LEASE AGREEMENT
THIS LEASE AGREEMENT, IS EFFECTIVE ON OCTOBER 11, 1995 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP ("HEREINAFTER LESSOR") AND LONG DISTANCE
NETWORK, INC., A TEXAS CORPORATION WITH ITS PRINCIPAL OFFICE LOCATED AT 0000
XXXXXXXXX XXXXXX, XXXXX 0000, XXXXXXXXXX, XXXXX 00000 ______________________
("HEREINAFTER LESSEE").
1. LEASE.
Lessor, subject to the conditions set forth in Section 25 hereof, agrees
to lease to Lessee and Lessee agrees to lease from Lessor hereunder, those
items of personal property (the "Equipment") which are described on Schedule
1 of Exhibit A hereto. Lessee agrees to execute and deliver to Lessor a
certificate of delivery and acceptance in substantively the form of Exhibit A
hereto (a "Delivery Certificate") immediately after Turnover of the
Equipment, and such execution shall constitute Lessee's irrevocable
acceptance of such items of Equipment for all purposes of this Lease. The
Delivery Certificate shall constitute a part of this Lease to the same extent
as if the provisions thereof were set forth herein.
2. DEFINITIONS.
"AMORTIZATION DEDUCTIONS" as defined in Section 11(b)(i) hereof.
"APPRAISAL PROCEDURE" shall mean the following procedure for determining
the Fair Market Sale Value of any item of Equipment. If either Lessor or
Lessee shall request by notice (the "Appraisal Request") to the other that
such value be determined by the Appraisal Procedure, (i) Lessor and Lessee
shall, within 15 days after the Appraisal Request, appoint an independent
appraiser mutually satisfactory to them, or (ii) if the parties are unable to
agree on a mutually acceptable appraiser within such time, Lessor and Lessee
shall each appoint one independent appraiser (PROVIDED) that if either party
hereto fails to notify the other party hereto of the identity of the
independent appraiser chosen by it within 30 days after the Appraisal
Request, the determination of such value shall be made by the independent
appraiser chosen by such other party), and (iii) if such appraisers cannot
agree on such value within 20 days after their appointment and if one
appraisal is not within 5% of the other appraisal, Lessor and Lessee shall
choose a third independent appraiser mutually satisfactory to them (or if
they fail to agree upon a third appraiser within 25 days after the
appointment of the first two appraisers, such third independent appraiser
shall within 20 days thereafter be appointed by the American Arbitration
Association), and such value shall be determined by such third independent
appraiser within 20 days after his appointment, after consultation with the
other two independent appraisers. If the first two appraisals are within 5%
of each other, then the average of the two appraisals shall be the Fair
Market Sale Value. The fees and expenses of all appraisers shall be paid by
Lessee.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or legal
holiday under the laws of the State of Florida.
"CODE" shall mean the Internal Revenue Code of 1954, as amended, or any
comparable successor law.
"COMMENCEMENT DATE" as defined in Section 3 hereof.
"DEFAULT" shall mean any event or condition which after the giving of
notice or lapse of time or both would become an Event of Default.
"DELIVERY CERTIFICATE" as defined in Section 1 hereof.
"EQUIPMENT" as defined in Section 1 hereof.
"EVENT OF DEFAULT" as defined in Section 18 hereof.
"EVENT OF LOSS" shall mean, with respect to any item of Equipment, the
actual or constructive total loss of such item of Equipment or the use
thereof, due to theft, destruction, damage beyond repair or rendition thereof
permanently unfit for normal use from any reason whatsoever, or the
condemnation, confiscation or seizure of, or requisition of title to or use
of, such item of Equipment.
"FAIR MARKET SALE VALUE" shall, at any time with respect to any item of
Equipment, be equal to the sale value of such item of Equipment which would
be obtained in an arm's-length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer-user
(other than a lessee currently in possession or a used equipment or scrap
dealer). For purposes of Section 7(b) hereof, Fair Market Sale Value shall
be determined by (i) an independent appraiser (at Lessee's expense) selected
by Lessor or (ii) by the Appraiser Procedure if the Appraisal Request is made
at least 90 days (but not more than 360 days) prior to the termination or
expiration of the Lease Term, as the case may be, which determination shall
be made (a) without deduction for any costs or expenses of dismantling or
removal; and (b) on the assumption that such item of Equipment is free and
clear of all Liens and is in the condition and repair in which it is required
to be returned pursuant to Section 7(a) hereof. For purposes of Section
19(c) hereof, Fair Market Sale Value shall be determined (at Lessee's
expense) by an independent appraiser selected by Lessor, on an "as-is,
where-is" basis, without regard to the provisions of clauses (a) and (b)
above; PROVIDED that if Lessor shall have sold any item of Equipment pursuant
to Section 19(b) hereof prior to giving the notice referred to in Section
19(c) hereof, Fair Market Sale Value of such item of Equipment shall be the
net proceeds of such sale after deduction of all costs and expenses incurred
by Lessor in connection therewith; PROVIDED FURTHER, that if for any reason
Lessor is not able to obtain possession of any item of Equipment pursuant to
Section 19(a) hereof, the Fair Market Sale Value of such item of Equipment
shall be zero.
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"IMPOSITION" as defined in Section 11(a) hereof.
"INDEMNITEE" as defined in Section 17 hereof.
"LATE CHARGE RATE" shall mean an interest rate per annum equal to the
higher of two percent (2%) over the Reference Rate or eighteen percent (18%),
but not to exceed the highest rate permitted by applicable law.
"LEASE" and the terms "hereof", "herein", "hereto" and "hereunder", when
used in this Lease Agreement, shall mean and include this Lease Agreement,
Exhibits and the Delivery Certificate hereto as the same may from time to
time be amended, modified or supplemented.
"LEASE TERM" shall mean, with respect to any item of Equipment, the term
of the lease of such item of Equipment hereunder specified in Section 3
hereof.
"LESSEE" as defined in the introductory paragraph to this Lease.
"LESSOR" as defined in the introductory paragraph of this Lease.
"LESSOR'S VALUE" shall mean, with respect to any item of Equipment, and
installation if applicable, the total amount set forth in Schedule 1 of
Exhibit A hereto.
"LESSOR'S LIENS" shall mean (i) any mortgage, pledge, lien, security
interest, charge, encumbrance, financing statement, title retention or any
other right or claim of any person claiming through or under Lessor, not
based upon or relating to ownership of the Equipment or the lease thereof
hereunder and (ii) any mortgage, pledge, lien, security interest, charge,
encumbrance, financing statement, title retention or any other right or claim
of Owner (other than Lessor) claiming through or under Lessor in connection
with the transactions described in Section 21(b) hereof.
"LIENS" shall mean any mortgage, pledge, lien, security interest, charge,
encumbrance, financing statement, title retention or any other right or claim
of any person, other than any Lessor's Lien.
"LOSS PAYMENT DATE" shall mean with respect to any item of Equipment the
date on which payment, as described in Section 16(b) hereof, is made to the
Lessor by the Lessee as the result of an Event of Loss with respect to such
item. The Loss Payment Date shall be within ninety (90) days of the said
Event of Loss.
"OWNER" shall mean the entity or person having ownership interest to the
Equipment as contemplated by the provisions of Section 21(b) hereof and may
be a person other than Lessor.
"OWNER'S ECONOMICS" shall mean the after-tax yield and periodic after-tax
cash flow anticipated by Owner as of the date of this Lease, in connection
with the transactions contemplated by this Lease as determined by Owner
unless Lessor shall have transferred its interest in the Equipment to another
person as contemplated by the provisions of Section 21(b) hereof in which
case "Owner's Economics" shall mean the after-tax yield and periodic
after-tax cash flow anticipated by such person as of the date of the lease
between such person and Lessor contemplated by said provisions, in connection
with the transactions contemplated by such lease as determined by such person.
"RECOVERY DEDUCTIONS" as defined in Section 11(b)(i) hereof.
"REFERENCE RATE" See Attached Amendment.
"RENT PAYMENT DATE" shall mean each date on which an installment of rent
is due and payable pursuant to Section 5(a) hereof.
"STIPULATED LOSS VALUE" shall mean, with respect to any item of
Equipment, the amount determined by multiplying the Lessor's Value of such
item of Equipment by the percentage set forth in Schedule A hereto opposite
the applicable Rent Payment Date; PROVIDED, that for purposes of Sections
16(b) and 19(c) hereof, any determination of Stipulated Loss Value as of a
date occurring after the final Rent Payment Date with respect to such item of
Equipment, shall be made as of such final Rent Payment Date.
"TAX BENEFITS" shall mean the right to claim such deductions, credits,
and other benefits as are provided by the Code to an owner of property,
including the Recovery Deductions and Amortization Deductions.
"TURNOVER" shall mean that point in time when the equipment installation
personnel complete testing of the equipment, or when the equipment is placed
into service, whichever first occurs.
All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles.
3. LEASE TERM.
The term of the lease of Equipment hereunder shall commence on the
Commencement Date specified in the Delivery Certificate ("Commencement Date")
and, unless earlier terminated pursuant to the provisions hereof or at law or
equity, shall continue for a term of sixty (60) months from such Commencement
Date. The Commencement Date specified in the Delivery Certificate shall be
the date on which Turnover occurs at a site provided by Lessee in accordance
with the provisions of Section 4 hereof.
4. INSTALLATION.
Lessor shall arrange for installation of the Equipment, the cost of which
installation shall be deemed to be part of Lessor's Value. Exhibit A hereto
shall indicate whether such cost is included or excluded from the monthly
rent payments due in accordance with Section 5(a) hereof. If excluded from
such monthly rent payments, Lessor shall separately invoice Lessee for such
installation upon completion thereof and Lessee shall pay such invoice within
thirty (30) days from the date thereof. Lessee shall be obligated to timely
provide a suitable site for the installation of the Equipment in
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accordance with the Equipment manufacturer's practices attached hereto as
Exhibit C. Lessee shall be responsible for compliance with environmental
requirements and central office grounding procedures specified in Exhibit C
hereto and for providing adequate space, lighting, heating, air-conditioning
and A/C power at the installation site. Unavailability of Lessee furnished
facilities shall be cause for adjustments to the installation price set forth
in Schedule 1 of Exhibit A hereto.
5. RENT: UNCONDITIONAL OBLIGATIONS.
(a) Lessee agrees to pay to Lessor, at the address specified in Section
24 hereof or at such other address as Lessor may specify, rent for the
Equipment at a rate not to exceed $22.244 per $1000 of the total Lessors
Value of such items of Equipment, as set forth in Schedule 1 of Exhibit A
dated October 11, 1995 or as from time to time amended, (plus applicable
sales or use taxes) per month, in sixty (60) consecutive monthly installments
with the first installment of rent being due on the Commencement Date unless
the Commencement Date is other than the first day of a calendar month, in
which event the first installment of rent shall be due on the first day of
the month following the Commencement Date, and succeeding installments being
due on the same date of each month thereafter.
(b) Lessee shall also pay to Lessor, on demand, interest at the Late
Charge Rate on any installment of rent and on any other amount owing
hereunder which is not paid on its due date, for any period for which the
same shall be overdue. Each payment made under this Lease shall be applied
first to the payment of interest then owing and then to rent or other amounts
owing hereunder. Interest shall be computed on the basis of a 360-day year
and actual days elapsed.
(c) This Lease is a net lease, and Lessee's obligation to pay all rent
and all other amounts payable hereunder is ABSOLUTE and UNCONDITIONAL under
any and all circumstances and shall not be affected by any circumstances of
any character whatsoever, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense, abatement or reduction or any right which
Lessee may have against Lessor, the manufacturer or supplier of any of the
Equipment or anyone else for any reason whatsoever; (ii) any defect in the
title, condition, design, or operation of, or lack of fitness for use of, or
any damage to, or loss of, all or any part of the Equipment from any cause
whatsoever; (iii) the existence of any Liens with respect to the Equipment;
(iv) the invalidity, unenforceability or disaffirmance of this Lease or any
other document related hereto; or (v) the prohibition of or interference with
the use or possession by Lessee of all or any part of the Equipment, for any
reason whatsoever, including without limitation, by reason of (1) claims for
patent, trademark or copyright infringement; (2) present or future
governmental laws, rules or orders; (3) the insolvency, bankruptcy or
reorganization of any person; and (4) any other cause whether similar or
dissimilar to the foregoing, any present or future law to the contrary
notwithstanding. Lessee hereby waives, to the extent permitted by applicable
law, any and all rights which it may now have or which may at any time
hereafter be conferred upon it, by statute or otherwise, to terminate,
cancel, quit or surrender the lease of any Equipment. If for any reason
whatsoever this Lease or any Supplement, other than pursuant to Section 16(b)
hereof, shall be terminated in whole or in part by operation of law or
otherwise, Lessee will nonetheless pay to Lessor an amount equal to each
installment of rent at the time such installment would have become due and
payable in accordance with the terms hereof. Each payment of rent or other
amount paid by Lessee hereunder shall be final and Lessee will not seek to
recover all or any part of such payment from Lessor for any reason whatsoever.
6. WARRANTY DISCLAIMER;
ASSIGNMENT OF WARRANTIES.
(a) LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND LESSEE
HEREBY EXPRESSLY WAIVES ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR
MERCHANTABILITY OR FITNESS OF THE EQUIPMENT FOR ANY PARTICULAR PURPOSE,
FREEDOM FROM INTERFERENCE OR INFRINGEMENT OR THE LIKE, OR AS TO THE TITLE TO
OR LESSOR'S OR LESSEE'S INTEREST IN THE EQUIPMENT OR AS TO ANY OTHER MATTER
RELATING TO THE EQUIPMENT OR ANY PART THEREOF.
LESSEE CONFIRMS THAT IT HAS SELECTED THE EQUIPMENT AND EACH PART THEREOF
ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE UPON ANY
STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY LESSOR.
LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION
OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE ACCORDED TO THE TRANSACTIONS
CONTEMPLATED BY THIS LEASE OR AS TO ANY TAX CONSEQUENCES AND/OR TAX TREATMENT
THEREOF.
(b) LESSOR HEREBY ASSIGNS TO LESSEE SUCH RIGHTS AS LESSOR MAY HAVE (TO
EXTENT LESSOR MAY VALIDLY ASSIGN SUCH RIGHTS) UNDER ALL MANUFACTURERS' AND
SUPPLIERS' WARRANTIES WITH RESPECT TO THE EQUIPMENT; PROVIDED, HOWEVER, THAT
THE FOREGOING RIGHTS SHALL AUTOMATICALLY REVERT TO LESSOR UPON THE OCCURRENCE
AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT HEREUNDER, OR UPON THE
RETURN OF THE EQUIPMENT TO LESSOR. LESSEE AGREES TO SETTLE ALL CLAIMS WITH
RESPECT TO THE EQUIPMENT DIRECTLY WITH THE MANUFACTURERS OR SUPPLIERS
THEREOF, AND TO GIVE LESSOR PROMPT NOTICE OF ANY SUCH SETTLEMENT AND THE
DETAILS OF SUCH SETTLEMENT. HOWEVER, IN THE EVENT ANY WARRANTIES ARE NOT
ASSIGNABLE, THE LESSOR AGREES TO ACT ON BEHALF OF THE LESSEE IN SETTLING
CLAIMS ARISING UNDER THE WARRANTY WITH THE MANUFACTURER OR SUPPLIER.
(c) IN NO EVENT SHALL LESSOR BE LIABLE FOR LOSS OF REVENUE OR PROFITS,
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
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NATURE OR FROM ANY CAUSE EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
7. DISPOSITION OF EQUIPMENT.
(a) RETURN.
Lessee shall, upon the expiration of the Lease Term of each item of
Equipment, subject to paragraph (b) below, return such item of Equipment to
Lessor at such place within the continental United States of America as
Lessor shall designate in writing to Lessee. Until such item of Equipment is
returned to Lessor pursuant to the provisions of this Section, all of the
provisions of this Lease with respect thereto shall continue in full force
and effect. Lessee shall pay all the costs and expenses in connection with
or incidental to the return of the Equipment, including, without limitation,
the cost of removing, assembling, packing, insuring and transporting the
Equipment. At the time of such return, the Equipment shall be in the
condition and repair required to be maintained by Section 12 hereof and free
and clear of all Liens.
(b) PURCHASE OPTION.
So long as no Default or Event of Default shall have occurred and be
continuing, Lessee may, by written notice given to Lessor at least 120 days
(but not more than 360 days) prior to the expiration date of the Lease Term
of any item of Equipment (which notice shall be irrevocable), elect to
purchase such item of Equipment on such expiration date for a cash purchase
price equal to the Fair Market Sale Value of such item of Equipment
determined as of such expiration date, plus an amount equal to all taxes
(other than income taxes on any gain on such sale), costs and expenses
(including legal fees and expenses) incurred or paid by Lessor in connection
with such sale. Upon payment by Lessee of such purchase price, and of all
other amounts then due and payable by Lessee hereunder, Lessor shall transfer
title to such items of Equipment to Lessee on an "as-is, where-is" basis,
without recourse and without representation or warranty of any kind, express
or implied, other than a representation and warranty that such item of
Equipment is free and clear of any Lessor's Liens.
8. REPRESENTATION AND WARRANTIES.
In order to induce Lessor to enter into this Lease and to lease the
Equipment to Lessee hereunder, Lessee represents and warrants that:
(a) ORGANIZATION.
Lessee is duly organized, validly existing and in good standing under the
laws of the State of Texas and is duly qualified to do business and is in
good standing in the State in which the Equipment will be located.
(b) POWER AND AUTHORITY.
Lessee has full power, authority and legal right to execute, deliver and
perform this Lease, and the execution, delivery and performance hereof has
been duly authorized by Lessee's governing body or officer(s).
(c) ENFORCEABILITY.
This Lease has been duly executed and delivered by Lessee and constitutes
a legal, valid and binding obligation of Lessee enforceable in accordance
with its terms.
(d) CONSENTS AND PERMITS.
The execution, delivery and performance of this Lease does not require
any approval or consent of any trustee, shareholder, partner, sole proprietor
or holders of any indebtedness or obligations of Lessee, and will not
contravene any law, regulation, judgment or decree applicable to Lessee, or
the certificate of partnership or incorporation or by-laws of Lessee, or
contravene the provisions of, or constitute a default under, or result in the
creation of any Lien upon any property of Lessee under any mortgage,
instrument or other agreement to which Lessee is a party or by which Lessee
or its assets may be bound or affected; and no authorization, approval,
license, filing or registration with any court or governmental agency or
instrumentality is necessary in connection with the execution, delivery,
performance, validity and enforceability of this Lease.
(e) FINANCIAL CONDITION OF THE LESSEE.
The financial statements of Lessee heretofore furnished to Lessor are
complete and correct and fairly present the financial condition of Lessee and
the results of its operations for the respective periods covered thereby,
there are no known contingent liabilities or liabilities for taxes of Lessee
which are not reflected in said financial statements and since the date
thereof, there has been no material adverse change in such financial
condition or operations.
(f) NO LITIGATION.
There is no action, suit, investigation or proceeding by or before any
court, arbitrator, administrative agency or other governmental authority
pending or threatened against or affecting Lessee (A) which involves the
transactions contemplated by this Lease or the Equipment; or (B) which, if
adversely determined, could have a material adverse effect on the financial
condition, business or operations of Lessee.
(g) UNITED STATES SOURCE INCOME.
No items of Equipment shall be used in a way that results in the creation
of an item of income to Lessor, the source of which for Federal Income Tax
purposes is without the United States.
9. LIENS.
Lessee will not directly or indirectly create, incur, assume, suffer, or
permit to exist any Lien on or with respect to the Equipment.
10. INSURANCE.
Lessee shall maintain at all times on the Equipment, at its expense,
property damage, direct damage and liability insurance in such amounts,
against such risks, in such form and with such insurers as shall be
satisfactory to Lessor and any other Owner; provided, that the amount of
direct damage insurance shall not on any date be less than the greater of the
full replacement value or the Stipulated Loss Value of the Equipment as of
such date. Each insurance policy will, among other things, name Lessor and
any other Owner as an additional insured or as loss payee (as the case may
be) as their interests may appear, require that the insurer give Lessor and
any such Owner at least thirty (30) days prior written notice of any
alteration in or cancellation of the terms of such policy, and require that
the interest of Lessor and any such Owner be continued insured regardless of
any breach of or violation by Lessee of any warranties, declarations or
conditions contained in such insurance policy. At Lessor's or such Owner's
option, Lessee shall furnish to Lessor and such
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Owner a certificate or other evidence satisfactory to Lessor that such
insurance coverage is in effect provided, however, that Lessor and such Owner
shall be under no duty to ascertain the existence or adequacy of such
insurance.
11. TAXES.
(a) GENERAL TAX PROVISIONS.
Lessee shall pay, and shall indemnify and hold Lessor harmless from and
against, all fees, taxes (whether sales, use, excise, personal property or
other taxes), imposts, duties, withholdings, assessments and other
governmental charges of whatever kind or character, however designated
(together with any penalties, fines or interest thereon), all of the
foregoing being herein collectively called "Impositions", which are at any
time levied or imposed against Lessor, Lessee, this Lease, the Equipment or
any part thereof by any Federal, State, or Local Government or taxing
authority in the United States or by any foreign government or any
subdivision or taxing authority thereof upon, with respect to, as a result of
or measured by (i) the Equipment (or any part thereof), or this Lease or the
interests of the Lessor therein; or (ii) the purchase, ownership, delivery,
leasing, possession, maintenance, use, operation, return, sale or other
disposition of the Equipment or any part thereof; or (iii) the rentals,
receipts or earnings payable under this Lease or otherwise arising from the
Equipment or any part thereof; EXCLUDING, HOWEVER, taxes based on or measured
by the net income of Lessor that are imposed by (1) the United States of
America, or (2) the State of Florida or any political subdivision of the
State of Florida, or (3) any other State of the United States of America or
any political subdivision of any such State in which Lessor is subject to
Impositions as the result (whether solely or in part) of business or
transactions unrelated to this Lease. In case any report or return is
required to be filed with respect to any obligation of Lessee under this
Section or arising out of this Section, Lessee will notify Lessor of such
requirement and make such report or return in such manner as shall be
satisfactory to Lessor; PROVIDED, that the payment of any use taxes shall be
made in such manner as specified by Lessor in writing to Lessee; or (iv) the
provisions of this Section shall survive the expiration or earlier
termination of this Lease.
(b) SPECIAL TAX PROVISIONS.
(i) The owner of the items of Equipment, shall be entitled to take into
account in computing its Federal income tax liability, Current Tax Rate and
such deductions, credits, and other benefits as are provided by the Code to
an owner of property, including, without limitation:
(A) Recovery deductions ("Recovery Deductions") under Section
168(a) of the Code for each item of Equipment in an amount determined,
commencing with the 1995 taxable year, by multiplying the Owner's Cost
of such item of Equipment by the percentages applicable under Section
168(b) of the Code with respect to "(5)-year property" within the
meaning of Section 168(c)(2) of the Code;
(B) Amortization of expenses ("Amortization Deductions") paid
or to be paid by Owner in connection with this Lease at a rate no less
rapid than straight line over the Lease Term.
(ii) For the purposes of this Subsection 11(b) only, the term "Owner"
shall include the "common parent" and all other corporations included in the
affiliated group, within the meaning of Section 1504 of the Code (or any
other successor section thereto), of which Owner is or becomes a member.
12. COMPLIANCE WITH LAWS; OPERATION AND MAINTENANCE.
(a) Lessee will use the Equipment in a careful and proper manner, will
comply with and conform to all governmental laws, rules and regulations
relating thereto, and will cause the Equipment to be operated in accordance
with the manufacturer's or supplier's instructions or manuals.
(b) Lessee will, at his own expense, keep and maintain the Equipment in
good repair, condition and working order and furnish all parts, replacements,
mechanisms, devices and servicing required therefor so that the value,
condition and operating efficiency therefor will at all times be maintained
and preserved reasonable wear and tear excepted. All such repairs, parts,
mechanisms, devices and replacements shall immediately, without further act,
become the property of Lessor and part of the Equipment.
(c) Lessee will not make or authorize any improvement, change, addition
or alteration to the Equipment (i) if such improvement, change, addition or
alteration will impair the originally intended function or use of the
Equipment or impair the value of the Equipment as it existed immediately
prior to such improvement, change, addition, or alteration; or (ii) if any
parts installed in or attached to or otherwise becoming a part of the
Equipment as a result of any such improvement, change, addition, or
alteration shall not be readily removable without damage to the Equipment.
Any part which is added to the Equipment without violating the provisions of
the immediately preceding sentence and which is not a replacement or
substitution for any property which was a part of the Equipment, shall remain
the property of Lessee and may be removed by Lessee at any time prior to the
expiration or earlier termination of the Lease Term. All such parts shall be
and remain free and clear of any Liens. Any such part which is not so
removed prior to the expiration or earlier termination of the Lease Term
shall, without further act, become property of Lessor.
13. INSPECTION.
Upon prior notice, Lessor or its authorized representative may at any
reasonable time or times inspect the Equipment when it deems it necessary to
protect its interest therein.
14. IDENTIFICATION.
Lessee shall, at its expense, attach to each item of Equipment a notice
satisfactory to Lessor disclosing Owner's ownership of such item of Equipment.
15. PERSONAL PROPERTY.
Lessee represents that the Equipment shall be and at all times remain
separately identifiable personal property. Lessee shall, at its expense,
take such action (including the obtaining and recording of waivers) as may be
necessary to prevent any third party from acquiring any right to or interest
in the Equipment by virtue of the Equipment being deemed to be real property
or a part of real property or a part of other personal property, and if at
any time any person shall claim any such right or interest, Lessee shall, at
its expense, cause such claim to be waived in writing or otherwise eliminated
to Lessor's satisfaction within 30 days after such claim shall
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have first become known to Lessee.
16. LOSS OR DAMAGE.
(a) All risk of loss, theft, damage or destruction to the Equipment or
any part thereof, however incurred or occasioned, shall be borne by Lessee
and, unless such occurrence constitutes an Event of Loss pursuant to
paragraph (b) of this Section, Lessee shall promptly cause the affected part
or parts of the Equipment to be replaced or restored to the condition and
repair required to be maintained by Section 12 hereof.
(b) If an Event of Loss with respect to any item of Equipment shall
occur, Lessee shall promptly give Lessor written notice thereof, and Lessee
shall pay to Lessor as soon as it receives insurance proceeds with respect to
said Event of Loss but in any event no later than 90 days after the
occurrence of said Event of Loss an amount equal to the sum of (i) the
Stipulated Loss Value of such item of Equipment computed as of the Rent
Payment Date with respect to such item of Equipment on or immediately
preceding the date of the occurrence of such Event of Loss; and (ii) all rent
and other amounts due and owing hereunder for such item of Equipment on or
prior to the Loss Payment Date. Upon payment of such amount to Lessor, the
lease of such item of Equipment hereunder shall terminate, and Lessor will
transfer within forty days to Lessee, Lessor's right, title and interest in
and to such item of Equipment, on an "as-is, where-is" basis, without
recourse and without representation or warranty, express or implied, other
than a representation and warranty that such item of Equipment is free and
clear of any Lessor's Liens.
(c) Any payments received at any time by Lessor or Lessee from any
insurer with respect to loss or damage to the Equipment shall be applied as
follows: (i) if such payments are received with respect to an Event of Loss
they shall be paid to Lessor but to the extent received by Lessor, they shall
reduce or discharge, as the case may be, Lessee's obligation to pay the
amounts due to Lessor under Section 16(b) hereof with respect to such Event
of Loss; or (ii) if such payments are received with respect to any loss of or
damage to the Equipment other than an Event of Loss, such payments shall,
unless a Default or Event of Default shall have occurred and be continuing,
be paid over to Lessee to reimburse Lessee for its payment of the costs and
expenses occurred by Lessee in replacing or restoring pursuant to Section
16(a) hereof the part or parts of the Equipment which suffered such loss or
damage.
17. GENERAL INDEMNITY.
Lessee assumes liability for, and shall indemnify, protect save and keep
harmless Lessor and its agents, servants, successors and assigns (an
"Indemnitee") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs and expenses, including
reasonable legal expenses, of whatsoever kind and nature, imposed on,
incurred by or asserted against an Indemnitee, in any way relating to or
arising out of this Lease or the enforcement hereof, or the manufacture,
purchase, acceptance, rejection, ownership, possession, use selection,
delivery, lease, operation, condition, sale, return or other disposition of
the Equipment or any part thereof (including, without limitation, latent or
other defects, whether or not discoverable by Lessee or any other person, any
claim in tort for strict liability and any claim for patent, trademark or
copyright infringement); PROVIDED, however, that Lessee shall not be required
to indemnify any Indemnitee for loss or liability arising from acts or events
which occur after the Equipment has been returned to Lessor in accordance
with the Lease, or for loss or liability resulting solely from the willful
misconduct or gross negligence of such Indemnitee. The provisions of this
Section shall survive the expiration or earlier termination of this Lease.
18. EVENTS OF DEFAULT.
The following events shall each constitute an event of default (herein
called "Event of Default") under this Lease:
(i) Lessee shall fail to execute and deliver to Lessor (or Lessor's
agent) the "Delivery Certificate" within twenty-four (24) hours of Turnover
of the Equipment to Lessee.
(ii) Lessee shall fail to commence lease payments on the first day of
the month following the Commencement Date, or such other initiation of lease
payments as specified in Section 5 of this Lease.
(iii) Lessee shall fail to make any payment of rent or other amount
owing hereunder after notice has been given that payment is past due; or
(iv) Lessee shall fail to maintain the insurance required by Section 10
hereof or to perform or observe any of the convenants contained in Sections
21 or 22 hereof; or
(v) Lessee shall fail to perform or observe any other convenant,
condition or agreement to be performed or observed by it with respect to this
Lease and such failure shall continue unremedied for 30 days after the
earlier of (a) the date on which Lessee obtains, or should have obtained
knowledge of such failure; or (b) the date on which notice thereof shall be
given by Lessor to Lessee; or
(vi) Any representation or warranty made by Lessee herein or in any
document, certificate or financial or other statement now or hereafter
furnished Lessor in connection with this Lease shall prove at any time to
have been untrue, incomplete or misleading in any material respect as of the
time when made; or
(vii) The entry of a decree or order for relief by a court having
jurisdiction in respect of Lessee, adjudging Lessee a bankrupt or insolvent,
or approving as properly filed a petition seeking a reorganization,
arrangement, adjustment or composition of or in respect of Lessee in an
involuntary proceeding or case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of Lessee
or of any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 30 days; or
(viii) The institution by Lessee of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or the commencement by Lessee of a
voluntary proceeding or case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or the consent by
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it to the filing of any such petition or to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or other similar official) of Lessee or of any substantial part
of its property, or the making by it of any assignment for the benefit of
creditors or the admission by it of its inability to pay its debts generally
as they become due or its willingness to be adjudicated a bankrupt or the
failure of Lessee generally to pay its debts as they become due or the taking
of corporate action by Lessee in furtherance of any of the foregoing.
19. REMEDIES.
If an Event of Default specified in Subsection 18(vii) or (viii) above
shall occur, then, and in any such event, Lessor shall not be obligated to
purchase or lease any of the Equipment and this Lease shall, without any
declaration or other action by Lessor, be in default. If an Event of
Default, other than an Event of Default specified in Subsection 18(vii) or
(viii) above, shall occur, Lessor may, at its option, declare this Lease to
be in default. At any time after this Lease is in default under the first
sentence of this Section 19, Lessor has declared this Lease to be in default
under the second sentence of this Section 19, Lessor and/or its
representative may do any one or more of the following with respect to all of
the Equipment or any part thereof as Lessor in its sole discretion shall
elect, to the extent permitted by applicable law then in effect:
(a) demand that Lessee, and Lessee shall at its expense upon
such demand, return the Equipment promptly to Lessor at such place in
the continental United States of America as Lessor shall specify, or
Lessor and/or its agents, at its option, may with or without entry upon
the premises where the Equipment is located and disable the Equipment,
or make the Equipment inoperable permanently or temporarily in Lessor's
sole discretion, and/or take immediate possession of the Equipment and
remove the same by summary proceedings or otherwise, all without
liability for by reason of such entry or taking of possession, whether
for the restoration of damage to property caused by such taking or for
disabling or otherwise;
(b) sell the Equipment at public or private sale, with or
without notice, advertisement or publication, as Lessor may determine,
or otherwise dispose of, hold, use, operate, lease to others or keep
idle the Equipment as Lessor in its sole discretion may determine, all
free and clear of any rights of Lessee and without any duty to account
to Lessee with respect to such action or inaction or for any proceeds
with respect thereto;
(c) by written notice to Lessee specifying a payment date
which shall be not earlier than 20 days after the date of such notice,
demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the
payment date specified in such notice, as liquidated damages for loss of
a bargain and not as a penalty, all accrued and unpaid rent for the
Equipment due on all Rent Payment Dates up to and including the payment
date specified in such notice plus an amount (together with interest on
such amount at the Late Charge Rate, from the payment date specified in
such notice to the date of actual payment) equal to the excess, if any,
of the Stipulated Loss Value of the Equipment as of the payment date
specified in such notice over the Fair Market Sale Value of the
Equipment as of such date;
(d) Lessor may exercise any other right or remedy which may be
available to it under applicable law or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the breach
hereof or to rescind this Lease. Lessor is entitled to recover any
amount that fully compensates the Lessor for any damage to or loss of
the Lessor's residual interest in the leased property caused by the
Lessee's default.
In the event any present value discounting is applied, the discount
rate used shall be the Federal Reserve Board Discount Rate.
In addition, Lessee shall be liable for any and all unpaid rent and other
amounts due hereunder before or during the exercise of any of the foregoing
remedies and for all reasonable legal fees and other costs and expenses
incurred by reason of the occurrence of any Event of Default or the exercise
of Lessor's remedies with respect thereto, including all reasonable costs and
expenses incurred in connection with the placing of the Equipment in the
condition required by Section 12 hereof.
No remedy referred to in this Section 19 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to
herein or otherwise available to Lessor at law or in equity; and the exercise
or beginning of exercise by Lessor of any one or more of such remedies shall
not preclude the simultaneous or later exercise by Lessor of any or all such
other remedies. No express or implied waiver by Lessor of an Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default. To the extent permitted by applicable law,
Lessee hereby waives any rights now or hereafter conferred by statute or
otherwise which may require Lessor to sell or lease or otherwise use the
Equipment in mitigation of Lessor's damages or losses or which may otherwise
limit or modify any of Lessor's rights or remedies under this Lease.
20. LESSOR'S RIGHT TO PERFORM.
If Lessee fails to make any payment required to be made by it hereunder
or fails to perform or comply with any of its other agreements contained
herein, Lessor may itself make such payment or perform or comply with such
agreement, and the amount of such payment and the amount of the reasonable
expenses of Lessor incurred in connection with such payment or the
performance of or compliance with such agreement, as the case may be,
together with interest thereon at the Late Charge Rate, shall be deemed to be
additional rent, payable by Lessee within 30 days of notice.
21. LOCATION; ASSIGNMENT OR SUBLEASE; TITLE TRANSFER
(a) LESSEE WILL NOT REMOVE THE EQUIPMENT FROM THE LOCATION SPECIFIED IN
SCHEDULE 1 OF EXHIBIT A WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, SUCH
CONSENT NOT TO BE UNREASONABLY WITHHELD, EXCEPT REMOVAL OUTSIDE THE
CONTINENTAL U.S. IS NOT PERMITTED. THE
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EQUIPMENT SHALL AT ALL TIMES BE IN THE SOLE POSSESSION AND CONTROL OF LESSEE
AND LESSEE WILL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, ASSIGN THIS
LEASE OR ANY INTEREST HEREIN OR SUBLEASE OR OTHERWISE TRANSFER ITS INTEREST
IN ANY OF THE EQUIPMENT AND ANY ATTEMPTED ASSIGNMENT, SUBLEASE OR OTHER
TRANSFER BY LESSEE IN VIOLATION OF THESE PROVISIONS SHALL BE VOID.
(b) LESSOR AND LESSEE ACKNOWLEDGE THAT LESSOR (i) MAY TRANSFER ITS
INTEREST IN THE EQUIPMENT TO AN OWNER OTHER THAN LESSOR. LESSOR MAY
CONTEMPORANEOUSLY THEREWITH LEASE THE EQUIPMENT BACK FROM SUCH OWNER, AND
(ii) MAY ASSIGN THIS LEASE, LESSEE HEREBY CONSENTS TO EACH OF THE
ABOVE-DESCRIBED TRANSACTIONS. FURTHER LESSEE DOES HEREBY ACKNOWLEDGE (i)
THAT ANY SUCH ASSIGNMENT BY LESSOR DOES NOT MATERIALLY CHANGE LESSEE'S DUTIES
AND OBLIGATION HEREUNDER, (ii) THAT SUCH ASSIGNMENT DOES NOT MATERIALLY
INCREASE THE BURDEN OR RIGHT IMPOSED ON THE LESSEE, AND (iii) THAT THE
ASSIGNMENT IS PERMITTED EVEN IF THE ASSIGNMENT COULD BE DEEMED TO MATERIALLY
AFFECT THE INTEREST OF THE LESSEE.
22. STATUS CHANGES IN LESSEE.
Lessee will not without thirty (30) days prior written notice to Lessor,
(a) enter into any transaction of merger or consolidation unless it is the
surviving corporation or after giving effect to such merger or consolidation
its net worth equals or exceeds that which existed prior to such merger or
consolidation; or (b) change the form of organization of its business; or (c)
change its name or its chief place of business. Lessee must obtain Lessor's
prior written concurrence before Lessee may undertake any actions to (a)
liquidate or dissolve or similar action of the Lessee's organization, or (b)
sell, transfer or otherwise dispose of all or any substantial part of
Lessee's assets.
23. FURTHER ASSURANCES; FINANCIAL INFORMATION.
(a) Lessee will, at its expense, promptly and duly execute and deliver
to Lessor such further documents and assurances and take such further action
as Lessor may from time to time request in order to establish and protect the
rights, interests and remedies created or intended to be created in favor of
Lessor hereunder, including, without limitation, the execution and filing of
Uniform Commercial Code financing statements covering the Equipment and
proceeds therefrom in the jurisdictions in which the Equipment is located
from time to time. To the extent permitted by applicable law, Lessee hereby
authorizes Lessor to file any such financing statements without the signature
of Lessee.
(b) Lessee will qualify to do business and remain qualified in good
standing, in each jurisdiction in which the Equipment is from time to time
located.
(c) Lessee will furnish to Lessor as soon as available, but in any
event not later than 90 days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee as at the end of such fiscal year, and
consolidated statements of income and changes in financial position of Lessee
for such fiscal year, all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a basis consistently
maintained throughout the period involved. These reports will not be
disclosed to anyone other than the Lessor and/or Owner as provided in Section
21(b).
24. NOTICES.
All notices, demands and other communications hereunder shall be in
writing, and shall be deemed to have been given or made when deposited in the
United States mail, first class postage prepaid, addressed as follows or to
such other address as any of the following persons may from time to time
designate in writing to the other persons listed below:
Lessor: Telecommunications Finance Group
000 Xxxxxxxx Xxxx
Xxxx Xxxx, Xxxxxxx 00000
Lessee: Long Distance Network, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
25. CONDITIONS PRECEDENT:
(a) Lessor shall not be obligated to lease the items of Equipment
described herein to Lessee hereunder unless:
(i) Such Uniform Commercial Code financing statements covering
Equipment and proceeds therefrom and landlord and/or mortgagee waivers
or disclaimers and/or severance agreements with respect to the items of
Equipment covered by this Lease as Lessor shall deem necessary or
desirable in order to perfect and protect its interests therein shall
have been duly executed and filed, at Lessee's expense, in such public
offices as Lessor shall direct;
(ii) All representations and warranties of Lessee contained
herein or in any document or certificate furnished Lessor in connection
herewith shall be true and correct on and as of the date of this Lease
with the same force and effect as if made on and as of such date; no
Event of Default or Default shall be in existence on such date or shall
occur as a result of the lease by Lessee of the Equipment specified in
Schedule 1 of Exhibit A;
(iii) In the sole judgment of Lessor, there shall have been no
material adverse change in the financial condition of business or Lessee;
(iv) All proceedings to be taken in connection with the
transactions contemplated by this Lease, and all documents incidental
thereto, shall be satisfactory in form and substance to Lessor and its
counsel;
(v) Lessor shall have received from Lessee, in form and
substance satisfactory to it, such other documents and information as
Lessor shall reasonably request;
(vi) All legal matters in connection with the transactions
contemplated by this Lease shall be satisfactory to Lessor's counsel;
and
(vii) No Change in Tax Law, which in the sole judgment of
Lessor would adversely affect Lessor's Economics, shall have occurred or
shall appear, in Lessor's good faith judgment, to be imminent.
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26. SOFTWARE LICENSE.
Reference is made to the form of DCO Software License Agreement attached
hereto as Exhibit B (the "License Document"). Lessor has arranged for the
Equipment manufacturer to grant Lessee a license to use the Software as
defined in the License Document in conjunction with the equipment leased
hereunder in accordance with the terms of the License Document. The original
license fee is contained in the lease rate. To avail itself of the license
grant, Lessee must execute the License Document, upon commencement of the
Lease. The option to obtain a fully paid up license as provided in Article 2
of the License Document shall be exercised by the Lessee and the payment made
directly to the equipment manufacturer named in the License Document and must
be exercised in conjunction with the option provided in Section 7(b) of the
Lease, to purchase the Equipment. "Buyer" and "Licensee" as used in the
License Document are synonymous with lessee.
27. LIMITATION OF LIABILITY.
LESSOR SHALL NOT BE LIABLE FOR LOST PROFITS OR REVENUE, SPECIAL, INDIRECT,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE OR FROM ANY CAUSE
WHETHER BASED IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, OR OTHER LEGAL
THEORY EVEN IF LESSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
LESSEE HEREBY AGREES THAT LESSOR WILL NOT BE LIABLE FOR ANY LOST PROFITS OR
REVENUE OR FOR ANY CLAIM OR DEMAND AGAINST LESSEE BY ANY OTHER PARTY.
28. MISCELLANEOUS.
(a) Any provision of this Lease which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provisions
in any other jurisdiction. To the extent permitted by applicable law, Lessee
hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.
(b) No terms or provisions of this Lease may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed
by the party against which the enforcement of the change, waiver, discharge
or termination is sought. No delay or failure on the part of Lessor to
exercise any power or right hereunder shall operate as a waiver thereof, nor
as an acquiescence in any default, nor shall any single or partial exercise
of any power or right preclude any other or further exercise thereof, or the
exercise of any other power or right. After the occurrence of any Default or
Event of Default, the acceptance by Lessor of any payment of rent or other
sum owed by Lessee pursuant hereto shall not constitute a waiver by Lessor of
such Default or Event of Default, regardless of Lessor's knowledge or lack of
knowledge thereof at the time of acceptance of any such payment, and shall
not constitute a reinstatement of this Lease, if this Lease shall have been
declared in default by Lessor pursuant to Section 18 hereof or otherwise,
unless Lessor shall have agreed in writing to reinstate the Lease and to
waive the Default or Event of Default.
In the event Lessee tenders payment to Lessor by check or draft
containing a qualified endorsement purporting to limit or modify Lessee's
liability or obligations under this Lease, such qualified endorsement shall
be of no force and effect even if Lessor processes the check or draft for
payment.
(c) This Lease with exhibits contains the full, final and exclusive
statement of the agreement between Lessor and Lessee relating to the Lease of
the Equipment.
(d) This Lease shall constitute an agreement of an operating lease, and
nothing herein shall be construed as conveying to Lessee any right, title or
interest in the Equipment except as Lessee only.
(d) This Lease shall constitute an agreement of an operating lease, and
nothing herein shall be construed as conveying to Lessee any right, title or
interest in the Equipment except as Lessee only.
(e) This Lease and the covenants and agreements contained herein shall
be binding upon, and inure to the benefit of, Lessor and its successors and
assigns and Lessee and, to the extent permitted by Section 21 hereof, its
successors and assigns.
(f) The headings of the Sections are for convenience of reference only,
are not a part of this Lease and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
(g) This Lease may be executed by the parties hereto on any number of
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.
(h) This Lease is deemed made and entered into in the State of Florida
and shall be governed by and construed under and in accordance with the laws
of the State of Florida as if both parties were residents of Florida.
(i) Lessee hereby irrevocably consents and agrees that any legal
action, suit, or proceeding arising out of or in any way in connection with
this Lease shall be instituted or brought in the courts of the State of
Florida, or the United States Courts for the District of Florida, and by
execution and delivery of this Lease, Lessee hereby irrevocably accepts and
submits to, for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of any such court, and to all
proceedings in such courts. Lessee irrevocably consents to service of any
summons and/or legal process by registered or certified United States mail,
postage prepaid, to Lessee at the address set forth in Section 24 hereof,
such method of service to constitute, in every respect, sufficient and
effective service of process in any legal action or proceeding. Nothing in
this Lease shall affect the right to service of process in any other manner
permitted by law or limit the right of Lessor to bring actions, suits or
proceedings in the court of any other jurisdiction. Lessee further agrees
that final judgment against it in any such legal action, suit or proceeding
shall be conclusive and may be enforced in any other jurisdiction, within or
outside the United States of America, by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the fact and the
amount of the liability.
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IN WITNESS WHEREOF, Lessor and Lessee have each caused this Lease to be duly
executed as of the day and year first above written and by its signature
below Lessee expressly acknowledges that this Lease may not be modified
unless done so in a writing signed by each of the parties hereto or their
successors in interest.
TELECOMMUNICATIONS FINANCE GROUP LONG DISTANCE NETWORK, INC. (Lessee)
By: /s/ X. X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------------------- ---------------------------------
Xxxx X. Xxxxxx, President/COO
----------------------------------- ------------------------------------
(Authorized Representative of (Name & Title)
Telecommunications Finance Group)
Date Signed: 12/1/95 Date Signed: 10/11/95
----------------------- ------------------------
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AMENDMENT TO LEASE AGREEMENT DATED OCTOBER 11, 1995 BETWEEN
TELECOMMUNICATIONS FINANCE GROUP (LESSOR) AND
LONG DISTANCE NETWORK, INC. (LESSEE)
FOR A DCO-CS TO BE LOCATED IN DALLAS, TEXAS
REFERENCE RATE" shall mean the rate of interest publicly announced by
Citibank, N.A. in New York, New York from time to time as its prime rate.
The reference rate is not intended to be the lowest rate of interest charged
by Citibank, N.A. in connection with extensions of credit to debtors. The
Reference Rate shall be determined at the close of business on the 15th day
of each calendar month (if the 15th day is not a Business Day, then on the
first preceding Business Day) and shall become effective as of the first day
of the calendar month succeeding such determination and shall continue in
effect to, and including, the last day of said calendar month.
TELECOMMUNICATIONS FINANCE GROUP LONG DISTANCE NETWORK, INC.
By: /s/ X. X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------------------- ---------------------------------
Xxxx X. Xxxxxx, President/COO
----------------------------------- ------------------------------------
(Authorized Representative of (Name & Title)
Telecommunications Finance Group)
Date Signed: 12/1/95 Date Signed: 10/11/95
----------------------- ------------------------
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