MASTER LEASE AGREEMENT
No.A
This Master Lease Agreement (the "MLA") is entered into by and between
Ascend Credit Corporation ("Lessor"), having its principal place of
business at 0000 Xxxxxx Xxx Xxxxxxx, Xxxxxxx, XX 00000 and GTC
Telecom Corp. ("Lessee"), having its principal place of business at 0000
XXXXXX XXX., XXXXX X-0, XXXXX XXXX, XX 00000.
1. LEASE AGREEMENT. Lessor agrees to lease to Lessee, and Lessee agrees to
lease from Lessor, the equipment (the "Equipment") referenced in each of the
Schedules (the "Schedule" or "Schedules") which incorporate this MLA therein
(the "Lease").
2. TERM. Each Lease shall be effective upon the execution of the MLA and
the related Schedule by the Lessor and the Lessee. The lease term (the
"Lease Term") of the Equipment referenced in each of the Schedules shall
commence on the rent commencement date specified in each Schedule (the
"Rent Commencement Date"). The Rent Commencement Date shall be the date
30 days from the date that the Equipment is shipped by the supplier (the "Ship
Date") as evidenced by a shipping document provided by the supplier related
to the Equipment (the "Shipping Document"). Lessor will provide Lessee with
a copy of the Shipping Document evidencing the Ship Date.
3. RENT. The rent (the "Rent") for the Equipment referenced in any
Schedule shall be as stated in such Schedule and shall be payable according
to the provisions of such Schedule. If any amount payable under a Schedule
is not received by Lessor within 10 days of the due date, Lessee agrees
to pay an Overdue Charge, as defined herein, with respect to such amount.
4. SELECTION AND ASSIGNMENT. Lessee will select the type, quantity and
Supplier of each item of Equipment designated in a Schedule, and Lessee
hereby assigns to Lessor all of its right, title and interest in and to the
related equipment purchase agreement, a copy of which has been provided to
Lessor by Lessee (the "Agreement"). The Agreement may be amended with the
consent of Lessor. Any such assignment with respect to Equipment shall
become binding upon Lessor when Lessor and Lessee have entered into a Lease
with respect to such Equipment and as of the Rent Commencement Date
referenced in such Lease. Upon such an assignment becoming effective,
Lessor shall be obligated to purchase the Equipment from the Supplier in
accordance with the provisions of the Agreement. It is expressly agreed
that Lessee shall at all times remain liable to Supplier under the Agreement
to perform all duties and obligations of Lessee thereunder, except for the
obligation to purchase the Equipment to the extent expressly assumed by the
Lessor hereunder, and that the Lessee shall be entitled to the same rights
of the purchaser of the Equipment under the Agreement, except such right,
title and interest in the Equipment retained exclusively by the Lessor as
owner of the Equipment. Lessor shall have no liability for a Supplier's
failure to meet the terms and conditions of the Agreement.
5. DELIVERY AND INSTALLATION. Lessee shall be responsible for payment of
all transportation, packing, installation, testing and other charges
associated with the delivery, installation or use of any Equipment which are
not included in the Agreement with respect to such Equipment.
6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE EQUIPMENT, ITS
MERCHANTABILITY, OR ITS FITNESS FOR A PARTICULAR PURPOSE. LESSOR SHALL NOT
BE LIABLE TO LESSEE OR ANY OTHER PERSON FOR DIRECT, INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM LESSEE'S USE OF THE
EQUIPMENT, OR FOR DAMAGES BASED ON STRICT OR ABSOLUTE TORT LIABILITY OR
LESSOR'S PASSIVE NEGLIGENCE. LESSEE HEREBY ACKNOWLEDGES THAT ANY
MANUFACTURER'S OR SUPPLIER'S WARRANTIES WITH RESPECT TO THE EQUIPMENT ARE
FOR THE BENEFIT OF BOTH LESSOR AND LESSEE. NOTWITHSTANDING THE FOREGOING,
LESSEE'S OBLIGATIONS TO PAY EACH RENT PAYMENT DUE, OR OTHERWISE PERFORM ITS
OBLIGATIONS, UNDER THIS LEASE ARE ABSOLUTE AND UNCONDITIONAL.
7. TITLE TO AND LOCATION OF EQUIPMENT. Lessor shall retain title to each
item of Equipment. Lessee, at its expense, shall protect Lessor's title and
keep the Equipment free from all claims, liens, encumbrances and legal
processes. The Equipment is personal property and is not to be regarded as
part of the real estate on which it may be situated. If requested by
Lessor, Lessee will, at Lessee's expense, furnish a landlord or mortgagee
waiver with respect to the Equipment. The Equipment shall not be removed
from the location specified in the Schedule without the written consent of
Lessor. Lessee shall, upon Lessor's request, affix and maintain plates,
tags or other identifying labels, showing Lessor's ownership of the
Equipment in a prominent position on the Equipment.
8. USE OF EQUIPMENT, INSPECTION AND REPORTS. The use of the Equipment by
Lessee shall conform with all applicable laws, insurance policies, and
warranties of the manufacturer or Supplier of the Equipment. Lessor shall
have the right to inspect the Equipment at the premises where the Equipment
is located. Lessee shall notify Lessor promptly of any claims, liens,
encumbrances or legal processes with respect to the Equipment.
9. FURTHER ASSURANCES. Lessee shall execute and deliver to Lessor such
instruments as Lessor deems necessary for the confirmation of this Lease and
Lessor's rights hereunder. Lessor is authorized to file financing
statements signed only by the Lessor in accordance with the Uniform
Commercial Code, or financing statements signed by Lessor as Lessee's
attorney-in-fact. Any such filing with respect to the Equipment leased
pursuant to a true lease shall not be deemed evidence of any intent to
create a security interest under the Uniform Commercial Code.
10. MAINTENANCE AND REPAIRS. Lessee shall, at its expense, maintain each
item of Equipment in good condition, normal wear and tear excepted. Lessee
shall not make any addition, alteration, or attachment to the Equipment
without Lessor's prior written consent. Lessee shall make no repair,
addition, alteration or attachment to the Equipment which interferes with
the normal operation or maintenance thereof, creates a safety hazard, or
might result in the creation of a mechanic's or materialman's lien.
11. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to
perform any of its obligations under a Lease, Lessor may perform any act or
make any payment which Lessor deems necessary for the maintenance and
preservation of the Equipment subject thereto and Lessor's title thereto.
All sums so paid by Lessor (together with all related Overdue Charges), and
reasonable attorneys' fees incurred by Lessor in connection therewith, shall
be additional rent payable to Lessor on demand. The performance of any such
act or the making of any such payment by Lessor shall not be deemed a waiver
or release of any obligation or default on the part of Lessee.
12. INDEMNIFICATION. Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold harmless, Lessor, and its agents, employees,
officers, directors, partners and successors and assigns, from and against,
all liabilities, obligations, losses, damages, injuries, claims, demands,
penalties, actions, costs and expenses, including, without limitation,
reasonable attorneys' fees, of whatever kind and nature, in contract or in
tort, arising out of the use, condition, operation, ownership, selection,
delivery, leasing or return of any item of Equipment, regardless of when,
how and by whom operated, or any failure on the part of Lessee to perform or
comply with any of its obligations under a Lease, excluding, however, any of
the foregoing which result from the gross negligence or willful misconduct
of Lessor. Such indemnities and assumptions of liabilities and obligations
shall continue in full force and effect, notwithstanding the expiration or
other termination of such Lease. Nothing contained in any Lease shall
authorize Lessee to operate the Equipment subject thereto so as to incur or
impose any liability on, or obligation for or on behalf of, Lessor.
13. NO OFF-SET. All Rents shall be paid by Lessee irrespective of any
off-set, counterclaim, recoupment, defense or other right which Lessee may
have against Lessor, the manufacturer or Supplier of the Equipment or any
other party.
14. ASSIGNMENT BY LESSEE. Lessee shall not, without Lessor's prior written
consent, (a) sell, assign, transfer, pledge, hypothecate, or otherwise
dispose of, encumber or suffer to exist a lien upon or against, any of the
Equipment or any Lease or any interest therein, by operation of law or
otherwise, or (b) sublease or lend any of the Equipment or permit any of the
Equipment to be used by anyone other than Lessee.
15. ASSIGNMENT BY LESSOR. Lessor may assign, sell or encumber its interest
in any of the Equipment and any Lease. Upon Lessor's written consent,
Lessee shall pay directly to the assignee of any such interest all Rent and
other sums due under an assigned Lease. THE RIGHTS OF ANY SUCH ASSIGNEE
SHALL NOT BE SUBJECT TO ANY ABATEMENT, DEDUCTION, OFF-SET, COUNTERCLAIM,
RECOUPMENT, DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE AGAINST LESSOR OR
ANY OTHER PERSON OR ENTITY. Notwithstanding the foregoing, any such
assignment (a) shall be subject to Lessee's right to possess and use the
Equipment subject to a Lease so long as Lessee is not in default thereunder,
and (b) shall not release any of Lessor's obligations hereunder.
16. RETURN OF EQUIPMENT. Unless Lessee has exercised its option, if any, to
renew a lease or purchase the Equipment subject thereto, upon expiration of
the then current Lease Term of such Lease, Lessee shall, at its expense,
cause such Equipment to be removed, disassembled, and placed in the same
condition as when delivered to Lessee (reasonable wear and tear excepted)
and properly crate such Equipment for shipment and deliver it to a common
carrier designated by Lessor. Lessee will ship such Equipment, F.O.B.
destination, to any address specified in writing by Lessor within the
continental United States. All additions, attachments, alterations and
repairs made or placed upon any of the Equipment shall become part of such
Equipment and shall be the property of Lessor.
17. EVENTS OF DEFAULT. The occurrence of any of the following shall be
deemed to constitute an Event of Default hereunder: (a) Lessee fails to pay
Rent, any other amount it is obligated to pay under a Lease or any other
amount it is obligated to pay to Lessor and does not cure such failure
within 10 days of such amount becoming due; (b) Lessee fails to perform or
observe any obligation or covenant to be performed or observed by Lessee
hereunder or under any Schedule, including, without limitation, supplying
all requested documentation, and does not cure such failure within 10 days
of receiving written notice thereof from Lessor; (c) any warranty,
representation or statement made or furnished to Lessor by or on behalf of
Lessee is proven to have been false in any material respect when made or
furnished; (d) the attempted sale or encumbrance by Lessee of the Equipment,
or the making of any levy, seizure or attachment thereof or thereon; or (e)
the dissolution, termination of existence, discontinuance of business,
insolvency, or appointment of a receiver of any part of the property of
Lessee, assignment by Lessee for the benefit of creditors, the commencement
of proceedings under any bankruptcy, reorganization or arrangement laws by
or against Lessee, or any other act of bankruptcy on the part of Lessee.
18. REMEDIES OF LESSOR. At any time after the occurrence of any Event of
Default, Lessor may exercise one or more of the following remedies: (a)
Lessor may terminate any or all of the Leases with respect to any or all
items of Equipment subject thereto; (b) Lessor may recover from Lessee all
Rent and other amounts then due and to become due under any or all of the
Leases; (c) Lessor may take possession of any or all items of Equipment,
wherever the same may be located, without demand or notice, without any
court order or other process of law and without liability to Lessee for any
damages occasioned by such taking of possession, and any such taking of
possession shall not constitute a termination of any Lease; (d) Lessor may
demand that Lessee return any or all items of Equipment to Lessor in
accordance with Paragraph 16; and (e) Lessor may pursue any other remedy
available at law or in equity, including, without limitation, seeking
damages, specific performance or an injunction.
Upon repossession or return of any item of the Equipment, Lessor shall
sell, lease or otherwise dispose of such item in a commercially reasonable
manner, with or without notice and on public or private bid, and apply the
net proceeds thereof (after deducting the estimated fair market value of
such item at the expiration of the term of the applicable Lease, in the case
of a sale, or the rents due for any period beyond the scheduled expiration
of such Lease, in the case of any subsequent lease of such item, and all
expenses, including, without limitation, reasonable attorneys' fees,
incurred in connection therewith) towards the Rent and other amounts due
under such Lease, with any excess net proceeds to be retained by Lessor.
Each of the remedies under this Lease shall be cumulative, and not
exclusive, and in addition to any other remedy referred to herein or
otherwise available to Lessor in law or in equity. Any repossession or
subsequent sale or lease by Lessor of any item of Equipment shall not bar an
action for a deficiency as herein provided, and the bringing of an action or
the entry of judgment against Lessee shall not bar Lessor's right to
repossess any or all items of Equipment.
19. CREDIT AND FINANCIAL INFORMATION. Within 90 days of the close of each
of Lessee's fiscal years, Lessee shall deliver to Lessor a copy of Lessee's
annual report, if any, and an audited balance sheet and profit and loss
statement with respect to such year. Within 45 days of the close of each of
Lessee's fiscal quarters, Lessee shall deliver to Lessor a copy of Lessee's
balance sheet and profit and loss statement with respect to such quarter,
certified by an officer of Lessee. At Lessor's request, Lessee shall
deliver to Lessor additonal information reqarding Lessee's operating and/or
projected performance.
20. INSURANCE. As of the date that risk of loss for the Equipment passes
from the Supplier to the Lessee under the terms of the Agreement, Lessee
shall obtain and maintain through the end of the Lease Term of each Lease
(and any renewal or extension thereof), at its own expense, property damage
and personal liability insurance and insurance against loss or damage to the
Equipment, including, without limitation, loss by fire (with extended
coverage), theft and such other risks of loss as are customarily insured
against with respect to the types of Equipment leased hereunder and by the
types of businesses in which such Equipment will be used by Lessee. Such
insurance shall be in such amounts, with such deductibles, in such form and
with such insurers as shall be satisfactory to Lessor; provided, however,
that the amount of the insurance against loss or damage to the Equipment
shall not be less than the greater of the replacement value of the
Equipment, from time to time, or the original purchase price of the
Equipment. Each insurance policy shall name Lessee as an insured and Lessor
as an additional insured or loss payee, and shall contain a clause requiring
the insurer to give Lessor at least 30 days prior written notice of any
alteration in the terms of such policy or of the cancellation thereof.
Lessee shall furnish to Lessor a certificate of insurance or other evidence
satisfactory to Lessor that such insurance coverage is in effect; provided,
however, that Lessor shall be under no duty either to ascertain the
existence of or to examine such insurance policy or to advise Lessee in the
event such insurance coverage shall not comply with the requirements hereof.
Lessee shall give Lessor prompt notice of any damage to, or loss of, any of
the Equipment, or any part thereof, or any personal injury or property
damage occasioned by the use of any of the Equipment.
21. TAXES. Lessee hereby assumes liability for, and shall pay when due,
and, on a net after-tax basis, shall indemnify, protect and hold harmless
Lessor against all fees, taxes and governmental charges (including, without
limitation, interest and penalties) of any nature imposed on or in any way
relating to Lessor, Lessee, any item of Equipment or any Lease, except state
and local taxes on or measured by Lessor's net income (other than any such
tax which is in substitution for or relieves Lessee from the payment of
taxes it would otherwise be obligated to pay or reimburse to Lessor as
herein provided) and federal taxes on Lessor's net income. Lessee shall, at
its expense, file when due with the appropriate authorities any and all tax
and similar returns, and reports required to be filed with respect thereto,
for which it has indemnified Lessor hereunder or, if requested by Lessor,
notify Lessor of all such requirements and furnish Lessor with all
information required for Lessor to effect such filings. Any fees, taxes or
other charges paid by Lessor upon failure of Lessee to make such payments
shall, at Lessor's option, become immediately due from Lessee to Lessor and
shall be subject to the Overdue Charge from the date paid by Lessor until
the date reimbursed by Lessee.
22. SEVERABILITY. If any provision of any Lease is held to be invalid by a
court of competent jurisdiction, such invalidity shall not affect the other
provisions of such Lease or any provision of any other Lease.
23. NOTICES. All notices hereunder shall be in writing and shall be deemed
given when sent by certified mail, postage prepaid, return receipt
requested, addressed to the party to which it is being sent at its address
set forth herein or to such other address as such party may designate in
writing to the other party.
24. AMENDMENTS, WAIVERS AND EXTENSIONS. This MLA and each Schedule
constitute the entire agreement between Lessor and Lessee with respect to
the lease of the Equipment subject to such Schedule, and supersede all
previous communications, understandings, and agreements, whether oral or
written, between the parties with respect to such subject matter. No
provision of any Lease may be changed, waived, amended or terminated except
by a written agreement, specifying such change, waiver, amendment or
termination, signed by both Lessee and Lessor, except that Lessor may
insert, on the appropriate schedule, the serial number of Equipment, after
delivery of such Equipment, and the Rent Commencement Date for the
Equipment. No waiver by Lessor of any Event of Default shall be construed
as a waiver of any future Event of Default or any other Event of Default.
At the expiration of the Lease Term with respect to a Lease, upon notice
given by Lessee at least ninety (90) days prior thereto, (a) such Lease
shall be renewed or the Equipment subject thereto shall be purchased under
the terms and conditions set forth herein for a term and rent amount or
purchase price, as the case may be, to be agreed upon, or (b) if no such
agreement is reached prior to the expiration of such Lease Term or such
notice specifies that Lessee intends to return the Equipment, then Lessee
shall return the Equipment to Lessor in the manner prescribed in Paragraph
16 of this MLA. In the absence of Lessor's timely receipt of the notice
contemplated by the preceding sentence, the Lease shall be automatically
extended, on a month-to-month basis, until terminated (upon notice by either
party given at least ninety (90) days prior to the end of the month on which
the termination is to be effective) or until renewed or the Equipment
subject thereto is purchased by agreement of the parties. Unless otherwise
agreed, Lessee shall continue to pay Rent for each month following such
Lease Term until the Equipment subject to such Lease is returned pursuant to
Paragraph 16 of this MLA.
25. CONSTRUCTION. This MLA shall be governed by and construed in accordance
with the internal laws, but not the choice of laws provisions, of the State
of California. The titles of the sections of this MLA are for convenience
only and shall not define or limit any of the terms or provisions hereof.
Time is of the essence in each of the provisions hereof.
26. PARTIES. This MLA shall be binding upon, and inure to the benefit of,
the permitted assigns, representatives and successors of the Lessor and
Lessee. If there is more than one Lessee named in this MLA, the liability
of each shall be joint and several.
27. COUNTERPARTS. Each Lease may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument.
28. OVERDUE CHARGE. Overdue Charge shall mean an amount equal to 2% per
month of any payment under a Lease which is past due, including, without
limitation, any amounts not included in any payment of Rent hereunder, or
the highest charge permitted by law, whichever is lower.
The person executing this MLA on behalf of Lessee hereby certifies that he
or she has read, and is duly authorized to execute, this MLA.
Accepted by:
Ascend Credit Corporation LESSEE: GTC Telecom Corp.
BY:/s/Xxxx X. Alman_______ BY:__/s/ Xxxx Sandhu__________
NAME:_Mark E. Alman_______ NAME:___Paul Sandhu___________
Print
TITLE:_Director of Corporate Finance TITLE:___Paul Sandhu__________
DATE:_6/10/99_____________ DATE:___4/29/99_______________
