Exhibit 10.18
LEASE AGREEMENT
between
AB LM ERICSSON FINANS (publ)
and
INTERNATIONAL TELECOMMUNICATIONS CORPORATION (LESSEE)
relating to
AXE Switch and related equipment
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Page 1(27)
CONTENTS
1. DEFINITIONS ............................................................. 4
2. AGREEMENT FOR LEASE OF THE EQUIPMENT .................................... 4
3. DELIVERY ................................................................ 5
4. RENT AND OTHER PAYMENTS ................................................. 6
5. TAXES, DUTIES AND COSTS ................................................. 7
6. TITLE TO THE EQUIPMENT .................................................. 8
7. MAINTENANCE AND USE ..................................................... 8
8. REPLACEMENT, ALTERATIONS AND ADDITIONS .................................. 9
9. INSURANCE ............................................................... 10
10. RISK, EVENT OF LOSS AND CONDEMNATION .................................... 12
11. INDEMNITY ............................................................... 14
12. RETURN OF THE EQUIPMENT, RECORDS, REPOSSESSION .......................... 14
13. EVENTS OF DEFAULT AND REMEDIES .......................................... 15
14. GPA ASSIGNMENT AGREEMENT ................................................ 16
15. OPTIONS ................................................................. 17
16. REPRESENTATIONS AND WARRANTIES .......................................... 18
17. COVENANTS ............................................................... 21
18. OBLIGATIONS OF INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD .............. 23
19. MISCELLANEOUS ........................................................... 24
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EXHIBIT A - DEFINITIONS
EXHIBIT B - EQUIPMENT LIST
EXHIBIT C - CONSENT OF SELLER
EXHIBIT D - BUDGET FOR ITG's 1996 FISCAL YEAR
SCHEDULE 1 - RENT PAYMENTS
SCHEDULE 2 - CONFIRMATION OF DELIVERY
SCHEDULE 3 - PENDING LEGAL DISPUTES OF LESSEE
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This LEASE AGREEMENT ("Lease Agreement") dated as of September ____ 1995, is
made and entered between
AB LM ERICSSON FINANS (publ), X-000 00 Xxxxxxxxx, Xxxxxx, (reg No. 556008-8550),
a Swedish limited liability corporation ("Lessor") with its principle office in
Stockholm, Sweden; and
INTERNATIONAL TELECOMMUNICATIONS CORPORATION, 00 Xxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxx, Xxx Xxxx, Xxxxxx Xxxxxx, a limited share company incorporated in Delaware,
United States ("Lessee") with its principal office in New York, New York, United
States.
WHEREAS:
Lessee has agreed to purchase certain Equipment (as defined herein) from
Ericsson Inc., Dallas, Texas, United States (the "Seller") under a supply
contract between Lessee and the Seller (hereinafter referred to as the "General
Purchase Agreement");
Lessee and Lessor have entered into a assignment agreement of even date herewith
(the "GPA Assignment Agreement") whereby Lessee has assigned all its rights,
title and interest to the Equipment pursuant to the General Purchase Agreement
to Lessor;
Lessor and Lessee have subject to the terms of this Agreement agreed that Lessee
shall lease the Equipment from Lessor.
NOW, THEREFORE, it is mutually agreed between the parties hereto as follows:
1. DEFINITIONS
Unless the context otherwise requires, the capitalized terms used
herein shall have the respective meanings assigned thereto in Exhibit A
(DEFINITIONS) for all purposes hereof.
2. AGREEMENT FOR LEASE OF THE EQUIPMENT
2.1 Lessor will lease the Equipment to Lessee and Lessee will take the
Equipment on lease from Lessor in accordance with the terms and
conditions of this Agreement in an "as is" condition and without
representations or warranties or conditions, express or implied, of any
kind or nature whatsoever, except as expressly provided herein and
except as provided for in the GPA Assignment Agreement.
2.2 Lessor's obligation to fulfill its part of this Agreement to Lessee
shall be subject to Lessor having acquired such rights and title to the
Equipment as is provided in the GPA Assignment Agreement not later than
on the Lease Commencement Date and the receipt of the following
documents on the day occurring ten (10) days after the day of signature
of this Agreement, all of which shall be satisfactory in form and
substance to Lessor:
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(a) evidence that Lessee is duly registered as an incorporated
stock company pursuant to the laws of the State of Delaware;
(b) evidence that an authorized person and/or persons has/have
signed and delivered this Agreement and any notices or other
documents to be given pursuant hereto and thereto on behalf of
Lessee (such as a copy of the approval of this Agreement by
the Board of Directors of Lessee and International
Telecommunications Group, Ltd. and a Power of Attorney);
(c) an original Certificate of Good Standing for Lessee dated no
later than the date of closing of this Lease Agreement;
(d) copies of written statements from Lessee's direct and indirect
shareholders, subsidiaries, and affiliates, including RSL
Communications, Inc., accepting that all debt of Lessee and
International Telecommunications Group, Ltd. ("ITG") to such
persons or entities is subordinated to this lease.
2.3 The conditions specified in Sub-article 2.2 are inserted for the sole
benefit of Lessor and may be waived or deferred in whole or in part,
with or without conditions, by Lessor.
3. DELIVERY
3.1 Subject to Sub-article 3.2, Lessor shall tender the Equipment for
delivery and Lessee shall take delivery of the Equipment at the
Delivery Location on the Delivery Date. In the event Lessee does not
fulfill the obligation to take delivery of the Equipment, Lessee shall
promptly, on demand, reimburse Lessor for all losses, costs and
expenses sustained by Lessor (including without limitation, taxes,
Lessor's actual funding costs, interest or payments made by Lessor to
Seller and cost of transportation, storage, insurance, presentation,
preparation and protection as a result of such failure).
3.2 Lessee acknowledges and agrees that Lessor's ability to perform its
obligations to deliver the Equipment under this Agreement is dependent
on the due and punctual performance by Seller of its obligations under
the General Purchase Agreement. Lessee further acknowledges and agrees
that Lessor shall not be responsible towards Lessee for any delay or
inability to perform any of its obligations under this Agreement to the
extent such delay or inability is due to circumstances for which Lessor
is not responsible.
3.3 Lessee shall, within fourteen (14) days from receipt of a copy of
Seller's invoice to Lessor, confirm that the Equipment or parts of the
Equipment (or the occurrence of any event) to which such invoice
relates is delivered (or has occurred), by returning the said copy
invoice to Lessor attaching a Confirmation of Delivery/Event Document
in the form and substance set out in Schedule 2.
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Lessee shall also assume Lessor's obligation to issue the Acceptance
Certificate to Seller in the time and manner stated in the General
Purchase Agreement and shall simultaneously send one copy of said
certificate to Lessor.
4. RENT AND OTHER PAYMENTS
4.1 Lessee covenants and agrees to pay Lessor in immediate availability
funds sixty-six (66) rent payments calculated in accordance with
Sub-article 4.3 hereof, the first rent payment to be made in the day
occurring nineteen (19) months after the Lease Commencement Date, and
thereafter sixty-five (65) monthly rent payments in arrears on the last
day of each month.
4.2 During the period up to and including the day occurring eighteen (18)
months after the Lease Commencement Date, and if no Termination Event
occurs, payments on this lease are deferred, but interest shall be
accrued and capitalized as follows: on the days occurring one (1) to
eighteen (18) months after the Lease Commencement Date, an interest
amount shall be capitalized and added to the Outstanding Balance. This
interest amount shall accrue at the Applicable Interest Rate on the
Outstanding Balance for the relevant period.
4.3 The rent payments due on each Rent Payment Date as referred to in
Sub-article 4.1 shall be calculated as follows.
(i) The rent payments due on the Rent Payment Dates occurring
nineteen (19) through twenty-four (24) months after the Lease
Commencement Date shall consist of an amount equal to the
interest that has accrued on the Outstanding Balance during
each period, calculated at the Applicable Interest Rate.
(ii) The rent payments due on the Rent Payment Dates occurring
twenty-five (25) through eighty-four (84) months after the
Lease Commencement Date shall consist of the sum of (A) a
depreciation amount and an (B) an interest amount, calculated
as follows. The depreciation amount (A) shall equal the
percentage of the Purchase Price as set forth opposite each
Rent Payment Date in Schedule 1 under the caption
"Depreciation. The interest amount (B) shall equal the
interest that has accrued on the Outstanding balance during
each period, calculated at the Applicable Interest Rate.
At each of these Rent Payment Dates, the depreciation amount
(A) shall be subtracted from the Outstanding Balance at the
respective Rent Payment Dates.
4.4 Lessor shall not later than two (2) Business days before the start of
each rent period in writing quote to Lessee the Applicable Interest
Rate and the rent payment or capitalized interest amounts for each
relevant rent period calculated in accordance with Sub-article 4.2 and
4.3 above.
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4.5 Unless the Lessee has raised any objections to the quotation not later
than five (5) Business Days after receipt of the quotation set out in
Sub-article 4.3 before each rent period it shall be deemed valid for
such rent period.
4.6 Lessee shall make any payment to be made to Lessor under this Agreement
(by telex advice) to Lessor's account with Skandinaviska Enskilda
Banken, Stockholm, Sweden, account no 5201-0000000, or to any other
bank account designated by Lessor from time to time.
4.7 In the event that any payment in accordance with this Agreement is not
paid when due, Lessee shall pay interest on any such amount from the
due date up to and including the day when the amount is actually paid
calculated at an annual rate of eight (8) per cent above prevailing
LIBOR.
4.8 Lessee's obligation to pay any amounts due under this Agreement shall
be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation (a) any withholding,
reduction, set-off, counterclaim or other right which Lessee may have
against Lessor or any other person, (b) any defect in the title,
condition or fitness for use of, or any damage to or loss or
destruction of, the Equipment or any interruption or cessation in the
use thereof by Lessee, including any governmental action, (c) any
insolvency, bankruptcy or similar proceedings by or against Lessee or
Lessor, or (d) any invalidity or unenforceability or lack of due
authorization of this Agreement or any failure of Lessor to perform any
obligation of Lessor to Lessee or any other person under this lease,
any present or future law or regulation to the contrary
notwithstanding, it being the express intention of Lessor and Lessee
that all rent payable to Lessor hereunder shall be, and continue to be,
payable in all such events unless the obligation to pay the same shall
be terminated pursuant to the express provisions of this Agreement.
4.9 Whenever any payment under this Agreement falls due on a day which is
not a Business Day the due date of such payment shall be the
immediately succeeding Business Day.
5. TAXES, DUTIES AND COSTS
5.1 Lessee agrees promptly to pay and indemnify and hold Lessor harmless
against all Taxes levied or imposed against or upon Lessor or Lessee
and relating to this Agreement.
5.2 If at any time any applicable law, regulation or any governmental
authority, monetary agency or central bank having jurisdiction requires
Lessee to make any deduction or withholding in respect of Taxes from
any payment due under this Agreement, the sum due from Lessee in
respect of such payment shall be increased to the extent necessary to
ensure that after the making of such deduction or withholding, Lessor
receives on the day such payment is due a net sum equal to the
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amount which it would have received had no such deduction or
withholding been required to be made.
5.3 Lessee's obligations under this Article 5 shall continue in full force
and effect notwithstanding the expiration or earlier termination of the
Agreement.
6. TITLE TO THE EQUIPMENT
6.1 Title to the Equipment or any part thereof shall at all times remain in
Lessor and Lessee shall have no right, title or interest in or to the
Equipment or any part thereof except as expressly provided by this
Agreement. Lessee may not sublease, sell, assign, pledge, move (from
the site where the Equipment is first placed) or otherwise dispose of
the Equipment without the written authorization of Lessor.
6.2 Lessee shall not, during the Lease Period, create or suffer to exist
any lien, mortgage or other encumbrance upon or against the Equipment,
or any of its rights under this Agreement, other than lien, mortgage or
other encumbrance arising from Lessor's own act or default, and the
Lessee shall indemnify and hold Lessor harmless from and against any
and all losses which Lessor may sustain arising therefrom. If at any
time a lien, mortgage, or other encumbrance shall be created or
suffered to exist by the Lessee, or be levied upon the Equipment or any
of its rights under this Agreement, other than lien, mortgage or other
encumbrance arising from Lessor's own act or default, the Lessee shall
forthwith notify the Lessor and cause the same forthwith to be
discharged by bond or otherwise. In the event Lessee shall fail to
discharge any such lien, mortgage or other encumbrance, Lessor shall be
entitled (but not bound) to discharge the same, in which event Lessee
shall pay to Lessor on demand the amount paid by Lessor together with
Lessor's costs and expenses, including reasonable legal fees and
expenses.
The Equipment or any part thereof shall be marked with a sign stating
that the Lessor is the legal owner of the Equipment.
7. MAINTENANCE AND USE
7.1 Lessee shall at its own cost and expense:
(i) maintain and service the Equipment and comply with its own
preventive maintenance program and with the Technical
Documents so that the Equipment will remain in as good
operating condition as when delivered to Lessee hereunder,
ordinary wear and tear excepted;
(ii) comply with and cause the Equipment to comply with all
applicable legal requirements, all restrictions and insurance
policies, now or hereafter in effect, and all agreements in
respect of the Equipment to which Lessee is a party or by
which it is bound, now or hereafter in effect, including,
without
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limitation, those which require the making of any unforeseen
or extraordinary changes, repairs, modifications or
alterations;
(iii) promptly furnish to Lessor upon Lessor's written request such
reasonable information as may be required to enable Lessor to
file any reports to be filed by Lessor with any Swedish
governmental authority because of Lessor's ownership of the
Equipment; and
(iv) procure that the Equipment will not be used for any purpose
for which it is not designed or reasonably suited, or outside
the tolerance and limitations for which the Equipment was
designed, and will be operated in accordance with the
Technical Documents.
7.2 All equipment shall remain at the proposed site in New York City, New
York, USA, unless an expressed written authorization has been received
by Lessor.
8. REPLACEMENT, ALTERATIONS AND ADDITIONS
8.1 Lessee shall, at its own cost and expense, promptly replace all parts
of the Equipment which are confiscated, worn out, damaged beyond repair
or permanently rendered unfit for use for any reason whatsoever.
Further, Lessee may, at its own cost and expense, remove in the
ordinary course of maintenance, service, repair, overhaul or testing,
any parts of the Equipment whether or not worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use, provided that Lessee shall at its own cost and
expense replace such part of the Equipment. All Replacement Parts
incorporated or installed in, or attached or added to, the Equipment
shall be free and clear of all liens (other than liens, mortgage or
other encumbrances arising from Lessor's own act or default) and shall
be in as good operating condition as, and shall have utility and value
of at least equal to, the parts replaced assuming such replaced parts
were in the conditions and repair required to be maintained by the
terms of this Agreement.
Any part of the Equipment, if at any time removed from the Equipment,
shall remain the property of Lessor no matter where located, until such
time as such part of the Equipment shall be replaced by a Replacement
Part which has been incorporated or installed in, or attached or added
to, the Equipment and which meet the requirements for Replacement Part
specified above. Immediately upon any such Replacement Part becoming
incorporated or installed in, or attached or added to, the Equipment as
above provided, or upon the shipment of the Replacement Part from the
manufacturer or Seller where such replaced part has been returned to
the manufacturer or Seller, without further act:
(i) title to the replaced part shall thereupon vest in Lessee,
free and clear of all rights of Lessor, and shall no longer be
deemed a part hereunder;
(ii) title to such Replacement Part shall thereupon vest in Lessor;
and
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(iii) such Replacement Part shall become subject to this lease and
be deemed part of the Equipment for all purposes hereof to the
same extent as the parts originally incorporated or installed
in, or attached or added to, the Equipment.
Lessee shall, at its own expense, repair, service, overhaul and test
any or all of the Equipment and update or add spare parts and make such
repairs, alterations and modifications to the Equipment which are
justified for the proper functioning in the ordinary course of
operating (as long as this does not cause the Equipment to lose its
identity), or to meet the requirements of any governmental authority
having jurisdiction.
9. INSURANCE
9.1 Lessee shall from the Delivery Date of each item until returned to
Lessor after expiration of the Lease Period (or until Lessee purchases
the Equipment if applicable) at its own expense keep each item of the
Equipment insured with an all-risk insurance policy covering all risks
normally covered by an insurance of equipment of the same kind as the
Equipment including but not limited to third party liability (and
specifically product liability when applicable) and all normally
insurable theft, loss and damage to the Equipment. If Lessee upon
Lessor's request cannot provide proof of such insurance coverage,
Lessor is entitled to contract such insurance at the sole expense of
Lessee.
Any such insurance shall be for an amount in USD not less than the
Outstanding Balance, for the relevant period of time.
9.2 All insurance carried in accordance with Sub-article 9.1 shall be
placed with an international insurer with recognized reputation and
responsibility satisfactory to Lessor, shall be in full force and
effect throughout the Lease Period. Any policies carried out in
accordance with Sub-article 9.1 covering the Equipment and any policies
taken out in substitution or replacement for any such policies;
(i) shall name Lessor as owner of the Equipment and as
additionally insured;
(ii) shall be made payable, in the case of policies covering loss
or damage to the Equipment, to Lessor pursuant to a loss
payable clause acceptable to Lessor;
(iii) shall provide that if such insurance is canceled or materially
changed for any reason whatever, or the same is allowed to
lapse for non-payment of premium, such cancellation, change or
lapse shall not be effective as to Lessor for thirty (30) days
after receipt by Lessor of written notice by such insurers of
such cancellation or lapse or of any material change in policy
terms and conditions; and
(iv) shall provide that in respect of the interests of Lessor in
such policies, the insurance shall not be invalidated by any
action of Lessee or any other person (other than Lessor) and
shall insure Lessor regardless of any breach or violation of
any warranties, declarations, or conditions contained in such
policies by Lessee or by any other person (other than by
Lessor).
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9.3 As between Lessor and Lessee, it is hereby agreed that all insurance
proceeds received under policies required hereby, as the result of the
occurrence of an Event of Loss with respect to the Equipment, will be
applied as follows:
(i) so much of such insurance proceeds as shall not exceed the
Outstanding Balance shall be applied in reduction of Lessee's
obligation to pay such Outstanding Balance, if not already
paid by Lessee or, if already paid by Lessee and no Event of
Default exists hereunder, shall be applied to reimburse Lessee
for its payment of such Outstanding Balance, and the balance,
if any, of such insurance proceeds remaining thereafter will
be paid to the order of Lessee; and
(ii) if such proceeds are received with respect to any part of the
Equipment then all such insurance proceeds shall be paid to
the order of Lessee, provided that Lessee shall have fully
performed the terms of Article 10 hereof with respect to the
Event of Loss for which such proceeds are paid.
Until settlement has been made with respect to this Article 9,
Lessee shall continue to pay Rent as it falls due.
9.4 Lessee shall furnish to Lessor:
(i) prior to the Lease Commencement Date and thereafter at
subsequent renewals by each of the renewal dates, executed
copies of endorsements evidencing the insurance required to be
maintained pursuant to this Article 9 and a letter addressed
to Lessor by a recognized firm of insurance brokers
satisfactory to Lessor confirming that this Article 9
adequately protects the interest of Lessor;
(ii) on request, evidence of any insurance required hereunder; and
(iii) on request, evidence of payment of premium or premium
installment due in respect of above insurance.
9.5 Lessee will not:
(i) make any modification to any insurance required hereunder
prejudicial to the interests of Lessor; or
(ii) do, or omit to do, or permit to be done, or left undone
anything whereby any required insurance would or might
reasonably be expected to be rendered, in whole or in part,
invalid or unenforceable and, without prejudice to the
foregoing, not use or keep or permit the Equipment or any part
thereof to be used or kept for any purpose, in any manner or
in any place not covered by the required insurance; or
(iii) take out or permit to be taken out any other insurance, the
existence of which would or might be prejudicial to the
interests of Lessor; or
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(iv) cause or permit the Equipment to be employed in any place or
in any manner or for any purpose inconsistent with the terms
of or outside the cover provided by any required insurance.
9.6 Lessee shall bear any part of any loss or liability which is to be
borne under any required policy.
10. RISK, EVENT OF LOSS AND CONDEMNATION
10.1 RISK
Commencing at the time such risk passes to Lessor under the terms of
the GPA Assignment Agreement and continuing until the termination of
the Lease Period, Lessee assumes the entire risk of loss or damage to
the Equipment or any part thereof or of any Event of Loss or any
liability of Lessor as owner arising out of operation, maintenance,
use, storage, overhaul, repair, transport or possession, of the
Equipment and no such Event of Loss or liability shall relieve Lessee
of its obligations hereunder.
10.2 EVENT OF LOSS WITH RESPECT TO THE EQUIPMENT
Upon the occurrence of any Event of Loss with respect to the Equipment,
Lessee shall, on the 30th day following the date on which the Event of
Loss shall have been declared by Lessor, pay or cause to be paid in
immediately available funds:
(i) the Outstanding Balance in effect as of such date for the
Equipment; and
(ii) any other unpaid amounts due hereunder.
At such time as Lessor has received the sum of (i) and (ii) above, the
obligation of Lessee to pay rent hereunder shall terminate and Lessor
will transfer to Lessee, without recourse or warranty, all of Lessor's
right, title and interest, if any, in and to the Equipment (except
software which Lessee takes possession of but not title, as fully
described in Article 6.1 of the General Purchase Agreement).
10.3 DEPRIVATION NOT CONSTITUTING AN EVENT OF LOSS
In the event of damage to the Equipment or any part thereof not
constituting an Event of Loss, Lessee shall promptly notify Lessor in
writing of such damage and shall remain obligated to make all payments
of rent which may become due hereunder in the same manner as if such
damage had not occurred. Lessee shall repair and restore the Equipment
or any part thereof to the condition required by Article 7 hereof. So
long as no Event of Default shall have occurred and be continuing,
Lessee shall be entitled to receive the entire award, judgment,
settlement, insurance proceeds or payments and all installments thereof
with respect to such damage, to the extent received by Lessor and as
provided in Article 9 hereof.
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10.4 EVENT OF LOSS WITH RESPECT TO ANY PART OF THE EQUIPMENT
Notwithstanding anything to the contrary contained in this Article 10,
upon the occurrence of an Event of Loss with respect to any part of the
Equipment under circumstances where there has not been an Event of Loss
with respect to the Equipment, Lessee shall, as promptly as is
reasonably possible, duly convey to Lessor, as replacement for any part
of the Equipment having suffered an Event of Loss, title to another
part of the Equipment of the same manufacturer and of the same or an
improved model suitable for installation and use on the Equipment as
the part of the Equipment having suffered an Event of Loss. Such
Replacement Part shall be free and clear of all liens, encumbrances or
rights of others whatsoever (other than a lien, mortgage or other
encumbrance arising from Lessor's own act or default) and have a value
and utility at least equal to, and be in as good operating condition
as, the part of the Equipment with respect to which an Event of Loss
has occurred if such part of the Equipment were in the condition and
repair as required by Article 7 hereof prior to such Event of Loss.
Lessee shall also at its expense promptly;
(i) if such replacement in any way alter the specification of the
Equipment as set out in Exhibit B cause Exhibit B hereto to be
amended accordingly, in form and substance satisfactory to
Lessor, subjecting such Replacement Part to the Equipment to
the terms of this Agreement, by being duly executed by Lessee
and recorded as may be necessary;
(ii) furnish Lessor with evidence of Lessee's title to such
Replacement Part to the Equipment as may be necessary or as
Lessor may reasonably request; and
(iii) take such other action as may be necessary or as Lessor may
reasonably request in order that such Replacement Part to the
Equipment be duly and properly titled in Lessor. Upon full
compliance by Lessee with the terms of this Sub-article 10.4,
Lessor will transfer to Lessee the title to any part of the
Equipment with respect to which such Event of Loss has
occurred.
10.5 APPLICATION OF PAYMENTS
Upon the occurrence of any Event of Loss, with respect to the Equipment
or any part of the Equipment, Lessor shall be entitled to and shall
receive the entire award, judgment, settlement, insurance proceeds or
payments and all installments thereof to the extent of Lessee's
obligations under Sub-article 10.2 hereof. Lessee hereby assigns to
Lessor any right or interest Lessee may have or may hereafter acquire
in any such award or payment; provided that unless an Event of Default
shall have occurred and be continuing, Lessee shall be entitled to
credit or reimbursement for the amount of such award, judgment,
settlement, insurance proceeds or payments actually received by Lessor
against Lessee's obligation to pay the Outstanding Balance.
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11. INDEMNITY
11.1 Lessee hereby assumes liability for, and shall indemnify, protect, save
and keep harmless Lessor from and against any and all Liabilities.
11.2 The foregoing indemnity in Sub-article 11.1 shall not extend to any
loss:
(a) to the extent that such loss is caused by the willful
misconduct or gross negligence of Lessor or Seller;
(b) to the extent that such loss is a result of any failure on the
part of Lessor to comply with any of the terms of, or is a
result of any misrepresentation of Lessor contained in, this
Agreement or any agreement relating hereto; or
11.3 Upon commencement of any proceeding (including the written threat or
written claim of any proceeding) against Lessor involving any
Liability, Lessor shall promptly, upon receiving written notice
thereof, give notice of such commencement to Lessee. Lessee shall be
entitled to be consulted by Lessor with respect to proceedings subject
to the control of Lessor.
11.4 Lessor shall supply Lessee with such information requested by Lessee as
is material and relevant to Lessee's participation in any proceeding to
the extent permitted by this Article 11. Unless an Event of Default has
occurred and is continuing, Lessor shall not enter into a settlement or
other compromise with respect to any Liability without prior written
consent of Lessee, such consent not to be unreasonably withheld or
delayed.
11.5 If Lessor shall obtain a repayment in respect of any Liabilities paid
by Lessee pursuant to this Article 11, Lessor shall promptly pay to
Lessee the amount of such repayment, together with any interest (other
than interest for the period, if any, after such Liability was paid by
Lessor until such Liability was paid or reimbursed by Lessee) received
by Lessor on account of such repayment.
11.6 The provisions of this Article 11 shall survive the expiration or
termination of this Agreement.
12. RETURN OF THE EQUIPMENT, RECORDS, REPOSSESSION
12.1 RETURN OF THE EQUIPMENT
Upon the expiration of the Lease Period or any prolongation period
thereof in accordance with Sub-article 15.5 pursuant to the terms
hereof, Lessee shall, except when title to the Equipment is transferred
to the Lessee pursuant to the terms of this Agreement, return the
Equipment to Lessor, free and clear of all liens, free of all
advertising or insignia placed thereon by Lessee and in the same
operating order, repair, condition and appearance as when received, and
shall pay for any repairs and
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refurbishing necessary to restore the Equipment to its original
condition, ordinary wear and tear excepted.
The Equipment shall be returned to Lessor, at Lessee's risk and
expense, at any location within Sweden designated by Lessor.
12.2 RETURN OF TECHNICAL DOCUMENTS
Upon return of the Equipment, Lessee shall tender to Lessor all data,
inspection records and related data (including but not limited to the
Technical Documents) pertaining to the Equipment.
12.3 STORAGE UPON RETURN
Upon written request by Lessor prior to expiration of the Lease Period
pursuant to this Agreement, Lessee will, except when title to the
Equipment is transferred to the Lessee pursuant to this Agreement,
provide Lessor with free storage facilities of the Equipment upon such
expiration or termination for a period not exceeding thirty (30) days.
During the period of any storage of the Equipment by Lessee pursuant to
this Sub-article 12.3, Lessee will:
(i) service, maintain and protect the Equipment to the extent
necessary to keep it in good condition and repair or as
otherwise directed by Lessor; and
(ii) maintain insurance with respect to the Equipment to the extent
requested by Lessor, provided that Lessor shall reimburse
Lessee for its reasonable costs and expenses in complying with
the provisions of this sentence.
13. EVENTS OF DEFAULT AND REMEDIES
13.1 Upon the occurrence of any Event of Default, Lessee shall, if demanded
by Lessor, following Lessor having given Lessee not less than five (5)
Business Days notice of its intention to make such demand, pay to
Lessor an amount equal to the Outstanding Balance upon which title to
the Equipment (except software which Lessee takes possession of but not
title, as fully described in Sections 3.6 and 6.1 of the General
Purchase Agreement) shall be transferred from Lessor to Lessee without
recourse or warranty and Lessee shall issue all other relevant
documents for such transfer. Lessee has no right to claim compensation
from Lessor with respect to the condition of the Equipment in
connection with such transfer and confirm that the condition of such
transfer of title shall be "as is where is".
13.2 If Lessee fails to duly and promptly perform any of its obligations
under this Agreement or materially fails to comply with any of the
covenants or agreements contained herein and continues to do so thirty
(30) days from receipt of written notice from Lessor, Lessor may itself
perform such obligations or comply with such covenants or agreements
for the account of Lessee without thereby waiving any default, and any
reasonable amount paid or expense (including, without limitation,
reasonable attorney's fees) incurred by Lessor in connection with such
performance or compliance shall be payable by Lessee to Lessor on
demand.
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Page 15(27)
13.3 Whether or not the Equipment is delivered to Lessee pursuant to this
Agreement, Lessee shall pay to Lessor on demand, if an Event of Default
shall have occurred and be continuing and notice thereof shall have
been given to Lessee, all relevant reasonable expenses (including the
costs of preparation of documents) payable or incurred by Lessor in
contemplation of or otherwise in connection with the enforcement of or
preservation of any rights under this Agreement or otherwise in respect
of money owing under this Agreement or in respect of any breach of any
representation, warranty, covenant or undertaking herein contained, or
in respect of the repossession of the Equipment.
14. GPA ASSIGNMENT AGREEMENT
14.1 Pursuant to the terms of the Consent of Seller attached hereto as
Exhibit C, Lessor hereby assigns to Lessee any and all warranties to
and other rights regarding the Equipment (ownership excluded) which
have been assigned to Lessor pursuant to the GPA Assignment Agreement,
and Lessor agrees to use its best efforts to procure any and all
necessary consents to so assign and undertakes to forthwith assign any
additional such rights or right similar thereto or otherwise pertaining
to the Equipment or the operation, maintenance or service thereof,
which may arise during the Lease Period or otherwise are presently not
known or considered or covered by this Agreement. Any amounts received
by Lessee as payment under any such warranty shall be applied to
restore the Equipment to the condition required by Article 7 hereof and
may be applied as otherwise deemed necessary and desirable by Lessee to
repair or maintain the Equipment. To the extent that any rights of
Lessor in respect of the Equipment may not be assigned to Lessee, or
otherwise made available to Lessee, such right shall, however, in the
relation between Lessor and Lessee solely inure to the benefit of
Lessee and Lessor will use its best efforts, at Lessee's sole expense,
to enforce such rights against manufacturer or Seller for the benefit
of Lessee, or at Lessee's option, forthwith give to Lessee a power of
attorney to enforce such rights for the benefit of Lessee.
14.2 Lessor hereby also assigns, and Lessee accepts such assignment, all its
obligations under the General Purchase Agreement, except its obligation
to pay the Purchase Price.
14.3 Lessor shall have the right, without Lessee's approval but with prior
written notice, to make a Disposition to an Affiliate, the Swedish
Export Credit Guarantee Board, the European Bank for Research and
Development, or any other bank or financial institution. Furthermore
Lessor is entitled to, subject to Lessee's written consent, such
consent not to be unreasonably withheld or delayed, to make a
Disposition to any other person or entity.
14.4 Lessor hereby warrants and covenants that it will reasonably assist
Lessee in enforcing the warranties and other rights assigned under this
Agreement. Lessor hereby assumes liability for, and shall indemnify,
protect, save and keep Lessee harmless from and against any and all
liabilities, obligations, losses, damages, costs and expenses,
including legal fees and expenses, of whatsoever kind and nature
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Page 16(27)
imposed on, incurred by and asserted against Lessee in any way relating
to or arising out of a material breach by Lessor of its obligations the
General Purchase Agreement and the GPA Assignment Agreement.
15. OPTIONS
15.1 Subject to the terms and conditions of this Agreement, Lessor hereby
grants to Lessee an Option to purchase all of the Equipment, (except
Software, which Lessee takes possession of but not title as described
in Article 6.1 of the General Purchase Agreement) by paying on the
Option Date the Option Price specified in Clause 15.2 below plus any
Taxes, provided that (i) Lessor shall have received in writing not
later than three (3) months prior to the Option Date notice of Lessee's
intention to exercise the Option, and (ii) Lessee has fulfilled all its
obligations under this Agreement up to and including the Option Date.
Notice of Lessee's intention to exercise its Option, once given, shall
be irrevocable.
15.2 The Option Price shall equal the Outstanding Balance at the specified
Option Date, plus all interest and rent that is due and has accrued by
the Option Date, plus all taxes, charges, or other fees for the
Lessee's account outstanding or due by the Option Date.
15.3 The Option shall be exercised no later than at the 82nd Rent Payment
Date, which fact implies that notice of Lessee's intention to exercise
the option shall be given no later than three months prior to the 82nd
Rent Payment Date.
15.4 If and when Lessor has received full payment under Clause 15.2 hereof
in respect of the Equipment, title to the Equipment (except Software as
provided above) shall be transferred from Lessor to Lessee and Lessor
shall at Lessee's expense issue all relevant documents necessary for
such transfer of title to the Equipment, subject, however to Lessee
indemnifying Lessor with respect to past and future operations and
obligations relating to the Equipment in accordance with Article 11 of
this Agreement. Lessee has no right to claim compensation from Lessor
with respect to the condition of the Equipment in connection with such
transfer of title and Lessee confirm that the condition of such
transfer shall be "as is, where is".
15.5 Lessor warrants to Lessee that, immediately prior to transferring title
of the Equipment to Lessee according to this Article 15, Lessor will
have good title to the Equipment and will have full power and lawful
authority to transfer that title to Lessee free from mortgages, charges
or other encumbrances created by Lessor other than such that have been
agreed to by Lessee. Save as aforesaid Lessor makes no warranties,
guarantees or representations of any kind, either express or implied,
statutory or otherwise, with regard to the Equipment and Lessee hereby
waives all remedies, warranties, representation, guarantees, express or
implied, arising by law or otherwise, including without limitation any
obligation of Lessor with respect to fitness for any purpose,
merchantability or consequential damages.
--------------------------------------------------------------------------------
Page 17(27)
15.6 Lessee shall pay to Lessor on demand all expenses (including legal and
stamp duties and similar charges but excluding Lessor's internal
administrative expenses) incurred by Lessor in connection with any sale
of the Equipment under this Article 15.
16. REPRESENTATIONS AND WARRANTIES
16.1 The Equipment is leased in "as is, where is" conditions and except as
stated in this Agreement Lessor makes no warranties, guarantees or
representation, expressed or implied, arising by law or otherwise, with
respect to the Equipment leased hereunder, including but not limited
to:
1) any implied warranty as to the condition, design,
merchantability or fitness for use or operation;
2) any implied warranty arising from course of performance,
course of dealing or usage of trade;
3) any obligation, liability, right, claim or remedy in tort,
whether or not arising from Lessor's negligence, actual or
imputed; and
4) any obligation, liability, right, claim or remedy for loss of
or damage to the Equipment, for loss, use, revenue or profit
with respect to the Equipment, for any liability of Lessee to
any third party, or for any other direct, incidental or
consequential damages; and all such warranties, guarantees,
representations, obligations, liabilities, rights, claims or
remedies, express or implied, statutory or otherwise, are
expressly excluded.
16.2 The Lessee represents and warrants that:
(i) The Lessee is a share company duly incorporated in Delaware
and validly existing under the laws of the State of New York
and has the corporate power and authority to carry on its
business as presently conducted and to perform its obligations
under this Agreement and is the holder of all necessary
licenses issued by all governmental authorities having
jurisdiction to authorize or permit Lessee to carry on its
business as presently conducted and to operate the Equipment;
(ii) this Agreement has been duly authorized by all necessary
corporate action on the part of Lessee;
(iii) neither the execution and delivery hereof nor the consummation
of the transactions contemplated hereby nor compliance by
Lessee with any terms and provisions hereof will contravene
any law applicable to Lessee or result in any breach of, or
constitute any default under, or result in the creation of any
lien, charge or encumbrance upon any property of Lessee under
any indenture, mortgage, chattel mortgage, conditional sales
contract, bank loan or credit agreement, or other agreement or
instrument to which Lessee is a
--------------------------------------------------------------------------------
Page 18(27)
party or by which Lessee or its properties or assets may be
bound or affected;
(iv) the execution, performance and delivery by Lessee of this
Agreement, and the other documents of which Lessee is a party,
and any of the transactions by Lessee contemplated hereby,
have been duly authorized by all necessary corporate action on
the part of Lessee, and Lessee has complied with, every
necessary consent, approval, order, or authorization of, or
registration with, or the giving of prior notice to, any
government entity having jurisdiction with respect to the
execution and delivery of this Agreement or the validity and
enforceability hereof or the satisfaction of all monetary and
other obligations hereunder;
(v) this Agreement has been duly entered into and delivered by
Lessee and constitutes the valid, legal and binding obligation
of Lessee enforceable in accordance with its terms except as
limited to (1) equitable principles and (2) bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally;
(vi) Lessee has taken all necessary and advisable action under the
laws of the State of New York in order to ensure the validity,
effectiveness and enforceability of this Agreement;
(vii) there are no suits or legal proceedings (including any
administrative proceeding) pending or threatened before any
court or administrative agency against Lessee which, if
adversely determined, would have a material adverse affect
upon its financial condition or business or its ability to
perform its obligations hereunder, except as set forth in
Schedule 3 hereto;
(viii) the obligations of Lessee under this Agreement are or will,
upon execution hereof by Lessee, be direct, general and
unconditional obligations of Lessee and rank or, as the case
may be, will rank at least pari pasu with all other present
and future unsecured and unsubordinated external obligations
(including contingent obligations) of Lessee, with the
exception of such obligations as are mandatorily preferred by
law and not by reason of any encumbrance;
(ix) no Event of Default has occurred and is continuing;
(x) the business plan related to Lessee's business activities for
1995 to 1997, as reflected in Attachment I, have been prepared
in accordance with generally accepted accounting principles
and practices in the United States and present fairly and
correctly the financial position of Lessee as at the date
thereof and the results of the operations of Lessee,
respectively, for the period referred to in the business plan,
and as at date referred to in the business plan, Lessee had no
significant liabilities (contingent or otherwise) which are
not disclosed by, or reserved against, in the business plan;
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Page 19(27)
(xi) there has been no material adverse change in the financial
position of Lessee from that set forth in the business plan
referred to in Sub-Article 16.2(x);
(xii) the information in the business plan referred to in
Sub-article 16.2(xi) and all other written information
furnished by Lessee to Lessor in connection with this
Agreement does not contain any untrue statement or omit to
state facts, the omission of which makes the statements
therein, in the light of the circumstances under which they
were made, misleading, nor omits to disclose any material
matter to Lessor and all expressions of expectation,
impression, belief and opinion contained therein were honestly
made on reasonable grounds after due and careful inquiry by
Lessee.
(xiii) no event has occurred which could have or may reasonably be
expected to have, a prejudicial effect on the rights of Lessor
under this Agreement or a material adverse effect on the
ability of Lessee to perform all or any of its obligations
under this Agreement.
(xiv) throughout the Lease Period, Lessee will not cease or threaten
to cease to carry on the whole or substantially the whole of
its business or dispose, or threaten to dispose, of a
substantial part of its assets.
(xv) Lessee's direct and indirect shareholders, subsidiaries, and
affiliates, including RSL Communications, Inc., prior to the
executing of this Agreement, in written statements have
accepted that Lessee's obligations pursuant to this Agreement
shall have priority over all Lessee's obligations to such
persons or entities, and that all debt owed by Lessee to such
persons or entities is subordinated to this lease.
(xvi) Lessee at time of the execution of this Agreement has a
positive net cash balance exceeding USD 250,000.00.
16.3 The representations and warranties in Sub-article 16.2 shall be deemed
to be repeated by Lessee on and as of the Delivery Date and each Rent
Payment Date as if made with reference to the facts and circumstances
existing on each such date.
16.4 Lessor represents and warrants that:
(i) Lessor is a corporation duly incorporated and validly existing
under the laws of Sweden as a limited liability corporation
and has the corporate power and authority to carry on its
business as presently conducted and to perform its obligations
under this Agreement;
(ii) the execution and delivery of this Agreement by Lessor have
been duly authorized by all necessary corporate action on the
part of Lessor, this Agreement has been duly entered into and
delivered by Lessor and, insofar as Swedish law is concerned,
constitute the valid, legal and binding obligation of Lessor,
enforceable in accordance with their respective terms (except
as limited to (1) equitable principles, and (2) bankruptcy,
insolvency,
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Page 20(27)
reorganization, moratorium or similar laws affecting the
rights of creditors generally), and the provisions hereof will
not contravene any Swedish law applicable to Lessor or result
in any breach of, or constitute any default under or result in
the creation of any lien, charge or encumbrance upon any
property of Lessor under any indenture, mortgage, chattel
mortgage, conditional sales contract, bank loan or credit
agreement, or other agreement or instrument to which Lessor is
a party or by which Lessor or its properties or assets may be
bound or affected;
(iii) Lessor has complied with every necessary consent, approval,
order or authorization of, or registration with, or the giving
of prior notice to, any government entity in Sweden having
jurisdiction with respect to the execution and delivery of
this Agreement or the validity and other obligations
hereunder.
(iv) there are no suits or legal proceedings (including any
administrative proceeding) pending or threatened before any
court or administrative agency against the Lessor which, if
adversely determined, would have a material adverse effect
upon its financial condition or business or its ability to
perform its obligations hereunder;
(v) the obligations of Lessor under this Agreement are or will,
upon execution thereof by Lessor, be direct, general and
unconditional obligations of Lessor and rank or, as the case
may be, will rank at least pari passu with all other present
and future unsecured and unsubordinated obligations (including
contingent obligations of Lessor) with the exception of such
obligations as are mandatorily preferred by law and not by
reason of any encumbrance; and
17. COVENANTS
17.1 Covenants of Lessee
Lessee hereby covenants with Lessor that from the date of this
Agreement and until the end of the Lease Period it will:
(i) remain in and continue to operate substantially the same
business as presently engaged in, preserve its corporate
existence, conduct its business in an orderly and efficient
manner, satisfy its debts and obligations as they fall due and
keep and maintain all of its properties in good working order
and condition;
(ii) at its own expense from time to time do and perform such other
and further acts and execute and deliver all other further
instruments as may be required by law or reasonably requested
by Lessor to establish, maintain and protect the respective
rights and remedies of Lessor and to carry out and give effect
to the intents and purposes of this Agreement and the parties
thereto;
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Page 21(27)
(iii) notify Lessor immediately of the occurrence of any Termination
Event or of any occurrence which might adversely affect
Lessee's ability to perform any of its obligations under this
Agreement;
(iv) obtain and maintain all necessary government and other
consents, licenses and permits and take all action which may
be necessary or desirable for the continued due performance of
Lessee's obligation under this Agreement and for the use and
operation of the Equipment;
(v) take all necessary steps to maintain and protect the interest
of Lessor as owner of the Equipment, including all necessary
registrations and filing with the relevant authority, and not
do or permit to be done anything which might jeopardize such
rights or the registration of the Equipment;
(vi) keep accurate and complete records of the Equipment and permit
Lessor and its authorized representatives to examine and take
copies of such records at any time upon giving reasonable
notice;
(vii) not do anything which may expose the Equipment or any part
thereof to penalty, forfeiture, seizure, arrest, impounding,
detention, confiscation, taking in execution, appropriation or
destruction nor abandon the Equipment or any part thereof;
(viii) not pledge the credit of Lessor for any maintenance,
overhauls, replacements, repairs or modifications to the
Equipment;
(ix) discharge all fees, charges and outgoing payable to any third
party in relation to the use or operation of the Equipment or
any premises where the Equipment is situated; and
(x) promptly notify Lessor in writing:
(a) of any material alterations in or material
modifications or additions to the Equipment;
(b) of any Lien arising on the Equipment and exercised
over the Equipment;
(c) of any event which will or may reasonably be
considered likely to become a casualty in respect of
the Equipment or any part of the Equipment or of any
other act done by, with, to, about or in connection
with or event occurring to or in relation to the
Equipment which will or may reasonably be considered
likely to involve Lessor or Lessee in any costs,
expense, loss or liability exceeding USD 200,000.00;
and
(d) of any (i) change of control (as defined in the
definition of Affiliate in Exhibit A) of Lessee or
(ii) purchase or sale of ten per cent (10%) or more
of Lessee's capital stock by any person.
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Page 22(27)
(xi) furnish to Lessor its annual audited financial reports within
ninety (90) days of period end, quarterly unaudited financial
reports within sixty (60) days of period end, and any revised
business plan as well as any other relevant financial
information regarding Lessee as Lessor reasonably requests.
(xii) not enter into any credit or other obligation, without written
consent from new creditors that all new debt shall be
subordinated to Lessee's obligations under this Agreement.
(xiii) maintain a positive liquid assets balance of USD 250,000.00 at
all times during the lease pursuant to this Agreement.
(xiv) not, without Lessor's prior written consent, which consent
shall not be unreasonably withheld, create, assume, incur or
suffer to be created, assumed or incurred or permit to subsist
any mortgage, lien, pledge or other encumbrance of any kind
("Encumbrance") upon any of its present or future revenues or
assets, for the purpose of securing any indebtedness (or any
guarantee or other obligation in respect of any indebtedness)
now or hereafter existing. Lessee shall however be entitled to
make such Encumbrance, except any Encumbrance on the equipment
subject to this Agreement, without Lessor's prior consent, for
the purpose of securing medium and long term indebtedness with
an aggregate value not exceeding USD 1,000,000.
17.2 Covenants Of Lessor
Lessor hereby covenants with Lessee that from the date of this
Agreement and until the end of the Lease Period:
(i) Lessor agrees that it will not assign, transfer or dispose of
its interest in the Equipment, (save as provided in Article
14); and
(ii) if Lessee shall pay the rent and other amounts payable by
Lessee hereunder as and when the same become due and payable
and shall perform and comply with all of the other terms and
conditions hereof, Lessor will not interfere with or deprive
Lessee of the peaceful and quiet use and enjoyment of the
Equipment.
18. GUARANTEE OF INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD.
18.1 ITG hereby guarantees all obligations of Lessee hereunder. In the event
of any material breach or default not timely cured by Lessee, ITG shall
immediately and retroactively become liable hereunder for the
performance of Lessee's obligations, warranties and covenants, and
Lessee's representations herein shall apply to ITG prospectively
thereafter.
18.2 ITG hereby covenants with Lessor that it will
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Page 23(27)
(i) from June 30, 1997 and until the end of the Lease Period,
maintain a debt to equity ratio of one to one (1:1) or lower.
(ii) not materially deviate from its 1996 annual budget, a copy of
which is attached hereto as Exhibit D, or from any other
annual budget during the term hereof, by more than
US$500,000.00 on a cumulative, consolidated basis, including
with regard to capital expenditures, dividends, management
fees, loans to affiliates and officers, unless an express,
written consent to such deviation has been made by Lessor.
Such a consent may not be withheld unduly.
18.3 For purposes of item (i) of section 18.2 above, ITG's (1) debt is
defined as any indebtedness to a third party and any indebtedness to
any affiliate of Lessee which is not subordinated to this Agreement,
including debt obligations under this Agreement; and (2) equity is
defined as the sum of ordinary share capital issued and fully paid,
together with any fully paid share premium, undistributable reserves,
and any indebtedness which is subordinated to the obligations under
this Agreement.
18.4 ITG shall submit its 1997 annual budget to Lessor for Lessor's approval
no later than 30 days prior to the end of its 1996 fiscal year, which
approval Lessor shall give unless such budget does not reasonably
reflect ITG's ability, in the event of a breach or default of Lessee,
to meet its obligations as guarantor hereunder. ITG's failure to gain
Lessor's approval for its 1997 budget shall constitute a default under
this Agreement subject to the same remedies against Lessee and ITG as a
default by Lessee.
If at the end of 1997, ITG has not performed substantially in
accordance with its 1996 or 1997 annual budget, the provisions of this
article applicable to the 1997 budget shall be extended for the full
term of the lease and applied to each annual budget.
18.5 With respect to its contingent obligations hereunder, ITG represents
and warrants that, prior to the execution of this Agreement, ITG's
direct and indirect shareholders, subsidiaries, and affiliates,
including RSL Communications, Inc., in written statements have accepted
that such obligations shall have priority over all ITG's obligations to
such persons or entities.
19. MISCELLANEOUS
19.1 The rights of Lessor under this Agreement are cumulative, may be
exercised as often as it considers appropriate and are in addition to
its rights under general law. The rights of Lessor against Lessee or in
relation to the Equipment (whether arising under this Agreement or the
general law) shall not be capable of being waived or varied, against or
in favor of Lessor, otherwise than in writing.
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Page 24(27)
19.2 Notwithstanding anything in this Agreement to the contrary, if any
payment by Lessee under this Agreement or the obligation to make the
same or the receipt of the same or the performance by either of the
parties hereto of any other of their obligations hereunder is following
the execution of this Agreement rendered unlawful or illegal in whole
or in part by the act of any government entity so as to render it
impossible for the parties hereto to comply with their respective
obligations under this Agreement then:
(a) the parties hereto shall forthwith negotiate with each other
in good faith with a view to making arrangements whereby such
payment can be made or received or other obligations performed
in such manner, place, currency, and other circumstances as
shall be lawful and legal and so as to achieve substantially
the same result so far as concerns the Lessor and the Lessee
as would have been achieved had such payment, receipt or other
obligation not been rendered unlawful or illegal;
(b) if the parties hereto are unable to reach agreement under
Sub-article (a) above within one month after the date on which
the relevant payment was due to be made or received hereunder
or the other obligations were due to be performed either party
hereto shall be entitled, by notice in writing to the other,
to terminate the Lease Period on the latest date permitted by
the relevant act of any government entity.
On any termination of the Lease Period pursuant to this
Sub-article 18.2 the Lessee shall pay to the Lessor an amount
equivalent to the Outstanding Balance.
If and when Lessor has received full payment under this
Sub-article 18.2 in respect of the Equipment, title to the
Equipment (except Software, which Lessee takes possession of
but not title as described in Article 6.1 of the General
Purchase Agreement) shall be transferred from Lessor to Lessee
or its designee, and Lessor shall issue all other relevant
documents necessary for such transfer of title and change of
registration of the Equipment, subject, however, to Lessee
indemnifying Lessor with respect to past and future operations
and obligations relating to the Equipment in accordance with
Article 11 of this Agreement. Lessee has no right to claim
compensation from Lessor with respect to the condition of the
Equipment and confirm that the condition of the Equipment on
such transfer or title shall be "as is, where is".
19.3 Lessor may set-off or withhold from any amount due and payable to
Lessee under this Agreement, any amount due and payable from Lessee
under this Agreement or any other agreement between the parties hereto.
19.4 Save where expressly provided in this Agreement, any certificate or
determination by Lessor as to any rate of interest or as to any other
amount payable under this Agreement shall, in the absence of manifest
error, be conclusive and binding on Lessee.
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Page 25(27)
19.5 If any sum paid or recovered in respect of the liabilities of Lessee
under this Agreement is less than the amount then due, Lessor may apply
such sum to rental, interest, fees or any other amount due under this
Agreement in such proportions and order and generally in such manner as
Lessor shall determine, and shall inform the Lessee subsequently.
19.6 The terms and conditions of this Agreement shall not be varied
otherwise than by an instrument in writing executed by or on behalf of
Lessor and Lessee.
19.7 If any of the provisions of this Agreement becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
Except as otherwise specifically provided herein, all notices and other
communications required or permitted under the terms and provisions
hereof shall be in writing and in English and any such notice or other
recommendation shall become effective when delivered by hand or
received by telex or telecopier or registered first-class mail, postage
prepaid, addressed as follows:
To the Lessor: AB LM Ericsson Finans (publ)
X-000 00 Xxxxxxxxx, XXXXXX
Telephone: x00 0 000 00 00
Telex: 14910 xxxx s
Telecopier: x00 0 000 00 00
To the Lessee: International Telecommunications Corporation (Lessee)
00 Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx, XXXXXX XXXXXX
or to such other address, telex or telecopier number as shall have been
notified (in accordance with this Sub-article) to the other party
hereto.
19.8 This Agreement shall in all respects be governed by, and construed in
accordance with the laws of the State of New York, United States,
including without limitation, all matters of construction, validity and
performance.
19.9 Lessee and Lessor shall, from time to time, do and perform such other
and further acts and execute and deliver any and all other further
instruments as may be required by law or reasonably requested by either
party to establish, maintain and protect the respective rights and
remedies of the other party and to carry out and effect the intent and
purposes of this Agreement.
19.10 The terms and conditions of this Agreement are confidential and shall
neither in whole or in part be disclosed to any person nor published
without the prior written consent of the parties hereto, provided that
this Article shall not prevent disclosure as required by law or
ministerial or judicial or parliamentary authority or to the legal or
audit or taxation advisers or bankers of any party hereto.
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Page 26(27)
19.11 All disputes in connection with this Agreement shall be finally settled
under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce, in New York, New York, United States, by three (3)
arbitrators appointed in accordance with the said Rules and the
proceedings shall be conducted in the English language.
19.12 Lessee hereby irrevocably waives any right of immunity which it or its
assets have or may acquire and Lessor may claim execution of any
judgment or order in any court or appropriate authority within United
States or any other country where Lessee has any assets.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year herein written.
AB LM ERICSSON FINANS (publ) INTERNATIONAL
("Lessor") TELECOMMUNICATIONS
CORPORATION
("Lessee")
By: /s/ Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------ -------------------------------
Name: Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxx Name: Xxxxxxx X. Xxxxxx
--------------------------------- ----------------------------
Title: Director President Title: President
--------------------------------- ----------------------------
INTERNATIONAL TELECOMMUNICATIONS
GROUP, LTD.
("Guarantor")
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------
Title: President
---------------------------------
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Page 27(27)
