EXHIBIT 10.36
CONFORMED COPY
DATED 20th October, 2000
DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
as Lessor (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties)
and
VIATEL U.K. LIMITED (as Lessee)
------------------------------------------
MASTER LEASE PURCHASE AGREEMENT
------------------------------------------
XXXXX & OVERY
London
CONTENTS
CLAUSE PAGE
1. Interpretation.......................................................................................1
2. Leasing; Quiet Enjoyment............................................................................25
3. Delivery, Risk and Acceptance.......................................................................25
4. Period of Leasing...................................................................................27
5. Rentals.............................................................................................27
6. Payments............................................................................................29
7. Conditions Precedent................................................................................32
8. Representations and Warranties of Lessee............................................................35
9. Representations and Warranties of Lessor............................................................38
10. Disclaimer and Exclusion of Liability; Lessor Security Interests....................................39
11. Protection of Lessor's Interests....................................................................43
12. Operational Undertakings............................................................................46
13. Inspection of the Equipment.........................................................................53
14. Insurance...........................................................................................53
15. Event of Loss.......................................................................................57
16. Default.............................................................................................64
17. Dealings with Equipment following Termination or Expiry.............................................70
18. Disposal............................................................................................72
19. Indemnities.........................................................................................73
20. Tax indemnity and Other Provisions..................................................................75
21. Increased Costs and Funding Problems................................................................83
22. Changes to the Parties..............................................................................85
23. Costs, Expenses and Fees............................................................................88
24. Evidence and Calculations...........................................................................89
25. Amendments and Waivers..............................................................................89
26. Set off.............................................................................................89
27. Severability........................................................................................90
28. Counterparts........................................................................................90
29. Notices.............................................................................................90
30. Language............................................................................................91
31. Continuation of Indemnities.........................................................................91
32. Indemnifiable Persons...............................................................................92
33. Governing Law.......................................................................................92
34. Illegality..........................................................................................92
SCHEDULES
1. Lease Schedule......................................................................................93
2. Certificate of Acceptance...........................................................................97
3. Part I - Conditions Precedent Documents.............................................................99
Part II - Conditions Precedent to Leasing of Equipment.............................................101
Part III - Conditions Precedent Documents..........................................................106
4. Loss Payee Clause..................................................................................107
5. Form of Written Non-Disclosure Agreement...........................................................108
6. Form of Permitted Sub-Lease........................................................................112
7. Form of Notices to Landlords.......................................................................154
8. Schedule of Euro and [Redacted] High Yield Notes...................................................164
9. Form of Subordination Letter Agreement.............................................................165
SIGNATORIES.................................................................................................173
THIS MASTER LEASE PURCHASE AGREEMENT is dated 20th October, 2000,
BETWEEN:
(1) DRESDNER KLEINWORT XXXXXX FINANCE LIMITED (Registered No. 212857) whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (in its
capacity as security trustee for and on behalf of itself and each of
the Lessor Risk Parties and together with its successors, permitted
assigns and permitted transferees, the "LESSOR"); and
(2) VIATEL U.K. LIMITED (Registered No. 2968371) whose registered office is
at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX (the "LESSEE").
WHEREAS:
The Lessee wishes to lease from the Lessor and the Lessor is willing to lease to
the Lessee the Equipment on the terms of this Master Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Master Agreement:
"ACCEPTANCE COST"
means, in respect of any Equipment, an amount equal to the finance
charges calculated on the price of that Equipment as determined under
the Nortel Supply Contract (excluding any VAT thereon) for the period
from the Ship Date of that Equipment to the Initial Term Start Date in
respect of that Equipment at the Acceptance Rate for that Equipment,
such finance charges to accrue from day to day and to be calculated on
the basis of a 360 day year.
"ACCEPTANCE RATE"
means in respect of any Equipment, the aggregate of the Cost of Funds
and the Margin.
"ACQUISITION COST"
means, in respect of any Equipment which is the subject of a Lease
Schedule, the aggregate of the price of that Equipment under the Nortel
Supply Contract and any other contract for the provision of any of the
Services (excluding any VAT) and, in the case of any Equipment, the
Acceptance Cost for that Equipment as set out in that Lease Schedule.
"ADDITIONAL ASSUREDS"
means each of the persons required to be named as additional assureds
under Clause 14.5(a) (Provisions common to insurances).
"ADJUSTED EURO QUOTE"
means, in respect of any Initial Term Start Date, a Euro Quote less the
Relevant Swap Rate in respect of Euros (which figure shall illustrate
the Viatel high yield risk premium for Euros).
"AFFILIATE"
means, in relation to a person, a Subsidiary or a holding company of
that person or any other Subsidiary of that holding company.
"AGENT'S FEES LETTER"
means the agent's fee side letter of even date between the Lessor and
the Lessee.
"AGGREGATE ACQUISITION COST"
means the aggregate of the Acquisition Costs under each of the Lease
Schedules.
"APPLICABLE LAW"
means, as the context may require, all or any laws, statutes,
proclamations, treaties, bylaws, directives, regulations, statutory
instruments, rules, orders, decisions, circulars, codes, decrees,
injunctions, resolutions, judgments, rules of court, delegated or
subordinate legislation, rules of common law or any European Union
legislation at any time or from time to time in force in a Relevant
Country and which are or may become applicable to this Master
Agreement, any agreement or document referred to in this Master
Agreement or any other Transaction Documents, and have force of law, as
the same may be subjected to any Change in Law from time to time.
"APPROVED AGENT"
means a bank or other financial institution mutually acceptable to the
Lessee, the Lessor and Nortel for the purpose of fixing the Euro Quote
in accordance with the provisions of Clause 21.3(b). Without limiting
the foregoing, the parties agree that following banks and financial
institutions are mutually acceptable for this purpose: Lloyds TSB Bank
plc, Barclays Bank Plc, HSBC Bank plc, Banque International de
Luxembourg and Toronto Dominion Bank.
"ASSIGNMENT"
means the Security Assignment re Nortel Supply Contract of even date
herewith between the Lessee and the Lessor.
"BOARD OF DIRECTORS"
means the board of directors of the Lessee, any Permitted Sub-Lessee or
any Guarantor, as the case may be, or any duly authorised committee of
such board.
"BREAK COSTS"
has the meaning given to it in Clause 6.8 (Break Costs indemnity).
2
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open
for general business in London and New York.
"CAPITAL OUTSTANDING"
means, in relation to any Equipment the subject of a Lease Schedule and
for any date, the amount set out in the "Schedule of Capital
Outstanding" annexed to that Lease Schedule (being the schedule annexed
as at the date that Lease Schedule is entered into or such other
schedule as may have been substituted therefor from time to time
following a prepayment by the Lessee under Clause 16.3(a) or an Event
of Loss in respect of part of the Equipment pursuant to Clause 15.5(c))
opposite that date (if the relevant date is a Rental Payment Date) and
opposite the immediately preceding Rental Payment Date (if the relevant
date is not a Rental Payment Date).
"CERTIFICATE OF ACCEPTANCE"
means, in relation to any Equipment, the certificate in the form set
out in Schedule 2 (Certificate of Acceptance) (or otherwise in such
form as the Lessor may reasonably require) relating to that Equipment.
"CHANGE IN LAW"
means the application to any person of any Applicable Law, which did
not apply to such person prior to the date of this Master Agreement,
or, after the date of this Master Agreement, any change (whether with
immediate, prospective or retrospective effect) in, or any change in
the practice of application of any Applicable Law (including, without
limitation, any Applicable Law ceasing to apply, being withdrawn or not
being renewed, becoming effective or being varied and any change in
interpretation of any Applicable Law by any competent authority).
"CHANGE OF CONTROL"
means such time as (i) a "person" or a "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 of
the United States of America (the "EXCHANGE ACT")) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the total voting power of the voting stock of Viatel,
Inc. or the Lessee or any Permitted Sub-Lessee on a fully diluted
basis, and if, in the case of the Lessee or any Permitted Sub-Lessee,
the Lessee or such Permitted Sub-Lessee ceases to be a member of
Viatel, Inc.'s Group; or (ii) individuals who on the 19th March, 1999
constituted the Board of Directors of Viatel, Inc. (together with any
new directors whose election by such Board of Directors or whose
nomination to such Board of Directors for election by Viatel, Inc.'s
stockholders was approved by a vote of at least two-thirds of the
members of such Board of Directors then in office who either were
members of such Board of Directors on 19th March 1999 or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board of
Directors of Viatel, Inc.
"COLLOCATION ACKNOWLEDGEMENT"
means, in respect of any Collocation Agreement, the agreement, in form
and substance reasonably acceptable to the Lessor and the Lessee
entered or to be entered into between the counterparty to the relevant
Collocation Agreement, the Lessor, the Lessee and, if appropriate, the
3
relevant Permitted Sub-Lessee and relating to that Collocation
Agreement whereby the counterparty to the relevant Collocation
Agreement, inter alia, acknowledges the ownership by the Lessor of the
Equipment located or to be located on premises owned by or leased to
the counterparty to the relevant Collocation Agreement.
"COLLOCATION AGREEMENT"
means any licence agreement made between the counterparty to such
licence agreement (being the ultimate lessee or sub-lessee of the
premises on which the Equipment is or is to be installed unless the
relevant site is owned by, or leased to, Viatel, Inc. or another member
of Viatel, Inc.'s Group) and the Lessee or, as the case may be, a
Permitted Sub-Lessee in respect of certain premises in one or more of
the Relevant Countries in which some or all of the Equipment is to be
located.
"COMMENCEMENT DATE"
means, in respect of any Equipment, the date on which such Equipment is
accepted and placed in service by the Lessee as evidenced by a Network
Acceptance Certificate in respect of such Equipment.
"COMMITMENT"
[Redacted]
"COMMITMENT FEE LETTER"
means the commitment fee side letter of even date between the Lessor
and the Lessee.
"COMMITMENT PERIOD"
[Redacted]
"COMPENSATION AWARD"
means the amount in Euros converted at the then prevailing exchange
rate of the proceeds of any condemnation or other compensatory proceeds
or awards arising on Compulsory Acquisition of the Equipment (other
than the Services).
"COMPULSORY ACQUISITION"
means requisition of the Equipment (other than the Services) for title,
other compulsory acquisition or requisition of the Equipment (other
than the Services) (otherwise than by requisition for use or hire not
involving requisition for title), or condemnation, seizure, capture,
nationalisation, appropriation, expropriation, deprivation or
confiscation for any reason of the Equipment (other than the Services)
by any authority.
"COMPULSORILY ACQUIRED"
will be construed accordingly.
4
"COST OF FUNDS"
means, in respect of a Lease Schedule, the interest rate swap offered
rate for Euros proposed by the Lessor on the date which falls three (3)
Business Days prior to the Initial Term Start Date for such Lease
Schedule, in respect of a period equal to the average life of such
Lease Schedule and which is acceptable to the Lessee. In the event that
such rate is not acceptable to the Lessee, then the rate shall be the
annual interest rate swap offered rate that the Lessor obtains from the
ICAPEURO screen provided by Reuters, which the Lessor then interpolates
to reflect the average life of the relevant Lease Schedule, and
converts into a monthly rate, in each case plus 5 basis points.
"DEED OF NOVATION"
means the deed of novation dated on or about the date of this Master
Agreement to be entered into by, Viatel, Inc. and the Lessee by which
Nortel Optical and Viatel, Inc. transfer their respective rights and
obligations under the Nortel Supply Contract to Nortel and the Lessee
respectively.
"DEFAULT RATE"
means, in respect of any Lease Schedule, two (2) per cent. per annum
above the aggregate of the Costs of Funds and the Margin.
"DELIVERY"
means, in respect of an item of the Equipment, the delivery of the item
by the Lessor to the Lessee under this Master Agreement.
"DETACHABLE ADDITIONS"
has the meaning in Clause 12.13(b) (Title to replacements etc.).
"ELECTION PROCEDURE"
[Redacted]
5
"ENVIRONMENT"
means all, or any of, the following media, the air (including the air
within buildings and the air within other natural or man-made
structures above or below ground), water (including ground and surface
water) and land (including surface and subsurface soil).
"ENVIRONMENTAL AFFILIATE"
means an agent, employee, independent contractor, sub-contractor or
other person in a contractual relationship with the Lessee relating to
the Equipment or its operation.
"ENVIRONMENTAL APPROVALS"
means any authorisation required under applicable Environmental Laws.
"ENVIRONMENTAL CLAIM"
means any written or oral notice or assertion from anyone, including,
without limitation, any government, alleging any breach, contravention
or violation of any Environmental Law or the existence of any liability
or potential liability arising from such breach, contravention or
violation or the presence of Hazardous Material including, without
limitation, liability to conduct, pay for or for damages in respect of
any investigation or audit clean-up, redemption, administrative cost or
charge or expense, damage to the Environment or any natural resource,
property loss or damage, personal injury or any penalty attaching or
relating to the presence, emission, release or leak of any Hazardous
Material in or to the Environment.
"ENVIRONMENTAL LAWS"
means any or all applicable law (whether civil, criminal or
administrative), common law, statute, statutory instrument, treaty,
convention, regulation, directive, by-law, demand, decree, ordinance,
injunction, resolution, order, judgment, rule, permit, licence or
restriction (in each case having the force of law) and codes of
practice or conduct, circulars and guidance notes having legal or
judicial import or effect, in each case of any Governmental Authority
in any applicable jurisdiction relating to or concerning:
(a) pollution or contamination of the Environment;
(b) harm, whether actual or potential, to mankind and human senses,
other living organisms and ecological systems;
6
(c) the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport or
handling of Hazardous Materials; and
(d) the emission, leak, release, spill or discharge into the
Environment of noise, vibration, dust, fumes, gas, odours, smoke,
steam effluvia, heat, light, radiation (of any kind), infection,
electricity or any Hazardous Material and any matter or thing
capable of constituting a nuisance or an actionable tort or breach
of statutory duty of any kind in respect of such matters,
including, without limitation, the following laws of the United States
of America: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990, as
amended, the Resource Conservation and Recovery Act, as amended, and
the Toxic Substances Control Act, as amended, together, in each case,
with the regulations promulgated and the guidance issued pursuant
thereto.
"EQUIPMENT"
means together each and every item of optical network, transmission or
other equipment supplied by the Seller as set out in the Lease
Schedules and including the Seller provided cabinet and/or racks in
which the same has been, or is to be, installed together with, where
the context so permits, all Technical Records relating thereto and
Services to be provided in connection with such equipment and including
any and all parts, components, equipment and accessories (whether
assembled or self assembly) installed thereon or therein on the
Commencement Date which form part of such Equipment (or which, having
been removed therefrom, remain the property of the Lessor) and all
substitutions, replacements and modifications required by law, other
modifications and replacements from time to time made to that Equipment
in accordance with or permitted by the terms of this Master Agreement,
(but excluding all items that cease to be subject to the terms of this
Master Agreement) and, unless the context otherwise requires,
references to "EQUIPMENT" shall include a reference to any of them or a
reference to any part of it.
"EURO" and "E"
means the lawful currency in a Participating Member State.
"EURO QUOTE"
[Redacted]
7
[Redacted]
"EVENT OF DEFAULT"
means any event specified in Clause 16.1 (Events of Default).
"EVENT OF LOSS"
in respect of all the Equipment (other than the Services), has the
meaning given in Clause 15.1 (Event of Loss of the Equipment) and, in
respect of part only of the Equipment (other than the Services), has
the meaning given in Clause 15.2 (Event of Loss of part of the
Equipment).
"FACILITY FEE LETTER"
means the facility fee side letter of even date between the Lessor and
the Lessee.
"FIXING PERIOD"
means the period ending [Redacted] from the date of this Master
Agreement.
"GOVERNMENTAL AUTHORITY"
means:
(a) any government (de jure or de facto) of a Relevant Country or
political subdivision of a Relevant Country, or local jurisdiction
in a Relevant Country; and/or
(b) any governmental authority or statutory, legal, fiscal, monetary
or administrative body or supra-national body (whether it be
domestic, foreign, international, state or local and including any
such authority or body of the European Union and the United
Nations) which operates or has jurisdiction, directly or
indirectly, in a Relevant Country; and/or
(c) any instrumentality, board, commission, court, or agency of any
thereof, however constituted.
8
"GROUP"
means in relation to any company, that company and any company which is
a holding company or subsidiary of that company and any subsidiary of
such holding company.
"GUARANTORS"
means together Viatel, Inc., a company incorporated and existing under
the laws of the State of New York and with its principal place of
business at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, X.X.X. together with,
if and when the same is established, any holding company of Viatel U.K.
Limited and "GUARANTOR" shall mean any of them.
"HAZARDOUS MATERIAL"
means any element or substance, whether natural or artificial, and
whether consisting of gas, liquid, solid or vapour, whether on its own
or in any combination with any other element or substance, which is
listed, identified, defined or determined by any Environmental Law to
be, to have been, or to be capable of being or becoming harmful to
mankind or any living organism or damaging to the Environment,
including, without limitation, oil (as defined in the United States
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended).
"INDEMNIFIABLE PERSON"
means each of the Lessor, each Lessor Risk Party, each member of the
Lessor Group, each member of a Lessor Risk Party's Group and their
respective shareholders, agents, subcontractors, partners, receivers,
assigns, directors, officers, servants and employees and the dependants
of any of the foregoing.
"INITIAL TERM"
means, in respect of any Equipment which is the subject of a Network
Acceptance Certificate, the period commencing on the Commencement Date
for that Equipment and continuing until the day preceding the day which
falls [Redacted] months (or, if the Initial Term Start Date falls in
the period described in proviso (ii) to the definition of "INITIAL TERM
START DATE", [Redacted] months) after the Initial Term Start Date for
that Equipment.
9
"INITIAL TERM START DATE"
means, in respect of any Equipment, the last Business Day of the month
during the Commitment Period in which the Commencement Date in respect
of that Equipment occurs PROVIDED ALWAYS THAT:
(a) if the Commencement Date for any Equipment occurs ten (10)
Business Days or less before the end of a month, the Initial Term
Start Date for that Equipment shall be the last Business Day of
the immediately succeeding month during the Commitment Period; and
(b) if the Commencement Date occurs ten (10) Business Days or less
prior to the end of the Commitment Period, the Initial Term Start
Date for the relevant Equipment shall be the last Business Day of
[Redacted]
"INSTALMENT SALE AGREEMENT"
means the instalment sale agreement entered or to be entered into
between the Lessor and the Seller in respect of the Equipment.
"INSURANCE PROCEEDS"
means the proceeds of any of the Insurances relating to loss of or
damage to the Equipment or any item thereof.
"INSURANCES"
means:
(a) all contracts and policies of insurance which are from time to
time effected in respect of the Equipment under Clause 14
(Insurance) or which are otherwise required to be taken out under
this Master Agreement; and
(b) all benefits thereunder and all claims in respect thereof,
(in the case of (a) and (b) above, as the interests of the Lessor may
appear).
"IRRECOVERABLE VAT"
means any VAT paid by or on behalf of the Lessor in relation to any
matter or transaction in respect of supplies of goods or services made
to the Lessor (or any company which is treated as a member of the same
group as the Lessor for VAT purposes) in connection with the Equipment
and any associated transaction in connection with the Lessor's
acquisition of the Equipment if in respect of such payment and to the
extent thereof the Lessor (or the representative member of the Lessor's
VAT group, if the Lessor is treated as a member of a VAT group) is not
entitled to recover such amount from the authority responsible for the
collection of VAT or is not entitled to receive and retain a credit in
full as "INPUT TAX" as a deduction against "OUTPUT TAX" (as the
expressions "OUTPUT TAX" and "INPUT TAX" are defined, in the United
Kingdom, in Section 24 VATA 1994 and in any other Relevant Country,
equivalent terms under equivalent legislation) under, in the United
Kingdom, Section 25 VATA 1994 and in any other Relevant Country, an
equivalent term under equivalent legislation in relation to VAT in
which such supplies are treated as made.
"LEASE GUARANTEE"
means the guarantee and indemnity of even date herewith by Viatel, Inc.
in favour of the Lessor in respect of the obligations of the Lessee
under this Master Agreement and the other Transaction Documents or, as
the case may be, such other guarantee and indemnity which might at any
time replace the same by the Guarantors on a joint and several basis in
favour of the Lessor in respect of those obligations.
10
"LEASE PARTICIPANT"
means a party (other than the Lessor) to any Lease Participation
Arrangements.
"LEASE PARTICIPATION ARRANGEMENTS"
means arrangements entered into by the Lessor and/or the Seller and/or
any third party:
(a) pursuant to which such other third party (but not the Seller), in
consideration of an agreed percentage of the Lease Payments due to
the Lessor under this Master Agreement, shall deposit monies with
the Lessor by way of funded sub-participation; or
(b) the effect and intention of which is to transfer to the Seller or
such other third party from the Lessor the risk of non payment by
the Lessee under this Master Agreement.
"LEASE SCHEDULE"
means, in relation to the Equipment or a part thereof which is to be
located in a particular Relevant Country, leased to the Lessee and (if
applicable) sub-leased to a particular Permitted Sub-Lessee, a lease
schedule to be entered into between the Lessor and the Lessee in
respect of that Equipment in substantially the same form as that set
out in Schedule 1 (Form of Lease Schedule) (or otherwise in such form
as the Lessor may reasonably require).
"LESSOR GROUP"
means the Lessor and any other member of the Group of companies of
which the Lessor is a member.
"LESSOR RISK PARTIES"
means together the Lessor, the Seller and any Lease Participant and
"LESSOR RISK PARTY" means any of them.
"LESSOR SECURITY INTEREST"
means any Security Interest on the Equipment which the Lessee
establishes arises as a result of:
(a) claims against or affecting the Lessor other than Security
Interests arising as a result of its participation in the
transactions contemplated by the Transaction Documents;
(b) acts or omissions of the Lessor which do not constitute the
performance of obligations or liabilities, or the exercise of
rights, by the Lessor under any of the Transaction Documents; or
(c) the non-payment of Taxes imposed on the Lessor other than Taxes
the subject of any indemnity in favour of the Lessor under the
Transaction Documents or where the liability to pay, or the
amount of, such Taxes is being disputed by the Lessor in good
faith by appropriate proceedings diligently pursued and a stay of
enforcement is in effect with respect to the Security Interest.
11
"LOSSES"
means any and all costs, expenses, payments, charges, losses, demands,
liabilities, claims (including Environmental Claims), actions,
proceedings, penalties, fines, damages, judgments, orders or other
actions.
"MAKE WHOLE AMOUNT"
means, in respect of a Lease Schedule, the sum equal to the excess, if
any, of:
(a) the sum of the present value of each of the remaining payments of
Periodic Rent under such Lease Schedule, discounted by the
Reinvestment Rate of the Lessor on the date of the relevant
prepayment; over
(b) the Capital Outstanding under such Lease Schedule plus the accrued
but unpaid finance charge on that Capital Outstanding (calculated
at the aggregate of the Cost of Funds and the Margin) up to and
including the relevant Termination Date.
"MARGIN"
[Redacted]
"MASTER AGREEMENT"
means this master lease purchase agreement.
"MASTER SUPPLEMENTAL AND AMENDMENT AGREEMENT IN RELATION TO THE NORTEL
SUPPLY CONTRACT"
means the agreement of that title dated on or about the date of this
Master Agreement between Nortel (in its capacity as seller under the
Nortel Supply Contract), the Lessor and the Lessee (in its capacity as
purchaser under the Nortel Supply Contract).
"MATERIAL ADVERSE CHANGE"
means:
(a) a materially adverse effect on the business, condition (financial
or otherwise), operations, performance or properties of Viatel,
Inc.'s Group taken as a whole since the date of Viatel, Inc.
Group's most recent audited annual financial statements for the
period to 31st December, 1999 (except for matters disclosed in
Viatel, Inc.'s Form 10-Q for the fiscal quarter ended 30th June,
2000 filed with the U.S. Securities and Exchange Commission (the
"SECOND QUARTER 2000 10-Q")); or
(b) a material impairment of the ability of the Lessee, any Permitted
Sub-Lessee or either or both of the Guarantors to perform when due
their respective obligations under or to remain in compliance with
the Transaction Documents to which they are or will be a party.
12
"MATERIAL CONTRACTS"
includes:
(a) any material licence issued to the Lessee, either of the
Guarantors or any other member of Viatel, Inc.'s Group and
required for the installation and utilisation of
telecommunications networks in the Relevant Countries in which
Equipment is located; or
(b) any other licence or agreement the termination or expiration of
which would cause a Material Adverse Change.
"NET INSURANCE PROCEEDS"
means, in relation to an Event of Loss, any Insurance Proceeds
referable thereto unconditionally received by the Lessor less the
costs and expenses of the Lessor referred to in Clause 15.6(a)(i)
(Application of Insurance Proceeds and Compensatory Awards).
"NETWORK"
has the meaning given to it in the Nortel Supply Contract.
"NETWORK ACCEPTANCE"
has the meaning given to it in the Nortel Supply Contract.
"NETWORK ACCEPTANCE CERTIFICATE"
means, in respect of any of the Equipment (other than the Services)
that undergoes Network Acceptance Tests, the Acceptance Certificate
relating to that Equipment signed by the Network Acceptance Manager of
the Lessee, the relevant Permitted Sub-Lessee or, as the case may be,
Viatel, Inc. upon satisfactory completion by that Equipment of those
Network Acceptance Tests.
"NETWORK ACCEPTANCE TEST"
has the meaning given to it in the Nortel Supply Contract.
"NORTEL"
means Nortel Networks plc (Registered No. 3937799), a company
incorporated under the laws of England and Wales whose registered
office is at Maidenhead Office Park, Xxxxxxxxx Xxx, Xxxxxxxxxx,
Xxxxxxxxx XX0 0XX, Xxxxxxx.
"NORTEL DEED OF NOVATION"
means the deed of novation of even date herewith entered into between
Nortel, the Lessor, the Lessee and Viatel, Inc. pursuant to which this
Master Agreement and the other relevant Transaction Documents are to be
13
novated by the Lessor to Nortel in the circumstances and subject to the
conditions set out therein.
"NORTEL NETWORKS GROUP"
means any company which is a member of the Group of companies to which
Nortel belongs.
"NORTEL OPTICAL"
means Nortel Networks Optical Components Limited (formerly known as
Nortel Networks plc and before that as Nortel plc), a company
incorporated under the laws of England and Wales (Registered No.
251571) whose registered office is at Maidenhead Office Park, Xxxxxxxxx
Xxx, Xxxxxxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxxx.
"NORTEL SUPPLY CONTRACT"
means the equipment purchase agreement dated 30th December, 1998
between Viatel, Inc., (as buyer) and Nortel Optical (under its former
name of Nortel plc) (as Seller) in respect of, inter alia, the
Equipment, the Software and certain services in relation thereto all as
more particularly described in the equipment purchase agreement as
amended and supplemented from time to time and as novated to Nortel and
the Lessee pursuant to the Deed of Novation, together with (i) Orders
in respect of the Equipment and (ii) the Master Supplemental and
Amendment Agreement in relation to the Nortel Supply Contract.
"ORDER"
has the meaning given to it in the Nortel Supply Contract.
"OUTSTANDING AMOUNTS"
means any amount payable by the Lessee (including but not limited to
Rental) which has fallen due under any of the Transaction Documents but
which is unpaid.
"PARENT BANK"
means Dresdner Bank A.G., London Branch.
"PARENT BANK'S SPOT RATE OF EXCHANGE"
means the Parent Bank's spot rate of exchange for the purchase of Euros
in the London foreign exchange market with any other currency at or
about 11.00 a.m. on a particular day.
"PARTICIPATING MEMBER STATE"
means a Member of state of the European Communities that adopts the
Euro as its currency in accordance with legislation of the European
Union relating to European Economic and Monetary Union.
14
"PARTICIPATION"
means the amount paid by a Lease Participant under the Lease
Participation Arrangements in order to acquire the relevant rights
granted by those Lease Participation Arrangements.
"PARTY"
means a party to this Master Agreement.
"PERIODIC RENT"
means, in respect of that part of the Equipment which is the subject of
a Lease Schedule, the amount to be paid by way of scheduled rent for
that Equipment, the amounts and dates for payment of which will be set
out in that Lease Schedule and which will be calculated by reference to
Clause 5.2(a)(ii).
"PERMITTED SECURITY INTEREST"
means:
(a) any lien in respect of Taxes which are either not yet assessed or,
if assessed, are not yet due and payable, or are being contested
in good faith by appropriate proceedings (and for the payment of
which adequate reserves or an adequate bond have been provided by
the Lessee);
(b) any lien of a mechanic, repairer, xxxxxxx or storage facility
provider or other similar lien arising in the ordinary course of
business by statute or by operation of law, in respect of
obligations which are not overdue or which are being contested in
good faith by appropriate proceedings (and for the payment of
which adequate reserves or an adequate bond have been provided by
the Lessee);
(c) any lien or other right of detention arising out of any judgment
or award with respect to which at the relevant time an appeal is
being presented in good faith and with respect to which there has
been secured a stay of execution pending such appeal;
(d) any Lessor Security Interest;
(e) any lien in favour of any Member of the Nortel Networks Group or
any of its suppliers under the Nortel Supply Contract;
(f) any Security Interest created by the Transaction Documents; and
(g) any Security Interest consented to in writing by the Lessor,
PROVIDED THAT, in the case of (a) to (c) and (e) above, any such
proceedings, or the continued existence of such lien or other right, do
not involve any likelihood of the sale, forfeiture or loss of the
Equipment or any interest therein.
15
"PERMITTED SUB-LEASE"
means, in respect of any or all of the Equipment which is the subject
of a Lease Schedule, a sub-lease of such Equipment entered into by the
Lessee with a Permitted Sub-Lessee (other than one in the United
States of America, [Redacted] or [Redacted]) substantially in the form
of the pro-forma sub-lease at Part I of Schedule 6 (Form of Permitted
Sub-Lease), for a Permitted Sub-Lease in the United States of America,
substantially in the form of the pro-forma sub-lease at Part II of
Schedule 6 (Form of Permitted Sub-Lease), for a Permitted Sub-Lease in
[Redacted], substantially in the form of the pro-forma sub-lease at
Part III of Schedule 6 (Form of Permitted Sub-Lease) and, for a
Permitted Sub-Lease in [Redacted], substantially in the form of the
pro-forma sub-lease at Part IV of Schedule 6 (Form of Permitted
Sub-Lease) and satisfying the conditions set out in Clause 12.3
(Possession and sub-leasing).
"PERMITTED SUB-LESSEE"
means a sub-lessee which is a member of Viatel, Inc.'s Group and which
has its principal place of business in the Relevant Country in which
the Equipment to be sub-leased to such sub-lessee is installed.
"POTENTIAL EVENT OF DEFAULT"
means an event which with the giving of notice, lapse of time,
determination of materiality or fulfilment of any other applicable
condition (or any combination of the foregoing), would constitute an
Event of Default.
"PROCEEDS"
means the proceeds of any sale or disposal of any of the Equipment.
"PROVISIONAL ACCEPTANCE CERTIFICATE"
means the acceptance certificate relating to any Equipment (other than
the Services) that undergoes Provisional Acceptance Tests signed by the
Lessee or Permitted Sub-Lessee or, as the case may be, Viatel, Inc.
upon satisfactory completion by that Equipment of those Provisional
Acceptance Tests.
"PROVISIONAL ACCEPTANCE TESTS"
has the meaning given to it in the Nortel Supply Contract.
"REINVESTMENT RATE"
means, in respect of the Capital Outstanding under a Lease Schedule,
the interest rate swap bid rate for Euros proposed by the Lessor on the
date which falls three (3) Business Days prior to the proposed
Termination Date for such Lease Schedule, in respect of a period equal
to the remaining average life of such Lease Schedule and which is
acceptable to the Lessee. In the event that such rate is not acceptable
to the Lessee, then the rate shall be the annual interest rate swap bid
rate that the Lessor obtains from the ICAPEURO screen provided by
Reuters, which the Lessor then interpolates to reflect the remaining
average life of the relevant Lease Schedule and converts into a monthly
rate, in each case less 5 basis points. If there is no rate available
on the ICAPEURO screen provided by Reuters, then the rate shall be the
16
average of the annual interest rate swap bid rates that the Lessor
obtains from each of Barclays Bank Plc, HSBC Bank plc and Lloyds TSB
Bank plc interpolated and converted into a monthly rate as aforesaid
less 5 basis points.
"RELEVANT COUNTRY"
means, according to the context in which it is used, the country in
which the Lessor, the Lessee, a Permitted Sub-Lessee or a Guarantor is
incorporated or in which the Equipment is located from time to time.
"RELEVANT SWAP RATE"
[Redacted]
"RENTAL"
means Periodic Rent and any other amount expressed to be payable by the
Lessee under this Master Agreement or any Lease Schedule as rental or
additional rental.
17
"RENTAL PAYMENT DATE"
means, for each Lease Schedule, the Initial Term Start Date and the
last Business Day of each month for the remainder of the Initial Term
for that Lease Schedule.
"REQUISITIONED EQUIPMENT"
has the meaning given to it in Clause 15.8 (Requisition for hire).
"SECURITY INTEREST"
means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof or
any agreement to give any security interest).
"SECURITY TRUSTEE AGREEMENT"
means the security trustee agreement entered or to be entered into
between the Lessor and each other Lessor Risk Party.
"SELLER"
means Nortel or any member of the Nortel Networks Group in its capacity
as seller of the Equipment to the Lessor.
"SERVICES"
means, in relation to the Equipment, Services (as that term is defined
in the Nortel Supply Contract) together with the provision of
maintenance, spares management (pursuant to any Service Level Agreement
entered into between Nortel and the Lessee) and any extended warranty
provided by Nortel to the Lessee.
"SETTLEMENT DATE"
means, in relation to an Event of Loss the 120th day after the date of
occurrence of the Event of Loss.
"SHIP DATE"
means the date on which a product ordered by Viatel or a Viatel
Affiliate is shipped from Nortel's or an Affiliate of Nortel's facility
or in the case of Software which is downloaded, the date upon which
such software is downloaded to the System; however Ship Date shall not
mean the date on which non-licensed software (as described in Clause
19.3 of Annex A (General Conditions) to the Nortel Supply Contract) is
activated.
"SIGNIFICANT SUBSIDIARY"
means, at any date of determination, any Subsidiary of Viatel, Inc.
that, together with its Subsidiaries (as defined in the Schedule of
Covenants to the Lease Guarantee):
18
(a) for the most recent fiscal year of Viatel, Inc., accounted for
more than 10 per cent. of the consolidated revenues of Viatel,
Inc.; or
(b) as of the end of such fiscal year, was the owner of more than 10
per cent. of the consolidated assets of Viatel, Inc.,
all as set forth in the most recently available consolidated financial
statements of Viatel, Inc. for such fiscal year.
"SOFTWARE"
means the set of machine readable instructions provided by the Seller
for the control and operation of the System.
"SPECIFICATION"
means any specification incorporated in Annex D of the Nortel Supply
Contract.
"SUB-LEASE ASSIGNMENT"
means the deed of assignment of the Permitted Sub-Leases to be entered
into by the Lessor and the Lessee.
"SUB-LESSEE INSOLVENCY EVENT"
means the occurrence of any of the events set out in Clauses 16.1(f) to
(j) inclusive in respect of a Permitted Sub-Lessee.
"SUBORDINATION LETTER AGREEMENT"
means the Subordination Letter Agreement in the form of Part I of
Schedule 9 (Form of Subordination Letter Agreement) and in the case of
any Permitted Sub-Lessee in [Redacted], in the form of Part II of
Schedule 9 (Form of subordination Letter Agreement) to be entered into
between the Lessor, the Lessee and any Permitted Sub-Lessee to which
the Lessee sub-leases any Equipment pursuant to Clause 12.3 (Possession
and sub-leasing), by which (among other things) the Permitted
Sub-Lessee confirms that its rights under the Permitted Sub-Lease to
which it is a party are subordinate to the Lessor's rights under this
Master Agreement and as owner of that Equipment.
"SUBSIDIARY"
means, with respect to any Person (as defined in the Schedule of
Covenants to the Lease Guarantee), any corporation, association or
other business entity of which more than 50 per cent. of the voting
power of the outstanding Voting Stock (as defined in the Schedule of
Covenants to the Lease Guarantee) is owned, directly or indirectly, by
such Person and/or one or more other Subsidiaries of such Person (as
defined in the Schedule of Covenants to the Lease Guarantee).
19
"SYSTEM"
means the Equipment and Software integrated as necessary to meet the
requirements of the Specification and the other provisions of the
Nortel Supply Contract.
"TA 1988"
means the Income and Corporation Taxes Xxx 0000.
"TAX LIABILITY"
means in respect of any person:
(a) any liability or any increase in the liability of that person to
make any payment or payments of or in respect of Tax;
(b) the loss, or setting off against income, profits or gains, or
against any liability to make a payment or payments of, or in
respect of Tax, of any relief, allowance, deduction or credit (a
"RELIEF") which would otherwise have been available to that
person; and
(c) the loss, or setting off against any liability to make a payment
or payments of or in respect of Tax, of a right to repayment of
Tax which would otherwise have been available to that person;
and in any case falling within (b) or (c) above the amount that is to
be treated as a Tax Liability shall be determined as follows:
(i) in a case which falls within (b) above, and where the Relief that
was the subject of the loss or setting off was or would have been
a deduction from or offset against Tax, the Tax Liability shall be
the amount of that Relief;
(ii) in a case which falls within (b) above, and which involves the
loss of a Relief which would otherwise have been available as a
deduction from or offset against gross income, profits or gains,
the Tax Liability shall be the amount of Tax which would (on the
basis of the Tax rates current at the date of the loss and
assuming that the person has sufficient gross income, profits or
gains to utilise the Relief) have been saved but for the loss of
the Relief;
(iii)in a case which falls within (b) above, and which involves the
setting off of a Relief which would otherwise have been available
as a deduction from or offset against gross income, profits or
gains, the Tax Liability shall be the amount of Tax which has been
or will be saved in consequence of the setting off; or
(iv) in a case which falls within (c) above, the Tax Liability shall be
the amount of the repayment that would have been obtained but for
the loss or setting off.
For the purposes of this definition any question of whether any relief,
allowance, deduction, credit or right to repayment of tax has been lost
or set off, and if so, the date on which that loss or set off took
place, shall be conclusively determined by the Lessor, acting in good
faith.
20
"TAXES"
means all present and future taxes, levies, duties, imposts, charges,
of any kind whatsoever, payable at the instance of or imposed by any
Governmental Authority, together with any penalties, additions, fines,
surcharges or interest relating thereto and "TAX", "TAX" and "TAXATION"
will be construed accordingly (subject to the definitions of VAT and
Irrecoverable VAT herein).
"TECHNICAL RECORDS"
means, in relation to the Equipment, all manuals, logs, records,
technical data, drawings, schedules and other materials, documents and
Software (whether kept or to be kept in compliance with any law or
regulation or the requirements of any Governmental Authority or
otherwise) relating to the Equipment, its ownership, operation, use,
maintenance or repair (and whether kept in written or electronic form).
"TERMINATION"
means a termination of the leasing of the Equipment the subject of a
Lease Schedule by reason of:
(a) the service of a notice by the Lessor on the Lessee under Clause
16.2 (Termination by Lessor); or
(b) the service by the Lessee of a Voluntary Termination Notice; or
(c) an Event of Loss occurring in respect of all of that Equipment; or
(d) the occurrence of an illegality event under Clause 34
(Illegality); or
(e) the occurrence of one of the mandatory prepayment events set out
in Clause 16.5.
"TERMINATION AMOUNT"
means, in respect of the items of Equipment which are the subject of a
Lease Schedule and for any date, the aggregate of the following amounts
for that Lease Schedule:
(a) the Capital Outstanding set out opposite that date in the Schedule
of Capital Outstanding to the relevant Lease Schedule (if the
relevant date is a Rental Payment Date) or, as the case may be,
set out opposite the immediately preceding Rental Payment Date in
the Schedule of Capital Outstanding to the relevant Lease Schedule
(if the relevant date is a day other than a Rental Payment Date);
(b) any unpaid Rental and any other Outstanding Amounts (to the extent
not included in Capital Outstanding under paragraph (a) above);
(c) any and all accrued but unpaid finance charges on the Capital
Outstanding calculated at the rate per annum which is the
aggregate of the Cost of Funds and the Margin; and
(d) the Make Whole Amount.
21
"TERMINATION DATE"
means:
(a) in the case of a notice served by the Lessor under Clause 16.2
(Termination by Lessor), the date on which that notice is served;
(b) in the case of a Voluntary Termination Notice or a Partial
Voluntary Termination Notice, the date for prepayment specified in
such notice;
(c) in the case of an Event of Loss, the Business Day following the
Settlement Date;
(d) in the case of an illegality event under Clause 34 (illegality),
the day falling one day before such illegality event; and
(e) in the case of the occurrence of one of the mandatory prepayment
events set out in Clause 16.5, the date upon which the Lessee is
obliged to make the mandatory prepayment pursuant to Clause 16.5.
"TIER 1 COUNTRY"
means any of the United Kingdom, [Redacted], United States of America,
[Redacted].
"TIER 2 COUNTRY"
[Redacted]
"TRANSACTION DOCUMENTS"
means:
(a) this Master Agreement;
(b) each Lease Schedule;
(c) each Certificate of Acceptance;
(d) the Security Assignment re Nortel Supply Contract;
(e) the Lease Guarantee;
(f) the Master Supplemental and Amendment Agreement in relation to the
Nortel Supply Contract;
(g) each agreement in respect of Lease Participation Arrangements;
(h) the Sub-Lease Assignment;
(i) the Deed of Novation;
(j) the Nortel Deed of Novation; and
22
(k) any and all other documents, agreements and letters, between the
Lessor and the Lessee (whether or not amongst others) to the
extent relating to the Equipment,
and all notices, consents, certificates and other documents from time
to time issued pursuant to any of the above and all other agreements,
letters and documents designated as such by the Parties.
"VAT"
means value added tax as provided for in the VATA 1994 and in any other
Relevant Country, equivalent legislation and legislation (whether
delegated or otherwise) supplemental to it or in any primary or
subordinate legislation promulgated by the European Union or any body
or agency thereof and any tax similar or equivalent to value added tax
imposed by any country other than the United Kingdom and any similar or
turnover Tax replacing or introduced in addition to any of the
foregoing.
"VATA 1994"
means the Value Added Tax Xxx 0000.
"VIATEL, INC."
means a company incorporated and existing under the laws of the State
of Delaware and with its principal place of business at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, X.X.X.
"VOLUNTARY TERMINATION NOTICE"
has the meaning given to it in Clause 16.3(b).
1.2 CONSTRUCTION
(a) In this Master Agreement unless the contrary intention appears a
reference to:
(i) an "AGREEMENT" includes a concession, contract, deed,
instrument, franchise, licence, treaty or undertaking (in
each case, whether oral or written);
an "AMENDMENT" includes a supplement, novation or
re-enactment and "AMENDED" is to be construed accordingly;
"ASSETS" includes present and future properties, revenues
and rights of every description;
"AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, permit, exemption, filing and
registration;
"INCLUDING" or "IN PARTICULAR" is to be construed as being
by way of illustration or emphasis and not limiting or
prejudicial to the generality of any foregoing words;
a "PERSON" includes any individual, company, unincorporated
association or body of persons (including a partnership,
joint venture or consortium), Governmental Authority, state,
agency, international organisation or other entity and its
successors and assigns;
23
a "REGULATION" includes any regulation, rule, official
directive, request (not having the force of law but which
banks and financial institutions in any Relevant Country
customarily comply with) or guideline (whether or not having
the force of law) of any Governmental Authority;
"SUBSIDIARY" and "HOLDING COMPANY" have the meanings
respectively given to them by sections 736 and 736A of the
Companies Xxx 0000;
(ii) a Clause or a Schedule or Appendix is a reference to a
clause of or a schedule or appendix to this Master
Agreement;
(iii) a Paragraph is a reference to a paragraph of a Schedule to
this Master Agreement;
(iv) a Transaction Document or another document is a reference to
that Transaction Document or other document as amended;
(v) a time of the day is a reference to London time; and
(vi) words importing the plural shall include the singular and
vice versa.
(b) In this Master Agreement unless the contrary intention appears a
reference to a provision of law is a reference to that provision
as amended or re-enacted and (i) includes any statute, decree,
constitution, regulation, order, judgment or directive of any
Governmental Authority; (ii) includes any treaty, pact, compact or
other agreement to which any Governmental Authority is a signatory
or party; and (iii) includes any judicial or administrative
interpretation or application thereof.
(c) Unless the contrary intention appears or it is specifically
defined therein, a term used in any other Transaction Document or
in any notice given under or in connection with any Transaction
Document has the same meaning in that Transaction Document or
notice as in this Master Agreement.
(d) The index to and the headings in this Master Agreement are for
convenience only and are to be ignored in construing this Master
Agreement.
(e) Wherever in this Master Agreement the Lessee is required to
indemnify the Lessor or any Lessor Risk Party "after Tax" this
shall mean that the payment to be made under the indemnity shall
be sufficient to ensure that the Lessor or, as the case may be,
the relevant Lessor Risk Party is fully indemnified in respect of
the relevant matter but receives no net benefit as a result of the
indemnity payment taking into account both any Tax liability of
the Lessor or, as the case may be, the relevant Lessor Risk Party
in respect of the receipt of the indemnity payment and the benefit
of any deduction or Tax relief to which the Lessor or, as the case
may be, the relevant Lessor Risk Party is entitled in respect of
payment of the liability giving rise to the indemnity payment.
(f) For the purposes of this Master Agreement, the Cost of Funds, the
Margin and any other interest rate shall be calculated on the
basis of the actual number of days elapsed and a 360 day year.
24
2. LEASING; QUIET ENJOYMENT
2.1 AGREEMENT TO LEASE
The Lessor agrees to lease and the Lessee agrees to take on lease the
Equipment on and subject to the terms of this Master Agreement.
2.2 QUIET ENJOYMENT
The Lessor recognises the Lessee's right to quiet enjoyment, use and
possession of the Equipment in the ordinary course of its business and
agrees, so long as no Event of Default or Potential Event of Default
has occurred and is continuing and subject to the terms of the
Transaction Documents (other than the Lease Participation
Arrangements), that the Lessor will not interrupt or interfere with
such quiet enjoyment, use and possession during the Lease Period. The
Lessor will not be liable to the Lessee for any interruption or
interference of or with the Lessee's enjoyment, use and possession to
the extent the same arises directly or indirectly from any act or
omission of any person other than the Lessor.
2.3 NATURE OF LESSOR'S AND LESSEE'S INTERESTS
(a) The Lessee acknowledges that the Lessor is acquiring the Equipment
under the Instalment Sale Agreement and that, as between the
Parties and subject to the Lessee's rights under this Master
Agreement and to Permitted Security Interests (other than Lessor
Security Interests), as from the Commencement Date for any
Equipment the Lessor will be the owner of and have title to that
Equipment except as otherwise provided expressly herein.
(b) The Lessee's sole rights in the Equipment will be as bailee under
this Master Agreement and the Lessee will not acquire or have any
right to acquire legal or beneficial ownership of the Equipment or
any proprietary interest therein.
3. DELIVERY, RISK AND ACCEPTANCE
3.1 DELIVERY
Delivery of an item of the Equipment by the Lessor to the Lessee under
this Master Agreement shall be deemed to take place immediately upon
execution of a Network Acceptance Certificate in respect of that
Equipment by the Lessee or the relevant Permitted Sub-Lessee acting in
each case through its Network Acceptance Manager (and if a person
purports to sign a Network Acceptance Certificate in that capacity, the
Lessor shall be entitled to assume that such person is in fact the
Network Acceptance Manager for the Lessee or, as the case may be, the
relevant Permitted Sub-Lessee).
3.2 RISK
After Delivery of an item of Equipment the item will be in every
respect at the sole risk of the Lessee who will bear all risk of loss,
theft or destruction of, or damage to, the item from any cause of any
kind.
25
3.3 ACCEPTANCE
(a) Acceptance of an item of the Equipment under this Master Agreement
shall be deemed to take place immediately upon execution of a
Network Acceptance Certificate in respect of that Equipment by the
Lessee or, the relevant Permitted Sub-Lessee acting in each case
through its Network Acceptance Manager (and if a person purports
to sign a Network Acceptance Certificate in that capacity, the
Lessor shall be entitled to assume that such person is in fact the
Network Acceptance Manager for the Lessee or, as the case may be,
the relevant Permitted Sub-Lessee). The execution and delivery of
a Network Acceptance Certificate shall, without the need for any
further action being taken, constitute irrevocable acceptance by
the Lessee of the item of Equipment for lease under this Master
Agreement without any qualification or reservation. The Lessee
acknowledges that its or, as the case may be, the relevant
Permitted Sub-Lessee's or, as the case may be, the relevant
authorised agent's execution and delivery of any Network
Acceptance Certificate shall conclusively establish, as between
the Lessor and the Lessee, that the Equipment has been inspected
by the Lessee, is in good repair and working order and is of the
design, manufacture and capacity selected by the Lessee and is
accepted by the Lessee under the applicable Lease Schedule.
(b) If and to the extent that title to or risk in any Equipment shall
pass to the Lessor prior to the Commencement Date or any such
Equipment shall come into the possession of the Lessee (or any
party acting on behalf of the Lessee) (otherwise than by way of a
leasing under this Master Agreement) the Lessee shall, so far as
practicable, in any such event from such time perform and
undertake in favour of the Lessor all of the obligations of the
Lessee (other than to pay Periodic Rent) to be performed under
this Master Agreement as if the leasing under this Master
Agreement had commenced.
(c) The Lessee acknowledges and agrees that, with effect from the
Commencement Date in respect of any Equipment until the date that
the Lessee signs a Lease Schedule in respect of that Equipment,
the Lessee is bound by the terms of this Master Agreement,
together with any riders, schedules or amendments hereto, as if
the Lessee had signed a Lease Schedule in respect of that
Equipment and shall perform and undertake in favour of the Lessor
all of the obligations imposed on the Lessee (other than the
obligation to pay Periodic Rent) to be performed under this Master
Agreement as if a Lease Schedule in respect of that Equipment had
been signed by the Lessee.
3.4 RESPONSIBILITY FOR DELAY AND COSTS
(a) The Lessor's ability to perform its obligations to lease the
Equipment under this Master Agreement is dependent upon the due
and punctual performance by the Seller of its obligations under
the Nortel Supply Contract and the Instalment Sale Agreement. The
Lessor will have no responsibility to the Lessee for, or arising
out of, any delay in or failure to effect Delivery of any item of
the Equipment or for any Event of Loss or damage incurred in the
course of Delivery.
(b) The Lessee will be responsible for all costs and expenses incurred
in connection with the Lessor's purchase of the Equipment
(including shipment, delivery and installation) not specifically
agreed as being part of the Acquisition Cost. The Lessee shall
indemnify the Lessor on demand against all such costs and expenses
incurred by the Lessor.
(c) The Lessee hereby agrees to indemnify, defend and hold the Lessor
and Lessor Risk Parties (other than the Seller in its capacity as
supplier of the Equipment under the Nortel Supply Contract)
harmless from any liability which the Lessor or any of the Lessor
Risk Parties (other than the Seller in its capacity as supplier of
26
the Equipment under the Nortel Supply Contract) suffers or incurs
to any other manufacturer or supplier arising from the failure of
the Lessee to lease any Equipment which is acquired or agreed to
be acquired by the Lessor at the request of the Lessee or for
which the Lessor has assumed an obligation to purchase at the
request of the Lessee.
4. PERIOD OF LEASING
The leasing of each item of the Equipment shall be deemed to have
commenced on the Commencement Date for such Equipment and shall
continue until expiration of the Initial Term for such Equipment
subject to the provisions for earlier termination contained in this
Master Agreement.
5. RENTALS
5.1 FIXING OF EURO QUOTE
[Redacted]
5.2 CALCULATION OF PERIODIC RENT AND CAPITAL OUTSTANDING
(a) Before issuing a Lease Schedule to the Lessee in accordance with
Clause 5.2(b) below, the Lessor shall calculate:
(i) the Acceptance Cost, Acquisition Cost and Capital Outstanding
for the Equipment which is to be subject to that Lease
Schedule; and
(ii) the Periodic Rent for the Equipment which is to be subject to
that Lease Schedule. Each amount of Periodic Rent shall be
the amount determined by the Lessor which, if paid in
27
[Redacted] (or, if the Initial Term Start Date falls in the
period described in proviso (ii) to the definition of
"Initial Term Start Date", [Redacted]) equal monthly amounts
commencing on the Initial Term Start Date and on each Rental
Payment Date thereafter, would repay in full the Capital
Outstanding on the Initial Term Start Date together with
finance charges on the balance outstanding from time to time
of the Capital Outstanding calculated on a daily basis at a
rate per annum equal to the applicable Acceptance Rate.
The calculations referred to in (i) and (ii) above shall be
made on the basis that the price of the Equipment the subject
of the relevant Lease Schedule under the Nortel Supply
Contract is in Euros.
(b) No later than three Business Days prior to the Initial Term Start
Date in respect of any Equipment which is to be the subject of a
Lease Schedule, the Lessor shall complete and deliver to the
Lessee a Certificate of Acceptance and Lease Schedule in respect
of that Equipment for signature. For each Initial Term Start Date,
there shall be one Lease Schedule in respect of all the Equipment
which is, or is to be located in a particular Relevant Country,
leased to the Lessee and sub-leased to a particular Permitted
Sub-Lessee. The Lessee shall promptly and, in any event, no later
than one Business Day prior to the relevant Initial Term Start
Date execute the relevant Certificate of Acceptance and Lease
Schedule and redeliver the same to the Lessor. If the Lessee does
not execute the relevant Certificate of Acceptance and Lease
Schedule prior to the Initial Term Start Date, the Lessee shall
nevertheless be deemed to accept the relevant Equipment and to
agree to the terms of the relevant Lease Schedule as if it had
signed such Lease Schedule and the terms and conditions of that
Lease Schedule and this Master Agreement shall then apply to the
relevant Equipment.
5.3 ACCEPTANCE COST
The Acceptance Cost for any Equipment will be capitalised on the
Initial Term Start Date for that Equipment and will constitute a part
of the Acquisition Cost of the Equipment.
5.4 PERIODIC RENTAL
Periodic Rent shall be due and payable in Euros in respect of each item
of Equipment without prior notice or demand by the Lessee on each
Rental Payment Date in respect of that item of Equipment during the
Initial Term for that item of Equipment.
6. PAYMENTS
6.1 CURRENCY
(a) All amounts payable by the Lessee under the Transaction Documents
by way of indemnity or reimbursement of any costs, expenses, Taxes
and the like incurred or suffered by any Indemnifiable Person are,
except as otherwise provided in the Transaction Documents, payable
in the currency in which the cost, expense, Tax or other like
amount was incurred or suffered.
(b) Any payments or prepayments of Rentals, Capital Outstanding,
Termination Amount and finance charges thereon under a Lease
Schedule are payable in Euros.
(c) Any other amounts payable under the Transaction Documents are,
except as otherwise provided in the Transaction Documents, payable
in Euros.
28
6.2 PLACE AND MANNER
(a) All payments to be made by the Lessee, under the Transaction
Documents will be made to the Lessor at Dresdner Bank AG,
Frankfurt, Swift Code: XXXXXXXX, for the account of Kleinwort
Xxxxxx Ltd., Swift Code: XXXXXX00, A/C 499/08047728/11, Favour of
Dresdner Kleinwort Xxxxxx Finance Limited, Account Number
259357802,or such other account(s) as the Lessor may notify to the
Lessee in writing for this purpose.
(b) Payments under the Transaction Documents to the Lessor shall be
made for value on the due date at such times and in such funds as
the Lessor may specify to the Lessee as being customary at the
time for the settlement of transactions in the relevant currency
in the place for payment.
(c) All payments to be made by the Lessee under the Transaction
Documents shall be made without set-off or counterclaim and in
such funds as the recipient may specify as being customary at the
time for the settlement of transactions in the currency in
question.
(d) All payments to be made by the Lessor to the Lessee under the
Transaction Documents shall be made for value on the due date to
such account of the Lessee in the principal financial centre of
the relevant currency (or, in the case of payments in Euros, in
the principal financial centre of a Participating Member State or
London) as the Lessee may by reasonable notice specify to the
Lessor for this purpose.
6.3 LATE PAYMENTS
If the Lessee fails to make a payment in full under the Transaction
Documents to the Lessor when due and payable (taking into account any
applicable grace period) it will, on demand, pay to the Lessor (without
prejudice to any other rights and remedies available to the Lessor)
interest on the amount outstanding at the Default Rate from and
including the date of demand. Such interest will be compounded monthly.
6.4 CALCULATIONS
Interest under Clause 6.3 (Late Payments) and the fees payable under
Clause 23.2 (Fees) accrue from day to day and are calculated on the
basis of the actual number of days elapsed and a year of 360 days.
6.5 BUSINESS DAYS
Whenever any payment falls due on a day which is not a Business Day,
the due date will be the next succeeding Business Day.
6.6 NET AGREEMENT
The Lessee's obligations under this Master Agreement are absolute and
unconditional and will not be affected by, or contingent upon, any act,
omission, matter or thing which, but for this provision, would or might
reduce, release or prejudice (in whole or in part) any of its
obligations under this Master Agreement including:
(a) any right of set-off, counterclaim, recoupment, suspension,
deduction or defence or other right which any Party may have
against another (unless and to the extent mandatorily required by
law to be exercised);
29
(b) any unavailability or interruption of use of any of the Equipment
for any reason including its Compulsory Acquisition (subject as
provided in Clause 15.5 (Consequences of an Event of Loss)), any
prohibition or other restriction against its use, operation or
possession, or any other interference with its use, operation or
possession (except as a result of a breach by the Lessor of Clause
2.2 (Quiet Enjoyment));
(c) any lack or invalidity of title or any other defect in the title,
quality, condition, design, operation or fitness for use or
purpose of the Equipment or any embargo or the ineligibility of
the Equipment for any particular use or trade;
(d) the absence or withdrawal of any authorisation relating to the
Equipment or any lack or invalidity of or any other defect in any
other documentation or the registration of any documentation
relating to the Equipment under the laws of England or any other
Relevant Country;
(e) subject as provided in Clause 15.5 (Consequences of an Event of
Loss), any Event of Loss of or any other loss of or damage to the
Equipment;
(f) any failure, breach or delay on the part of any Party however
fundamental, whether with or without fault on its part, in
performing or complying with any of the provisions of any
Transaction Document (other than any breach by the Lessor of its
obligations under the Instalment Sale Agreement which breach
prevents the Lessee, or as the case may be, the relevant Permitted
Sub-Lessee from using the Equipment or any part of it or prevents
the Lessor passing title to the Equipment or any part of it to the
Lessee in accordance with this Master Agreement);
(g) any insolvency, bankruptcy, reorganisation, arrangement,
readjustment of debt, dissolution, liquidation or similar
proceedings by or against the Lessor or the Lessee or any other
person; or
(h) any invalidity or unenforceability or lack of due authorisation of
or other defect in any Transaction Document,
it being the declared intention of the Parties that the provisions of
this Clause 6.6 and the obligations of the Lessee to pay the amounts
expressed to be payable under this Master Agreement will survive any
frustration and that, except as expressly provided in this Master
Agreement, no moneys payable under this Master Agreement by the Lessee
to the Lessor will in any circumstances be repayable to the Lessee.
Nothing in this Clause 6.6 shall constitute a waiver by the Lessee of
any right to claim damages against the Lessor and/or other relief from
the courts arising out of any breach by the Lessor of its express
obligations under this Master Agreement and the Lessee's right to
termination as a consequence of repudiatory or fundamental breach by
the Lessor and provided further that the Lessee shall not be bound to
continue to pay Periodic Rent to the Lessor if it is bound by an order
of a court of competent jurisdiction directing it to make payment to a
third party.
6.7 TIME OF THE ESSENCE
Punctual payment of amounts payable by the Lessee to the Lessor and
performance by the Lessee of its obligations under this Master
Agreement shall, subject to any express periods of grace set out in
Clause 16.1 (Events of Default) or elsewhere, be of the essence and
conditions of this Master Agreement.
30
6.8 BREAK COSTS INDEMNITY
The Lessee agrees to indemnify the Lessor on demand against any Losses
(including any loss of margin or other loss, premium or expense on
account of funds borrowed, contracted for or utilised to fund or
maintain the funding of any amount payable or paid by way of
Acquisition Cost (or any part thereof) or any other amount due or to
become due under this Master Agreement or which may be incurred in
liquidating or employing any such funds) ("BREAK COSTS") incurred by
the Lessor as a consequence of:
(a) any delay in or non-delivery of any of the Equipment under the
Nortel Supply Contract and/or the Instalment Sale Agreement or
this Master Agreement or the non-payment of all or any part of the
purchase price for the Equipment under the Nortel Supply Contract
and/or the Instalment Sale Agreement for any reason on the
anticipated due date therefor (other than by reason of a breach by
the Lessor of its express obligations under the Nortel Supply
Contract and/or the Instalment Sale Agreement or by reason of the
operation of Clause 7.6 (Lessee's conditions precedent) or Clause
7.7 (Further Lessee's conditions precedent)) or the operation of
Clause 7.5(a) (Failure to satisfy conditions precedent);
(b) the receipt of any Rental otherwise than on a Rental Payment Date;
or
(c) any Termination (other than a Termination in respect of which the
Make Whole Amount is payable).
6.9 CHANGE OF CURRENCY
(a) Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:
(i) any reference in the Transaction Documents to, and any obligations
arising under the Transaction Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Lessor; and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by the Lessor (acting
reasonably).
(b) If a change in any currency of a country occurs, this Master Agreement
will, to the extent the Lessor (acting reasonably) specifies to be
necessary, be amended to comply with any generally accepted conventions
and market practice in the relevant interbank market and otherwise to
reflect the change in currency.
7. CONDITIONS PRECEDENT
7.1 DOCUMENTARY CONDITIONS PRECEDENT
This Master Agreement shall become effective upon its execution by the
Parties but the obligations of the Lessor under this Master Agreement
including its obligation to purchase and supply any Equipment to be
leased hereunder are subject to the condition that the Lessor has
received all of the documents set out in Part I of Schedule 3 in form
and substance satisfactory to the Lessor and the Lessor Risk Parties.
31
7.2 GENERAL CONDITIONS PRECEDENT
The obligations of the Lessor under this Master Agreement to purchase
and supply any Equipment or enter into any lease thereof in accordance
with this Master Agreement are subject to the further conditions
precedent that as of the date the Lessor would but for this Clause 7.2
be obligated to do so:
(a) no Event of Default or Potential Event of Default has occurred and
is continuing or might result from the leasing of the Equipment;
(b) the representations and warranties in Clause 8.1 (Representations
and warranties of Lessee) and in Clause 5 of the Lease Guarantee
are true and accurate in all material respects as if made on such
date by reference to the facts and circumstances then existing and
will remain true and correct in all material respects immediately
after execution of the Transaction Documents;
(c) no change has occurred after the date of this Master Agreement in
any Applicable Law or in the interpretation of any such law or
regulation which in the Lessor's opinion would make it illegal for
the Lessor or the Lessee or either of the Guarantors to perform
any of their respective obligations under the Transaction
Documents;
(d) the Lessor has received such other documents, opinions,
certificates, authorisations and assurances as the Lessor may
reasonably request;
(e) Viatel, Inc., the Lessee, Nortel Optical and Nortel have entered
into the Deed of Novation;
(f) all undisputed balances due and outstanding from the Lessee, or
either of the Guarantors or any member of Viatel, Inc.'s Group to
the Nortel Networks Group are current, or if not current, are
being disputed in good faith;
(g) since the date of the most recent audited annual financial
statements of Viatel, Inc.'s Group for the period to 31st
December, 1999 (except for matters disclosed in the Second Quarter
2000 10-Q), no Material Adverse Change has occurred;
(h) an agent for service of process in England for Viatel, Inc. has
been appointed and evidence (in a form and substance reasonably
satisfactory to the Lessor) has been furnished to the Lessor both
of the appointment of that agent for service of process and of
that agent's acceptance of such appointment;
(i) the Lessor is satisfied with the results of its due diligence
including its review of all Material Contracts of the Lessee, the
Guarantors and the Permitted Sub-Lessees; and
(j) all necessary internal approvals from any party to any Transaction
Document which is required to furnish such approval (including
approvals from the boards of directors of companies within the
Nortel Networks Group) have been given in a form and substance
satisfactory to the Lessor.
32
7.3 CONDITIONS PRECEDENT TO LEASING OF EQUIPMENT
(a) Without prejudice to Clause 7.1 (Documentary conditions precedent) and
Clause 7.2 (General conditions precedent), the obligation of the Lessor
to supply each item of Equipment under this Master Agreement is subject
to:
(i) the conditions precedent set out in Part II of Schedule 3
(Conditions Precedent Documents) being fulfilled to the
satisfaction of the Lessor (or waived in writing by the Lessor)
on or prior to the Initial Term Start Date for such item of
Equipment (or such other date as may be specified in Part II of
Schedule 3);
(ii) the Acquisition Cost of the Equipment when aggregated with the
Acquisition Cost of all Equipment already supplied by the Lessor
under this Master Agreement and the subject of Lease Schedules
not exceeding the Commitment; and
(iii)the Lessor being satisfied that any and all steps necessary to be
taken prior to the Initial Term Start Date in each Tier 1 Country
have been taken to protect the Lessor's ownership and
repossession rights, including, without limitation, all filings
and registrations.
(b) The Lessor shall not be required to pay the Acquisition Cost for any
Equipment unless and until the Lessee has executed a Lease Schedule in
respect of such Equipment and all of the conditions precedent set out
in Part II of Schedule 3 (Conditions Precedent Documents) have been
fulfilled to the satisfaction of the Lessor (or waived in writing by
the Lessor).
7.4 WAIVER OR DEFERRAL OF CONDITIONS PRECEDENT
(a) The conditions precedent referred to in Clauses 7.1 (Documentary
conditions precedent), 7.2 (General conditions precedent) and 7.3
(Conditions precedent to leasing of Equipment) are inserted for the
sole benefit of the Lessor and may be waived or deferred in whole or in
part subject to such conditions as the Lessor may notify to the Lessee.
(b) The Lessee will, to the extent that it is capable of so doing, use its
commercially reasonable endeavours to fulfil, or ensure fulfilment of,
such conditions within the time specified.
7.5 FAILURE TO SATISFY CONDITIONS PRECEDENT
If:
(a) any of the conditions precedent referred to in Clauses 7.1
(Documentary conditions precedent), 7.2 (General conditions
precedent) and 7.3 (Conditions precedent to leasing of Equipment)
to the leasing of any of the Equipment (other than receipt of the
relevant Lease Schedule signed by the Lessee as referred to in
paragraph (i) of Part II of Schedule 3) which have not been waived
or deferred by the Lessor under Clause 7.4 (Waiver or deferral of
conditions precedent) are not fulfilled to the satisfaction of the
Lessor on or before the Initial Term Start Date in respect of that
Equipment; or
(b) the Lessee shall refuse for any reason whatsoever to accept
delivery of any item of the Equipment otherwise deliverable under
this Master Agreement,
then:
33
(i) the leasing of that Equipment shall automatically terminate
on the Initial Term Start Date for that Equipment and the
terms of the Master Supplemental and Amendment Agreement in
relation to the Nortel Supply Contract shall then apply to
the relevant Equipment; and
(ii) the Lessee will indemnify the Lessor on demand against all
Losses (including Break Costs ) suffered or incurred by the
Lessor as a result of or in connection with the termination
of the leasing of the Equipment.
7.6 LESSEE'S CONDITIONS PRECEDENT
The obligations of the Lessee to take the Equipment on lease from the
Lessor are subject to the condition that the Lessee has received no
later than the Initial Term Start Date all of the documents set out in
Part III of Schedule 3.
7.7 FURTHER LESSEE'S CONDITIONS PRECEDENT
The obligations of the Lessee to take the Equipment on lease from the
Lessor are subject to the further condition precedent that the
representations and warranties of the Lessor in Clause 9
(Representations and warranties of Lessor) are true and accurate as at
the date of this Master Agreement.
7.8 LESSEE'S WAIVER OR DEFERRAL OF CONDITIONS PRECEDENT
(a) The conditions precedent specified in Clauses 7.6 (Lessee's conditions
precedent) and 7.7 (Further Lessee's conditions precedent) are inserted
for the sole benefit of the Lessee and may be waived or deferred in
whole or in part subject to such conditions as the Lessee may notify to
the Lessor.
(b) The Lessor will to the extent that it is capable of so doing, use its
commercially reasonable endeavours to fulfil, or ensure fulfilment of
such conditions within the time specified and otherwise under the terms
of such notification.
8. REPRESENTATIONS AND WARRANTIES OF LESSEE
8.1 REPRESENTATIONS AND WARRANTIES OF LESSEE
The Lessee makes the representations and warranties set out in this
Clause 8 to the Lessor.
8.2 STATUS
(a) It is a corporation or limited liability company duly organised and
validly existing under the laws of the jurisdiction of its formation;
and
(b) It has the power to own its property and assets and carry on its
business as it is now being conducted and is the holder of all
necessary licences material to the conduct of its business.
34
8.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of, the
Transaction Documents to which it is or will be a party and the
transactions contemplated by those Transaction Documents.
8.4 LEGAL VALIDITY
Each Transaction Document to which it is or will be a party
constitutes, or when executed in accordance with the terms of that
Transaction Document will constitute, its legal, valid and binding
obligation enforceable in accordance with the terms of that Transaction
Document.
8.5 NON-CONFLICT
The entry into and performance by it of, and the transactions
contemplated by, the Transaction Documents do not and will not:
(a) conflict with any law or regulation or judicial or official order;
or
(b) conflict with its constitutional documents; or
(c) conflict with any document which is binding upon it or any of its
assets; or
(d) result in the creation of any Security Interest over any of its
assets except as contemplated by the Transaction Documents (other
than the Lease Participation Arrangements).
8.6 NO DEFAULT
(a) No Potential Event of Default is outstanding or might result from the
entry into or performance of any Transaction Document to which the
Lessee is a party; and
(b) no other event is outstanding which constitutes (or with the giving of
notice, lapse of time, determination of materiality or the fulfilment
of any other applicable condition or any combination of the foregoing,
might constitute) a default under any document which is binding on it
or any of its assets to an extent or in a manner which might effect a
Material Adverse Change.
8.7 AUTHORISATIONS
All authorisations, approvals, consents, licences, exemptions filings,
recordings and other matters, official or otherwise, required or
desirable in connection with the entry into, performance, validity and
enforceability of, and the transactions contemplated by, the
Transaction Documents to which the Lessee is a party have been obtained
or effected (as appropriate) and are in full force and effect.
8.8 FINANCIAL STATEMENTS
The audited Financial Statements of Viatel, Inc. for the fiscal year
ended 31st December, 1999 delivered to the Lessor:
(a) have been prepared in accordance with generally accepted
accounting principles consistently applied; and
35
(b) fairly represent the financial condition of the Lessee, and
(except for any matters disclosed in the Second Quarter 2000 10-Q)
nothing has occurred which would be reasonably likely to
constitute a Material Adverse Change in respect of the Lessee
since the date of the balance sheet included in those accounts.
8.9 LITIGATION
No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened, which has a reasonable
likelihood of being adversely determined, and if so adversely
determined, would effect a Material Adverse Change.
8.10 INFORMATION
To the best of its knowledge and belief all written information
supplied by the Lessee to the Lessor was true as at the date that it
was supplied and the Lessee has not failed to disclose to the Lessor
any information which, if disclosed, might adversely affect the
decision of a person considering whether to enter into this Master
Agreement in the capacity of the Lessor.
8.11 OWNERSHIP
It is a wholly owned Subsidiary of Viatel, Inc.
8.12 ENVIRONMENTAL
Except as may already have been disclosed by the Lessee in writing to,
and acknowledged in writing by, the Lessor:
(a) the Lessee and its Environmental Affiliates have without
limitation complied in all material respects with the provisions
of all applicable Environmental Laws in relation to the Equipment
(other than Services); and
(b) the Lessee and its Environmental Affiliates have obtained all
material Environmental Approvals in relation to the Equipment
(other than Services) and are in compliance in all material
respects with such Environmental Approvals.
8.13 INSURANCES
All Insurances required to be effected under Clause 14 (Insurances) are
in full force and effect, all premiums and contributions which have
fallen due have been paid and no event or circumstances has occurred
nor has there been any omission to disclose a fact which in any such
case would entitle any insurer to avoid or otherwise reduce its
liability under any of the Insurances.
8.14 MATERIAL CONTRACTS
(a) Each of the Material Contracts to which the Lessee is a party
constitutes its legal, valid and binding obligation and is enforceable
in accordance with its terms (except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or equitable principles relating to a limiting creditors'
rights generally) and all authorisations, approvals, consents,
36
licences, exemptions, filings, recordings, and other matters necessary
in connection with the entry into, performance, validity and
enforceability of the Material Contracts have been obtained or effected
(as appropriate) and are in full force and effect.
(b) Neither the Lessee nor any other member of Viatel, Inc.'s Group is in
breach of its obligations under any Material Contract in any respect
which would be reasonably likely to result in the termination thereof
nor, has anything occurred under, in respect of or in connection with
any Material Contract which could result in any such breach of any
Material Contract.
8.15 MOVEABLE PROPERTY
Subject to the Instalment Sale Agreement being entered into on or prior
to the first Commencement Date, in each Relevant Country, the Equipment
(other than Services) belongs to the Lessor, constitutes the Lessor's
personal or moveable property (as appropriate) and in each Relevant
Country no person has any rights in or to any Equipment (other than
Services) by reason of that Equipment (other than Services) being, or
being deemed to be, affixed to or attached to, or otherwise located on,
real property.
8.16 REGISTRATIONS RE EQUIPMENT
Except for those registrations referred to in Schedule 3 Part II
(Conditions Precedent to leasing of Equipment), it is not necessary to
effect in any Relevant Country in which any Equipment (other than
Services) is, or is to be located, any registrations with any relevant
Governmental Authority concerning the installation of that Equipment
(other than Services) on real property or the fixture, attachment or
location, or deemed fixture, attachment or location, of that Equipment
(other than Services) on that property or, as the case may be, in order
to protect the ownership and/or security interests of the Lessor and
the other Lessor Risk Parties.
8.17 LEASE GUARANTEE
The covenants contained in the Lease Guarantee are not materially less
onerous than those contained in any indenture entered into by Viatel,
Inc.
8.18 TITLE TO THE EQUIPMENT
Neither the Lessee nor any Permitted Sub-Lessee nor any other member of
the Viatel, Inc. Group has title to any Equipment which is or is to be
the subject of a Lease Schedule.
8.19 PERMANENT ESTABLISHMENT
Other than in England and Wales, the Lessee has not established a
permanent establishment in any other Relevant Country where it is
proposing to enter into a Permitted Sub-Lease with a Permitted
Sub-Lessee.
8.20 TIME FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties in this Clause 8 shall survive the
execution of this Master Agreement:
(a) are made on the date of this Master Agreement; and
37
(b) (other than the representation and warranty set out in Clause 8.15
(Taxes) above) are deemed to be repeated on each Initial Term
Start Date, with reference to the facts and circumstances then
subsisting as if made at such time except that each reference to
the financial statements of Viatel, Inc. in Clause 8.8 (Financial
Statements) shall be construed as a reference to the then latest
available financial statements of the Lessee and each reference to
the date as of such accounts were prepared shall be construed as a
reference to the date as of which the then latest available
accounts of the Lessee were prepared.
9. REPRESENTATIONS AND WARRANTIES OF LESSOR
9.1 REPRESENTATIONS AND WARRANTIES OF LESSOR
The Lessor makes the representations and warranties set out in this
Clause 9 to the Lessee on the date of this Master Agreement.
9.2 STATUS
It is a limited liability company duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation.
9.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of, the
Transaction Documents to which it is or will be a party and the
transactions contemplated by those Transaction Documents.
9.4 LEGAL VALIDITY
Each Transaction Document to which it is or will be a party
constitutes, or when executed in accordance with the terms of that
Transaction Document will constitute, its legal, valid and binding
obligation enforceable in accordance with the terms of that Transaction
Document except as enforcement may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally or equitable
principle relating to or limiting creditors' rights generally.
10. DISCLAIMER AND EXCLUSION OF LIABILITY; LESSOR SECURITY INTERESTS
10.1 DISCLAIMER
THE LESSEE ACKNOWLEDGES AND AGREES THAT:
(a) THE EQUIPMENT HAS BEEN SELECTED BY THE LESSEE (AND NOT THE LESSOR)
IN ACCORDANCE WITH THE TERMS OF THE NORTEL SUPPLY CONTRACT FOR
ACQUISITION BY THE LESSOR UNDER THE INSTALMENT SALE AGREEMENT AND
LEASING BY THE LESSEE FROM THE LESSOR UNDER THIS MASTER AGREEMENT
AND THE LESSOR HAS NOT BEEN AND WILL NOT BE INVOLVED IN THE
DESIGN, MANUFACTURE, CONSTRUCTION OR INSTALLATION OF THE
EQUIPMENT;
(b) THE LESSEE IS LEASING EACH ITEM OF THE EQUIPMENT IN AN "AS IS,
WHERE IS" CONDITION, WITH ALL FAULTS AND SUBJECT TO ALL SECURITY
38
INTERESTS AND DEBTS (OTHER THAN LESSOR SECURITY INTERESTS) AS AT
THE COMMENCEMENT DATE FOR THAT EQUIPMENT AND DELIVERY OF A NETWORK
ACCEPTANCE CERTIFICATE FOR THAT EQUIPMENT WILL BE CONCLUSIVE
PROOF, AS BETWEEN THE PARTIES, THAT THE LESSEE'S DULY AUTHORISED
TECHNICAL EXPERTS HAVE HAD FULL OPPORTUNITY TO INSPECT THE ITEM
AND THAT THE ITEM IS IN GOOD WORKING ORDER AND REPAIR, COMPLETE,
OF SATISFACTORY QUALITY, FIT FOR ANY PURPOSE FOR WHICH IT MAY BE
INTENDED OR REQUIRED, WITHOUT DEFECT (WHETHER IN CONDITION, DESIGN
OR OTHERWISE AND WHETHER OR NOT DISCOVERABLE AS AT THE
COMMENCEMENT DATE FOR THAT EQUIPMENT) AND IN EVERY WAY
SATISFACTORY TO THE LESSEE (ALL OF THE FOREGOING, HOWEVER, BEING
STATED FOR THE LESSOR'S BENEFIT ONLY WITHOUT PREJUDICE TO THE
LESSEE'S RIGHTS AND REMEDIES AGAINST THE SELLER);
(c) SUBJECT TO CLAUSE 2.2 (QUIET ENJOYMENT), NO REPRESENTATION,
WARRANTY, TERM OR CONDITION (EXPRESS OR IMPLIED AND WHETHER
STATUTORY OR OTHERWISE) HAS BEEN OR IS GIVEN BY OR ON BEHALF OF
THE LESSOR NOR ANY OTHER LESSOR RISK PARTY (OTHER THAN THE SELLER
IN ITS CAPACITY AS SUPPLIER OF THE EQUIPMENT PURSUANT TO THE
NORTEL SUPPLY CONTRACT) AND THE LESSOR (ON BEHALF OF ITSELF AND
EACH SUCH LESSOR RISK PARTY) HEREBY DISCLAIMS ANY REPRESENTATION,
WARRANTY, TERM OR CONDITION WHATSOEVER, IN RELATION TO THE
EQUIPMENT INCLUDING AS TO TITLE, DESCRIPTION, VALUE, CONDITION,
DESIGN, CAPACITY, QUALITY, DURABILITY, OPERATION, PERFORMANCE,
FITNESS OR SUITABILITY OR ELIGIBILITY FOR ANY PARTICULAR USE OR
PURPOSE, AS TO THE ABSENCE OF DEFECTS (WHETHER OR NOT
DISCOVERABLE) OR ANY INFRINGEMENT OF ANY INTELLECTUAL PROPERTY OR
OTHER RIGHTS OF ANY PERSONS, ALL OF WHICH REPRESENTATIONS,
WARRANTIES, TERMS AND CONDITIONS ARE HEREBY EXCLUDED;
(d) THE LESSOR WILL HAVE NO LIABILITY TO THE LESSEE AND THE LESSEE
WILL HAVE NO RIGHT, CLAIM OR REMEDY OF ANY KIND AGAINST THE
LESSOR, IN EACH CASE, HOWSOEVER AND WHERESOEVER ARISING, WHETHER
IN CONTRACT, TORT OR OTHERWISE, IN RESPECT OF ANY LOSSES
(INCLUDING CONSEQUENTIAL AND INDIRECT LOSSES AND LOSS OF PROFIT,
SPECIAL DAMAGES OR ANY DAMAGES/LOSSES ARISING FROM OR ATTRIBUTABLE
TO FAILURE TO REALISE EXPECTED SAVINGS, LOSS OF DATA, CAPITAL
DOWNTIME COSTS, LOSS OF USE, LOSS OF GOODWILL OR LOSS OF
ANTICIPATED OR ACTUAL REVENUE) ARISING AS A DIRECT OR INDIRECT
RESULT OF ANY LOSS OF OR DAMAGE (INCLUDING DEATH, INJURY AND
DISEASE) TO OR ANY UNAVAILABILITY (WHETHER INITIALLY OR FOR ANY
PERIOD) OF THE EQUIPMENT OR ANY OTHER ASSETS OR ANY PERSONS
IRRESPECTIVE OF WHETHER SUCH LOSS, DAMAGE OR UNAVAILABILITY SHALL
ARISE FROM ANY ACT OR OMISSION OF THE LESSOR OR ANY PERSON ACTING
ON ITS BEHALF (INCLUDING THE NEGLIGENCE OF THE LESSOR OR ANY SUCH
PERSON);
(e) THE DESCRIPTION OF THE EQUIPMENT CONTAINED IN ANY OF THE
TRANSACTION DOCUMENTS IS FOR IDENTIFICATION PURPOSES ONLY;
39
(f) SUBJECT TO THE EXPRESS TERMS OF THIS AGREEMENT AND SAVE FOR DULY
AUTHORISED EMPLOYEES OF THE LESSOR, NO PERSON (INCLUDING ANY
DEALER OR SUPPLIER OR ANY PERSON THROUGH WHOM THE TRANSACTIONS
CONTEMPLATED BY THE TRANSACTION DOCUMENTS MAY HAVE BEEN
INTRODUCED, NEGOTIATED OR CONDUCTED) HAS ANY AUTHORITY (EXPRESS OR
IMPLIED) TO ACT AS THE LESSOR'S AGENT OR TO MAKE ANY STATEMENT,
REPRESENTATION OR WARRANTY ON BEHALF OF THE LESSOR.
10.2 WAIVER
(a) WITHOUT PREJUDICE TO THE GENERALITY OF CLAUSE 10.1 (DISCLAIMER), THE
LESSEE WAIVES, AS BETWEEN ITSELF AND THE LESSOR, ALL ITS RIGHTS IN
RESPECT OF ANY WARRANTY, REPRESENTATION, TERM OR CONDITION OF THE TYPE
REFERRED TO IN CLAUSE 10.1(c) (DISCLAIMER).
(b) THE LESSEE ACKNOWLEDGES AND AGREES THAT ANY DAMAGE TO OR LOSS,
DESTRUCTION, OR UNFITNESS OF, OR DEFECT IN THE EQUIPMENT, OR THE
INABILITY OF THE LESSEE TO USE THE EQUIPMENT FOR ANY REASON WHATSOEVER,
OR ANY OTHER CIRCUMSTANCE WHATSOEVER SHALL NOT:
(i) GIVE RISE TO ANY DEFENCE, COUNTERCLAIM, OR RIGHT OF SETOFF
AGAINST THE LESSOR OR ANY OTHER LESSOR RISK PARTY (EXCEPT THE
SELLER IN ITS CAPACITY AS SUPPLIER UNDER THE NORTEL SUPPLY
CONTRACT); OR
(ii) PERMIT ANY ABATEMENT OR RECOUPMENT OF, OR REDUCTION IN PERIODIC
RENT; OR
(iii) ALLOW THE LESSEE TO CANCEL, TERMINATE, MODIFY OR REPUDIATE THE
APPLICABLE LEASE SCHEDULE; OR
(iv) RELIEVE THE LESSEE OF, OR EXCUSE THE LESSEE FROM, THE PERFORMANCE
OF ITS OBLIGATIONS UNDER THE APPLICABLE LEASE SCHEDULES
INCLUDING, BUT NOT LIMITED TO, ITS OBLIGATION TO PAY THE FULL
AMOUNT OF PERIODIC RENT, WHICH OBLIGATIONS ARE ABSOLUTE AND
UNCONDITIONAL.
10.3 NO OBLIGATION TO REPLACE ETC.
If any item of Equipment is lost, damaged, Compulsorily Acquired, worn
out, in need of repair or otherwise unfit or unavailable, the Lessor
and each other Lessor Risk Party (other than the Seller in its capacity
as supplier of the Equipment pursuant to the Nortel Supply Contract)
will:
(a) have no liability or responsibility of any kind in respect of any
such loss, damage, Compulsory Acquisition, wearing out, want of
repair, unfitness or unavailability; and
(b) be under no obligation to:
(i) provide any replacement for such item of Equipment;
40
(ii) repair, maintain, reinstate or insure the Equipment or
secure its release or return; or
(iii) compensate the Lessee in respect thereof nor, except to the
extent expressly provided in this Master Agreement, return
to or otherwise account to the Lessee for all or any part of
any Periodic Rent or other sum that has been paid in
advance.
10.4 NO EXCLUSION
Without prejudice to the indemnities given by the Lessee in the
Transaction Documents, nothing in this Clause 10 shall exclude or limit
any liability on the part of the Lessor or any other Lessor Risk Party
to the Lessee:
(a) in contract for any breach by the Lessor or any other Lessor Risk
Party of its express obligations to the Lessee under the
Transaction Documents; or
(b) to the extent that the Lessor or any other Lessor Risk Party may
be precluded by Applicable Law from excluding or limiting its
liability and in particular nothing in this Clause 10 shall afford
to the Lessor or any other Lessor Risk Party any wider exclusion
of any liability of the Lessor or any other Lessor Risk Party for
death or personal injury than the Lessor or any other Lessor Risk
Party may effectively exclude having regard to the provisions of
the Unfair Contract Terms Xxx 0000.
10.5 LESSOR SECURITY INTERESTS
Other than pursuant to and in accordance with the Transaction
Documents, the Lessor will not knowingly create or permit to arise any
Lessor Security Interests in any of the Equipment which is not fully
subordinate to the interest of the Lessee in the Equipment pursuant to
this Master Agreement.
10.6 RIGHTS AGAINST SUPPLIERS
(a) Without prejudice to the other provisions of this Clause 10 and subject
as provided below, if the Lessee is dissatisfied with any of the
Equipment or any Services provided in connection with it then the
Lessee's sole remedy will be to take the matter up with the original
supplier or manufacturer of the Equipment and the Lessee shall,
notwithstanding any such claim, continue to pay the Lessor all amounts
due and to become due under the applicable Lease Schedule and the other
Transaction Documents.
(b) Prior to the Lessee making a claim under any supplier or manufacturer
condition, warranty or guarantee the Lessee will notify the Lessor.
(c) Nothing in this Clause 10.6 will entitle the Lessee to carry on any
proceedings in the name of the Lessor without the Lessor's prior
written consent (which consent the Lessor may give or withhold in its
absolute discretion).
(d) To the extent that the Lessor has the benefits of any or all of the
conditions, warranties and guarantees of the suppliers and
manufacturers of the Equipment and providers of the Services, subject
always to the Security Assignment re Nortel Supply Contract, the Lessor
hereby assigns them to the Lessee. To the extent that any of such
41
conditions, warranties and guarantees are non-assignable, the Lessor
will, subject always to the Security Assignment re Nortel Supply
Contract, hold the benefit of such conditions, warranties and
guarantees on trust for the Lessee (or as the Lessee may direct) and
will enforce such conditions, warranties and guarantees for the benefit
of the Lessee at the Lessee's direction.
10.7 CONFIRMATION
The Lessee acknowledges that Clauses 3.1 (Delivery), 3.3 (Acceptance)
and 3.4 (Refusal), 7.3(b) and 10.1 to 10.6 inclusive (the "IDENTIFIED
CLAUSES") have been the subject of full and free discussion and
negotiation between the parties, the Lessee fully understands the
provisions of the Identified Clauses and the implications thereof and
that the Rental and other amounts payable by it under this Master
Agreement have been calculated and the insurance provisions agreed, in
the light of such discussions and negotiation and taking full account
of the terms of the identified clauses. The Lessee further acknowledges
and accepts that the provisions of the Identified Clauses are fair and
reasonable to be included in this Master Agreement having regard to the
circumstances which were, or ought reasonably to have been in the
contemplation of the Lessee and the Lessor at the time this Master
Agreement was entered into.
11. PROTECTION OF LESSOR'S INTERESTS
11.1 PROTECTION OF LESSOR'S INTERESTS
The Lessee will:
(a) on or before the Commencement Date relating to any item of the
Equipment (other than Services) and at the request of the Lessor
where the Lessor has received advice from legal counsel in the
Relevant Country that it is necessary or advisable in that
Relevant Country to protect its interest, the Lessee shall affix
or cause to be affixed to the Equipment (other than Services), in
a conspicuous place, a label or plaque stating that the Equipment
(other than Services) is owned by the Lessor;
(b) not place or permit to be placed on the Equipment (other than
Services)any other plates or insignia dealing with the rights of
any person in the Equipment (other than Services) but this will
not prohibit the Lessee's usual livery and advertising material
(if any);
(c) not, directly or indirectly, create, incur, assume, suffer or
permit to subsist any Security Interest on or with respect to the
Equipment (other than Permitted Security Interests) or any
interest therein or in this Master Agreement or the Insurances and
promptly, take such action as may be necessary to discharge any
such Security Interest;
(d) not, directly or indirectly, sell or dispose of, or purport to
sell or dispose of, the Equipment or any interest therein nor hold
itself out as the owner of the Equipment or as having any power to
sell or dispose of the Equipment;
(e) not pledge the credit of the Lessor, whether for any maintenance,
service, repairs, overhauls of, or modifications to, the Equipment
or otherwise;
(f) not do any act or thing which could reasonably be expected to
prejudice or jeopardise the rights and interests (whether as to
ownership, security or otherwise) of the Lessor in and to the
Equipment and use all reasonable endeavours to take such action as
42
Lessor's counsel has advised to be necessary or has recommended to
prevent those rights and interests from being prejudiced or
jeopardised, and to keep the Equipment free from all claims of
other persons (including Compulsory Acquisition, execution,
distress, impounding, arrest and forfeiture), except in respect of
Lessor Security Interests, and, in the event of any such claim,
use all reasonable endeavours to ensure the release of the
Equipment as soon as practicably possible; and
(g) take whatever action the Lessor may reasonably require for
perfecting or protecting the rights of the Lessor under the
Transaction Documents (other than the Lease Participation
Arrangements) and the interests of the Lessor in the Equipment
including the execution and delivery of any documents and the
giving of any notice or direction and the making of any
registration which, in each case, the Lessor reasonably thinks
expedient.
11.2 NOTIFICATION OF EVENTS
The Lessee shall notify the Lessor:
(a) as soon as practicable, but in any event within five (5) Business
Days after the occurrence thereof, of any Event of Loss to all or
any part of the Equipment;
(b) as soon as practicable after becoming aware thereof, of any loss
of or damage to the Equipment (not amounting to an Event of Loss)
where the cost of repair, reinstatement or replacement is
reasonably likely to be in excess of E1,000,000;
(c) as soon as reasonably practicable after becoming aware thereof, of
any Security Interest (other than a Permitted Security Interest)
having become, or being alleged to have become, attached to any of
the Equipment or any interest therein or the Insurances or the
enforcement or attempted enforcement of any Security Interest
against the Equipment, any such interest or the Insurances;
(d) as soon as reasonably practicable after becoming aware thereof, of
any execution, forfeiture, distress, impounding, attachment or
other equivalent legal process in any relevant jurisdiction being
levied or enforced upon the Equipment or seizure of any Equipment
(not amounting to Compulsory Acquisition);
(e) as soon as reasonably practicable after becoming aware thereof, of
any injury or damage to any person or property caused by, or in
connection with, the Equipment which is reasonably likely to give
rise to (i) a claim against an Indemnifiable Person; or (ii) any
other claim or claims in aggregate in excess of E1,000,000;
(f) as soon as reasonably practicable after becoming aware thereof, of
any other occurrence in respect of the Equipment which is
reasonably likely to involve an Indemnifiable Person or the Lessee
in any loss, liability or claim in aggregate in excess of
E1,000,000;
(g) as soon as practicable after becoming aware thereof, of any
Potential Event of Default together with details of any action
being taken in connection therewith;
(h) within five (5) Business Days of receipt thereof, of any notice
from any Governmental Authority which is reasonably likely to give
rise to the revocation, termination, material adverse amendment,
suspension or withdrawal of any material authorisation (including
43
any Environmental Approval) which relates to the Equipment or is
necessary for the possession, installation, location, use or
operation of the Equipment; and
(i) as soon as practicable after becoming aware thereof, of it ceasing
to be a wholly owned Subsidiary of Viatel, Inc.
11.3 SUPPLY OF INFORMATION
The Lessee will supply to the Lessor:
(a) as soon as reasonably practicable and in any event within the
earlier of (i) 270 days of the end of its financial year and (ii)
any relevant statutorily required time period from the end of its
financial year, the annual audited report and financial statements
of the Lessee for that financial year;
(b) as soon as the same are available, unaudited quarterly internal
financial statements or management accounts in whatever form
available and statements of income and retained earnings for such
year; and
(c) promptly, such further information in the possession or control of
the Lessee regarding its financial condition and operations or the
Equipment as the Lessor may reasonably request.
11.4 TAXATION AUTHORITIES
The Lessee will as soon as reasonably practicable after the Lessee or
the Lessor has received a request from any Inland Revenue or H.M.
Customs & Excise (or any equivalent body in a Relevant Country)
official, inform the Lessor of that request (if made to the Lessee),
furnish to that official such information as may be in the possession
or control of the Lessee and as may be required by that official to be
so furnished about the Equipment or the leasing of the Equipment or the
use to which the same is being or has been put and will as soon as
reasonably practicable after receipt of a request from the Lessor
furnish to the Lessor such information and documents in the possession
or control of the Lessee and which the Lessor requires in order to
enable the Lessor to respond to a request of the Lessor from such an
official.
11.5 TAXES AND OTHER OUTGOINGS
The Lessee shall promptly pay (and if requested by the Lessor produce
to the Lessor evidence of the payment thereof):
(a) all licence and registration fees, Taxes and other amounts payable
in respect of the Equipment or its possession or operation; and
(b) all rent, fees, charges, Taxes and other amounts payable in
respect of any premises where the Equipment is from time to time
located whether such payments are to be made under a Collocation
Agreement or otherwise,
except to the extent that the payment is being contested in good faith
by appropriate proceedings, in respect of which adequate reserves have
been provided and for which an appropriate bond has been provided or in
respect of which execution has been stayed.
44
11.6 MOVEABLE PROPERTY
(a) The Lessor and the Lessee agrees that it is their intention that title
to the Equipment (other than Services) or any part of it shall not pass
to the Lessee by reason of the same being attached or affixed by any
means whatsoever to, or resting by its own weight on, any land or
buildings but shall remain the personal property of the Lessor. The
Lessee waives any right which it may at any time have in the Equipment
(other than Services) or any part of it as a result of having any
interest in any such land or buildings.
(b) The Lessee shall take in each Relevant Country all such steps as the
Lessor is advised by legal counsel in that Relevant Country are
necessary or recommended to prevent, to the extent possible under the
Applicable Law of each Relevant Country in which the Equipment (other
than Services) is or is to be located, any person, including without
limitation the Lessee's landlords and such landlords' mortgagees, from
acquiring, having or retaining any rights in or to the Equipment (other
than Services) by reason of its being affixed or attached to, or
otherwise located on, real property including, without limitation,
effecting any and all registrations with all Governmental Authorities
it is necessary to effect in each Relevant Country in which the
Equipment (other than Services) is or is to be located. In particular,
but without limitation on the generality of the preceding sentence,
where the Lessor has received advice from legal counsel in the Relevant
Country that it is necessary or recommended so to do in order to
protect the Lessor's interest in the Equipment (other than Services)
the Lessee will ensure that all persons having any interest from time
to time in any such land or buildings in that Relevant Country in which
the Equipment (other than Services) may from time to time be installed
(whether such interest arises as landlord, tenant, lessee, mortgagee or
otherwise) shall prior to the installation of the Equipment (other than
Services), or if later upon acquisition of such interest, receive
written notice of the Lessor's ownership interest in the Equipment
(other than Services) and will obtain from such persons and deliver to
the Lessor written waivers in such form as the Lessor may reasonably
require of any rights which they may have or acquire in the Equipment
(other than Services).
11.7 PROCURING OF GUARANTEE
The Lessee undertakes with the Lessor that if a holding company is
established to own the Lessee and/or Viatel, Inc.'s other European
Subsidiaries, the Lessee shall procure that promptly upon the same
being established (and in any event within 15 Business Days), such
holding company enters into a guarantee and indemnity with the Lessor
on a joint and several basis with Viatel, Inc. and in substantially the
same form (mutatis mutandis) as the Lease Guarantee in place at the
date of this Master Agreement.
12. OPERATIONAL UNDERTAKINGS
12.1 DURATION AND APPLICATION
The undertakings in this Clause 12:
(a) remain in force from the date of this Master Agreement until,
following the end of the Initial Term, the Equipment is sold or
otherwise disposed of or returned to the Lessor under the terms of
this Master Agreement; and
(b) apply save to the extent, in any particular case, the Lessor gives
to the Lessee its prior written consent to the contrary.
45
12.2 LOCATION
(a) The Equipment shall be located in a Tier 1 Country or a Tier 2 Country
and at the address specified in the applicable Lease Schedule or such
other location as the Lessor may agree in writing (such agreement not
to be unreasonably withheld, delayed or conditioned) and may be removed
therefrom to another location only either:
(i) if the Lessor confirms to the Lessee that it is satisfied that the
ownership interest in, and repossession rights in respect of the
relevant Equipment are not adversely affected by the location of
the Equipment in such other location; or
(ii) for the purpose of repairs, modification or maintenance which
cannot be effected while the item remains on or at the land or
building in question but upon completion of the repair,
modification or maintenance the item will be promptly returned to
and (as applicable) re-installed at the land or building from
which it was removed.
(b) The Lessee may remove an item of Equipment in connection with the
exercise by the Seller of its right/obligation pursuant to the Nortel
Supply Contract to replace any part of the Equipment which is
defective.
(c) The Lessee shall procure that no Transaction Document, including any
Permitted Sub-Lease, shall be deposited with a state or judiciary
office in [Redacted].
12.3 POSSESSION AND SUB-LEASING
(a) The Lessee will keep the Equipment leased to it pursuant to Lease
Schedules to which it is a party in its own physical possession and
control and will not (save as provided in Clause 12.3(b)) sub-lease,
lend or otherwise part with possession of the Equipment except for the
purpose of repairs, modifications or maintenance as provided for in
Clause 12.2(a)(ii).
(b) As long as no Potential Event of Default has occurred and is continuing
the Lessee may sublease the Equipment without the prior written consent
of the Lessor to any Permitted Sub-Lessee, provided always that any
such sub-lease shall comply with the following terms and conditions:
(i) the subject matter of any sub-lease shall be all (and not a part
only) of the Equipment which is the subject matter of a Lease
Schedule;
(ii) the Permitted Sub-Lessee shall have its principal place of
business in the Relevant Country in which the relevant Equipment
is or is to be installed;
(iii) it shall provide that it is subject and subordinate to both the
Lessor's and the Lessor Risk Parties' rights, title and interest
in and to the Equipment under this Master Agreement and the other
Transaction Documents;
(iv) it will not release the Lessee from any of its obligations under
this Master Agreement or any of the other Transaction Documents;
(v) it will enable the Lessor to receive prior to such sub-lease
being entered into a satisfactory legal opinion from counsel in
the appropriate Relevant Country stating that such sub-lease will
not adversely affect the Lessor's interests and rights in the
Equipment and this Master Agreement and the other Transaction
Documents;
46
(vi) it shall require the Permitted Sub-Lessee to maintain the
Equipment on the same terms as those set out in this Clause 12;
(vii) notwithstanding any such sub-lease, the Insurances in relation to
the relevant Equipment to which the Lessee is obliged to effect
pursuant to Clause 14 (Insurances) shall remain in full force and
effect;
(viii)it will not (including any extensions thereto) extend beyond the
Initial Term for the relevant Lease Schedule; and
(ix) it will not contain provisions permitting any Permitted
Sub-Lessees to sub-sub-lease, lend or otherwise part with
possession of the Equipment and each Permitted Sub-Lease will
expressly prohibit sub-sub-leasing by the Permitted Sub-Lessee.
(c) The Lessee undertakes that in arranging the sub-leasing of any
Equipment it will:
(i) at all times protect and preserve the Lessor's interests in the
Equipment including, without limitation (at no cost to the Lessor
and as conditions precedent to the sub-leasing of the relevant
Equipment pursuant to the relevant Permitted Sub-lease):
(A) entering into with the Lessor the Sub-Lease Assignment,
serving notice of such assignment on the relevant Permitted
Sub-Lessee and procuring an acknowledgement of such
assignment from the Permitted Sub-Lessee;
(B) procuring a legal opinion, in form and substance
satisfactory to the Lessor, from counsel in each Relevant
Country in which the Equipment the subject of a Permitted
Sub-Lease is located stating that (to the extent the laws of
that Relevant Country are applicable) the Transaction
Documents and the interests (whether as to ownership,
repossession or security) of the Lessor and any of the
Lessor Risk Parties in the Equipment, will continue to be
enforceable in accordance with their terms after giving
effect to such Permitted Sub-Lease; and
(C) procuring or, as the case may be, entering into all other
documents as the Lessor shall be advised by counsel are
reasonably necessary or desirable in order to protect the
Lessor's interest under this Master Agreement and in the
Equipment;
(ii) be responsible for and indemnify the Lessor for all reasonable
costs and expenses (including legal fees) incurred by the Lessor
and any of the Lessor Risk Parties in connection with any
Permitted Sub-Lease;
(iii) remain liable to pay and perform all of its obligations under
this Master Agreement and the other Transaction Documents
notwithstanding any such Permitted Sub-Lease. The Lessee accepts
that under no circumstances will the Lessee be released from any
of its obligations under this Master Agreement as a consequence
of a Permitted Sub-Lease to a Permitted Sub-Lessee and the Lessee
fully warrants the performance by all Permitted Sub-Lessees of
all obligations contained in the Permitted Sub-Leases referred to
in this Clause 12.3. The acceptance by the Lessor of a Permitted
Sub-Lease pursuant to this Clause 12.3 shall not be construed as
a waiver to any right, title or claim the Lessor has against the
Lessee or any Permitted sub-Lessee under this Master Agreement.
(d) The Lessee will provide to the Lessor copies of any Permitted Sub-Lease
and other ancillary documentation (i) no later than five (5) Business
Days prior to the scheduled execution date of such Permitted Sub-Lease
47
and thereafter (ii) executed copies of the Permitted Sub-Lease and
other ancillary documentation within ten (10) Business Days after the
date of execution thereof.
(e) Any Permitted Sub-Lessee may transfer all (but not some only) of its
rights and obligations under a Permitted Sub-Lease to a member of
Viatel, Inc.'s Group provided that:
(i) the Lessee would have been entitled to enter into a Permitted
Sub-Lease with the relevant transferee pursuant to the terms of
this Clause 12.3; and
(ii) the Lessee notifies the Lessor of such transfer at least two
Business Days prior to it becoming effective, serves notice of
the Sub-Lease Assignment on the relevant transferee and procures
that the transferee acknowledges such assignment, such notice and
acknowledgement to be in the forms annexed to the Sub-Lease
Assignment, mutatis mutandis.
12.4 OPERATION
(a) The Lessee will use the Equipment, or ensure that the Equipment is
used, (i) in a skilful and proper manner, in accordance with any
operating instructions of the manufacturer or supplier and generally in
accordance with good industry standards; and (ii) only by competent and
properly trained personnel.
(b) The Lessee will use the Equipment solely in the conduct of its business
and will not use the Equipment or allow it to be used in any illegal
trade or business or for any purpose or in any place prohibited by or
prejudicial to the terms, or outside the cover, of the Insurances.
(c) The Lessee will not at any time represent the Lessor as being in any
way connected or associated with the operation of the Equipment.
12.5 COMPLIANCE WITH LAW
The Lessee will comply with all Applicable Laws, regulation, codes and
standards from time to time governing the Equipment (other than the
Services), its use, possession and operation except to the extent that
non-compliance with any Applicable Law would not, or would not be
likely to, have a material adverse effect on:
(i) the Equipment;
(ii) the Lessor's rights under the Transaction Documents;
(iii) the ability of the Lessee, the Guarantors or any of the Permitted
Sub-Lessees to perform their respective obligations under the
Transaction Documents;
(iv) the Lessor's rights, title and interest in and to the Equipment
(other than the Services); or
(v) the ability of the Lessor or any other member of the Parent
Bank's Group to carry on its business in the Relevant Country.
12.6 AUTHORISATIONS
The Lessee will ensure that all authorisations (including all
Environmental Approvals) governing, or necessary or required for, the
use, possession and operation of the Equipment (other than Services)
48
are obtained and maintained and will ensure compliance with all
conditions attaching thereto, except where failure so to comply would
not have an adverse effect on the Lessor's rights, title and interest
in the Equipment (other than Services) or on the ability of the Lessee,
the Guarantors or any of the Permitted Sub-Lessees to carry on their
respective business in the Relevant Country.
12.7 SAFETY
The Lessee will be responsible for all aspects of the safety of the
Equipment (other than Services) including its safe installation,
condition, operation and storage. The Lessee will take all reasonable
steps having regard to the nature of its business to ensure the safety
of all persons and property from any losses or damage arising as a
result of the possession, use or operation of the Equipment (other than
Services) or otherwise connected with the Equipment (other than
Services). In particular the Lessee will comply with the requirements
of, and recommendations made under, the Health and Safety at Work etc.,
Xxx 0000 (or any equivalent legislation in any Relevant Country) and
any regulations made thereunder (and whether such requirements or
recommendations are applicable to the Lessee or the Lessor) ("SAFETY
LAW") except to the extent that non-compliance with any Safety Law
would not, or would not be likely to, have an adverse effect on:
(i) the Equipment (other than Services);
(ii) the Lessor's rights under the Transaction Documents;
(iii) the ability of the Lessee, the Guarantors or any of the Permitted
Sub-Lessees to perform their respective obligations under the
Transaction Documents;
(iv) the Lessor's rights, title and interest in and to the Equipment;
or
(v) the ability of the Lessor or any other member of the Parent
Bank's Group to carry on its business in the Relevant Country.
12.8 MAINTENANCE
(a) The Lessee will ensure that the Equipment (other than Services) is
maintained, serviced, repaired, overhauled and tested:
(i) in conformity with all Applicable Laws, regulations and
standards;
(ii) so as to keep each item of Equipment (other than Services) in as
good operating condition (normal wear and tear excepted) as on
the Commencement Date for that item of Equipment;
(iii) in accordance with any recommended maintenance programme of the
manufacturer or supplier and as may be required for any
continuing warranty or guarantee; and
(iv) in accordance with prudent industry standards and their own
standard practices for similar equipment owned or leased by them
or any of them.
(b) The Lessee will maintain or cause to be maintained the Technical
Records in conformity with all laws and regulations and the
requirements of any Governmental Authority governing the Equipment
49
(other than Services) and good industry standards and so as to keep an
accurate and complete record of all work undertaken on the Equipment
(other than Services) (whether in compliance with the Lessee's
obligations under Clause 12.8(a) or not) and all monies expended in
connection with that work. As soon as reasonably practicable following
receipt of a request the Lessee will provide copies of the Technical
Records to the Lessor.
12.9 ENVIRONMENTAL
The Lessee will comply or ensure compliance with Environmental Laws
applicable to the Equipment (other than Services) and/or any activity
on or in any land or building in which the Equipment (other than
Services) or any item thereof may from time to time be installed (where
Viatel, Inc. is responsible for the operation and/or management of that
land or building whether as owner, as landlord, as lessee or other
occupier or otherwise howsoever) and shall obtain, maintain in full
force and effect and comply with any and all Environmental Approvals
except to the extent that non-compliance with any Environmental Law
would not, or would not be likely to, have an adverse effect on:
(i) the Equipment (other than Services);
(ii) the Lessor's rights under the Transaction Documents;
(iii) the ability of the Lessee, the Guarantors or any of the Permitted
Sub-Lessees to perform their respective obligations under the
Transaction Documents;
(iv) the Lessor's rights, title and interest in and to the Equipment
(other than Services); or
(v) the ability of the Lessor or any other member of the Parent
Bank's Group to carry on its business in the Relevant Country.
12.10 REPLACEMENT OF PARTS
The Lessee will promptly replace in accordance with standard industry
customs and practices all parts of any item of the Equipment (other
than Services) which may from time to time become worn out, lost,
stolen, confiscated, seized, destroyed, damaged beyond repair or
rendered unfit for use for any reason whatsoever other than any items
of the Equipment (other than Services) the subject of an Event of Loss.
Parts may only be removed from any item of the Equipment (other than
Services) for this purpose or for the purpose of alterations,
additions, modifications or maintenance under the terms of this Master
Agreement. Any replacement part will be of at least equal remaining
useful life and utility to the removed part and reasonably considered
suitable by the Lessee.
12.11 REQUIRED MODIFICATIONS ETC.
The Lessee will make all alterations, additions and modifications to
any item of the Equipment (other than Services) that may from time to
time be required to comply with (i) all Applicable Laws governing that
Equipment (other than Services), its possession, use, maintenance or
operation; and (ii) the requirements for any condition, warranty or
guarantee from the manufacturer or supplier.
50
12.12 OTHER MODIFICATIONS ETC.
(a) The Lessee may at its discretion make any alteration, addition or
modification to any item of the Equipment (other than Services) which
it reasonably considers desirable for the proper operation of that
Equipment (other than Services) or the Lessee's business so long as no
such alteration, addition or modification reduces the saleability,
value or utility of that Equipment (other than Services) or prevents
that Equipment (other than Services) from being operated in a safe and
proper manner or results in the Lessee being unable to comply with its
obligations under this Master Agreement and the other Transaction
Documents.
(b) Save as provided in Clause 12.11 (Required modifications etc.) and
Clause 12.12(a), the Lessee may not make any alterations, additions or
modifications to any item of the Equipment (other than Services).
12.13 TITLE TO REPLACEMENTS ETC.
(a) Subject to Clause 12.13(b), the Lessee will ensure that all replacement
parts under Clause 12.10 (Replacement of parts) and all parts forming
part of any alteration, addition or modification under Clause 12.11
(Required modifications etc.) or under Clause 12.12 (Other
modifications etc.) will either, prior to becoming attached to or
incorporated into any item of the Equipment (other than Services),
become the property of the Lessor or be such that, upon attachment or
incorporation, title to them will, without further act, vest in the
Lessor, in each case, free of all Security Interests (other than
Permitted Security Interests) and claims of third parties. All such
parts will, upon attachment or incorporation, become part of that
Equipment (other than Services) and subject to the terms of this Master
Agreement and the other Transaction Documents for all purposes.
(b) Clause 12.13(a) shall not apply to additions ("DETACHABLE ADDITIONS")
to any item of the Equipment (other than Services) under Clause 12.12
(Other modifications etc.) which do not form an integral part of the
Equipment (other than Services), which can be removed without damage to
that Equipment (other than Services) and which are not required to
maintain the saleability, value or utility of that Equipment (other
than Services) or so that that Equipment (other than Services) can
continue to operate in a safe and proper manner. Title to Detachable
Additions will not vest in the Lessor and until the sale or other
disposal of that Equipment or until its return to the Lessor under the
terms of this Master Agreement the Lessee may detach all Detachable
Additions but, to the extent not so detached at the time of any sale,
disposal or return, title will pass to the Lessor and the Lessor will
not be required to compensate the Lessee therefor or account to the
Lessee for any sales proceeds received in respect thereof.
12.14 NOTIFICATION
As soon as reasonably practicable following the making of any material
alteration, modification or addition to any item of the Equipment
(other than Services) the Lessee will notify the Lessor in writing and
provide reasonable details thereof including, in the case of a
Detachable Addition, sufficient information so as to enable the Lessor
to identify the Detachable Addition in question and where it is
attached.
12.15 NON-INSTALLED ITEMS
(a) The Lessee will ensure that any item of the Equipment (other than
Services) which is not at any time installed in a network will be
properly and safely stored.
51
(b) All items of Equipment (other than Services) at any time removed from a
network will remain the property of the Lessor no matter where located
until such time as such items shall be replaced by items which have
been incorporated or installed in or attached to a network and which
meet the requirements for replacement items specified in this Clause 12
and which have become the property of the Lessor.
13. INSPECTION OF THE EQUIPMENT
(a) At any reasonable time and upon reasonable notice (having regard to any
terms and conditions of access imposed on the Lessee or, as the case
may be, the relevant Permitted Sub-Lessee by the landlord or licensor
of any facility where the Equipment is located) the Lessor or its
authorised representative may inspect or survey the Equipment (other
than Services) and the Technical Records. For this purpose, the Lessee
will provide, free of charge, all facilities reasonably required
therefor and shall use all reasonable endeavours to ensure that the
Lessor and its authorised representatives have access to the Equipment
(other than Services) and the Technical Records to effect inspections
and surveys in accordance with this Clause 13.
(b) The Lessor will have no duty to make any such inspection and will not
incur any liability or obligation by reason of not making any such
inspection. The Lessor shall avoid any unreasonable disturbance of the
operations of the Lessee and/or any Permitted Sub-Lessees. The Lessor
or its authorised agents may, with regard to all of the Equipment and
at the cost of the Lessee:
(i) once per year, make an inspection of the whole or any part of the
Equipment (other than Services);
(ii) at any time thereafter make further inspection of that Equipment
(other than Services) during that year provided that the costs
and expenses of those subsequent inspections shall be for the
account of the Lessor unless it discovers that the Lessee is not
in material compliance with its respective obligations under the
Transaction Documents or an Event of Default has occurred and is
subsisting in which case the cost shall be for the account of the
Lessee; and
(iii) providing an Event of Default has occurred and is subsisting,
conduct any number of inspections of the whole or any part of the
Equipment (other than Services).
14. INSURANCE
14.1 SCOPE OF INSURANCES
The Lessee will ensure that insurance is effected and maintained:
(a) of the Equipment against "all risks" of loss of or damage to the
Equipment;
(b) against liability to third parties (including any claim by an
employee, agent or contractor of the Lessee against an Additional
Insured) for death, injury or disease to persons or loss of or
damage to property caused by or arising out of or in connection
with the Equipment including its design, construction, operation
or condition; and
(c) against such further risks as may be required by law or
regulation.
52
14.2 DURATION OF INSURANCES
(a) Subject to Clause 14.2(b), the Lessee's undertakings in Clause 14.1
(Scope of insurances) will remain in force in respect of an item of
Equipment from the Commencement Date for that item of Equipment
throughout the Initial Term until, following the termination of the
leasing of the Equipment, title to the Equipment passes to the Lessee
or the Equipment is sold or otherwise disposed of (in each case, in
accordance with the terms of this Master Agreement) or, in the case of
an Event of Default returned to the Lessor under the terms of this
Master Agreement.
(b) Without prejudice to Clause 14.2(a), the Lessee's undertaking in Clause
14.1(b) (Scope of insurances) will continue for a period of two years
following the end of the Initial Term for any reason.
14.3 TERMS OF LOSS OR DAMAGE INSURANCES
(a) The insurance required to be effected under Clause 14.1(a) (Scope of
insurances) will be in an amount at least equal to the greater of:
(i) 115 per cent. of the Capital Outstanding on the Initial Term
Start Date or, as the case may be, at the beginning of the
relevant subsequent policy period; and
(ii) the replacement value of the Equipment from time to time.
(b) Each policy of insurance effected in compliance with Clause 14.1(a)
(Scope of insurances) will:
(i) insure the Equipment on an agreed value basis such that the
insurers do not have the right to replace the Equipment;
(ii) contain a loss payee clause substantially in the form set out in
Schedule 4 (Loss payee clause); and
(iii) not be subject to any deductible which would result in any claim
under the insurances required to be effected under Clause 14.1(a)
(Scope of insurances) being reduced in aggregate by more than ten
thousand US Dollars (US$10,000).
14.4 TERMS OF THIRD PARTY LIABILITY INSURANCES
(a) The insurance required to be effected under Clause 14.1(b) (Scope of
insurances) will be for, subject to Clause 14.10 (Protection of
Additional Assureds), a combined single limit of not less than twenty
five million US Dollars (US$25,000,000) for any one occurrence and in
the aggregate in any year in respect of product liability.
(b) Each policy of insurance effected in compliance with Clause 14.1(b)
(Scope of insurances) will:
(i) contain a "cross liabilities clause" which provides that each
Additional Assured will be entitled to be indemnified in respect
of claims made by any other assured; and
(ii) have no deductible.
53
14.5 PROVISIONS COMMON TO INSURANCES
Each policy effected in compliance with Clause 14.1 (Scope of
insurances) will:
(a) name the Lessor and, in the case of any policy effected in
compliance with Clause 14.1(b) (Scope of insurances), each member
of the Lessor Group, each Lessor Risk Party (excluding the Seller
in its capacity as the supplier of the Equipment under the Nortel
Supply Contract) and each member of each Lessor Risk Party's Group
and their respective successors, assigns, shareholders, officers,
directors, employees, secondees and agents as additional assureds
for their respective rights and interests;
(b) provide that the insurance is primary and without any right of
contribution from any other insurance carried by any Additional
Assured;
(c) provide that the insurers waive any rights of:
(i) recourse to and subrogation against the Additional Assureds;
and
(ii) set off and counterclaim other than in respect of unpaid
premiums directly attributable to the Equipment;
(d) provide that the Additional Assureds have no responsibility for
premiums;
(e) provide that the cover provided to the Additional Assureds will
not be invalidated by, and will insure each Additional Assured
regardless of, any act or omission of any person (including any
misrepresentation, non-disclosure, want of due diligence or breach
or violation of any warranty, declaration or condition contained
in the policy);
(f) not contain any provision for cancellation or automatic
termination of cover (but this will not prohibit insurers'
entitlement to lapse cover for non-payment of premium);
(g) provide that the cover provided to the Additional Assureds may
only be cancelled or materially altered in a manner adverse to any
of the Additional Assureds or allowed to lapse for non-payment of
premium by the insurers giving not less than 30 days' (but seven
days or such period as may be customarily available in respect of
war risks) notice in writing to the Lessor;
(h) contain a "severability of interest clause" which provides that
the policy will operate in all respects, except the limit of
liability or sum assured, as if a separate policy had been issued
to each party insured thereunder (including the Additional
Assureds); and
(i) contain only such exclusions from cover as may be usual and
customary in the insurance of equipment of the same or similar
type to the Equipment as used in the same or similar businesses to
that of the Lessee.
14.6 GENERAL PROVISIONS
Each policy effected in compliance with Clause 14.1 (Scope of
insurances) will be:
(a) placed through reputable brokers of international standing;
54
(b) placed with insurers approved by the Lessor, such approval not to
be unreasonably withheld; and
(c) in a form and contain such provisions as are customary in the
relevant insurance market and not contain any term, condition,
limitation or exception which has the effect of limiting,
restricting or modifying, or is inconsistent with, any of the
requirements of this Clause 14.
14.7 EVIDENCE OF INSURANCES
In respect of all the insurances required to be effected under this
Clause 14 the Lessee will ensure that in respect of each item of
Equipment:
(a) on or before the Commencement Date for that item of Equipment, the
Lessor is provided with certificates of insurance from the
insurers or insurance brokers in a form satisfactory to the Lessor
together with copies of the policy or policies and evidence of the
payment of premiums;
(b) on the occasion of each renewal, prior to the renewal date, the
Lessor is provided with confirmation of renewal from the insurers
or insurance brokers in a form satisfactory to the Lessor together
with details of any changes to the policy or policies and evidence
of the payment of premiums;
(c) there is in force at all times in favour of the Lessor letters of
undertaking from the insurers or insurance brokers for the time
being in a form satisfactory to the Lessor;
(d) insurers are notified that the Equipment is leased by the Lessor
to the Lessee;
(e) if so requested, such information is provided to the Lessor as to
the Insurances as the Lessor may reasonably request; and
(f) if necessary in connection with the making of any claim by any
Additional Assured, the originals of the policy or policies and
related documentation are made available to the Lessor promptly
upon request.
14.8 FAILURE TO COMPLY
If at any time the Lessee shall fail to comply with any of the
provisions of Clauses 14.1 (Scope of insurances) to 14.7 (Evidence of
insurances) inclusive then the Lessor shall be entitled (but not
bound), after consultation with any brokers through whom the insurances
were effected (and at the Lessee's expense), and without prejudice to
the Lessor's right to treat such failure (subject to any applicable
grace period) as an Event of Default:
(i) to procure such insurance under the provisions of this Clause 14;
and
(ii) while such failure continues, to require that the Equipment is not
used.
14.9 PRESERVATION OF INSURANCES
The Lessee will not:
55
(a) do or omit to do anything which is contrary to any of the terms of
the Insurances required to be effected under this Clause 14 or
which might entitle the insurers to cancel any policy or reduce or
avoid any claim or liability under any policy; or
(b) change or modify any of the Insurances such that any interest of
any Additional Assured would be materially adversely affected; or
(c) effect any other insurance if a claim under such insurance would
result in the operation of any contribution clause in any of the
policies of insurance required to be effected under this Clause
14.
14.10 PROTECTION OF ADDITIONAL ASSUREDS
(a) If at any time due to changes in law or regulation or in insurance
market practice the Lessor's insurance adviser certifies that in its
opinion the insurances required to be effected under this Clause 14 do
not adequately cover the interests of the Additional Assureds, the
Lessor may notify the Lessee and the Lessee and its insurance adviser
will consult with the Lessor and its insurance adviser with a view to
agreeing and implementing changes to such insurances so that such
interests are adequately covered to the satisfaction of the Lessor's
insurance adviser.
(b) If within 45 days of the Lessor's notification under Clause 14.10(a) no
changes have been implemented to the insurances to the satisfaction of
the Lessor's insurance adviser or if at any time the Lessee is unable
due to changes in insurance market practice to implement any of the
requirements of Clauses 14.1 (Scope of insurances) to 14.6 (General
provisions), the Lessor may, at the Lessee's expense and without
prejudice to its rights under Clause 14.8 (Failure to comply), effect
and maintain a Lessor's interest policy or policies with such insurers,
through such brokers and on such terms and at such premiums as the
Lessor may (in consultation with its insurance adviser) reasonably
consider fit to ensure that the interests of the Additional Assureds
are adequately protected.
14.11 MEANING OF EQUIPMENT
For the purposes of this Clause 14, references to the Equipment or any
part thereof exclude the Services or any of them.
15. EVENT OF LOSS
15.1 EVENT OF LOSS OF THE EQUIPMENT
"EVENT OF LOSS" in respect of all the Equipment means:
(a) any of the following occurring to the Equipment, taken as a whole:
(i) its actual, constructive, arranged, agreed or compromised
total loss (including any damage to it which results in an
insurance settlement on the basis of total loss);
(ii) its destruction, damage beyond repair or being rendered
permanently unfit for normal use for any reason;
(iii) its Compulsory Acquisition;
56
(iv) its requisition for use or hire for a period exceeding 60
days; or
(v) its theft or disappearance resulting in loss of use by the
Lessee or any Permitted Sub-Lessee of the Equipment for a
period exceeding 60 days in each case; and
(b) any of the events set out in Clause 15.1(a) occurring to part only
of the Equipment where the Acquisition Cost determined by the
Lessor as attributable to the remainder of the Equipment is less
than 10 per cent. of the Acquisition Cost of all the Equipment.
15.2 EVENT OF LOSS OF PART OF THE EQUIPMENT
"EVENT OF LOSS" in respect of part only of the Equipment means, subject
to Clause 15.1(b), any of the events set out in Clause 15.1(a) (Event
of Loss of all the Equipment) occurring to one or more discrete items
of the Equipment.
15.3 DATE OF OCCURRENCE OF EVENT OF LOSS
The date of occurrence of an Event of Loss under Clause 15.1 (Event of
Loss of all the Equipment) or 15.2 (Event of Loss of part of the
Equipment) will be the date on which the relevant event set out in
paragraphs (i) to (v) of Clause 15.1(a) (Event of Loss of all the
Equipment) occurs.
15.4 PROCEDURE AND PAYMENTS FOLLOWING AN EVENT OF LOSS
(a) If any of the Equipment the subject of a Lease Schedule suffers an
Event of Loss as defined in Clause 15.1(a) or 15.2 above the Lessee
shall either:
(i) before the Settlement Date replace that Equipment with equipment
of the same make, value and utility and procure, as the Lessor may
require, that:
(A) title to that Equipment passes to the Lessor, and
(B) that Equipment becomes subject to the provisions of the
Transaction Documents; or
(ii) on the Settlement Date pending replacement of that Equipment, pay
the Capital Outstanding relating to that Equipment plus:
(A) any unpaid Rental (to the extent not included in the Capital
Outstanding) together with any and all other Outstanding
Amounts due and payable on or before the Settlement Date;
(B) any and all accrued but unpaid finance charges on the
Capital Outstanding calculated on a daily basis at a rate
per annum equal to the applicable Acceptance Rate; and
(C) the Make Whole Amount,
into an escrow account and if within one year of the date of the
Event of Loss that Equipment has not been replaced with Equipment
of the same make, value and utility, title has not passed to the
57
Lessor and the Equipment is not subject to the provisions of the
Transaction Documents, then the Lessor may apply the money in the
escrow account (including accrued interest) towards prepayment of
the Capital Outstanding in respect of that Equipment together
with:
(1) any unpaid Rental (to the extent not included in the Capital
Outstanding) and any and all other Outstanding Amounts due
and payable on or prior to the date of payment;
(2) any and all accrued but unpaid finance charges on the
Capital Outstanding on that date calculated on a daily basis
at a rate per annum equal to the applicable Acceptance Rate;
and
(3) the Make Whole Amount,
and if the balance standing to the credit of the escrow account
is not sufficient to discharge the Capital Outstanding together
with the amounts referred to in (1) to (3) inclusive above in
full, the Lessee shall forthwith pay to the Lessor an amount
equal to the deficit for application as aforesaid; or
(iii) on Settlement Date deliver to the Lessor a standby letter of
credit in form and substance reasonably satisfactory to the
Lessor issued by a bank reasonably acceptable to the Lessor in a
principal amount equal to the Capital Outstanding relating to the
Equipment plus:
(A) any unpaid Rental (to the extent not included in the Capital
Outstanding) together with any and all other Outstanding
Amounts due and payable on or before the Settlement Date;
(B) any and all accrued but unpaid finance charges on the
Capital Outstanding calculated on a daily basis at a rate
per annum equal to the applicable Acceptance Rate; and
(C) the Make Whole Amount,
and if within one year of the date of the Event of Loss that
Equipment has not been replaced with Equipment of the same make,
value and utility, title has not passed to the Lessor and the
Equipment is not subject to the provisions of the Transaction
Documents, then the Lessor may make a demand under the standby
letter of credit and use it towards prepayment of the Capital
Outstanding relating to such Equipment together with:
(1) any unpaid Rental (to the extent not included in the Capital
Outstanding) and any and all other Outstanding Amounts due
and payable on or prior to the date of payment; and
(2) any and all accrued but unpaid finance charges on the
Capital Outstanding on that date calculated on a daily basis
at a rate per annum equal to the applicable Acceptance Rate;
and
(3) the Make Whole Xxxxxx,
00
and if the amount which the Lessor is able to drawdown under the
letter of credit is not sufficient to discharge the Capital
Outstanding together with the amounts referred to in (1) to (3)
inclusive above in full, the Lessee shall forthwith pay to the
Lessor an amount equal to the deficit for application as
aforesaid; or
(iv) on the Settlement Date prepay the remaining Capital Outstanding
relating to such Equipment together with:
(A) any unpaid Rental (to the extent not included in the Capital
Outstanding) and any and all other Outstanding Amounts, due
and payable on or prior to the Settlement Date;
(B) any and all accrued but unpaid finance charges on the
Capital Outstanding calculated on a daily basis at a rate
per annum equal to the applicable Acceptance Rate; and
(C) the Make Whole Amount.
(b) The amount payable under Clause 15.4(a) will be paid as additional
rental and as compensation for the early termination of the Lessee's
obligation to take on lease or, as the case may be, the leasing of the
Equipment or the relevant part of it.
(c) The Lessee's obligations pursuant to Clause 15.4(a):
(i) apply regardless of whether or not any Net Insurance Proceeds or
Compensation Awards are paid or payable to the Lessor or the
Lessee; and
(ii) are (subject to the provisions of Clause 15.6(b)) without
prejudice to the Lessee's obligations to continue to pay Rental
in respect of the Equipment or the relevant part during the
period from and including the date of occurrence of the Event of
Loss in question to and including the Settlement Date, which
obligations shall apply notwithstanding the Event of Loss.
15.5 CONSEQUENCES OF AN EVENT OF LOSS
(a) Following the occurrence of an Event of Loss of all or part of the
Equipment then, unless the Lessee replaces the relevant Equipment in
accordance with Clause 15.4(a)(i), (ii) or (iii), on the Settlement
Date in question (if Clause 15.4(a)(i) applies) or on or before the
first anniversary of the Settlement Date in question (if Clauses
15.4(a)(ii) or (iii) applies):
(i) the leasing of the Equipment or the relevant part; and
(ii) any obligation of the Lessor to acquire the Equipment or the
relevant part and to lease it to the Lessee,
will, in each case, terminate.
(b) Following the termination of the leasing of all of the Equipment (or
such part as is referred to in Clause 15.1) under Clause 15.5(a) the
Lessee's obligations to pay Rentals that would otherwise fall due for
payment on or after the Settlement Date (or, as the case may be, the
first anniversary of the Settlement Date) will cease.
59
(c) Following the termination of the leasing of part only of the Equipment
(other than such part as is referred to in Clause 15.1) under Clause
15.5(a) Rentals falling due for payment on or after the Settlement Date
(or, as the case may be, the first anniversary of the Settlement Date)
and the Capital Outstanding under the relevant Lease Schedules will be
recalculated, the relevant Lease Schedules amended accordingly and the
"Schedules of Capital Outstanding" annexed to the relevant Lease
Schedules will be substituted with replacement "Schedules of Capital
Outstanding" reflecting the recalculation of Capital Outstanding
referred to above.
(d) The provisions of this Clause 15.5 are without prejudice to the
Lessee's other obligations under the Transaction Documents including
its obligations to pay any adjustments to Rental (whenever the same
fell due for payment) or other amounts under any of the Transaction
Documents.
(e) Notwithstanding the occurrence of an Event of Loss or the termination
of the leasing of the Equipment or any part as a consequence the Lessee
will not be entitled to any refund in respect of any Rentals or other
amounts paid in advance.
(f) Upon any replacement of or repayment for the Equipment as provided in
this Clause 15, the Lease Schedule shall terminate only with respect to
the Equipment so replaced or paid for, and the Lessor shall transfer to
the Lessee title only to such Equipment "AS IS, WHERE IS", "WITH ALL
FAULTS", and "WITH NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE
OR FOR ANY PARTICULAR PURPOSE, BUT, IN ALL CASES, FREE AND CLEAR OF ALL
LESSOR SECURITY INTERESTS AND FREE AND CLEAR OF ANY SECURITY INTERESTS
CREATED BY THE TRANSACTION DOCUMENTS. The Lessee shall pay any VAT,
sales or use taxes due on such transfer.
15.6 APPLICATION OF INSURANCE PROCEEDS AND COMPENSATORY AWARDS
(a) Following the occurrence of an Event of Loss in respect of all or part
of the Equipment, unless the Lessee has replaced the relevant Equipment
in accordance with Clause 15.4(a)(i), (ii) or (iii), any Insurance
Proceeds and Compensation Awards referable thereto unconditionally
received by the Lessor in cleared funds will (subject to the provisions
of paragraph (b)) be held by the Lessor pending the relevant Settlement
Date, following the occurrence of which, will be applied by the Lessor
in the following order:
(i) first, in retention by the Lessor for its own account of an
amount equal to all costs and expenses (including Taxes and legal
fees) incurred by the Lessor in connection with the collection of
those proceeds or awards (unless otherwise paid or reimbursed by
the Lessee);
(ii) secondly, in retention by the Lessor for its own account of an
amount equal to any Net Insurance Proceeds and any Compensatory
Awards set-off, under Clause 15.4(a) (Payments following an Event
of Loss), against the aggregate of any amount that would
otherwise be payable by the Lessee under Clause 15.4(a);
(iii) thirdly, as to any balance in payment to the Lessee as a rebate
of Rental.
(b) If, prior to the relevant Settlement Date:
(i) the Lessor receives Insurance Proceeds; and
60
(ii) the amount of such Insurance Proceeds is at least sufficient to
pay the aggregate of (x) the amount which would become due for
payment under Clause 15.4(a)(iv) on the relevant Settlement Date
(the Reinvestment Rate for the purposes of calculating the Make
Whole Amount to be determined with reference to the date of
receipt of the Insurance Proceeds) and (y) any and all Periodic
Rent falling due between the date of receipt of the Insurance
Proceeds and the Settlement Date,
then on each Rental Payment Date falling on or before the Settlement
Date, the Lessor shall apply such part of the Insurance Proceeds in and
towards payment of the relevant Periodic Rent (and such application
shall discharge the obligation of the Lessee to pay such Periodic
Rent). Any application of Insurance Proceeds pursuant to Clauses
15.6(a) or 15.6(b) shall be net of an amount equal to all amounts
applied by the Lessor in and towards Periodic Rent in accordance with
this Clause 15.6(b).
(c) Following the occurrence of an Event of Loss in respect of all or part
of the Equipment, if the Lessee has replaced the relevant Equipment in
accordance with Clause 15.4(a)(i), (ii) or (iii) any Insurance Proceeds
and Compensatory Awards referable thereto unconditionally received by
the Lessor in cleared funds will be applied by the Lessor in the
following order:
(i) first in retention by the Lessor for its own account of an amount
equal to all costs and expenses (including Taxes and Legal Fees)
incurred by the Lessor in connection with the collection of the
proceeds; and
(ii) secondly, as to any balance, upon receipt by the Lessor of
evidence reasonably satisfactory to it that repair or replacement
of the lost or damaged Equipment has been completed, in or
towards payment of the cost of repair or replacement (any
shortfall being borne by the Lessee) or, to the extent that the
Lessee has borne such cost, in reimbursement to the Lessee (any
surplus, after completion of all repairs and replacement and the
discharge of all costs relating thereto, being paid to the
Lessee).
15.7 DAMAGE NOT CONSTITUTING AN EVENT OF LOSS
(a) In the event that the Equipment suffers damage not constituting an
Event of Loss of all or any part of the Equipment the Lessee will
promptly repair or replace (in compliance with Clauses 12.10
(Replacement of parts) and 12.13 (Title to replacements etc.)) the
Equipment or the relevant part.
(b) Any Insurance Proceeds unconditionally received by the Lessor in
cleared funds in respect of any loss of or damage to the Equipment not
constituting an Event of Loss of all or any part of the Equipment will
be applied by the Lessor in the following order:
(i) firstly, in retention by the Lessor for its own account of an
amount equal to all costs and expenses (including Taxes and legal
fees) incurred by the Lessor in connection with the collection of
the proceeds; and
(ii) secondly, as to any balance, upon receipt by the Lessor of
evidence satisfactory to it that repair or replacement of the
lost or damaged Equipment has been put in hand or completed, in
or towards payment of the cost of repair or replacement (any
shortfall being borne by the Lessee) or, to the extent that the
Lessee has borne such cost, in reimbursement to the Lessee (any
surplus, after completion of all repairs and replacements and the
discharge of all costs relating thereto, being paid to the
Lessee).
61
15.8 REQUISITION FOR HIRE
(a) If all or part of the Equipment (the "REQUISITIONED EQUIPMENT") is
requisitioned for use or hire by any Governmental Authority or other
competent authority during the Initial Term (and unless and until an
Event of Loss occurs in respect of the Requisitioned Equipment, in
which case the other provisions of this Clause 15 will apply), the
leasing of the Equipment including the Requisitioned Equipment will
continue in full force (subject to Clause 16.2 (Termination by Lessor))
and the Lessee will continue to comply with all its obligations under
this Master Agreement (including to pay Rental) other than, in the case
of the Requisitioned Equipment, non-financial obligations which the
Lessee is unable to comply with solely by virtue of the requisition.
(b) Subject to no Potential Event of Default having occurred and being
continuing and to Clause 26 (Set-off), during the Initial Term the
Lessee may receive all requisition hire (other than any Compensation
Award or any compensation referred to in Clause 15.8(d)) paid by any
Governmental Authority or other competent authority on account of the
requisition and the Lessor will account to the Lessee for any such
requisition hire received by it as soon as reasonably practicable after
receipt.
(c) The Lessee will as soon as practicable after the end of any requisition
for use or hire cause the Requisitioned Equipment to be put into the
condition required by this Master Agreement.
(d) The Lessor shall be entitled to all compensation payable in respect of
any change to the structure, state or condition of the Requisitioned
Equipment arising during the period of requisition but, subject to
Clause 26 (Set-off), the Lessor will apply such compensation in
reimbursing the Lessee for the cost of complying with its obligations
under Clause 15.8(c).
(e) If the Requisitioned Equipment is under requisition for use or for hire
at the end of the Initial Term then, unless otherwise agreed by the
Parties, the leasing of the Equipment including the Requisitioned
Equipment will terminate in accordance with the terms of this Master
Agreement and title to the Equipment (including the Requisitioned
Equipment) shall pass to the Lessee in accordance with the provisions
of Clause 17.1 (End of Initial Term purchase option and Transfer of
Title to the Equipment).
15.9 MEANING OF EQUIPMENT
For the purposes of this Clause 15 references to the Equipment or any
part thereof exclude the Services or any of them.
16. DEFAULT
16.1 EVENTS OF DEFAULT
Each of the following events is an Event of Default (whether or not
caused by any reason whatsoever outside the control of the Lessee or
any other person):
(a) NON-PAYMENT:
(i) the Lessee fails to pay any Periodic Rent or any Termination
Amounts when due, and, other than in respect of a payment
under Clause 16.5(b) (Mandatory prepayment), such failure to
pay continues for five (5) Business Days; or
62
(ii) the Lessee fails to pay any other sum required hereunder or
under any of the other Transaction Documents, and such
failure continues for a period of ten (10) Business Days; or
(iii) either of the Guarantors fail to pay when due any amounts
owing to the Lessor under the Lease Guarantee, and:
(A) where a demand has been made upon the Lessee, such
failure to pay continues for five (5) Business Days; or
(B) where a demand has not been made upon the Lessee, such
failure to pay continues for ten (10) Business Days;
(b) INSURANCES: any of the Insurances are not, or cease to be,
maintained in full force and effect;
(c) MISREPRESENTATION: a representation, warranty, statement or
certificate made by either of the Guarantors, the Lessee, or any
Permitted Sub-Lessees in or in connection with any Transaction
Document or in any document delivered by or on behalf of the
Lessee, the Guarantors or the Permitted Sub-Lessees under or in
connection with any Transaction Document is false or misleading in
any material respect when made or deemed to be made;
(d) BREACH OF COVENANTS: any of the Lessee, the Guarantors or
Permitted Sub-Lessees violates or fails to perform any of the
terms, covenants or conditions of the Transaction Documents to
which they are a party (other than such as are referred to in
paragraphs (a), (b), (c), (m), (n) and (o) of this Clause 16.1,
and Clause 6.8 of the Lease Guarantee), which failure, if
remediable, is not cured within 30 days after written notice
thereof is given by the Lessor to the Lessee, Guarantor or
Permitted Sub-Lessee;
(e) CROSS-DEFAULT: the Lessee, any Permitted Sub-Lessee, either of the
Guarantors or any Significant Subsidiary fails to pay when due or
otherwise defaults under any promissory note, credit agreement,
loan agreement, conditional sales contract, guarantee, lease,
indenture, bond, debenture or other obligation whatsoever in an
amount which when aggregated with any and all other such defaults
exceeds ten million US Dollars (USD10,000,000) (or the equivalent
thereof in another currency), and any party to which such
obligation is owed or a holder thereof otherwise declares or
causes the obligations of the Lessee, any Permitted Sub-Lessee,
either of the Guarantors or any Significant Subsidiary as the case
may be, thereunder to become due and payable prior to the stated
maturity thereof;
(f) INSOLVENCY:
(i) the Lessee, either of the Guarantors or any Significant
Subsidiary are, or are deemed for the purposes of any law to
be, unable generally to pay their debts as they fall due or
to be insolvent, or admit inability to pay their debts as
they fall due; or
63
(ii) the Lessee, either of the Guarantors or any Significant
Subsidiary suspend making payments on all or any class of
their debts or announce an intention to do so, or a
moratorium is declared in respect of any of their
indebtedness;
(g) INSOLVENCY PROCEEDINGS:
(i) any petition is issued, proposal to creditors is put or any
meeting is convened in connection with a composition,
assignment or arrangement with creditors of the Lessee,
either of the Guarantors or any Significant Subsidiary; or
(ii) a meeting of the Lessee, the Guarantors or any Significant
Subsidiary is convened for the purpose of considering any
resolution for (or to petition for) their winding-up or for
their administration or any such resolution is passed by the
Lessee, either of the Guarantors or any Significant
Subsidiary; or
(iii) any person presents a petition for the winding-up or for the
administration of the Lessee, either of the Guarantors or
any Significant Subsidiary and, in the case of presentation
of a winding-up petition which the person against whom the
petition is presented reasonably considers to be frivolous
or vexatious, the petition is not discharged or withdrawn:
(A) in respect of a petition presented in a jurisdiction
other than the United States of America, within 30 days
of its presentation; and
(B) in respect of a petition presented in the United States
of America, within 60 days of its presentation; or
(iv) an order for the winding-up or administration of the Lessee,
either of the Guarantors or any Significant Subsidiary is
made; or
(v) any other step (including petition, proposal or convening a
meeting) is taken with a view to the rehabilitation,
administration, custodianship, liquidation, winding-up or
dissolution of the Lessee, either of the Guarantors or any
Significant Subsidiary or any other insolvency proceedings
involving the Lessee, either of the Guarantors or any
Significant Subsidiary;
(h) APPOINTMENT OF RECEIVERS AND MANAGERS:
(i) any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or the like is appointed in respect of the
Lessee, either of the Guarantors or any Significant
Subsidiary or any part of any of their assets; or
(ii) the directors of the Lessee, either of the Guarantors or any
Significant Subsidiary request the appointment of a
liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or the like; or
(iii) any other steps are taken to enforce any Security Interest
over any substantial part of the assets of the Lessee,
either of the Guarantors or any Significant Subsidiary or to
repossess any goods in the possession of any of the Lessee,
64
either of the Guarantors or any Significant Subsidiary under
any hire purchase, conditional sale, chattel leasing,
retention of title or similar agreement;
(i) CREDITORS' PROCESS: any attachment, sequestration, distress or
execution affects any material assets of the Lessee, either of the
Guarantors or any Significant Subsidiary and is not discharged
within 14 days;
(j) ANALOGOUS PROCEEDINGS: there occurs, in relation to of the Lessee,
either of the Guarantors or any Significant Subsidiary, any event
anywhere which corresponds with, or is analogous to, any of those
mentioned in Clauses 16.1(f) to 16.1(i) (inclusive);
(k) VALIDITY AND ENFORCEABILITY CONTESTED: if the validity or
enforceability of any of the Transaction Documents shall at any
time and for any reason be contested by the Lessee or either of
the Guarantors or the Lessee or either of the Guarantors shall
deny that it has any, or any further, liability thereunder;
(l) UNLAWFULNESS: any of the Transaction Documents (other than Lease
Participation Arrangements) shall at any time and for any reason
become invalid or unenforceable or otherwise cease to remain in
full force and effect or it becomes impossible or unlawful at any
time for the Lessee or either of the Guarantors to fulfil their
respective covenants and obligations under any of the Transaction
Documents to which they are a party or for the Lessor to exercise
its rights under the Transaction Documents (other than Lease
Participation Arrangements);
(m) EQUIPMENT:
(i) any steps are taken to enforce any Security Interest (other
than a Lessor Security Interest) over the Equipment; or
(ii) any execution, forfeiture, distress, impounding or other
legal process (not amounting to Compulsory Acquisition) is
levied or enforced upon the Equipment;
(n) CESSATION OF BUSINESS: the Lessee or either of the Guarantors
ceases, or threatens to cease, to carry on all or a substantial
part of its business; and
(o) CONDITIONS SUBSEQUENT: the Lessee does not fulfil or ensure
fulfilment of any deferred condition or other requirement within
any period stipulated by the Lessor under Clause 7.3 (Waiver or
deferral of conditions precedent).
16.2 TERMINATION BY LESSOR
(a) The occurrence of an Event of Default, to the extent that it comprises
a failure by the Lessee to comply with any of the provisions of this
Master Agreement, shall go to the root of this Master Agreement and
accordingly shall constitute a breach of condition which the Lessor may
treat as a repudiation by the Lessee of this Master Agreement.
(b) Without prejudice to any other rights or remedies of the Lessor,
whether under the Transaction Documents or otherwise, upon and at any
time after the occurrence of an Event of Default the Lessor may, by
notice to the Lessee terminate:
65
(i) the leasing of the Equipment and the Lessor's consent to the
Lessee's possession of the Equipment; and
(ii) any obligation of the Lessor to acquire the Equipment and to
lease it to the Lessee,
whereupon the same shall immediately terminate.
16.3 VOLUNTARY TERMINATION
(a) Provided that no Event of Default or Potential Event of Default has
then occurred and is continuing, the Lessee shall have the option to
terminate the leasing of all or any part of the Equipment which is the
subject of any one or more Lease Schedules entered into between the
Lessor and the Lessee and to purchase such Equipment on any day upon
the terms and conditions set out in this Clause 16.3 provided that:
(i) either (A) the Lessee exercises the option to terminate the
leasing of all of the Equipment the subject of one or more Lease
Schedules or (B) the Capital Outstanding in respect of the
relevant Equipment is at least E1,000,000; and
(ii) if paragraph (i)(B) above applies, the Capital Outstanding in
respect of the Equipment remaining the subject of a Lease
Schedule following such repayment is at least E1,000,000.
The Lessee may terminate the leasing of part of the Equipment which is
the subject of one or more Lease Schedules and purchase that Equipment
where the Capital Outstanding in respect of the Equipment which would
remain the subject of a Lease Schedule following such repayment (the
"REPAID SCHEDULE") would be less than E1,000,000 provided that
immediately following that repayment the Lessee consolidates the Repaid
Schedule with another Lease Schedule or Lease Schedules so that the
combined Capital Outstanding of the Repaid Schedule and that other
Lease Schedule or Lease Schedules is at least E1,000,000 (the "COMBINED
SCHEDULE").
If the leasing of part only of the Equipment the subject of a Lease
Schedule is terminated, the Capital Outstanding and the remaining
Periodic Rents under that Lease Schedule shall be adjusted by the
Lessor accordingly and the 'Schedule of Capital Outstanding' under that
Lease Schedule shall be replaced by a replacement 'Schedule of Capital
Outstanding' taking account of the repayment. Such replacement
'Schedule of Capital Outstanding' and the other new numbers shall form
part of that Lease Schedule from the relevant Termination Date and
shall be binding upon the Lessee in substitution for the previous
'Schedule of Capital Outstanding' and numbers.
(b) If the Lessee desires to exercise the option set out in Clause 16.3(a),
it shall give the Lessor written notice (the "VOLUNTARY TERMINATION
NOTICE") of its intention so to do at least 90 days and not more than
180 days before the proposed Termination Date, specifying that part of
the Equipment that is to be the subject of such intention and the
proposed Termination Date. On the Termination Date, the Lessee shall
pay to the Lessor in respect of the Equipment an amount equal to the
aggregate of (without duplication):
(i) the relevant Termination Amount for each relevant Lease Schedule;
and
(ii) any and all Taxes, Irrecoverable VAT and other charges incurred
or suffered by the Lessor or any other Lessor Risk Party in
connection with or as a result of the early termination by the
66
Lessee but not including any Taxes on or measured by the net
income, profit or gains of the Lessor or, as the case may be, any
such Lessor Risk Party,
(the "EARLY TERMINATION PRICE").
(c) Upon payment of the Early Termination Price and all other sums then due
under this Master Agreement and the applicable Lease Schedule with
respect to such Equipment, the Lessor shall transfer legal title to,
and all of its rights and interests in and to, such Equipment to the
Lessee "AS IS, WHERE IS", "WITH ALL FAULTS", and WITH NO WARRANTIES
WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A
PARTICULAR PURPOSE BUT, IN ALL CASES, FREE AND CLEAR OF ALL LESSOR
SECURITY INTERESTS AND FREE AND CLEAR OF ANY SECURITY INTEREST CREATED
BY THE TRANSACTION DOCUMENTS.
(d) Once served, a Voluntary Termination Notice will be irrevocable.
16.4 PAYMENTS ON TERMINATION
(a) On the Termination Date which is consequential on a termination by the
Lessor pursuant to Clause 16.2, the Lessee will pay to the Lessor an
amount equal to the aggregate of (without duplication):
(i) the relevant Termination Amount for each relevant Lease Schedule;
(ii) any other costs actually incurred by the Lessor or any other
Lessor Risk Party (including, without limitation, the Break
Costs, if any);
(iii) any and all Taxes, Irrecoverable VAT and other charges incurred
or suffered by the Lessor or any other Lessor Risk Party in
connection with or as a result of the early termination by the
Lessee but not including any Taxes on or measured by the net
income, profit or gains of the Lessor or, as the case may be, any
such Lessor Risk Party; and
(iv) any and all costs, fees and expenses incurred by the Lessor or
any other Lessor Risk Party in connection with or as a result of
the termination by the Lessor.
(b) The Early Termination Price payable under Clause 16.3(b) will be paid
as additional rental and the amount payable under Clause 16.4, in the
case of a termination under Clause 16.2 (Termination by Lessor) as a
result of acceptance by the Lessor of a repudiatory breach by the
Lessee of this Master Agreement, shall be payable as liquidated damages
and, in all other cases, as a liquidated sum or debt.
16.5 MANDATORY PREPAYMENT
(a) On the occurrence of a Sub-Lessee Insolvency Event, the Lessee shall
prepay the Capital Outstanding relating to the Equipment sub-leased to
that Permitted Sub-Lessee together with:
(i) any unpaid Rental (to the extent not included in the Capital
Outstanding) and any and all Outstanding Amounts due or payable
on or prior to the date of that Sub-Lessee Insolvency Event with
respect to such Equipment; and
67
(ii) any and all accrued but unpaid finance charges on such Capital
Outstanding calculated at the rate per annum which is the
aggregate of the Cost of Funds and the Margin; and
(iii) the Make Whole Amount.
(b) Concurrently with, or prior to, a Change of Control of either of the
Guarantors, the Lessee or any Permitted Sub-Lessee taking effect, the
Lessee shall have exercised its prepayment right under Clause 16.3 of
this Master Agreement in respect of:
(i) in the case of a proposed Change of Control of either of the
Guarantors or of the Lessee, the whole of the Capital
Outstanding; and
(ii) in the case of a proposed Change of Control of any of the
Permitted Sub-Lessees, so much of the Capital Outstanding as
relates to the Equipment sub-leased to that Permitted Sub-Lessee,
and the Lessee shall have prepaid the relevant Capital Outstanding
relating to the relevant Equipment (as described in sub-paragraphs (i)
and (ii) above) together with:
(A) any unpaid Rental (to the extent not included in the Capital
Outstanding) and any and all Outstanding Amounts due or payable
on or prior to the date of that Change of Control; and
(B) any and all accrued but unpaid finance charges on such Capital
Outstanding calculated at the rate per annum which is the
aggregate of the Cost of Funds and the Margin; and
(C) the Make Whole Amount.
16.6 LESSEE'S CONTINUING OBLIGATIONS
(a) Following the termination of the leasing of the Equipment under Clause
16.2 (Termination by Lessor) or Clause 16.3(a) (Voluntary Termination)
or 16.5 (Mandatory Prepayment) the Lessee's obligations to pay Rentals
that would otherwise fall due for payment after the Termination Date
will cease.
(b) Following the termination of the leasing of part only of the Equipment
under Clause 16.3(a) (Voluntary Termination), Rentals falling due for
payment after the Termination Date and the amount of the Capital
Outstanding will be recalculated in accordance with the replacement
"Schedule of Capital Outstanding" which is calculated for the Repaid
Schedule or as the case may be the Combined Schedule and substituted
for the original "Schedule of Capital Outstanding" to the Lease
Schedule that has been repaid in part of the Lease Schedule.
(c) The provisions of this Clause 16.6 are without prejudice to the
Lessee's other obligations under the Transaction Documents including
its obligation to pay any adjustments to Rental (whenever the same fell
due for payment) or other amounts under any of the Transaction
Documents.
(d) Notwithstanding the termination of the leasing of the Equipment or any
part under this Clause 16 the Lessee will not be entitled to any refund
of any Rentals or other amounts paid in advance.
68
17. DEALINGS WITH EQUIPMENT FOLLOWING TERMINATION OR EXPIRY
17.1 END OF INITIAL TERM PURCHASE OPTION AND TRANSFER OF TITLE TO THE
EQUIPMENT
(a) Upon the expiration of the Initial Term with respect to any Lease
Schedule which relates to any Equipment which is located in [Redacted],
[Redacted], [Redacted], [Redacted], the United States of America or
England and [Redacted], the Lessee shall, on giving not less than
thirty (30) days prior written notice to the Lessor, or such lesser
period as the Lessor may agree, be entitled to purchase the Equipment
which is the subject of such Lease Schedule at the price of one hundred
Euros (E/100) (the "OPTION PRICE") in respect of each Lease Schedule,
provided that no Event of Default under Clause 16.1(a) has occurred and
is continuing and no other amount is outstanding under the Transaction
Documents. If the option is exercised, the Option Price shall be paid
as part of the final payment of Periodic Rent by the relevant Lessee,
whereupon the Lessor shall transfer legal title to, and all of its
rights and interests in and to, the Equipment which is the subject of
such Lease Schedule to the Lessee.
(b) Upon the expiration of the Initial Term with respect to any Lease
Schedule which relates to any Equipment which is located in [Redacted]
or [Redacted] and upon payment in full of the final payment of Periodic
Rent by the Lessee, the Lessor shall transfer legal title to, and all
of its rights and interests in and to, the Equipment which is the
subject of such Lease Schedule to the Lessee. For the avoidance of
doubt, until payment in full by the Lessee of any amount outstanding
under or in connection with such Lease Schedule, the Lessor shall
retain legal title to the Equipment which is the subject of such Lease
Schedule.
(c) In the case of both Clause 17.1(a) and Clause 17.1(b) above, the Lessor
shall transfer legal title to, and all of its rights and interests in
and to, the Equipment which is the subject of such Lease Schedule to
the Lessee which is the party to that Lease Schedule "AS IS, WHERE IS",
"WITH ALL FAULTS", and WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE BUT, IN
ALL CASES, FREE AND CLEAR OF ALL LESSOR SECURITY INTERESTS AND FREE AND
CLEAR OF ANY SECURITY INTEREST CREATED BY THE TRANSACTION DOCUMENTS.
(d) In the event that the Lessee fails to exercise the purchase option
referred to in Clause 17.1(a) in respect of any of the Equipment or in
the event of an Early Termination of the leasing of any of the
Equipment where title does not pass pursuant to any other provision of
this Master Agreement the Lessor shall be entitled, (but not obliged),
by notice in writing to the Lessee, to transfer title to that Equipment
to the Lessee whereupon the provisions of Clause 17.1(c) shall apply.
17.2 REDELIVERY
(a) Subject to Clauses 16.3 and 17.1, following an early Termination of the
Initial Term in respect of any of the Equipment the Lessee will, if
required (and only if required) by the Lessor, immediately proceed to
redeliver the relevant Equipment to the Lessor at such place in the
country in which such Equipment is then located as the Lessor may
reasonably specify. The costs of any such redelivery of the Equipment
shall be for the account of the Lessee.
(b) The Lessee will redeliver the Equipment or the relevant part in a
condition so as to demonstrate that the Lessee has in all respects
complied with their obligations under this Master Agreement and in
particular the Equipment or the part will:
69
(i) be free of Security Interests (other than Lessor Security
Interests);
(ii) subject to any modifications made under the terms of this Master
Agreement, have installed thereon all equipment installed thereon
at the relevant Commencement Date (or replacements therefor) and
all additions (other than Detachable Additions) thereto; and
(iii) be accompanied by the Technical Records referable thereto which
shall be complete and up to date and in compliance with the
Lessee's obligations relating thereto under this Master
Agreement.
(c) If, in order to redeliver the Equipment or relevant part, it requires
to be deinstalled, disassembled or crated the Lessee will ensure that
it is deinstalled, disassembled and crated by an authorised
representative of the manufacturer or supplier or other service entity
reasonably satisfactory to the Lessor.
17.3 REPOSSESSION
(a) If the Lessee fails to deliver the Equipment or a part of the
Equipment, as the case may be, following a request to do so from the
Lessor under Clause 17.2(a) (Redelivery) the Lessor may, without
prejudice to the Lessee's obligations under this Master Agreement and
the Lessor's other rights and remedies, retake possession of the
Equipment and the Technical Records.
(b) In exercise of its rights under Clause 17.3(a) the Lessor, its agents
and representatives may enter upon any land or premises where any of
the Equipment is or is believed to be located and do all lawful things
or acts necessary or advisable without breach of peace in order to
retake possession of the Equipment and the Technical Records and remove
them from the land or premises (including the severance of any
Equipment that may be a fixture).
(c) To the extent the Lessor considers it necessary or advisable to enable
the Lessor to exercise its rights under this Clause 17.3 the Lessee
will, promptly at the request of the Lessor, exercise and enforce, and
permit the Lessor to exercise and enforce, any rights the Lessee may
have in any lease, licence or other agreement relating to any land or
premises and use all reasonable endeavours to obtain any authorisation
from any person with an interest in any land or premises.
(d) The Lessor will have no responsibility to the Lessee for any trespass,
loss or damage (unless caused by wilful misconduct or reckless
disregard with knowledge of the probable consequences) caused to any
persons or property (including the Equipment and the Technical Records)
in the exercise of the Lessor's rights under this Clause 17.3 and the
Lessee will indemnify the Lessor, its agents and representatives on
demand against any claim made in respect of any such trespass, loss or
damage, unless such loss or damage is caused by wilful misconduct or
reckless disregard with knowledge of the probable consequences.
17.4 STORAGE
Subject to the title transfer provisions of Clauses 16.3 and 17.1,
following an early Termination of the Initial Term in respect of any of
the Equipment pending any exercise by the Lessor of its rights under
Clause 17.2 (Redelivery) or the completion of a disposal of that
Equipment or relevant part under Clause 18 (Disposal) the Lessee will
not use that Equipment and, unless the Lessor otherwise directs, ensure
that such Equipment or the relevant part is safely and properly stored
70
at the Lessee's premises (or at such other address as the Lessor may
reasonably designate) and at the Lessee's expense.
17.5 ASSIGNMENT OF WARRANTIES
Following an early Termination of the Initial Term in respect of any of
the Equipment and if (but only if) that Equipment is to be redelivered
to the Lessor pursuant to Clause 17.2 (Redelivery), the Lessee shall
assign to the Lessor (or as the Lessor may direct) the benefit of all
warranties, indemnities and guarantees which the Lessee may have in
respect of the Equipment or to the extent that any of such warranties,
indemnities or guarantees are non-assignable they will hold the benefit
of such warranties, indemnities or guarantees on trust for the Lessor
(or as the Lessor may direct).
18. DISPOSAL
Following a Termination of the Initial Term in respect of any of the
Equipment (other than the Services) and the service of a notice by the
Lessor under Clause 17.1(d), that Equipment (other than Services) shall
be at the sole risk and cost of the Lessee and the Lessee shall deal
with such Equipment (other than the Services) (including any storage or
disposal of such Equipment (other than the Services)) safely and in
compliance with all Applicable Laws and entirely at the Lessee's cost.
Any storage of the relevant Equipment (other than Services) shall be
fully in accordance with Clause 17.4 (Storage).
19. INDEMNITIES
19.1 GENERAL INDEMNITY
The Lessee assumes liability for and agree with the Lessor (whether or
not Delivery of all or any of the Equipment occurs and without
prejudice to any of the Lessor's other rights under the Transaction
Documents) to indemnify each Indemnifiable Person and keep each
Indemnifiable Person fully indemnified at all times on demand from and
against any Losses (including in respect of death, injury or disease of
or to any person or loss of or damage to property of any person
(including the Equipment and the Technical Records) or any loss of any
other nature suffered by any person and any legal fees and expenses and
costs of investigations and inspections and the removal of the
Equipment and any costs incurred by the Lessor in the exercise of any
of its rights and powers following a termination of the leasing of the
Equipment or any part) of any kind and nature which may be imposed on,
incurred by, or asserted against at any time (whether before, after or
during the Initial Term and whether before or after Delivery of any or
all of the Equipment) any Indemnifiable Person or the Equipment (each a
"LIABILITY") in consequence of or in any way relating to, associated
with or arising directly or indirectly, out of:
(a) the design, manufacture, installation, assembly, description,
testing, maintenance, repair, refurbishment, condition, service,
overhaul, modification, change, alteration, loss, damage, removal,
storage or technical documentation of or for the Equipment or the
Technical Records or any deficiency in or inadequacy of any of the
foregoing or any infringement (or alleged infringement) of any
intellectual property or other right of any kind or any breach of,
or non-compliance with, any Environmental Law;
(b) the purchase, sale, ownership, management, control, delivery,
non-delivery, import, export, possession, use, operation,
registration, non-registration, insurance, lack of insurance,
leasing or sub-leasing of the Equipment; or
71
(c) the occurrence of any Event of Default or Potential Event of
Default,
regardless of whether the Equipment or Technical Records were or were
not in the possession or control of the Lessee at the relevant time and
regardless of whether the Liability arises out of, is contributed to
by, or is attributable to any negligent act or omission of any
Indemnifiable Person.
19.2 EXCLUSIONS FROM GENERAL INDEMNITY
The indemnities contained in Clause 19.1 (General indemnity) will not
extend to any Indemnifiable Person to the extent that the Liability
incurred by such Indemnifiable Person:
(a) is caused by any act on the part of that Indemnifiable Person
(excluding any act of the Lessee acting in any capacity on behalf
of an Indemnified Person) which constitutes the wilful misconduct
of, or recklessness with knowledge of the probable consequences on
the part of, that Indemnifiable Person;
(b) is caused by any failure on the part of that Indemnifiable Person
to comply with any of its specific obligations under any of the
Transaction Documents;
(c) constitutes any part of the Acquisition Cost;
(d) constitutes a cost which is expressly to be borne by that
Indemnifiable Person, as against the Lessee, under any other
provision of this Master Agreement or the other Transaction
Documents; or
(e) is a Liability to which Clause 20.1 (Tax indemnity) applies.
The indemnities contained in Clause 19.1 (General indemnity) will also
not extend to the Seller (in that capacity) to the extent of any
liability incurred by the Seller (in that capacity) as a result of or
related to the Seller's breach of any term of the Nortel Supply
Contract.
19.3 CURRENCY INDEMNITY
(a) If the Lessor receives an amount in respect of the Lessee's liability
under the Transaction Documents or if that liability is converted into
a claim, proof, judgment or order in a currency other than the currency
(the "CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under the relevant Transaction Document:
(i) the Lessee shall indemnify the Lessor as an independent
obligation against any loss or liability arising out of or as a
result of the conversion;
(ii) if the amount received by the Lessor, when converted into the
contractual currency at a market rate in the usual course of its
business, on the date of receipt, is less than the amount owed in
the contractual currency, the Lessee shall forthwith on demand
pay to the Lessor an amount in the contractual currency equal to
the deficit; and
(iii) the Lessee shall forthwith on demand pay to the Lessor any
exchange costs and taxes payable in connection with any such
conversion.
72
(b) The Lessee waives any right it may have in any jurisdiction to pay any
amount under the Transaction Documents in a currency other than that in
which it is expressed to be payable.
19.4 NOTIFICATION OF INDEMNITY CLAIMS
Without prejudice to the provisions of this Clause 19 and without
limiting in any way, or being a condition precedent or subsequent to,
the indemnities in favour of any Indemnifiable Person under this Master
Agreement, the Lessor will:
(a) notify the Lessee in writing as soon as reasonably practicable
after receipt by the Lessor of notice of a Liability (provided
such notice is in writing), such notification to give such details
as the Lessor then has and which are, in all the circumstances,
reasonable having regard to the contents of the notice of a
Liability received by the Lessor and any other knowledge the
Lessor may have regarding that Liability; and
(b) where reasonably practicable notify the Lessee of the Lessor's
intention to pay or ensure the payment of any monies in respect of
that Liability before any payment is made.
19.5 RECOVERIES FROM THIRD PARTIES
If any Indemnifiable Person recovers from, or is paid by, any person
(other than the Lessee) any amount (other than under Clause 20 (Tax
indemnity and other provisions)) in respect of any payments paid or
discharged by the Lessee under this Clause 19, then if the
Indemnifiable Person has received payment of such amount and the Lessor
is satisfied that such amount is unconditionally available for
retention by the Indemnifiable Person, the Lessor will ensure that the
Lessee is paid a sum equal to the value of such recovered or paid
amount, such payment to the Lessee to be subject always to the
provisions of Clause 20 (Tax indemnity and other provisions).
19.6 NOTIFICATION AND CONSULTATION
(a) If the Lessor becomes aware of any matter which gives rise to or would
give rise to a liability for which the Lessee indemnifies the Lessor
under this Clause 19 then the Lessor shall notify the Lessee in writing
accordingly.
(b) If reasonably requested by the Lessee in writing, the Lessor shall
discuss with the Lessee what action to take in relation to such matter.
The Lessor undertakes to consider in good faith any suggestions made by
the Lessee in this regard.
(c) If, contrary to any such suggestion from the Lessee, the Lessor decides
that it wishes to settle or compromise any claim or not to defend any
claim, then the Lessor and the Lessee shall identify a mutually
acceptable leading counsel who shall be instructed to consider the
merits of the claim and any settlement offer proposed by the Lessee.
If, in the opinion of such leading counsel, there is a greater than 50%
chance of such defence succeeding or of the claimant being awarded less
than the settlement offer, the Lessor shall comply with the suggestion
of the Lessee to reject the settlement or proposal made by the claimant
and/or defend the claim, PROVIDED THAT the Lessee, in terms
satisfactory to the Lessor agrees to indemnify and keep indemnified the
Lessor on an after tax basis, in respect of all costs, claims, demands,
losses and expenses suffered or incurred by the Lessor in rejecting
such settlement offer and for defending the claim (including, without
prejudice to the generality of the foregoing, such costs and expenses
relating to court proceedings and any appeals against the decision of
any court in favour of the claimant in part or in whole) . For the
avoidance of doubt, the Lessee agrees that, without the prior written
73
consent of the Lessor (which the Lessor shall have full discretion to
withhold), it shall not be entitled to use the Lessor's name in
connection with any claim.
20. TAX INDEMNITY AND OTHER PROVISIONS
20.1 GENERAL TAX INDEMNITY
(a) The Lessee shall indemnify each Indemnifiable Person on demand and keep
that Indemnifiable Person fully indemnified at all times on a full
indemnity and after tax basis from and against any and all Tax
Liabilities of each Indemnifiable Person in respect of:
(i) the Equipment which has been delivered under this Master
Agreement or any right, title or interest therein;
(ii) this Master Agreement, or any of the other Transaction Documents
or any document, payment or transaction contemplated by this
Master Agreement or any of the other Transaction Documents; and
(iii) anything done by any member of the Lessor Group in response to
any request by the Lessee or any member of Viatel, Inc.'s Group.
(b) The indemnities contained in Clause 20.1(a) shall not extend to any Tax
Liability of an Indemnifiable Person to the extent:
(i) such Tax Liability is in respect of tax on income, profits or
gains attributable to any Rental, Termination Amount or any
amount which discharges any liability to pay such amounts
actually receivable under this Master Agreement or any of the
other Transaction Documents or to any other amounts payable to
and retained by the Lessor under this Master Agreement or any of
the Transaction Documents or to any sale or other proceeds
(including, without limitation, insurance monies) actually
received and retained by the Lessor in respect of the Equipment
pursuant to any of the Transaction Documents;
(ii) against or in respect of any Tax Liability to an extent that it
would not have arisen or been payable, but for the delay or
failure by the Lessor or any member of the Lessor's Group in the
filing of Tax Returns on a due and timely basis or the payment of
any Tax Liability which delay or failure has not been requested
by the Lessee or any other member of Viatel, Inc.'s Group;
(iii) the matter in respect of which the obligation to indemnify
arises, results solely from any action which constitutes wilful
default or reckless disregard with knowledge of the probable
consequences of that Indemnifiable Person or by an agent of that
Indemnifiable Person (other than the Lessee);
(iv) such Tax Liability is in respect of Taxes in respect of which the
Lessor has expressly agreed in writing in any Transaction
Document or after the date hereof shall not be the responsibility
of the Lessee;
(v) such Tax Liability is in respect of VAT;
74
(vi) such Tax Liability is in respect of Taxes withheld or deducted at
the source to the extent such Taxes are required to be withheld
or deducted and are not based on a Change in Law;
(vii) such Tax Liability is in respect of any costs for which the
Lessee is liable to make payment pursuant to Clause 21 (Increased
Costs and Funding Problems); or
(viii)such Tax Liability is suffered by the Lessor in respect of the
payment of a sum by way of indemnity pursuant to this Master
Agreement or any other Lease Document.
(c) The Lessor shall, at the request and expense of the Lessee, provide a
certificate from its accountants as to the amount of any Tax Liability
which it claims from the Lessee under Clause 20.1.
(d) If the Lessor or any Indemnifiable Person becomes aware of any Taxes in
respect of which the Lessee may be required to make a payment or
increased payment pursuant to this Clause 20.1, then, to the extent it
can do so without disclosing the affairs of its other customers or
matters relating to its business which it regards as confidential, the
Lessor or such Indemnifiable Person (as the case may be) shall notify
the Lessee in writing accordingly. If reasonably requested by the
Lessee in writing, the Lessor or such Indemnifiable Person (as the case
may be) shall discuss with the Lessee what action to take in relation
to such Taxes. The Lessor or any Indemnifiable Person undertakes to
consider in good faith any suggestions made by the Lessee in this
regard, but the Lessee recognises that neither the Lessor nor any
Indemnifiable Person shall be bound to comply with such suggestions or
appeal against any assessment to tax or the rejection of any claim for
relief, and the Lessor or any Indemnifiable Person may acting in good
xxxxx xxxxxx or compromise any claim by any Tax authority in its
absolute discretion. If the Lessor or any Indemnifiable Person (as the
case may be) at the written request of the Lessee does challenge or
appeal any matter in relation to Taxes which are the subject of this
Clause 20.1(d), the Lessee shall indemnify the Lessor or that
Indemnifiable Person (as the case may be), on an after tax basis, in
respect of all costs, claims, demands, losses and expenses suffered or
incurred by the Lessor or the relevant Indemnifiable Person in making
such challenge or appeal (including, without prejudice to the
generality of the foregoing, such costs and expenses relating to
appeals against the decision of any court in favour of the relevant Tax
authority in part or in whole).
20.2 NON-DEDUCTIBILITY OF PAYMENTS BY LESSOR AND LESSOR RISK PARTIES
(a) Notwithstanding anything contained in the foregoing provisions of this
Master Agreement, if any sum payable by or on behalf of the Lessor or
any Lessor Risk Party under this Master Agreement or under any of the
other Transaction Documents will not or may not be fully deductible by
the Lessor or the relevant Lessor Risk Party for the purpose of
computing its liability to Taxes, the Lessor or the relevant Lessor
Risk Party shall be entitled to withhold from any such payment such
amount as the Lessor or the relevant Lessor Risk Party shall determine
in good faith to be required to put the Lessor or the relevant Lessor
Risk Party in the same after-Tax position as it would have been in had
the payment been fully deductible and any receipt by the Lessor
relating to that payment had been taxable.
(b) If all or any part of such payment by the Lessor or the relevant Lessor
Risk Party is made without any such withholding by the Lessor or the
relevant Lessor Risk Party (including, without limitation, in
circumstances where the Lessor or the relevant Lessor Risk Party is
required to make a payment without such withholding pursuant to the
provisions of this Master Agreement or any other Transaction Document)
and it subsequently proves that such payment (or any part of such
75
payment) is not deductible by the Lessor or the relevant Lessor Risk
Party as aforesaid, the Lessee shall on demand pay to the Lessor or the
relevant Lessor Risk Party by way of indemnity such amount as the
Lessor or the relevant Lessor Risk Party shall determine in good faith
to be required to put it in the same after-Tax position as it would
have been in had the payment been fully deductible (after taking into
account any financial or cash flow advantage or disadvantage to the
Lessor or the relevant Lessor Risk Party resulting from the making of
such payment).
(c) If any payment is initially made by the Lessor or the relevant Lessor
Risk Party subject to a withholding pursuant to this Clause 20.2 on the
basis that it is not an allowable deduction, or that it will not be
allowed as a deduction of the Lessor or the relevant Lessor Risk Party
for tax purposes in the financial year of the Lessor or the relevant
Lessor Risk Party in which it is incurred and it is subsequently
determined that it is so deductible, such payment shall be made by the
Lessor or the relevant Lessor Risk Party to the Lessee as the Lessor or
the relevant Lessor Risk Party shall determine in good faith
appropriate in order to put the Lessor or the relevant Lessor Risk
Party in the same after-Tax position as it would have been in had the
payment been fully deductible and no withholding had been made (after
taking into account any financial or cash flow advantage or
disadvantage received or suffered by the Lessor or the relevant Lessor
Risk Party).
20.3 STAMP TAXES ETC.
Without prejudice to the generality of Clause 20.1 (General Tax
Indemnity), the Lessee shall, on demand, pay all stamp, registration
and documentary Taxes to which this Master Agreement or any of the
other Transaction Documents is or at any time may be subject and shall
indemnify the Lessor and each Lessor Risk Party on demand against any
Losses resulting from any failure to pay or any delay in paying any
such Taxes PROVIDED THAT the Lessor and each Lessor Risk Party shall be
entitled (but not obliged) to pay any such Taxes (whether or not they
are its primary responsibility) whereupon the Lessee shall indemnify
the Lessor and each Lessor Risk Party on demand against any Losses
resulting from any failure to pay or any delay on the part of the
Lessee in paying any such Taxes and any reasonable and proper costs or
expenses incurred by the Lessor in relation thereto.
20.4 INSUFFICIENCY OF INDEMNITY PAYMENTS
(a) If the Lessor or any Lessor Risk Party makes a payment or suffers a
loss in respect of which it is entitled to be indemnified or reimbursed
or otherwise kept harmless pursuant to any provision of this Master
Agreement or any of the other Transaction Documents and the Lessor or
the relevant Lessor Risk Party reasonably determines in good faith, and
if reasonably requested by the Lessee, based on written advice of the
Lessor's solicitors, accountants or counsel specialising in tax matters
(a copy of which is provided to the Lessee) that:
(i) the loss or payment is not or is unlikely to be wholly deductible
in computing the profits of the Lessor or the relevant Lessor
Risk Party for the purposes of computing its Tax Liability whilst
the payment to be made by way of indemnity or reimbursement (for
the purpose of this Clause 20.4(a), the "PAYMENT") will or is
likely to give rise to a Tax Liability for the Lessor; or
(ii) the Payment will or is likely to give rise to a Tax Liability for
the Lessor or the relevant Lessor Risk Party in any financial
year of the Lessor or the relevant Lessor Risk Party earlier than
the financial year in which the loss or payment is or is likely
to be deductible, then, at the time of the Payment the Lessee
76
shall pay such an amount (the "ADDITIONAL PAYMENT") as will,
after taking into account any Tax Liability likely to be suffered
or incurred by the Lessor or the relevant Lessor Risk Party in
respect of the Payment or the Additional Payment, leave the
Lessor or the relevant Lessor Risk Party in no better and no
worse an after Tax position than it would have been in had the
Payment not given rise to any such Tax Liability and the loss or
payment had not been so deductible PROVIDED THAT if at the time
of the Payment the Lessor or the relevant Lessor Risk Party
considers that no Additional Payment is necessary but
subsequently determines acting reasonably and in good faith, and
if reasonably requested by the Lessee, based on written advice of
the Lessor's solicitors, accountants or counsel specialising in
tax matters (a copy of which is provided to the Lessee) that an
Additional Payment is necessary so as to indemnify the Lessor or
the relevant Lessor Risk Party, the Additional Payment shall be
paid by the Lessee to the Lessor or the relevant Lessor Risk
Party following demand by the Lessor or the Relevant Lessor Risk
Party. At the Lessee's request, the Lessor shall, as a condition
to the payment of any Additional Amounts under this Clause
20.4(a), provide the Lessee with a schedule setting forth the
Lessor's calculations of any Additional Payment computed under
this Clause 20.4(a), and the Lessor shall reasonably and in good
faith co-operate with the Lessee to respond to any questions
raised by the Lessee with respect to such calculations.
(b) Without prejudice to the generality of Clause 20.1 (General Tax
Indemnity), if and to the extent that the Lessor reasonably determines
in good faith (and if reasonably requested by the Lessee, based on
written advice of the Lessor's solicitors, accountants or counsel
specialising in tax matters (a copy of which is provided to the
Lessee)) that any sum (the "INDEMNITY SUM") constituting (directly or
indirectly) an indemnity to the Lessor but paid by the Lessee under
this Master Agreement or any other Transaction Document to any person
other than the Lessor, shall be treated as taxable in the hands of the
Lessor, the Lessee shall promptly pay to the Lessor such sum (the
"CORRESPONDING SUM") as (after taking into account any Taxes suffered
by the Lessor on the Corresponding Sum and any Tax deduction received
by the Lessor in respect of the payment giving rise to the indemnity)
shall reimburse the Lessor for any Taxes suffered by it in respect of
the Indemnity Sum after taking into account any deduction for tax
purposes obtained by the Lessor in respect of the payment of the
Indemnity Sum.
20.5 PAYMENTS BY LESSEE
(a) All payments due to or by the Lessor and each other Lessor Risk Party
under this Agreement and the other Transaction Documents shall be
calculated and made free and clear of and without deduction for, or on
account of, any present or future Taxes or other charges of whatsoever
nature, now or hereafter imposed by any taxing or Governmental
Authority whatsoever unless such deduction or withholding is required
by law.
(b) If such deduction or withholding is required by any law, regulation or
regulatory requirement the Lessee shall:
(i) if the payment is to be made by the Lessee, ensure or procure
that the deduction or withholding is made and that it does not
exceed the minimum legal requirement therefor;
(ii) pay, or procure the payment of, the full amount deducted or
withheld to the relevant Taxation or other authority in
accordance with the Applicable Law;
(iii) (A) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by the
Lessee, increase the payment in respect of which the
deduction or withholding is required so that the net amount
received by the Lessor or the relevant other Lessor Risk
77
Party after the deduction or withholding shall be equal to
the amount which the Lessor or the relevant other Lessor
Risk Party (as the case may be) would have been entitled to
receive in the absence of any requirement to make a
deduction or withholding; or
(B) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by any person
other than the Lessee, procure the payment or pay directly
to the Lessor such sum (a "COMPENSATING SUM") as will, after
taking into account any deduction or withholding which is
required to be made in respect of the Compensating Sum,
result in the Lessor or, as the case may be, the relevant
other Lessor Risk Party receiving, or, as the case may be,
paying, on the due date for payment, a net sum equal to the
sum which the Lessor or, as the case may be, the relevant
other Lessor Risk Party would have received or, as the case
may be, paid in the absence of any obligation to make a
deduction or withholding; and
(iv) promptly deliver or procure the delivery to the Lessor of any
appropriate receipts evidencing the deduction or withholding
which has been made, or (in the absence of such receipts) provide
a certification to the Lessor of the deduction or withholding
made.
(c) Each Indemnifiable Person agrees to furnish to the Lessee from time to
time such duly executed and properly completed forms or certificates
that are reasonably requested by the Lessee in order to claim any
reduction of or exemption from any withholding or other tax imposed by
any taxing authority in respect of any payments otherwise required to
be made by the Lessee pursuant to this Master Agreement or other
Transaction Document, which reduction or exemption may be available to
such Indemnifiable Person under Applicable Law.
20.6 TAXATION UNDERTAKINGS
The Lessee hereby undertakes to the Lessor from the date hereof and
thereafter until the sale or other disposition of all of the Equipment
following the expiry or termination of the Initial Term that it will:
(a) Pay Taxes
duly pay and discharge or cause to be paid and discharged all
Taxes, assessments and governmental charges levied upon the
Lessee or its property and lawfully payable by the Lessee in
respect of, or on the Equipment, not later than the due date of
payment, except to the extent there is a good faith contest
thereof by appropriate proceedings by the Lessee, PROVIDED THAT
the Lessee shall not be required to pay and discharge any
interest or penalties in relation to such Taxes, assessments or
Governmental Authority charges to the extent that such interest
or penalties would not have arisen but for an unreasonable delay
by the Lessor in notifying the Lessee of the relevant Taxes,
assessment or charge as soon as reasonably practicable following
the Lessor becoming aware of such Taxes, assessment or charge in
circumstances when the Lessee did not, at such time, know of such
Taxes, assessment or charge (and would not have known of the
existence of such Taxes, assessment or charge on making
reasonable enquiries).
78
(b) Taxation authorities
as soon as reasonably practicable after the Lessee, has received
a request from any Inland Revenue or H.M. Customs & Excise
official (or any person from an equivalent body in a Relevant
Country) inform the Lessor of that request, furnish to that
official such information as may be in the possession or control
of the Lessee and as may be required by that official to be so
furnished about any Equipment or the leasing of the Equipment or
the use to which the same is being or has been put and will as
soon as reasonably practicable after receipt of a request from
the Lessor furnish to the Lessor such information and documents
in the possession or control of the Lessee and which the Lessor
requires in order to enable the Lessor to respond to a request of
the Lessor from such an official.
20.7 VALUE ADDED TAX
(a) All payments made by the Lessee under this Master Agreement and the
other Transaction Documents are calculated without regard to VAT. If
any such payment constitutes the whole or any part of the consideration
for a taxable or deemed taxable supply (whether that supply is taxable
pursuant to the exercise of an option or otherwise) by the Lessor, the
amount of that payment shall be increased by an amount equal to the
amount of VAT which is chargeable in respect of the taxable supply in
question subject to the production by the Lessor of a valid VAT invoice
(where applicable) in respect of the VAT in question.
(b) In respect of each item of Equipment, subject to the production by the
Lessor of a valid VAT invoice (where applicable) in respect of the VAT
in question, the Lessee shall pay to the Lessor on or before the fifth
(5th) Business Day preceding the date on which the relevant VAT is due
to be accounted for by the Lessor to H.M. Customs & Excise or any
equivalent body in a Relevant Country an amount equal to the amount of
VAT for which the Lessor is obliged to account to H.M. Customs & Excise
or any equivalent body in a Relevant Country in respect of the supply
under this Master Agreement and the relevant Lease Schedule of such
item of Equipment.
(c) If, in respect of any item of Equipment, the Lessor determines that the
consideration for the supply thereof under this Master Agreement and
the relevant Lease Schedule is increased or decreased, then:
(i) if the consideration for the supply is increased, the Lessee
shall pay to the Lessor on demand (or, if later five (5) Business
Days before the same is due to be accounted for by the Lessor to
H.M. Customs & Excise or any equivalent body in a Relevant
Country) an amount equal to the amount of additional VAT for
which the Lessor is obliged to account to H.M. Customs & Excise
or any equivalent body in a Relevant Country; and
(ii) if the consideration for the supply is decreased, the Lessor
shall issue a credit note to the Lessee in an amount equal to the
credit which the Lessor claims from H.M. Customs & Excise or any
equivalent body in a Relevant Country in respect of the reduction
in consideration, and that amount shall be deducted from the next
payment of Periodic Rent due from the Lessee in respect of the
relevant item of Equipment or shall be reimbursed to the Lessee
within two (2) Business Days of demand by the Lessee if there is
no further payment of Periodic Rent due or to the extent that the
next such payment is less than the amount in question.
79
(d) Any payment or other consideration to be made or furnished by the
Lessor to the Lessee pursuant to or in connection with this Master
Agreement or any of the other Transaction Documents or any transaction
or document contemplated herein or therein may be increased or added to
by reference to (or as a result of any increase in the rate of) any VAT
which shall be or may become chargeable in respect of the taxable
supply in question on the basis that the relevant payment or
consideration is stated on an exclusive of VAT basis.
(e) If and to the extent that the Lessor (or any company which is treated
as a member of the same group as the Lessor for VAT purposes) bears VAT
which is Irrecoverable VAT then the Lessee shall on or within five (5)
Business Days of demand indemnify and keep indemnified the Lessor upon
demand against such Irrecoverable VAT such indemnity being in an amount
equal to the after-Tax cost to the Lessor of such Irrecoverable VAT
together with interest thereon at the rate of LIBOR calculated on a
seven day basis and compounded quarterly from the date upon which the
Lessor made payment of the amount of such Irrecoverable VAT to but
excluding the date of payment of the amount of the indemnity.
20.8 DUE DATE OF PAYMENT IN RESPECT OF TAX LIABILITIES
Where the Lessee becomes liable to make any payment pursuant to this
Master Agreement or in relation to any Transaction Document in respect
of a Tax Liability suffered or incurred by the Lessor or, as the case
may be, any of the Lessor Risk Parties, the due date for the making of
that payment shall be:
(a) in a case that involves an actual payment of Tax, the later of (i)
three Business Days before the last date that is the date on which
the Lessor or, as the case may be, the relevant Lessor Risk Party
has to pay to the appropriate tax authority the Tax that has given
rise to the Lessee's liability under this Master Agreement in
order to avoid incurring a liability or a charge or penalty in
respect of that Tax Liability and (ii) the date falling twenty
Business Days after the Lessee has been notified by the Lessor in
accordance with Clause 29 (Notices) that the Lessee has a
liability for an amount under this Agreement; or
(b) in a case that involves the loss or setting off of a right to
repayment of Tax, the later of (i) the date when such repayment
would have been due but for such loss or setting off and (ii) the
date falling five Business Days after the Lessee has been notified
by the Lessor in accordance with Clause 29 (Notices) that the
Lessee has a liability for an amount under this Agreement; or
(c) in a case which involves the loss or setting off of a Relief, the
later of (i) the date that is the last date on which, assuming
that the Relief would have been used on the first occasion on
which, but for such loss or setting off, the Relief could have
been used, the Lessor or, as the case may be, the relevant Lessor
Risk Party has to pay to the appropriate tax authority any Tax
which, but for such loss or setting off, would have been saved by
virtue of the Relief in order to avoid incurring a liability to
interest or a charge or penalty in respect of that Tax Liability
and (ii) the date falling five Business Days after the Lessee has
been notified by the Lessor, in accordance with Clause 29
(Notices), that the Lessee has a liability for an amount under
this Agreement; or
(d) in any other case, the date falling five Business Days after the
date when the Lessee has been notified by the Lessor in accordance
with Clause 29 (Notices) that the Lessee has a liability for an
amount under this Agreement.
80
20.9 MITIGATION
(a) Without prejudice to the provisions of Clauses 20.5 (Payments by
Lessee), 21.1 (Increased Costs), 21.3 (Funding Problems) and 34
(Illegality), the Lessor confirms that if any of the circumstances set
out in Clauses 20.5 (Payments by Lessee), 21.1 (Increased Costs), 21.3
(Funding Problems) and 34 (Illegality) arise as a result of a Change in
Law and, if the Lessee so requests, the Lessor shall consult for a
period not exceeding thirty (30) days with the Lessee (at the Lessee's
cost) with a view to finding a means for reducing or avoiding the
withholding or increased cost or reduction in its return or reduction
in the amount of any payment received or avoiding the illegality
(including, without limitation, by transferring its rights and
obligations or the rights and obligations of any other Lessor Risk
Party under the Transaction Documents to another branch office or
another person) PROVIDED THAT the Lessor shall not be under any
obligation to enter into, or to continue with, such consultations or to
take, or to continue, any such action if, in its bona fide opinion, to
do so would be likely to (a) have an adverse effect upon its business,
operation or financial condition, or (b) result in its rights,
interests, anticipated financial return or position under or in
relation to any of the Transaction Documents being materially less
favourable to it than would have been the case in the absence of the
relevant withholding or increased cost unless indemnified or secured to
its satisfaction in respect thereof, or (c) involve it in any unlawful
act or activity or (d) (unless indemnified or secured to its
satisfaction) involve it in any liability to Tax or any expense which
is significant in the bona fide opinion of the Lessor or the relevant
Lessor Risk Party or (e) involve it in any disclosure of any documents
and/or information relating to its business or affairs which it
considers (in its bona fide opinion) to be of a confidential nature. If
the relevant event falls within Clause 21.1 (Increased Costs) or Clause
34 (Illegality) and by the end of any such thirty (30) day consultation
period, no agreement has been reached between the Lessee and the Lessor
in respect of any such increased cost or illegality affecting the
relevant Lessor Risk Party (the "AFFECTED PARTY"), the Lessee shall be
entitled to nominate a bank or financial institution (the "LESSEE
NOMINEE") to replace the Affected Party and, following any such
nomination, the Lessor shall take such reasonable action as is within
its power to effect within a reasonable time a transfer of the rights
and obligations of such Affected Party under the Transaction Documents
to such Lessee Nominee.
(b) The provisions of Clause 20.9 above are without prejudice to the
provisions of Clauses 20.5 (Payments by Lessee), 21.1 (Increased
Costs), 21.3 (Funding problems) and 34 (Illegality) which remain in
full force and effect subject only as affected by the provisions of
Clause 20.2.
20.10 [Redacted] WITHHOLDING TAX
Subject to Clause 20.5, any amount expressed to be payable or to be
calculated under this Master Agreement is, or, as the case may be,
shall be expressed as a minimum payment, net of any applicable legally
required withholding for [Redacted] withholding taxes. For the
avoidance of doubt, the Lessor agrees that if it recovers from the
Lessee an amount in respect of a deduction or withholding pursuant to
Clause 20.5, it cannot make a claim against the Lessee in respect of
the same deduction or withholding under this Clause 20.10.
21. INCREASED COSTS AND FUNDING PROBLEMS
21.1 INCREASED COSTS
(a) Subject to Clause 21.2 (Exceptions), the Lessee shall forthwith on
demand by the Lessor pay to the Lessor the amount of any increased cost
incurred by the Lessor, any other member of the Lessor Group, any
81
Lessor Risk Party or any other member of any Lessor Risk Party's Group
as a result of the introduction of or compliance with any Change in Law
(including any law or regulation relating to change in currency of a
country, or reserve asset, special deposit, cash ratio, liquidity or
capital adequacy requirements or any other form of banking or monetary
control). Any request for payment from the Lessee under this Clause
21.1(a) shall be made in writing and shall set forth the basis therefor
and the calculation thereof in reasonable detail.
(b) In this Master Agreement "INCREASED COSTS" means:
(i) a cost or additional cost incurred by the Lessor, any other
member of the Lessor Group, any Lessor Risk Party or any other
member of the relevant Lessor Risk Party's Group as a result of
it having entered into, or performing, maintaining or funding its
obligations under or pursuant to, this Master Agreement or any
other Transaction Document; or
(ii) that portion of a cost or additional cost incurred by the Lessor,
any other member of the Lessor Group, any Lessor Risk Party or
any other member of the relevant Lessor Risk Party's Group in
making payment of, funding or maintaining all or any amounts of
Capital Outstanding or all or any commitments or obligations
under or in connection with this Master Agreement or any of the
other Transaction Documents as is attributable to it making
payment of, funding or maintaining such amounts or such
commitments or obligations; or
(iii) a reduction in any amount payable to the Lessor, any other member
of the Lessor Group, any Lessor Risk Party or any other member of
the relevant Lessor Risk Party's Group or in the effective return
to the Lessor, any other member of the Lessor Group, any Lessor
Risk Party or any other member of the relevant Lessor Risk
Party's Group under this Master Agreement or any other
Transaction Document or (to the extent that it is attributable to
this Master Agreement or any other Transaction Document) on its
capital; or
(iv) the amount of any payment made by the Lessor, any other member of
the Lessor Group, any Lessor Risk Party or any other member of
the relevant Lessor Risk Party's Group or the amount of any
interest or other return foregone by the Lessor, any other member
of the Lessor Group, any Lessor Risk Party or any other member of
the relevant Lessor Risk Party's Group calculated by reference to
any amount received or receivable by the Lessor, any other member
of the Lessor Group, any Lessor Risk Party or any other member of
the relevant Lessor Risk Party's Group under any of this Master
Agreement and the other Transaction Documents.
(c) When calculating an increased cost, the Lessor may allocate or spread
costs, liabilities and losses to or across the liabilities or assets of
itself, any other member of the Lessor Group, any Lessor Risk Party or
any other member of the relevant Lessor Risk Party's Group, any class
of such liabilities or assets, and on such basis, as it considers
appropriate. Nothing contained in this Clause 21 shall oblige the
Lessor or any Lessor Risk Party to disclose any information relating to
the way in which they and members of the Lessor Group or any member of
the relevant Lessor Risk Party's Group employ their capital or arrange
their internal financial affairs.
21.2 EXCEPTIONS
Clause 21.1 (Increased costs) does not apply to any increased costs to
the extent compensated for by the operation of Clause 20 (Tax indemnity
and other provisions).
82
21.3 FUNDING PROBLEMS
[Redacted]
22. CHANGES TO THE PARTIES
22.1 SUCCESSORS AND ASSIGNS
The provisions of this Master Agreement shall be binding upon and inure
to the benefit of the Parties and their successors and permitted
assigns and transferees.
22.2 DEALINGS BY THE LESSEE
The Lessee will not sell, assign or otherwise transfer their interest
in this Master Agreement without the consent of the Lessor.
22.3 DEALINGS BY THE LESSOR
(a) Subject to Clause 22.4 the Lessor may:
(i) transfer or assign the whole or any part of its rights in and to
this Master Agreement, the Equipment and the Lease Schedules to a
member of the Lessor's Group, a member of the Nortel Networks
Group or the Seller; or
(ii) transfer or assign the whole or any part of its rights in and to
this Master Agreement, the Equipment and the Lease Schedules to a
third party provided that the Lessor obtains the written consent
of the Lessee and Viatel, Inc. (such consent not to be
unreasonably withheld, conditioned or delayed). No such transfer
or assignment shall be effective, and payments hereunder shall
83
continue to be payable to the Lessor unless and until the Lessor
gives notice to the Lessee in writing of such transfer or
assignment. Immediately upon receipt of such notice, the Lessee
shall record such transfer or assignment, and the name and
address of the transferee on a register maintained to show the
ownership of the Lessor's interest hereunder and in the
Equipment;
(b) It is a condition of any transfer or assignment under Clause 22.3(a)
above, that:
(i) equivalent rights and obligations of the Lessor under the other
Transaction Documents are transferred to such company at the same
time;
(ii) any costs and expenses (including stamp duties) properly payable
in respect of any such transfer will be for the Lessor's account;
(iii) the Lessor shall use all reasonable endeavours (and shall consult
in good faith with the Lessee to try to determine the most
appropriate course of action) to ensure that no proposed
transferee shall have a domicile for Tax purposes which would, as
a result of such proposed transferee entering into the relevant
Transaction Documents, result in obligations of the Lessee to
withhold Taxes from payments hereunder which obligations they
were not under prior to the transfer. If the Lessor does not use
all such reasonable endeavours, then the obligations of the
Lessee shall be limited to the extent which would have applied
had no such transfer taken place. The Lessee shall otherwise be
liable for any such increased obligations;
(iv) the transferee or assignee has acknowledged the Lessee's right to
quiet enjoyment in respect of the Equipment under Clause 2.2
(Quiet Enjoyment) of this Master Agreement;
(v) before the assignment or transfer, and after the proposed
transferee has entered into a written non-disclosure agreement
substantially in the form of Schedule 5 (Form of written
non-disclosure agreement) (or such other form as may be agreed)
the Lessee will:
(A) make a copy of Viatel, Inc.'s business plan available to any
proposed assignee or transferee;
(B) provide management time to discuss for a reasonable amount
of time that business plan with the assignee or transferee
during normal business hours; and
(C) provide all information including (but not limited to)
documents, management or other reports and financial
statements as may reasonably be requested by that assignee
or transferee.
(c) Upon any transfer under Clause 22.3(a) the transferring Lessor will be
released from all its obligations to the Lessee under this Master
Agreement and the other Transaction Documents other than obligations
which the transferring Lessor has not so transferred and which remain
outstanding. The Lessee will enter into such documents as the Lessor
may reasonably require in order to effect such a transfer or
assignment.
22.4 LEASE PARTICIPATION ARRANGEMENTS
The Lessor may enter into Lease Participation Arrangements in respect
of the whole or any part of its right, title and interest in and to
this Master Agreement, the Equipment and any Lease Schedule with a
84
Lessor Risk Party subject to the terms and conditions of any Lease
Schedule provided that:
(a) the amount sub-participated to a Lease Participant pursuant to a
Lease Participation Arrangement is not less than five million
Euros (E5,000,000);
(b) the Lessor shall not enter into Lease Participation Arrangements
with any person or entity who could reasonably be regarded (at the
time of entry into such Lease Participation Arrangements) as a
competitor to the main business carried on by Viatel, Inc. at that
time;
(c) the Lessor shall consult in good faith with the Lessee (for a
reasonable period of time not to exceed 10 business days) in
respect of the identity of any proposed Lease Participant;
(d) the Lease Participant is an entity:
(i) which is a bank, insurance company, investment bank, pension
fund or any other financial institution or institutional
investor; or
(ii) which, as part of its normal activities conducts or engages
in investment business.
(e) the Lessee continues to enjoy the right to the quiet enjoyment of
the Equipment as set out in Clause 2.2 (Quiet Enjoyment);
(f) before entry into the Lease Participant Arrangements and after the
proposed sub-participant has entered into a written non-disclosure
agreement substantially in the form of Schedule 5 (Form of written
non-disclosure agreement (or such other form as may be agreed) the
Lessee will:
(A) make a copy of Viatel, Inc.'s business plan available to any
proposed sub-participant;
(B) provide management time to discuss for a reasonable amount
of time that business plan with the sub-participant during
normal business hours; and
(C) provide all information including (but not limited to)
documents, management or other reports and financial
statements as may reasonably be requested by that
sub-participant; and
(g) if the Lease Participant is not a United States person (as such
term is used in Section 7701(a)(30 of the U.S. Internal Revenue
Code of 1986,as amended), such Lease Participant is able to
deliver to the Lessee a U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or successor form, certifying to such Lease
Participant's entitlement to a complete exemption from U.S.
withholding tax with respect to the portion of the Rental
attributable to Equipment located in the United States.
85
23. COSTS, EXPENSES AND FEES
23.1 COSTS AND EXPENSES
(a) The Lessee will forthwith on demand pay or reimburse to the Lessor and
Nortel Networks plc all reasonable costs and expenses (including legal
fees (capped for the Viatel documentation of the transaction at
[Redacted] if documentary closing takes place or the parties terminate
discussions on or before 30th September, 2000 and at [Redacted] if
documentary closing takes place or the parties terminate discussions on
or after 1st October, 2000 but before 20th October, 2000, such figures
being inclusive of disbursements but exclusive of VAT and include the
fees of English counsel and counsel in each Tier 1 Country) on an
unqualified full indemnity basis, printing and publishing costs, telex,
telephone, facsimile and travel costs, filing, registration and
approval costs and other out-of-pocket expenses) incurred by the Lessor
in connection with:
(i) the negotiation, preparation and documentation of the
transactions contemplated by the Transaction Documents and any
amendment, waiver or consent from time to time in connection
with any of the Transaction Documents;
(ii) the execution of the Transaction Documents;
(iii) the syndication and initial sub-participation by the Lessor
(but not any subsequent sub-participation by any then existing
Lessor Risk Parties, the costs in respect of which shall be
for the account of that Lessor Risk Party);
(iv) the preservation or enforcement or attempted preservation or
enforcement of any right or remedy of the Lessor or any other
Lessor Risk Party under or in connection with the Transaction
Documents or the Equipment including in relation to the
tracing or recovery of possession of the Equipment (whether or
not successful);
(v) the termination of the leasing of all or any of the Equipment
for any reason including the collection of any Insurance
Proceeds or Compensatory Awards or the sale or disposal of any
of the Equipment; and
(vi) the Insurances (to the extent the Lessee has failed to
maintain the same) including in relation to any renewal or
changes to the terms of any policy and the operation of Clause
14.10 (Protection of Additional Assureds).
(b) Subject as otherwise provided in the Transaction Documents, any costs
and expenses incurred by the Lessee in the performance of its
obligations or exercise of its rights under the Transaction Documents
will be borne by the Lessee and the Lessor will have no responsibility
or liability in connection with them.
(c) If the Lessee fails to comply with any of its obligations under the
Transaction Documents the Lessor may, but is not obliged to, effect
compliance and the Lessee will reimburse the Lessor on demand for all
costs and expenses incurred by the Lessor in so doing.
23.2 FEES
(a) The Lessee shall pay to the Lessor for its own account an agency fee in
accordance with the Agent's Fee Letter.
86
(b) The Lessee shall pay to the Lessor a commitment fee in accordance with
the Commitment Fees Letter.
(c) The Lessee shall pay to the Lessor a facility fee in accordance with
the Facility Fee Letter.
24. EVIDENCE AND CALCULATIONS
24.1 ACCOUNTS
Accounts maintained by the Lessor in connection with this Master
Agreement are conclusive (save for manifest error) evidence of the
matters to which they relate.
24.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by the Lessor of a rate or amount
under any of the Transaction Document is, in the absence of manifest
error, conclusive evidence of the matters to which it relates.
25. AMENDMENTS AND WAIVERS
25.1 PROCEDURE
The terms of this Master Agreement may not be amended or waived without
the agreement in writing of the Lessor and the Lessee.
25.2 WAIVERS AND REMEDIES CUMULATIVE
(a) The rights of each Party under the Transaction Documents:
(i) may be exercised as often as necessary;
(ii) are cumulative and not exclusive of its rights under the general
law; and
(iii) may be waived only in writing and specifically.
(b) Delay in exercising or non-exercise of any such right is not a waiver
of that right.
(c) Nothing in this Master Agreement shall limit or affect a party's right
to recover damages for breach of the provisions of this Master
Agreement.
26. SET OFF
The Lessor may set off any matured obligation owed by the Lessee under
the Transaction Documents (to the extent beneficially owned by the
Lessor) against any obligation (whether or not matured) owed by the
Lessor to the Lessee, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in
different currencies, the Lessor may cause the Parent Bank to convert
either obligation at a market rate of exchange in the usual course of
business of the Parent Bank for the purpose of the setoff. If either
obligation is unliquidated or unascertained, the Lessor may set off in
an amount estimated by it in good faith to be the amount of that
obligation.
87
27. SEVERABILITY
If a provision of any Transaction Document is or becomes illegal,
invalid or unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other
provision of the Transaction Documents; or
(b) the validity or enforceability in other jurisdictions of that or
any other provision of the Transaction Documents.
28. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by
each party in separate counterparts, and this has the same effect as if
the signatures on the counterparts were on a single copy of this Master
Agreement.
29. NOTICES
29.1 GIVING OF NOTICES
All notices or other communications under or in connection with the
Transaction Documents shall be given in writing and, unless otherwise
stated, may be made by letter or facsimile. Any such notice will be
deemed to be given as follows:
(a) if by letter, when delivered personally or on actual receipt;
(b) if by facsimile, when received in legible form.
However, a notice given in accordance with the above but received on a
non working day or after business hours in the place of receipt will
only be deemed to be given on the next working day in that place.
29.2 ADDRESSES FOR NOTICES
(a) The address and facsimile number of the Lessor are:
Address: XX Xxx 00000
Xxxxxxxxx Xxxxx
0 Xxxx Xxxx
Xxxxxx
XX0X 0XX
Facsimile: x00 (0) 00 0000 0000
Attn: Xxxxx Xxxxxxx, Leasing Team
or such other as the Lessor may notify to the Lessee by not less than
five Business Days' notice.
88
(b) The address and facsimile number of the Lessee are:
Address: Xxxxxxx Xxxxx
00 Xxxxxx Xxxx
Xxxxxx
XX0X 0XX
Facsimile: x00 000 000 0000
Attn: General Counsel
with a copy to:
Address: Viatel, Inc.
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx XX 00000
Facsimile: 00 1 212 350 9250
Attn: General Counsel
or such other as the Lessee may notify to the Lessor by not less than
five Business Days' notice.
30. LANGUAGE
(a) Any notice given under or in connection with any Transaction
Document shall be in English.
(b) All other documents provided under or in connection with any
Transaction Document shall be:
(i) in English; or
(ii) if not in English, accompanied by a certified English
translation and, in this case, the English translation shall
prevail unless the document is a statutory or other official
document.
31. CONTINUATION OF INDEMNITIES
The indemnities in this Master Agreement will continue in force
notwithstanding the end or earlier termination of the Initial Term or
the sale or other disposal of any of the Equipment or the cessation of
business of the Lessee or any other person or any other fact, event or
circumstance of any kind whether similar to the foregoing or not.
32. INDEMNIFIABLE PERSONS
(a) All rights expressed to be granted to or in favour of any
Indemnifiable Person under this Master Agreement (other than the
Lessor) are given to the Lessor on behalf of, and in trust for,
that Indemnifiable Person.
(b) Without duplicating the liability of the Lessee under this Master
Agreement, where in this Master Agreement an indemnity is
expressed to be for the benefit of an Indemnifiable Person (other
than the Lessor), the Lessor will be entitled to indemnify the
Indemnifiable Person on the same terms (but with any necessary
89
changes) as the indemnity expressed to be for the benefit of the
Indemnifiable Person and the Lessee will on demand indemnify the
Lessor and hold the Lessor harmless on a full indemnity basis
against each amount paid or payable by the Lessor to the
Indemnified Person under any such indemnity.
33. GOVERNING LAW
This Agreement is governed by English law.
34. ILLEGALITY
(a) If it is or becomes unlawful in any jurisdiction for:
(i) a Lessor risk Party to give effect to any of its obligations
as contemplated by this Master Agreement or any other
relevant Transaction Document or to maintain its
Participation; or
(ii) if it is or becomes illegal for the Lessee, either Guarantor
or any Permitted Sub-Lessee to perform their respective
obligations under the Transaction Documents;
the unutilised portion of the Commitment will be cancelled and will not
be capable of being redrawn.
(b) The Lessee shall pay, on any Equipment affected by Clause 34(a)
above, an amount equivalent to the amount that would have been
payable under paragraph (a)(iv) of Clause 15.4 (Procedure and
Payments following an Event of Loss) had that Equipment suffered
an Event of Loss, except that the Lessee shall pay Break Costs but
shall not pay the Make Whole Amount.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Master Agreement.
90
SCHEDULE 1
LEASE SCHEDULE
This Lease Schedule dated the [ ] 200[0][1]("LEASE SCHEDULE"), by and between:
(1) DRESDNER KLEINWORT XXXXXX FINANCE LIMITED (the "LESSOR"), and
(2) Viatel U.K. LIMITED (the "LESSEE").
This Lease Schedule incorporates by reference the above-referenced Master Lease
Purchase Agreement dated [ ], 2000 and made between the Lessor and the Lessee
and any riders, schedules, amendments or documents attached thereto or
incorporated therein, now or hereafter executed between the Lessor and the
Lessee (the "MASTER AGREEMENT"). Any and all capitalised terms used in this
Lease Schedule shall have the meanings given to them in the Master Agreement.
1. LEASE
1.1 Subject to the terms and conditions set forth in this Lease Schedule,
the Lessor hereby leases to the Lessee and the Lessee hereby leases
from the Lessor the property described in Clause 3 below and all
Technical Records relating thereto (the "EQUIPMENT") and the lessor
agrees to procure the Services to be provided in connection therewith.
1.2 This Lease Schedule evidences a separate, distinct and independent
lease and contractual agreement between the Lessor and the Lessee. In
the event of a conflict between the Master Agreement and this Lease
Schedule, the terms and conditions of this Lease Schedule shall
prevail.
2. EQUIPMENT
The Lessor, at the express request of the Lessee, has acquired or
agreed to acquire the Equipment from Nortel Networks plc and its
Affiliates. The Lessor has made no representations or recommendations
regarding the choice of Nortel Networks plc and its Affiliates as
manufacturers or suppliers. The Lessee has negotiated or agreed to the
warranties given by Nortel Networks plc and its Affiliates and all
other terms relating to the Equipment directly with Nortel Networks plc
and its Affiliates without the assistance or participation of the
Lessor.
3. DESCRIPTION OF EQUIPMENT; LOCATION
The description of the Equipment, including quantity, model/feature,
identification and/or serial number and location, is set forth in
Attachment A incorporated by reference herein.
4. ACQUISITION COST; INITIAL TERM; PERIODIC RENT; ASSUMED INTEREST RATE;
RENT PAYMENT DATE
4.1 Acquisition Cost: [ ]
4.2 Total Finance Charge: [ ]
91
4.3 Initial Term: [Redacted] Months from the
Initial Term Start Date
4.4 Initial Term Start Date: [ ]
4.5 Cost of Funds: [ ] per annum
4.6 Margin: [ ] per annum
4.7 Periodic Rent: Euro [ ]]
4.8 Rental Payment Date: The Initial Term Start Date
and the last Business Day
of each month during the
Initial Term.
5. EARLY TERMINATION.
See the Schedule of Capital Outstanding attached to this Lease
Schedule.
6. GOVERNING LAW
THIS LEASE SCHEDULE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, ENGLISH LAW.
IN WITNESS WHEREOF, the Lessor and the Lessee, each by its duly authorised
officer or agent, have duly executed and delivered this Lease Schedule the day
and year first written above.
DRESDNER KLEINWORT XXXXXX VIATEL U.K. LIMITED
FINANCE LIMITED
By: By:
Name: Name:
Title: Title:
92
SCHEDULE OF CAPITAL OUTSTANDING
RENT PAYMENT DATE CAPITAL OUTSTANDING (E)
93
ATTACHMENT A TO LEASE SCHEDULE
DESCRIPTION OF EQUIPMENT LOCATION OF EQUIPMENT
94
SCHEDULE 2
CERTIFICATE OF ACCEPTANCE
[Letterhead of Lessee]
To: DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
[Date]
Lease Agreement (the "LEASE") dated [ ] between Viatel U.K. Limited (the
"LESSEE") and Dresdner Kleinwort Xxxxxx Finance Limited (the "LESSOR") (the
"LEASE") regarding [ ] (the "EQUIPMENT").
The Lessee hereby certifies that:
1. On [ ] it received the equipment described in the attached
Equipment Description and that it [comprises] [is comprised in] the
Equipment.
2. The Lessee's duly authorised technical experts have inspected that
equipment and the Lessee is satisfied that it is in good working order
and repair, complete, of satisfactory quality, fit for any purpose for
which it may be intended or required, without defect and in every way
satisfactory.
3. Accordingly, for the purposes of the Lease, that equipment has been
delivered to and accepted by the Lessee from the Lessor without
qualification or reservation.
The Lessee also hereby certifies that:
A. The representations and warranties of the Lessee contained in the Lease
are true and accurate on and as of the date of this Certificate.
B. No Event of Default or Potential Event of Default (as defined in the
Lease) has occurred and is continuing at the date of this Certificate
or is likely to result from any circumstances of which it is aware.
SIGNED
For and on behalf of
[LESSEE]
95
[Attachment - Equipment Description]
96
SCHEDULE 3
CONDITIONS PRECEDENT DOCUMENTS
PART I
1. CORPORATE DOCUMENTATION
(a) Certified copies of the constitutional documents of the Lessee, any
Permitted Sub-Lessees and the Guarantors (including, without
limitation, of the "by-laws" ("statuts") as published in the [Redacted]
in respect of any [Redacted] Permitted Sub-Lessee and details of the
legal form and identities of the directors in respect of any [Redacted]
Permitted Sub-Lessee).
(b) Certified copies of resolutions of the board of directors or of a duly
constituted committee of the board of directors of the Lessee, any
Permitted Sub-Lessees and the Guarantors approving and authorising its
appropriate officer(s) to execute (and seal if required) and deliver
each of the Transaction Documents to which it is or is to be a party
and to give all notices and take all other action required thereunder.
(c) Specimen signatures of each of the persons authorised in the
resolutions referred to in paragraph 1(b) above authenticated by the
company secretary or equivalent officer of the relevant entity.
2. TRANSACTION DOCUMENTS
Originals of the following duly executed by all parties to them (other
than the Lessor):
(a) this Master Agreement;
(b) the Lease Guarantee;
(c) the Security Assignment re. Nortel Supply Contract;
(d) the Commitment Fee Letter, the Agent's Fee Letter and the Facility
Fee Letter;
(e) the Master Supplemental and Amendment Agreement in relation to the
Nortel Supply Contract;
(f) the Sub-Lease Assignment;
(g) the Deed of Novation;
(h) the Nortel Deed of Novation; and
(i) any other Transaction Document.
3. OTHER DOCUMENTS
(a) Receipt by the Lessor of a certified copy of the Nortel Supply
Contract.
97
(b) Receipt by the Lessor of originals of the Instalment Sale Agreement and
the Security Trustee Agreement duly executed by all parties (other than
the Lessor).
4. FEES
Receipt by the Lessor of the Agency Fee and the Facility Fee.
5. GENERAL
(a) A copy of any other authorisation or other document, opinion or
assurance necessary or desirable in the reasonable judgment of the
Lessor in connection with the entry into and performance of, and the
transactions contemplated by any Transaction Document or for the
validity and enforceability of any Transaction Document;
(b) A copy of the latest annual audited financial statements of each of:
(i) the Lessee; and
(ii) Viatel, Inc.
6. LEGAL OPINIONS
Legal Opinions, in a form and substance satisfactory to the Lessor
from:
(i) Xxxxx & Xxxxx, English counsel;
(ii) Xxxxx & Overy, New York counsel;
(iii) [Redacted];
(iv) [Redacted];
(v) [Redacted];
(vi) [Redacted];
(vii) [Redacted];
(viii) [Redacted];
(ix) Bird & Bird, English counsel for Lessee;
(x) Xxxxx X Xxxxxxxx, Xx., in-house counsel for Viatel, Inc.
98
PART II
CONDITIONS PRECEDENT TO LEASING OF EQUIPMENT
(a) no Event of Default or Potential Event of Default has occurred and is
continuing;
(b) the representations and warranties in Clause 8 (Representations and
warranties of Lessee) and in Clause 5 (Representations and Warranties)
of the Lease Guarantee are true and accurate as if made on the relevant
Initial Term Start Date by reference to the facts and circumstances
then existing as if made at such time except that each reference to
financial statements in Clause 8.8 (Financial Information) and in
Clause 5.6 (Financial Statements) of the Lease Guarantee shall be
construed as a reference to the then latest available accounts of the
Lessee or, as the case may be, the Guarantors and each reference to the
date as of which such accounts were prepared shall be construed as a
reference to the date as of which the then latest available accounts of
the Lessee or, as the case may be, the Guarantors were prepared;
(c) no Change in Law has occurred after the date of this Master Agreement
which in the Lessor's or any Lessor Risk Parties' opinion would make it
illegal or impossible for any of the Lessor, the Lessee, the Permitted
Sub-Lessees, the Guarantors or the Lessor Risk Parties to perform any
of their respective obligations under this Master Agreement or any of
the other Transaction Documents;
(d) receipt by the Lessor of the Certificate of Acceptance for the relevant
Equipment duly executed by the Lessee;
(e) the proposed Commencement Date is a date falling within the Commitment
Period;
(f) neither the Lessee, any of the Permitted Sub-Lessees or either of the
Guarantors has suffered any Material Adverse Change;
(g) the Lease Schedule in respect of the relevant Equipment executed by the
Lessee;
(h) no breach of Material Contracts;
(i) a legal opinion, in a form and substance satisfactory to the Lessor,
has been provided in the Relevant Country in which the relevant
Equipment the subject of the relevant drawdown is to be located;
(j) all undisputed balances due and outstanding to Nortel Networks Group
from the Lessee, Permitted Sub-Lessee or Guarantor are current or, if
not current, are being disputed in good faith;
(k) certificates of insurance in respect of the insurances required by
Clause 14 (Insurance);
(l) a certified copy of each Permitted Sub-Lease;
(m) a copy of each Subordination Letter Agreement;
(n) a copy of each legal opinion referred to in Clause 12.3(b)(v);
(o) the Lessor is satisfied that title to the Equipment remains solely with
Nortel;
99
(p) receipt by the Lessor of any Collocation Agreement which relates to the
premises on which any of the relevant Equipment is to be located, duly
executed by all parties and in full force and effect;
(q) receipt by the Lessor of any Collocation Acknowledgment which relates
to the premises on which any of the relevant Equipment is to be
located, duly executed by all parties other than the Lessor and in full
force and effect;
(r) where any Equipment is to be sub-leased to a Permitted Sub-Lessee in:
(i) [Redacted], evidence that:
(A) a plate has been affixed to the cabinet containing
the Equipment which sufficiently identifies to any
creditors of that Permitted Sub-Lessee that the
Equipment belongs to the Lessor and does not form
part of the assets of that Permitted Sub-Lessee;
(B) prior to any of the Equipment being delivered to the
relevant premises, the relevant Permitted Sub-Lessee
has served notices ([Redacted] as may be required by
the Lessor) and otherwise in the relevant form of
Schedule 7 (Form of Notices to Landlords) upon the
landlords and any superior landlords of the
premises/land on which the Equipment is to be located
by registered post and the landlords and any superior
landlords have been requested to acknowledge and
confirm their agreement to such notices;
(C) prior to any additional Equipment being delivered to
the relevant premises, the Lessee has served notices
([Redacted] as may be required by the Lessor) and
otherwise in the relevant form of Schedule 7 (Form of
Notices to Landlords) upon the landlords and any
superior landlords of the premises/land on which the
Equipment is to be located by registered post and the
landlords and any superior landlords have been
requested to acknowledge and confirm their agreement
to such notices; and
(D) the Lessee has served notice upon the Permitted
Sub-Lessee in the form of Part I of the Schedule to
the Sub-Lease Assignment (Form of Notice to Permitted
Sub-Lessee) and the Permitted Sub-Lessee has
acknowledged that notice in the form of Part III of
the Schedule to the Sub-Lease Assignment (Form of
Acknowledgement of Permitted Sub-Lessee).
(ii) [Redacted], evidence that:
(A) a plate has been affixed to the cabinet containing
the Equipment which sufficiently identifies to any
creditors of that Permitted Sub-Lessee that the
Equipment belongs to the Lessor and does not form
part of the assets of that Permitted Sub-Lessee;
(B) prior to or on the day that the Equipment is
installed on the premises, the relevant Permitted
Sub- Lessee has served notices (in [Redacted] if so
required by the Lessor) and otherwise in the relevant
form of Schedule 7 (Form of Notices to Landlords)
upon the landlords and any superior landlords of the
100
premises/land on which the Equipment is or is to be
located by registered post and the landlords and any
superior landlords have been requested to acknowledge
and confirm their agreement to such notices;
(C) the Lessee has served notice by bailiff upon the
Permitted Sub-Lessee in the form of Part I of the
Schedule to the Sub-Lease Assignment (Form of Notice
to Permitted Sub-Lessee) and the Permitted Sub-Lessee
has acknowledged that notice in the form of Part III
of the Schedule to the Sub-Lease Assignment (Form of
Acknowledgement of Permitted Sub-Lessee);
(D) the Lessee has executed the Permitted Sub-Lease and
the relevant sub-lease lease schedule in the form
required for registration with the commercial court
of the area in which the Permitted Sub-Lessee has its
registered office and has presented those documents
to the relevant commercial court for registration;
(E) the Lessee and the Permitted Sub-Lessee have entered
into an agreement in the form of Part IV(A) of
Schedule 6 (Form of Permitted Sub-Lease); and
(F) from time to time at the request of the Lessor the
Lessee has presented for registration each Sub-Lease
Lease Schedule;
(iii) [Redacted], evidence that:
(A) prior to or on the day that the Equipment is
installed on the premises, the relevant Permitted
Sub-Lessee has served notices (in [Redacted] if so
required by the Lessor) in the form of Schedule 7
(Form of Notices to Landlords) upon the landlords and
any superior landlords of the premises/land on which
the Equipment is or is to be located by registered
post and that the landlords and any superior
landlords have been requested to acknowledge and
confirm their agreement to such notices;
(B) the Lessee has served notice by bailiff upon the
Permitted Sub-Lessee in the form of Part II of the
Schedule to the Sub-Lease Assignment (Form of Notice
to Permitted Sub-Lessee in [Redacted]) and that the
Permitted Sub-Lessee has acknowledge that notice in
the form of Part IV of the Schedule to the Sub-Lease
Assignment (Form of Acknowledgement of Permitted
Sub-Lessee in [Redacted]);
(C) the Lessee and the Permitted Sub-Lessee have entered
into an agreement in the form of Part III(A) of
Schedule 6 (Form of Permitted Sub-Lease); and
(D) the relevant Transaction Documents, including the
Permitted Sub-Lease, have been executed outside
[Redacted] and have not been deposited with a state
or judiciary office in [Redacted];
(iv) [Redacted], evidence that:
(A) the relevant Permitted Sub-Lessee has served notices
(in [Redacted] if so required by the Lessor) and
otherwise in the relevant form of Schedule 7 (Form of
Notices to Landlords) upon the landlords and any
superior landlords of the premises/land on which the
Equipment is or is to be located by registered post
and that the landlords and any superior landlords
have been requested to acknowledge and confirm their
agreement to such notices; and
101
(B) the Lessee has served notice by registered post upon
the Lessee in the form of Part I of the Schedule to
the Sub-Lease Assignment (Form of Notice to Permitted
Sub-Lessee) and that the Permitted Sub-Lessee has
acknowledged that notice in the form of Part III of
the Schedule to the Sub-Lease Assignment (Form of
Acknowledgement of Permitted Sub-Lessee);
(v) [Redacted],
(A) evidence of satisfaction of any local law
requirements or recommendations following
determination of the same by the Lessor at the
relevant time; and
(B) an amendment satisfactory to the Lessor to Clause
17.1 (Dealings with Equipment following termination
or expiry) to reflect local requirements or
recommendations following determination of the same
by the Lessor at the relevant time;
(vi) [Redacted], evidence that:
(A) the Lessee has served notices (in [Redacted] if
required by the Lessor) and otherwise in the relevant
form of Schedule 7 (Form of Notices to Landlords)
upon the landlords and any superior landlords of the
premises/land on which the Equipment is or is to be
located by registered post and that the landlords and
any superior landlords have been requested to
acknowledge and confirm their agreement to such
notices; and
(B) the Lessee has served notice upon the Permitted
Sub-Lessee in the form of Part I of the Schedule to
the Sub-Lease Assignment (Form of Notice to Permitted
Sub-Lessee) has acknowledged that notice in the form
of Part III of the Schedule to the Sub-Lease
Assignment (Form of Acknowledgement of Permitted
Sub-Lessee);
(vii) United States of America, evidence that:
(A) the relevant Permitted Sub-Lessee has served notices
in the relevant form of Schedule 7 (Form of Notices
to Landlords) upon the landlords and any superior
landlords of the premises/land on which the Equipment
is or is to be located by registered mail and that
the landlords and any superior landlords have been
requested to acknowledge and confirm their agreement
to such notices;
(B) the Lessee has filed a UCC-1 Financing Statement in
accordance with Article 9 (Part 4) of the New York
Commercial Code for the Sub-Lease Assignment, such
filing to be made with the Secretary of State and
also in the country where the Equipment is located;
(C) two originals of the IRS Form W-8BEN have been
completed and signed by each of Nortel Networks plc
and the Lessor and delivered to each of the Lessee
and Viatel, Inc. upon signing of this Master
Agreement; and
(D) an original of the IRS Form W-8BEN has been completed
and signed by Viatel, Inc. and delivered to the
Lessor upon signing of this Master Agreement;
102
(viii) [Redacted],
(A) evidence of satisfaction with any local law
requirements or recommendations following
determination of the same by the Lessor at the
relevant time; and
(B) an amendment satisfactory to the Lessor to Clause
17.1 (Dealings with Equipment following termination
or expiry) to reflect local law requirements or
recommendations following determination of the same
by the Lessor at the relevant time.
103
CONDITIONS PRECEDENT DOCUMENTS
PART III
1. A certified copy of the authorised signatory book of the Lessor
together with (if the same is required to establish the authority of
the person who signs on behalf of the Lessor) a certified copy of a
power of attorney in favour of the person who signs the Transaction
Documents on behalf of the Lessor.
2. Originals of the documents listed in paragraph 2 to Part I of this
Schedule 3, executed by all parties to them other than the Lessee,
Permitted Sub-Lessees and Guarantors.
104
SCHEDULE 4
LOSS PAYEE CLAUSE
All recoveries under this policy in respect of loss of or damage to the
Equipment or any of it shall be applied as follows:
(a) At any time during the Initial Term, all claims hereunder in respect of
an Event of Loss to all or any of the Equipment shall be paid in full
to such account of the Lessor as the Lessor may notify to the insurers.
(b) All claims in respect of major loss or damage (that is to say any loss
or damage not constituting an Event of Loss the claim in respect of
which exceeds E1,000,000 (or the equivalent in any other currency)
inclusive of any deductible) shall be paid in full to such account of
the Lessor as the Lessor may notify to the insurers.
(c) All other claims hereunder shall be paid in full to the Lessee or to
its order, unless and until the Lessor shall have notified insurers
that an Event of Default has occurred, whereupon all such claims shall
be paid to such account of the Lessor as the Lessor may notify to the
insurers.
All recoveries under this policy which the Lessor, any member of the Lessor
Group, any Lessor Risk Party, any member of each Lessor Risk Party's Group or
their respective successors, assigns, shareholders, officers, directors,
employees, secondees and agents or the Lessee may be entitled to make in respect
of liability to third parties, incurred by them shall be paid to the person to
whom the liability (or alleged liability) covered by this policy was incurred or
to the extent that the liability (or alleged liability) to such person has
previously been discharged by the Lessor, any Lessor Risk Party, the Lessee or
any of the other persons referred to above (the "Paying Party"), such moneys
shall be paid to the Paying Party or its order in reimbursement of the moneys so
expended by it in or towards satisfaction of such liability or alleged
liability.
105
SCHEDULE 5
FORM OF WRITTEN NON-DISCLOSURE AGREEMENT
NON-DISCLOSURE AGREEMENT
THIS NON-DISCLOSURE AGREEMENT is made and entered into as of the ___ day of
_______, 2000, by ____________, a _____________ with an address at _____________
(the "Evaluating Party"), for the benefit of VIATEL U.K. LIMITED (Registered No.
2968371) whose registered office is at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx,
XX0X 0XX (the "Lessee"), and VIATEL, INC., a Delaware corporation with an
address at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Viatel").
WHEREAS, DRESDNER KLEINWORT XXXXXX FINANCE LIMITED (Registered No. 21285) whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xxxxxx, XX0X 0XX (in its capacity
as security trustee for and on behalf of itself and each of the Lessor Risk
Parties, the "Lessor"), and Lessee are parties to a certain Master Lease
Purchase Agreement, dated [ ], 2000 (the "Lease Agreement");
WHEREAS, the Lessor may be interested in assigning or transferring, or selling a
sub-participation in, all or part of its rights and obligations under the Lease
Agreement to the Evaluating Party;
WHEREAS, the Evaluating Party is interested in conducting certain due diligence
for the purpose of determining the feasibility of it acquiring such rights and
obligations of the Lessor under the Lease Agreement or a sub-participation
therein (the "Evaluation"); and
WHEREAS, for purposes of the Evaluation, the Lessee and Viatel are willing to
make certain information available to the Evaluating Party on the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the payment and receipt of 10 Euros by the
Lessee to the Evaluating Party and other good and value consideration,
including, but not limited to the promises contained herein (the receipt and
adequacy of which is hereby acknowledged by the Evaluating Party), the parties
hereto agree as follows:
1. DEFINITION OF CONFIDENTIAL INFORMATION. "Confidential Information"
means (i) a copy of Viatel's business plan (as it may be updated and revised),
(ii) Viatel's management reports and financial statements, (iii) written
non-public information, (iv) electronic communications or information and (v)
oral communications (including, but not limited to the Evaluating Party's
discussions with management of the Lessee or Viatel) that the Lessee or Viatel
furnishes to the Evaluating Party, and to its Affiliates or any Other Recipient
(as hereinafter defined) in connection with the Evaluation, together with any
analysis, forecast, interpretation or other document prepared by the Evaluating
Party, any of its Affiliates or any Other Recipient which contains or otherwise
reflects directly or indirectly such information. "CONFIDENTIAL INFORMATION"
does not include any information which (i) generally became available to the
public, other than as a result of a disclosure by the Evaluating Party or Other
Recipient that constituted a breach of an obligation to the Lessee or Viatel
under this Agreement, (ii) the Evaluating Party or Other Recipient is required
to disclose by judicial or administrative process in connection with any action,
suit or proceeding or claim or otherwise by Applicable Law, (iii) is obtained by
the Evaluating party or Other Recipient from any source other than the Lessee or
Viatel, provided that such source (x) has not, to the Evaluating Party's or
Other Recipient's knowledge entered into a confidentiality or non-disclosure
agreement with respect to such information and (y) is not providing such
information in breach of such confidentiality or non-disclosure agreement, (iv)
was or is independently developed by the Evaluating Party or Other Recipient, or
(v) was lawfully available to the Evaluating Party or Other Recipient on a non-
confidential basis before the date of this Agreement. Information shall be
deemed to be in the public domain if it becomes a matter of public knowledge or
is contained in materials available to the public (including for the avoidance
106
of doubt any filing made with the United States Securities and Exchange
Commission, any other securities commission (or similarly acting entity) to
which either the Lessee or Viatel is required to publicly disclose information
or any press release). For the purposes of this Agreement, "APPLICABLE LAW"
means, as the context may require, all or any laws, statutes, proclamations,
treaties, bylaws, directives, regulations, statutory instruments, rules, orders,
decisions, circulars, codes, decrees, injunctions, resolutions, judgments, rules
of court, delegated or subordinate legislation, rules of common law, any
European Union legislation at any time or from time to time in force in a
Relevant Country or any practice, concession, ruling, request, notice,
guideline, statement of policy or practice statement by any central bank, tax,
fiscal, governmental, local, international, national or other competent
authority or agency (whether or not having the force of law but in respect of
which compliance by entities of the type and nature of the Evaluating Party in
the relevant jurisdiction is customary), as the same may be subjected to any
Change in Law from time to time.
2. USE OF CONFIDENTIAL INFORMATION. The Evaluating Party agrees that it
shall not use any part of the Confidential Information in any manner other than
for the exclusive purpose of the Evaluation.
3. NON-DISCLOSURE TO OTHER PARTIES. The Evaluating party agrees that it
will keep the Confidential Information confidential. The Evaluating Party shall
not, without the prior written consent of Viatel, disclose any portion of the
Confidential Information to any person other than to its Affiliates, its and its
Affiliates' respective directors, officers, and employees, and its and their
counsel and other professional advisors (such counsel and other professional
advisors, together with their representatives and affiliates, are referred to as
"Other Recipients"), in each case who are directly involved in the Evaluation
and whose access to the Confidential Information is necessary to assist in the
Evaluation; provided, that such Affiliates, directors, officers, employees and
Other Recipients shall be informed by the Evaluating Party of the confidential
nature of such information and shall agree to be bound by this agreement. The
Evaluating Party agrees to cause its directors, officers, employees and Other
Recipients to comply with this agreement, and the Evaluating Party shall be
responsible for any breach of this agreement by any of them. For the purposes of
this Agreement, "Affiliate" means the ultimate holding company or companies of
the Evaluating Party or any subsidiary of such holding company or companies
("holding company" and "subsidiary" having the same meanings ascribed to them in
sections 736 and 736A of the Companies Xxx 0000, as amended). For the avoidance
of doubt, nothing in this Agreement prevents the Evaluating Party from
consulting with Lessor or Nortel Networks plc with respect to the Evaluation.
4. SECURITIES LAWS. The Evaluating Party acknowledges that it is aware,
and that it will advise its relevant representatives that the securities laws of
the United States may prohibit any person who receives any material, non-public
information of Viatel or Lessee from purchasing or selling securities of Viatel
or from communicating such information to any other person under circumstances
in which it is reasonably foreseeable that such person is likely to purchase or
sell such securities.
5. RETURN OR DESTRUCTION OF DOCUMENTS. If the Evaluating Party ceases
for any reason to proceed with acquiring rights and obligations of the Lessor
under the Lease Agreement or a sub-participation therein, or otherwise upon the
request of the Lessee or Viatel, the Evaluating Party and each Other Recipient
shall promptly deliver to the Lessee or Viatel all written Confidential
Information, and shall destroy any copies of the Confidential Information and
any portion of such information as may consist of analysis, forecast,
interpretation or other document prepared by the Evaluating Party or Other
Recipient which is in its or their possession or under its or their custody and
control and expunge any Confidential Information, analysis, forecast,
interpretation or other document from any computer, word processor or other
device in its or their possession or under its or their custody or control (save
where regulatory requirements dictates otherwise). The Evaluating Party shall
certify to Viatel that all confidential information has been returned and such
destruction has been effected, as appropriate.
107
6. DISCLOSURE BY OPERATION OF APPLICABLE LAW. If either the Evaluating
Party or any Other Recipient or any of its representatives is requested or
legally compelled pursuant to any Applicable Law to disclose any of the
Confidential Information, the Evaluating Party or such Other Recipient will
provide the Lessee and Viatel with prompt notice so that it may make an
application to the appropriate court for injunctive relief or other appropriate
remedy to prevent such disclosure. If such injunction or other appropriate
remedy is not obtained, or the Lessee and Viatel waive compliance with the
provisions of this Section 6 (the Lessee and Viatel being deemed to have so
waived compliance if either the Lessee or Viatel fails to initiate proceedings
for an injunction or other appropriate remedy within seventy-two (72) hours
after notice of the intended disclosure is given pursuant to the first sentence
of this Section 6 or to the end of the next working day (if the seventy-two (72)
hour period ends on a weekend)), the Evaluating Party or such Other Recipient
will furnish only that portion of the Confidential Information which it is
legally required to furnish and will exercise reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded to the furnished
Confidential Information.
7. INJUNCTIVE RELIEF. The Evaluating Party acknowledges that remedies
at law including damages may be inadequate to protect against breach of this
Agreement, and it agrees in advance to the granting of injunctive relief,
specific performance or other equitable relief in favor of the Lessee and Viatel
without proof of actual damages. Nothing contained herein shall be construed as
prohibiting the disclosing party from pursuing any other remedies available to
it, either at law or in equity, for such threatened or actual breach, including
specific performance and recovery of monetary damages.
8. SEVERABILITY. Any provision of this Agreement 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 provision in any
other jurisdiction.
9. WAIVER. No failure or delay by any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with English Law. All parties to the Agreement irrevocably agree that
the courts of England are to have exclusive jurisdiction to settle any dispute
which may arise out of or in connection with the Agreement and that accordingly
any suit, action or proceedings arising out of or in connection with this
Agreement shall be brought in such courts.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12. ENTIRE AGREEMENT; AMENDMENT. This constitutes the entire agreement
between the parties as to the substantive matters described herein. This
Agreement may not be altered, modified, amended or revoked except by an
instrument in writing signed by the party against whom the enforcement of any
such alteration, modification, amendment or revocation is sought.
13. TERM. This Agreement shall end two (2) years from the date hereof,
provided however, that if the Evaluating Party becomes a party to the Lease
Agreement, or a Lessor Risk Party thereunder, this Agreement shall be superseded
as to the Evaluating Party by Clause 35 of the Lease Agreement (but the
Evaluating Party shall remain obligated to enforce each Other Recipient's
compliance with this Agreement).
108
14. CAPITALIZED TERM. Capitalized terms used but not defined herein
shall have the meaning ascribed to such terms in the Lease Agreement.
AS WITNESS whereof the duly authorised representatives of the parties hereto
have executed this Agreement the day and year first above written .
Executed this [ ] day of [ ],
For and on behalf of [ ]
109
SCHEDULE 6
FORM OF PERMITTED SUB-LEASE
SUBLEASE AGREEMENT
PART I
[FOR ALL SUB-LESSEES EXCEPT US SUB-LESSEE,
[Redacted] SUB-LESSEE AND [Redacted] SUB-LESSEE]
THIS SUBLEASE AGREEMENT dated as of this _____ day of ____________, 2000
(hereinafter referred to as this "Sublease") is executed by and between VIATEL
U.K. LIMITED (Registered No. 2968371), a company organized and existing under
English law, with its mailing address and chief place of business at Xxxxxxx
Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as
"Sublessor") and [Viatel Sub] a company incorporated under the laws of
____________, with its mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, the Sublessee wishes to lease from the Sublessor, and the Sublessor is
willing to lease to the Sublessee the equipment specified in the sublease
schedules in the form of Exhibit A hereto (each a "Sublease Schedule" and
collectively the "Sublease Schedules") executed and delivered by Sublessor and
Sublessee from time to time after the execution and delivery of this Sublease
(collectively the "Equipment").
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease);
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. SUBLEASE:
(a) The Sublessor agrees to sublease and the Sublessee agrees to take on
sublease the Equipment on and subject to the terms of this Sublease.
(b) The Equipment is subject and subordinate to the Base Lease under and
pursuant to which Sublessor has acquired no present right, title, or
interest in or to any of the Equipment other than a leasehold estate.
(c) This Sublease shall be confirmed and effective as to items of Equipment
only upon: (i) due execution of the Base Lease and the commencement of
the leasing of the Equipment under the Base Lease; (ii) due execution
by Sublessor and Sublessee of a Sublease Schedule covering such
Equipment; (iii) due execution and delivery by Sublessor and acceptance
by Lessor of a Sublease Assignment covering such Sublease Schedule, and
service of a notice of such assignment on the Sublessee and receipt by
the Lessor of a signed acknowledgement by the Sublessee of such notice;
and (iv) such other documents as Sublessor may reasonably require. Upon
satisfaction of (i) to (iv) above, the Equipment described therein
shall be deemed to have been delivered to and accepted by Sublessee for
sublease under this Sublease.
110
2. TERM:
The term of this Sublease for Equipment will commence on the day specified in
the Sublease Schedule covering such Equipment as the "Commencement Date" and
will continue for the period specified as the "Term" in such Sublease Schedule,
as the same may be extended pursuant to the provisions of such Sublease Schedule
relating to renewal, if any, but subject always to the Base Lease. The term of
this Sublease (including all extensions hereto) for Equipment will not in any
event extend beyond the Initial Term of the relevant Lease Schedule under the
Base Lease.
3. RENT:
(a) Sublessee agrees to pay rent for Equipment during the Term for such
Equipment on the due dates and in the amount set forth in the Sublease
Schedule covering such Equipment. If any payment hereunder falls due on
a date which is not a Business Day, such payment shall be due and
payable on the next succeeding Business Day.
(b) (i) All payments made by the Sublessee under this Sublease are
calculated without regard to VAT. If any such payment constitutes
the whole or any part of the consideration for a taxable or
deemed taxable supply (whether that supply is taxable pursuant to
the exercise of an option or otherwise) by the Sublessor, the
amount of that payment shall be increased by an amount equal to
the amount of VAT which is chargeable in respect of the taxable
supply in question subject to the production by the Sublessor of
a valid VAT invoice (where applicable) in respect of the VAT in
question.
(ii) In respect of each item of Equipment, subject to the production
by the Sublessor of a valid VAT invoice (where applicable) in
respect of the VAT in question, the Sublessee shall pay to the
Sublessor on or before the fifth (5th) Business Day preceding the
date on which the relevant VAT is due to be accounted for by the
Sublessor to the applicable taxing authority an amount equal to
the amount of VAT for which the then Sublessor is obliged to
account to the applicable taxing authority in respect of the
supply under this Sublease and the relevant Sublease Schedule of
such item of Equipment.
(iii) If, in respect of any item of Equipment, the Sublessor determines
that the consideration for the supply thereof under this Sublease
and the relevant Sublease Schedule is increased or decreased,
then:
(A) if the consideration for the supply is increased, the
Sublessee shall pay to the Sublessor on demand (or, if later
five (5) Business Days before the same is due to be
accounted for by the Sublessor to the applicable taxing
authority) an amount equal to the amount of additional VAT
for which the Sublessor is obligated to account to the
applicable taxing authority; and
(B) if the consideration for the supply is decreased, the
Sublessor shall issue a credit note to the Sublessee in an
amount equal to the credit which the Sublessor claims from
the applicable taxing authority in respect of the reduction
in consideration, and that amount shall be deducted from the
next payment of rent due from the Sublessee in respect of
the relevant item of Equipment or shall be reimbursed to the
Sublessee within two (2) Business Days of demand by the
Sublessee if there is no further payment of rent due or to
the extent that the next such payment is less than the
amount in question.
111
(iv) Any payment of other consideration to be made or furnished by the
Sublessor to the Sublessee pursuant to or in connection with this
Sublease or any transaction or document contemplated herein may
be increased or added to by reference to (or as a result of any
increase in the rate of) any VAT which shall be or may become
chargeable in respect of the taxable supply in question on the
basis that the relevant payment or consideration is stated on an
exclusive of VAT basis.
(v) If and to the extent that the Sublessor (or any company which is
treated as a member of the same group as the Sublessor for VAT
purposes) bears VAT which is Irrecoverable VAT then the Sublessee
shall on or within five (5) Business Days of demand indemnify and
keep indemnified the Sublessor upon demand against such
Irrecoverable VAT such indemnity being in an amount equal to the
after-Tax cost to the Sublessor of such Irrecoverable VAT
together with interest thereon at the rate of LIBOR calculated on
a seven day basis and compounded quarterly from the date upon
which the Sublessor made payment of the amount of such
Irrecoverable VAT to but excluding the date of payment of the
amount of the indemnity.
(c) (i) All payments due to or by the Sublessor under this Sublease shall
be calculated and made free and clear of and without deduction
for, or on account of, any present or future Taxes or other
charges of whatsoever nature, now or hereafter imposed by any
taxing or Governmental Authority whatsoever unless such deduction
or withholding is required by law.
(ii) If such deduction or withholding is required by any law,
regulation or regulatory requirement the Sublessee shall:
(A) if the payment is to be made by the Sublessee, ensure or
procure that the deduction or withholding is made and that
it does not exceed the minimum legal requirement therefor;
(B) pay, or procure the payment of, the full amount deducted or
withheld to the relevant authority in accordance with the
Applicable Law;
(C) (1) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by the
Sublessee, increase the payment in respect of which the
deduction or withholding is required so that the net
amount received by the Sublessor after the deduction or
withholding shall be equal to the amount which the
Sublessor would have been entitled to receive in the
absence of any requirement to make a deduction or
withholding; or
(2) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by any
person other that the Sublessee, procure the payment or
pay directly to the Sublessor such sum (a "Compensating
Sum") as will, after taking into account any deduction
or withholding which is required to be made in respect
of the Compensating Sum, result in the Sublessor
receiving, or, as the case may be, paying, on the due
112
date for payment, a net sum equal to the sum which the
Sublessor would have received or, as the case may be,
paid in the absence of any obligation to make a
deduction or withholding; and
(D) promptly deliver or procure the delivery to the Sublessor of
any appropriate receipts evidencing the deduction or
withholding which has been made, or (in the absence of such
receipts) provide a certification to the Sublessor of the
deduction or withholding made.
(iii) The Sublessor agrees to furnish to the Sublessee from time to
time such duly executed and properly completed forms or
certificates that are reasonably requested by the Sublessee in
order to claim any reduction of or exemption from any withholding
or other tax imposed by any taxing authority in respect of any
payments otherwise required to be made by the Sublessee pursuant
to this Sublease, which reduction or exemption may be available
to the Sublessor under Applicable Law.
4. BASE LEASE:
During the Term of this Sublease with respect to Equipment, Sublessee shall (a)
maintain such Equipment on the same terms as those set forth in Section 12 of
the Base Lease and (b) insure such Equipment in compliance with Section 14 of
the Base Lease. In addition, if a termination of the leasing of any Equipment
occurs under the Base Lease and Sublessor is required to return such Equipment
to Lessor, Sublessee shall immediately redeliver such Equipment to Sublessor or,
at Sublessor's direction, to Lessor, at such place in the country in which such
Equipment is then located as Sublessor or Lessor, as the case may be, reasonably
specifies, and will otherwise co-operate with Sublessor in returning such
Equipment to Lessor in the condition in which such Equipment is required to be
returned pursuant to the terms of the Base Lease. Notwithstanding the foregoing
or any other provision of this Sublease or any Sublease Schedule, the Sublessor
and Sublessee acknowledge and agree that the execution and delivery of this
Sublease and Sublease Schedules shall not release the Sublessor from any of its
obligations under the Base Lease or the Transaction Documents.
5. SUBORDINATION:
Sublessor warrants that during the Term of this Sublease with respect to
Equipment, so long as no event of default shall have occurred hereunder,
Sublessor will not interrupt Sublessee's possession, use and operation of such
Equipment. Nevertheless, Sublessee acknowledges that this Sublease and
Sublessee's rights hereunder to the possession, use and enjoyment of the
Equipment are subject and subordinate to all terms and provisions of the Base
Lease, a copy of which has been provided to Sublessee, and to the rights of the
Lessor and Lessor Risk Parties thereunder and under the other Transaction
Documents; provided, however, that upon termination of the leasing of any
Equipment under the Base Lease in circumstances where Sublessor is required to
return such Equipment to Lessor, Lessor may terminate this Sublease with respect
to such Equipment and the right of Sublessee to possess such Equipment.
6. INDEMNIFICATION:
Sublessee agrees to indemnify, save and keep harmless Sublessor and its agents,
employees, successors and assigns from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including legal expenses of
whatsoever kind and nature, in contract or tort, howsoever arising from any
cause whatsoever, including but not limited to, strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, acceptance or rejection
of the Equipment under this Sublease, the delivery, lease, sublease, possession,
maintenance, use, condition, return or operation of the Equipment (including,
113
without limitation, latent or other defects, whether or not discoverable by
Sublessor and any claim for patent, trademark or copyright infringement); or
(ii) the condition of the Equipment disposed of after use by Sublessee.
Sublessee will, upon request of Sublessor, at its own expense, defend any and
all actions based on or arising out of any of the foregoing.
7. ASSIGNMENT, POSSESSION AND RETURN:
(a) Subject to paragraph (b) below, the Sublessee will not sublease,
assign or otherwise transfer or relinquish possession of the Equipment
and any such sublease, assignment or transfer will, without further
act or instrument, be void and of no force or effect. Subject to
clause 7(c), at the end of the Term for any Equipment, Sublessee
shall, if required, and only if required, redeliver the Equipment to
Sublessor in such place in the country in which such Equipment is then
located as Sublessor shall reasonably specify in the condition
Sublessee is required to maintain such Equipment as provided in this
Sublease.
(b) The Sublessee may transfer all (but not some only) of its rights and
obligations under this Sub-Lease to any member of Viatel, Inc.'s Group
if the Lessee would have been entitled to enter into a Permitted
Sub-Lease with such assignee under Clause 12.3 of the Base Lease,
provided that, prior to such assignment becoming effective, the
SubLessor shall notify the Lessor of the proposed transfer, shall give
notice of the Sub-Lease Assignment to the transferee and shall procure
an acknowledgement to such notice, in each case in the form required
by the Sub-Lease Assignment, mutatis mutandis.
(c) Upon the expiration of the Term for any Equipment;
[ALTERNATIVE A]
[the Sublessee, on not less than thirty (30) days prior written notice to the
Sublessor, or such lesser period as the Sublessor may agree, shall be entitled
to purchase such Equipment at a price of one hundred Euros (E100) (the "Option
Price") in respect of each Sublease Schedule, so long as no default under Clause
8(a) of this Sub-Lease or Event of Default under Clause 16.1(a) of the Base
Lease has occurred and is continuing and no other amount is outstanding under
the Transaction Documents. Upon (i) payment of the Option Price at or following
the expiration of the Term for such Equipment and (ii) the transfer to Sublessor
of legal title to, and all rights and interests in and to, such Equipment, the
Sublessor shall transfer legal title to, and all of its rights and interests in
and to, such Equipment to the Sublessee.]
[ALTERNATIVE B]
[so long as no default under Clause 8(a) of this Sub-Lease or Event of Default
under Clause 16.1(a) of the Base Lease has occurred and is continuing and no
other amount is outstanding under the Transaction Documents then immediately
upon the transfer to Sublessor of legal title to, and all rights and interests
in and to, such Equipment, the Sublessor shall transfer legal title to, and all
of its rights and interests in and to, such Equipment to the Sublessee.]
The Sublessor shall transfer legal title to, and all of its rights and interest
in and to, any Equipment as provided above "AS IS, WHERE IS", "WITH ALL FAULTS",
AND WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED.
114
8. DEFAULTS; REMEDIES:
Each of the following will constitute a default hereunder: (a) Sublessee fails
to pay rent or any other amount when due under this Sublease or any Sublease
Schedule; (b) Sublessee breaches any other term, provision, obligation or
covenant of this Sublease which breach, if remediable, is not cured within 30
days after written notice thereof is given by the Sublessor to the Sublessee;
and (c) a Sublessee Insolvency Event shall occur. Upon the occurrence of any
default under this Sublease, Sublessor, at its option, may do any one or more of
the following: (1) declare this Sublease and all of the Sublease Schedules in
default upon notice to Sublessee; (2) proceed by appropriate court action or
actions at law or in equity or in insolvency or bankruptcy as permitted under
Applicable Law, including to enforce performance by Sublessee of the covenants
and terms of this Sublease and/or to recover damages for the breach of this
Sublease; (3) terminate this Sublease and all of the Sublease Schedules upon
notice to Sublessee; and (4) whether or not this Sublease and the Sublease
Schedules are terminated, and without notice to Sublessee, repossess the
Equipment wherever found, with or without legal process, and for this purpose
Sublessor and/or its agents may enter upon any premises of or under the control
or jurisdiction of Sublessee or any agent of Sublessee without liability for
suit, action or other proceeding by Sublessor (any damages occasioned by such
repossession being herein expressly waived by Sublessee except for damages
occasioned by the gross negligence or wilful misconduct of Sublessor or its
agents) and remove the Equipment therefrom. The remedies provided in this
Section 8 in favour of Sublessor are not exclusive but will be cumulative and
will be in addition to all other remedies in Sublessor's favour existing under
Applicable Law, including at law, in equity or in bankruptcy.
9. ASSIGNMENT OF SUBLEASE:
(a) Sublessee acknowledges receipt of a copy of the notice of Sub-Lease
Assignment. Sublessee hereby agrees to execute and deliver to Lessor
the Acknowledgement in the form attached as Part II of Schedule I to
the Sub-Lease Assignment.
(b) Lessor may sell and/or assign the Equipment and/or Base Lease, all as
provided for in the Base Lease, whereupon without further act or
instrument (except for written notice to Sublessee of such sale or
assignment), such purchaser or assignee of the Equipment and the Base
Lease shall assume the benefits of this Sublease and the Sub-Lease
Assignment and the obligations of the Sublessee under the
Acknowledgement.
(c) Notwithstanding any term or provision contained in this Sublease, the
obligations of the Lessee under the Base Lease are and shall remain
obligations of the Sublessor.
10. NO OWNERSHIP INTEREST IN EQUIPMENT; REPOSSESSION OF EQUIPMENT:
In no event shall this Sublease be construed as a sale of the Equipment, and
except as provided in clause 7(b), Sublessee shall acquire no ownership, title,
property, right or interest in or with respect to the Equipment other than its
leasehold interest hereunder. It is the express intention of the parties that if
the leasing of the Equipment terminates in accordance with the terms of the Base
Lease and Sublessor is required to return the Equipment to Lessor, if the
Equipment is not so returned in accordance with the terms of the Base Lease,
Lessor shall have the right to pursue all remedies under Applicable Law to cause
the return of the Equipment, including, without limitation, the right to
repossess the Equipment in accordance with Applicable Law and the Base Lease.
115
11. MISCELLANEOUS:
The terms of this Sublease shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Sublessor and Sublessee. This Sublease and any instrument referred to
herein together with the Sublease Schedules and all attachments and riders
thereto signed by the parties or delivered in connection herewith shall be
governed by the laws of England, constitute the entire agreement of the parties
with respect to the subject matter hereof and will collectively constitute the
Sublease with respect to the Equipment and supersede all negotiations and prior
written or oral agreements of the parties with respect thereto. Any provision
contained in this Sublease which may be invalid under applicable law or any
government rule or regulation will be deemed omitted, modified or altered to
conform thereto.
12. JURISDICTION:
FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES THAT THE
COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN CONNECTION WITH
THIS SUBLEASE AND ACCORDINGLY SUBMITS TO THE JURISDICTION OF THE ENGLISH COURTS.
Without prejudice to any other mode of service, the Sublessee:
(a) irrevocably appoints as its agent for service of process Viatel U.K.
Limited in relation to any proceedings before the English courts in
connection with this Sublease;
(b) agrees that failure by a process agent to notify the Sublessee of the
process will not invalidate the proceedings concerned;
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address set forth in
the caption to this Sublease; and
(d) agrees that if the appointment of any person mentioned in paragraph
(a) above ceases to be effective the Sublessee shall immediately
appoint a further person in England to accept service of process on
its behalf in England and, failing such appointment within fifteen
(15) days, the Sublessor is entitled to appoint such a person by
notice to the Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Sublease; and
agrees that a judgment or order of an English court in connection with this
Sublease is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction.
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Sublease in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED ___________________________________________
(Sublessor) (Sublessee)
By:_____________________________ By:________________________________________
(Signature) (Title) (Signature) (Title)
116
SUBLEASE SCHEDULE NO. __________ TO SUBLEASE DATED ___________, 2000
THE EQUIPMENT IS LEASED TO SUBLESSOR (IDENTIFIED BELOW) UNDER THE MASTER
LEASE PURCHASE AGREEMENT DATED _____________, 2000, LEASE SCHEDULE(S)
NO(S). ___________________
VIATEL U.K. LIMITED
(Sublessor) (Sublessee)
XXXXXXX XXXXX, 00 XXXXXX XXXX ______________________________________
(Street)
XXXXXX XXXX 0XX, XXXXXXX ______________________________________
(City, Postal Code, Country)
The Sublease Agreement is incorporated herein by reference as if set forth at
length and Sublessee and Sublessor confirm that the Sublease Agreement is
subject and subordinate to the Master Lease Purchase Agreement and Lease
Schedule(s) referenced above and otherwise confirm all the terms and provisions
of the Sublease Agreement except as specifically set forth herein to the
contrary.
A. EQUIPMENT
This Sublease Schedule covers certain Equipment described more fully in
Attachment 1 attached hereto and made a part hereof.
B. DEFINITIONS AND MEANINGS OF CERTAIN TERMS
1. Commencement Date: ________________________________.
2. Term of Sublease: _____________ days followed by a basic term of
[Redacted] months, and ending on
3. Sublease Monthly Rent: __________________________________, plus VAT, if
any.
4 Additional Provisions:
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
C. RENT PAYMENTS
All rent and all other payments under the Sublease Agreement are to be made to
Sublessor to the following account:
117
Except as expressly modified hereby, all terms and provisions of the Sublease
Agreement remain in full force and effect. The parties hereto have caused their
duly authorized officers to execute this Sublease Schedule as of the
Commencement Date.
VIATEL U.K. LIMITED -------------------------------
(Sublessor) (Sublessee)
By:
------------------------------------ -------------------------------
--------------------------------------- -------------------------------
(Title) (Date) (Title) (Date)
118
PART II
[FOR US SUB-LESSEE]
THIS SUBLEASE AGREEMENT dated as of this _____ day of ____________, 2000
(hereinafter referred to as this "Sublease") is executed by and between VIATEL
U.K. LIMITED (Registered No. 2968371), a company organized and existing under
English law, with its mailing address and chief place of business at Xxxxxxx
Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as
"Sublessor") and [Viatel Sub] a company incorporated under the laws of
____________, with its mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, the Sublessee wishes to lease from the Sublessor, and the Sublessor is
willing to lease to the Sublessee the equipment specified in the sublease
schedules in the form of Exhibit A hereto (each a "Sublease Schedule" and
collectively the "Sublease Schedules") executed and delivered by Sublessor and
Sublessee from time to time after the execution and delivery of this Sublease
(collectively the "Equipment").
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease);
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. SUBLEASE:
(a) The Sublessor agrees to sublease and the Sublessee agrees to take on
sublease the Equipment on and subject to the terms of this Sublease.
(b) The Equipment is subject and subordinate to the Base Lease under and
pursuant to which Sublessor has acquired no present right, title, or
interest in or to any of the Equipment other than a leasehold estate.
(c) This Sublease shall be confirmed and effective as to items of Equipment
only upon: (i) due execution of the Base Lease and the commencement of
the leasing of the Equipment under the Base Lease; (ii) due - execution
by Sublessor and Sublessee of a Sublease Schedule covering such
Equipment; (iii) due execution and delivery by Sublessor and acceptance
by Lessor of a Sublease Assignment covering such Sublease Schedule, and
service of a notice of such assignment on the Sublessee and receipt by
the Lessor of a signed acknowledgement by the Sublessee of such notice;
and (iv) such other documents as Sublessor may reasonably require. Upon
satisfaction of (i) to (iv) above, the Equipment described therein
shall be deemed to have been delivered to and accepted by Sublessee for
sublease under this Sublease.
119
2. TERM:
The term of this Sublease for Equipment will commence on the day specified in
the Sublease Schedule covering such Equipment as the "Commencement Date" and
will continue for the period specified as the "Term" in such Sublease Schedule,
as the same may be extended pursuant to the provisions of such Sublease Schedule
relating to renewal, if any, but subject always to the Base Lease. The term of
this Sublease (including all extensions hereto) for Equipment will not in any
event extend beyond the Initial Term of the relevant Lease Schedule under the
Base Lease.
3. RENT:
(a) Sublessee agrees to pay rent for Equipment during the Term for such
Equipment on the due dates and in the amount set forth in the Sublease
Schedule covering such Equipment. If any payment hereunder falls due on
a date which is not a Business Day, such payment shall be due and
payable on the next succeeding Business Day.
(b) (i) All payments made by the Sublessee under this Sublease are
calculated without regard to VAT. If any such payment constitutes
the whole or any part of the consideration for a taxable or
deemed taxable supply (whether that supply is taxable pursuant to
the exercise of an option or otherwise) by the Sublessor, the
amount of that payment shall be increased by an amount equal to
the amount of VAT which is chargeable in respect of the taxable
supply in question subject to the production by the Sublessor of
a valid VAT invoice (where applicable) in respect of the VAT in
question.
(ii) In respect of each item of Equipment, subject to the production
by the Sublessor of a valid VAT invoice (where applicable) in
respect of the VAT in question, the Sublessee shall pay to the
Sublessor on or before the fifth (5th) Business Day preceding the
date on which the relevant VAT is due to be accounted for by the
Sublessor to the applicable taxing authority an amount equal to
the amount of VAT for which the then Sublessor is obliged to
account to the applicable taxing authority in respect of the
supply under this Sublease and the relevant Sublease Schedule of
such item of Equipment.
(iii) If, in respect of any item of Equipment, the Sublessor determines
that the consideration for the supply thereof under this Sublease
and the relevant Sublease Schedule is increased or decreased,
then:
(A) if the consideration for the supply is increased, the
Sublessee shall pay to the Sublessor on demand (or, if later
five (5) Business Days before the same is due to be
accounted for by the Sublessor to the applicable taxing
authority) an amount equal to the amount of additional VAT
for which the Sublessor is obligated to account to the
applicable taxing authority; and
(B) if the consideration for the supply is decreased, the
Sublessor shall issue a credit note to the Sublessee in an
amount equal to the credit which the Sublessor claims from
the applicable taxing authority in respect of the reduction
in consideration, and that amount shall be deducted from the
next payment of rent due from the Sublessee in respect of
the relevant item of Equipment or shall be reimbursed to the
Sublessee within two (2) Business Days of demand by the
Sublessee if there is no further payment of rent due or to
the extent that the next such payment is less than the
amount in question.
120
(iv) Any payment of other consideration to be made or furnished by the
Sublessor to the Sublessee pursuant to or in connection with this
Sublease or any transaction or document contemplated herein may
be increased or added to by reference to (or as a result of any
increase in the rate of) any VAT which shall be or may become
chargeable in respect of the taxable supply in question on the
basis that the relevant payment or consideration is stated on an
exclusive of VAT basis.
(v) If and to the extent that the Sublessor (or any company which is
treated as a member of the same group as the Sublessor for VAT
purposes) bears VAT which is Irrecoverable VAT then the Sublessee
shall on or within five (5) Business Days of demand indemnify and
keep indemnified the Sublessor upon demand against such
Irrecoverable VAT such indemnity being in an amount equal to the
after-Tax cost to the Sublessor of such Irrecoverable VAT
together with interest thereon at the rate of LIBOR calculated on
a seven day basis and compounded quarterly from the date upon
which the Sublessor made payment of the amount of such
Irrecoverable VAT to but excluding the date of payment of the
amount of the indemnity.
(c) (i) All payments due to or by the Sublessor under this Sublease shall
be calculated and made free and clear of and without deduction
for, or on account of, any present or future Taxes or other
charges of whatsoever nature, now or hereafter imposed by any
taxing or Governmental Authority whatsoever unless such deduction
or withholding is required by law.
(ii) If such deduction or withholding is required by any law,
regulation or regulatory requirement the Sublessee shall:
(A) if the payment is to be made by the Sublessee, ensure or
procure that the deduction or withholding is made and that
it does not exceed the minimum legal requirement therefor;
(B) pay, or procure the payment of, the full amount deducted or
withheld to the relevant authority in accordance with the
Applicable Law;
(C) (1) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by the
Sublessee, increase the payment in respect of which the
deduction or withholding is required so that the net
amount received by the Sublessor after the deduction or
withholding shall be equal to the amount which the
Sublessor would have been entitled to receive in the
absence of any requirement to make a deduction or
withholding; or
(2) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by any
person other that the Sublessee, procure the payment or
pay directly to the Sublessor such sum (a "Compensating
Sum") as will, after taking into account any deduction
or withholding which is required to be made in respect
of the Compensating Sum, result in the Sublessor
receiving, or, as the case may be, paying, on the due
date for payment, a net sum equal to the sum which the
Sublessor would have received or, as the case may be,
paid in the absence of any obligation to make a
deduction or withholding; and
121
(D) promptly deliver or procure the delivery to the Sublessor of
any appropriate receipts evidencing the deduction or
withholding which has been made, or (in the absence of such
receipts) provide a certification to the Sublessor of the
deduction or withholding made.
(iii) The Sublessor agrees to furnish to the Sublessee from time to
time such duly executed and properly completed forms or
certificates that are reasonably requested by the Sublessee in
order to claim any reduction of or exemption from any withholding
or other tax imposed by any taxing authority in respect of any
payments otherwise required to be made by the Sublessee pursuant
to this Sublease, which reduction or exemption may be available
to the Sublessor under Applicable Law. Without limiting the
foregoing, the Sublessor shall, prior to the due date for the
first rent payment due hereunder, deliver a duly completed U.S.
Internal Revenue Service Form W-8BEN to the Sublessee (claiming
complete exemption from U.S. withholding tax) with respect to
payments made under this Sublease, and shall, from time to time
deliver to the Sublessee such new or updated forms as are
required to claim exemption from U.S. withholding tax with
respect to payment made under this Sublease.
4. BASE LEASE:
During the Term of this Sublease with respect to Equipment, Sublessee shall (a)
maintain such Equipment on the same terms as those set forth in Section 12 of
the Base Lease and (b) insure such Equipment in compliance with Section 14 of
the Base Lease. In addition, if a termination of the leasing of any Equipment
occurs under the Base Lease and Sublessor is required to return such Equipment
to Lessor, Sublessee shall immediately redeliver such Equipment to Sublessor or,
at Sublessor's direction, to Lessor, at such place in the country in which such
Equipment is then located as Sublessor or Lessor, as the case may be, reasonably
specifies, and will otherwise co-operate with Sublessor in returning such
Equipment to Lessor in the condition in which such Equipment is required to be
returned pursuant to the terms of the Base Lease. Notwithstanding the foregoing
or any other provision of this Sublease or any Sublease Schedule, the Sublessor
and Sublessee acknowledge and agree that the execution and delivery of this
Sublease and Sublease Schedules shall not release the Sublessor from any of its
obligations under the Base Lease or the Transaction Documents.
5. SUBORDINATION:
Sublessor warrants that during the Term of this Sublease with respect to
Equipment, so long as no event of default shall have occurred hereunder,
Sublessor will not interrupt Sublessee's possession, use and operation of such
Equipment. Nevertheless, Sublessee acknowledges that this Sublease and
Sublessee's rights hereunder to the possession, use and enjoyment of the
Equipment are subject and subordinate to all terms and provisions of the Base
Lease, a copy of which has been provided to Sublessee, and to the rights of the
Lessor and Lessor Risk Parties thereunder and under the other Transaction
Documents; provided, however, that upon termination of the leasing of any
Equipment under the Base Lease in circumstances where Sublessor is required to
return such Equipment to Lessor, Lessor may terminate this Sublease with respect
to such Equipment and the right of Sublessee to possess such Equipment.
6. INDEMNIFICATION:
Sublessee agrees to indemnify, save and keep harmless Sublessor and its agents,
employees, successors and assigns from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including legal expenses of
whatsoever kind and nature, in contract or tort, howsoever arising from any
122
cause whatsoever, including but not limited to, strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, acceptance or rejection
of the Equipment under this Sublease, the delivery, lease, sublease, possession,
maintenance, use, condition, return or operation of the Equipment (including,
without limitation, latent or other defects, whether or not discoverable by
Sublessor and any claim for patent, trademark or copyright infringement); or
(ii) the condition of the Equipment disposed of after use by Sublessee.
Sublessee will, upon request of Sublessor, at its own expense, defend any and
all actions based on or arising out of any of the foregoing.
7. ASSIGNMENT, POSSESSION AND RETURN:
(a) Subject to paragraph (b) below, the Sublessee will not sublease, assign
or otherwise transfer or relinquish possession of the Equipment and any
such sublease, assignment or transfer will, without further act or
instrument, be void and of no force or effect. Subject to clause 7(c),
at the end of the Term for any Equipment, Sublessee shall, if required,
and only if required, redeliver the Equipment to Sublessor in such
place in the country in which such Equipment is then located as
Sublessor shall reasonably specify in the condition Sublessee is
required to maintain such Equipment as provided in this Sublease.
(b) The Sublessee may transfer all (but not some only) of its rights and
obligations under this Sub-Lease to any member of Viatel, Inc.'s Group
if the Lessee would have been entitled to enter into a Permitted
Sub-Lease with such assignee under Clause 12.3 of the Base Lease,
provided that, prior to such assignment becoming effective, the
Sublessor shall notify the Lessor of the proposed transfer, shall give
notice of the Sub-Lease Assignment to the transferee and shall procure
an acknowledgement to such notice, in each case in the form required by
the Sub-Lease Assignment, mutatis mutandis.
(c) Upon the expiration of the Term for any Equipment; the Sublessee, on
not less than thirty (30) days prior written notice to the Sublessor,
or such lesser period as the Sublessor may agree, shall be entitled to
purchase such Equipment at a price of one hundred Euros (E100) (the
"Option Price") in respect of each Sublease Schedule, so long as no
default under Clause 8(a) of this Sub-Lease or Event of Default under
Clause 16.1(a) of the Base Lease has occurred and is continuing and no
other amount is outstanding under the Transaction Documents. Upon (i)
payment of the Option Price at or following the expiration of the Term
for such Equipment and (ii) the transfer to Sublessor of legal title
to, and all rights and interests in and to, such Equipment, the
Sublessor shall transfer legal title to, and all of its rights and
interests in and to, such Equipment to the Sublessee.
The Sublessor shall transfer legal title to, and all of its rights and interest
in and to, any Equipment as provided above "AS IS, WHERE IS", "WITH ALL FAULTS",
AND WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED.
8. DEFAULTS; REMEDIES:
Each of the following will constitute a default hereunder: (a) Sublessee fails
to pay rent or any other amount when due under this Sublease or any Sublease
Schedule; (b) Sublessee breaches any other term, provision, obligation or
covenant of this Sublease which breach, if remediable, is not cured within 30
days after written notice thereof is given by the Sublessor to the Sublessee;
and (c) a Sublessee Insolvency Event shall occur. Upon the occurrence of any
default under this Sublease, Sublessor, at its option, may do any one or more of
the following: (1) declare this Sublease and all of the Sublease Schedules in
default upon notice to Sublessee; (2) proceed by appropriate court action or
actions at law or in equity or in insolvency or bankruptcy as permitted under
Applicable Law, including to enforce performance by Sublessee of the covenants
123
and terms of this Sublease and/or to recover damages for the breach of this
Sublease; (3) terminate this Sublease and all of the Sublease Schedules upon
notice to Sublessee; and (4) whether or not this Sublease and the Sublease
Schedules are terminated, and without notice to Sublessee, repossess the
Equipment wherever found, with or without legal process, and for this purpose
Sublessor and/or its agents may enter upon any premises of or under the control
or jurisdiction of Sublessee or any agent of Sublessee without liability for
suit, action or other proceeding by Sublessor (any damages occasioned by such
repossession being herein expressly waived by Sublessee except for damages
occasioned by the gross negligence or wilful misconduct of Sublessor or its
agents) and remove the Equipment therefrom. The remedies provided in this
Section 8 in favour of Sublessor are not exclusive but will be cumulative and
will be in addition to all other remedies in Sublessor's favour existing under
Applicable Law, including at law, in equity or in bankruptcy.
9. ASSIGNMENT OF SUBLEASE:
(a) Sublessee acknowledges receipt of a copy of the notice of Sub-Lease
Assignment. Sublessee hereby agrees to execute and deliver to Lessor
the Acknowledgement in the form attached as Part II of Schedule I to
the Sub-Lease Assignment.
(b) Lessor may sell and/or assign the Equipment and/or Base Lease, all as
provided for in the Base Lease, whereupon without further act or
instrument (except for written notice to Sublessee of such sale or
assignment and the name and address of the transferee is recorded in a
registered maintained to show the ownership of the Lessor's interest
under the Base Lease), and provided that the name and address of the
transferee of the Lessor under the Base Lease is recorded in a register
maintained by the Sublessee to show the ownership of the Lessor's
interest under the Base Lease, such purchaser or assignee of the
Equipment and the Base Lease shall assume the benefits of this Sublease
and the Sub-Lease Assignment and the obligations of the Sublessee under
the Acknowledgement.
(c) Notwithstanding any term or provision contained in this Sublease, the
obligations of the Lessee under the Base Lease are and shall remain
obligations of the Sublessor.
(d) In the event the Sublessor transfers, sells or assigns its interest in
the Equipment or the Sublease or any interest thereunder, no such
transfer, sale or assignment shall be effective, and payment hereunder
shall continue to be payable to the Sublessor unless and until the
Sublessor gives notice to the Sublessee in writing of such transfer,
sale or assignment, and immediately upon receipt of such notice the
Sublessee shall record such transfer, sale or assignment, and the name
and address of the transferee, in a register maintained to show the
ownership of the Sublessor's interest hereunder and in the Equipment.
10. NO OWNERSHIP INTEREST IN EQUIPMENT; REPOSSESSION OF EQUIPMENT:
In no event shall this Sublease be construed as a sale of the Equipment, and
except as provided in clause 7(b), Sublessee shall acquire no ownership, title,
property, right or interest in or with respect to the Equipment other than its
leasehold interest hereunder. It is the express intention of the parties that if
the leasing of the Equipment terminates in accordance with the terms of the Base
Lease and Sublessor is required to return the Equipment to Lessor, if the
Equipment is not so returned in accordance with the terms of the Base Lease,
Lessor shall have the right to pursue all remedies under Applicable Law to cause
the return of the Equipment, including, without limitation, the right to
repossess the Equipment in accordance with Applicable Law and the Base Lease.
Notwithstanding any other provision of this Sublease to the contrary, it is the
express intention of the parties that for U.S. federal income tax purposes, the
124
Sublessee shall be treated as the owner of the Equipment and the Sublessor shall
be treated as a lender.
11. MISCELLANEOUS:
The terms of this Sublease shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Sublessor and Sublessee. This Sublease and any instrument referred to
herein together with the Sublease Schedules and all attachments and riders
thereto signed by the parties or delivered in connection herewith shall be
governed by the laws of England, constitute the entire agreement of the parties
with respect to the subject matter hereof and will collectively constitute the
Sublease with respect to the Equipment and supersede all negotiations and prior
written or oral agreements of the parties with respect thereto. Any provision
contained in this Sublease which may be invalid under applicable law or any
government rule or regulation will be deemed omitted, modified or altered to
conform thereto.
12. JURISDICTION:
FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES THAT THE
COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN CONNECTION WITH
THIS SUBLEASE AND ACCORDINGLY SUBMITS TO THE JURISDICTION OF THE ENGLISH COURTS.
Without prejudice to any other mode of service, the Sublessee:
(a) irrevocably appoints as its agent for service of process Viatel U.K.
Limited in relation to any proceedings before the English courts in
connection with this Sublease;
(b) agrees that failure by a process agent to notify the Sublessee of the
process will not invalidate the proceedings concerned;
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address set forth in
the caption to this Sublease; and
(d) agrees that if the appointment of any person mentioned in paragraph (a)
above ceases to be effective the Sublessee shall immediately appoint a
further person in England to accept service of process on its behalf in
England and, failing such appointment within fifteen (15) days, the
Sublessor is entitled to appoint such a person by notice to the
Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Sublease; and
agrees that a judgment or order of an English court in connection with this
Sublease is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Sublease in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED ___________________________________
(Sublessor) (Sublessee)
By:________________________________ By:___________________________________
(Signature) (Title) (Signature) (Title)
125
SUBLEASE SCHEDULE NO. __________ TO SUBLEASE DATED ___________, 2000
THE EQUIPMENT IS LEASED TO SUBLESSOR (IDENTIFIED BELOW) UNDER THE
MASTER LEASE PURCHASE AGREEMENT DATED _____________, 2000,
LEASE SCHEDULE(S) NO(S). ___________________
VIATEL U.K. LIMITED -----------------------------------------
(Sublessor) (Sublessee)
XXXXXXX XXXXX, 00 XXXXXX XXXX -----------------------------------------
----------------------------- (Street)
XXXXXX XXXX 0XX, XXXXXXX -----------------------------------------
----------------------------- (City, Postal Code, Country)
The Sublease Agreement is incorporated herein by reference as if set
forth at length and Sublessee and Sublessor confirm that the Sublease Agreement
is subject and subordinate to the Master Lease Purchase Agreement and Lease
Schedule(s) referenced above and otherwise confirm all the terms and provisions
of the Sublease Agreement except as specifically set forth herein to the
contrary.
A. EQUIPMENT
This Sublease Schedule covers certain Equipment described more fully in
Attachment 1 attached hereto and made a part hereof.
B. DEFINITIONS AND MEANINGS OF CERTAIN TERMS
1. Commencement Date: ________________________________.
2. Term of Sublease: _____________ days followed by a basic term
[Redacted] and ending on
3. Sublease Monthly Rent: __________________________________,
plus VAT, if any.
4 Additional Provisions:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
C. RENT PAYMENTS
All rent and all other payments under the Sublease Agreement are to be made to
Sublessor to the following account:
126
Except as expressly modified hereby, all terms and provisions of the Sublease
Agreement remain in full force and effect. The parties hereto have caused their
duly authorized officers to execute this Sublease Schedule as of the
Commencement Date.
VIATEL U.K. LIMITED -----------------------------------
(Sublessor) (Sublessee)
By:
----------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
(Title) (Date) (Title) (Date)
127
PART III
[FOR [Redacted] SUB-LESSEE]
THIS SUBLEASE AGREEMENT dated as of this _____ day of ____________, 2000
(hereinafter referred to as this "Sublease") is executed by and between VIATEL
U.K. LIMITED (Registered No. 2968371), a company organized and existing under
English law, with its mailing address and chief place of business at Xxxxxxx
Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as
"Sublessor") and [Viatel Sub] a company incorporated under the laws of
____________, with its mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, the Sublessee wishes to lease from the Sublessor, and the Sublessor is
willing to lease to the Sublessee the equipment specified in the sublease
schedules in the form of Exhibit A hereto (each a "Sublease Schedule" and
collectively the "Sublease Schedules") executed and delivered by Sublessor and
Sublessee from time to time after the execution and delivery of this Sublease
(collectively the "Equipment").
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease);
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. SUBLEASE:
(a) The Sublessor agrees to sublease and the Sublessee agrees to take on
sublease the Equipment on and subject to the terms of this Sublease.
(b) The Equipment is subject and subordinate to the Base Lease under and
pursuant to which Sublessor has acquired no present right, title, or
interest in or to any of the Equipment other than a leasehold estate.
(c) This Sublease shall be confirmed and effective as to items of Equipment
only upon: (i) due execution of the Base Lease and the commencement of
the leasing of the Equipment under the Base Lease; (ii) due execution
by Sublessor and Sublessee of a Sublease Schedule covering such
Equipment; (iii) due execution and delivery by Sublessor and acceptance
by Lessor of a Sublease Assignment covering such Sublease Schedule, and
service of a notice of such assignment on the Sublessee and receipt by
the Lessor of a signed acknowledgement by the Sublessee of such notice;
and (iv) such other documents as Sublessor may reasonably require. Upon
satisfaction of (i) to (iv) above, the Equipment described therein
shall be deemed to have been delivered to and accepted by Sublessee for
sublease under this Sublease.
2. TERM:
The term of this Sublease for Equipment will commence on the day specified in
the Sublease Schedule covering such Equipment as the "Commencement Date" and
will continue for the period specified as the "Term" in such Sublease Schedule,
as the same may be extended pursuant to the provisions of such Sublease Schedule
128
relating to renewal, if any, but subject always to the Base Lease. The term of
this Sublease (including all extensions hereto) for Equipment will not in any
event extend beyond the Initial Term of the relevant Lease Schedule under the
Base Lease.
3. RENT:
(a) Sublessee agrees to pay rent for Equipment during the Term for such
Equipment on the due dates and in the amount set forth in the Sublease
Schedule covering such Equipment. If any payment hereunder falls due on
a date which is not a Business Day, such payment shall be due and
payable on the next succeeding Business Day.
(b) (i) All payments made by the Sublessee under this Sublease are
calculated without regard to VAT. If any such payment constitutes
the whole or any part of the consideration for a taxable or
deemed taxable supply (whether that supply is taxable pursuant to
the exercise of an option or otherwise) by the Sublessor, the
amount of that payment shall be increased by an amount equal to
the amount of VAT which is chargeable in respect of the taxable
supply in question subject to the production by the Sublessor of
a valid VAT invoice (where applicable) in respect of the VAT in
question.
(ii) In respect of each item of Equipment, subject to the production
by the Sublessor of a valid VAT invoice (where applicable) in
respect of the VAT in question, the Sublessee shall pay to the
Sublessor on or before the fifth (5th) Business Day preceding the
date on which the relevant VAT is due to be accounted for by the
Sublessor to the applicable taxing authority an amount equal to
the amount of VAT for which the then Sublessor is obliged to
account to the applicable taxing authority in respect of the
supply under this Sublease and the relevant Sublease Schedule of
such item of Equipment.
(iii) If, in respect of any item of Equipment, the Sublessor determines
that the consideration for the supply thereof under this Sublease
and the relevant Sublease Schedule is increased or decreased,
then:
(A) if the consideration for the supply is increased, the
Sublessee shall pay to the Sublessor on demand (or, if later
five (5) Business Days before the same is due to be
accounted for by the Sublessor to the applicable taxing
authority) an amount equal to the amount of additional VAT
for which the Sublessor is obligated to account to the
applicable taxing authority; and
(B) if the consideration for the supply is decreased, the
Sublessor shall issue a credit note to the Sublessee in an
amount equal to the credit which the Sublessor claims from
the applicable taxing authority in respect of the reduction
in consideration, and that amount shall be deducted from the
next payment of rent due from the Sublessee in respect of
the relevant item of Equipment or shall be reimbursed to the
Sublessee within two (2) Business Days of demand by the
Sublessee if there is no further payment of rent due or to
the extent that the next such payment is less than the
amount in question.
(iv) Any payment of other consideration to be made or furnished by the
Sublessor to the Sublessee pursuant to or in connection with this
Sublease or any transaction or document contemplated herein may
be increased or added to by reference to (or as a result of any
increase in the rate of) any VAT which shall be or may become
chargeable in respect of the taxable supply in question on the
129
basis that the relevant payment or consideration is stated on an
exclusive of VAT basis.
(v) If and to the extent that the Sublessor (or any company which is
treated as a member of the same group as the Sublessor for VAT
purposes) bears VAT which is Irrecoverable VAT then the Sublessee
shall on or within five (5) Business Days of demand indemnify and
keep indemnified the Sublessor upon demand against such
Irrecoverable VAT such indemnity being in an amount equal to the
after-Tax cost to the Sublessor of such Irrecoverable VAT
together with interest thereon at the rate of LIBOR calculated on
a seven day basis and compounded quarterly from the date upon
which the Sublessor made payment of the amount of such
Irrecoverable VAT to but excluding the date of payment of the
amount of the indemnity.
(c) (i) All payments due to or by the Sublessor under this Sublease shall
be calculated and made free and clear of and without deduction
for, or on account of, any present or future Taxes or other
charges of whatsoever nature, now or hereafter imposed by any
taxing or Governmental Authority whatsoever unless such deduction
or withholding is required by law.
(ii) If such deduction or withholding is required by any law,
regulation or regulatory requirement the Sublessee shall:
(A) if the payment is to be made by the Sublessee, ensure or
procure that the deduction or withholding is made and that
it does not exceed the minimum legal requirement therefor;
(B) pay, or procure the payment of, the full amount deducted or
withheld to the relevant authority in accordance with the
Applicable Law;
(C) (1) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by the
Sublessee, increase the payment in respect of which the
deduction or withholding is required so that the net
amount received by the Sublessor after the deduction or
withholding shall be equal to the amount which the
Sublessor would have been entitled to receive in the
absence of any requirement to make a deduction or
withholding; or
(2) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by any
person other that the Sublessee, procure the payment or
pay directly to the Sublessor such sum (a "Compensating
Sum") as will, after taking into account any deduction
or withholding which is required to be made in respect
of the Compensating Sum, result in the Sublessor
receiving, or, as the case may be, paying, on the due
date for payment, a net sum equal to the sum which the
Sublessor would have received or, as the case may be,
paid in the absence of any obligation to make a
deduction or withholding; and
(D) promptly deliver or procure the delivery to the Sublessor of
any appropriate receipts evidencing the deduction or
withholding which has been made, or (in the absence of such
130
receipts) provide a certification to the Sublessor of the
deduction or withholding made.
(iii) The Sublessor agrees to furnish to the Sublessee from time to
time such duly executed and properly completed forms or
certificates that are reasonably requested by the Sublessee in
order to claim any reduction of or exemption from any withholding
or other tax imposed by any taxing authority in respect of any
payments otherwise required to be made by the Sublessee pursuant
to this Sublease, which reduction or exemption may be available
to the Sublessor under Applicable Law.
4. BASE LEASE:
During the Term of this Sublease with respect to Equipment, Sublessee shall (a)
maintain such Equipment on the same terms as those set forth in Section 12 of
the Base Lease and (b) insure such Equipment in compliance with Section 14 of
the Base Lease. In addition, if a termination of the leasing of any Equipment
occurs under the Base Lease and Sublessor is required to return such Equipment
to Lessor, Sublessee shall immediately redeliver such Equipment to Sublessor or,
at Sublessor's direction, to Lessor, at such place in the country in which such
Equipment is then located as Sublessor or Lessor, as the case may be, reasonably
specifies, and will otherwise co-operate with Sublessor in returning such
Equipment to Lessor in the condition in which such Equipment is required to be
returned pursuant to the terms of the Base Lease. Notwithstanding the foregoing
or any other provision of this Sublease or any Sublease Schedule, the Sublessor
and Sublessee acknowledge and agree that the execution and delivery of this
Sublease and Sublease Schedules shall not release the Sublessor from any of its
obligations under the Base Lease or the Transaction Documents.
5. SUBORDINATION:
Sublessor warrants that during the Term of this Sublease with respect to
Equipment, so long as no event of default shall have occurred hereunder,
Sublessor will not interrupt Sublessee's possession, use and operation of such
Equipment. Nevertheless, Sublessee acknowledges that this Sublease and
Sublessee's rights hereunder to the possession, use and enjoyment of the
Equipment are subject and subordinate to all terms and provisions of the Base
Lease, a copy of which has been provided to Sublessee, and to the rights of the
Lessor and Lessor Risk Parties thereunder and under the other Transaction
Documents; provided, however, that upon termination of the leasing of any
Equipment under the Base Lease in circumstances where Sublessor is required to
return such Equipment to Lessor, Lessor may terminate this Sublease with respect
to such Equipment and the right of Sublessee to possess such Equipment.
6. INDEMNIFICATION:
Sublessee agrees to indemnify, save and keep harmless Sublessor and its agents,
employees, successors and assigns from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including legal expenses of
whatsoever kind and nature, in contract or tort, howsoever arising from any
cause whatsoever, including but not limited to, strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, acceptance or rejection
of the Equipment under this Sublease, the delivery, lease, sublease, possession,
maintenance, use, condition, return or operation of the Equipment (including,
without limitation, latent or other defects, whether or not discoverable by
Sublessor and any claim for patent, trademark or copyright infringement); or
(ii) the condition of the Equipment disposed of after use by Sublessee.
Sublessee will, upon request of Sublessor, at its own expense, defend any and
all actions based on or arising out of any of the foregoing.
131
7. ASSIGNMENT, POSSESSION AND RETURN:
(a) Subject to paragraph (b) below, the Sublessee will not sublease, assign
or otherwise transfer or relinquish possession of the Equipment and any
such sublease, assignment or transfer will, without further act or
instrument, be void and of no force or effect. At the end of the Term
for any Equipment, Sublessee shall, if required, and only if required,
redeliver the Equipment to Sublessor in such place in the country in
which such Equipment is then located as Sublessor shall reasonably
specify in the condition Sublessee is required to maintain such
Equipment as provided in this Sublease.
(b) The Sublessee may transfer all (but not some only) of its rights and
obligations under this Sub-Lease to any member of Viatel, Inc.'s Group
if the Lessee would have been entitled to enter into a Permitted
Sub-Lease with such assignee under Clause 12.3 of the Base Lease,
provided that, prior to such assignment becoming effective, the
SubLessor shall notify the Lessor of the proposed transfer, shall give
notice of the Sub-Lease Assignment to the transferee and shall procure
an acknowledgement to such notice, in each case in the form required by
the Sub-Lease Assignment, mutatis mutandis.
8. DEFAULTS; REMEDIES:
Each of the following will constitute a default hereunder: (a) Sublessee fails
to pay rent or any other amount when due under this Sublease or any Sublease
Schedule; (b) Sublessee breaches any other term, provision, obligation or
covenant of this Sublease which breach, if remediable, is not cured within 30
days after written notice thereof is given by the Sublessor to the Sublessee;
and (c) a Sublessee Insolvency Event shall occur. Upon the occurrence of any
default under this Sublease, Sublessor, at its option, may do any one or more of
the following: (1) declare this Sublease and all of the Sublease Schedules in
default upon notice to Sublessee; (2) proceed by appropriate court action or
actions at law or in equity or in insolvency or bankruptcy as permitted under
Applicable Law, including to enforce performance by Sublessee of the covenants
and terms of this Sublease and/or to recover damages for the breach of this
Sublease; (3) terminate this Sublease and all of the Sublease Schedules upon
notice to Sublessee; and (4) whether or not this Sublease and the Sublease
Schedules are terminated, and without notice to Sublessee, repossess the
Equipment wherever found, with or without legal process, and for this purpose
Sublessor and/or its agents may enter upon any premises of or under the control
or jurisdiction of Sublessee or any agent of Sublessee without liability for
suit, action or other proceeding by Sublessor (any damages occasioned by such
repossession being herein expressly waived by Sublessee except for damages
occasioned by the gross negligence or wilful misconduct of Sublessor or its
agents) and remove the Equipment therefrom. The remedies provided in this
Section 8 in favour of Sublessor are not exclusive but will be cumulative and
will be in addition to all other remedies in Sublessor's favour existing under
Applicable Law, including at law, in equity or in bankruptcy.
9. ASSIGNMENT OF SUBLEASE:
(a) Sublessee acknowledges receipt of a copy of the notice of Sub-Lease
Assignment. Sublessee hereby agrees to execute and deliver to Lessor
the Acknowledgement in the form attached as Part II of Schedule I to
the Sub-Lease Assignment.
(b) Lessor may sell and/or assign the Equipment and/or Base Lease, all as
provided for in the Base Lease, whereupon without further act or
instrument (except for written notice to Sublessee of such sale or
assignment), such purchaser or assignee of the Equipment and the Base
Lease shall assume the benefits of this Sublease and the Sub-Lease
Assignment and the obligations of the Sublessee under the
Acknowledgement.
132
(c) Notwithstanding any term or provision contained in this Sublease, the
obligations of the Lessee under the Base Lease are and shall remain
obligations of the Sublessor.
10. NO OWNERSHIP INTEREST IN EQUIPMENT; REPOSSESSION OF EQUIPMENT:
In no event shall this Sublease be construed as a sale of the Equipment,
Sublessee shall acquire no ownership, title, property, right or interest in or
with respect to the Equipment other than its leasehold interest hereunder. It is
the express intention of the parties that if the leasing of the Equipment
terminates in accordance with the terms of the Base Lease and Sublessor is
required to return the Equipment to Lessor, if the Equipment is not so returned
in accordance with the terms of the Base Lease, Lessor shall have the right to
pursue all remedies under Applicable Law to cause the return of the Equipment,
including, without limitation, the right to repossess the Equipment in
accordance with Applicable Law and the Base Lease.
11. MISCELLANEOUS:
The terms of this Sublease shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Sublessor and Sublessee. This Sublease and any instrument referred to
herein together with the Sublease Schedules and all attachments and riders
thereto signed by the parties or delivered in connection herewith shall be
governed by the laws of England, constitute the entire agreement of the parties
with respect to the subject matter hereof and will collectively constitute the
Sublease with respect to the Equipment and supersede all negotiations and prior
written or oral agreements of the parties with respect thereto. Any provision
contained in this Sublease which may be invalid under applicable law or any
government rule or regulation will be deemed omitted, modified or altered to
conform thereto.
12. JURISDICTION:
FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES THAT THE
COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN CONNECTION WITH
THIS SUBLEASE AND ACCORDINGLY SUBMITS TO THE JURISDICTION OF THE ENGLISH COURTS.
Without prejudice to any other mode of service, the Sublessee:
(a) irrevocably appoints as its agent for service of process Viatel U.K.
Limited in relation to any proceedings before the English courts in
connection with this Sublease;
(b) agrees that failure by a process agent to notify the Sublessee of the
process will not invalidate the proceedings concerned;
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address set forth in
the caption to this Sublease; and
(d) agrees that if the appointment of any person mentioned in paragraph (a)
above ceases to be effective the Sublessee shall immediately appoint a
further person in England to accept service of process on its behalf in
England and, failing such appointment within fifteen (15) days, the
Sublessor is entitled to appoint such a person by notice to the
Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Sublease; and
agrees that a judgment or order of an English court in connection with this
133
Sublease is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Sublease in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED
-----------------------------------
(Sublessor) (Sublessee)
By: By:
------------------------------------ --------------------------------
(Signature) (Title) (Signature) (Title)
134
SUBLEASE SCHEDULE NO. __________ TO SUBLEASE DATED ___________, 2000
THE EQUIPMENT IS LEASED TO SUBLESSOR (IDENTIFIED BELOW)
UNDER THE MASTER LEASE PURCHASE AGREEMENT DATED _____________, 2000,
LEASE SCHEDULE(S) NO(S). ___________________
VIATEL U.K. LIMITED
(Sublessor) (Sublessee)
XXXXXXX XXXXX, 00 XXXXXX XXXX ______________________________________________
(Street)
XXXXXX XXXX 0XX, XXXXXXX ______________________________________________
(City, Postal Code, Country)
The Sublease Agreement is incorporated herein by reference as if set forth at
length and Sublessee and Sublessor confirm that the Sublease Agreement is
subject and subordinate to the Master Lease Purchase Agreement and Lease
Schedule(s) referenced above and otherwise confirm all the terms and provisions
of the Sublease Agreement except as specifically set forth herein to the
contrary.
A. EQUIPMENT
This Sublease Schedule covers certain Equipment described more fully in
Attachment 1 attached hereto and made a part hereof.
B. DEFINITIONS AND MEANINGS OF CERTAIN TERMS
1. Commencement Date: ________________________________.
2. Term of Sublease: _____________ days followed by a basic term of
[Redacted] months, and ending on
3. Sublease Monthly Rent: __________________________________, plus VAT, if
any.
4. Additional Provisions:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
C. RENT PAYMENTS
All rent and all other payments under the Sublease Agreement are to be made to
Sublessor to the following account:
135
Except as expressly modified hereby, all terms and provisions of the Sublease
Agreement remain in full force and effect. The parties hereto have caused their
duly authorized officers to execute this Sublease Schedule as of the
Commencement Date.
VIATEL U.K. LIMITED _____________________________________
(Sublessor) (Sublessee)
By:___________________________________ _____________________________________
-------------------------------------- -------------------------------------
(Title) (Date) (Title) (Date)
136
PART III (A)
FORM OF AGREEMENT FOR ENTRY INTO BETWEEN LESSOR AND [Redacted] SUB-LESSEE
THIS AGREEMENT dated as of this _____ day of ____________, 2000 (hereinafter
referred to as this "Agreement") is executed by and between VIATEL U.K. LIMITED
(Registered No. 2968371), a company organized and existing under English law,
with its mailing address and chief place of business at Xxxxxxx Xxxxx, 00 Xxxxxx
Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as "Sublessor") and
[Viatel Sub] a company incorporated under the laws of ____________, with its
mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, pursuant to the terms of a Sublease dated on or about the date of this
Agreement (the "Sub-Lease") the Sublessee has leased from the Sublessor the
equipment specified in the Sub-Lease;
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease); and
WHEREAS, the Sublessor and the Sublessee wish to provide the terms of which the
equipment may become the property of the Sublessee.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. ASSIGNMENT, POSSESSION AND RETURN:
Upon the expiration of the Term for any Equipment; the Sublessee, on not less
than thirty (30) days prior written notice to the Sublessor, or such lesser
period as the Sublessor may agree, shall be entitled to purchase such Equipment
at a price of one hundred Euros (E100) (the "Option Price") in respect of each
Sublease Schedule, so long as no default under Clause 8(a) of the Sub-Lease or
Event of Default under Clause 16.1(a) of the Base Lease has occurred and is
continuing and no other amount is outstanding under the Transaction Documents.
Upon (i) payment of the Option Price at or following the expiration of the Term
for such Equipment and (ii) the transfer to Sublessor of legal title to, and all
rights and interests in and to, such Equipment, the Sublessor shall transfer
legal title to, and all of its rights and interests in and to, such Equipment to
the Sublessee.
The Sublessor shall transfer legal title to, and all of its rights and interest
in and to, any Equipment as provided above "AS IS, WHERE IS", "WITH ALL FAULTS",
AND WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED.
2. GOVERNING LAW AND JURISDICTION:
(a) This Agreement shall be governed by the laws of England, constitute the
entire agreement and the parties with respect to the subject matter hereof.
Any provision of this Agreement which may be invalid under applicable law
or any government rule or regulation will be deemed omitted, modified or
altered to conform thereto.
137
(b) FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES THAT
THE COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN
CONNECTION WITH THIS AGREEMENT AND ACCORDINGLY SUBMITS TO THE JURISDICTION
OF THE ENGLISH COURTS.
Without prejudice to any other mode of service, the Sublessee:
(i) irrevocably appoints as its agent for service of process Viatel U.K.
Limited in relation to any proceedings before the English courts in
connection with this Agreement;
(ii) agrees that failure by a process agent to notify the Sublessee of the
process will not invalidate the proceedings concerned;
(iii) consents to the service of process relating to any such proceedings
by prepaid posting of a copy of the process to its address set forth
in the caption to this Agreement; and
(iv) agrees that if the appointment of any person mentioned in paragraph
(a) above ceases to be effective the Sublessee shall immediately
appoint a further person in England to accept service of process on
its behalf in England and, failing such appointment within fifteen
(15) days, the Sublessor is entitled to appoint such a person by
notice to the Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Agreement; and
agrees that a judgment or order of an English court in connection with this
Agreement is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction.
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Agreement in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED _____________________________________________
(Sublessor) (Sublessee)
By:__________________________ By:__________________________________________
(Signature) (Title) (Signature) (Title)
138
PART IV
[FOR [Redacted] SUB-LESSEE]
THIS SUBLEASE AGREEMENT dated as of this _____ day of ____________, 2000
(hereinafter referred to as this "Sublease") is executed by and between VIATEL
U.K. LIMITED (Registered No. 2968371), a company organized and existing under
English law, with its mailing address and chief place of business at Xxxxxxx
Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as
"Sublessor") and [Viatel Sub] a company incorporated under the laws of
____________, with its mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, the Sublessee wishes to lease from the Sublessor, and the Sublessor is
willing to lease to the Sublessee the equipment specified in the sublease
schedules in the form of Exhibit A hereto (each a "Sublease Schedule" and
collectively the "Sublease Schedules") executed and delivered by Sublessor and
Sublessee from time to time after the execution and delivery of this Sublease
(collectively the "Equipment").
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease);
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. SUBLEASE:
(a) The Sublessor agrees to sublease and the Sublessee agrees to take on
sublease the Equipment on and subject to the terms of this Sublease.
(b) The Equipment is subject and subordinate to the Base Lease under and
pursuant to which Sublessor has acquired no present right, title, or
interest in or to any of the Equipment other than a leasehold estate.
(c) This Sublease shall be confirmed and effective as to items of Equipment
only upon: (i) due execution of the Base Lease and the commencement of
the leasing of the Equipment under the Base Lease; (ii) due execution
by Sublessor and Sublessee of a Sublease Schedule covering such
Equipment; (iii) due execution and delivery by Sublessor and acceptance
by Lessor of a Sublease Assignment covering such Sublease Schedule, and
service of a notice of such assignment on the Sublessee and receipt by
the Lessor of a signed acknowledgement by the Sublessee of such notice;
and (iv) such other documents as Sublessor may reasonably require. Upon
satisfaction of (i) to (iv) above, the Equipment described therein
shall be deemed to have been delivered to and accepted by Sublessee for
sublease under this Sublease.
2. TERM:
The term of this Sublease for Equipment will commence on the day specified in
the Sublease Schedule covering such Equipment as the "Commencement Date" and
will continue for the period specified as the "Term" in such Sublease Schedule,
as the same may be extended pursuant to the provisions of such Sublease Schedule
139
relating to renewal, if any, but subject always to the Base Lease. The term of
this Sublease (including all extensions hereto) for Equipment will not in any
event extend beyond the Initial Term of the relevant Lease Schedule under the
Base Lease.
3. RENT:
(a) Sublessee agrees to pay rent for Equipment during the Term for such
Equipment on the due dates and in the amount set forth in the Sublease
Schedule covering such Equipment. If any payment hereunder falls due on
a date which is not a Business Day, such payment shall be due and
payable on the next succeeding Business Day.
(b) (i) All payments made by the Sublessee under this Sublease are
calculated without regard to VAT. If any such payment constitutes
the whole or any part of the consideration for a taxable or
deemed taxable supply (whether that supply is taxable pursuant to
the exercise of an option or otherwise) by the Sublessor, the
amount of that payment shall be increased by an amount equal to
the amount of VAT which is chargeable in respect of the taxable
supply in question subject to the production by the Sublessor of
a valid VAT invoice (where applicable) in respect of the VAT in
question.
(ii) In respect of each item of Equipment, subject to the production
by the Sublessor of a valid VAT invoice (where applicable) in
respect of the VAT in question, the Sublessee shall pay to the
Sublessor on or before the fifth (5th) Business Day preceding the
date on which the relevant VAT is due to be accounted for by the
Sublessor to the applicable taxing authority an amount equal to
the amount of VAT for which the then Sublessor is obliged to
account to the applicable taxing authority in respect of the
supply under this Sublease and the relevant Sublease Schedule of
such item of Equipment.
(iii) If, in respect of any item of Equipment, the Sublessor determines
that the consideration for the supply thereof under this Sublease
and the relevant Sublease Schedule is increased or decreased,
then:
(A) if the consideration for the supply is increased, the
Sublessee shall pay to the Sublessor on demand (or, if later
five (5) Business Days before the same is due to be
accounted for by the Sublessor to the applicable taxing
authority) an amount equal to the amount of additional VAT
for which the Sublessor is obligated to account to the
applicable taxing authority; and
(B) if the consideration for the supply is decreased, the
Sublessor shall issue a credit note to the Sublessee in an
amount equal to the credit which the Sublessor claims from
the applicable taxing authority in respect of the reduction
in consideration, and that amount shall be deducted from the
next payment of rent due from the Sublessee in respect of
the relevant item of Equipment or shall be reimbursed to the
Sublessee within two (2) Business Days of demand by the
Sublessee if there is no further payment of rent due or to
the extent that the next such payment is less than the
amount in question.
(iv) Any payment of other consideration to be made or furnished by the
Sublessor to the Sublessee pursuant to or in connection with this
Sublease or any transaction or document contemplated herein may
be increased or added to by reference to (or as a result of any
increase in the rate of) any VAT which shall be or may become
chargeable in respect of the taxable supply in question on the
140
basis that the relevant payment or consideration is stated on an
exclusive of VAT basis.
(v) If and to the extent that the Sublessor (or any company which is
treated as a member of the same group as the Sublessor for VAT
purposes) bears VAT which is Irrecoverable VAT then the Sublessee
shall on or within five (5) Business Days of demand indemnify and
keep indemnified the Sublessor upon demand against such
Irrecoverable VAT such indemnity being in an amount equal to the
after-Tax cost to the Sublessor of such Irrecoverable VAT
together with interest thereon at the rate of LIBOR calculated on
a seven day basis and compounded quarterly from the date upon
which the Sublessor made payment of the amount of such
Irrecoverable VAT to but excluding the date of payment of the
amount of the indemnity.
(c) (i) All payments due to or by the Sublessor under this Sublease shall
be calculated and made free and clear of and without deduction
for, or on account of, any present or future Taxes or other
charges of whatsoever nature, now or hereafter imposed by any
taxing or Governmental Authority whatsoever unless such deduction
or withholding is required by law.
(ii) If such deduction or withholding is required by any law,
regulation or regulatory requirement the Sublessee shall:
(A) if the payment is to be made by the Sublessee, ensure or
procure that the deduction or withholding is made and that
it does not exceed the minimum legal requirement therefor;
(B) pay, or procure the payment of, the full amount deducted or
withheld to the relevant authority in accordance with the
Applicable Law;
(C) (1) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by the
Sublessee, increase the payment in respect of which the
deduction or withholding is required so that the net
amount received by the Sublessor after the deduction or
withholding shall be equal to the amount which the
Sublessor would have been entitled to receive in the
absence of any requirement to make a deduction or
withholding; or
(2) if the deduction or withholding is so required due to a
Change in Law and if the payment is to be made by any
person other that the Sublessee, procure the payment or
pay directly to the Sublessor such sum (a "Compensating
Sum") as will, after taking into account any deduction
or withholding which is required to be made in respect
of the Compensating Sum, result in the Sublessor
receiving, or, as the case may be, paying, on the due
date for payment, a net sum equal to the sum which the
Sublessor would have received or, as the case may be,
paid in the absence of any obligation to make a
deduction or withholding; and
(D) promptly deliver or procure the delivery to the Sublessor of
any appropriate receipts evidencing the deduction or
withholding which has been made, or (in the absence of such
141
receipts) provide a certification to the Sublessor of the
deduction or withholding made.
(iii) The Sublessor agrees to furnish to the Sublessee from time to
time such duly executed and properly completed forms or
certificates that are reasonably requested by the Sublessee in
order to claim any reduction of or exemption from any withholding
or other tax imposed by any taxing authority in respect of any
payments otherwise required to be made by the Sublessee pursuant
to this Sublease, which reduction or exemption may be available
to the Sublessor under Applicable Law.
4. BASE LEASE:
During the Term of this Sublease with respect to Equipment, Sublessee shall (a)
maintain such Equipment on the same terms as those set forth in Section 12 of
the Base Lease and (b) insure such Equipment in compliance with Section 14 of
the Base Lease. In addition, if a termination of the leasing of any Equipment
occurs under the Base Lease and Sublessor is required to return such Equipment
to Lessor, Sublessee shall immediately redeliver such Equipment to Sublessor or,
at Sublessor's direction, to Lessor, at such place in the country in which such
Equipment is then located as Sublessor or Lessor, as the case may be, reasonably
specifies, and will otherwise co-operate with Sublessor in returning such
Equipment to Lessor in the condition in which such Equipment is required to be
returned pursuant to the terms of the Base Lease. Notwithstanding the foregoing
or any other provision of this Sublease or any Sublease Schedule, the Sublessor
and Sublessee acknowledge and agree that the execution and delivery of this
Sublease and Sublease Schedules shall not release the Sublessor from any of its
obligations under the Base Lease or the Transaction Documents.
5. SUBORDINATION:
Sublessor warrants that during the Term of this Sublease with respect to
Equipment, so long as no event of default shall have occurred hereunder,
Sublessor will not interrupt Sublessee's possession, use and operation of such
Equipment. Nevertheless, Sublessee acknowledges that this Sublease and
Sublessee's rights hereunder to the possession, use and enjoyment of the
Equipment are subject and subordinate to all terms and provisions of the Base
Lease, a copy of which has been provided to Sublessee, and to the rights of the
Lessor and Lessor Risk Parties thereunder and under the other Transaction
Documents; provided, however, that upon termination of the leasing of any
Equipment under the Base Lease in circumstances where Sublessor is required to
return such Equipment to Lessor, Lessor may terminate this Sublease with respect
to such Equipment and the right of Sublessee to possess such Equipment.
6. INDEMNIFICATION:
Sublessee agrees to indemnify, save and keep harmless Sublessor and its agents,
employees, successors and assigns from and against any and all losses, damages,
penalties, injuries, claims, actions and suits, including legal expenses of
whatsoever kind and nature, in contract or tort, howsoever arising from any
cause whatsoever, including but not limited to, strict liability in tort, or
otherwise arising out of (i) the selection, manufacture, acceptance or rejection
of the Equipment under this Sublease, the delivery, lease, sublease, possession,
maintenance, use, condition, return or operation of the Equipment (including,
without limitation, latent or other defects, whether or not discoverable by
Sublessor and any claim for patent, trademark or copyright infringement); or
(ii) the condition of the Equipment disposed of after use by Sublessee.
Sublessee will, upon request of Sublessor, at its own expense, defend any and
all actions based on or arising out of any of the foregoing.
142
7. ASSIGNMENT, POSSESSION AND RETURN:
(a) Subject to paragraph (b) below, the Sublessee will not sublease, assign
or otherwise transfer or relinquish possession of the Equipment and any
such sublease, assignment or transfer will, without further act or
instrument, be void and of no force or effect. At the end of the Term
for any Equipment, Sublessee shall, if required, and only if required,
redeliver the Equipment to Sublessor in such place in the country in
which such Equipment is then located as Sublessor shall reasonably
specify in the condition Sublessee is required to maintain such
Equipment as provided in this Sublease.
(b) The Sublessee may transfer all (but not some only) of its rights and
obligations under this Sub-Lease to any member of Viatel, Inc.'s Group
if the Lessee would have been entitled to enter into a Permitted
Sub-Lease with such assignee under Clause 12.3 of the Base Lease,
provided that, prior to such assignment becoming effective, the
SubLessor shall notify the Lessor of the proposed transfer, shall give
notice of the Sub-Lease Assignment to the transferee and shall procure
an acknowledgement to such notice, in each case in the form required by
the Sub-Lease Assignment, mutatis mutandis.
8. DEFAULTS; REMEDIES:
Each of the following will constitute a default hereunder: (a) Sublessee fails
to pay rent or any other amount when due under this Sublease or any Sublease
Schedule; (b) Sublessee breaches any other term, provision, obligation or
covenant of this Sublease which breach, if remediable, is not cured within 30
days after written notice thereof is given by the Sublessor to the Sublessee;
and (c) a Sublessee Insolvency Event shall occur. Upon the occurrence of any
default under this Sublease, Sublessor, at its option, may do any one or more of
the following: (1) declare this Sublease and all of the Sublease Schedules in
default upon notice to Sublessee; (2) proceed by appropriate court action or
actions at law or in equity or in insolvency or bankruptcy as permitted under
Applicable Law, including to enforce performance by Sublessee of the covenants
and terms of this Sublease and/or to recover damages for the breach of this
Sublease; (3) terminate this Sublease and all of the Sublease Schedules upon
notice to Sublessee; and (4) whether or not this Sublease and the Sublease
Schedules are terminated, and without notice to Sublessee, repossess the
Equipment wherever found, with or without legal process, and for this purpose
Sublessor and/or its agents may enter upon any premises of or under the control
or jurisdiction of Sublessee or any agent of Sublessee without liability for
suit, action or other proceeding by Sublessor (any damages occasioned by such
repossession being herein expressly waived by Sublessee except for damages
occasioned by the gross negligence or wilful misconduct of Sublessor or its
agents) and remove the Equipment therefrom. The remedies provided in this
Section 8 in favour of Sublessor are not exclusive but will be cumulative and
will be in addition to all other remedies in Sublessor's favour existing under
Applicable Law, including at law, in equity or in bankruptcy.
9. ASSIGNMENT OF SUBLEASE:
(a) Sublessee acknowledges receipt of a copy of the notice of Sub-Lease
Assignment. Sublessee hereby agrees to execute and deliver to Lessor
the Acknowledgement in the form attached as Part II of Schedule I to
the Sub-Lease Assignment.
(b) Lessor may sell and/or assign the Equipment and/or Base Lease, all as
provided for in the Base Lease, whereupon without further act or
instrument (except for written notice to Sublessee of such sale or
assignment), such purchaser or assignee of the Equipment and the Base
Lease shall assume the benefits of this Sublease and the Sub-Lease
Assignment and the obligations of the Sublessee under the
Acknowledgement.
143
(c) Notwithstanding any term or provision contained in this Sublease, the
obligations of the Lessee under the Base Lease are and shall remain
obligations of the Sublessor.
10. NO OWNERSHIP INTEREST IN EQUIPMENT; REPOSSESSION OF EQUIPMENT:
In no event shall this Sublease be construed as a sale of the Equipment,
Sublessee shall acquire no ownership, title, property, right or interest in or
with respect to the Equipment other than its leasehold interest hereunder. It is
the express intention of the parties that if the leasing of the Equipment
terminates in accordance with the terms of the Base Lease and Sublessor is
required to return the Equipment to Lessor, if the Equipment is not so returned
in accordance with the terms of the Base Lease, Lessor shall have the right to
pursue all remedies under Applicable Law to cause the return of the Equipment,
including, without limitation, the right to repossess the Equipment in
accordance with Applicable Law and the Base Lease.
11. MISCELLANEOUS:
The terms of this Sublease shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Sublessor and Sublessee. This Sublease and any instrument referred to
herein together with the Sublease Schedules and all attachments and riders
thereto signed by the parties or delivered in connection herewith shall be
governed by the laws of England, constitute the entire agreement of the parties
with respect to the subject matter hereof and will collectively constitute the
Sublease with respect to the Equipment and supersede all negotiations and prior
written or oral agreements of the parties with respect thereto. Any provision
contained in this Sublease which may be invalid under applicable law or any
government rule or regulation will be deemed omitted, modified or altered to
conform thereto.
12. JURISDICTION:
FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES THAT THE
COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN CONNECTION WITH
THIS SUBLEASE AND ACCORDINGLY SUBMITS TO THE JURISDICTION OF THE ENGLISH COURTS.
Without prejudice to any other mode of service, the Sublessee:
(a) irrevocably appoints as its agent for service of process Viatel U.K.
Limited in relation to any proceedings before the English courts in
connection with this Sublease;
(b) agrees that failure by a process agent to notify the Sublessee of the
process will not invalidate the proceedings concerned;
(c) consents to the service of process relating to any such proceedings by
prepaid posting of a copy of the process to its address set forth in
the caption to this Sublease; and
(d) agrees that if the appointment of any person mentioned in paragraph (a)
above ceases to be effective the Sublessee shall immediately appoint a
further person in England to accept service of process on its behalf in
England and, failing such appointment within fifteen (15) days, the
Sublessor is entitled to appoint such a person by notice to the
Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Sublease; and
agrees that a judgment or order of an English court in connection with this
144
Sublease is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction.
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Sublease in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED ___________________________________________
(Sublessor) (Sublessee)
By:____________________________ By:________________________________________
(Signature) (Title) (Signature) (Title)
145
SUBLEASE SCHEDULE NO. __________ TO SUBLEASE DATED ___________, 2000
THE EQUIPMENT IS LEASED TO SUBLESSOR (IDENTIFIED BELOW)
UNDER THE MASTER LEASE PURCHASE AGREEMENT DATED _____________, 2000,
LEASE SCHEDULE(S) NO(S). ___________________
VIATEL U.K. LIMITED
(Sublessor) (Sublessee)
XXXXXXX XXXXX, 00 XXXXXX XXXX
----------------------------- ----------------------------------------
(Street)
XXXXXX XXXX 0XX, XXXXXXX
----------------------------- ----------------------------------------
(City, Postal Code, Country)
The Sublease Agreement is incorporated herein by reference as if set forth at
length and Sublessee and Sublessor confirm that the Sublease Agreement is
subject and subordinate to the Master Lease Purchase Agreement and Lease
Schedule(s) referenced above and otherwise confirm all the terms and provisions
of the Sublease Agreement except as specifically set forth herein to the
contrary.
A. EQUIPMENT
This Sublease Schedule covers certain Equipment described more fully in
Attachment 1 attached hereto and made a part hereof.
B. DEFINITIONS AND MEANINGS OF CERTAIN TERMS
1. Commencement Date: ________________________________.
2. Term of Sublease: _____________ days followed by a basic term of
[Redacted] months, and ending on
3. Sublease Monthly Rent: __________________________________, plus VAT, if
any.
4 Additional Provisions:
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
C. RENT PAYMENTS
All rent and all other payments under the Sublease Agreement are to be made to
Sublessor to the following account:
146
Except as expressly modified hereby, all terms and provisions of the Sublease
Agreement remain in full force and effect. The parties hereto have caused their
duly authorized officers to execute this Sublease Schedule as of the
Commencement Date.
VIATEL U.K. LIMITED _________________________________
(Sublessor) (Sublessee)
By: __________________________________ _________________________________
-------------------------------------- ---------------------------------
(Title) (Date) (Title) (Date)
147
PART IV(A)
FORM OF AGREEMENT FOR ENTRY INTO BETWEEN LESSOR AND [Redacted] SUB-LESSEE
THIS AGREEMENT dated as of this _____ day of ____________, 2000 (hereinafter
referred to as this "Agreement") is executed by and between VIATEL U.K. LIMITED
(Registered No. 2968371), a company organized and existing under English law,
with its mailing address and chief place of business at Xxxxxxx Xxxxx, 00 Xxxxxx
Xxxx, Xxxxxx XX0X 0XX, Xxxxxxx (hereinafter referred to as "Sublessor") and
[Viatel Sub] a company incorporated under the laws of ____________, with its
mailing address and chief place of business at
_______________________________________________ (hereinafter referred to as
"Sublessee").
WHEREAS, pursuant to the terms of a Sub-Lease dated on or about the date of this
Agreement (the "SUB-LEASE") the Sublessee has leased from the Sublessor the
equipment specified in the Sub-Lease;
WHEREAS, the Sublessor is leasing the equipment as lessee pursuant to the Master
Lease Purchase Agreement, dated ____, 2000 (the "Base Lease"), between Dresdner
Kleinwort Xxxxxx Finance Limited (in its capacity as security trustee for and on
behalf of itself and each of the Lessor Risk Parties (together with its
successors, permitted assigns and permitted transferees, the "Lessor") and
Sublessor (unless otherwise indicated, capitalized terms used herein have the
meanings given to such terms in the Base Lease); and
WHEREAS, the Sublessor and the Sublessee wish to provide the terms of which the
equipment may become the property of the Sublessee.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. ASSIGNMENT, POSSESSION AND RETURN:
Upon the expiration of the Term for any Equipment so long as no default under
Clause 8(a) of the Sub-Lease or Event of Default under Clause 16.1(a) of the
Base Lease has occurred and is continuing and no other amount is outstanding
under the Transaction Documents then immediately upon the transfer to Sublessor
of legal title to, and all rights and interests in and to, such Equipment, the
Sublessor shall transfer legal title to, and all of its rights and interests in
and to, such Equipment to the Sublessee.
The Sublessor shall transfer legal title to, and all of its rights and interest
in and to, any Equipment as provided above "AS IS, WHERE IS", "WITH ALL FAULTS",
AND WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED.
2. GOVERNING LAW AND JURISDICTION:
(a) This Agreement shall be governed by the laws of England, constitute the
entire agreement and the parties with respect to the subject matter
hereof. Any provision of this Agreement which may be invalid under
applicable law or any government rule or regulation will be deemed
omitted, modified or altered to conform thereto.
(b) FOR THE BENEFIT OF THE SUBLESSOR AND THE LESSOR, THE SUBLESSEE AGREES
THAT THE COURTS OF ENGLAND HAVE JURISDICTION TO SETTLE ANY DISPUTES IN
CONNECTION WITH THIS AGREEMENT AND ACCORDINGLY SUBMITS TO THE
JURISDICTION OF THE ENGLISH COURTS.
148
Without prejudice to any other mode of service, the Sublessee:
(i) irrevocably appoints as its agent for service of process Viatel
U.K. Limited in relation to any proceedings before the English
courts in connection with this Agreement;
(ii) agrees that failure by a process agent to notify the Sublessee of
the process will not invalidate the proceedings concerned;
(iii) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process to its
address set forth in the caption to this Agreement; and
(iv) agrees that if the appointment of any person mentioned in
paragraph (a) above ceases to be effective the Sublessee shall
immediately appoint a further person in England to accept service
of process on its behalf in England and, failing such appointment
within fifteen (15) days, the Sublessor is entitled to appoint
such a person by notice to the Sublessee.
The Sublessee waives objection to the English courts on grounds of inconvenient
forum or otherwise as regards proceedings in connection with this Agreement; and
agrees that a judgment or order of an English court in connection with this
Agreement is conclusive and binding on it and may be enforced against it in the
courts of any other jurisdiction.
Nothing in this clause limits the right of the Sublessor or the Lessor to bring
proceedings against the Sublessee in connection with this Agreement in any other
court of competent jurisdiction or concurrently in more than one jurisdiction.
VIATEL U.K. LIMITED _____________________________
(Sublessor) (Sublessee)
By:____________________________ By:________________________________________
(Signature) (Title) (Signature) (Title)
149
SCHEDULE 7
FORMS OF NOTICES TO LANDLORDS
VIATEL [Redacted] SUB-LEASE
[ON LETTERHEAD OF VIATEL [Redacted], AS APPROPRIATE]
[TO BE PRODUCED IN THE [Redacted] LANGUAGE, AS APPROPRIATE]
[PLACE], [DATE], 2000
Sirs,
Acting in your capacity as landlord of the rented premises [DESCRIBE
PREMISES] (the "PREMISES") with regard to the terms and conditions of a
lease agreement signed in favour of Viatel [INSERT COMPANY
HEADQUARTERS, COMPANY REGISTRATION NUMBER] ("VIATEL") dated [DATE], we
inform you, through this letter, that the leased equipment appearing in
the list in the Schedule (the "EQUIPMENT") will be installed in the
Premises as of [DATE [this date must be later than, or on, the date of
receipt of this letter]].
The Equipment is the exclusive property of Dresdner Kleinwort Xxxxxx
Finance Limited, owner of the Equipment, and Viatel has no property or
possessory right whatsoever over the Equipment.
This notification informs you in your capacity as landlord that the
Equipment is not the property of Viatel, and thus prevents you from
exercising any privilege over the Equipment with respect to obligations
of Viatel [in accordance with the rights defined in [Redacted].
You are kindly requested to acknowledge the receipt of this letter by
signing a copy and returning it to the address above.
Yours faithfully
(SIGNATURE OF VIATEL [Redacted] SUB-LESSEE, AS APPROPRIATE)
-----------------------------------------------------------------------
I confirm and acknowledge receipt:
------------------------------- --------------------------------
Signed By Dated
-----------------------------
* Select as approptiate for [Redacted] notices. Leave blank for [Redacted].
150
SCHEDULE
THE CABINET(S) TO WHICH A PLATE HAS BEEN AFFIXED IDENTIFYING THE
OWNER OF THE EQUIPMENT AS DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
AND ALL EQUIPMENT IN THAT (THOSE) CABINET(S) INCLUDING, BUT NOT
LIMITED TO, THE EQUIPMENT AS SET OUT IN THIS SCHEDULE BELOW:
LIST OF EQUIPMENT
[insert details]
151
VIATEL [Redacted] SUB-LEASE
[ON LETTERHEAD OF VIATEL [Redacted] SUB-LESSEE]
[TO BE PRODUCED IN THE [Redacted] LANGUAGE
[PLACE], [DATE], 2000
Sirs,
Acting in your capacity as landlord of the rented premises [DESCRIBE
PREMISES] (the "Premises") with regards to the terms and conditions of
a lease agreement signed in favour of Viatel [INSERT COMPANY
HEADQUARTERS, COMPANY REGISTRATION NUMBER] ("VIATEL") dated [DATE], we
inform you, through this letter, that the leased equipment appearing in
the list in the Schedule (the "EQUIPMENT") will be installed in the
Premises as of [DATE [this date must be later than, or on, the date of
receipt of this letter]].
The Equipment is the exclusive property of Dresdner Kleinwort Xxxxxx
Finance Limited, owner of the Equipment, and Viatel has no property or
possessory right whatsoever over the Equipment.
This notification informs you in your capacity as landlord that the
Equipment is not the property of Viatel, and thus prevents you from
exercising any privilege over the Equipment with respect to obligations
of Viatel.
On behalf of Dresdner Kleinwort Xxxxxx Finance Limited, you are kindly
requested to acknowledge the receipt of this letter by signing a copy
and returning it to the address above.
Yours faithfully
(SIGNATURE OF VIATEL [Redacted] SUB-LESSEE)
-----------------------------------------------------------------------
I confirm and acknowledge receipt:
------------------------------ ---------------------------------
Signed By Dated
152
SCHEDULE
THE CABINET(S) TO WHICH A PLATE HAS BEEN AFFIXED IDENTIFYING THE
OWNER OF THE EQUIPMENT AS DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
AND ALL EQUIPMENT IN THAT (THOSE) CABINET(S) INCLUDING, BUT NOT
LIMITED TO, THE EQUIPMENT AS SET OUT IN THIS SCHEDULE BELOW:
LIST OF EQUIPMENT
[insert details]
153
VIATEL US SUB-LEASE
[ON LETTERHEAD OF VIATEL US SUB-LESSEE]
(APPLIES TO BOTH NEW-JERSEY AND NEW-YORK)
[ADDRESS]
[PLACE], [DATE], 2000
Sirs,
Acting in your capacity as landlord of the rented premises [DESCRIBE
PREMISES] (the "PREMISES") with regards to the terms and conditions of
a lease agreement signed in favour of Viatel [INSERT COMPANY
HEADQUARTERS, COMPANY REGISTRATION NUMBER] ("Viatel")dated [DATE], we
inform you, through this letter, that the leased equipment appearing in
the list in the Schedule (the "EQUIPMENT") will be installed in the
Premises as of [DATE [this date must be later than, or on, the date of
receipt of this letter]].
The Equipment is the exclusive property of Dresdner Kleinwort Xxxxxx
Finance Limited, owner of the Equipment, and Viatel has no property or
possessory right whatsoever over the Equipment.
This notification informs you in your capacity as landlord that the
Equipment is not the property of Viatel.
On behalf of Dresdner Kleinwort Xxxxxx Finance Limited you are kindly
requested to acknowledge the receipt of this letter by signing a copy
and returning it to the address above.
Execution of this letter indicates that you have received notice and
waive and relinquish any landlord's lien or rights over the Equipment
that may have been granted under the lease or applicable law and that
you acknowledge that the Equipment may be installed in or located on
the Premises and is not and shall not be deemed a fixture or part of
the real property but shall at all times be considered personal
property.
By signing the acknowledgement below, you will also be permitting
Dresdner Kleinwort Xxxxxx Finance Ltd or any appointed agent to enter
your premises on short notice for the sole purpose of repossessing or
removing the Equipment.
Yours faithfully
(SIGNATURE OF VIATEL US SUB-LESSEE)
-----------------------------------------------------------------------
I confirm and acknowledge receipt and hereby waive any lien or rights
over the Equipment set out in the Schedule to this letter that I might
otherwise be entitled to under the provisions of the lease or
applicable law.
154
I confirm that I will permit Dresdner Kleinwort Xxxxxx Finance Ltd or
any appointed agent to enter my premises on short notice for the sole
purpose of repossessing or removing the Equipment.
----------------------------------- ----------------------------
Signed By Dated
155
SCHEDULE
THE CABINET(S) TO WHICH A PLATE HAS BEEN AFFIXED IDENTIFYING THE
OWNER OF THE EQUIPMENT AS DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
AND ALL THE EQUIPMENT IN THAT (THOSE) CABINET(S) INCLUDING, BUT NOT
LIMITED TO, THE EQUIPMENT AS SET OUT IN THIS SCHEDULE BELOW:
LIST OF EQUIPMENT
[insert details]
156
VIATEL [Redacted] SUB-LEASE
[ON LETTERHEAD OF VIATEL [Redacted] SUB-LESSEE]
[TO BE PRODUCED IN THE [Redacted] LANGUAGE
[PLACE], [DATE], 2000
Sirs,
Acting in your capacity as landlord of the rented premises [DESCRIBE
PREMISES] (the "PREMISES") with regards to the terms and conditions of
a lease agreement signed in favour of Viatel [INSERT COMPANY
HEADQUARTERS, COMPANY REGISTRATION NUMBER] ("VIATEL") dated [DATE], we
inform you, through this letter, that the leased equipment appearing in
the list in the Schedule (the "EQUIPMENT") will be installed in the
Premises as of [DATE [this date must be later than, or on, the date of
receipt of this letter]].
The Equipment is the exclusive property of Dresdner Kleinwort Xxxxxx
Finance Limited, owner of the Equipment, and Viatel has no property or
possessory right whatsoever over the Equipment.
This notification informs you in your capacity as landlord that the
Equipment is not the property of Viatel, and thus prevents you from
exercising any privilege over the Equipment with respect to obligations
of Viatel.
On behalf of Dresdner Kleinwort Xxxxxx Finance Limited please sign a
copy of this letter to indicate your receipt and confirmation of the
interests of Dresdner Kleinwort Xxxxxx Finance Limited and then return
it to the address above.
Yours faithfully
(SIGNATURE OF VIATEL [Redacted] SUB-LESSEE)
-----------------------------------------------------------------------
I confirm and acknowledge receipt of the letter and of the title of
Dresdner Kleinwort Xxxxxx Finance Limited to the Equipment set out in
the Schedule to the letter:
----------------------------------- ----------------------------
Signed By Dated
157
SCHEDULE
THE CABINET(S) TO WHICH A PLATE HAS BEEN AFFIXED IDENTIFYING THE
OWNER OF THE EQUIPMENT AS DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
AND ALL THE EQUIPMENT IN THAT (THOSE) CABINET(S) INCLUDING, BUT NOT
LIMITED TO THE EQUIPMENT AS SET OUT IN THIS SCHEDULE BELOW:
LIST OF EQUIPMENT
[insert details]
158
SCHEDULE 8
SCHEDULE OF EURO AND [Redacted] HIGH YIELD NOTES
EURO HIGH YIELD NOTES:
1. Euro 12.75 per cent. maturing 15th April, 2008.
2. Euro 11.5 per cent. maturing 15th March, 2009.
[Redacted] HIGH YIELD NOTES:
[Redacted]
159
SCHEDULE 9
FORM OF SUBORDINATION LETTER AGREEMENT
PART I
[FOR ALL SUB-LESSEE JURISDICTIONS OTHER THAN [Redacted]]
DATED , 2000
VIATEL U.K. LIMITED
and
[VIATEL SUB-LESSEE]
and
DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
--------------------------------------------
SUBORDINATION LETTER AGREEMENT
--------------------------------------------
[GRAPHIC OMITTED][GRAPHIC OMITTED]
London
160
THIS AGREEMENT is dated [ ], 2000,
BETWEEN:
(1) VIATEL U.K. LIMITED (Registered No. 2968371) whose registered office is
at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX (together with its
successors, permitted assigns and transferees, the "LESSEE");
(3) VIATEL SUB-LESSEE [INSERT COMPANY DETAILS]; and
(2) DRESDNER KLEINWORT XXXXXX FINANCE LIMITED (Registered No. 212857) whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (together
with its successors, permitted assigns and permitted transferees,
"DKB").
IT IS AGREED AS FOLLOWS:
1. Reference is made to :
(a) the Master Lease Purchase Agreement dated [ ], 2000 between
DKB, as Lessor, and the Lessee, (the "MASTER LEASE") in
relation to certain optical network and transmission equipment
as more fully described in the Master Lease (the "EQUIPMENT");
(b) the Sub-Lease Agreement dated [ ], 2000 between the Lessee as
sub-lessor, and [Viatel Sub-Lessee], as sub-lessee (the
"EQUIPMENT SUB-LEASE") relating to certain of the Equipment
(being that located in [relevant jurisdiction] (the "RELEVANT
EQUIPMENT");
2. A term defined in the Master Lease has the same meaning when used in
this Deed, unless it is otherwise defined in this Deed or the context
otherwise requires.
3. For the benefit of DKB, the Lessee and [Viatel Sub-Lessee] acknowledge
and agree that DKB has agreed to the leasing of the Equipment to the
Lessee and the sub-leasing of the Relevant Equipment to [Viatel
Sub-Lessee] on the basis that the right, title and interest of the
Lessee and [Viatel Sub-Lessee] (whether pursuant to or through the
Master Lease or the Equipment Sub-Lease, at law or otherwise howsoever)
in and to the Equipment (in respect of the Lessee) and the Relevant
Equipment (in respect of [Viatel Sub-Lessee]) is in all respects
subject and subordinate to those of DKB as owner and lessor of the
Equipment.
4. In consideration of DKB agreeing to lease the Equipment to the Lessee
pursuant to the Master Lease and to the leasing of the Relevant
Equipment to [Viatel Sub-Lessee] and the payment by DKB to [Viatel
Sub-Lessee] of E10 and other valuable consideration, receipt and
sufficiency of which is hereby acknowledged by [Viatel Sub-Lessee],
[Viatel Sub-Lessee] agrees that:
(a) its rights under the Equipment Sub-Lease and its right, title and
interest in, to and under the Relevant Equipment (whether
pursuant to or through the Master Lease or the Equipment
Sub-Lease, at law or otherwise howsoever) are subject and
subordinate in all respects to DKB's rights under the Master
Lease and its right, title and interest in, to and under the
Equipment as owner and lessor of the Equipment and to the
Lessee's rights under the Master Lease;
(b) its rights to possession of the Relevant Equipment, and the
sub-leasing of it, under the Equipment Sub-Lease and any other
right of possession which it may have at law or otherwise will
161
terminate immediately and automatically (and without any notice
from or action by the Lessee or DKB) on the termination of the
leasing of the Equipment under the Master Lease for any reason;
(c) upon written notification from DKB that the leasing of the
Equipment or, as the case may be, the Relevant Equipment, under
the Master Lease has terminated and that DKB requires the
Relevant Equipment to be redelivered to it, it will promptly
redeliver the Relevant Equipment to DKB at [ ] or at such other
place within [the relevant country] reasonably specified by DKB;
(d) it will have no claim (including without limitation a claim in
damages) of any kind against DKB or the Relevant Equipment
arising from any breach, non-performance or default by the Lessee
or any termination of the leasing of the Relevant Equipment under
the Equipment Sub-Lease for any reason and will look solely to
the Lessee in respect of any such claim which it may have
pursuant to the Equipment Sub-Lease, at law or otherwise.
5. This agreement shall be governed by the laws of England. [Viatel
Sub-Lessee] agrees for the benefit of DKB that any legal action or
proceedings arising out of or in connection with this agreement against
[Viatel Sub-Lessee] or any of its assets may be brought in the English
courts and irrevocably and unconditionally submits to the jurisdiction
of such courts and waives objection to the English courts on grounds of
inconvenient forum or otherwise in connection with this agreement and
irrevocably designates, appoints and empowers [Agent] [reference; ] at
present of [ ] to receive for it and on its behalf, service of process
issued out of the English courts in any legal action or proceeding
arising out of and in connection with this agreement. The submission to
such jurisdiction shall not (and shall not be construed so as to) limit
the right of DKB to take proceedings against [Viatel Sub-Lessee] in the
courts of any other competent jurisdiction, nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.
[Viatel Sub-Lessee] further agrees that only the courts of England and
not those of any other jurisdiction shall have jurisdiction to
determine any claim which [Viatel Sub-Lessee] may have against DKB
arising out of and in connection with this agreement.
Signed by the Lessee, [Viatel Sub-Lessee] and DKB on the day and year above
written.
SIGNED )
)
by Viatel U.K. Limited )
acting by [ ] and )
[ ] acting under the )
authority of that company: )
SIGNED )
)
by [Viatel Sub-Lessee] )
a company duly incorporated in [ ] acting)
by [ ] and [ ] )
acting under the authority of that company: )
162
SIGNED BY
.......................................
for and on behalf of DRESDNER
KLEINWORT XXXXXX FINANCE LIMITED
163
PART II
[FOR VIATEL [Redacted] SUB-LESSEE]
DATED , 2000
VIATEL U.K. LIMITED
and
[VIATEL SUB-LESSEE]
and
DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
--------------------------------------------
SUBORDINATION LETTER AGREEMENT
--------------------------------------------
[Graphic Omitted]
London
164
THIS AGREEMENT is dated [ ], 2000,
BETWEEN:
(1) VIATEL U.K. LIMITED (Registered No. 2968371) whose registered office is
at Xxxxxxx Xxxxx, 00 Xxxxxx Xxxx, Xxxxxx XX0X 0XX (together with its
successors, permitted assigns and transferees, the "LESSEE");
(3) VIATEL [Redacted] SUB-LESSEE [INSERT COMPANY DETAILS]; and
(2) DRESDNER KLEINWORT XXXXXX FINANCE LIMITED (Registered No. 212857) whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (together
with its successors, permitted assigns and permitted transferees,
"DKB").
IT IS AGREED AS FOLLOWS:
1. Reference is made to :
(a) the Master Lease Purchase Agreement dated [ ], 2000 between
DKB, as Lessor, and the Lessee, (the "MASTER LEASE") in
relation to certain optical network and transmission equipment
as more fully described in the Master Lease (the "EQUIPMENT");
(b) the Sub-Lease Agreement dated [ ], 2000 between the Lessee as
sub-lessor, and [Viatel [Redacted] Sub-Lessee], as sub-lessee
(the "EQUIPMENT SUB-LEASE") relating to certain of the
Equipment (being that located in [relevant jurisdiction] (the
"RELEVANT EQUIPMENT");
2. A term defined in the Master Lease has the same meaning when used in
this Deed, unless it is otherwise defined in this Deed or the context
otherwise requires.
3. For the benefit of DKB, the Lessee and [Viatel [Redacted] Sub-Lessee]
acknowledge and agree that DKB has agreed to the leasing of the
Equipment to the Lessee and the sub-leasing of the Relevant Equipment
to [Viatel [Redacted] Sub-Lessee] on the basis that the right, title
and interest of the Lessee and [Viatel [Redacted] Sub-Lessee] (whether
pursuant to or through the Master Lease or the Equipment Sub-Lease, at
law or otherwise howsoever) in and to the Equipment (in respect of the
Lessee) and the Relevant Equipment (in respect of [Viatel [Redacted]
Sub-Lessee]) is in all respects subject and subordinate to those of DKB
as owner and lessor of the Equipment.
4. In consideration of DKB agreeing to lease the Equipment to the Lessee
pursuant to the Master Lease and to the leasing of the Relevant
Equipment to [Viatel [Redacted] Sub-Lessee] and the payment by DKB to
[Viatel [Redacted] Sub-Lessee] of E10 and other valuable consideration,
receipt and sufficiency of which is hereby acknowledged by [Viatel
[Redacted] Sub-Lessee], [Viatel [Redacted] Sub-Lessee] agrees that:
(a) its rights under the Equipment Sub-Lease and its right, title and
interest in, to and under the Relevant Equipment (whether
pursuant to or through the Master Lease or the Equipment
Sub-Lease, at law or otherwise howsoever) are subject and
subordinate in all respects to DKB's rights under the Master
Lease and its right, title and interest in, to and under the
Equipment as owner and lessor of the Equipment and to the
Lessee's rights under the Master Lease;
165
(b) its rights to possession of the Relevant Equipment, and the
sub-leasing of it, under the Equipment Sub-Lease will terminate
immediately and automatically on the termination of the leasing
of the Equipment or, as the case may be, the Relevant Equipment
under the Master Lease for any reason, as consequence of the fact
that the Equipment Sub-Lease automatically and by force of law
will be rescinded ([Redacted]) upon the termination of the
leasing of the Equipment or, as the case may be, the Relevant
Equipment under the Master Lease for any reason;
(c) upon written notification from DKB that the leasing of the
Equipment or, as the case may be, the Relevant Equipment, under
the Master Lease has terminated and that DKB requires the
Relevant Equipment to be redelivered to it, it will promptly
redeliver the Relevant Equipment to DKB at [ ] or at such other
place within [the relevant country] reasonably specified by DKB;
(d) it will have no claim (including without limitation a claim in
damages) of any kind against DKB or the Relevant Equipment
arising from any breach, non-performance or default by the Lessee
or any termination of the leasing of the Relevant Equipment under
the Equipment Sub-Lease for any reason and will look solely to
the Lessee in respect of any such claim which it may have
pursuant to the Equipment Sub-Lease, at law or otherwise.
5. This agreement shall be governed by the laws of England. [Viatel
[Redacted] Sub-Lessee] agrees for the benefit of DKB that any legal
action or proceedings arising out of or in connection with this
agreement against [Viatel [Redacted] Sub-Lessee] or any of its assets
may be brought in the English courts and irrevocably and
unconditionally submits to the jurisdiction of such courts and waives
objection to the English courts on grounds of inconvenient forum or
otherwise in connection with this agreement and irrevocably designates,
appoints and empowers [Agent] [reference; ] at present of [ ] to
receive for it and on its behalf, service of process issued out of the
English courts in any legal action or proceeding arising out of and in
connection with this agreement. The submission to such jurisdiction
shall not (and shall not be construed so as to) limit the right of DKB
to take proceedings against [Viatel [Redacted] Sub-Lessee] in the
courts of any other competent jurisdiction, nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.
[Viatel [Redacted] Sub-Lessee] further agrees that only the courts of
England and not those of any other jurisdiction shall have jurisdiction
to determine any claim which [Viatel [Redacted] Sub-Lessee] may have
against DKB arising out of and in connection with this agreement.
Signed by the Lessee, [Viatel[Redacted] Sub-Lessee] and DKB on the day and year
above written.
SIGNED )
)
by Viatel U.K. Limited )
acting by [ ] and )
[ ] acting under the )
authority of that company: )
166
SIGNED )
)
by [Viatel [Redacted] Sub-Lessee] )
a company duly incorporated in [ ] acting)
by [ ] and [ ] )
acting under the authority of that company: )
SIGNED BY
.......................................................
for and on behalf of DRESDNER
KLEINWORT XXXXXX FINANCE LIMITED
167
SIGNATORIES
LESSOR
DRESDNER KLEINWORT XXXXXX FINANCE LIMITED
By: XXXXX XXXX XXXXXXX By: XXXXXXX XXXXXXXX XXXXX
Name: Xxxxx Xxxx Xxxxxxx Name: Xxxxxxx Xxxxxxxx Xxxxx
Title: Authorised Signatory Title: Authorised Signatory
LESSEE
VIATEL U.K. LIMITED
By: XXXXX X. XXXX By: XXXXX X. XXXXXXXX, XX.
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Director Title: Director
