the Net Grocer Equipment and Net Grocer Leases are sold and assigned under any circumstances or refinanced before the termination of the Net Grocer Leases, the Purchaser and the Seller shall share in the excess proceeds or deficit proceeds as follows: (a) if such sale shall produce proceeds in excess of that amount required to pay all debt with Excel Bank, N.A. related to such Net Grocer Leases, Purchaser shall receive 25% of such excess and Seller shall receive 75% of that excess, with Seller's share of the excess to be remitted immediately to Seller as prepayment of the Promissory Note, between Purchaser and Seller, with any excess being delivered to Seller; (b) if such sale or refinancing shall produce proceeds that are less that the amount required to pay all debt with Excel Bank, N.A. related to the Net Grocer Leases, Purchaser shall pay directly to Excel Bank, N.A. promptly upon such sale or refinancing an amount equal to 25% of the deficiency, and Seller shall be liable for the remaining 75% of such deficiency. For purposes of this Agreement, proceeds from sale and assignment, and/or from refinancing Net Grocer Leases and/or Net Grocer Equipment shall include all proceeds from all Net Grocer Lease Schedules number I thru 7, and/or from the Equipment subject thereto whether in the form of fixed rental or month-to-month rentals, sale, or refinancing. Agreed to this 24th day of September, 1999 LEC LEASING, INC. By: /s/ R.G. Farrell ----------------------------- Title: Pres. -------------------------- Attest: William J. Vargas ------------------------- Title: Chief Financial Officer -------------------------- (CORPORATE SEAL) GOLF ENTERTAINMENT, INC. By: /s/ R.G. Farrell ----------------------------- Title: Pres. -------------------------- Attest: William J. Vargas ------------------------- Title: Chief Financial Officer -------------------------- (CORPORATE SEAL) SOMERSET CAPITAL GROUP, LTD. By: /s/ Pedro Wasmer ---------------------------- Title: President ------------------------- Attest: /s/ [ILLEGIBLE] ------------------------ Title: V.P. & Corp. Secy. ------------------------- (CORPORATE SEAL) EXHIBIT B FAIRNESS OPINIONS October 27, 1999 Mr. Ronald G. Farrell, Chairman of the Board, & Members of the Board Golf Entertainment, Inc. Suite 175 3 Northwinds Center 2500 Northwinds Parkway Alpharetta, GA 30004 Dear Sirs: I. Engagement Background J.P. Turner & Company, L.L.C. ("JPT") is a broker/dealer licensed to conduct business throughout 46 of the 50 states of the United States of America. Golf Entertainment, Inc. ("GECC"), then known as LEC Technologies, Inc. ("LECE") engaged JPT on January 12, 1999 to perform a fairness opinion regarding the sale of all subsidiaries of GECC to a former insider (the "January Proposal"). Subsequently on September 28, 1999, GECC revised the engagement and requested that JPT deliver an opinion to the Board of Directors of GECC (the "Board") that the sale of a certain portfolio of equipment leases owned by LEC Leasing, Inc. (a subsidiary of GECC; the "Seller") to Somerset Capital Group, Ltd. ("Purchaser") is fair from a financial point of view to the shareholders of all of the issued and outstanding stock of GECC (the "Fairness Opinion"). The engagement also included JPT's assistance in marketing efforts to identify and negotiate with potential additional purchasers outside of those identified by GECC's Chairman. The purpose of the sale was to divest GECC of all existing business operations and liabilities in order to retain the "public shell" desired for pursuit of an unrelated business strategy. II. Relationship of JPT with Interested Parties A component of GECC's new strategy was the retention of JPT as GECC's investment banker. A portion of the compensation plans relating to the investment banking contract involve JPT's equity investment in GECC. Consequently, in order to avoid a potential conflict of interest in JPT's rendering of a Fairness Opinion regarding the sale, JPT contracted with a well respected and experienced, independent firm primarily engaged in the performance of business valuations and fairness opinions, SLF Valuation Services Inc. ("SLFV") to evaluate the proposed transaction. SLFV has delivered a fairness opinion dated October 27, 1999 to JPT regarding the proposed transaction (the "SLFV Fairness Opinion"; see attached as "Exhibit A"). SLFV's compensation has been entirely monetary and has been paid directly by JPT. SLFV earns its fee solely through the generation of the SLFV Fairness Opinion - such fee is earned regardless of the content or conclusion of the SLFV Fairness Opinion. Neither JPT nor SLFV received any instructions from the Seller or the Purchaser with regard to the conclusions to be contained within the Fairness Opinion. III. The Transaction JPT understands that the Purchaser has made an offer (the "Purchase Transaction") to purchase from the Seller a portfolio of certain equipment leases (substantially the entire lease portfolio of GECC) for $3,559,500 in the following manner: $524,500 in cash, $400,000 30-month fully amortized (i.e., level payment) promissory note with a 10% interest rate, repayment/refinancing of the approximate $2,635,000 Excel and Finova obligations which were primarily formerly used to fund the Seller's initial equity investment in the individual leases as they were written, and the assumption of all non-recourse debt and certain recourse debt securing the lease portfolio. IV. Purpose of the Fairness Opinion The Fairness Opinion is being undertaken in order to assess the adequacy of compensation to be received by the Seller in exchange for the lease portfolio being sold. Consequently, the Fairness Opinion shall be included in various legal filings as well as in correspondence with former, current, and future investors in Seller. JPT's opinions expressed herein are provided for the information of the Board in its evaluation of the Purchase Transaction and our opinions are not intended to be and do not constitute a recommendation to any shareholder with respect to any offer. JPT's opinions are not and should not be construed as a valuation of the shares of common and preferred stock of GECC (the "Shares"). Furthermore, JPT does not estimate or predict the future with respect to the performance of GECC's publicly traded securities. JPT's opinions may not be published or otherwise used or referred to, nor shall any public reference to JPT be made, without our prior written consent. We consent to the reference to this letter and its inclusion in GECC's proxy solicitation materials distributed by the Board to its shareholders in connection with the proposed transaction and any appropriate references in any future filings with the U.S. Securities & Exchange Commission. V. Scope of Review For the purpose of attesting to the Fairness Opinion, JPT and/or SLFV have recently analyzed certain publicly-available and confidential financial, operational and other information relating to the Seller and the Purchaser, including information derived from discussions with members of the management of the Seller. Except as expressly described herein, JPT and SLFV have not conducted any independent investigations to verify the accuracy and completeness thereof. In carrying out this engagement and in formulating this opinion, the following items, among others, have been reviewed and relied upon: 1. Purchase and Sale Agreement dated September 24, 1999 in connection with the Purchase Transaction. 2. Annual reports of GECC for the three fiscal years ended December 31, 1997. 3. Form 10-K of GECC for the two fiscal years ended December 31, 1998. 4. Form 10-Q of GECC for the six months ended June 30, 1999. 5. Draft income statement and balance sheet of the Seller for the six months ended June 30, 1999. 6. Certain internal information and documentation, contracts and agreements, primarily financial in nature, concerning the business, assets, liabilities and future prospects of the Seller. 7. Certain financial information with respect to the Purchaser (SLFV). 8. Opinions of, and discussions with, experts in the computer and equipment leasing industry, including an independent expert in the market valuation of leased computer and related equipment (SLFV). 9. Meetings and/or discussions with members of senior management of the Seller concerning the Seller's past and proposed future business operations, financial condition and results and prospects. 10. Discussion with a representative of a major customer of the Seller (SLFV). 11. Attendance in January 1999 at the former head office of the Seller in Las Vegas, Nevada to review Seller's business operations. 12. Public information relating to the business, operations and financial performance and stock trading history of the Seller and other selected public companies that were considered relevant (SLFV). 13. A letter of representation as to certain factual matters dated the date hereof provided by the Seller and addressed to JPT and SLFV. 14. SLFV Fairness Opinion (see Exhibit "A"); and 15. Such other information, investigations and analyses as JPT and/or SLFV considered appropriate in the circumstances. VI. Methodological Basis of the Fairness Opinion There are two main components to the Fairness Opinion. They are: 1. The fair market value of the Net Assets. 2. The value of the consideration for the Net Assets. If the value of the consideration for the Net Assets exceeds the fair market value of the Net Assets sold, then the transaction is considered fair, from a financial point-of-view, to the seller's shareholders. A. Value of the Net Assets 1. Approaches Considered Accepted business valuation practice generally dictates the use of either an earnings/cash flow based or asset-based technique in the determination of fair market value. Where a company is a going concern and earning an acceptable rate of return on its assets employed, an earnings/cash flow-based technique would be the primary valuation technique as it would generate the highest value. In such a case, the asset-based technique is used to support the value determined under the earnings-based technique and to quantify the amount of goodwill, if any, therein. Only when the asset-based technique produces a higher value, may it be used as a primary valuation technique for a company that is a going concern. The following approaches were considered to determine the fair market value of the Net Assets: a. Adjusted Book Value Approach The adjusted book value approach is an asset-based technique that is generally used to determine the value of a company where the underlying value of its tangible net assets constitutes the prime determinant of corporate worth. To quantify value on this basis, the fair market value of all tangible assets are added and, from that, liabilities are subtracted. b. Earnings and Cash Flow Techniques Earnings and cash flow techniques are employed to develop value where a business interest is viable as a going concern. The most commonly adopted earnings/cash flow techniques are: 1. Capitalization of normalized after tax earnings or net free cash flow. a) This technique is appropriate where normalized after tax earnings or net free cash flow can be predicted with a reasonable degree of confidence. b) To determine the value of a business using this technique, maintainable earnings or net free cash flow is capitalized at a rate of return reflecting the appropriate level of risk related thereto. Maintainable earnings or net free cash flow is based on that which is expected to be earned in the future. 2. Discounting of projected after tax net free cash flow. a) This approach involves an estimate of future annual net free cash flow, and the selection of an appropriate discount rate. This approach is a present value calculation of future cash flow expectations. b) Net free cash flow represents the cash that the investor has completely available to take out of the business or to do with as he wishes with absolutely no impairment of the ongoing ability of the business to continue to produce the expected levels of cash flow in the future. c) In addition to the expected net free cash flow in each year, this technique also requires, among others, that: i) Where the business is expected to operate beyond the expected cash flow projection period, the subsequent results are capitalized and then discounted to present value. This is generally known as the residual value. ii) Where the business is expected to terminate at the end of the cash flow projection period, an estimate of residual value is made and discounted to present value. 3. Capitalization of Normalized Earnings Before Interest & Income Taxes ("EBIT") a) Under this technique, a multiple which reflects the internal and external risks associated with a company is applied to its normalized EBIT. c. Market Comparison Technique The market comparison technique analyzes comparable companies to establish value. It is an efficient technique in that it provides the best insights what a notional purchaser would be prepared to pay. The market technique utilizes capitalization multiples based on current market prices with historical financial data of the publicly traded comparable companies. Selected capitalization multiples are then applied to the company's historical financial results to arrive at an indication of value. A difficulty in using this technique is to find exactly comparable companies. 2. Selection of Appropriate Approach An adjusted book value approach was used to determine the fair market value of the Net Assets. In arriving at this approach, the following factors, among others, were considered: 1. Historical operating results and financial position of GECC and its subsidiaries, which demonstrates an inability by management to successfully operate a leasing operation with no current justification for a positive outlook. Factors include: a) GECC had an accumulated deficit of $7.9 million at December 31, 1998 and net operating loss carryforwards for Federal income tax purposes of approximately $5.3 million at that date. The loss per common share for the fiscal years ended December 31, 1997, 1998 and the six months ended June 30, 1999 were $1.80, $2.63, and $.45, respectively. b) GECC has demonstrated a historical inability to adequately manage its selling, general and administrative expenses ("SG&A"). SG&A expressed as a percentage of revenue has increased from an average of approximately 15 percent in fiscal 1996 and 1997 to 24 percent in fiscal 1998 and 37 percent in the six months ended June 30, 1999. 2. Reliance on customers. a) A review of the Seller's investment in leased assets for fiscal 1998 and the six months to June 30, 1999 indicated that there were seventeen active customers, of which one customer represented 43 percent of the total investment in leased assets during both of these periods. This increases the risk attributable to the future viability of the leasing business and the ability to generate new business. 3. Interest rate differential a) It is understood that for several years, the Seller has not been able to achieve a positive interest rate differential between its cost of borrowing and the rate of return that it receives on new equipment leases, which has been reflected in prior historical losses. This has and will likely continue to negatively impact the Seller's overall cash flows from leasing activities. 4. Industry a) Approximately fifty publicly traded companies were identified that lease durable goods. Potentially comparable companies were subsequently identified by eliminating the following types of companies: i) Companies that do not lease computer equipment (i.e. vehicles, construction equipment, trailers) ii) Diversified leasing companies for which computer equipment leasing does not comprise a major portion of gross revenue. iii) Companies with revenues in excess of $100 million. The Seller's revenue for fiscal 1998 was $12.4 million. 1) Following the above elimination, three companies were identified as being potentially comparable. A detailed level of analysis (quantitative and qualitative) was performed on each company. Based on the results of the analysis, none of these companies were deemed to be comparable. The reasons included the following: i) Favorable financial structure. ii) Vertical integration (systems consulting). iii) High level of profitability. 2) Based on the industry analysis as set out above and discussions with individuals within the leasing industry, it is understood that leasing companies with revenues comparable to the Seller are typically privately held. 5. Historical inability to dispose of the leasing business of the Seller. a) JPT and other parties have attempted to dispose of the business of the Seller since approximately January 1999. In the past ten months, one offer was received from GECC's then President. This offer was terminated in May 1999. Since that time, no offers have been received by GECC in this regard, other than the current Purchaser. 6. Strategic plan of GECC. a) GECC has stated that it "is continuing its efforts to divest itself of its technology services businesses and is focusing primarily on acquiring and consolidating the ownership of existing golf ranges and golf centers." b) Since the resignation of Mr. Michael Daniels as President of GECC on March 23, 1999, and Mr. Rooney on August 17, 1999 (appointed on April 19, 1999), Mr. Ron Farrell has assumed the President's title until a replacement is found. No replacement has yet been found. c) Therefore, it appears that no new leasing business will be generated in the future under the current structure and if a purchaser is not found, the leasing operations of the Seller will be wound down in an orderly manner. B. Calculation of Value As indicated above, the net assets have been valued based on an adjusted book value approach. To determine the appropriate adjustments, JPT and SLFV performed financial analysis as appropriate and, among others, held detailed meetings and discussions with management of the Seller were held with respect to the Net Assets. The Seller's cash flow and viability depends to a great degree on its ability to realize the residual value of leased equipment after the initial term of the lease by re-leasing or selling such equipment. At the inception of each lease and at the end of each fiscal year thereafter, the Seller establishes the residual value of the leased equipment, which is the estimated market value thereof at the end of the initial lease term. In determining the estimated market value, management considers, among others, developments in the high technology equipment market that tend to occur at rapid rates and which add to the risk of obsolescence and shortened product life cycles. The Net Assets (at June 30, 1999) include the estimated residual value of the Seller's portfolio of leases expiring between July 31, 1999 and December 31, 2003. The residual value is greater than the Net Assets. It was deemed appropriate in this matter to reduce the estimated residual value of the leased equipment at June 30, 1999 for additional annual obsolescence on the equipment that will likely occur in the future. In determining the adjustment to the residual value of the leased equipment, consideration was also given to the estimated return that an investor would require on assets of this nature. No other adjustments to the Net Assets were deemed necessary or appropriate. VII. General This analysis must be considered as a whole and that selecting portions of the analysis and factors considered by it, without considering all factors and analyses together, could create a misleading view of the process employed and that the analysis is not necessarily amenable to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on a particular factor or analysis. VIII. Value of the Consideration for the Net Assets The terms of the consideration paid for the Net Assets are set out herein. In determining the risk associated with the consideration, the value of the promissory note has been adjusted to recognize the additional risk that payments thereon may not be made. To determine the appropriate adjustment, discussions on the business operations of the Purchaser were held with the CFO of GECC and the 1998 fiscal year financial statements of the Purchaser were reviewed. The resulting adjustment represents a discount of 8 percent off the initial principal amount of $400,000. IX. Assumptions and Limitations JPT and SLFV have relied upon, and have assumed the completeness, accuracy and fair representation of all financial and other information, data, advice, opinions and representations obtained from public sources, the Seller, and its affiliates or advisors or otherwise, pursuant to JPT's engagement and the opinion herein is conditional upon such completeness, accuracy, and fair representation. Subject to the exercise of professional judgment and except as expressly described herein, neither JPT nor SLFV have attempted to verify independently the accuracy or completeness of any information, data, advice, opinions or representations provided to JPT and/or SLFV. The conclusion herein is based on JPT's and SLFV's review of financial information of the Seller with respect to business activities up to June 30, 1999. This includes due diligence performed by JPT and SLFV with respect to the January Proposal. Neither JPT nor SLFV have reviewed any documentation or information of the Seller with respect to business activities subsequent to June 30, 1999. Although subsequent developments may affect the Fairness Opinion, JPT does not have any obligation to update, revise, or affirm the Fairness Opinion as a result thereof. Senior management of GECC has represented to JPT and SLFV, in a letter delivered as at the date hereof; among other things, that the information, data, opinions, and other materials (the "Information") provided to JPT and SLFV by or on behalf of the Seller are complete and correct at the date the Information was provided to JPT and SLFV and that, since the date of the Information, there has been no material change, financial or otherwise, in the position of the Seller, or in its assets, liabilities (contingent or otherwise), business, or operations (excluding the shut-down of GECC's leasing operations and this Purchase Transaction) and there has been no change of any material fact which is of a nature as to render the Information untrue or misleading in any material respect. The opinion herein is rendered on the basis of securities markets, economic, general business, and financial conditions prevailing as of the date hereof and the condition and prospects, financial and otherwise, of the Seller as they were reflected in the information and documents reviewed by JPT and SLFV and as they were represented to JPT and SLFV in discussions with management of the Seller. In JPT's and SLFV's analyses and in connection with the preparation of the Fairness Opinion, JPT and SLFV have made numerous assumptions with respect to industry performance, general business, market, economic conditions, and other matters, many of which are beyond the control of any party involved in the Purchase Transaction. X. Fairness Opinion Based upon JPT's analysis, and subject to the foregoing, JPT is of the opinion that, as at the date hereof, the Purchase Transaction is fair, from a financial point- of-view, to the holders of all the issued and outstanding stock of GECC. Yours very truly, J.P. Turner & Company, L.L.C. SLF Valuation Services Inc. business valuators & litigation accountants toronto, montreal , ottawa October 27, 1999 Mr. Ben Hughes, Director Research & Analysis J.P. Turner & Company, L.L.C. 3340 Peachtree Road, Suite 450 Atlanta, Georgia 30326 Dear Sir We understand that Golf Entertainment, Inc. ("GECC"), formerly LEC Technologies, Inc., is the owner of all of the issued and outstanding shares of common stock of LEC Leasing, Inc. (the "Seller"), which owns a portfolio of equipment leases (the "Leases and Equipment"). We furthermore understand that Somerset Capital Group, Ltd. (the "Purchaser") has purchased from the Seller (the "Purchase Transaction") the Leases and Equipment. All amounts herein are expressed in United States dollars, unless otherwise specified. The terms and conditions of the Purchase Transaction are set out in the Purchase and Sale Agreement, dated September 24, 1999 (the "Purchase Agreement"). These include the following: 1. At closing, the Purchaser shall pay the Seller the purchase price of $3,559,500 and an amount equal to the balance due on the non-recourse debt which encumbers the Leases and Equipment on the closing date of the Purchase Transaction, subject to adjustment as referred to in the Purchase Agreement. 2. The purchase price shall be paid as follows: a) Cash to be paid at closing of $524,500. b) The assumption by the Purchaser of all non-recourse debt and certain recourse debt that encumbers the Leases and Equipment on the closing date of the Purchase Transaction. c) By delivery of a duly executed promissory note in the principal amount of $400,000 with interest at the rate of 10 percent payable in thirty consecutive equal monthly installments including both principal and interest. d) By cash to be borrowed from Excel Bank, N.A. ("Excel") or another financial institution acceptable to the Purchaser in an amount required to discharge Seller's obligations including those with Seller's affiliates as joint obligors, to Excel and to Finova Capital Corporation, estimated as at August 31, 1999 and not to exceed $2,635,000. 1167 Caledonia Road Toronto, Ontario Canada, M6A 2X1 Tel: 416 785 5353 Fax: 416 785 5663 The assets and liabilities that form part of the Purchase Transaction are hereinafter referred to as the "Net Assets." ENGAGEMENT OF SLF VALUATION SERVICES INC. SLF Valuation Services Inc. ("SLFV") was first contacted by J.P. Turner & Company, L.L.C. ("JPT") in connection with a proposed sale of the assets and liabilities of the Seller and other subsidiaries of GECC on January 15, 1999 (the "January Proposal"). SLFV was retained as financial advisor to JPT effective February 22, 1999, to assist JPT in advising the Board of Directors of GECC ("the Board") with respect to its review of the January Proposal. After the completion of a significant portion of due diligence, SLFV was advised on or about May 6, 1999, that the January Proposal had terminated. SLFV's fixed fee in this regard was $30,000 Cdn. and was not contingent on any event. On September 29, 1999, SLFV was contacted by JPT in connection with the Purchase Transaction. JPT advised SLFV that JPT had been retained by the Board to provide an opinion to the Board with respect to the fairness, from a financial point of view, of the Purchase Transaction to holders of all the issued and outstanding stock of GECC (the "JPT Opinion"). SLFV was retained as financial advisor to JPT on September 29, 1999, to assist JPT in advising the Board with respect to its review of the Purchase Transaction. In connection with the engagement, SLFV has been requested to provide a written opinion (the "Fairness Opinion") as at the date hereof to JPT with respect to the fairness, from a financial point of view, of the Purchase Transaction to holders of all the issued and outstanding stock of GECC. The fixed fee with respect to the Fairness Opinion is $25,500 Cdn. and is not contingent on any event. SLFV furthermore consents to the inclusion and reference to the Fairness Opinion and its conclusion in GECC's proxy solicitation materials distributed by the Board to its shareholders in connection with the Purchase Transaction and any appropriate references in any future filings with the U.S. Securities & Exchange Commission. Pursuant to the terms of SLFV's engagement, SLFV has not been engaged to prepare a formal valuation of any of the Net Assets or any class of shares of GECC and this Fairness Opinion should not be construed as such. However, SLFV has performed financial analyses that are considered appropriate and necessary in the circumstances to support the conclusions reached in the Fairness Opinion. SLFV received no instructions from JPT, GECC, the Seller or the Purchaser in connection with the preparation of this Fairness Opinion. SLFV's opinions expressed herein are provided for the information of JPT in its preparation of the JPT Opinion and SLFV's opinions are not intended to be and do not constitute a recommendation to any shareholder with respect to the Purchase Transaction or any other transaction. SLFV's opinions are not and should not be construed as a valuation of the Net Assets of the Seller. SLFV's opinions may not be published or otherwise used or referred to, except as provided for herein, nor shall any public reference to SLFV be made, without SLFV's prior written consent. CREDENTIALS OF SLFV SLFV is an independent business valuation firm in Canada with operations in all facets of business and securities valuation, corporate finance and acquisitions and divestitures. The opinions expressed herein are the opinions of SLFV and the form and content herein have been approved for release by its President, who is experienced and qualified in merger, acquisition and divestiture and business valuation matters. RELATIONSHIP OF SLFV WITH INTERESTED PARTIES SLFV is not a security holder, creditor, insider, associate or affiliate of JPT, GECC, the Seller or the Purchaser and, except as referred to herein, has not previously provided financial advisory services to GECC, the Seller or the Purchaser. There are no understandings or agreements between SLFV and GECC, the Seller or the Purchaser with respect to any future business dealings. SCOPE OF REVIEW CONDUCTED BY SLFV For the purpose of preparing this Fairness Opinion, SLFV has analyzed certain publicly available and confidential financial, operational and other information relating to the Seller and Purchaser, including information derived from discussions with members of the management of the Seller and GECC. Except as expressly described herein, SLFV has not conducted any independent investigations to verify the accuracy and completeness thereof. In carrying out this engagement and in formulating SLFV's opinion, SLFV has reviewed and relied upon, in part, among other things: 1. Purchase and Sale Agreement, dated September 24, 1999, in connection with the Purchase Transaction. 2. Annual reports of GECC for the three fiscal years ended December 31, 1997. 3. Form 10-K of GECC for the two fiscal years ended December 31, 1998. 4. Form 10-Q of GECC for the six months ended June 30, 1999. 5. Draft income statement and balance sheet of certain subsidiaries of GECC for the six months ended June 30, 1999. 6. Certain internal information and documentation, contracts and agreements, primarily financial in nature, concerning the business, assets, liabilities and future prospects of the Seller. 7. Certain financial information with respect to the Purchaser. 8. Opinions of, and discussions with, experts in the computer and equipment leasing industry, including an independent expert in the market valuation of leased computer and related equipment. 9. Meetings and/or discussions with members of senior management of the Seller concerning the Seller's past and proposed future business operations, financial condition and results and prospects. 10. Discussion with a representative of a major customer of the Seller. 11. Attendance in January 1999 at the former head office of the Seller in Las Vegas, Nevada to review its business operations. 12. Public information relating to the business, operations and financial performance and stock trading history of the Seller and other selected public companies that SLFV considered relevant. 13. A letter of representation as to certain factual matters dated the date hereof provided by the Seller and addressed to SLFV and JPT. 14. Such other information, investigations and analyses as SLFV considered appropriate in the circumstances. METHODOLOGICAL BASIS OF THE FAIRNESS OPINION If the value of the consideration for the net Assets exceeds the fair market value of the Net Assets sold, then the transaction is considered fair, from a financial point of view, to the shareholders of GECC. There are two main components to the Fairness Opinion. They are: 1. The fair market value of the Net Assets. Fair market value is defined as "the highest price available in an open and unrestricted market between informed and prudent parties dealing at arm's length under no compulsion to transact in terms of money or money's worth." 2. The value of the consideration for the Net Assets. VALUE OF THE NET ASSETS APPROACHES CONSIDERED Accepted business valuation practice generally dictates the use of either an earnings/cash flow based or asset-based technique in the determination of fair market value. Where a company is a going concern and earning an acceptable rate of return on its assets employed, an earnings/cash flow-based technique would be the primary valuation technique as it would generate the highest value. In such a case, the asset-based technique is used to support the value determined under the earnings-based technique and to quantify the amount of goodwill, if any, therein. Only when the asset-based technique produces a higher value, may it be used as a primary valuation technique for a company that is a going concern. SLFV considered the following approaches to determine the fair market value of the Net Assets: ADJUSTED BOOK VALUE APPROACH The adjusted book value approach is an asset-based technique that is generally used to determine the value of a company that is a going concern and where the underlying value of its tangible net assets constitutes the prime determinant of corporate worth. To quantify value on this basis, the fair market value of all tangible net assets are added and, from that, liabilities are subtracted. EARNINGS/CASH FLOW TECHNIQUES Earnings/cash flow techniques are employed to develop value where a business interest is viable as a going concern. The most commonly adopted earnings/cash flow techniques are: 1. Capitalization of normalized after tax earnings/net free cash flow. a) This technique is appropriate where normalized after tax earnings or net free cash flow can be predicted with a reasonable degree of confidence. b) To determine the value of a business using this technique, maintainable earnings or net free cash flow is capitalized at a rate of return reflecting the appropriate level of risk related thereto. Maintainable earnings/net free cash flow is based on that which is expected to be earned in the future. 2. Discounting of projected after tax net free cash flow. a) This approach involves an estimate of future annual net free cash flow, and the selection of an appropriate discount rate. This approach is a present value calculation of future cash flow expectations. b) Net free cash flow represents the cash that the investor has completely available to take out of the business or to do with as he wishes with absolutely no impairment of the ongoing ability of the business to continue to produce the expected levels of cash flow in the future. c) In addition to the expected net free cash flow in each year, this technique also requires, among others, that: i) Where the business is expected to operate beyond the expected cash flow projection period, the subsequent results are capitalized and then discounted to present value. This is generally known as the residual value. ii) Where the business is expected to terminate at the end of the cash flow projection period, an estimate of residual value is made and discounted to present value. 3. Capitalization of Normalized Earnings Before Interest & Income Taxes ("EBIT") a) Under this technique, a multiple, which reflects the internal and external risks associated with a company, is applied to its normalized EBIT. MARKET COMPARISON TECHNIQUE The market comparison technique analyzes comparable companies to establish value. It is an efficient technique in that it provides the best insights as to what a notional purchaser would be prepared to pay. The market technique utilizes capitalization multiples based on current market prices with historical financial data of the publicly traded comparable companies. Selected capitalization multiples are then applied to the company's historical financial results to arrive at an indication of value. A difficulty in using this technique is to find exactly comparable companies. Selection of Appropriate Approach SLFV has used an adjusted book value approach to determine the fair market value of the Net Assets. In arriving at this approach, SLFV considered, among others, the following factors: 1. Historical operating results and financial position of GECC and its subsidiaries, which demonstrates an inability by management to successfully operate a leasing operation with no current justification for a positive outlook. Factors include: a) GECC had an accumulated deficit of $7.9 million at December 31, 1998 and net operating loss carryforwards for Federal income tax purposes of approximately $5.3 million at that date. The loss per common share for the fiscal years ended December 31, 1997, 1998 and the six months ended June 30, 1999 were $1.80, $2.63 and $.45, respectively. b) GECC has demonstrated a historical inability to adequately manage its selling, general and administrative expenses ("SG&A"). SG&A expressed as a percentage of revenue has increased from an average of approximately 15 percent in fiscal 1996 and 1997 to 24 percent in fiscal 1998 and 37 percent in the six months ended June 30, 1999. 2. Reliance on customers. a) Our review of the Seller's investment in leased assets for fiscal 1998 and the six months to June 30, 1999 indicated that there were seventeen active customers, of which one customer represented 43 percent of the total investment in leased assets during both of these periods. This increases the risk attributable to the future viability of the leasing business and the ability to generate new business. 3. Interest rate differential a) We understand that for several years, the Seller has not been able to achieve a positive interest rate differential between its cost of borrowing and the rate of return that it receives on new equipment leases, which has been reflected in prior historical losses. This has and will likely continue to negatively impact the Seller's overall cash flows from leasing activities. 4. Industry a) SLFV identified approximately fifty publicly traded companies that lease durable goods. Potentially comparable companies were subsequently identified by eliminating the following types of companies: i) Companies that do not lease computer equipment (i.e. vehicles, construction equipment, trailers) ii) Diversified leasing companies for which computer equipment leasing does not comprise a major portion of gross revenue. iii) Companies with revenues in excess of $100 million. The Seller's revenue for fiscal 1998 was $12.4 million. b) Following the above elimination, three companies were identified as being potentially comparable. SLFV performed a detailed level of analysis (quantitative and qualitative) on each company. Based on the results of the analysis, none of these companies was deemed comparable. The reasons for the exclusions included the following: i) Favorable financial structure. ii) Vertical integration (systems consulting). iii) High level of profitability. c) Based on our industry analysis as set out above and discussions with individuals within the leasing industry, we understand that leasing companies with revenues comparable to the Seller are typically privately held. 5. Historical inability to dispose of the leasing business of the Seller. a) We understand that JPT and/or other parties have attempted to dispose of the business of the Seller since approximately January 1999. In the past ten months, one offer was received from GECC's then President. This offer was terminated in May 1999. Since that time, no offers have been received by GECC in this regard. 6. Strategic plan of GECC. a) GECC has stated that it "is continuing its efforts to divest itself of its technology services businesses and is focusing primarily on acquiring and consolidating the ownership of existing golf ranges and golf centers." b) Since the resignation of Mr. Michael Daniels as President of GECC on March 23, 1999, and Mr. Rooney on August 17, 1999 (appointed on April 19, 1999), Mr. Ron Farrell has assumed the President's title until a replacement is found. No replacement has yet been found. c) Therefore, it appears that no new leasing business will be generated in the future under the current structure and if a purchaser is not found, the leasing operations of the Seller will be wound down in an orderly manner. CALCULATION OF VALUE As indicated above, we have valued the net assets based on an adjusted book value approach. To determine the appropriate adjustments, SLFV performed financial analysis as appropriate and, among others, held detailed meetings and discussions with management of the Seller with respect to the Net Assets. The Seller's cash flow and viability depends to a great degree on its ability to realize the residual value of leased equipment after the initial term of the lease by re-leasing or selling such equipment. At the inception of each lease and at the end of each fiscal year thereafter, the Seller establishes the residual value of the leased equipment, which is the estimated market value thereof at the end of the initial lease term. In determining the estimated market value, management considers, among others, developments in the high technology equipment market that tend to occur at rapid rates and which add to the risk of obsolescence and shortened product life cycles. The Net Assets (at June 30, 1999) include the estimated residual value of the Seller's portfolio of leases expiring between July 31, 1999 and December 31, 2003. The residual value is greater than the Net Assets. SLFV has deemed it appropriate in this matter to reduce the estimated residual value of the leased equipment at June 30, 1999 for additional annual obsolescence on the equipment that will likely occur in the future. In determining the estimated residual value of the leased equipment, SLFV has also recognized the estimated return that an investor would require on assets of this nature. SLFV did not consider it appropriate to adjust any other assets or liabilities comprising the Net Assets. GENERAL SLFV believes that its analysis must be considered as a whole and that selecting portions of the analysis and factors considered by it, without considering all factors and analyses together, could create a misleading view of the process employed and that the analysis is not necessarily amenable to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on a particular factor or analysis. Value of the Consideration for the Net Assets The terms of the consideration paid for the Net Assets are set out herein. In determining the risk associated with the consideration, we have adjusted the promissory note to recognize additional risk that payments thereon may not be made. To determine the appropriate adjustment, we have discussed the business operation of the Purchaser with the former CFO of GECC and have reviewed the balance sheet, income statement and related notes of the Purchaser for its 1998 fiscal year. Our adjustment represents a discount of 8 percent off the initial principal amount of $400,000. ASSUMPTIONS AND LIMITATIONS SLFV has relied upon, and has assumed the completeness, accuracy and fair representation of all financial and other information, data, advice, opinions and representations obtained by SLFV from public sources or provided to SLFV by JPT, the Seller and its affiliates or advisors or otherwise pursuant to SLFV's engagement and the opinion herein is conditional upon such completeness, accuracy and fair representation. Subject to the exercise of professional judgment and except as expressly described herein, SLFV has not attempted to verify independently the accuracy or completeness of any information, data, advice, opinions or representations provided to SLFV. The conclusion herein is based on SLFV's review of financial information of the Seller with respect to business activities up to June 30, 1999. This includes due diligence performed by SLFV with respect to the January Proposal. SLFV has not reviewed any documentation or information of the Seller with respect to business activities subsequent to June 30, 1999. Although subsequent developments may affect the Fairness Opinion, SLFV does not have any obligation to update, revise or affirm the Fairness Opinion as a result thereof. Senior management of GECC has represented to SLFV and JPT, in a letter delivered as at the date hereof; among other things, that the information, data, opinions and other materials (the "Information") provided to SLFV and JPT by or on behalf of the Seller are complete and accurate at the date the Information was provided to SLFV and JPT and that, since the date of the Information, there has been no material change, financial or otherwise, in the position of the Seller, or in its assets, liabilities (contingent or otherwise), business or operations and there has been no change of any material fact which is of a nature as to render the Information untrue or misleading in any material respect. The opinion herein is rendered on the basis of securities markets, economic and general business and financial conditions prevailing as at the date hereof and the condition and prospects, financial and otherwise, of the Seller as they were reflected in the information and documents reviewed by SLFV and as they were represented to SLFV in discussions with management of the Seller and SLFV does not estimate or predict the future with respect to the performance of GECC's publicly traded securities. In SLFV's analyses and in connection with the preparation of the Fairness Opinion, SLFV has made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the Purchase Transaction. FAIRNESS OPINION Based upon SLFV's analysis, and subject to the foregoing, SLFV is of the opinion that, as at the date hereof, the Purchase Transaction is fair, from a financial point of view, to the holders of all the issued and outstanding stock of GECC. Yours very truly, SLF VALUATION SERVICES INC. ANNUAL REPORT [LOGO] GOLF ENTERTAINMENT, INC. 2500 Northwinds Parkway Three Northwinds Center Suite 175 Alpharetta, Georgia 30004 ================================================================================ TO OUR SHAREHOLDERS REFOCUSING FOR THE FUTURE I am please to report that the past year was one of great change, transition and adjustment for Golf Entertainment, Inc. Although the financial results were disappointing, I believe that the past year will be remembered as a watershed year for our Company - - Your Board of Directors came to the difficult conclusion that the Company was unable to effectively compete in the technology services industry and that a new strategic direction was necessary. - To that end, you, our shareholders, approved changing the Company's name to Golf Entertainment, Inc. and approved the issuance of shares of common stock upon the conversion of the Company's 6% Convertible Debentures to a new investment group that will provide the seed capital for the Company's new strategic direction - to become an owner and consolidator of golf entertainment facilities. TANGIBLE RESULTS The Company has already begun to implement the change in strategy. To that end, the Company has already accomplished several items that it believes will benefit the Company and its shareholders, including: - Reducing corporate expenses from $362,700 in the Fourth Quarter of 1998 to $185,300 in the Third Quarter of 1999, a savings of approximately $177,400 per quarter. - Eliminating almost $140,000 of old debt through settlement of various claims. - Closing its Las Vegas, Nevada offices, thereby reducing general and administrative expenditures by approximately $35,000 per month. - Ceasing operations of the Company's operating subsidiaries. - Replacing the former chief executive officer and other management of the Company. - Acquiring a golf facility in Oklahoma City, Oklahoma. - Acquiring a golf facility in Columbia, South Carolina. THE FUTURE Our strategies in 1999 and beyond are fourfold: - To sell the Company's lease portfolio and exit the technology services business as reflected in our proxy statement. - To gain revenue growth and improve margins in order to enhance the Company's value to our shareholders. - To enhance growth through acquisition, gain the confidence of the investment community and our credibility to our shareholders through solid business practices, timely reporting and more meaningful analyses of results. - To form strategic alliances with major lenders for the financing of strategic acquisition opportunities. We believe that these strategies are consistent with our basic goals of delivering value to our shareholders. CONCLUSION We deeply appreciate the contributions of our employees, directors and friends during the past year as well as the support of our shareholders. We are extremely confident that the actions taken in 1998 and thus far in 1999 will provide the foundation necessary to finally deliver the results and performance that our shareholders deserve. Ronald G. Farrell Chief Executive Officer 10-K INCORPORATED BY REFERENCE, AS FILED ON APRIL 15, 1999 -----END PRIVACY-ENHANCED MESSAGE-----