LEASE AGREEMENT
This LEASE AGREEMENT, is effective on June 2, 1992 between
TELECOMMUNICATIONS FINANCE GROUP (hereinafter "Lessor"), and Communication
Telesystems International, a California corporation with its principal office
located at 4350 LaJolla Village Drive, Suite 800, San Diego, California 92122
(hereinafter "Lessee").
1. LEASE.
Lessor, subject to the conditions set forth in Section 25 hereof,
agrees to lease to Lessee and Lessee agrees to lease from Lessor hereunder,
those items of personal property (the "Equipment") which are described on
Schedule 1 of Exhibit A hereto. Lessee agrees to execute and deliver to Lessor a
certificate of delivery and acceptance in substantively the form of Exhibit A
hereto (a "Delivery Certificate") immediately after Turnover of the Equipment,
and such execution shall constitute Lessee's irrevocable acceptance of such
items of Equipment for all purposes of this Lease. The Delivery Certificate
shall constitute a part of this Lease to the same extent as if the provisions
thereof were set forth herein.
2. DEFINITIONS.
"AMORTIZATION DEDUCTIONS" as defined in Section 11(b)(i) hereof.
"APPRAISAL PROCEDURE" shall mean the following procedure for
determining the Fair Market Sale Value of any item of Equipment. If
either Lessor or Lessee shall request by notice (the "Appraisal
Request") to the other that such value be determined by the Appraisal
Procedure, (i) Lessor and Lessee shall, within 15 days after the
Appraisal Request, appoint an independent appraiser mutually
satisfactory to them, or (ii) if the parties are unable to agree on a
mutually acceptable appraiser within such time, Lessor and Lessee
shall each appoint one independent appraiser (PROVIDED that if either
party hereto fails to notify the other party hereto of the identity of
the independent appraiser chosen by it within 30 days after the
Appraisal Request, the determination of such value shall be made by
the independent appraiser chosen by such other party), and (iii) if
such appraisers cannot agree on such value within 20 days after their
appointment and if one appraisal is not within 5% of the other
appraisal, Lessor and Lessee shall choose a third independent
appraiser mutually satisfactory to them (or, if they fail to agree
upon a third appraiser within 25 days after the appointment of the
first two appraisers, such third independent appraiser shall within 20
days thereafter be appointed by the American Arbitration Association),
and such value shall be determined by such third independent appraiser
within 20 days after his appointment, after consultation with the
other two
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independent appraisers. If the first two appraisals are within 5% of
each other, then the average of the two appraisals shall be the Fair
Market Sale Value. The fees and expenses of all appraisers shall be
paid by Lessee.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or legal
holiday under the laws of the State of Florida.
"CODE" shall mean the Internal Revenue Code of 1954, as amended, or
any comparable successor law.
"COMMENCEMENT DATE" as defined in Section 3 hereof.
"DEFAULT" shall mean any event or condition which after the giving of
notice or lapse of time or both would become an Event of Default.
"DELIVERY CERTIFICATE" as defined in Section 1 hereof.
"EQUIPMENT" as defined in Section 1 hereof.
"EVENT OF DEFAULT" as defined in Section 18 hereof.
"EVENT OF LOSS" shall mean, with respect to any item of Equipment, the
actual or constructive total loss of such item of Equipment or the use
thereof, due to theft, destruction, damage beyond repair or rendition
thereof permanently unfit for normal use from any reason whatsoever,
or the condemnation, confiscation or seizure of, or requisition of
title to or use of, such item of Equipment.
"FAIR MARKET SALE VALUE" shall, at any time with respect to any item
of Equipment, be equal to the sale value of such item of Equipment
which would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an
informed and willing buyer-user (other than a lessee currently in
possession or a used equipment or scrap dealer). For purposes of
Section 7(b) hereof, Fair Market Sale Value shall be determined by (i)
an independent appraiser (at Lessee's expense) selected by Lessor or
(ii) by the Appraiser Procedure if the Appraisal Request is made at
least 90 days (but not more than 360 days) prior to the termination or
expiration of the Lease Term, as the case may be, which determination
shall be made (a) without deduction for any costs or expenses of
dismantling or removal; and (b) on the assumption that such item of
Equipment is free and clear of all Liens and is in the condition and
repair in which it is required to be returned pursuant to Section 7(a)
hereof. For purposes of Section 19(c) hereof, Fair Market Sale Value
shall
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be determined (at Lessee's expense) by an independent appraiser
selected by Lessor, on an "as-is, where-is" basis, without regard to
the provisions of clauses (a) and (b) above; PROVIDED that if Lessor
shall have sold any item of Equipment pursuant to Section 19(b) hereof
prior to giving the notice referred to in Section 19(c) hereof, Fair
Market Sale Value of such item of Equipment shall be the net proceeds
of such sale after deduction of all costs and expenses incurred by
Lessor in connection therewith; PROVIDED, FURTHER, that if for any
reason Lessor is not able to obtain possession of any item of
Equipment pursuant to Section 19(a) hereof, the Fair Market Sale Value
of such item of Equipment shall be zero.
"IMPOSITION" as defined in Section 11(a) hereof.
"INDEMNITEE" as defined in Section 17 hereof.
"LATE CHARGE RATE" shall mean an interest rate per annum equal to the
higher of two percent (2%) over the Reference Rate or eighteen percent
(18%), but not to exceed the highest rate permitted by applicable law.
"LEASE" and the terms "hereof", "herein", "hereto" and "hereunder",
when used in this Lease Agreement, shall mean and include this Lease
Agreement, Exhibits and the Delivery Certificate hereto as the same
may from time to time be amended, modified or supplemented.
"LEASE TERM" shall mean, with respect to any item of Equipment, the
term of the lease of such item of Equipment hereunder specified in
Section 3 hereof.
"LESSEE" as defined in the introductory paragraph to this Lease.
"LESSOR" as defined in the introductory paragraph of this Lease.
"LESSOR'S VALUE" shall mean, with respect to any item of Equipment and
installation if applicable, the total amount set forth in Schedule 1
of Exhibit A hereto.
"LESSOR'S LIENS" shall mean (i) any mortgage, pledge, lien, security
interest, charge, encumbrance, financing statement, title retention or
any other right or claim of any person claiming through or under
Lessor, not based upon or relating to ownership of the Equipment or
the lease thereof hereunder and (ii) any mortgage, pledge, lien,
security interest, charge, encumbrance, financing statement, title
retention or any other right or claim of Owner (other than Lessor)
claiming through or under Lessor in connection with the transactions
described in Section 21(b) hereof.
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"LIENS" shall mean any mortgage, pledge, lien, security interest,
charge, encumbrance, financing statement, title retention or any other
right or claim of any person, other than any Lessor's Lien.
"LOSS PAYMENT DATE" shall mean with respect to any item of Equipment
the date on which payment, as described in Section 16(b) hereof, is
made to the Lessor by the Lessee as the result of an Event of Loss
with respect to such item. The Loss Payment Date shall be within
ninety (90) days of the said Event of Loss.
"OWNER" shall mean the entity or person having ownership interest to
the Equipment as contemplated by the provisions of Section 21(b)
hereof and may be a person other than Lessor.
"OWNER'S ECONOMICS" shall mean the after-tax yield and periodic
after-tax cash flow anticipated by Owner as of the date of this
Lease, in connection with the transactions contemplated by this
Lease as determined by Owner unless Lessor shall have transferred
its interest in the Equipment to another person as contemplated by
the provisions of Section 21(b) hereof in which case "Owner's
Economics" shall mean the after-tax yield and periodic after-tax
cash flow anticipated by such person as of the date of the lease
between such person and Lessor contemplated by said provisions, in
connection with the transactions contemplated by such lease as
determined by such person.
"RECOVERY DEDUCTIONS" as defined in Section 11(b)(i) hereof.
"REFERENCE RATE" shall mean the rate of interest publicly announced by
Citibank, N.A. in New York, New York from time to time as its prime
rate.
The reference rate is not intended to be the lowest rate of interest
charged by Citibank, N.A. in connection with extensions of credit to
debtors. The Reference Rate shall be determined at the close of
business on the 15th day of each calendar month (if the 15th day is
not a Business Day, then on the first preceding Business Day) and
shall become effective as of the first day of the calendar month
succeeding such determination and shall continue in effect to, and
including, the last day of said calendar month.
"RENT PAYMENT DATE" shall mean each date on which an installment of
rent is due and payable pursuant to Section 5(a) hereof.
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"STIPULATED LOSS VALUE" shall mean, with respect to any item of
Equipment, the amount determined by multiplying the Lessors Value of
such item of Equipment by the percentage set forth in Schedule A
hereto opposite the applicable Rent Payment Date; provided, that for
purposes of Sections 16(b) and 19(c) hereof, any determination of
Stipulated Loss Value as of a date occurring after the final Rent
Payment Date with respect to such item of Equipment, shall be made as
of such final Rent Payment Date.
"TAX BENEFITS" shall mean the right to claim such deductions, credits,
and other benefits as are provided by the Code to an owner of
property, including the Recovery Deductions and Amortization
Deductions.
"TURNOVER" shall mean that point in time when the equipment
installation personnel complete testing of the equipment, or when the
equipment is placed into service, whichever first occurs.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles.
3. LEASE TERM.
The term of the lease of the Equipment hereunder shall commence on the
Commencement Date specified in the Delivery Certificate ("Commencement Date")
and, unless earlier terminated pursuant to the provisions hereof or at law or
equity, shall continue for a term of sixty (60) months from such Commencement
Date. The Commencement Date specified in the Delivery Certificate shall be the
date on which Turnover occurs at a site provided by Lessee in accordance with
the provisions of Section 4 hereof.
4. INSTALLATION.
Lessor shall arrange for installation of the Equipment, the cost of
which installation shall be deemed to be part of Lessor's Value. Exhibit A
hereto shall indicate whether such cost is included or excluded from the monthly
rent payments due in accordance with Section 5(a) hereof. If excluded from such
monthly rent payments, Lessor shall separately invoice Lessee for such
installation upon completion thereof and Lessee shall pay such invoice within
thirty (30) days from the date thereof. Lessee shall be obligated to timely
provide a suitable site for the installation of the Equipment in accordance with
the Equipment manufacturer's practices attached hereto as Exhibit C. Lessee
shall be responsible for compliance with environmental requirements and central
office grounding procedures specified in Exhibit C hereto and for providing
adequate space, lighting, heating, air-conditioning and A/C power at the
installation site. Unavailability of Lessee furnished facilities shall be cause
for adjustments to the installation price set forth in Schedule 1 of Exhibit A
hereto.
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5. RENT; UNCONDITIONAL OBLIGATIONS.
(a) Lessee agrees to pay to Lessor, at the address specified in
Section 24 hereof or at such other address as Lessor may specify, rent for the
Equipment at a rate not to exceed $22.244 per $1,000 of the total Lessor's Value
of such items of Equipment, as set forth in Schedule 1 of Exhibit A dated June
2, 1992, or as from time to time amended, (plus applicable sales or use taxes)
per month, in sixty (60) consecutive monthly installments, with the first
installment of rent being due on the Commencement date unless the Commencement
Date is other than the first day of a calendar month, in which event the first
installment of rent shall be due on the first day of the month following the
Commencement Date, and succeeding installments being due on the same date of
each month thereafter.
(b) Lessee shall also pay to Lessor, on demand, interest at the Late
Charge Rate on any installment of rent and on any other amount owing hereunder
which is not paid within fifteen (15) days of its due date, for any period for
which the same shall be overdue. Each payment made under this Lease shall be
applied first to the payment of interest then owing and then to rent or other
amounts owing hereunder. Interest shall be computed on the basis of a 360-day
year and actual days elapsed.
(c) This Lease is a net lease, and Lessee's obligation to pay all
rent and all other amounts payable hereunder is ABSOLUTE AND UNCONDITIONAL under
any and all circumstances and shall not be affected by any circumstances of any
character whatsoever, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense, abatement or reduction or any right which
Lessee may have against Lessor, the manufacturer or supplier of any of the
Equipment or anyone else for any reason whatsoever; (ii) any defect in the
title, condition, design, or operation of, or lack of fitness for use of, or any
damage to, or loss of, all or any part of the Equipment from any cause
whatsoever; (iii) the existence of any Liens with respect to the Equipment; (iv)
the invalidity, unenforceability or disaffirmance of this Lease or any other
document related hereto; or (v) the prohibition of or interference with the use
or possession by Lessee of all or any part of the Equipment, for any reason
whatsoever, including without limitation, by reason of (1) claims for patent,
trademark or copyright infringement; (2) present or future governmental laws,
rules or orders; (3) the insolvency, bankruptcy or reorganization of any person;
and (4) any other cause whether similar or dissimilar to the foregoing, any
present or future law to the contrary notwithstanding. Lessee hereby waives, to
the extent permitted by applicable law, any and all rights which it may now have
or which may at any time hereafter be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender the lease of any Equipment.
If for any reason whatsoever this Lease or any Supplement, other than pursuant
to Section 16(b) hereof, shall be terminated in whole or in part by operation of
law or otherwise, Lessee will nonetheless pay to Lessor an amount equal to each
installment of rent at the time such installment would have become due and
payable in accordance with the terms hereof. Each payment of rent or other
amount paid by Lessee hereunder shall be final and Lessee will not seek to
recover all or any part of such payment for Lessor for any reason whatsoever.
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(d) In the event Communication Telesystems International (CTI) has a
liquidated damage claim against Siemens Stromberg-Carlson (SS-C), with the
concurrence of SS-C these liquidated damages may be offset against Lease
payments and Lessor will collect the offset amounts from SS-C.
(e) In the event CTI exercises their rights under item 11 of the Contract
Modification between SS-C and CTI, and, subject to approval of SS-C, CTI is
authorized to assign the lease to SS-C.
6. WARRANTY DISCLAIMER; ASSIGNMENT OF WARRANTIES.
(a) LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND LESSEE
HEREBY EXPRESSLY WAIVES ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE, FREEDOM
FROM INTERFERENCE OR INFRINGEMENT OR THE LIKE, OR AS TO THE TITLE TO OR LESSOR'S
OR LESSEE'S INTEREST IN THE EQUIPMENT OR AS TO ANY OTHER MATTER RELATING TO THE
EQUIPMENT OR ANY PART THEREOF.
LESSEE CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT AND EACH PART
THEREOF ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE
UPON ANY STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY LESSOR.
LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE ACCORDED TO THE
TRANSACTIONS CONTEMPLATED BY THIS LEASE OR AS TO ANY TAX CONSEQUENCES AND/OR TAX
TREATMENT THEREOF.
(b) LESSOR HEREBY ASSIGNS TO LESSEE SUCH RIGHTS AS LESSOR MAY HAVE
(TO EXTENT LESSOR MAY VALIDLY ASSIGN SUCH RIGHTS) UNDER ALL MANUFACTURERS'
AND SUPPLIERS' WARRANTIES WITH RESPECT TO THE EQUIPMENT; PROVIDED, HOWEVER,
THAT THE FOREGOING RIGHTS SHALL AUTOMATICALLY REVERT TO LESSOR UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT HEREUNDER, OR
UPON THE RETURN OF THE EQUIPMENT TO LESSOR. LESSEE AGREES TO SETTLE ALL
CLAIMS WITH RESPECT TO THE EQUIPMENT DIRECTLY WITH THE MANUFACTURERS OR
SUPPLIERS THEREOF, AND TO GIVE LESSOR PROMPT NOTICE OF ANY SUCH SETTLEMENT
AND THE DETAILS OF SUCH SETTLEMENT. HOWEVER, IN THE EVENT ANY WARRANTIES ARE
NOT ASSIGNABLE, THE LESSOR AGREES TO ACT ON BEHALF OF THE LESSEE IN SETTLING
CLAIMS ARISING UNDER THE WARRANTY WITH THE MANUFACTURER OR SUPPLIER.
(c) IN NO EVENT SHALL LESSOR BE LIABLE FOR LOSS OF REVENUE OR
PROFITS, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR
FROM ANY CAUSE EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
7. DISPOSITION OF EQUIPMENT.
(a) RETURN.
Lessee shall, upon the expiration of the Lease Term of each item of
Equipment, subject to paragraph (b) below, return such item of Equipment to
Lessor at such place within the continental United States of America as Lessor
shall designate in
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writing to Lessee. Until such item of Equipment is returned to Lessor pursuant
to the provisions of this Section, all of the provisions of this Lease with
respect thereto shall continue in full force and effect. Lessee shall pay all
the costs and expenses in connection with or incidental to the return of the
Equipment, including, without limitation, the cost of removing, assembling,
packing, insuring and transporting the Equipment. At the time of such return,
the Equipment shall be in the condition and repair required to be maintained by
Section 12 hereof and free and clear of all Liens.
(b) PURCHASE OPTION.
So long as no Default or Event of Default shall have occurred and be
continuing, Lessee may, by written notice given to Lessor at least 120 days (but
not more than 360 days) prior to the expiration date of the Lease Term of any
item of Equipment (which notice shall be irrevocable), elect to purchase such
item of Equipment on such expiration date for a cash purchase price equal to the
Fair Market Sale Value of such item of Equipment determined as of such
expiration date, plus an amount equal to all taxes (other than income taxes on
any gain on such sale), costs and expenses (including legal fees and expenses)
incurred or paid by Lessor in connection with such sale. Upon payment by Lessee
of such purchase price, and of all other amounts then due and payable by Lessee
hereunder, Lessor shall transfer title to such items of Equipment to Lessee on
an "as-is, where-is" basis, without recourse and without representation or
warranty of any kind, express or implied, other than a representation and
warranty that such item of Equipment is free and clear of any Lessor's Liens.
8. REPRESENTATION AND WARRANTIES.
In order to induce Lessor to enter into this Lease and to lease the
Equipment to Lessee hereunder, Lessee represents and warrants that:
(a) ORGANIZATION.
Lessee is duly organized, validly existing and in good standing under
the laws of the State of California and is duly qualified to do business and is
in good standing in the State in which the Equipment will be located.
(b) POWER AND AUTHORITY.
Lessee has full power, authority and legal right to execute, deliver
and perform this Lease, and the execution, delivery and performance hereof has
been duly authorized by Lessee's governing body or officer(s).
(c) ENFORCEABILITY.
This Lease has been duly executed and delivered by Lessee and
constitutes a legal, valid and binding obligation of Lessee enforceable in
accordance with its terms.
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(d) CONSENTS AND PERMITS.
The execution, delivery and performance of this Lease does not
require any approval or consent of any trustee, shareholder, partner, sole
proprietor, or holders of any indebtedness or obligations of Lessee, and will
not contravene any law, regulation, judgment or decree applicable to Lessee,
or the certificate of partnership or incorporation or by-laws of Lessee, or
contravene the provisions of, or constitute a default under, or result in the
creation of any Lien upon any property of Lessee under any mortgage,
instrument or other agreement to which Lessee is a party or by which Lessee
or its assets may be bound or affected; and no authorization, approval,
license, filing or registration with any court or governmental agency or
instrumentality is necessary in connection with the execution, delivery,
performance, validity and enforceability of this Lease.
(e) FINANCIAL CONDITION OF THE LESSEE.
The financial statements of Lessee heretofore furnished to Lessor are
complete and correct and fairly present the financial condition of Lessee and
the results of its operations for the respective periods covered thereby, there
are no known contingent liabilities or liabilities for taxes of Lessee which are
not reflected in said financial statements and since the date thereof, there has
been no material adverse change in such financial condition or operations.
(f) NO LITIGATION.
There is no action, suit, investigation or proceeding by or before any
court, arbitrator, administrative agency or other governmental authority pending
or threatened against or affecting Lessee (A) which involves the transactions
contemplated by this Lease or the Equipment; or (B) which, if adversely
determined, could have a material adverse effect on the financial condition,
business or operations of Lessee.
(g) UNITED STATES SOURCE INCOME.
No items of Equipment shall be used in a way that results in the
creation of an item of income to Lessor, the source of which for Federal Income
Tax purposes is without the United States.
9. LIENS.
Lessee will not directly or indirectly create, incur, assume, suffer,
or permit to exist any Lien on or with respect to the Equipment.
10. INSURANCE.
Lessee shall maintain at all times on the Equipment, at its expense,
property damage, direct damage and liability insurance in such amounts, against
such risks, in such form and with such insurers as shall be reasonably
satisfactory to Lessor and any other Owner; provided, that the amount of direct
damage
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insurance shall not on any date be less than the greater of the full replacement
value or the Stipulated Loss Value of the Equipment as of such date. Each
insurance policy will, among other things, name Lessor and any other Owner as an
additional insured or as loss payee (as the case may be) as their interests may
appear, require that the insurer give Lessor and any such Owner at least thirty
(30) days prior written notice of any alteration in or cancellation of the terms
of such policy, and require that the interest of Lessor and any such Owner be
continued insured regardless of any breach of or violation by Lessee of any
warranties, declarations or conditions contained in such insurance policy. At
Lessor's or such Owner's option, Lessee shall furnish to Lessor and such Owner a
certificate or other evidence satisfactory to Lessor that such insurance
coverage is in effect provided, however, that Lessor and such Owner shall be
under no duty to ascertain the existence or adequacy of such insurance.
11. TAXES.
(a) GENERAL TAX PROVISIONS.
Lessee shall pay, and shall indemnify and hold Lessor harmless from
and against, all fees, taxes (whether sales, use, excise, personal property or
other taxes), imposts, duties, withholdings, assessments and other governmental
charges of whatever kind or character, however designated (together with any
penalties, fines or interest thereon), all of the foregoing being herein
collectively called "Impositions", which are at any time levied or imposed
against Lessor, Lessee, this Lease, the Equipment or any part thereof by any
Federal, State, or Local Government or taxing authority in the United States or
by any foreign government or any subdivision or taxing authority thereof upon,
with respect to, as a result of or measured by (i) the Equipment (or any part
thereof), or this Lease or the interest of the Lessor therein; or (ii) the
purchase, ownership, delivery, leasing, possession, maintenance, use, operation,
return, sale or other disposition of the Equipment or any part thereof; or (iii)
the rentals, receipts or earnings payable under this Lease or otherwise arising
from the Equipment or any part thereof; EXCLUDING, HOWEVER, taxes based on or
measured by the net income of Lessor that are imposed by (1) the United States
of America, or (2) the State of Florida or any political subdivision of the
State of Florida, or (3) any other State of the United States of America or any
political subdivision of any such State in which Lessor is subject to
Impositions as the result (whether solely or in part) of business or
transactions unrelated to this Lease. In case any report or return is required
to be filed with respect to any obligation of Lessee under this Section or
arising out of this Section, Lessee will notify Lessor of such requirement and
make such report or return in such manner as shall be satisfactory to Lessor;
PROVIDED, that the payment of any use taxes shall be made in such manner as
specified by Lessor in writing to Lessee; or (iv) The provisions of this Section
shall survive the expiration or earlier termiation of this Lease.
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(b) SPECIAL TAX PROVISIONS.
(i) The Owner of the items of Equipment, shall be entitled to
take into account in computing its Federal income tax liability, Current Tax
Rate and such deductions, credits, and other benefits as are provided by the
Code to an owner of property.
(ii) For the purposes of this Subsection 11(b) only, the term
"Owner" shall include the "common parent" and all other corporations included in
the affiliated group, within the meaning of Section 1504 of the Code (or any
other successor section thereto), of which Owner is or becomes a member.
12. COMPLIANCE WITH LAWS; OPERATION AND MAINTENANCE.
(a) Lessee will use the Equipment in a careful and proper manner,
will comply with and conform to all governmental laws, rules and regulations
relating thereto, and will cause the Equipment to be operated in accordance with
the manufacturer's or supplier's instructions or manuals.
(b) Lessee will, at its own expense, keep and maintain the Equipment
in good repair, condition and working order and furnish all parts, replacements,
mechanisms, devices and servicing required therefor so that the value, condition
and operating efficiency therefor will at all times be maintained and preserved,
reasonable wear and tear excepted. All such repairs, parts, mechanisms, devices
and replacements shall immediately, without further act, become the property of
Lessor and part of the Equipment.
(c) Lessee will not make or authorize any improvement, change,
addition or alteration to the Equipment (i) if such improvement, change,
addition or alteration will impair the originally intended function or use of
the Equipment or impair the value of the Equipment as it existed immediately
prior to such improvement, change, addition or alteration; or (ii) if any parts
installed in or attached to or otherwise becoming a part of the Equipment as a
result of any such improvement, change, addition or alteration shall not be
readily removable without damage to the Equipment. Any part which is added to
the Equipment without violating the provisions of the immediately preceding
sentence and which is not a replacement or substitution for any property which
was a part of the Equipment, shall remain the property of Lessee and may be
removed by Lessee at any time prior to the expiration or earlier termination of
the Lease Term. All such parts shall be and remain free and clear of any Liens.
Any such part which is not so removed prior to the expiration or earlier
termination of the Lease Term shall, without further act, become the property of
Lessor.
13. INSPECTION.
Upon prior notice, Lessor or its authorized representatives may at any
reasonable time or times inspect the Equipment when it deems it necessary to
protect its interest therein.
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14. INDEMNIFICATION.
Lessee shall, at its expense, attach to each item of Equipment a
notice satisfactory to Lessor disclosing Owner's ownership of such item of
Equipment.
15. PERSONAL PROPERTY.
Lessee represents that the Equipment shall be and at all times remain
separately identifiable personal property. Lessee shall, at its expense, take
such action (including the obtaining and recording of waivers) as may be
necessary to prevent any third party from acquiring any right to or interest in
the Equipment by virtue of the Equipment being deemed to be real property or a
part of real property or a part of other personal property, and if at any time
any person shall claim any such right or interest, Lessee shall, at its expense,
cause such claim to be waived in writing or otherwise eliminated to Lessor's
satisfaction within 30 days after such claim shall have first become known to
Lessee.
16. LOSS OR DAMAGE.
(a) All risk of loss, theft, damage or destruction to the Equipment
or any part thereof, however incurred or occasioned, shall be borne by Lessee
and, unless such occurrence constitutes an Event of Loss pursuant to paragraph
(b) of this Section, Lessee shall promptly give Lessor written notice hereof
and shall promptly cause the affected part or parts of the Equipment to be
replaced or restored to the condition and repair required to be maintained by
Section 12 hereof.
(b) If an Event of Loss with respect to any item of Equipment shall
occur, Lessee shall promptly give Lessor written notice thereof, and Lessee
shall pay to Lessor as soon as it receives insurance proceeds with respect to
said Event of Loss but in any event no later than 180 days after the occurrence
of said Event of Loss an amount equal to the sum of (i) the Stipulated Loss
Value of such item of Equipment computed as of the Rent Payment Date with
respect to such item of Equipment on or immediately preceding the date of the
occurrence of such Event of Loss; and (ii) all rent and other amounts due and
owing hereunder for such item of Equipment on or prior to the Loss Payment Date.
Upon payment of such amount to Lessor, the lease of such item of Equipment
hereunder shall terminate, and Lessor will transfer within forty days to Lessee,
Lessor's right, title and interest in and to such item of Equipment, on an
"as-is, where-is" basis, without recourse and without representation or
warranty, express or implied, other than a representation and warranty that
such item of Equipment is free and clear of any Lessor's Liens.
(c) Any payments received at any time by Lessor or Lessee from any
insurer with respect to loss or damage to the Equipment shall be applied as
follows: (i) if such payments are received with respect to an Event of Loss,
payments for all physical damage shall be paid to Lessor, but to the extent
received by Lessor, they shall reduce or discharge, as the case may be, Lessee's
obligation to pay the amounts due to Lessor under Section 16(b) hereof with
respect to such Event of Loss. To the
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extent payment received by Lessor is greater than the amount owed to Lessor as
provided in Section 18(b) hereof, such excess shall be paid to Lessee within 15
days from receipt by the Lessor of said payment; or (ii) if such payments are
received with respect to any loss of or damage to the Equipment other than an
Event of Loss, such payments shall, unless a Default or Event of Default shall
have occurred and be continuing, be paid over to Lessee to reimburse Lessee for
its payment of the costs and expenses incurred by Lessee in replacing or
restoring pursuant to Section 16(a) hereof the part or parts of the Equipment
which suffered such loss or damage.
17. GENERAL INDEMNITY.
Lessee assumes liability for, and shall indemnify, protect save and
keep harmless Lessor and its agents, servants, successors and assigns (an
"Indemnitee") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs and expenses, including
reasonable legal expenses, of whatsoever kind and nature, imposed on, incurred
by or asserted against any Indemnitee, in any way relating to or arising out of
this Lease or the enforcement hereof, or the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, latent or other defects, whether or not
discoverable by Lessee or any other person, any claim in tort for strict
liability and any claim for patent, trademark or copyright infringement);
provided, however, that Lessee shall not be required to indemnify any Indemnitee
for loss or liability arising from acts or events which occur after the
Equipment has been returned to Lessor in accordance with the Lease, or for loss
or liability resulting solely from the willful misconduct or gross negligence of
such Indemnitee. The provisions of this Section shall survive the expiration or
earlier termination of this Lease.
18. EVENTS OF DEFAULT.
The following event shall each constitute an event of default (herein
called "Event of Default") under this Lease:
(i) Lessee shall fail to execute and deliver to Lessor (or Lessor's
agent) the "Delivery Certificate" within twenty-four (24) hours of Turnover of
the Equipment to Lessee.
(ii) Lessee shall fail to commence lease payments on the first day of
the month following the Commencement Date, or such other initiation of lease
payments as specified in Section 5 of this Lease.
(iii) Lessee shall fail to make any payment of rent or other amount
owing hereunder after notice has been given that payment is past due; or
(iv) Lessee shall fail to maintain the insurance required by Section
10 hereof or to perform or observe any of the covenants contained in Sections 21
or 22 hereof; or
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(v) Lessee shall fail to perform or observe any other covenant,
condition or agreement to be performed or observed by it with respect to this
Lease and such failure shall continue unremedied for 30 days after the earlier
of (a) the date on which Lessee obtains, or should have obtained knowledge of
such failure; or (b) the date on which notice thereof shall be given by Lessor
to Lessee; or
(vi) Any representation or warranty made by Lessee herein or in any
document, certificate or financial or other statement now or hereafter furnished
Lessor in connection with this Lease shall prove at any time to have been
untrue, incomplete or misleading in any material respect as of the time when
made; or
(vii) The entry of a decree or order for relief by a court having
jurisdiction in respect of Lessee, adjudging Lessee a bankrupt or insolvent, or
approving as properly filed a petition seeking a reorganization, arrangement,
adjustment or composition of or in respect of Lessee in an involuntary
proceeding or case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of Lessee or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 30 days; or
(viii) The institution by Lessee or proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the commencement by Lessee of a voluntary
proceeding or case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or the consent by it to the filing of any such petition or to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of Lessee or of
any substantial part of its property, or the making by it of any assignment for
the benefit of creditors or the admission by it of its inability to pay its
debts generally as they become due or its willingness to be adjudicated a
bankrupt or the failure of Lessee generally to pay its debts as they become due
or the taking of corporate action by Lessee in furtherance of any of the
foregoing.
19. REMEDIES. If an Event of Default specified in Subsection 18(vii) or
(viii) above shall occur, then, and in any such event, Lessor shall not be
obligated to purchase or lease any of the Equipment and this Lease shall,
without any declaration or other action by Lessor, be in default. If an Event of
Default, other than an Event of Default specified in Subsection 18(vii) or
(viii) above, shall occur, Lessor may, at its option, declare this Lease to be
in default. Lessee will have ten (10) days from the date Lessor declares the
Lease to be in default to cure the specified Event of Default. At any time after
this Lease is in default under the first sentence of this Section 19, or ten
(10) days after Lessor has declared this Lease to be in default under the second
sentence of this Section 19, and Lessee has not cured
-14-
the Event of Default, Lessor and/or its representative may do any one or more of
the following with respect to all of the Equipment or any part thereof as Lessor
in its sole discretion shall elect, to the extent permitted by applicable law
then in effect:
(a) demand that Lessee, and Lessee shall at its expense upon
such demand, return the Equipment promptly to Lessor at such place in the
continental United States of America as Lessor shall specify, or Lessor and/or
its agents, at its option, may with or without entry upon the premises where the
Equipment is located and disable the Equipment, or make the Equipment inoperable
permanently or temporarily in Lessor's sole discretion, and/or take immediate
possession of the Equipment and remove the same by summary proceedings or
otherwise, all without liability for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by such
taking or for disabling or otherwise;
(b) sell the Equipment at public or private sale, with or
without notice, advertisement or publication, as Lessor may determine, or
otherwise dispose of, hold, use, operate, lease to others or keep idle the
Equipment as Lessor in its sole discretion may determine, all free and clear of
any rights of Lessee and without any duty to account to Lessee with respect to
such action or inaction or for any proceeds with respect thereto;
(c) by written notice to Lessee specifying a payment date which
shall be not earlier than 20 days after the date of such notice, demand that
Lessee pay to Lessor, and Lessee shall pay to Lessor, on the payment date
specified in such notice, as liquidated damages for loss of a bargain and not as
a penalty, all accrued and unpaid rent for the Equipment due on all Rent Payment
Dates up to and including the payment date specified in such notice PLUS an
amount (together with interest on such amount at the Late Charge Rate, from the
payment date specified in such notice to the date of actual payment) equal to
the excess, if any, of the Stipulated Loss Value of the Equipment as of the
payment date specified in such notice over the Fair Market Sale Value of the
Equipment as of such date;
(d) Lessor may exercise any other right or remedy which may be
available to it under applicable law or proceed by appropriate court action to
enforce the terms hereof or to recover damages for the breach hereof or to
rescind this Lease. Lessor is entitled to recover any amount that fully
compensates the Lessor for any damage to or loss of the Lessor's residual
interest in the leased property caused by the Lessee's default.
In the event any present value discounting is applied, the discount rate
used shall be the Federal Reserve Board Discount Rate.
In addition, Lessee shall be liable for any and all unpaid rent and other
amounts due hereunder before or during the exercise of any of the foregoing
remedies and for all reasonable legal fees and other costs and expenses incurred
by reason of the occurrence of any Event of Default or the exercise of Lessor's
remedies with respect thereto, including all reasonable costs and expenses
incurred in connection with the placing of the Equipment in the condition
required by Section 12 hereof.
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No remedy referred to in this Section 19 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to herein
or otherwise available to Lessor at law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such remedies shall not
preclude the simultaneous or later exercise by Lessor of any or all such other
remedies. No express or implied waiver by Lessor of an Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent Event of
Default. To the extent permitted by applicable law, Lessee hereby waives any
rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell or lease or otherwise use the Equipment in mitigation of Lessor's
damages or losses or which may otherwise limit or modify any of Lessor's rights
or remedies under this Lease.
20. LESSOR'S RIGHT TO PERFORM. If Lessee fails to make any payment
required to be made by it hereunder or fails to perform or comply with any of
its other agreements contained herein, Lessor may itself make such payment or
perform or comply with such agreement, and the amount of such payment and the
amount of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the case may
be, together with interest thereon at the Late Charge Rate, shall be deemed to
be additional rent, payable by Lessee within 30 days of notice.
21. LOCATION; ASSIGNMENT OR SUBLEASE; TITLE TRANSFER.
(a) LESSEE WILL NOT REMOVE THE EQUIPMENT FROM THE LOCATION SPECIFIED
IN SCHEDULE 1 OF EXHIBIT A WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SUCH
CONSENT NOT TO BE UNREASONABLY WITHHELD, EXCEPT REMOVAL OUTSIDE THE CONTINTENTAL
U.S. IS NOT PERMITTED. THE EQUIPMENT SHALL AT ALL TIMES BE IN THE SOLE
POSSESSION AND CONTROL OF LESSEE AND LESSEE WILL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR, WHICH MAY NOT BE UNREASONABLY WITHHELD, ASSIGN THIS LEASE OR
ANY INTEREST HEREIN OR SUBLEASE OR OTHERWISE TRANSFER ITS INTEREST IN ANY OF THE
EQUIPMENT, AND ANY ATTEMPTED ASSIGNMENT, SUBLEASE OR OTHER TRANSFER BY LESSEE IN
VIOLATION OF THESE PROVISIONS SHALL BE VOID.
(b) LESSOR AND LESSEE ACKNOWLEDGE THAT LESSOR (i) MAY TRANSFER ITS
INTEREST IN THE EQUIPMENT TO AN OWNER OTHER THAN LESSOR. LESSOR MAY
CONTEMPORANEOUSLY THEREWITH LEASE THE EQUIPMENT BACK FROM SUCH OWNER, AND (ii)
MAY ASSIGN THIS LEASE. LESSEE HEREBY CONSENTS TO EACH OF THE ABOVE-DESCRIBED
TRANSACTIONS. FURTHER LESSEE DOES HEREBY ACKNOWLEDGE (i) THAT ANY SUCH
ASSIGNMENT BY LESSOR DOES NOT MATERIALLY CHANGE LESSEE'S DUTIES AND OBLIGATIONS
HEREUNDER, (ii) THAT SUCH ASSIGNMENT DOES NOT MATERIALLY INCREASE THE BURDEN OR
RIGHT IMPOSED ON THE LESSEE, AND (iii) THAT THE ASSIGNMENT IS PERMITTED EVEN IF
THE ASSIGNMENT COULD BE DEEMED TO MATERIALLY AFFECT THE INTEREST OF THE LESSEE.
22. STATUS CHANGES IN LESSEE. Lessee will not without thirty (30) days
prior written notice to Lessor, (a) enter into any transaction of merger or
consolidation unless it is the
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surviving corporation or after giving effect to such merger or consolidation its
net worth equals or exceeds that which existed prior to such merger or
consolidation; or (b) change the form of organization of its business; or (c)
change its name or its chief place of business. Lessee may obtain Lessor's prior
written concurrence, which may not be unreasonably withheld, before Lessee may
undertake any actions to (a) liquidate or dissolve or similar action of the
Lessee's organization, or (b) sell, transfer or otherwise dispose of all or any
substantial part of Lessee's assets.
23. FURTHER ASSURANCES; FINANCIAL INFORMATION.
(a) Lessee will, at its expense, promptly and duly execute and
deliver to Lessor such further documents and assurances and take such further
action as Lessor may from time to time reasonably request in order to establish
and protect the rights, interests and remedies created or intended to be created
in favor of Lessor hereunder, including, without limitation, the execution and
filing of Uniform Commercial Code financing statements covering the Equipment
and proceeds therefrom in the jurisdictions in which the Equipment is located
from time to time. To the extent permitted by applicable law, Lessee hereby
authorizes Lessor to file any such financing statements without the signature of
Lessee.
(b) Lessee will qualify to do business and remain qualified in good
standing, in each jurisdiction in which the Equipment is from time to time
located.
(c) Lessee will furnish to Lessor as soon as available, but in any
event not later than 90 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as at the end of such fiscal year, and
consolidated statements of income and changes in financial position of Lessee
for such fiscal year, all in reasonable detail, prepare in accordance with
generally accepted accounting principles applied on a basis consistently
maintained throughout the period involved. These reports will not be disclosed
to anyone other than the Lessor and/or the Owner as provided in Section 21(b).
24. NOTICES. All notices, demands and other communications hereunder
shall be in writing, and shall be deemed to have been given or made when
deposited in the United States mail, first class postage prepaid, addressed as
follows or to such other address as any of the following persons may from time
to time designate in writing to the other persons listed below:
Lessor: Telecommunications Finance Group
400 Rinehart Road
Lake Mary, Florida 32746
Lessee: Communication Telesystems International
4350 LaJolla Village Drive
Suite 800
San Diego, CA 92122
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25. CONDITIONS PRECEDENT:
(a) Lessor shall not be obligated to lease the items of Equipment
described herein to Lessee hereunder unless:
(i) Such Uniform Commercial Code financing statements covering
Equipment and proceeds therefrom and landlord and/or mortgagee waivers or
disclaimers and/or severance agreements with respect to the items of Equipment
covered by this Lease as Lessor shall deem necessary or desirable in order to
perfect and protect its interests therein shall have been duly executed and
filed, at Lessee's expense, in such public offices as Lessor shall direct;
(ii) All representations and warranties of Lessee contained
herein or in any document or certificates furnished Lessor in connection
herewith shall be true and correct on and as of the date of this Lease with the
same force and effect as if made on and as of such date; no Event of Default or
Default shall be in existence on such date or shall occur as a result of the
lease by Lessee of the Equipment specified in Schedule 1 of Exhibit A;
(iii) In the sole judgment of Lessor, there shall have been no
material adverse change in the financial condition or business of Lessee;
(iv) All proceedings to be taken in connection with the
transactions contemplated by this Lease, and all documents incidental thereto,
shall be satisfactory in form and substance to Lessor and its counsel;
(v) Lessor shall have received from Lessee, in form and
substance satisfactory to it, such other documents and information as Lessor
shall reasonably request;
(vi) All legal matters in connection with the transactions
contemplated by this Lease shall be satisfactory to Lessor's counsel; and
(vii) No Change in Tax Law, which in the sole judgment of Lessor
would adversely affect Lessor's Economics, shall have occurred or shall appear,
in Lessor's good faith judgment, to be imminent.
26. SOFTWARE LICENSE. Reference is made to the form of DCO Software
Product License Agreement attached hereto as Exhibit B (the "License
Document"). Lessor has arranged for the Equipment manufacturer to grant Lessee a
license to use the Software as defined in the License Document in conjunction
with the equipment leased hereunder in accordance with the terms of the License
Document. The original license fee is contained in the lease rate. To avail
itself of the license grant, Lessee must execute the License Document, upon
Commencement of the Lease. The option to obtain a fully paid up license as
provided in Article 2 of the License Document may be exercised by the Lessee and
the payment made directly to the equipment manufacturer named in the License
-18-
Document.
27. LIMITATION OF LIABILITY.
LESSOR SHALL NOT BE LIABLE FOR LOST PROFITS OR REVENUE, SPECIAL,
INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE OR FROM
ANY CAUSE WHETHER BASED IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR OTHER
LEGAL THEORY EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. LESSEE HEREBY AGREES THAT LESSOR WILL NOT BE LIABLE FOR ANY LOST
PROFITS OR REVENUE OR FOR ANY CLAIM OR DEMAND AGAINST LESSEE BY ANY OTHER
PARTY.
28. MISCELLANEOUS.
(a) Any provision of this Lease which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent
permitted by applicable law, Lessee hereby waives any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
(b) No terms or provisions of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which the enforcement of the change, waiver, discharge or
termination is sought. No delay or failure on the part of Lessor to exercise any
power or right hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof, or the exercise
of any other power or right. After the occurrence of any Default or Event of
Default, the acceptance by Lessor of any payment of rent or other sum owed by
Lessee pursuant hereto shall not constitute a waiver by Lessor of such Default
or Event of Default, regardless of Lessor's knowledge or lack of knowledge
thereof at the time of acceptance of any such payment, and shall not constitute
a reinstatement of this Lease, if this Lease shall have been declared in default
by Lessor pursuant to Section 18 hereof or otherwise, unless Lessor shall have
agreed in writing to reinstate the Lease and to waive the Default or Event of
Default.
In the event Lessee tenders payment to Lessor by check or draft containing
a qualified endorsement purporting to limit or modify Lessee's liability or
obligations under this Lease, such qualified endorsement shall be of no force
and effect even if Lessor processes the check or draft for payment.
-19-
(c) This Lease with exhibits contains the full, final and exclusive
statement of the agreement between Lessor and Lessee relating to the lease of
the Equipment.
(d) This Lease shall constitute an agreement of an operating lease,
and nothing herein shall be construed as conveying to Lessee any right, title or
interest in the Equipment except as Lessee only.
(e) This Lease and the covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, Lessor and its successors
and assigns and Lessee and, to the extent permitted by Section 21 hereof, its
successors and assigns.
(f) The headings of the Sections are for convenience of reference
only, are not a part of this Lease and shall not be deemed to affect the meaning
or construction of any of the provisions hereof.
(g) This Lease may be executed by the parties hereto on any number of
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
(h) This Lease is deemed made and entered into in the State of
Florida and shall be governed by and construed under and in accordance with the
laws of the State of Florida as if both parties were residents of Florida.
(i) Lessee hereby irrevocably consents and agrees that any legal
action, suit, or proceeding arising out of or in any way in connection with this
Lease shall be instituted or brought in the courts of the State of Florida, or
the United States Courts for the District of Florida, and by execution and
delivery of this Lease, Lessee hereby irrevocably accepts and submits to, for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of any such court, and to all proceedings in such
courts. Lessee irrevocably consents to service of any summons and/or legal
process by registered or certified United States mail, postage prepaid, to
Lessee at the address set forth in Section 24 hereof, such method of service to
constitute, in every respect, sufficient and effective service of process in any
legal action or proceeding. Nothing in this Lease shall affect the right to
service of process in any other manner permitted by law or limit the right of
Lessor to bring actions, suits or proceedings in the court of any other
jurisdiction. Lessee further agrees that final judgment against it in any such
legal action, suit or proceeding shall be conclusive and may be enforced in any
other jurisdiction, within or outside the United States of America, by suit on
the judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and the amount of the liability.
-20-
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be
duly executed as of the day and year first above written and by its signatures
below Lessee expressly acknowledges that this Lease may not be modified unless
done so in a writing signed by each of the parties hereto or their successors in
interest.
COMMUNICATION TELESYSTEMS
INTERNATIONAL
By: /s/ [ILLEGIBLE]
--------------------------------
Sec & Tres
-----------------------------------
(Name & Title)
Dated Signed:
----------------------
TELECOMMUNICATIONS FINANCE GROUP
By: /s/ [ILLEGIBLE]
--------------------------------
-----------------------------------
Authorized Representative of
Telecommunications Finance Group
Dated Signed: 6/9/92
----------------------
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LIST OF OMITTED SCHEDULES AND EXHIBITS
The following Schedules and Exhibits to the Lease Agreement (6/2/92) have
been omitted from this Exhibit and shall be furnished supplementally to the
Commission upon request:
Schedule A - Stipulated Loss Value
Schedule B - Amendment to Lease Agreement
Schedule C - Amendment to Lease Agreement
Schedule D - Buyout Price on 60 Month Lease, with a Three Month Payment
Deferral, as a Percentage of Lessors Cost as Shown in Schedule 1
of Exhibit A of the Lease
Schedule E - Amendment to Lease Agreement
Exhibit A - Certificate of Delivery and Acceptance
Exhibit B - Software License Agreement
Secretary's Certificate
Exhibit A to Assignment of Purchase Order