TELECOMMUNICATIONS FINANCE GROUP
LEASE AGREEMENT
THIS LEASE AGREEMENT, IS EFFECTIVE ON February 23, 1993
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BETWEEN TELECOMMUNICATIONS FINANCE GROUP ("HEREINAFTER LESSOR") AND
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Communication Telesystems International , a
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California Corporation
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WITH ITS PRINCIPAL OFFICE LOCATED AT 4350 LaJolla Village Drive, Suite 100,
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San Diego, CA 92122
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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 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 be determined (at Lessee's expense)
by an independent appraiser selected by Lessor, on an "as-is, whereas"
basis, without regard to the provisions of clauses (a) and (b) above;
PROVIDED that is 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, modifies 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.
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"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.
"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
Manufacturers Hanover Trust Company ("MHT") in New York, New York from
time to time as its reference rate.
The reference rate is not intended to be the lowest rate of interest
charged by MHT 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.
"STIPULATED LOSS VALUE" shall mean, with respect to any item of
Equipment, the amount determined by multiplying the Lessor's 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 an 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 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.
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 $21.993 per $1000 of the total Lessors
Value of such items of Equipment, as set forth in Schedule 1 of Exhibit
A dated February 23, 1993 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 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 than 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 an
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 what-
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soever; (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
from Lessor for any reason whatsoever.
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 JUDGEMENT 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 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 expirations 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.
(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
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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 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 interests 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 of 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 termination of this
Lease.
(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, including, without limitation:
(A) Recovery deductions ("Recovery Deductions") under Section 168(a)
of the Code for each item of Equipment in an amount determined,
commencing with the 1993 taxable year, by multiplying the Owner's
Cost of such item of Equipment by the percentages applicable under
Section 168(b) of the Code with respect to "(5)-year property" within
the meaning of Section 168(c) (2) of the Code;
(B) Amortization of expenses ("Amortization Deductions") paid or to
be paid by Owner in connection with this Lease at a rate no less
rapid than straight line over the Lease Term.
(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 his 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.
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(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
property of Lessor.
13. INSPECTION.
Upon prior notice, Lessor or its authorized representative may at any
reasonable time or times inspect the Equipment when it deems it necessary to
protect its interest therein.
14. IDENTIFICATION.
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 they 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; 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 occurred 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 an 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 events 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
(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
- 5 -
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 of 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. At any time after this Lease is in default under
the first sentence of this Section 19, Lessor has declared this Lease to be
in default under the second sentence of this Section 19, 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 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 damanges 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. 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 statue 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.
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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
CONTINENTAL U.S. IS NOT PERMITTED. THE EQUIPMENT SHALL AT 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 ANY 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 OBLIGATION 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 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 must obtain Lessor's prior written concurrence 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 [illegible copy] 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
Lessor, 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, prepared in accordance with general 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/owner 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 other persons listed below:
Lessor: Telecommunications Finance Group
400 Rinehart Road
Lake Mary, Florida 32746
Lessee: Communications Telesystems International
4350 LaJolla Village Drive
Suite 100
San Diego, CA 92122
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 certificate 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 of business or
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 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
-7-
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 Document.
"Buyer" and "Licensee" as used in the License Document are synonymous
with lessee.
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
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.
(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.
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 signature
below Lessee expressly acknowledges that this Lease may not be modified
unless done so in writing signed by each of the parties hereto or their
successors in interest.
TELECOMMUNICATIONS FINANCE GROUP COMMUNICATION TELESYSTEMS INTERNATIONAL (LESSEE)
By: /s/ C.E. CALLOWAY By: /s/ EDWARD S. SOREN
--------------------------------- --------------------------------------------
EDWARD S. SOREN, PRESIDENT
- ------------------------------------ -----------------------------------------------
(Authorized Representative of (Name & Title)
Telecommunications Finance Group)
Date Signed: 3/9/93 Date Signed: 2/26/93
------------------------ -----------------------------------
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AMENDMENT TO LEASE AGREEMENT DATED FEBRUARY 23, 1993 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
COMMUNICATION TELESYSTEMS INTERNATIONAL (LESSEE)
FOR A DCO-CS TO BE LOCATED IN DALLAS, TEXAS
"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.
COMMUNICATION TELESYSTEMS
TELECOMMUNICATIONS FINANCE GROUP INTERNATIONAL
By: /s/ C.E. CALLOWAY By: /s/ EDWARD S. SOREN
--------------------------------- --------------------------------
EDWARD S. SOREN, PRESIDENT
- ------------------------------------ -----------------------------------
(AUTHORIZED REPRESENTATIVE OF (NAME & TITLE)
TELECOMMUNICATIONS FINANCE GROUP)
DATE SIGNED: 3/9/93 DATE SIGNED: 2/26/93
------------------------ -----------------------
0295-8 (1894)
LIST OF OMITTED SCHEDULES AND ATTACHMENTS
The following Schedules and Attachments to the Lease Agreement
(2/23/93) 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 - Amendment to Lease Agreement
Schedule E - 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 F - Amendment to Lease Agreement
Certificate of Delivery and Acceptance
Assignment of Purchase Order