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LEASE AGREEMENT
This LEASE AGREEMENT, is effective on October 1, 1999 between
TELECOMMUNICATIONS FINANCE GROUP (hereinafter "Lessor"), and AXISTEL
COMMUNICATIONS, INC., a Delaware corporation with its principal office located
at Xxx Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000,
(hereinafter "Lessee").
1. Lease.
Lessor, subject to the conditions set forth in Section 25 hereof, agrees
to lease to Lessee and Lessee agrees to lease from Lessor hereunder, those
items of personal property (the "equipment") which are described on Schedule 1
hereto and amendments to Schedule 1. Lessee agrees to execute and deliver to
Lessor a Certificate of Delivery and Acceptance immediately after Acceptance of
the equipment, and such execution shall constitute Lessee's irrevocable
acceptance of such items of equipment for all purposes of this Lease.
2. Definitions.
"Acceptance" shall mean that point in time when the equipment installation
personnel complete testing of the equipment and Lessee concurs that the
installation effort is complete, or when the equipment is placed into
service, whichever first occurs.
"Amortization Deductions" as defined in Section II (b)(i) hereof.
"Appraisal Procedure" shall mean the following procedure for determining
the Fair Market Sale Value of any item of equipment. If either Lessor or
Lessee shall request by notice (the "Appraisal Request") to the other that
such value be determined by the Appraisal Procedure, (i) Lessor and Lessee
shall, within 15 days after the Appraisal Request, appoint an independent
appraiser mutually satisfactory to them, or (ii) if the parties are unable
to agree on a mutually acceptable appraiser within such time, Lessor and
Lessee shall each appoint one independent appraiser (provided that if
either party hereto fails to notify the other party hereto of the identity
of the independent appraiser chosen by it within 30 days after the
Appraisal Request, the determination of such value shall be made by the
independent appraiser chosen by such other party), and (iii) if such
appraisers cannot agree on such value within 20 days after their
appointment and if one appraisal is not within 5% of the other appraisal,
Lessor and Lessee shall choose a third independent appraiser mutually
satisfactory to them (or, if they fail to agree upon a third appraiser
within 25 days after the appointment of the first two appraisers, such
third independent appraiser shall within 20 days thereafter be appointed by
the American Arbitration Association), and such value shall be determined
by such third independent appraiser within 20 days after his appointment,
after consultation with the other two independent appraisers. If the first
two appraisals are within 5% of each other, then the average of the two
appraisals shall be the Fair Market Sale Value. The fees and expenses of
all appraisers shall be paid by Lessee.
"Business Day" shall mean a day other than a Saturday, Sunday or legal
holiday under the laws of the State of Florida.
"Certificate of Delivery and Acceptance" as defined in Section I hereof.
"Code" shall mean the Internal Revenue Code of 1954, as amended, or any
comparable successor law.
"Commencement Date" as defined in Section 3 hereof.
"Default" shall mean any event or condition which after the giving of
notice or lapse of time or both would become an Event of Default.
"Equipment" as defined in Section 1 hereof.
"Event of Default" as defined in Section 18 hereof.
"Event of Loss" shall mean, with respect to any item of equipment, the
actual or constructive total loss of such item of equipment or the use
thereof, due to theft, destruction, damage beyond repair or rendition
thereof permanently unfit for normal use from any reason whatsoever, or
the condemnation, confiscation or seizure of, or requisition of title to
or use of, such item of equipment.
"Fair Market Sale Value" shall, at any time with respect to any item of
equipment, be equal to the sale value of such item of equipment which
would be obtained in an arm's-length transaction between an informed and
willing seller under no compulsion to sell and an informed and willing
buyer-user (other than a lessee currently in possession or a used
equipment or scrap dealer). For purposes of Section 7(b) hereof, Fair
Market Sale Value shall be determined by (i) an independent appraiser (at
Lessee's expense) selected by Lessor or (ii) by the Appraisal Procedure if
the Appraisal Request is made at least 90 days (but not more than 360
days) prior to the termination or expiration of the Lease Term, as the
case may be, which determination shall be made (a) without deduction for
any costs or expenses of dismantling or removal; and (b) on the
assumption that such item of equipment is free and clear of all Liens and
is in the condition and repair in which it is required to be returned
pursuant to Section 7(a) hereof. For purposes of Section 19(c) hereof,
Fair Market Sale Value shall be determined (at Lessee's expense) by an
independent appraiser selected by Lessor, on an "as-is, where-is" basis,
without regard to the provisions of clauses (a) and (b) above; provided
that if Lessor shall have sold any item of equipment pursuant to Section
19(b) hereof prior to giving the notice referred to in Section 19(c)
hereof, Fair Market Sale Value of such item of equipment shall be the net
proceeds of such sale after deduction of all costs and expenses incurred
by Lessor in connection therewith; provided further, that if for any
reason Lessor is not able to obtain possession of any item of equipment
pursuant to Section 19(a) hereof, the Fair Market Sale Value of such item
of equipment shall be zero.
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"Imposition" as defined in Section 11 (a) hereof.
"Indemnitee" as defined in Section 17 hereof.
"Late Charge Rate" shall mean an interest rate per annum equal to the higher of
two percent (2%) over the Reference Rate or eighteen percent (18%), but not to
exceed the highest rate permitted by applicable law.
"Lease" and the terms "hereof", "herein", "hereto" and "hereunder", when used in
this Lease Agreement, shall mean and include this Lease Agreement, Schedules,
and Exhibits hereto as the same may from time to time be amended, modified or
supplemented.
"Lease Term" shall mean, with respect to any item of equipment, the term of the
lease of such item of equipment hereunder specified in Section 3 hereof.
"Lessee" as defined in the introductory paragraph to this Lease.
"Lessor" as defined in the introductory paragraph of this Lease.
"Lessor's Value" shall mean, with respect to any item of equipment and
installation if applicable, the total amount set forth in Schedule 1 hereto.
"Lessor's Liens" shall mean (i) any mortgage, pledge, lien, security interest,
charge, encumbrance, financing statement, title retention or any other right or
claim of any person claiming through or under Lessor, not based upon or relating
to ownership of the equipment or the lease thereof hereunder and (ii) any
mortgage, pledge, lien, security interest, charge, encumbrance, financing
statement, title retention or any other right or claim of Owner (other than
Lessor) claiming through or under Lessor in connection with the transactions
described in Section 21(b) hereof.
"Liens" shall mean any mortgage, pledge, lien, security interest, charge,
encumbrance, financing statement, title retention or any other right or claim of
any person, other than any Lessor's Lien.
"Loss Payment Date" shall mean with respect to any item of equipment the date on
which payment, as described in Section 16(b) hereof, is made to the Lessor by
the Lessee as the result of an Event of Loss with respect to such item. The Loss
Payment Date shall be within ninety (90) days of the said Event of Loss.
"Owner" shall mean the entity or person having ownership interest to the
equipment as contemplated by the provisions of Section 21(b) hereof and may be a
person other than Lessor.
"Owner's Economics" shall mean the after-tax yield and periodic after-tax cash
flow anticipated by Owner as of the date of this Lease, in connection with the
transactions contemplated by this Lease as determined by Owner unless Lessor
shall have transferred its interest in the equipment to another person as
contemplated by the provisions of Section 21(b) hereof in which case "Owner's
Economics" shall mean the after-tax yield and periodic after-tax cash flow
anticipated by such person as of the date of the lease between such person and
Lessor contemplated by said provisions, in connection with transactions
contemplated by such lease as determined by such person.
"Recovery Deductions" as defined in Section 11(b)(i) hereof.
"Reference Rate" shall mean the rate of interest publicly announced by Citibank,
N.A. in New York, New York from time to time as its prime rate.
The reference rate is not intended to be the lowest interest charged by
Citibank, N.A. in connection with extensions of credit to debtors. The
Reference Rate shall be determined at the close of business on the 15th day of
each calendar month (if the 15th day is not a Business Day, then on the first
preceding Business Day) and shall become effective as of the first day of the
calendar month succeeding such determination and shall continue in effect to,
and including, the last day of said calendar month.
"Rent Payment Date" shall mean each date on which an installment of rent is due
and payable pursuant to Section 5(a) hereof.
"Stipulated Loss Value" shall mean, with respect to any item of equipment, the
amount determined by multiplying the Lessor's Value of such item of equipment by
the percentage set forth in Schedule A hereto opposite the applicable Rent
Payment Date provided, that for purposes of Sections 16(b) and 19(c) hereof, any
determination of Stipulated Loss Value as of a date occurring after the final
Rent Payment with respect to such item of equipment, shall be made as of such
final Rent Payment Date.
"Tax Benefits" shall mean the right to claim such deductions, credits, and other
benefits as are provided by the Code to an owner of property, including the
Recovery Deductions And Amortization Deductions.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles.
Lease Term.
The term of the lease of the equipment hereunder shall commence on the
Commencement Date specified in the Certificate of Delivery.
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and Acceptance ("Commencement Date") and, unless earlier terminated pursuant to
the provisions hereof or at law or equity, shall continue for a term of sixty
(60) months from such Commencement Date. The Commencement Date specified in the
Certificate of Delivery and Acceptance shall be the 2nd day of the month
following the date on which Acceptance occurs at a site provided by Lessee in
accordance with the provisions of Section 4 hereof.
4. Installation.
Lessor shall arrange for installation of the equipment, the cost of which
installation shall be deemed to be part of Lessor's Value. Exhibit A hereto
shall indicate whether such cost is included or excluded from the monthly rent
payments due in accordance with Section 5(a) hereof. If excluded from such
monthly rent payments, Lessor shall separately invoice Lessee for such
installation upon completion thereof and Lessee shall pay such invoice with
thirty (30) days from the date thereof. Lessee shall be obligated to timely
provide a suitable site for the installation of the equipment in accordance
with the equipment manufacturer's practices and specifications. Lessee shall be
responsible for compliance with environmental requirements and central office
grounding procedures and for providing adequate space, lighting, heating, air
conditioning and A/C power at the installation site. Unavailability of Lessee
furnished facilities shall be cause for adjustments to the installation price
set forth in Schedule 1 hereto.
5. Rent: Unconditional Obligations.
(a) Lessee agrees to pay to Lessor, at the address specified in Section 24
hereof or at such other address as Lessor may specify, rent for the initial
equipment at a rate equal to $21.742 per $1,000 of the total Lessor's Value of
such items of equipment, as set forth in Schedule I dated October 1, 1999,
(plus applicable sales or use taxes) per month, in sixty (60) consecutive
monthly installments, with the first installment of rent being due on the first
day of the month following the Commencement Date, and succeeding installments
being due on the same date of each month thereafter. In the event of any
additions to the initially leased equipment, the rental rate on any additional
equipment will be the rate as shown on the Amendment to Schedule I adding the
equipment to the lease.
(b) Lessee shall also pay to Lessor, on demand, interest at the Late Charge
Rate on any installment of rent and on any other amount owing hereunder which
is not paid on its due date, for any period for which the same shall be
overdue. Each payment made under this Lease shall be applied first to the
payment of interest then owing and then to rent or other amounts owing
hereunder. Interest shall be computed on the basis of a 360-day year and actual
days elapsed.
(c) This Lease is a net lease, and Lessee's obligation to pay all rent and
all other amounts payable hereunder is ABSOLUTE AND UNCONDITIONAL under any and
all circumstances and shall not be affected by any circumstances of any
character whatsoever, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense, abatement or reduction or any right which
Lessee may have against Lessor, the manufacturer or supplier of any of the
equipment or anyone else for any reason whatsoever; (ii) any defect in the
title, condition, design, or operation of, or lack of fitness for use of, or any
damage to, or loss of, all or any part of the equipment from any cause
whatsoever; (iii) the existence of any Liens with respect to the equipment; (iv)
the invalidity, unenforceability or disaffirmance of this Lease or any other
document related hereto; or (v) the prohibition of or interference with the use
or possession by Lessee of all or any part of the equipment, for any reason
whatsoever, including without limitation, by reason of (1) claims for patent,
trademark or copyright infringement; (2) present or future governmental laws,
rules or orders; (3) the insolvency, bankruptcy or reorganization of any
person; and (4) any other cause whether similar or dissimilar to the foregoing,
any present or future law to the contrary notwithstanding. Lessee hereby waives,
to the extent permitted by applicable law, any and all rights which it may now
have or which may at a time hereafter be conferred upon it, by statute or
otherwise, to terminate, cancel, quit or surrender the lease of any equipment.
If for any reason whatsoever this Lease or any Supplement, other than pursuant
to Section 16(b) hereof, shall be terminated in whole or in part by operation of
law or otherwise, Lessee will nonetheless pay to Lessor an amount equal to each
installment of rent at the time such installment would have become due and
payable in accordance with terms hereof. Each payment of rent or other amount
paid by Lessee hereunder shall be final and Lessee will not seek to recover all
or any part of such payment for Lessor for any reason whatsoever.
6. WARRANTY DISCLAIMER; ASSIGNMENT OF WARRANTIES.
(a) LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND LESSEE HEREBY
EXPRESSLY WAIVES ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE, FREEDOM
FROM INTERFERENCE OR INFRINGEMENT OR THE LIKE, OR AS TO THE TITLE TO OR LESSOR'S
OR LESSEE'S INTEREST IN THE EQUIPMENT OR AS TO ANY OTHER MATTER RELATING TO THE
EQUIPMENT OR ANY PART THEREOF.
LESSEE CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT AND EACH PART THEREOF ON
THE BASIS OF ITS OWN JUDGEMENT AND EXPRESSLY DISCLAIMS RELIANCE UPON ANY
STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY LESSOR.
LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATIONS
OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE ACCORDED TO THE TRANSACTIONS
CONTEMPLATED BY THIS LEASE OR AS TO ANY TAX CONSEQUENCES AND/OR TAX TREATMENT
THEREOF.
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(b) LESSOR HEREBY ASSIGNS TO LESSEE SUCH RIGHTS AS LESSOR MAY HAVE (TO
EXTENT LESSOR MAY VALIDLY ASSIGN SUCH RIGHTS) UNDER ALL MANUFACTURERS' AND
SUPPLIERS' WARRANTIES WITH RESPECT TO THE EQUIPMENT; PROVIDED, HOWEVER, THAT THE
FOREGOING RIGHT'S SHALL AUTOMATICALLY REVERT TO LESSOR UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT HEREUNDER, OR UPON THE RETURN OF
THE EQUIPMENT TO LESSOR. LESSEE AGREES TO SETTLE ALL CLAIMS WITH RESPECT TO THE
EQUIPMENT DIRECTLY WITH THE MANUFACTURERS OR SUPPLIERS THEREOF, AND TO GIVE
LESSOR PROMPT NOTICE OF ANY SUCH SETTLEMENT AND THE DETAILS OF SUCH SETTLEMENT,
HOWEVER, IN THE EVENT ANY WARRANTIES ARE NOT ASSIGNABLE, THE LESSOR AGREES TO
ACT ON BEHALF OF THE LESSEE IN SETTLING CLAIMS ARISING UNDER THE WARRANTY WITH
THE MANUFACTURER OR SUPPLIER.
(c) IN NO EVENT SHALL LESSOR BE LIABLE FOR LOSS OF REVENUE OR PROFITS,
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY NATURE OR FROM
ANY CAUSE EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7. Disposition of Equipment.
(a) Return.
Lessee shall, upon the expiration or earlier termination of the Lease
Term of each item of equipment, subject to paragraph (b) below, return such
item of equipment to Lessor at such place within the continental United States
of America as Lessor shall designate in writing to Lessee. Until such item of
equipment is returned to Lessor pursuant to the provisions of this Section, all
of the provisions of this Lease with respect thereto shall continue in full
force and effect. Lessee shall pay all the costs and expenses in connection
with or incidental to the return of the equipment, including, without
limitation, the cost of removing, assembling, packing, insuring and
transporting the equipment. At the time of such return, the equipment shall be
in the condition and repair required to be maintained by Section 12 hereof and
free and clear of all Liens.
(b) Purchase Option.
So long as no Default or Event of Default shall have occurred and be
continuing, Lessee may, by written notice given to Lessor at least 120 days
(but not more than 360 days) prior to the expiration date of the Lease Term of
any item of equipment (which notice shall be irrevocable), elect to purchase
such item of equipment on such expiration date for a cash purchase price equal
to the Fair Market Sale Value of such item of equipment determined as of such
expiration date, plus an amount equal to all taxes (other than income taxes on
any gain on such sale), costs and expenses (including legal fees and expenses)
incurred or paid by Lessor in connection with such sale. Upon payment by
Lessee of such purchase price, and of all other amounts then due and payable by
Lessee, Lessor shall transfer title, if any, to such items of equipment except
computer software to Lessee on an "as-is, where-is" basis, without recourse and
without representation or warranty of any kind, express or implied, other than a
representation and warranty that such item of equipment is free and clear of
any Lessor's Liens.
8. Representation and Warranties.
In order to induce Lessor to enter into this Lease and to lease the
equipment to Lessee hereunder, Lessee represents and warrants that:
(a) Organization.
Lessee in duly organized, validly existing and in good standing under
the laws of the State of Delaware and is duly qualified to do business and is
in good standing in the State in which the equipment will be located.
(b) Power and Authority.
Lessee has full power, authority and legal right to execute, deliver
and perform this Lease, and the execution, delivery and performance hereof has
been duly authorized by Lessee's governing body or officer(s).
(c) Enforceability.
This Lease has been duly executed and delivered by Lessee and
constitutes a legal, valid and binding obligation of Lessee enforceable in
accordance with its terms.
(d) Consents and Permits.
The execution, delivery and performance of this Lease does not require
any approval or consent of any trustee, shareholder, partner, sole proprietor,
or holders of any indebtedness or obligations of Lessee, and will not contravene
any law, regulation, judgement or decree applicable to Lessee, or the
certificate of partnership or incorporation or by-laws of Lessee, or contravene
the provisions of, or constitute a default under, or result in the creation of
any Lien upon any property of Lessee under any mortgage, instrument or other
agreement to which Lessee is a party or by which Lessee or its assets may be
bound or affected; and no authorization, approval, license, filing or
registration with any court or governmental agency or instrumentality is
necessary in connection with the execution, delivery, performance, validity and
enforceability of this Lease.
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(e) Financial Condition of the Lessee.
The financial statements and any other financial information of Lessee
heretofore furnished to Lessor are complete and correct and fairly present the
financial condition of Lessee and the results of its operations for the
respective periods covered thereby, there are no known contingent liabilities or
liabilities for taxes of Lessee which are not reflected in said financial
statements and since the date thereof, there has been no material adverse
change in such financial condition or operations.
(f) No Litigation.
There is no action, suit, investigation or proceeding by or before any
court, arbitrator, administrative agency or other governmental authority
pending or threatened against or affecting Lessee (A) which involves the
transactions contemplated by this Lease or the equipment; or (B) which, if
adversely determined, could have a material adverse effect on the financial
condition, business or operations of Lessee.
(g) United States Source Income.
No items of equipment shall be used in a way that results in the
creation of an item of income to Lessor, the source of which for Federal
Income Tax purposes is without the United States.
9. Liens.
Lessee will not directly or indirectly create, incur, assume, suffer,
or permit to exist any Lien on or with respect to the equipment.
10. Insurance.
Lessee shall maintain at all times on the equipment, at its expense,
property damage, direct damage and liability insurance in such amounts, against
such risks, in such form and with such insurers as shall be reasonably
satisfactory to Lessor and any other Owner; provided, that the amount of direct
damage insurance shall not on any date be less than the greater of the full
replacement value or the Stipulated Loss Value of the equipment as of such date.
Each insurance policy will, among other things, name Lessor and any other Owner
as an additional insured or as loss payee (as the case may be) as their
interests may appear, require that the insurer give Lessor and any such Owner at
least (30) days prior written notice of any alteration in or cancellation of the
terms of such policy, and require that the interest of Lessor and any such Owner
continue to be insured regardless of any breach of or violation by Lessee of any
warranties, declarations or conditions contained in such insurance policy.
Lessee shall furnish to Lessor and such Owner a certificate or other evidence
satisfactory to Lessor that such insurance coverage is in effect provided,
however, that Lessor and such Owner shall be under no duty to ascertain the
existence or adequacy of such insurance.
11. Taxes.
(a) General Tax Provisions.
Lessee shall timely pay, and shall indemnify and hold Lessor harmless
from and against, all fees, taxes (whether sales, use, excise, personal property
or other taxes), imports, duties, withholdings, assessments and other
governmental charges of whatever kind or character, however designated (together
with any penalties, fines or interest thereon), all of the foregoing being
herein collectively called "Impositions", which are at any time levied or
imposed against Lessor, Lessee, this Lease, the equipment or any part thereof by
any Federal, State, or Local Government or taxing authority in the United States
or by any foreign government or any subdivision or taxing authority thereof
upon, with respect to, us a result of or measured by (i) the equipment (or any
part thereof), or this Lease or the interests of the Lessor therein; or (ii) the
purchase, ownership, delivery, leasing, possession, maintenance, use, operation,
return, sale or other disposition of the equipment or any part thereof; or (iii)
the rentals, receipts or earnings payable under this Lease or otherwise arising
from the equipment or any part thereof; excluding, however, taxes based on or
measured by the net income of Lessor that are imposed by (1) the United States
of America, or (2) the State of Florida or any political subdivision of the
State of Florida, or (3) any other State of the United States of America or any
political subdivision of any such State in which Lessor is subject to
impositions as the result (whether solely or in part) of business or
transactions unrelated to this Lease. In case any report or return is required
to be filed with respect to any obligation of Lessee under this Section, Lessee
will notify Lessor of such requirement and make such report or return in such
manner as shall be satisfactory to Lessor; provided, that the payment of any use
taxes shall be made in such manner as specified by Lessor in writing to Lessee;
or (iv) The provisions of this Section shall survive the expiration or earlier
termination of this Lease.
(b) Special Tax Provisions.
(i) The Owner of the items of equipment, shall be entitled to
take into account in computing in Federal income tax liability, Current Tax Rate
and such deductions, credits, and other benefits as are provided by the Code to
an owner of property, including, without limitation:
(A) Recovery deductions ("Recovery Deductions") under Section
168 (a) of the Code for each item of equipment in an amount determined,
commencing with the 1999 taxable year, by multiplying the Owner's Cost of such
item of equipment by the percentages applicable under Section 168 (b) of the
Code with respect to "(5)-year property" within the meaning of Section 168
(c)(2) of the Code;
(B) Amortization of expenses ("Amortization Deductions") paid
or to be paid by Owner in connection with this Lease at a rate no less rapid
than straight line over the Lease Term.
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(ii) For the purposes of this Subsection 11(b) only, the term "Owner"
shall include the "common parent" and all other corporations included in the
affiliated group, within the meaning of Section 1504 of the Code (or any other
successor section thereto), of which Owner is or becomes a member.
12. Compliance with Laws; Operation and Maintenance.
(a) Lessee will use the equipment in a careful and proper manner, will
comply with and conform to all governmental laws, rules and regulations relating
thereto, and will cause the equipment to be operated in accordance with the
manufacturer's or supplier's instructions or manuals.
(b) Lessee will, at its own expense, keep and maintain the equipment
in good repair, condition and working order and furnish all parts, replacements,
mechanisms, devices and servicing required therefor so that the value,
condition and operating efficiency therefor will at all times be maintained and
preserved, reasonable wear and tear excepted. Lessee will, at its own expense,
perform all required acts necessary to maintain any manufacturer's warranties
and guarantees respecting the equipment. All such repairs, parts, mechanisms,
devices and replacements shall immediately, without further act, become the
property of Lessor and part of the equipment.
(c) Lessee will not make or authorize any improvement, change, addition
or alteration to the equipment (i) if such improvement, change, addition or
alteration will impair the originally intended function or use of the equipment
or impair the value of the equipment as it existed immediately prior to such
improvement, change, addition or alteration; or (ii) if any parts installed in
or attached to or otherwise becoming a part of the equipment as a result of any
such improvement, change, addition or alteration shall not be readily removable
without damage to the equipment. Any part which is added to the equipment
without violating the provisions of the immediately preceding sentence and which
is not a replacement or substitution for any property which was a part of the
equipment, shall remain the property of Lessee and may be removed by Lessee at
any time prior to the expiration or earlier termination of the Lease Term. All
such parts shall be and remain free and clear of any Liens. Any such part which
is not so removed prior to the expiration or earlier termination of the Lease
Term shall, without further act, become the property of Lessor.
13. Inspection.
Upon prior notice, Lessor or its authorized representatives may at any
reasonable time or times inspect the equipment when it deems it necessary to
protect its interest therein.
14. Identification.
Lessee shall, at its expense, attach to each item of equipment a
notice satisfactory to Lessor disclosing Owner's ownership of such item of
equipment.
15. Personal Property.
Lessee represents that the equipment shall be and at all times remain
separately identifiable personal property. Lessee shall, at its expense, take
such action (including the obtaining and recording of waivers) as may be
necessary to prevent any third party from acquiring any right to or interest in
the equipment by virtue of the equipment being deemed to be real property or a
part of real property or a part of other personal property, and if at any time
any person shall claim any such right or interest. Lessee shall, at its
expense, cause such claim to be waived in writing or otherwise eliminated to
Lessor's satisfaction within 30 days after such claim shall have first become
known to Lessee.
16. Loss or Damage.
(a) All risk of loss, theft, damage or destruction to the equipment or
any part thereof, however incurred or occasioned, shall be borne by Lessee and,
unless such occurrence constitutes an Event of Loss pursuant to paragraph (b) of
this Section, Lessee shall promptly give Lessor written notice hereof and shall
promptly cause the affected part or parts of the equipment to be replaced or
restored to the condition and repair required to be maintained by Section 12
hereof.
(b) If an Event of Loss with respect to any item of equipment shall
occur, Lessee shall promptly give Lessor written notice thereof, and Lessee
shall pay to Lessor as soon as it receives insurance proceeds with respect to
said Event of Loss but in any event no later than 90 days after the occurrence
of said Event of Loss an amount equal to the sum of (i) the Stipulated Loss
Value of such item of equipment computed as of the Rent Payment Date with
respect to such item of equipment on or immediately preceding the date of the
occurrence of such Event of Loss; and (ii) all rent and other amounts due and
owing hereunder for such item of equipment on or prior to the Loss Payment Date.
Upon payment of such amount to Lessor, the lease of such item of equipment
hereunder shall terminate, and Lessor will transfer within forty days to
Lessee, Lessor's right, title, if any, and interest in and to such item of
equipment, on an "as-is, where-is" basis, without recourse and without
representation or warranty, express or implied, other than a representation and
warranty that such item of equipment is free and clear of any Lessor's Liens.
(c) Any payments received at any time by Lessor or Lessee from any
insurer with respect to loss or damage to the equipment shall be applied as
follows: (i) if such payments are received with respect to an Event of Loss they
shall be paid to Lessor, but to the extent received by Lessor, they shall reduce
or discharge, as the case may be, Lessee's obligation to pay the amounts due to
Lessor under Section 16(b) hereof with respect to such Event of Loss; or (ii) if
such payments are received with respect to any loss of or damage to the
equipment other than an Event of Loss, such payments shall, unless a Default or
Event of Default shall have occurred and be continuing, be paid over to Lessee
to reimburse Lessee for its payment of the costs and expenses incurred by Lessee
in replacing or restoring pursuant to Section 16(a) hereof the part or parts of
the equipment which suffered such loss or damage.
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17. GENERAL INDEMNITY.
Lessee assumes liability for, and shall indemnify, protect, save and keep
harmless Lessor, the partners comprising Lessor, its and their directors,
officers, employees, agents, servants, successors and assigns (an "Indemnitee")
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs and expenses, including reasonable
legal expenses, of whatsoever kind and nature, imposed on, incurred by or
asserted against any Indemnitee, in any way relating to or arising out of this
Lease or the enforcement hereof, or the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the equipment or any part
thereof (including, without limitation, latent or other defects, whether or not
discoverable by Lessee or any other person, any claim in tort whether or not for
strict liability and any claim for patent, trademark, copyright or other
intellectual property infringement); provided, however, that Lessee shall not
be required to indemnify any Indemnitee for loss or liability arising from acts
or events which occur after the equipment has been returned to Lessor in
accordance with the Lease, or for loss or liability resulting solely from the
willful misconduct or gross negligence of such Indemnitee. The provisions of
this Section shall survive the expiration or earlier termination of this Lease.
18. EVENTS OF DEFAULT.
The following events shall each constitute an event of default (herein
called "Event of Default") under this Lease:
(i) Lessee shall fail to execute and deliver to Lessor (or Lessor's agent)
the "Certificate of Delivery and Acceptance" within twenty-four (24) hours of
Acceptance of the equipment to Lessee.
(ii) Lessee shall fail to commence lease payments on the first day of the
month following the Commencement Date, or such other initiation of lease
payments as specified in Section 5 of this Lease.
(iii) Lessee shall fail to make any payment of rent or other amount owing
hereunder or otherwise after notice has been given that payment is past due; or
(iv) Lessee shall fail to maintain the insurance required by Section 10
hereof or to perform or observe any of the covenants contained in Sections 21
or 22 hereof; or
(v) Lessee shall fail to perform or observe any other covenant, condition
or agreement to be performed or observed by it with respect to this Lease or
any other agreement between Lessor and Lessee and such failure shall continue
unremedied for 30 days after the earlier of (a) the date on which Lessee
obtains, or should have obtained knowledge of such failure; or (b) the date on
which notice thereof shall be given Lessor to Lessee; or
(vi) Any representation or warranty made by Lessee herein or in any
document, certificate or financial or other statement now or hereafter
furnished Lessor in connection with this Lease shall prove at any time to have
been untrue, incomplete or misleading in any material respect as of the time
when made; or
(vii) The entry of a decree or order for relief by a court having
jurisdiction in respect of Lessee, adjudging Lessee a bankrupt or insolvent, or
approving as properly filed a petition seeking a reorganization, arrangement,
adjustment or composition of or in respect of Lessee in an involuntary
proceeding or case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of Lessee or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 30 days; or
(viii) The institution by Lessee of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the commencement by Lessee of a voluntary
proceeding or case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal of state bankruptcy, insolvency or
other similar law, or the consent by it to the filing of any such petition or to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of Lessee or of
any substantial part of its property, or the making by it of any assignment for
the benefit of creditors or the admission by of it inability to pay its debts
generally as they become due or its willingness to be adjudicated a bankrupt or
the failure of Lessee generally to pay its debts as they become due or the
taking of corporate action by Lessee in furtherance of any of the foregoing.
19. REMEDIES.
If an Event of Default specified in Subsection 18(vii) or (viii) above
shall occur, then, and in any such event, Lessor shall not be obligated to
purchase or lease any of the equipment and this Lease shall, without any
declaration or other action by Lessor, be in default. If an Event of Default,
other than Event of Default specified in Subsection 18(vii) or (viii) above,
shall occur, Lessor may, at its option, declare this Lease to be in default. At
any time after this Lease is in default under the first sentence of this
Section 19, Lesser has declared this Lease to be in default under the second
sentence of this Section 19, Lessor and/or its representative may do any one
or more of the following with respect to all of the equipment or any part
thereof as Lessor in its sole discretion shall elect, to the extent permitted
by applicable law then in effect;
(a) demand that Lessee, and Lessee shall at its expense upon such demand,
return the equipment promptly to Lessor at such place in the continental United
States of America as Lessor shall specify, or Lessor and\or its agents, at its
option, may with or without entry upon the premises where the equipment is
located and disable the equipment, or make the equipment inoperable permanently
or temporarily in Lessor's sole discretion, and/or take immediate possession of
the equipment and remove the same by summary proceedings or otherwise, all
without
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8
liability for or by reason of such entry or taking of possession, whether for
the restoration of damage to property caused by such taking or for disabling or
otherwise;
(b) sell the equipment at public or private sale, with or without notice,
advertisement or publication, as Lessor may determine, or otherwise dispose of,
hold, use, operate, lease to others or keep idle the equipment as Lessor in its
sole discretion may determine, all free and clear of any right of Lessee and
without any duty to account to Lessor with respect to such action or inaction
or for any proceeds with respect thereto:
(c) by written notice to Lessee specifying a payment date which shall be
not earlier than 20 days after the date of such notice, demand that Lessee pay
to Lessor, and Lessee shall pay to Lessor, on the payment date specified in
such notice, as liquidated damages for loss of a bargain and not as a penalty,
all accrued and unpaid rent for the equipment due on all Rent Payment Dates up
to and including the payment date specified in such notice plus an amount
(together with interest on such amount at the Late Charge Rate, from the payment
date specified in such notice to the date of actual payment) equal to the
excess, if any, of the Stipulated Loss Value of the equipment as of the payment
date specified in such notice over the Fair Market Sale Value of the equipment
as of such date;
(d) Lessor may exercise any other right or remedy which may be available
to it under applicable law or proceed by appropriate court action to enforce
the terms hereof or to recover damages for the breach hereof or to rescind
this Lease. Lessor is entitled to recover any amount that fully compensates
the Lessor for any damages to or loss of the Lessor's residual interest in the
equipment caused by the Lessee's default.
In the event any present value discounting is applied, the discount rate
used shall be the Federal Reserve Board Discount Rate.
In addition, Lessee shall be liable for any and all unpaid rent and other
amounts due hereunder before or during the exercise of any of the foregoing
remedies and for all reasonable legal fees and other costs and expenses
incurred by reason of the occurrence of any Event of Default or the exercise of
Lessor's remedies with respect thereto, including all reasonable costs and
expenses incurred in connection with the placing of the equipment in the
condition required by Section 12 hereof.
No remedy referred to in this Section 19 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to herein
or otherwise available to Lessor at law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such remedies shall not
preclude the simultaneous or later exercise by Lessor of any or all such other
remedies. No express or implied waiver by Lessor of an Event of Default shall
in any way be, or be construed to be, a waiver of any future or subsequent
Event of Default. To the extent permitted by applicable law, Lessee hereby
waives any rights now or hereafter conferred by statute or otherwise which may
require Lessor to sell or lease or otherwise use the equipment in mitigation of
Lessor's damages or losses or which may otherwise limit or modify any of
Lessor's rights or remedies under this Lease.
20. Lessor's Right to Perform.
If Lessee fails to make any payment, other than rent due hereunder,
required to be made by it hereunder or fails to perform or comply with any of
its other agreements contained herein, Lessor may itself make such payment or
perform or comply with such agreement, and the amount of such payment and the
amount of the reasonable expenses of Lessor incurred in connection with such
payment or the performance of or compliance with such agreement, as the case
may be, together with interest thereon at the Late Charge Rate, shall be deemed
to be additional rent, payable by Lessee within 30 days of notice.
21. LOCATION; ASSIGNMENT OR SUBLEASE; TITLE TRANSFER.
(a) LESSEE WILL NOT REMOVE THE EQUIPMENT FROM THE LOCATION SPECIFIED IN
SCHEDULE 1 WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD, EXCEPT REMOVAL OUTSIDE THE CONTINENTAL U.S. IS NOT
PERMITTED. THE EQUIPMENT SHALL AT ALL TIMES BE IN THE SOLE POSSESSION AND
CONTROL OF LESSEE AND LESSEE WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR, ASSIGN THIS LEASE OR ANY INTEREST HEREIN OR SUBLEASE OR OTHERWISE
TRANSFER ITS INTEREST IN ANY OF THE EQUIPMENT, AND ANY ATTEMPTED ASSIGNMENT,
SUBLEASE OR OTHER TRANSFER BY LESSEE IN VIOLATION OF THESE PROVISIONS SHALL BE
VOID.
(b) LESSOR AND LESSEE ACKNOWLEDGE THAT LESSOR (i) MAY TRANSFER ITS
INTEREST IN THE EQUIPMENT TO AN OWNER OTHER THAN LESSOR. LESSOR MAY
CONTEMPORANEOUSLY THEREWITH LEASE THE EQUIPMENT BACK FROM SUCH OWNER, AND (ii)
MAY ASSIGN THIS LEASE. LESSEE HEREBY CONSENTS TO EACH OF THE ABOVE-DESCRIBED
TRANSACTIONS, FURTHER LESSEE DOES HEREBY ACKNOWLEDGE (i) THAT ANY SUCH TRANSFER
AND/OR ASSIGNMENT BY LESSOR DOES NOT MATERIALLY CHANGE LESSEE'S DUTIES AND
OBLIGATIONS HEREUNDER, (ii) THAT SUCH TRANSFER AND/OR ASSIGNMENT DOES NOT
MATERIALLY INCREASE THE BURDENS OR RIGHTS IMPOSED ON THE LESSEE, AND (iii) THAT
THE ASSIGNMENT IS PERMITTED EVEN IF THE ASSIGNMENT COULD BE DEEMED TO
MATERIALLY AFFECT THE INTEREST OF THE LESSEE.
22. Status Changes in Lessee.
Lessee will not without thirty (30) days prior written notice to Lessor,
(a) enter into any transaction of merger or consolidation unless it is the
surviving corporation or after giving effect to such merger or consolidation
its net worth equals or exceeds that which existed prior to such merger or
consolidation; or (b) change the form of organization of its business; or (c)
change its name or its chief place of business. Lessee must obtain Lessor's
prior written concurrence before Lessee may undertake any actions to (a)
liquidate, dissolve or any such similar action of the Lessee's organization, or
(b) sell, transfer or otherwise dispose of all or any substantial part of
Lessee's assets.
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9
23. Further Assurances; Financial Information.
(a) Lessee will, at its expense, promptly and duly execute and deliver
to Lessor such further documents and assurances and take such further action as
Lessor may from time to time reasonably request in order to establish and
protect the rights, interests and remedies created or intended to be created in
favor of Lessor hereunder, including, without limitation, the execution and
filing of Uniform Commercial Code financing statements covering the equipment
and proceeds therefrom in the jurisdictions in which the equipment is located
from time to time. To the extent permitted by applicable law, Lessee hereby
authorizes Lessor to file any such financing statements without the signature of
Lessee.
(b) Lessee will qualify to do business and remain qualified in good
standing, in each jurisdiction in which the equipment is from time to time
located.
(c) Lessee will furnish to Lessor as soon as available, but in any event
not later than 90 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as at the end of such fiscal year, and
consolidated statements of income and changes in financial position of Lessee
for such fiscal year, all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a basis consistently
maintained throughout the period involved. These reports will not be disclosed
to anyone other than the Lessor and/or the Owner as provided in Section 21(b).
24. Notices.
All notices, demands and other communications hereunder shall be in
writing, and shall be deemed to have been given or made when deposited in the
United States mail, first class postage prepaid, addressed as follows or to such
other address as any of the authorized representatives of the following entities
may from time to time designate in writing to the other listed below:
Lessor: TELECOMMUNICATIONS FINANCE GROUP
Attn: Director, Credit & Leasing
000 Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
TELECOMMUNICATIONS FINANCE GROUP
Attn: General Counsel
000 Xxxxxx Xxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Lessee: AXISTEL COMMUNICATIONS, INC.
Xxx Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
25. Conditions Precedent:
(a) Lessor shall not be obligated to lease the items of equipment
described herein to Lessee hereunder unless:
(i) Such Uniform Commercial Code financing statements
covering equipment and proceeds therefrom and landlord and/or mortgagee waivers
or disclaimers and/or severance agreements with respect to the items of
equipment covered by this Lease as Lessor shall deem necessary or desirable in
order to perfect and protect its interests therein shall have been duly executed
and filed, at Lessee's expense, in such public offices as Lessor shall direct;
(ii) All representations and warranties of Lessee contained
herein or in any document or certificate furnished Lessor in connection herewith
shall be true and correct on and as of the date of this Lease with the
same force and effect as if made on and as of such date; no Event of Default or
Default shall be in existence on such date or shall occur as a result of the
lease by Lessee of the equipment specified in Schedule 1;
(iii) In the sole judgment of Lessor, there shall have been
no material adverse change in the financial condition or business of Lessee;
(iv) All proceedings to be taken in connection with the
transactions contemplated by this Lease, and all documents incidental thereto,
shall be satisfactory in form and substance to Lessor and its counsel;
(v) Lessor shall have received from Lessee, in form and
substance satisfactory to it, such other documents and information as Lessor
shall reasonably request;
(vi) All legal matters in connection with the transactions
contemplated by this Lease shall be satisfactory to Lessor's counsel; and
(vii) No Change in Tax Law, which in the sole judgment of
Lessor would adversely affect Lessor's Economics, shall have occurred or shall
appear, in Lessor's good faith judgment, to be imminent.
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(viii) A deposit equal to 10% of Lessor's value must be
received by Lessor prior to shipment of equipment.
(ix) Lessee to provide an executed Guaranty, and related
Secretary's Certificate, in the form provided by
Lessor, from eVentures Group, Inc.
(x) Lessee to provide financial statements for eVentures
Group, Inc. reflecting an equity cash infusion of no
less than $5,000,000.00.
(xi) Lessee to provide documentation outlining it's exact
legal relationship to eVentures Group, Inc. which will
be reviewed by Lessor's counsel to ensure
acceptability.
26. Software License.
Reference is made to the form of Software Product License Agreement
attached hereto as Exhibit B (the "License Document"). Lessor has arranged for
the equipment manufacturer to grant Lessee a license to use the Software as
defined in the License Document in conjunction with the equipment leased
hereunder in accordance with the terms of the License Document. The original
license fee is contained in the lease rate. To avail itself of the license
grant, Lessee must execute the License Document, upon Commencement of the
Lease. "Buyer" and "Licensee" as used in the License Document are synonymous
with Lessee.
27. LIMITATION OF LIABILITY.
LESSOR SHALL NOT BE LIABLE FOR LOST PROFITS OR REVENUE, SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE OR FROM ANY CAUSE
WHETHER BASED IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR OTHER LEGAL THEORY
EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. LESSEE
HEREBY AGREES THAT LESSOR WILL NOT BE LIABLE FOR ANY LOST PROFITS OR REVENUE OR
FOR ANY CLAIM OR DEMAND AGAINST LESSEE BY ANY OTHER PARTY.
28. Miscellaneous.
(a) Any provision of this Lease which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions in
any other jurisdiction. To the extent permitted by applicable law, Lessee
hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
(b) No terms or provisions of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which the enforcement of the change, waiver, discharge or
termination is sought. No delay or failure on the part of Lessor to exercise
any power or right hereunder shall operate as a waiver thereof, nor as an
acquiesence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof, or the exercise
of any other power or right. After the occurrence of any Default or Event of
Default, the acceptance by Lessor of any payment of rent or other sum owed by
Lessee pursuant hereto shall not constitute a waiver by Lessor of such Default
or Event of Default, regardless of Lessor's knowledge or lack of knowledge
thereof at the time of acceptance of any such payment, and shall not constitute
a reinstatement of this Lease, if this Lease shall have been declared in
default by Lessor pursuant to Section 18 hereof or otherwise, unless Lessor
shall have agreed in writing to reinstate the Lease and to waive the Default or
Event of Default.
In the event Lessee tenders payment to Lessor by check or draft containing a
qualified endorsement purporting to limit or modify Lessee's liability or
obligations under this Lease, such qualified endorsement shall be of no force
and effect even if Lessor processes the check or draft for payment.
(c) This Lease with exhibits contains the full, final and exclusive
statement of the agreement between Lessor and Lessee relating to the lease of
the equipment.
(d) This Lease shall constitute an agreement of an operating lease, and
nothing herein shall be construed as conveying to Lessee any right, title or
interest in the equipment except as Lessee only.
(e) This Lease and the covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, Lessor and its successors and
assigns and Lessee and, to the extent permitted by Section 21 hereof, its
successors and assigns.
(f) The headings of the Sections are for convenience of reference only,
are not a part of this Lease and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
(g) This Lease may be executed by the parties hereto on any number of
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
(h) This Lease is deemed made and entered into in the State of Florida and
shall be governed by and construed under and in accordance with the laws of the
State of Florida as if both parties were residents of Florida.
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(i) Lessee hereby irrevocably consents and agrees that any legal action,
suit, or proceeding arising out of or in any way in connection with
this Lease shall be instituted or brought in the courts of the State of
Florida, or the United States Courts for the District of Florida, and
by execution and delivery of this Lease, Lessee hereby irrevocably
accepts and submits to, for itself and in respect of its property,
generally and unconditionally, the non-exclusive jurisdiction of any
such court, and to all proceedings in such courts. Lessee irrevocably
consents to service of any summons and/or legal process by registered
or certified United States mail, postage prepaid, to Lessee at the
address set forth in Section 24 hereof, such method of service to
constitute, in every respect, sufficient and effective service of
process in any legal action or proceeding. Nothing in this Lease shall
affect the right to service of process in any other manner permitted by
law or limit the right of Lessor to bring actions, suits or proceedings
in the court of any other jurisdiction. Lessee further agrees that
final judgment against it in any such legal action, suit or proceeding
shall be conclusive and may be enforced in any other jurisdiction,
within or outside the United States of America, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive
evidence of the fact and the amount of the liability.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be duly
executed as of the day and year first above written and by its signature below
Lessee expressly acknowledges that this Lease may not be modified unless done
so in a writing signed by each of the parties hereto or their successors in
interest.
AXISTEL COMMUNICATIONS, INC. (Lessee)
By: /s/ XXXXXXXX XXXXXX
-----------------------------------
Xxxxxxxx Xxxxxx President and COO
-----------------------------------
(Name & Title)
Date Signed: 10/15/99
----------------------------
TELECOMMUNICATIONS FINANCE GROUP (Lessor)
By:
-----------------------------------
Director, Credit & Leasing
-----------------------------------
Authorized Representative
Date Signed:
----------------------------
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AXISTEL COMMUNICATIONS, INC.
JERSEY CITY, NEW JERSEY
ORIGINAL LEASE VALUE -- OCTOBER 1, 1999
0.009166 SCHEDULE A
STIPULATED LOSS VALUE
The Stipulated Loss Value of any item of Equipment as of any Rent Payment Date
with respect of such item of Equipment shall be determined by multiplying the
Lessor's Value of such item of Equipment by the percentage set forth below for
such Rent Payment Date; provided that, any determination of Stipulated Loss
Value as of a date occurring after the final Rent Payment Date with respect to
such item of equipment, shall be made as of such final Rent Payment Date.
After Rent
Payment Number Percentage
0 105.0000
1 104.0758
2 103.1400
3 102.1926
4 101.2335
5 100.2625
6 99.2795
7 98.2845
8 97.2773
9 96.2579
10 95.2260
11 94.1816
12 93.1246
13 92.0548
14 90.9722
15 89.8766
16 88.7679
17 87.6459
18 86.5107
19 85.3620
20 84.1996
21 83.0236
22 81.8338
23 80.6300
24 79.4121
25 78.1799
26 76.9334
27 75.6725
28 74.3969
29 73.1066
30 71.8014
31 70.4812
32 69.1458
33 67.7951
34 66.4290
35 65.0473
36 63.6499
37 62.2366
38 60.8073
39 59.3618
40 57.9001
41 56.4219
42 54.9271
43 53.4155
44 51.8870
45 50.3414
46 48.7787
47 47.1985
48 45.6008
49 43.5687
50 41.5188
51 39.4509
52 37.3647
53 35.2602
54 33.1372
55 30.9954
56 28.8348
57 26.6552
58 24.4563
59 22.2381
60 [illegible]
13
SCHEDULE B
AMENDMENT TO LEASE AGREEMENT DATED OCTOBER 1, 1999 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
AXISTEL COMMUNICATIONS, INC. (LESSEE)
FOR EQUIPMENT TO BE INSTALLED IN JERSEY CITY, NEW JERSEY
A DEPOSIT EQUAL TO 100% OF LESSOR'S VALUE IS REQUIRED BY LESSOR WHICH WILL BE
APPLIED FIRST TO THE FIRST INSTALLMENT OF LEASE RENT AND THEN TO SUCCEEDING
INSTALLMENTS OF LEASE RENT UNTIL FULLY UTILIZED.
IN THE EVENT OF EARLY TERMINATION OF THE LEASE DUE TO DEFAULT BY LESSEE, ANY
UNAPPLIED PORTION OF THE 10% DEPOSIT IS NON-REFUNDABLE AND WILL BE RETAINED BY
LESSOR.
IN THE EVENT LESSEE HAS MORE THAN ONE LEASE WITH LESSOR, AN EVENT OF DEFAULT FOR
ONE LEASE WILL, IN ITSELF, BE AN EVENT OF DEFAULT ON ALL OTHER LEASES IN THE
NAME OF THE LESSEE.
TELECOMMUNICATIONS FINANCE GROUP AXISTEL COMMUNICATIONS, INC.
By: By: /s/ XXXXXXXX XXXXXX
----------------------------- --------------------------------
DIRECTOR, CREDIT & LEASING XXXXXXXX XXXXXX, PRESIDENT & COO
-------------------------------- -----------------------------------
Authorized Representative (Name & Title)
Date Signed: Date Signed: 10/15/99
-------------------- -----------------------
14
SCHEDULE C
AMENDMENT TO LEASE AGREEMENT DATED OCTOBER 1, 1999 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
AXISTEL COMMUNICATIONS, INC. (LESSEE)
FOR EQUIPMENT TO BE INSTALLED IN JERSEY CITY, NEW JERSEY
LESSEE AFFIRMS TO THE FOLLOWING IN REGARDS TO THIRD PARTY VENDOR EQUIPMENT:
ALL ADDITIONS TO THE LEASE WILL BE CONTINGENT UPON LESSEE'S CONTINUED
FULFILLMENT OF ALL OBLIGATIONS UNDER THE LEASE INCLUDING TIMELY PAYMENT OF ALL
AMOUNTS DUE.
ALL THIRD PARTY VENDOR EQUIPMENT TO BE ADDED TO THE LEASE MUST BE APPROVED BY
TELECOMMUNICATIONS FINANCE GROUP AT ITS SOLE DISCRETION.
THE CUMULATIVE TOTAL THIRD PARTY VENDOR EQUIPMENT VALUE, WHICH MAY BE ADDED TO
THE LEASE, CANNOT EXCEED 10% OF THE SIEMENS ORDER VALUE. THE 10% VENDOR
ALLOWANCE SHALL NOT APPLY TO CERTAIN OEM EQUIPMENT CONTAINED IN A SIEMENS ORDER,
I.E. VOICE MAIL EQUIPMENT, ETC. THE THIRD PARTY VENDOR ALLOWANCE SHALL NOT
EXCEED $500,000.00 ON ANY SINGLE LEASE.
THE VENDOR ALLOWANCE SHALL BECOME AVAILABLE AS SIEMENS EQUIPMENT IS SHIPPED.
A DEPOSIT EQUAL TO 10% OF THE THIRD PARTY VENDOR EQUIPMENT IS REQUIRED BY LESSOR
PRIOR TO ISSUING A PURCHASE ORDER TO THE THIRD PARTY VENDOR. THIS DEPOSIT WILL
BE APPLIED FIRST TO THE FIRST INSTALLMENT TO LEASE RENT IN WHICH THE VENDOR
EQUIPMENT IS INCLUDED, AND THEN TO SUCCEEDING INSTALLMENTS OF LEASE RENT UNTIL
FULLY UTILIZED.
IN THE EVENT OF EARLY TERMINATION OF THE LEASE DUE TO DEFAULT BY LESSEE, ANY
UNAPPLIED PORTION OF THE DEPOSIT IS NON REFUNDABLE AND WILL BE RETAINED BY
LESSOR.
A 10% FEE WILL BE ADDED TO THE PRICE OF ALL THIRD PARTY VENDOR EQUIPMENT.
THIS EQUIPMENT WILL BE ADDED TO THE LEASE AT THE THEN CURRENT LEASE RATE AS
DETERMINED BY LESSOR.
TELECOMMUNICATIONS FINANCE GROUP AXISTEL COMMUNICATIONS, INC.
By: By: /s/ XXXXXXXX XXXXXX
----------------------------- --------------------------------
DIRECTOR, CREDIT & LEASING XXXXXXXX X. XXXXXX, PRESIDENT & COO
-------------------------------- -----------------------------------
Authorized Representative (Name & Title)
Date Signed: Date Signed: 10/15/99
-------------------- -----------------------
15
SCHEDULE I
EQUIPMENT DESCRIPTION
The items of personal property to be leased pursuant to this Lease Agreement,
dated as of OCTOBER 1, 1999 between TELECOMMUNICATIONS FINANCE GROUP, as Lessor,
and AXISTEL COMMUNICATIONS, INC., as Lessee, are described below and in the
attached equipment list(s):
Equipment List
--------------
Number Description Amount
------ ----------- ------
9907032 EWSD release 16.0 switching system configured with DE5.4 $ 2,618,190.00
Switching Network, 10 SS7 links, and 15,000 Long Distance
DS-0's per proposal 9907032, Issue 2, dated July 20, 1999.
Optional SmartCommander gateway server configured for
OMT1, with local client workstation and traffic package.
EWSD interface to Fast Feature Platform RTC; EWSD DS-1
Interface Hardware; EWSD SS7 A-Link Interface Hardware;
DSX equipment for 834 DS1's (28 DSI's per panel).
Dual Fast Feature Platform-II configuration; FFP-II spares $ 648,010.00
(without CE); Siemens provided Channel Banks to support
SS7 DSU DP's; Siemens provided SS7 DSU DP's;
PPDC Service- Pre-Paid Debit Card Enhanced (905050);
PPDC - Time Remaining Warning (90520)
Cognitronics Model 1623 Expanded Announcer equipped with one
(1) T-1; Additional language libraries for Cognitronics 1623 (Spanish);
Additional T-1 interfaces for Cognitronics 1623; PPDC - Datalogging
(905002); PPDC - Pin to Pin Recharge (905075); PPDC - Hotline
(905003); PPDC - Fractional Cents Usage (905100); PPDC - Zone
Surcharge (905105); PPDC - First Use Surcharge (905040); PPDC -
Origination based Surcharge (905115); PPDC - Call Duration
Surcharge (905130); PPDC - Batch Numbers (905140); PPDC -
Real Time Tax Support (905155); PPDC - Credit card Validation
software (905010):PPDC - Expanded Call History (905095); PPDC -
Activate Upon Use (905145); PPDC - Long Distance (905004);
Enhanced NOO - Geo Routing (905200); International Call Back
with internet activation (904410); Student Phone Home/Stay in Touch
(905400); One Number Service Long Distance (906100).
Inventor system (900300) $ 401,900.00
Customer care network server $ 31,900.00
9907081 Power for 600 AMPS with 8 hour backup including: $ 114,410.00
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1 Lorain Power Board (582I0650I07); 14 Lorain Chargers
(A50B50); 2 GNB Batteries (M81-024-10063-038AAL)
TOTALS $ 3,814,410.00
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The above described equipment to be installed at:
Xxx Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000
BY: /s/ [ILLEGIBLE]
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DATE: 10/15/99
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