MASTER
CONDITIONAL SALE AGREEMENT
between
Ascend Communications, Inc.,
a wholly-owned subsidiary
of Lucent Technologies Inc.
and
Globaltron Communications Corporation
TABLE OF CONTENTS
Page
1. DEFINITIONS 2
2. SALE OF EQUIPMENT 6
2.1 Delivery and Sale 6
2.2 Shipping Documents 6
3. PURCHASE PRICE; PAYMENT AND PREPAYMENT 6
3.1 Purchase Price 6
3.2 Payment of Purchase Price Balance 6
3.3 Overdue Amounts 7
3.4 Payments 7
3.5 Prepayment 7
3.6 Purchaser's Obligations Unconditional 7
3.7 Purchase Price Balance 8
4. TITLE TO EQUIPMENT; SELLER COVENANTS 9
4.1 Retention of Title by Seller; Grant of Security Interest 9
4.2 Transfer of Title 10
4.3 Application of Payments 10
4.4 Seller Covenants 10
5. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT 10
5.1 Conditions Precedent to First Shipment Date 10
5.2 CONDITIONS PRECEDENT TO EACH SHIPMENT DATE 11
5.3 CONDITIONS PRECEDENT TO LEASE OF EQUIPMENT 12
5.4 CONDITIONS PRECEDENT TO SELLER'S CONDITIONAL SALE OF THE
SECONDARY EQUIPMENT 13
5.5 CONDITIONS PRECEDENT TO SELLER'S CONDITIONAL SALE OF THE
TERTIARY EQUIPMENT 13
6. REPRESENTATIONS AND WARRANTIES 13
6.1 Warranties of Seller 13
6.2 Representations and Warranties of Purchaser 14
7. COVENANTS 15
7.1 Reports, Etc 15
7.2 Preservation of Corporate Existence 16
7.3 Maintenance 16
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TABLE OF CONTENTS
(continued)
Page
8. POSSESSION AND USE OF THE EQUIPMENT 16
8.1 Use of the Equipment 16
8.2 Transfer of Title or Possession 16
8.3 Liens 17
9. TAXES 17
10. INSURANCE 17
11. RISK OF LOSS 18
12. INDEMNIFICATION 18
13. EVENTS OF DEFAULT 18
14. REMEDIES 19
15. RETURN OF EQUIPMENT 20
16. IDENTIFICATION 20
16. NOTICES 21
17. GENERAL 21
17.1 Expenses 21
17.2 Relationship Of The Parties 22
17.3 Entire Agreement, Merger And Modification, No Waivers, Severability 22
17.4 Limitation Of Liability 22
17.5 Interpretation 22
17.6 Submission to Jurisdiction 23
17.7 Immunity 23
17.8 Assignment 23
17.9 Further Acts 23
17.10 No Waiver of Rights 24
17.11 No Oral Modification; Oral Agreements 24
17.12 Survival 24
17.13 Successors and Assigns 24
17.14 Counterparts 24
17.15 Confidentiality 24
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MASTER CONDITIONAL SALE AGREEMENT
THIS MASTER CONDITIONAL SALE AGREEMENT dated as of September 15, 1999, is
entered into by and between Ascend Communications, Inc., a wholly-owned
subsidiary of Lucent Technologies, Inc., (together with its successors and
assigns, "Seller"), a corporation organized and existing under the laws of the
State of Delaware, U.S.A., and Globaltron Communications Corporation (together
with its permitted successors and assigns, "Purchaser"), a corporation organized
and existing under the laws of the State of [Delaware], U.S.A.
RECITALS
WHEREAS, the Seller is in the business of, among other things, selling
telecommunications equipment;
WHEREAS, the Purchaser is in the business of, among other businesses,
providing telecommunications services;
WHEREAS, the Purchaser and the Seller desire to structure a master
arrangement whereby, from time to time, the Purchaser will purchase
telecommunications equipment from the Seller and Seller will sell such equipment
to Purchaser on a conditional sale basis;
WHEREAS, from time to time the Purchaser may lease such equipment, on
an operating lease basis, to certain of its Affiliates in [geographic areas
outside the United States] (the "Region");
WHEREAS, the Purchaser is the ultimate parent of each of the
Guarantors, and each such Guarantor has agreed in favor of Seller, to guarantee
the obligations of the Purchaser hereunder, and in connection herewith,
Purchaser has agreed to provide a pledge of stock of foreign subsidiaries in
favor of Seller / to secure its obligations hereunder;
WHEREAS, each Guarantor acknowledges the direct and indirect benefits,
including the use of the Equipment, derived by it by reason of the extension of
credit by Seller to Purchaser hereunder and its guarantee the obligations of the
Purchaser;
NOW THEREFORE, in consideration of the foregoing, the promises set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Seller and the Purchaser agree
as follows:
AGREEMENT
1. DEFINITIONS
Unless the context otherwise requires, the following terms shall have the
following meanings for all purposes of this Agreement and shall apply equally to
the singular and the plural forms of the terms herein defined:
"Affiliate" with respect to any Person, means any other Person, at the time such
determination is made, directly or indirectly controlling, controlled by or
under common control with such Person. For the purposes of this definition,
"control" (including "controlled by" and "under common control with") means, at
the time such determination is made, the power, directly or indirectly, to
direct or cause the direction of the management and policies of such Person
whether through the ownership of voting securities or by contract or otherwise.
"Agreement", "this Agreement", "herein", "hereunder", "hereof" or other words of
like import mean this Conditional Sale Agreement, as it may hereafter be
amended, supplemented or modified from time to time.
"Xxxx of Sale" means, with respect to any item of Equipment, a xxxx of sale to
be executed by Seller in favor of Purchaser in respect of such Equipment, which
xxxx of sale shall be substantially in the form of Exhibit A hereto.
"Business Day" means any day other than a Saturday, Sunday or other day on which
commercial banking institutions in New York, New York, or Alameda, California
are authorized or required by law to close.
"Bridge Pointe Capital Documentation" means the each of the duly authorized and
executed agreements between Purchaser and Bridge Point Capital evidencing equity
or subordinated debt commitments of Bridge Point Capital with respect to
Purchaser.
"Claim" means any and all liabilities, losses, damages, actions, suits, demands,
claims of any kind and nature (including, without limitation, claims relating to
environmental discharge, cleanup or compliance), and all costs and expenses
whatsoever to the extent they may be actually incurred or suffered by an
Indemnified Person in connection therewith (including, without limitation,
reasonable attorneys' fees and expenses), fines, penalties (and other charges of
applicable governmental authorities), licensing fees relating to any item of
Equipment, damage to or loss of use of property (including, without limitation,
consequential or special damages to third parties or damages to Purchaser's
property), or bodily injury to or death of any person (including, without
limitation, any agent or employee of Purchaser).
"Collateral" has the meaning specified in Section 4.1.
"Conditional Sale Documents" means this Agreement, each Shipping Document, the
Note, each Lease, each Lease Assignment, each Guarantee, each Pledge Agreement
and any other supplement, document, instrument, certificate, amendment,
modification, assignment or agreement related to, contemplated by or executed in
connection with any of the foregoing.
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"Default" means any event or condition that, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.
"Dollars" or "$" means the legal currency of the United States of America.
"Equipment" means any or all of the equipment, from time to time, sold by the
Seller to the Purchaser and identified in each Shipping Document delivered by
Seller in accordance with the provisions hereof.
"Event of Default" has the meaning specified in Section 14.
"Event of Loss" means, in respect of any item of Equipment, the occurrence of
any event or circumstance that has resulted (i) in such item of Equipment being
lost, stolen, destroyed or damaged beyond economic repair, (ii) in the
condemnation, confiscation, seizure or requisition of title to or use of such
item of Equipment or (iii) in an insurance settlement on the basis of a total
loss or compromised total loss of such item of Equipment.
"Governmental Approval" means all licenses, permits, consents and approvals of,
the giving of notices to, and the registration, recording and filing of all
documents with, and the taking of all other actions in respect of any
governmental or quasi-governmental authority (including, without limitation, any
court or judicative body) in the United States, any state or municipality
therein or in any other applicable country or jurisdiction.
"Guarantee" means the Guarantee in favor of Seller by each Guarantor
substantially in the form of Exhibit C hereto.
"Guarantor" means each Qualified Lessee, including the following entities,
[insert the names of the subsidiaries and the jurisdictions of incorporation].
"Indemnified Person" means Seller and its officers, directors, shareholders,
partners, and employees.
"Initial Equipment" means Equipment for which the sum of the aggregate Purchase
Price of such Equipment and the amounts advanced to the Purchaser under the
Secured Promissory Notes is equal to less than three million and 00/000 Xxxxxx
Xxxxxx dollars ($3,000,000).
"Lease" means each lease entered into between the Purchaser and a Qualified
Lessee pursuant to which Equipment is leased, which lease shall be substantially
in the form of Exhibit D hereto; provided that the parties may, by mutual
agreement, modify the terms or form of such lease to address country specific
issues, including without limitation any relevant regulatory and tax issues, in
accordance with Section 8.2.
"Lien" means any mortgage, pledge, lien, charge, assignment, encumbrance, lease,
exercise of rights, security interest, claim or right of another,
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"Mandatory Prepayment Event" means any of the events, conditions or
circumstances specified in Section 3.5(b).
"Maturity Date" means, with respect to an item of Equipment, the date that is
(i) March 1, 2002, provided that if such date is not a Business Day, the
Maturity Date is the next Business Day thereafter or (ii) such earlier date to
which the Maturity Date may be accelerated in accordance with the provisions of
this Agreement.
"Monthly Period" means, with respect to any Equipment, (i) initially, the period
from, and including, the Shipment Date for such Equipment to, and including, the
last day of the calendar month in which the Shipment Date for such Equipment
occurs and (ii) thereafter, each calendar month prior to the Maturity Date in
respect of such Equipment.
"Note" means the promissory note evidencing the payment obligations of the
Purchaser hereunder, which promissory note shall be substantially in the form of
Exhibit B hereto.
"Overdue Rate" means the per annum interest rate that equals the lesser of (i)
the maximum rate of interest permitted by applicable law and (ii) 15.75%.
"Payment Date" means, with respect to each Monthly Period, the first Business
Day of such Monthly Period when payments of amounts in arrears are to be made.
"Payment Event" means, in respect of each item of Equipment and as determined by
the Seller, the full, final and unconditional payment by the Purchaser of the
Purchase Price in respect of such item of Equipment together with all accrued
and unpaid interest thereon and all other amounts then due and owing in respect
of such item of Equipment hereunder.
"Permitted Liens" means (a) the title and interest of Seller under this
Agreement and the rights of Seller hereunder and under the Conditional Sale
Documents and of any Qualified Lessee under a Lease, and (b) prior to the
expiration or termination of the Term, liens for Taxes, assessments or other
governmental charges or levies imposed on Purchaser or any Lessee which are not
delinquent, or which are in good faith being contested by Purchaser or such
Qualified Lessee by appropriate proceedings (and for the payment of which
adequate reserves satisfactory to Seller have been provided), so long as such
proceedings do not involve any risk of the sale, forfeiture or loss of the
Equipment, or Seller's interests with respect thereto.
"Person" means any individual, sole proprietorship, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, institution, entity or government (national, federal, state,
provincial or local, or any agency, instrumentality, division or body thereof).
"Pledge Agreement" means a pledge agreement, deed of charge over shares, share
mortgage, notarial deed or such other agreement entered into between Seller and
Purchaser granting Seller a security interest in Purchaser's shares of any
Qualified Lessee to secure Purchaser's obligations under this Agreement.
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"PTT" means with respect to any Qualified Lessee, the post, telephone and
telegraph administration or any other governmental authority, including an
authority of any state or political subdivision, providing telephone and
telecommunications services in the jurisdiction where such Qualified Lessee is
located.
"PTT Agreement" has the meaning specified in Section 5.1(e).
"Purchase Price" means, in respect of any item of Equipment, the amount due to
the Seller for the purchase of such item of Equipment (exclusive of costs to be
paid by Purchaser in connection with the delivery of such Equipment for freight,
installation, maintenance, professional services and taxes), which amount shall
be set out in the invoice issued by the Seller in respect of such item of
Equipment.
"Purchase Price Balance" means, in respect of any item of Equipment at any time,
the amount of the Purchase Price for such Equipment that has not then been paid
which amount will be determined in accordance with Section 3.7 hereof.
"Qualified Lessee" means any Person organized under the laws of a jurisdiction,
and conducting business in, the Region which is an Affiliate of Purchaser and
has entered into a PTT Agreement with the applicable PTT.
"Secondary Equipment" means Equipment for which the sum of the aggregate
Purchase Price of such Equipment and the amounts advanced to the Purchaser under
the Secured Promissory Notes is equal to less than six million and 00/000 Xxxxxx
Xxxxxx dollars ($6,000,000).
"Secured Promissory Notes" means that certain Secured Promissory Note between
Seller and Purchaser dated as of August 27 1999; and that certain Secured
Promissory Note between Seller and Purchaser dated as of September 14, 1999.
"Security Agreement" means each agreement duly executed and delivered by a
Qualified Lessee and in full force and effect granting Seller a security
interest in all of the assets of such Qualified Lessee.
"Shipping Documents" means, with respect to each item of Equipment, the
documents delivered by Seller in respect thereof in accordance with Section 2.2.
"Shipment Date" means, in respect of any Equipment, the date on which such
equipment is shipped by, or on behalf of, the Seller to the Purchaser (or to its
direction) which date shall be the date designated as such in a Shipping
Document.
"Standard Terms" means Seller's standard terms of sale as such terms may be
amended, modified or supplemented from time to time.
"Term" means the period from the first Shipment Date hereunder until the date on
which all obligations of Purchaser to Seller hereunder and under the other
Conditional Sale Documents shall have been satisfied.
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"Tertiary Equipment" means Equipment for which the sum of the aggregate Purchase
Price of such Equipment and the amounts advanced to the Purchaser under the
Secured Promissory Notes is equal to less than ten million and 00/000 Xxxxxx
Xxxxxx dollars ($10,000,000).
2. SALE OF EQUIPMENT
2.1 Delivery and Sale. Subject to the provisions of Section 5, from
time to time on any Business Day on or prior to March 31, 2000, Seller will
sell, and Purchaser will purchase, Equipment subject to the terms of this
Agreement and to the Standard Terms provided that at no time may the aggregate
Purchase Price in respect of all Equipment sold and purchased hereunder exceed
$1,750,000. On each Shipment Date, the Seller shall be deemed to sell, and the
Purchaser shall be deemed to purchase, the relevant Equipment subject to the
terms of this Agreement and to the Standard Terms. In the event of any
inconsistency between the provisions of this Agreement and the Standard Terms,
the provisions of this Agreement will prevail.
2.2 Shipping Documents. Concurrently with the shipment of each item of
Equipment to Purchaser, Seller shall deliver to the Purchaser shipping documents
that identify such Equipment and the Shipping Date for such Equipment. The
information set forth in such shipping documents shall be binding on the
Purchaser absent manifest error.
3. PURCHASE PRICE; PAYMENT AND PREPAYMENT
3.1 Purchase Price. In consideration of the shipment by Seller of any
Equipment, Purchaser hereby agrees to pay the Purchase Price for such Equipment,
together with interest on the Purchase Price Balance for such Equipment from
time to time, on the dates and in the amounts determined in accordance with
Section 3.2. on each Payment Date in respect of each Monthly Period for each
item of Equipment that occurs after March 31, 2000, Purchaser shall pay
one-twenty-fourth (1/24th) of the Purchase Price for each such item of
Equipment. The interest with respect to the Purchase Price Balance of each item
of Equipment shall accrue (x) from, and including, the Shipment Date in respect
of such Equipment occurs (y) to, but excluding, the Maturity Date for such
Equipment.
3.2 Payment of Purchase Price Balance. On each Payment Date in respect
of a Monthly Period for each item of Equipment which is a full calendar month,
the Purchaser shall pay to Seller, an amount that equals the product of (i) the
Purchase Price Balance for such Equipment and (ii) the factor set forth as the
payment factor in Schedule I hereto opposite such Monthly Period. On each
Payment Date in respect of a Monthly Period for each item of Equipment which is
not a full calendar month, the Purchaser shall pay to Seller, an amount that
equals (x) the product of (i) the Purchase Price Balance for such Equipment and
(ii) the factor set forth as the payment factor in Schedule I hereto opposite
such Monthly Period divided by thirty (30), multiplied by (y) the number of
calendar days in such Monthly Period. In addition, on the Maturity Date, the
Purchaser shall pay the greater of (x) one United States dollar and (y) the
outstanding Purchase Price Balance in respect of such Equipment together with
any other amounts due in respect of such Equipment hereunder.
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3.3 Overdue Amounts. If (i) any amount payable by Purchaser pursuant
to Sections 3.1 or 3.2 is not paid in full within ten (10) days of the due date
therefor or (ii) any other amount payable by the Purchaser under this Agreement
(including, without limitation, Section 13) or any other Conditional Sale
Document is not paid in full when due, then Purchaser shall pay to Seller, to
the extent permitted by law, an additional amount equal to interest at the
Overdue Rate on the amount not paid for each day during the period from, and
including the due date to, but excluding, the date on which such amount is paid
in full.
3.4 Payments. All payments to Seller hereunder shall be made, in
Dollars, by wire transfer in immediately available funds to Seller do the
account of Ascend Communications, Inc. at Xxxxx Fargo Bank, Oakland Main Office,
Oakland, California, Account No. 00000000, ABA No.: 011 000 390, or to such
other person(s) or account(s) as Seller may designate from time to time.
3.5 Prepayment.
(a) Optional Prepayment. So long as no Event of Default shall
have occurred and be continuing hereunder, the Purchaser shall have the right,
upon giving at least thirty (30) days' prior written notice to Seller, to prepay
the Purchase Price Balance which is then outstanding with respect to all or any
items of Equipment provided that any prepayment in respect of less than all
items of Equipment shall be in a minimum amount of $500,000. Such notice shall
specify the amount and the date of such prepayment (which date shall be a
Payment Date) and, in the case of a prepayment in respect of less than all items
of Equipment, the Equipment to which such prepayment relates. Once given, any
such notice shall be irrevocable. On the date specified for prepayment, the
Purchaser shall pay to the Seller the amounts payable by the Purchaser on such
Payment Date pursuant to Sections 3.1 and 3.2 and any other amounts payable in
respect on such Equipment hereunder.
(b) Mandatory Prepayments. Purchaser shall immediately prepay
the aggregate Purchase Price Balance of all Equipment which is then outstanding,
all unpaid interest determined by Seller to have accrued on such amount and all
other amounts outstanding hereunder, under the Note and under the other
Conditional Sale Documents within five (5) Business Days following receipt of
notice from Seller (stating in reasonable detail the basis for such notice),
that this Agreement or any other Conditional Sale Document has become, or is
determined to be, illegal, invalid or unenforceable, or for any other reason
does not constitute a valid reservation of title in the Equipment in favor of
Seller, or is not effective to continue a validly perfected first priority
security interest, as the case may be, in favor of Seller in respect of all of
the Collateral, or Purchaser or any Affiliate of Purchaser takes any action,
directly or indirectly, to challenge the legality, validity or binding effect of
this Agreement, or any other Conditional Sale Document.
3.6 Purchaser's Obligations Unconditional. Purchaser's obligation to
pay the full amount of the Purchase Price and interest thereon for the Equipment
and all other amounts payable to Seller hereunder, under the Note and under the
other Conditional Sale Documents (each, a "Payment") shall be absolute and
unconditional under any and all circumstances, shall not be subject to notice or
demand unless otherwise provided herein, and shall not be affected by any
circumstance of any character, including, without limitation: (a) any setoff,
counterclaim,
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deduction, recoupment, abatement, suspension, deferment, diminution, proration,
defense or other right which Purchaser may have against Seller or any other
Person for any reason whatsoever, including any claim of Purchaser against
Seller or any other Person; (b) any defect / in the title, condition, design,
operation or fitness for use excluding meeting the signaling requirements of
country and answer supervision or any other functionality recent warrants that
the equipment meets design specifications, including answer supervision or any
damage to, or loss or destruction of, or any Lien upon the Equipment or the
interruption or cessation or restriction in the use or possession thereof by
Purchaser for any reason whatsoever; (c) any condemnation, expropriation, of
requisition or other taking of the Equipment; (d) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings by or against Purchaser, Seller or any other Person; (e) any change,
extension, waiver, indulgence or other act or omission in respect of any
obligation or liability of Purchaser or Seller except as otherwise expressly
provided thereby; (f) any failure by Purchaser or any Affiliate to obtain any
anticipated tax allowances or other tax benefits in the United States or
elsewhere; or (g) any other circumstance, happening or event whatsoever, whether
or not similar to the foregoing and whether or not Purchaser or Seller shall
have had any knowledge, actual or otherwise, of any of the foregoing. If for any
reason whatsoever this Agreement shall be terminated in whole or in part by
operation of law or otherwise, except as specifically provided herein, Purchaser
nonetheless agrees to pay to Seller an amount equal to the aggregate Purchase
Price Balance of all Equipment at the time of payment, plus interest accrued to
the date of payment and all other amounts payable hereunder and under any other
Conditional Sale Document, and, upon such payment in fill, Seller shall, to the
extent permitted by applicable law, transfer the title to the equipment which
has been retained by Seller hereunder to Purchaser and otherwise comply with the
provisions of Section 4.2. Except as otherwise expressly provided hereunder, to
the extent permitted by applicable law, Purchaser waives and disclaims all
rights now or hereafter conferred by statute or otherwise to terminate, cancel,
quit or surrender this Agreement or the Equipment or to any abatement,
suspension, deferment, diminution, reduction or proration of any payment on
account of any occurrence described in this Agreement. Each payment paid by
Purchaser hereunder shall be final, and Purchaser shall not seek to recover all
or any part of such payment from Seller, or from whosoever may be entitled
thereto, for any reason whatsoever.
3.7 Purchase Price Balance. As long as no Default or Event of Default
has occurred and is continuing, the Purchase Price Balance, at any time of the
determination thereof, in respect of any item of Equipment will equal (x) the
Purchase Price for such Equipment minus (y) any payments allocated to reduce the
Purchase Price Balance of such Equipment hereunder. Upon the occurrence, and
during the continuation of, a Default or an Event of Default, the Purchase Price
Balance at such time in respect of any item of Equipment shall be such amount as
the Seller may, in good faith, determine. The Seller shall maintain in its
records a running calculation of the Purchase Price Balance in respect of such
Equipment which calculation, absent manifest error, shall be deemed conclusively
correct. The aggregate Purchase Price Balance of any Equipment may be adjusted
upward if and to the extent that at any time all or any part of any payment
theretofore received by Seller from or on behalf of Purchaser pursuant to
Section 3.2 or 3.5(a) in respect of such Equipment, or any of the other
obligations of Purchaser hereunder or under the Note or any other Conditional
Sale Document, is or must be rescinded, released, rebated or returned by Seller
to Purchaser, any Qualified Lessee or any other person for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy, winding-up or
reorganization of Purchaser, any Qualified Lessee or any other person, or in
respect of any obligation owed to any Qualified Lessee under the Lease
Documents), in which case, the obligations of Purchaser, shall, for purposes of
this Agreement and the other Conditional Sale
8
Documents, be deemed to be readjusted or reinstated to the extent of any such
recovery notwithstanding such payment, as though such payment had not been made.
The allocation of any such upward adjustment to the Purchase Price Balance of
the Equipment shall be made by Seller in the good faith exercise of its
reasonable discretion.
4. TITLE TO EQUIPMENT; SELLER COVENANTS
4.1 Retention of Title by Seller; Grant of Security Interest.
Notwithstanding the shipment of the Equipment to Purchaser and its possession
and use thereof by Purchaser or any Qualified Lessee, Seller shall and does
hereby retain, to the exclusion of Purchaser to the extent permitted by
applicable law, the full title to and property interest in the Equipment and all
proceeds thereof.
In addition, to secure its obligations hereunder and under
each other Conditional Sale Document, Purchaser hereby grants, pledges,
transfers, assigns and sets over to Seller and hereby mortgages, charges and
assigns to Seller all of Purchaser's right, title and interest in and to the
following:
(w) the Equipment;
(x) any lease of all or any part of the Equipment (including,
without limitation, any Lease), any contract assigning or otherwise transferring
to Purchaser any right, title or interest in, to or under any lease or granting
to Purchaser any security interest in any lease or in amounts due thereunder,
together with all renewals of any such lease, sublease or any such contract
executed from time to time, and all payments, including, without limitation, all
payments of rent, all insurance proceeds (other than public liability insurance
proceeds) and all other amounts due or to become due thereunder;
(y) all rents, deposits, commitment fees, option payments,
reserves, agreed value payments, issues, profits, revenues, products and other
income, together with and the right to receive any of the foregoing, relating to
all or any portion of the Equipment or any other of the foregoing, whenever
acquired, including, without limitation, the proceeds of any insurance
maintained with respect to any of the foregoing and all proceeds of any
condemnation, expropriation or requisition payable with respect to any of the
foregoing and all proceeds payable or received with respect to an Event of Loss;
and
(z) all proceeds of the foregoing.
All of the property described in this Section 4.1 shall be
referred to hereinafter collectively as the "Collateral".
Subject to Section 4.2, Seller shall continue to retain such
title, interest and property in the Equipment and the other Collateral, as
security for the prompt payment when due of the Purchase Price Balance, and
interest thereon, any other sums due and owing to Seller pursuant to the terms
of this Agreement and the other Conditional Sale Documents, and the
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performance and observance by Purchaser of all the agreements, covenants and
provisions herein and in the other Conditional Sale Documents.
4.2 Transfer of Title. Upon a Payment Event in respect of any item of
Equipment, and without releasing or limiting any obligations of Purchaser under
this Agreement or any other Conditional Sale Documents which by their terms
survive the Maturity Date of such Equipment or the expiration or termination of
this Agreement, Seller shall (a) release its security interest in such Equipment
and the Collateral related thereto, (b) transfer to Purchaser good and
marketable title to such Equipment, free of any Liens created by or through the
Seller, by execution and delivery to Purchaser of a Xxxx of Sale for the
Equipment, and (c) execute and deliver (at Purchaser's sole cost and expense)
such documents or take such actions evidencing such release of security interest
and transfer of title as Purchaser shall reasonably request including, without
limitation, the cancellation of all filings in respect of such Equipment which
reflect Seller's interest therein.
4.3 Application of Payments.
(a) As long as no Event of Default has occurred and is
continuing, Seller shall apply any amount realized or received pursuant to the
Conditional Sale Documents promptly upon the receipt of same in the following
order: first, to payment of any interest payable pursuant to Section 3.3;
second, to payment of any amount payable pursuant to Section 3.2 (other than the
Purchase Price Balance) payable hereunder; third, to payment of any other
amounts payable pursuant to Section 3.2 (other than the Purchase Price Balance)
payable hereunder; fourth, to payment of the Purchase Price Balance pursuant to
Section 3.1 in respect of such Equipment.
(b) As long as an Event of Default has occurred and is
continuing, Seller shall apply amounts realized or received pursuant to the
Conditional Sale Documents, promptly upon receipt of the same, against the
Purchase Price Balance, all interest thereon and any other amounts then due to
Seller under any Conditional Sale Document in such manner as Seller, in its sole
discretion, deems appropriate.
4.4 Seller Covenants. Seller hereby agrees for the benefit of
Purchaser that, unless an Event of Default shall have occurred and be
continuing, Seller shall not interfere with or deprive the Purchaser or
applicable Qualified Lessee of the peaceful and quiet enjoyment of the Equipment
or exercise any right of a "Lessor" under any Lease.
5. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
5.1 Conditions Precedent to First Shipment Date. The obligation of
Seller to ship Equipment to Purchaser on the first Shipment Date hereunder is
subject, to the extent described below in this Section 5.1, to the satisfaction
of each of the following conditions precedent:
(a) Purchaser Documents. Seller shall have received, on or
prior to the first Shipment Date hereunder, (i) the Note duly executed by the
Purchaser and in full force and effect; and (ii) all other Conditional Sale
Documents.
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(b) Proof of Corporate Action. On or prior to the first Shipment
Date hereunder, Seller shall have received copies of the corporate resolutions,
delegations and all other documents supporting and evidencing all corporate
action taken by Purchaser to authorize the execution and delivery of each
Conditional Sale Document to which it is a party, certified by the Secretary or
other duly authorized officer of PUrchaser and all other documents which Seller
may reasonably request relating to the legal existence of Purchaser, the
corporate authority for and the validity of this Agreement and all other
Conditional Sale Documents thereunder and any other matters relevant thereto,
all in form and substance reasonably satisfactory to Seller.
(c) Opinions of Counsel. On or prior to the first Shipment
Date hereunder, Seller shall have received an opinion or opinions of counsel to
the Purchaser, in form and substance reasonably satisfactory to Seller, dated
the date of this Agreement and addressed to Seller.
(d) Registration and Recording. On or prior to the first
Shipment Date hereunder, Seller shall have received evidence satisfactory to
Seller that (I) Uniform Commercial Code financing statements have been duly
executed and delivered by Purchaser, as debtor, and Seller, as secured party,
and have been duly filed in all places within the States of California, Delaware
[other states where Equipment will be located, if any]; and (ii) all
registrations, recordations, filings or any other action have been duly
completed in all other places in which such filings are necessary or advisable,
in the opinion of counsel for Seller, to establish, maintain, preserve, perfect
and protect Seller's rights, titles and interests under the Conditional Sale
Documents in and to the Collateral.
(e) PTT Documentation. On or prior to the first Shipment Date,
Seller shall have received copies of all of the agreements entered into between
each Affiliate of the Purchaser and each applicable PTT (a "PTT Agreement").
(f) Consents and Approvals. On or prior to the first Shipment
Date hereunder, all approvals and consents of any trustee or holder of any
indebtedness or obligation of Purchaser or any Guarantor which are required in
connection with any of the transactions contemplated by the Conditional Sale
Documents, shall have been duly obtained, and evidence thereof reasonably
satisfactory in form and substance to Seller, certified by duly authorized
officers of Purchaser or Guarantor, as the case may be, shall have been
delivered to Seller.
5.2 Conditions Precedent to Each Shipment Date. The obligation of
Seller to ship any Equipment to Purchaser on any Shipment Date hereunder is
subject, to the extent described below in this Section 5.2, to the satisfaction
of each of the following conditions precedent:
(a) Certain Conditions. On each Shipment Date, the
representations and warranties of Purchaser in Section 6 will be true and
correct and by its acceptance of the Equipment Purchaser shall be deemed to have
represented to Seller that, such representations and warranties are true and
correct.
(b) Insurance. On or prior to each Shipment Date, Seller shall
have received the broker's report and certificates of insurance with respect to
the insurance required to be maintained pursuant to Section 10 in respect of the
related Equipment, in each case, in form and substance satisfactory to Seller.
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(c) PTT Documentation. On or prior to each Shipment Date, if
there are one or more PTT Agreements that have not been delivered to Seller
previously by Purchaser, Seller shall have received copies of such PTT
Agreements.
(d) Other Matters. On each Shipment Date, all other matters
incident to the purchase and conditional sale of the Equipment, the Lease
Agreements shall be reasonably satisfactory to Seller. Without limiting the
generality of the foregoing, (i) in Seller's reasonable good faith judgment (A)
all action necessary or advisable to protect or maintain Seller's rights, titles
and interests under the Conditional Sale Documents and in the Equipment have
been taken, and (B) the Conditional Sale Documents and the transactions
contemplated thereby shall comply in all material respects with legal and
regulatory requirements of the jurisdiction in which the Equipment is to be
located, and (ii) no sales, use, value added, stamp or transfer type tax
(however named or described) that has not been paid or indemnified by Purchaser
shall be imposed on Seller as a result of the Conditional Sale Documents or the
transactions contemplated thereby, including, without limitation, sales tax
imposed in the country and local jurisdiction in which the Equipment is, or is
intended to be, located.
5.3 Conditions Precedent to Lease of Equipment. The Purchaser agrees
that the lease of any Equipment to a Qualified Lessee is subject, to the extent
described below in this Section 5.2, to the satisfaction of each of the
following conditions precedent:
(a) Lease Documents. Prior to the lease of any Equipment to a
Qualified Lessee, Seller shall have approved the form of Lease, the Lease shall
be in full force and effect and Seller shall have received (I) a chattel paper
counterpart of the Lease, (ii) the Guarantee of such Qualified Lessee duly
executed and delivered by the Qualified Lessee and in full force and effect;
(iii) a Pledge Agreement duly executed by the Purchaser with respect to the
shares of such Qualified Lessee; (iv) a Security Agreement duly executed and
delivered by the such Qualified Lessee and in full force and effect granting
Seller a security interest in all of the assets of such Qualified Lessee, unless
this requirement is waived in writing by Seller; (iv) the organizational
documents of the Qualified Lessee and (v) originals, or copies, duly certified
in a manner satisfactory to Seller, of all documents to be delivered to
Purchaser at the closing with respect to the Lease.
(b) Registration and Recording. Prior to the lease of any
Equipment to a Qualified Lessee, Seller shall have received evidence
satisfactory to Seller that:
(i) upon the lease of such Equipment, the Seller
will retain full ownership rights to and interest in the Equipment, and the
Seller will have a first-priority security interest in the corresponding Lease
and other Collateral under applicable law of the jurisdiction in which such
Equipment is to be located; and
(ii) precautionary Uniform Commercial Code financing
statements and all registrations, recordations, filings or any other relevant
jurisdiction have been duly executed by the relevant Qualified Lessee, as
lessee, and Purchaser, as lessor, and listing Seller as assignee, and shall be
promptly duly filed in any applicable states of the United States or any other
applicable jurisdiction, to establish, maintain, preserve, perfect and protect
Seller's rights, titles and interests in and to the relevant Lease.
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(c) Consents and Approvals. On or prior to the lease of any
Equipment to a Qualified Lessee, all appropriate action, if any, required to
have been taken in connection with such Lease shall have been duly taken by any
governmental authority or agency having jurisdiction, and Purchaser shall have
furnished to Seller copies of all governmental consents, permits and approvals,
if any, required for the execution, delivery or performance of such Lease.
(d) Opinions of Counsel. On or prior to the lease of any
Equipment to a Qualified Lessee hereunder, Seller shall have received an opinion
of counsel to such Qualified Lessee with respect to the laws of the jurisdiction
of organization of such Qualified Lessee, in form and substance reasonably
satisfactory to Seller, dated the date of this Agreement and addressed to
Seller.
(g) Evidence of Business Climate. Upon request of Seller,
evidence satisfactory to Seller with respect to the business climate, including
without limitation, information on political climate, economy or financial
system of the jurisdiction of organization of such Qualified Lessee.
(h) Approval of Business Climate. Written approval from Seller
to Purchaser confirming the acceptability of the business climate of the
jurisdiction of organization of such Qualified Lessee.
5.4 Conditions Precedent to Seller's Conditional Sale of the
Secondary Equipment. Seller shall have received evidence satisfactory to Seller
of (i) Bridge Pointe Capital Documentation evidencing an equity investment
commitment in Purchaser or subordinated debt commitment to Purchaser by Bridge
Pointe Capital of at least eight hundred thousand and 00/000 Xxxxxx Xxxxxx
dollars ($800,000) and (ii) Bridge Pointe Capital funding such commitment.
5.5 Conditions Precedent to Seller's Conditional Sale of the
Tertiary Equipment. Seller shall have received evidence satisfactory to Seller
of (i) Bridge Pointe Capital Documentation evidencing an equity investment
commitment in Purchaser or subordinated debt commitment to Purchaser by Bridge
Pointe Capital of at least $4,000,000 (provided that this amount will constitute
an aggregate of all commitments from Bridge Pointe Capital to Purchaser after
August 1, 1999, and inclusive of the $800,000 commitment set forth in Section
5.4 above) and (ii) evidence of Bridge Pointe Capital funding such commitment.
6. REPRESENTATIONS AND WARRANTIES
6.1 Warranties of Seller. SELLER MAKES NO REPRESENTATION OR WARRANTY
IN THIS AGREEMENT OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
EQUIPMENT, ITS MERCHANTABILITY, OR ITS FITNESS FOR A PARTICULAR PURPOSE. SELLER
SHALL NOT BE LIABLE TO PURCHASER OR ANY OTHER PERSON (INCLUDING ANY LESSEE) FOR
DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM THE
USE OF THE EQUIPMENT, OR FOR DAMAGES BASED ON STRICT OR ABSOLUTE TORT LIABILITY
OR SELLER'S PASSIVE NEGLIGENCE. EACH OF PURCHASER AND SELLER HEREBY ACKNOWLEDGES
THAT ANY MANUFACTURER'S OR SUPPLIER'S
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WARRANTIES WITH RESPECT TO THE EQUIPMENT ARE FOR THE BENEFIT OF BOTH PURCHASER
AND SELLER. NOTWITHSTANDING THE FOREGOING, PURCHASER'S OBLIGATIONS TO MAKE EACH
PAYMENT DUE, OR OTHERWISE PERFORM ITS OBLIGATIONS, UNDER THIS AGREEMENT ARE
ABSOLUTE AND UNCONDITIONAL.
6.2 Representations and Warranties of Purchaser. Purchaser makes the
following representations, warranties and covenants as of the date hereof and as
of each Shipment Date that:
(a) Corporate Status and Power. The Purchaser (a) is a
corporation duly organized, validly existing and in good standing or the
equivalent under the laws of the jurisdiction of its organization, (b) has all
powers required to conduct its business, (c) has full corporate power, authority
and legal right to execute, deliver and perform this Agreement and each other
Conditional Sale Document to which it is party and to carry out the transactions
contemplated hereby.
(b) Due Execution and Enforceability. Each of this Agreement
and each other Conditional Sale Document to which it is party has been duly
executed and delivered by the Purchaser and constitutes the valid and binding
obligation of the Purchaser, enforceable against Purchaser in accordance with
its terms except as such enforceability may be limited by bankruptcy or similar
laws applicable to creditors generally or by general principles of equity.
(c) Non-Contravention. Neither the execution and delivery by
the Purchaser of this Agreement or any other Conditional Sale Document to which
it is a party nor the consummation by the Purchaser of the transactions
contemplated hereby or thereby is an event that, of itself or with the giving of
notice or the passage of time or both, will (a) conflict with the certificate of
incorporation or by-laws of the Purchaser; (b) violate any material judgment,
decree or order or statute, rule or regulation applicable to the Purchaser, (c)
contravene or result in any breach of, or constitute a default under any
indenture, mortgage, material contract or other material agreement to which
Purchaser is a party or by which Purchaser or any of its properties may be bound
or affected, or (d) result in the creation of any Lien (excepting the Lien
arising pursuant to the Conditional Sale Documents), charge or encumbrance upon
any property of Purchaser.
(d) Government Approvals. All Governmental Approvals, if any,
required in connection with the execution and delivery by Purchaser of the
Conditional Sale Documents to which Purchaser is a party, the consummation of
the transactions by Purchaser contemplated thereby, and the performance of its
obligations thereunder, have been, or will be contemporaneously with the
delivery of the Equipment hereunder, obtained, given or accomplished.
(e) Litigation. There is no action or proceeding pending or,
to the knowledge of Purchaser, overtly threatened against or affecting Purchaser
or any of the Collateral before any court or other governmental authority or
arbitration body which, if adversely determined, is reasonably likely to
materially and adversely affect the financial condition of Purchaser or the
ability of Purchaser to perform its obligations under the Conditional Sale
Documents to which it
14
is party, or which questions in any respect, directly or indirectly, the
legality, validity, binding effect or enforceability of any of the Conditional
Sale Documents or any part or portion thereof, or any action contemplated
thereby.
(f) No Default. No Default or Event of Default has occurred
and is continuing or will result from the purchase of the relevant Equipment or
consummation of the other transactions contemplated by the Conditional Sale
Documents; and to the best of Purchaser's knowledge, there does not exist any
material default or failure of condition or performance under any Lease by a
Qualified Lessee or by Purchaser in its capacity as Lessor thereunder.
(g) All Disclosures Made. No document, certificate or
statement furnished by Purchaser to Seller in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits a material fact necessary to make the statements contained therein not
misleading. There is no fact which Purchaser has not disclosed to Seller in
writing which materially adversely affects or, so far as Purchaser can
reasonably foresee, will materially adversely affect the ability of Purchaser to
carry on its business and perform its obligations under this Agreement and the
other Conditional Sale Documents.
(h) Leases Comply with Applicable Law. In respect of any
Lease, to the knowledge of Purchaser after reasonably inquiry, the form of Lease
to be entered into by the Purchaser and the Qualified Lessee in connection with
the corresponding Equipment complies with the requirements of all applicable
laws and contains all information and disclosures required by such applicable
laws.
7. COVENANTS
Purchaser agrees that during the Term, unless Seller shall otherwise consent in
writing:
7.1 Reports, Etc. Purchaser shall furnish to Seller the following
described reports, notices and information:
(a) Notice of Default or Event of Default. Promptly upon
becoming aware of the existence of any condition or event which constitutes a
Default or an Event of Default, a written notice signed by a senior officer of
Purchaser specifying the nature and period of existence thereof and what action
Purchaser is taking or proposes to take with respect thereto;
(b) Equipment Location. Promptly upon installation or
relocation of any Equipment, a list including a description of the equipment,
the purchase order number on which such Equipment was originally ordered, the
installation locations of such Equipment and the serial numbers of such
Equipment, if any.
(c) Financial Performance of Purchaser. Promptly, but in any
event no later than 90 days from the end of each fiscal year of Purchaser; (i)
Purchaser shall provide audited financial statements of Purchaser for such
period certified by independent certified accountants of nationally recognized
standing reasonably acceptable to Seller; and (ii) as soon as available upon
execution of this Agreement, but in any event no later that 30 days after the
end of each month, Purchaser shall provide unaudited financial statements to
Seller, certified by a
15
responsible officer. All such financial statements to be completed and correct
in all material respects and to be prepared in reasonable detail and in
accordance with generally accepted accounting principles applied consistently
throughout the periods reflected therein and with prior periods.
(d) Requested Information. Promptly upon request, such other
data and information as from time to xxxx Xxxxxx may reasonably request,
including information on the operating performance and projected performance,
periodic information regarding acquisition activity and the subscriber base in
each country in the Region in which the Purchaser and its Affiliates operate.
Information provided to the Purchaser pursuant this clause (d) shall be subject
to the confidentiality provisions of Section 18.15 hereof.
7.2 Preservation of Corporate Existence. (a) Purchaser shall maintain
and preserve its corporate existence; (b) Purchaser shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
franchises and all rights necessary to carry on its business and operations; and
(c) Purchaser shall not, without the prior written consent of Seller,
consolidate with or merge or amalgamate into (or attempt any such consolidation,
merger or amalgamation) any other corporation or permit any other corporation to
merge into it, provided that the foregoing shall not apply to any consolidation
or merger of Purchaser with any Guarantor or with any subsidiary of Purchaser so
long as such Guarantor or Purchaser, as applicable, is the survivor and no
Default or Event of Default will result therefrom.
7.3 Maintenance. Purchaser shall maintain, or cause to be maintained,
the Equipment in good operating order and appearance, protect the Equipment from
deterioration, other than normal wear and tear, and will not use, or permit to
be used, the Equipment for any purpose other than that for which it is intended
and is permitted by applicable law.
8. POSSESSION AND USE OF THE EQUIPMENT
8.1 Use of the Equipment. Purchaser shall not, and shall not permit
any third party to, operate, use or locate the Equipment, or any part thereof,
except as otherwise provided in this Agreement.
8.2 Transfer of Title or Possession. Purchaser shall not, and shall
cause each Lessee not to, without the prior written consent of Seller, lease,
sublease or otherwise in any manner deliver, transfer or relinquish possession
of the Equipment, or sell or convey any or all of its right, title and interest
in or to any part thereof; provided, however, that, Purchaser may, without the
prior written consent of Seller but subject to the conditions precedent set out
herein, lease the Equipment to a Qualified Lessee pursuant to a Lease; further,
provided, that if the Purchaser and Seller are unable to agree to amendments to
the Lease required for a particular jurisdiction within 30 days from the
Shipment Date for such Equipment, the Equipment shall be deemed sold to the
Purchaser on the Standard Terms.
Notwithstanding any lease of the Equipment permitted under
this Section 8.2, (1) Purchaser shall remain primarily liable hereunder for the
performance of all of the terms of this Agreement to the same extent as if such
permitted lease had not occurred, and (2) in connection with any permitted lease
hereunder, Purchaser, at its own expense, shall take or cause to be taken
16
all action reasonably requested by Seller to be taken, including filings,
registrations and recordations, to preserve, and to continue to evidence the
retention by Seller of title to the Equipment and the security interest in the
other Collateral and Seller's other rights under the Conditional Sale Documents.
8.3 Liens. Purchaser shall not, directly or indirectly, create, incur
or assume or suffer to be created, incurred, assumed or to exist any Lien of
any kind (other than Permitted Liens) on any of its rights, titles and interests
in or under this Agreement or any of the other Conditional Sale Documents or its
rights and interests in and to the Equipment or any part thereof or any of the
other Collateral, and if any such Lien other than any Permitted Lien does exist,
Purchaser, at its sole cost and expense, shall promptly remove the same.
9. TAXES
Purchaser hereby assumes liability for, and shall pay when due, and, on a net
after-tax basis, shall indemnify, protect and hold harmless Seller against all
fees, taxes and governmental charges (including, without limitation, interest
and penalties) of any nature imposed on or in any way relating to Seller,
Purchaser, any Qualified Lessee, any item of Equipment, this Agreement or any
Lease, except state and local taxes on or measured by Seller's net income (other
than any such tax which is in substitution for or relieves Purchaser from the
payment of taxes it would otherwise be obligated to pay or reimburse to Seller
as herein provided) and federal taxes on Seller's net income. Purchaser 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 Seller hereunder or, if requested by Seller, notify
Seller of all such requirements and furnish Seller with all information required
for Seller to effect such filings. Any fees, taxes or other charges paid by
Seller upon failure of Purchaser to make such payments shall, at Seller's
option, become immediately due from Purchaser to Seller and shall be subject to
the Overdue Charge from the date paid by Seller until the date reimbursed by
Purchaser. Purchaser shall have no obligation to indemnify Seller under this
Section 9 to the extent that any tax or governmental charge results from the
failure by Seller to take all steps which are reasonable and customary in the
ordinary course of Seller's business to avail itself of any and all exemptions
from liability for, or reductions in, any such taxes or governmental charges.
10. INSURANCE
The Purchaser shall, or shall cause the corresponding Lessee, to maintain
insurance with financially sound and reputable insurers, of the kinds and in the
amounts customarily insured against by companies engaged in the same or similar
business and similarly situated. The Purchaser shall, or shall cause the
corresponding Lessee, to pay all insurance premiums payable as and when due. The
Seller shall be named as sole loss payee or additional insured, as applicable,
with respect to each such insurance policy.
11. RISK OF LOSS
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Risk of loss in respect of each item of Equipment shall pass to Purchaser on the
Shipment Date in respect thereof. Upon the occurrence of an Event of Loss,
Purchaser shall promptly pay to Seller the applicable Purchase Price Balance of
the Equipment subject to the Event of Loss, interest on the Purchase Price
Balance thereof from the most recent Payment Date in respect thereof to the date
of payment at a per annum rate of 12.25%. Upon payment by Purchaser of the
amounts in the preceding sentence, Seller will transfer to Purchaser, "AS IS,
WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all of Lessor's right,
title and interest, if any, in such items of Equipment.
12. INDEMNIFICATION
Purchaser assumes liability for, and shall pay when due, and shall indemnify,
reimburse and hold each Indemnified Person harmless from and against all Claims,
directly or indirectly relating to or arising out of the acquisition, use,
manufacture, purchase, shipment, transportation, delivery, installation, lease
or sublease, ownership, operation, possession, control, storage, return or
condition of any item of Equipment (regardless of whether such item of Equipment
is at the time in the possession of Purchaser), the falsity of any non-tax
representation or warranty of Purchaser or Purchaser's failure to comply with
the terms of this Agreement during the Term. The foregoing indemnity shall
cover, without limitation, (i) any Claim in connection with a design or other
defect (latent or patent) in any item of Equipment, (ii) any Claim for
infringement of any patent, copyright, trademark or other intellectual property
right, or (iii) any Claim for negligence or strict or absolute liability in
tort; provided, however, that Purchaser shall not indemnify Seller in respect of
any Claim to the extent resulting from the gross negligence, willful misconduct
or bad faith of Seller.
Such indemnities shall continue in full force and effect, notwithstanding the
expiration or termination of this Agreement. Upon Seller's written demand,
Purchaser shall assume and diligently conduct, at its sole cost and expense, the
entire defense of any Indemnified Person against any indemnified Claim described
in this Section 12. Purchaser shall not settle or compromise any Claim against
or involving Seller without first obtaining Seller's written consent thereto,
which consent shall not be unreasonably withheld. Purchaser shall give Seller
prompt notice of any occurrence, event or condition in connection with which
Seller may be entitled to indemnification hereunder. The provisions of this
Section 12 are in addition to, and not in limitation of, the provisions of
Section 9.
13. EVENTS OF DEFAULT
An Event of Default shall occur if (i) Purchaser fails to make any payment due
under Section 3.2 hereof within ten (10) days of the due date therefor or any
other payment required under this Agreement when due and such failure continues
for a period of three (3) days after written notice from Seller, or (ii)
Purchaser fails to perform or observe any other covenant, condition or agreement
to be performed or observed by it or breaches any provision contained in this
Agreement or in any other document furnished to Seller in connection herewith,
and such failure or breach continues for a period of thirty (30) days after
written notice from Seller, or (iii) Purchaser without Seller's consent,
attempts to assign this Agreement or sell, transfer, encumber, part with
possession (other than under a Lease permitted hereunder) of any item of
Equipment;
18
or (iv) Purchaser makes any representation or warranty herein or in any document
furnished by Purchaser in connection herewith, which shall have been materially
false or inaccurate when made or at the time to which such representation or
warranty relates; (v) an Event of Default (as therein defined) under any
Guarantee shall occur; (vi) Purchaser or any Qualified Lessee shall commit an
act of bankruptcy or become insolvent or bankrupt or make an assignment for the
benefit of creditors or consent to the appointment of a trustee or receiver or
either shall be appointed for them or for a substantial part of its property
without its consent, or bankruptcy reorganization, or insolvency proceedings
shall be instituted by or against them, and if instituted against them, shall
not be vacated or dismissed within sixty (60) days; or (vii) an initial public
offering of securities representing shares of Purchaser. Any Event of Default
shall be deemed material and a substantial impairment of Seller's interests for
the purposes of this Agreement, the UCC, and any other applicable law.
14. REMEDIES
Upon the occurrences of any Event of Default and at any time thereafter,
provided such Event of Default is then continuing, Seller may, in its
discretion, do any one or more of the following:
(a) accelerate the Maturity Date in respect of any or all
Equipment;
(b) recover any accrued and unpaid amounts which are due and
owing under any Conditional Sale Document plus interest at the Overdue Rate;
(c) recover any amounts due under any indemnity then
determinable, plus interest at the Overdue Rate;
(d) require that Purchaser return the Equipment in accordance
with Section 15 hereof
(e) enter the premises where such Equipment is located and
take immediate possession of and remove the same, all without liability to
Seller or its agents for such entry;
(f) exercise the rights of "Lessor" under any Lease;
(g) sell any or all of the Equipment at public or private
sale, with or without notice to Seller or advertisement, or otherwise dispose
of, hold, use, operate, lease to others or keep idle such Equipment, all free
and clear of any rights of Purchaser and without any duty to account to
Purchaser for such action or inaction or for any proceeds with respect thereto;
and
(h) exercise any other right or remedy which may be available
to it under the UCC or other applicable law including the right to recover
damages for the breach hereof.
In addition, Purchaser shall be liable for, and reimburse Seller for, all
reasonable legal fees and all commercially reasonable costs and expenses
incurred by Seller as a result of the foregoing defaults or the exercise of
Seller's remedies, including without limitation, recovering possession of the
Equipment, selling or leasing the Equipment (including broker's and sales
representative's fees and commissions), and placing any Equipment in the
condition required by Section 15. No
19
remedy referred to in this Section is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to above or otherwise
available to Seller at law or in equity. No express or implied waiver by Seller
of any default shall constitute a waiver of any other default by Seller, or a
waiver of any of Seller's right.
15. RETURN OF EQUIPMENT
If required to return any Equipment to the Seller hereunder, Purchaser shall, at
its expense and risk, cause such Equipment to be removed, disassembled, and
placed in the same condition as when delivered to Seller (reasonable wear and
tear excepted) and properly crate such Equipment for shipment and deliver it to
a common carrier designated by Seller. Purchaser will ship such Equipment,
F.O.B. destination, to any address specified in writing by Seller 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 Seller. The Equipment when returned to Seller pursuant
to this Section 15 shall comply with the requirements of this Agreement.
16. IDENTIFICATION
The Equipment shall bear the respective manufacturers' serial numbers.
Purchaser, at its sole cost and expense, shall xxxx, or cause to be marked,
legibly each item of Equipment on or before placing such Equipment into service
and thereafter during the Term for so long as such Equipment is subject to the
terms hereof, with a metal plate, disc, or other marking of the customary size
no smaller than ten centimeters by seven centimeters (10cm. x 7cm) and bearing a
legend as follows:
"THIS EQUIPMENT IS OWNED BY ASCEND COMMUNICATIONS, INC., A WHOLLY- OWNED
SUBSIDIARY OF LUCENT TECHNOLOGIES INC., AND IS SUBJECT TO A CONDITIONAL SALE
AGREEMENT BETWEEN ASCEND COMMUNICATIONS, INC., A WHOLLY-OWNED SUBSIDIARY OF
LUCENT TECHNOLOGIES INC., AND GLOBALTRON COMMUNICATIONS CORPORATION AND IS
LEASED TO [QUALIFIED LESSEE NAME] AND MAY NOT BE USED BY ANY OTHER PERSON
WITHOUT THE PRIOR WRITTEN CONSENT OF ASCEND COMMUNICATIONS, INC., A WHOLLY-
OWNED SUBSIDIARY OF LUCENT TECHNOLOGIES INC., AND GLOBALTRON COMMUNICATIONS
CORPORATION."
or such other legend as may be reasonably requested by Seller to evidence the
fact that the Equipment is subject to this Agreement. Purchaser shall not remove
or deface, and shall require each Lessee to agree not to remove or deface, any
metal plate, disc or other marking so placed on the Equipment or the identifying
serial number of the Equipment or any part thereof and, in the event of such
removal or defacement, shall promptly cause such metal plate, disc, other
marking or serial number to be replaced.
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16. NOTICES
Except as otherwise specifically set forth in this Agreement, all notices,
demands, requests or other communications which may be or are required to be
given, served, or sent by any party pursuant to this Agreement shall be in
writing and shall be personally delivered, mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, sent by Federal
Express or other recognized overnight delivery service, addressed as follows:
If to the Purchaser, to: GLOBALTRON COMMUNICATIONS CORPORATION
ATTN: XXXX XXXXXX, PRESIDENT & CEO
000 XX 0XX XXXXXX
XXXXX, XX 00000
with a copy to: ILLEGIBLE
Attn: XXXXX XXXXX, CFO
If to the Seller, to: Xxxxxxxx Xxxxxx
Assistant Secretary
Lucent Technologies Inc., InterNetworking
Systems
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
with a copy to: Xxxxx Xxxxx, Manager of Corporate Finance
Each party may designate by notice in writing a new address, to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication which shall be delivered,
mailed or transmitted in the manner described above shall be deemed sufficiently
given, served, sent or received for all purposes at such time as is delivered to
the addressee (with an affidavit of personal delivery, the return receipt or the
delivery receipt being deemed conclusive, but not exclusive, evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.
17. GENERAL
17.1 Expenses. Without limitation of the terms of Section 12,
Purchaser agrees, promptly upon demand, to pay to Seller all out-of-pocket costs
and expenses (including reasonable attorneys fee) incurred by Seller in
connection with this Agreement, the enforcement of any rights and remedies
created in connection with the Conditional Sale Documents, or the entering into
or giving or withholding of any future amendments or supplements or waivers or
consents with respect thereto, as well as,
(a) out of pocket costs payable to third parties arising with
respect to the documentation of the Lease, perfection of the Seller's security
first priority interest in the
21
Collateral and rights to the Equipment located outside the continental United
States, subject to the prior approval of the Purchaser, such approval not to be
unreasonably withheld or delayed; and
(b) all other expenses in connection with such transactions
including, without limitation, all fees, taxes, expenses, and other charges
(including, without limitation, reasonable fees and expenses of counsel) payable
in connection with (i) any transfer of possession of or the replacement of the
Equipment as provided in this Agreement, (ii) the recording or filing of
instruments, including the Conditional Sale Documents, any financing statements,
company charges and other filings described in this Agreement, (iii) any
transfer of title to the Equipment pursuant to Section 4 and the removal of any
Liens on the Equipment in connection therewith other than any fees, charges or
expenses incurred in connection with the removal of any Seller Liens, and (iv)
the taking, possession, removing, storing, repairing, leasing or selling of the
Equipment as part of Seller's enforcement of any remedies under this Agreement,
the Note or the other Conditional Sale Documents. Except as set forth herein,
each party hereto shall pay its own expenses (including legal and accounting
fees) incurred in the negotiation, documentation and review of the Agreement and
any due diligence efforts expended in connection with its execution.
17.2 Relationship Of The Parties. Nothing in this Agreement shall be
construed as making either party a joint venturer, partner, agent,
representative, or employee of the other party. The parties' status is that of
independent contractors and, except as otherwise expressly set forth herein, the
parties shall be responsible for determining the method, details, and means of
performing their obligations described herein. Each party shall solely be
responsible for its own employees. This Agreement is not intended to confer any
right upon any person other than the parties to this Agreement.
17.3 Entire Agreement, Merger And Modification, No Waivers,
Severability. This Agreement and the Exhibits contains the entire understanding
between the Seller and the Purchaser with respect to the subject matter hereof
and merges and supersedes all prior and contemporaneous agreements, dealings and
negotiations. No modification, alteration or amendment shall be effective unless
made in writing, dated and signed by duly authorized representatives of both
parties. No waiver of any breach hereof shall be held to be a waiver of any
other or subsequent breach. If any provision of this Agreement is determined by
a court of competent jurisdiction to be invalid, illegal or unenforceable, such
determination shall not affect the validity of the remaining provisions unless
the Seller determines in its discretion that the court's determination causes
this Agreement to fail in any of its essential purposes.
17.4 Limitation Of Liability. In no event shall either party be liable
to the other for any speculative, indirect, special or consequential damages,
including but not limited to lost profits, even if advised of the possibility of
such damages, in connection with performance under this Agreement.
17.5 Interpretation.
22
(a) Headings. Table of contents and section headings used
herein are for convenience only and shall not in any way affect the construction
of, or be taken into consideration in interpreting, this Agreement.
(b) References. Any reference to a specific Section or Section
number shall be interpreted as a reference to that Section of this Agreement
unless otherwise expressly provided.
(c) Incorporation of Exhibits and Schedules. All annexes,
schedules and exhibits referenced in and attached to this Agreement are by this
reference incorporated into and made a part of this Agreement.
(d) Governing Law. THIS AGREEMENT AND THE NOTE AND ALL THE
RIGHTS AND OBLIGATIONS HEREUNDER AND THEREUNDER AND ALL MA1TERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE THEREOF SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS, BUT NOT THE CHOICE OF LAW PROVISIONS, OF THE
STATE OF CALIFORNIA, U.S.A.
17.6 Submission to Jurisdiction. The parties hereto hereby irrevocably
and unconditionally submit to the non-exclusive jurisdiction of the California
courts and of any United States federal courts sitting in California with
respect to any disputes arising out of or in connection with this Agreement.
17.7 Immunity. Purchaser agrees that in any legal action or
proceedings against it or its assets in connection with this Agreement or the
other Conditional Sale Documents, no immunity from legal action or proceedings
(including, without limitation, suit, attachment prior to judgment, other
attachment, the obtaining of judgment, execution or other enforcement) shall be
claimed by or on behalf of Purchaser or with respect to its assets, irrevocably
waives any such right of immunity which it or its assets how have or may
hereafter acquire or which may be attributed to it or its assets and consents
generally in respect of any such legal action or proceedings to the giving of
any relief or the issue of any process in connection with such action or
proceedings including, without limitation, the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended use) of any
order or judgment which may be made or given in such action or proceedings.
17.8 Assignment. Seller may at any time, without notice to or the
consent of Purchaser or any other Person, sell, assign, transfer, convey, grant
participations in or otherwise dispose of to one or more persons, and any
assignee, transferee, participant or other recipient may resell, reassign,
retransfer or reconvey, at any time and from time to time, all or any portion of
the Note any interest of Seller in any of the Collateral and/or the Conditional
Sale Documents, and the rights, benefits and advantages of Seller hereunder and
under the other Conditional Sale Documents. Seller shall promptly notify
Purchaser of any such sale, assignment, transfer, conveyance, participation or
disposal provided that the failure to provide such notice shall not adversely
affect the transfer contemplated thereby.
17.9 Further Acts. Subject to the limitations otherwise provided
herein, Purchaser shall from time to time do and perform such other and further
acts and execute and deliver any and all
23
such other and further instruments as may be required by law or reasonably
requested by Seller to establish, maintain and protect the rights, title,
interests and remedies intended to be created or provided hereunder and under
the other Conditional Sale Documents in favor of Seller and to carry out and
effect the intent and purposes of this Agreement and the other Conditional Sale
Documents. Without limiting the generality of the foregoing, Purchaser shall, at
its own cost and expense, promptly furnish to Seller such information as may be
required to enable Seller to file any reports, including tax returns, required
to be filed by Seller with any governmental authority because of Seller's
interests in the Equipment or in the other Collateral.
17.10 No Waiver of Rights. No waiver of or delay or omission in the
exercise of any right or remedy provided herein or in any other Conditional Sale
Document or otherwise available to Seller shall impair, affect or be construed
as a waiver of its rights thereafter to exercise the same. Any single or partial
exercise by Seller of any right or remedy provided herein or in any other
Conditional Sale Document shall not preclude any other or further exercise of
any other right or remedy. Any extension of time for payment hereunder or other
indulgences granted to Purchaser shall not alter, affect or waive Seller's
rights or the obligations of Purchaser hereunder or under any other Conditional
Sale Document, except in accordance with the explicit terms of such extension.
17.11 No Oral Modification; Oral Agreements. No term or provision of
this Agreement or the Note may be waived, modified, terminated or discharged
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.
17.12 Survival. Any other provisions contained in this Agreement to
the contrary notwithstanding, it is hereby agreed that, except as otherwise
provided herein, the provisions of Sections 9, 12, 14, 15 and 18, shall survive
the expiration, cancellation, completion or termination hereof to the extent
required thereby for their full observance and performance.
17.13 Successors and Assigns. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns, including, without limitation, the subrogees and
participants of Seller.
17.14 Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which when so executed shall be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
17.15 Confidentiality. Purchaser and Seller understand that certain
commercial and financial information contained in this Agreement and each other
Conditional Sale Agreement is considered by Purchaser and Seller as privileged
and confidential. Purchaser and Seller each agree that it shall treat this
Agreement and the terms hereof as privileged and confidential and will not, or
permit its agents and advisers to, without the prior written consent of the
other, disclose the terms and conditions of or the existence of this Agreement
or the agreements of the parties contained herein to any third person or persons
except (i) to legal counsel or auditors in connection with the transactions
contemplated hereby, (ii) as may be required by law or in connection with legal
proceedings, and (iii) to any transferee or assignee of Seller hereunder. In
connection with any permitted disclosure of the terms and conditions of or the
existence of this
24
Agreement and each other Conditional Sale Agreement or the agreements contained
herein to any person or entity, Purchaser or Seller, as the case may be, and
such party's agents and advisers, shall request, and shall use reasonable
efforts to obtain, confidential treatment of such information.
25
IN WITNESS WHEREOF, the Seller and the Purchaser have caused this
Agreement to be executed as of the date stated at the beginning of this
Agreement.
ASCEND COMMUNICATIONS, INC., a GLOBALTRON COMMUNICATIONS
wholly-owned subsidiary of Lucent CORPORATION
Technologies, Inc.
By:_____________________ By: /s/ Xxxx Xxxxxx,
Name:___________________ Name: Xxxx Xxxxxx
Title:__________________ Title: President & CEO
26
SCHEDULE I
--------------------------------------------------------------------------------------------------------------------------------
Month Purchase Price Factor
--------------------------------------------------------------------------------------------------------------------------------
1 .010208333
--------------------------------------------------------------------------------------------------------------------------------
2 .010208333
--------------------------------------------------------------------------------------------------------------------------------
3 .010208333
--------------------------------------------------------------------------------------------------------------------------------
4 .010208333
--------------------------------------------------------------------------------------------------------------------------------
5 .010208333
--------------------------------------------------------------------------------------------------------------------------------
6 .010208333
--------------------------------------------------------------------------------------------------------------------------------
7 .010208333
--------------------------------------------------------------------------------------------------------------------------------
8 .010208333
--------------------------------------------------------------------------------------------------------------------------------
9 .010208333
--------------------------------------------------------------------------------------------------------------------------------
10 .010208333
--------------------------------------------------------------------------------------------------------------------------------
11 .010208333
--------------------------------------------------------------------------------------------------------------------------------
12 .010208333
--------------------------------------------------------------------------------------------------------------------------------
13 .010208333
--------------------------------------------------------------------------------------------------------------------------------
14 .010208333
--------------------------------------------------------------------------------------------------------------------------------
15 .010208333
--------------------------------------------------------------------------------------------------------------------------------
16 .010208333
--------------------------------------------------------------------------------------------------------------------------------
17 .010208333
--------------------------------------------------------------------------------------------------------------------------------
18 .010208333
--------------------------------------------------------------------------------------------------------------------------------
19 .010208333
--------------------------------------------------------------------------------------------------------------------------------
20 .010208333
--------------------------------------------------------------------------------------------------------------------------------
21 .010208333
--------------------------------------------------------------------------------------------------------------------------------
22 .010208333
--------------------------------------------------------------------------------------------------------------------------------
23 .010208333
--------------------------------------------------------------------------------------------------------------------------------
24 .010208333
--------------------------------------------------------------------------------------------------------------------------------
25 .010208333
--------------------------------------------------------------------------------------------------------------------------------
26 .010208333
--------------------------------------------------------------------------------------------------------------------------------
27 .010208333
--------------------------------------------------------------------------------------------------------------------------------
28 .010208333
--------------------------------------------------------------------------------------------------------------------------------
29 .010208333
--------------------------------------------------------------------------------------------------------------------------------
30 .010208333
--------------------------------------------------------------------------------------------------------------------------------
SCHEDULE I