Exhibit 10.19
Lease Agreement
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Lease agreement
between
RSL Com Europe Ltd
and
AB LM Ericsson Finans
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Commercial in confidence
Lease Agreement
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Contents;
1. General Agreement
2. Tranche I Special Terms
3. General Terms
4. Exhibit 1 - Description of the equipment
5. Exhibit 2 - Option dates and option prices
6. Exhibit 3 - Termination value
7. Exhibit 5 - Form for supplier's consent
8. Exhibit 6 - Form for acceptance of delivery
9. Exhibit 7 - Rent payments
10. Exhibit 11 - Debenture
11. Exhibit 12 - Form for sub-lessee's consent
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Commercial in confidence
General Agreement 1(12)
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AGREEMENT
between
AB ▇ ▇ ERICSSON FINANS
and
RSL COM EUROPE LIMITED
relating to
Lease of ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇ and Trance 4 for
RSL's European Network Roll-Out
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Commercial in confidence
General Agreement 2(12)
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This agreement ("Agreement") is made and entered into between
AB ▇ ▇ ERICSSON FINANS, a Swedish limited liability company.
and
RSL Com Europe Ltd., a UK limited liability company with its registered address
at ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ England.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in two counterparts on the last day below written.
AB ▇ ▇ ERICSSON RSL COM EUROPE LTD
FINANS
Date: Date: 10/4/96
By: /s/ AB ▇ ▇ ERICSSON FINANS By: /s/ ▇. ▇▇▇▇▇▇▇▇
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Name: AB ▇ ▇ ERICSSON FINANS Name: ▇. ▇▇▇▇▇▇▇▇
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Title:__________________ Title: President & CEO
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Commercial in confidence
General Agreement 3(12)
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AGREEMENT
This agreement outlines the Special Terms for the lease agreement under which
AB LM Ericsson Finans is prepared to undertake the commitment to provide a lease
facility to RSL Com Europe Ltd up to the equivalent of USD 10,000,000 (ten
million US dollars).
Each individual lease agreement (for tranche 1, tranche 2, tranche 3 and tranche
4) will consist of the following:
o Special Terms which will consist of clauses I to 18 below as modified to
reflect tranche specific circumstances. Where a clause is left blank in
the Special Terms the corresponding clause of the General Terms shall
apply.
o General Terms
o Exhibits: Exhibit 1 is tranche specific.
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Commercial in confidence
General Agreement 4(12)
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1 DEFINITIONS
1.1 In each tranche specific lease agreement, the following terms and
conditions, which are not defined in the General Terms, shall have the
following meanings:
"Account" : tranche specific.
There is no collateral provided for the Lessee's obligations under the
Agreement and all references to "Collateral" shall be inoperative.
"Currency of Payment" : tranche specific
"Commitment" means the commitment of Lessor to provide a lease facility to
lessee up to the equivalent of USD 10,000,000 (ten million US dollars).
This Commitment can be drawn in no more than four tranches. Tranches shall
consist of equipment as follows;
o Tranche 1, all equipment in order Y3344 (contract December 7, 1995)
excluding Sweden and Finland SSP SW,
o Tranche 2, equipment in respect of which lessee shall have issued
acceptance certificates issued by Lessee for the Equipment in
accordance with Clause 4.3 of the General Terms, before July 1, 1996
o Tranche 3 equipment in respect of which lessee shall have issued
acceptance certificates issued by Lessee for the Equipment in
accordance with Clause 4.3, before January 1, 1997
o Tranche 4 equipment in respect of which lessee shall have issued
acceptance certificates issued by Lessee for the Equipment in
accordance with Clause 4.3, before July 1, 1997
"Expire Date" means the date occurring 72 months after the Lease
Commencement Date, or such later date as may follow from an agreement to
extend the lease pursuant to Clause 13.8.
"Final Availability Date" means
o for Tranche 1, June 30, 1996,
o for Tranche 2, July 2, 1996,
o for Tranche 3, January 2, 1997,
o for Tranche 4, July 2, 1997.
"Language" means the English language.
"Lease Commencement Date" means,
o for Tranche 1, in respect of the AXE 10 Switching Systems at any
location, the date when the acceptance certificate is issued by
Lessee for the Equipment at that Location in accordance with Clause
4.3 or such other date when the Equipment shall be deemed to be
accepted by the Lessee hereunder.
o for Tranche 2, 1 July 1996
o for Tranche 3, 1 January 1997
o for Tranche 4, 1 July 1997
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Commercial in confidence
General Agreement 5(12)
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"Location": tranche specific.
"Margin" means four and one half (4.5) percentage points.
"Purchase Price" means the sum specified in exhibit 1 for each tranche.
"Security Documents" means the Debenture comprised in Exhibit 11.
There is no "Security Provider" under the Agreement and all references to
"Security Provider" shall be inoperative.
"Supplier": tranche specific and means the Ericsson company with whom a
supply agreement is concluded
"Supply Agreement" Tranche specific and means a Supply and Installation
Contract to be concluded between Lessee and Supplier.
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Commercial in confidence
General Agreement 6(12)
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2 CONDITIONS PRECEDENT
2.1 The following additional documents shall be delivered pursuant to Clause
2.1:
A business plan reflecting the equity increase provided for in Clause 2.2.
Sub-lessee's consent, in the form attached hereto as Exhibit 12, signed
and delivered by Cyberlink Sweden AB, Sweden, and Cyberlink International
OY, Finland.
Clause 2.1(g) regarding legal opinion shall not be applicable.
2.2 The following additional condition(s) shall be met pursuant to Clause
2.2.:
Lessee shall increase the value of the equity of Lessee with USD four
million six hundred thousand (4,6OO,OOO) (such equity to be defined in
accordance with the International Accounting Standards of IASC) evidenced
by a balance sheet certified by the Lessee's auditors.
The Debenture (Exhibit 11) shall become effective.
3. ASSIGNMENT
Clause 3.1 shall read as follows:
3.1 The Lessee does hereby assign to the Lessor all of the Lessee's rights and
interest in respect of the Equipment under the Supply Agreement,
including, but not limited to, the right to acquire ownership to hardware
parts and license to use software parts of the Equipment and the benefit
of all warranties in respect of the Equipment contained in the Supply
Agreement. In the event that ownership rights of any hardware parts have
already been transferred from Supplier to Lessee under the Supply
Agreement, such ownership rights are hereby assigned to Lessor.
3.2 The Lessor hereby assumes the Lessee's obligation to pay the Purchase
Price and take delivery of the Equipment under the Supply Agreement. The
Lessor does not assume any of the Lessee's other obligations under the
Supply Agreement, and the Lessee shall in respect of such obligations at
all times remain liable to the Seller as if this Agreement had not been
executed.
3.3 When the Lessor exercises any of the rights under the Supply Agreement, or
makes any claim with respect to the Equipment, the terms and conditions of
the Supply Agreement shall apply to, and be binding upon, the Lessor.
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Commercial in confidence
General Agreement 7(12)
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3.4 The Lessor shall procure that the Seller consents to the assignment and
assumption by the Lessor of certain rights and obligations under the
Supply Agreement in the form attached hereto as Exhibit 5. Except as
provided in Exhibit 5, the Supply Agreement shall not be modified by this
Agreement.
3.5 Neither party shall enter into any other agreement that would amend,
modify or supplement the Supply Agreement without the prior written
consent of the other party.
3.6 If the Lease Commencement Date has not occurred on or prior to the Final
Availability Date, the Lessor shall be entitled to terminate this
Agreement by giving written notice to the Lessee and the Supplier.
Following such notice of termination all rights assigned to the Lessee
pursuant to Clause 3.1 shall be reassigned to the Lessee, and the Lessor
shall be released from the obligations assumed pursuant to Clause 3.2,
which shall be reassumed by the Lessee. On receipt of the Lessor's
certificate evidencing the Lessor's costs incurred in connection with the
entering into and termination of this Agreement, the Lessee shall promptly
reimburse the Lessor for all such costs.
Clause 3 shall not apply to any services. Examples of services are
Interconnect support, On-site second line support, On-site services and
Support for maintenance.
4 SELECTION, DELIVERY AND INSPECTION
4.6 Equipment already in the possession of the lessee on the date of this
agreement shall be deemed to be delivered, and shall be accepted by the
lessee pursuant to this clause 4 unless otherwise agreed in writing by the
lessor.
5 LEASE
5.6 The following sentence shall be read in conjunction with clause 5.6 of the
General Terms;
For the avoidance of doubt, the Guarantees and Warrantees and other rights
refer to the rights of the lessee arising under the supply agreement and
any reference to rights in this clause 5.6 shall include Guarantees and
Warranties.
6 PAYMENTS
6.1 Clause 6.1 shall not be applicable.
6.2 For Tranche 2, Tranche 3 and Tranche 4 only, Initial Rent Payment shall be
Capitalised and added to the outstanding balance of the Purchase Price for
all purposes of this agreement.
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Commercial in confidence
General Agreement 8(12)
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The initial Rent Payment shall be calculated as follows;
Accrued interest on the aggregate amounts paid by Lessor for the
applicable items of Equipment under the terms of Supply Agreement, up to
and including the Lease Commencement Date. This payment shall accrue at an
interest rate which shall be equal to one month LIBOR, as defined below,
plus four and one half (4.5) percentage points, as determined on the first
Business Day of each month. The interest shall be calculated on the basis
of actual days elapsed, but computed using a 360-day year, and shall be
compounded monthly.
One month LIBOR shall be determined as the arithmetic mean of the rates of
interest per annum for one month's deposits of US Dollars which are
offered to prime banks that participate in the London market
(i) as such rates appear on the page designated as page "LIBO" on the
Reuters Monitor Money Rates Service ("LIBO Page" as of 10.00 a.m.
(London time) on such date, if two or more quotations appear on the
LIBO Page for such date, or
(ii) by the principal London offices of Barclays Bank plc, ▇▇▇▇▇▇
Guaranty Trust Company of New York, and National Westminster Bank
plc as of 10.00 a.m. (London time) on such date, if fewer than two
quotations appear on the LIBO Page for such date.
6.3 Lessee covenants and agrees to pay Lessor in immediately available funds
twenty (20) Rent Payments in arrears during the Lease Period. The first
Rent Payment shall become due on the day falling six (6) months after the
Lease Commencement Date which is for:
o Tranche 1, attributable to the date of the first AXE 10 Switching
system to be accepted,
o Tranche 2, July 1, 1996
o Tranche 3, January 1,1997
o Tranche 4, July 1,1997.
Thereafter, the following three (3) Rent Payments shall become due on the
last day of each following six (6) months period. Thereafter, the
following sixteen (16) Rent Payments shall become due on the last day of
each following three (3) months period, provided however, that the last
Rent Payment shall become due on the last day of the Lease Period.
6.12 For each amount of the Purchase Price to be paid by the Lessor to the
Supplier in currency different from GBP, the Lessor will determine the
Purchase Price in GBP by converting such amount into GBP at the rate of
exchange at which the Lessor is or would be able to purchase GBP in the
foreign exchange market for spot delivery at or around 11.00
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Commercial in confidence
General Agreement 9(12)
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a.m. Stockholm time two (2) Business Days prior to the date of Lessor's
payment.
6.13 The Lessor shall notify the Lessee of the amount of any Rent Payment due
no later than 10 working days prior to the relevant Rent Payment date.
7 USE, MAINTENANCE AND ALTERATIONS
7.5 Subject as provided herein, the Lessee may not, without prior written
notice to the Lessor, permanently remove any part from, or alter or make
additions to, the equipment. Such written notice shall be without
responsibility on the part of the lessor for any interference with the
operations of the equipment or impairment of its value.
7.8 Lessee may sub-lease the Equipment to Cyberlink Sweden AB and Cyberlink
International OY, provided that (i) the sub-lease shall terminate one day
prior to the expiration or termination for whatever cause of this
Agreement, (ii) the sub-lessee shall undertake in writing to be bound by
the terms and conditions of this Agreement and accept Lessor as third
party beneficiary, (iii) Lessee shall remain responsible to Lessor in
accordance with the terms of this Agreement and shall be responsible to
Lessor for any acts or omissions of the sub-licensee as if such acts and
omissions were undertaken by Lessee, and (iv) the sub-lessees shall have
executed the sub-lessee's consent attached hereto as Exhibit 12.
8. INDEMNITIES
8.3 The Lessee shall be responsible for and reimburse the lessor against all
taxes, duties and other charges levied or imposed by any Government or
local authority against the Lessor or the Lessee and relating to this
agreement or the Equipment except for taxes on the Lessor's overall
income.
9 INSURANCES
[ ]
10 INFORMATION
10.1 (f) budget for the current year in the form of consolidated balance
sheet, consolidated cash flow and consolidated income statement, and
projections for the following year of consolidated balance sheet,
consolidated cash flow and consolidated income statement, and upon
request from lessor, detailed information to be reviewed at lessee's
premises.
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Commercial in confidence
General Agreement 10(12)
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10.1 (h) site asset register
11 OWNERSHIP AND MARKING
11.1 [ ]
11.2 There shall be, displayed in a prominent position in the immediate
vicinity of the equipment which is subject to this lease a notice bearing
the inscription "Any and all equipment in this room bearing the Ericsson
name is owned by AB LM Ericsson Finans." This notice will be provided and
affixed by Ericsson.
The inscription provided for in Clause 11.2 shall be in English, Swedish
or Finnish as applicable.
12 EVENTS OF DEFAULT
12.1 (a) the lessee shall fail to pay any amount due under this agreement
within five (5) business days after notice thereof has been given to
the lessee;
12.1 (q) The debt/equity ratio of Lessee exceeds one to one (1:1).
For this purpose:
(i) debt is defined as any indebtedness to a third party any
indebtedness to any affiliate to Lessee which is not subordinated to
this Agreement, and including debt obligations under this Agreement
(ii) equity is defined as the sum of ordinary share capital issued and
fully paid together with any fully paid share premium, any
undistributable reserves, any retained earnings and any indebtedness
which is subordinated to the obligations under this Agreement.
12.2 (a) enter the premises of the lessee or any other place where the
equipment may be located and reposess the equipment, disconnecting
and separating all thereof from any other property any using all
reasonable means necessary to do so.;
13 PURCHASE OPTION
The Option Dates and the Option Prices are defined in Exhibit 2. The
Lessee shall pay to the Lessor 70% of all costs and expenses incurred by
Lessor in connection with the sale of the Equipment under this Clause 13,
where costs and expenses are defined as the actual administrative costs at
no more than (pound)19,000 (nineteen thousand) per purchase option
exercise event, where each event can encompass one or several tranches
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Commercial in confidence
General Agreement 11(12)
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14 RETURN OF THE EQUIPMENT
14.1 The Equipment shall be returned to Stockholm, Sweden to the premises of
the Lessor, or as otherwise notified by Lessor.
15 REPRESENTATIONS AND WARRANTIES
15.1 The following additional representation and warranty is made by the
Lessee:
- the business plan related to Lessee's business activities provided for
in Clause 2.1 has been prepared in accordance with generally accepted
accounting principles and practices in the UK 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.
16 RIGHTS, REMEDIES AND WAIVERS
[ ]
17 MISCELLANEOUS
17.5 Lessor: AB ▇ ▇ ERICSSON FINANS
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Telefax: ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Telex: 14910 ▇▇▇▇ S
For the attention of: Finance department
Lessee: RSL COM EUROPE LTD
Victoria House
London Square
Cross Lanes
Guidford
Surrey
England
Telephone: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Telefax: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
For the attention of: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Commercial in confidence
General Agreement 12(12)
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17.11 Clause 17.11 shall not apply.
17.12 With advance notice of five (5) Business days, the lessor (or its nominee)
shall at any time during working hour have the right to enter the premises
of the lessee or any other place where the equipment may be located for
the purpose of inspecting the same or observing its use.
17.13 Clause 17.13 shall not apply.
17.14 The following additional provisions shall apply.
The Lessee shall not, without Lessor's prior written consent, 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 securing medium and long term indebtedness with an
aggregate value not exceeding USD 2,000,000.
17.15 For tranche 1 only, in the event that the Swedish Export Credit Board
(EKN) would approve a guarantee of the lease payments within four (4)
months from the date of this agreement, either party may call for good
faith negotiations as to the amendment of relevant parts of this
agreement. Should the parties not be able to agree on such amendment
within two (2) months from the date of the EKN approval, this agreement
shall remain in full force without any changes.
18 APPLICABLE LAW AND JURISDICTION
[ ]
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Commercial in confidence
Special Terms - Tranche 1 1(12)
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LEASE AGREEMENT
between
AB ▇ ▇ ERICSSON FINANS
and
RSL COM EUROPE LIMITED
relating to
Tranche 1:
four AXE 10 Switching Systems to be installed in England, Sweden and
Finland
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Commercial in confidence
Special Terms - Tranche 1 2(12)
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This lease agreement ("Agreement") is made and entered into between
AB ▇ ▇ ERICSSON FINANS, a Swedish limited liability company, hereinafter called
the "Lessor",
and
RSL Com Europe Ltd., a UK limited liability company with its registered address
at ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ England, hereinafter called
the "Lessee".
This Agreement, consisting of this signature cover page, the general terms of
Agreement ("General Terms") and the special terms of Agreement ("Special Terms")
as well as the Exhibits (as defined below), sets out the terms on which the
Lessor agrees to lease the Equipment (as defined below) to the Lessee. The
General Terms set out the main terms of the Agreement. The Special Terms set out
the customer specific terms of the Agreement, as an amendment or complement to
the corresponding terms (with corresponding numbering) of the General Terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in two counterparts on the last day below written.
AB ▇ ▇ ERICSSON RSL COM EUROPE LTD
FINANS
By: [ILLEGIBLE] By: ▇. ▇▇▇▇▇▇▇▇
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Name: _____________________ Name: ▇. ▇▇▇▇▇▇▇▇
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Title: ____________________ Title: President & CEO
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Commercial in confidence
Special Terms - Tranche 1 3(12)
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TABLE OF CONTENTS
SPECIAL TERMS/GENERAL TERMS
1 Definitions 4
2 Conditions precedent 5
3 Assignment 5
4 Selection, delivery and inspection 6
5 Lease 6
6 Payments 7
7 Use, maintenance and alterations 8
8 Indemnities 8
9 Insurances 8
10 Information 9
11 Ownership and marking 9
12 Events of default 9
13 Purchase option 10
14 Return of the equipment 10
15 Representations and warranties 10
16 Rights, remedies and waivers 10
17 Miscellaneous 11
18 Applicable law and jurisdiction 12
EXHIBITS
1 Description of the Equipment
2 Option Dates and Option Prices
3 Termination Value
4 (Not applicable)
5 Form for Supplier's consent
6 Form for acceptance of delivery
7 Rent Payments
8 (Not applicable)
9 (Not applicable)
10 (Not applicable)
11 Debenture
12 Form for sub-lessee's consent
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Special Terms - Tranche 1 4(12)
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Special Terms
1 DEFINITIONS
1.1 In this Agreement the following terms and conditions, which are not
defined in the General Terms, shall have the following meanings:
"Account" means, on the date hereof, Lessors account # 5554-822959 with
Skandinaviska Enskilda Banken, Stockholm, Sweden.
There is no collateral provided for the Lessee's obligations under the
Agreement and all references to "Collateral" shall be inoperative.
"Currency of Payment" means Pound Sterling (GBP).
"Expire Date" means the date occurring 72 months after the Lease
Commencement Date, or such later date as may follow from an agreement to
extend the lease pursuant to Clause 13.8.
"Final Availability Date" means June 30, 1996. In case any equipment is
not accepted within this time frame, it will become part of a subsequent
tranche.
"Language" means the English language.
"Lease Commencement Date" means in respect of the AXE 10 Switching Systems
at any location, the date when the acceptance certificate is issued by
Lessee for the Equipment at that Location in accordance with Clause 4.3 or
such other date when the Equipment shall be deemed to be accepted by the
Lessee hereunder.
"Location" means ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
Hemvamsgatan 22,171 28 Solna, Sweden, and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇.
"Margin" means four and one half (4.5) percentage points.
"Purchase Price" means the sum specified in exhibit 1 for tranche 1,
converted to GEP as per Clause 6.12
"Security Documents" means the Debenture comprised in Exhibit 11.
There is no "Security Provider" under the Agreement and all references to
"Security Provider" shall be inoperative.
"Supplier" means Ericsson Ltd, UK
"Supply Agreement" means the "Supply and Installation Contract" concluded
between Lessee and Supplier on December 7, 1995.
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Special Terms - Tranche 1 5(12)
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2 CONDITIONS PRECEDENT
2.1 The following additional documents shall be delivered pursuant to Clause
2.1:
A business plan reflecting the equity increase provided for in Clause 2.2.
Sub-lessee's consent, in the form attached hereto as Exhibit 12, signed
and delivered by Cyberlink Sweden AB, Sweden, and Cyberlink International
OY, Finland.
Clause 2.1(g) regarding legal opinion shall not be applicable.
2.2 Clause 2.2 (a) shall not be applicable.
The following additional condition(s) shall be met pursuant to Clause 2.2:
Lessee shall increase the value of the equity of Lessee with USD four
million six hundred thousand (4,600,000) (such equity to be defined in
accordance with the International Accounting Standards of IASC) evidenced
by a balance sheet certified by the Lessee's auditors.
The Debenture (Exhibit 11) shall become effective.
3. ASSIGNMENT
Clause 3.1 shall read as follows:
3.1 The Lessee does hereby assign to the Lessor all of the Lessee's rights and
interest in respect of the Equipment under the Supply Agreement,
including, but not limited to, the right to acquire ownership to hardware
parts and license to use software parts of the Equipment and the benefit
of all warranties in respect of the Equipment contained in the Supply
Agreement. In the event that ownership rights of any hardware parts have
already been transferred from Supplier to Lessee under the Supply
Agreement, such ownership rights are hereby assigned to Lessor.
3.2 The Lessor hereby assumes the Lessee's obligation to pay the Purchase
Price and take delivery of the Equipment under the Supply Agreement. The
Lessor does not assume any of the Lessee's other obligations under the
Supply Agreement, and the Lessee shall in respect of such obligations at
all times remain liable to the Seller as if this Agreement had not been
executed.
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Commercial in confidence
Special Terms - Tranche 1 6(12)
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3.3 When the Lessor exercises any of the rights under the Supply Agreement, or
makes any claim with respect to the Equipment, the terms and conditions of
the Supply Agreement shall apply to, and be binding upon, the Lessor.
3.4 The Lessor shall procure that the Seller consents to the assignment and
assumption by the Lessor of certain rights and obligations under the
Supply Agreement in the form attached hereto as Exhibit 5. Except as
provided in Exhibit 5, the Supply Agreement shall not be modified by this
Agreement.
3.5 Neither party shall enter into any other agreement that would amend,
modify or supplement the Supply Agreement without the prior written
consent of the other party
3.6 If the Lease Commencement Date has not occurred on or prior to the Final
Availability Date, the Lessor shall be entitled to terminate this
Agreement by giving written notice to the Lessee and the Supplier.
Following such notice of termination all rights assigned to the Lessee
pursuant to Clause 3.1 shall be reassigned to the Lessee, and the Lessor
shall be released from the obligations assumed pursuant to Clause 3.2,
which shall be reassumed by the Lessee. On receipt of the Lessor's
certificate evidencing the Lessor's costs incurred in connection with the
entering into and termination of this Agreement, the Lessee shall promptly
reimburse the Lessor for all such costs.
Clause 3 shall not apply to the following services:
-Interconnect support, 2 weeks, GBP 12,000
-On-site second line support, GBP 40,000
-On-site services, SEK 600,000
-Support for maintenance, FIM 198,000.
4 SELECTION, DELIVERY AND INSPECTION
4.6 Equipment already in the possession of the lessee on the date of this
agreement shall be deemed to be delivered, and shall be accepted by the
lessee pursuant to this clause 4 unless otherwise agreed in writing by the
lessor.
5 LEASE
5.6 The following sentence shall be read in conjunction with clause 5.6 of the
General Terms;
For the avoidance of doubt, the Guarantees and Warrantees and other rights
refer to the rights of the lessee arising under the supply agreement and
any reference to rights in this clause 5.6 shall include Guarantees and
Warranties.
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Commercial in confidence
Special Terms - Tranche 1 7(12)
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6 PAYMENTS
6.1 Clause 6.1 shall not be applicable.
6.2 For Tranche 2, Tranche 3 and Tranche 4 only, Initial Rent Payment shall be
capitalised and added to the outstanding balance of the Purchase Price for
all purposes of this agreement.
The initial Rent Payment shall be calculated as follows;
Accrued interest on the aggregate amounts paid by Lessor for the
applicable items of Equipment under the terms of Supply Agreement, up to
and including the Lease Commencement Date. This payment shall accrue at an
interest rate which shall be equal to one month LIBOR, as defined below,
plus four and one half (4.5) percentage points, as determined on the first
Business Day of each month. The interest shall be calculated on the basis
of actual days elapsed, but computed using a 360-day year, and shall be
compounded monthly
One month LIBOR shall be determined as the arithmetic mean of the rates of
interest per annum for one month's deposits of US Dollars which are
offered to prime banks that participate in the London market
(i) as such rates appear on the page designated as page "LIBO" on the
Reuters Monitor Money Rates Service ("LIBO Page") as of 10.00 a.m.
(London time) on such date, if two or more quotations appear on the
LIBO Page for such date, or
(ii) by the principal London offices of Barclays Bank plc, ▇▇▇▇▇▇
Guaranty Trust Company of New York, and National Westminster Bank
plc as of 10.00 a.m. (London time) on such date, if fewer than two
quotations appear on the LIBO Page for such date.
Initial rent does not apply to tranche 1.
6.3 Lessee covenants and agrees to pay Lessor in immediately available funds
twenty (20) Rent Payments in arrears during the Lease Period. The first
Rent Payment shall become due on the day falling six (6) months after the
Lease Commencement Date which is attributable to the first AXE 10
switching system to be accepted. Thereafter, the following three (3) Rent
Payments shall become due on the last day of each following six (6) months
period. Thereafter, the following sixteen (16) Rent Payments shall become
due on the last day of each following three (3) months period, provided
however, that the last Rent Payment shall become due on the last day of
the Lease Period.
6.12 For each amount of the Purchase Price to be paid by the Lessor to the
Supplier in SEK and FIM, the Lessor will determine the Purchase Price in
GBP by converting such amount of SEK and FIM, respectively, into GBP at
the rate of exchange at which the Lessor is or would be able to
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Commercial in confidence
Special Terms - Tranche 1 8(12)
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purchase GBP with SEK and FIM, respectively, in the foreign exchange
market for spot delivery at or around 11.00 a.m. Stockholm time two (2)
Business Days prior to the date of Lessor's payment.
6.13 The Lessor shall notify the Lessee of the amount of any Rent Payment due
no later than 10 working days prior to the relevant Rent Payment date.
7 USE, MAINTENANCE AND ALTERATIONS
7.5 Subject as provided herein, the Lessee may not, without prior written
notice to the Lessor, permanently remove any part from, or alter or make
additions to, the equipment. Such written notice shall be without
responsibility on the part of the lessor for any interference with the
operations of the equipment or impairment of its value
7.8 Lessee may sub-lease the Equipment to Cyberlink Sweden AB and Cyberlink
International OY, provided that (i) the sub-lease shall terminate one day
prior to the expiration or termination for whatever cause of this
Agreement, (ii) the sub-lessee shall undertake in writing to be bound by
the terms and conditions of this Agreement and accept Lessor as third
party beneficiary, (iii) Lessee shall remain responsible to Lessor in
accordance with the terms of this Agreement and shall be responsible to
Lessor for any acts or omissions of the sub-licensee as if such acts and
omissions were undertaken by Lessee, and (iv) the sub-lessees shall have
executed the sub-lessees consent attached hereto as Exhibit 12.
8 INDEMNITIES
8.3 The Lessee shall be responsible for and reimburse the lessor against all
taxes, duties and other charges levied or imposed by any Government or
local authority against the Lessor or the Lessee and relating to this
agreement or the Equipment except for taxes on the Lessor's overall
income..
9 INSURANCES
[ ]
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Commercial in confidence
Special Terms - Tranche 1 10(12)
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12.2 (a) enter the premises of the lessee or any other place where the
equipment may be located and reposess the equipment, disconnecting
and separating all thereof from any other property any using all
reasonable means necessary to do so.;
13 PURCHASE OPTION
The Option Dates and the Option Prices are defined in Exhibit 2. The
Lessee shall pay to the Lessor 70% of all costs and expenses incurred by
Lessor in connection with the sale of the Equipment under this Clause 13,
where costs and expenses are defined as the actual administrative costs at
no more than (pound) 19,000 (nineteen thousand) per purchase option
exercise event, where each event can encompass one or several tranches.
14 RETURN OF THE EQUIPMENT
14.1 The Equipment shall be returned to Stockholm, Sweden to the premises of
the Lessor, or as otherwise notified by Lessor.
15 REPRESENTATIONS AND WARRANTIES
15.1 The following additional representation and warranty is made by the
Lessee:
- the business plan related to Lessee's business activities provided for
in Clause 2.1 has been prepared in accordance with generally accepted
accounting principles and practices in the UK 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.
16 RIGHTS REMEDIES AND WAIVERS
[ ]
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Commercial in confidence
Special Terms - Tranche 1 11(12)
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17 MISCELLANEOUS
17.5 Lessor AB ▇ ▇ ERICSSON FlNANS
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Telephone: ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Telefax: ▇▇▇ ▇▇▇▇ ▇▇ ▇▇
Telex: 14910 ▇▇▇▇ S
For the attention of: Finance department
Lessee: RSL COM EUROPE LTD
Victoria House
London Square
Cross Lanes
Guidford
Surrey
England
Telephone: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Telefax: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
For the attention of: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
17.11 Clause 17.11 shall not apply.
17.12 With advance notice of five (5) Business days, the lessor (or
its nominee) shall at any time during working hour have the
right to enter the premises of the lessee or any other place
where the equipment may be located for the purpose of
inspecting the same or observing its use.
17.13 Clause 17.13 shall not apply.
17.14 The following additional provisions shall apply.
The Lessee shall not, without Lessor's prior written consent,
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 securing
medium and long term indebtedness with an aggregate value not
exceeding USD 2,000,000.
17.15 In the event that the Swedish Export Credit Board (EKN) would
approve a guarantee of the lease payments within four (4)
months from the date of this agreement, either party may call
for good faith negotiations as to the amendment of relevant
parts of this agreement
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Commercial in confidence
Special Terms - Tranche 1 12(12)
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Should the parties not be able to agree on such amendment within two (2)
months from the date of the EKN approval, this agreement shall remain in
full force without any changes.
18 APPLICABLE LAW AND JURISDICTION
[ ]
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Commercial in confidence
1(19)
GENERAL TERMS
1. DEFINITIONS
1.1 In this Agreement the following terms and expressions shall have the
following meanings:
"Account" means the account specified in the Special Terms or any other
bank account designated by the Lessor from time to time.
"Agreement" means this Agreement consisting of two parts, Special Terms
and General Terms, and the Exhibits hereto, as hereafter amended from time
to time.
"Business Day" means a day on which banks are open for business in
Stockholm and, in respect of any payment to be made hereunder, also in the
principal financial center of the currency of such payment.
"Collateral" means any collateral provided as security for the Lessee's
obligations under this Agreement, as specified in the Special Terms.
"Currency Of Payment" means the currency of payment under the Agreement as
specified in the Special Terms.
"Default" means an event which with the giving of notice and/or the
passage of time and/or the making of any determination of materiality or
fulfilment of any other applicable condition (or any combination of the
foregoing) would constitute an Event of Default.
"Default Rate" means the interest rate calculated as two (2) per cent per
annum above the higher of the Interest Rate and the Lessor's cost of funds
from whatever sources it may select.
"Delivery Date" means the date on which the Equipment is actually
delivered to the Lessee by the Supplier.
"Events of Default" means any of the events of default specified in Clause
12 or a failure by the Lessee to meet a deferred condition precedent as
specified in Clause 2.3.
"Event of Loss" means any of the following events:
(i) the Equipment shall be lost, stolen, destroyed or irreparably
damaged;
(ii) insurance proceeds shall be received based upon an event of total or
constructive total loss with respect to the Equipment under an
insurance policy;
(iii) title to the Equipment shall be taken or requisitioned by any
governmental body by condemnation or otherwise;
(iv) the use of the Equipment shall be taken or requisitioned by any
governmental body by condemnation or otherwise for a period
2(19)
longer than three (3) months (or the remaining term of the Lease
Period, if less); or
(v) as a result of any rule, regulation, order or other action by the
relevant authority, any governmental body having jurisdiction or
any court of competent jurisdiction, the normal operation or use of
the Equipment shall have been prohibited for a period of six months.
"Equipment" means the equipment described in Exhibit 1 and includes any
part thereof, and all replacements, renewals and additions made in or to
such equipment together with the Technical Documents and all handbooks,
manuals, data and drawings relating thereto.
"Expiry Date" means the date specified as such in the Special Terms or
such later date as may follow from an agreement to extend the lease
pursuant to Clause 13.8.
"Final Availability Date" has the meaning specified in the Special Terms.
"General Terms" means the second part of this Agreement.
"Initial Rent Payment" means the payment of the initial rent in the
Currency of Payment, calculated in accordance with Clause 6.2., Special
Terms.
"Initial Rent Payment Date" means each date on which an Initial Rent
Payment shall be made as set forth in Clause 6.2., Special Terms.
"Interest Rate" means, in respect of each Rent Payment, LIBOR (as quoted
on the fifth Business Day prior to the preceding Rent Payment Date, or, in
the case the first Rent Payment Date, the Lease Commencement Date) in each
case plus the Margin.
"Language" has the meaning specified in the Special Terms.
"Lease Commencement Date" means the last day of the month when an
acceptance certificate is issued by Lessee in accordance with Clause 4.4
or such other date when the Equipment shall be deemed to be accepted by
the Lessee hereunder.
"Lease Period" means the period commencing on the Lease Commencement Date
and ending on the earlier of (i) the Expiry Date, (ii) the day on which
this Agreement or the leasing of the Equipment is terminated pursuant to
the terms hereof, and (iii) the Rent Payment Date on which the Lessee has
exercised its option to purchase the Equipment pursuant to Clause 13.
"LIBOR" means the arithmetic mean (rounded to the next higher one hundred
thousandth of a percentage point) of the rates of interest per annum for
three months' deposits of US Dollars which are offered to prime banks in
the London interbank market (i) as such rates appear on the page
designated as page "LIBO" on the Reuters Monitor Money Rates Service
("LIBO Page") as of 10.00 a.m. (London time) on such date, if two or more
quotations appear on the LIBO Page for such date, or (ii) by the principal
London offices of Barclays Bank plc, ▇▇▇▇▇▇ Guaranty Trust Company of New
York, and National Westminster Bank plc as of 10.00 a.m. (London time) on
such date, if fewer than two quotations appear on the LIBO Page for such
date.
"Location" means the location specified in the Special Terms.
3(19)
"Margin" has the meaning specified in the Special Terms.
"Management Fee Payment" means the payment of the management fee,
calculated in accordance with Clause 6.1., Special Terms
"Management Fee Payment Date" means the date on which the Management Fee
shall be made as set forth in Clause 6.1., Special Terms
"Option Price" means the price specified in Exhibit 2 for the relevant
Option Date.
"Option Date" means the date(s) on which Lessee is granted an option to
purchase the Equipment pursuant to Clause 13.1, Special Terms.
"Purchase Price" means the sum of the purchase price payable to the
Supplier under the Supply Agreement and all other costs and expenses of
whatever nature payable by the Lessor in respect of the acquisition of the
Equipment. The purchase price under the Supply Agreement is set out in the
Special Terms.
"Rent Payment" means the periodical payment for the lease of the Equipment
in the Currency of Payment, calculated in accordance with Clause 6.4.
"Rent Payment Date" means each date on which a Rent Payment shall be made
as set forth in Clause 6.3., Special Terms.
"Security Document" means any pledge agreement, guarantee or other
document providing security for the Lessee's obligations under this
Agreement, as specified in the Special Terms.
"Security Provider" means any party to a Security Document other than the
Lessor.
"Special Terms" means the first part of this Agreement.
"Supplier" has the meaning specified in the Special Terms.
"Supply Agreement" has the meaning specified in the Special Terms.
"Technical Documents" means all documentation in respect of the Equipment
delivered by the Supplier under the Supply Agreement.
"Termination Value" means the value specified in Exhibit 3.
1.2 The terms and conditions in the General Terms are complemented and amended
by the Special Terms and in case of any discrepancy, the Special Terms
shall prevail.
1.3 Any reference to a clause with a certain number shall, unless the context
otherwise requires, be construed as a reference to the clause with such
number in the General Terms, as amended or complemented by the
corresponding clause in the Special Terms. In case a clause with such
number does not exist in the General Terms, the reference shall be solely
to the clause with such number in the Special Terms.
2 CONDITIONS PRECEDENT
2.1 The obligations of the Lessor under this Agreement are subject to the
receipt of the following documents, in form and substance satisfactory to
the Lessor, on or
4(19)
before the earlier of (i) the day falling thirty (30) Business Days after
the date hereof and (ii) the Lease Commencement Date:
(a) a certified copy of the constituent documents for the Lessee and
each Security Provider;
(b) evidence that the Lessee and each Security Provider is duly
registered at the relevant authority as a limited liability company
or other kind of business entity, as described in the recital to
this Agreement or the relevant Security Document;
(c) evidence that the Lessee has all necessary licenses and permits to
operate the Equipment and enter into this Agreement and the Supply
Agreement;
(d) evidence that the person(s) which has (have) signed this Agreement
and the Supply Agreement on behalf of the Lessee are duly authorized
to do so;
(e) evidence that the person(s) which has (have) signed the Security
Documents on behalf of each Security Provider are duly authorized to
do so;
(f) the latest available finance report of the Lessee and each Security
Provider;
(g) a legal opinion from independent counsel acceptable to Lessor,
substantially in the form of Exhibit 4 at the expense of Lessee; and
(h) other document(s) specified in the Special Terms.
2.2 The obligation of the Lessor to lease the Equipment to the Lessee is
subject to the following conditions having been met on or before the Lease
Commencement Date:
(a) the Initial Rent Payment shall have been received by the Lessor;
(b) the Lessor shall have acquired such rights and title to the
Equipment as is provided in the Supply Agreement:
(c) the Lessor shall have received a certified copy of an insurance
certificate evidencing that the Equipment is insured in accordance
with Clause 9;
(d) no Default shall have occurred or would occur as a result of the
commencement of the Lease Period; and
(e) other condition(s) specified in the Special Terms.
2.3 The conditions precedent set out in Clauses 2.1 and 2.2 are inserted for
the sole benefit of the Lessor and may be waived or deferred, with or
without conditions, by the Lessor. If the Lessor agrees to the
commencement of the Lease Period without all conditions having been met,
such conditions shall, unless otherwise is agreed, be deferred for ten
(10) Business Days from the Lease Commencement Date. If any condition is
not met on the date to which it has been deterred, it shall constitute an
Event of Default hereunder.
5(19)
3 ASSIGNMENT
3.1 The Lessee does hereby assign to the Lessor all of the Lessee's rights and
interest in respect of the Equipment under the Supply Agreement,
including, but not limited to, the right to acquire ownership to hardware
parts and license to use software parts of the Equipment and the benefit
of all warranties in respect of the Equipment contained in the Supply
Agreement
3.2 The Lessor hereby assumes the Lessee's obligation to pay the Purchase
Price and take delivery of the Equipment under the Supply Agreement. The
Lessor does not assume any of the Lessee's other obligations under the
Supply Agreement, and the Lessee shall in respect of such obligations at
all times remain liable to the Seller as if this Agreement had not been
executed.
3.3 When the Lessor exercises any of the rights under the Supply Agreement, or
makes any claim with respect to the Equipment, the terms and conditions of
the Supply Agreement shall apply to, and be binding upon, the Lessor.
3.4 The Lessor shall procure that the Seller consents to the assignment and
assumption by the Lessor of certain rights and obligations under the
Supply Agreement in the form attached hereto as Exhibit 5. Except as
provided in Exhibit 5, the Supply Agreement shall not be modified by this
Agreement.
3.5 Neither party shall enter into any other agreement that would amend,
modify or supplement the Supply Agreement without the prior written
consent of the other party.
3.6 If the Lease Commencement Date has not occurred on or prior to the Final
Availability Date, the Lessor shall be entitled to terminate this
Agreement by giving written notice to the Lessee and the Supplier.
Following such notice of termination all rights assigned to the Lessee
pursuant to Clause 3.1 shall be reassigned to the Lessee, and the Lessor
shall be released from the obligations assumed pursuant to Clause 3.2,
which shall be reassumed by the Lessee. On receipt of the Lessor's
certificate evidencing the Lessor's costs incurred in connection with the
entering into and termination of this Agreement, the Lessee shall promptly
reimburse the Lessor for all such costs.
4 SELECTION, DELIVERY AND INSPECTION
4.1 The Lessee has been responsible for agreeing the design, capacity, quality
and specification of the Equipment with the Supplier. The Lessor is only
responsible for the financing of the Equipment and the Lessee accepts that
the Lessor shall have no responsibility whatsoever for the design,
capacity, quality and specification of the Equipment.
4.2 Unless otherwise instructed in writing by the Lessor, the Lessee shall be
responsible for and arrange to take delivery of the Equipment from the
Supplier at a place to be agreed between the Lessee and the Supplier and
notified by the Lessee to the Lessor. The Lessor shall not be liable for
any damage or loss arising directly or indirectly from any delay or
failure in delivery (or, where applicable, installation) of the Equipment
4.3 The Lessee shall on behalf of the Lessor issue the final acceptance
certificate to the Supplier under the Supply Agreement and any defect or
other objection relating to any part of the Equipment shall be dealt with
by the Lessee directly with the Supplier. Simultaneously with the issuance
of the acceptance certificate the Lessee shall send a copy of the said
certificate to Lessor. The Lessee's
6(19)
acceptance of delivery from the Supplier on behalf of the Lessor shall
constitute conclusive acceptance also under this Agreement. If the Lessee
fails to give timely notice under the Supply Agreement of any defect or
other objection to the Supplier, the Equipment shall as between the Lessor
and the Lessee be considered to have been properly and timely delivered in
good condition and satisfactory working order.
4.4 The Lessee shall, within five (5) Business Days after the last of the
Delivery Dates, sign and deliver to the Lessor a certificate of delivery
in the form attached hereto as Exhibit 6. This certificate shall be in
addition to any certificates or acknowledgements that may be required by
the Supplier.
4.5 All risk of loss or damage to the Equipment shall as between the Lessor
and the Lessee pass to the Lessee when such risk passes from the Supplier
to the Lessor under the Supply Agreement.
4.6 Equipment already in the possession of the Lessee on the date of this
Agreement shall be deemed to be delivered to and accepted by the Lessee
pursuant to this Clause 4 unless otherwise agreed in writing by the
Lessor.
5 LEASE
5.1 The Lessor agrees to lease to the Lessee, and the Lessee agrees to lease
from the Lessor, the Equipment upon the terms set forth in this Agreement.
5.2 The term of this Agreement shall, unless earlier terminated pursuant to
the express provisions hereto, expire on the Expiry Date. The Lessee shall
have no right to request an extension of the Lease Period other than in
accordance with Clause 13.8.
5.3 The Lessee leases the Equipment "as is". The Lessor does not let or supply
the Equipment to the Lessee with or subject to any condition or warranty,
express or implied, whether statutory or otherwise, whether as to the
state of quality of the Equipment or as to description, repair or fitness
for any purpose or otherwise, and all such conditions and warranties are
hereby expressly excluded.
5.4 No third party (including any affiliate of the Lessor) has any authority
to bind the Lessor or make any representation or give any warranty or
guarantee on behalf of the Lessor.
5.5 The Lessor shall not be liable for any defects or deficiencies in the
Equipment or for any direct or consequential damages therefrom or for any
interruption in the Lessee's business occasioned by the Lessee's inability
to use the Equipment for any reason whatsoever. The Lessor shall under no
circumstances be liable to provide the Lessee with any replacement
equipment
5.6 The Lessor hereby assigns to the Lessee for the Lease Period any and all
guarantees, warranties and other rights (ownership excluded) which may
have been (or in the future are) given to the Lessor in respect of the
Equipment and which the Lessor has the right to assign. The Lessor shall
take all reasonable steps, at the cost and expense of the Lessee, to
obtain all necessary consents to so assign. To the extent that any rights
may not be assigned to the Lessee, such rights shall, as between the
Lessor and the Lessee, solely inure to the benefit of the Lessee, and the
Lessor shall, at the Lessee's sole expense and risk, enforce such rights
or give the Lessee a power of attorney to enforce in the Lessor's name.
7(19)
6 PAYMENTS
6.1 The Lessee shall make the Management Fee Payment on the Management Fee
Payment Date, as set forth in the Special Terms.
6.2 The Lessee shall make the Initial Rent Payments on the Initial Rent
Payment Dates, as set form in the Special Terms.
6.3 The Lessee shall make the Rent Payments on the Rent Payment Dates, as set
forth in the Special Terms.
6.4 The Rent Payments due on each Rent Payment Date shall consist of the sum
of (i) an amount equivalent to the percentage of the Purchase Price set
forth opposite such Rent Payment Date in Exhibit 7 under the heading "Per
cent of the Purchase Price in each Rent Payment" and (ii) an amount equal
to the interest that would have accrued (calculated at the Interest Rate
on the actual number of days elapsed on a 360 day/year basis) on the
outstanding balance of the Purchase Price during the period commencing on
the preceding Rent Payment Date (or, in the case of the first Rent
Payment, the Lease Commencement Date) set fourth in Exhibit 7 under the
heading "Outstanding balance in per cent of the Purchase Price".
6.5 Lessor shall not later than two (2) Business Days before the commencement
of each rent period in writing quote to Lessee the Interest Rate and the
Rent Payment for the subsequent period. Unless Lessee has raised any
objections to the quotation no later than five (5) Business Days after the
receipt of the quotation, it shall be deemed valid for the relevant rent
period.
6.6 The Lessee shall make any payment to be made to the Lessor under this
Agreement (by telex advice) in immediately available funds to the Account.
6.7 In event that the Lessor does not receive on the due date any amount due
under this Agreement, the Lessee shall pay to the Lessor on demand
interest on such amount from and including the due date to the date of
actual payment at the Default Rate.
6.8 Whenever a payment is due on a day which is not a Business Day, such
payment shall be made on the next Business Day.
6.9 The Lessee undertakes an unconditional obligation to make the Initial Rent
Payment and the Rent Payments as specified in this Clause 6. The Lessee
shall not be released from the obligation to pay any sum due hereunder by
reason of any defect or deficiency in the Equipment, or the Equipment
becoming wholly or partially unserviceable for any reason, including
reasons beyond the Lessee's control. All payments hereunder shall be made
by the Lessee free and clear of any right of set-off or counterclaim.
6.10 The Lessee shall pay all taxes and other governmental charges on any
payment hereunder, and the Lessee shall pay to the Lessor together with
any payment hereunder, the applicable amount of value added tax (if any)
at the then applicable rate thereon. If value added tax or any other tax
or charge is assessed on a payment already made hereunder, the Lessee
shall at the request of the Lessor promptly reimburse the Lessor for such
tax or charge.
6.11 All payments hereunder shall be made free and clear of all deductions or
withholdings whatsoever. In the event that the Lessee is required by law
to make any deduction or withholding on account of tax or otherwise from
any such payments, or any new taxes or levies are imposed on such
payments, or there is
8(19)
an increase in the existing taxes or levies on such payments, the sum due
from the Lessee shall be increased to the extent necessary to ensure that,
after such deduction or withholding is made, the Lessor receives a net sum
equal to the sum which the Lessor would have received had no deduction or
withholding been made.
7 USE, MAINTENANCE AND ALTERATIONS
7.1 The Lessee shall use the Equipment in a careful and proper manner and in
accordance with the Technical Documents and any insurance required
hereunder. The Lessee shall ensure that the Equipment is only used and
operated by properly skilled personnel. The Lessee shall not use or permit
the Equipment to be used in contravention of any law or regulation or for
any purpose for which the Equipment is not designed and suitable.
7.2 The Lessee shall not do or permit to be done anything which may expose any
part of the Equipment to penalty, forfeiture, impounding, detention or
destruction and not abandon any part of the Equipment.
7.3 The Lessee shall, at its own expense, keep the Equipment in good working
order and condition and make all necessary adjustments, repairs and
replacements. The Lessee shall procure that all parts of the Equipment are
properly serviced in accordance with recommendations of the manufacturer
thereof and the Technical Documents. The Lessee shall keep such records of
the maintenance and use of the Equipment as the Lessor from time to time
specifies.
7.4 The Lessee shall, at its own expense, obtain and keep in full force and
effect all permissions, licences and other authorizations which may at any
time be required in connection with the possession or use of the Equipment
and the due performance by the Lessee of its obligations under this
Agreement. The Lessee shall comply with all statutory and other official
obligations relating to the possession and use of the Equipment and shall
at its own expense add to or install with the Equipment any safety or
other equipment required by any applicable law or regulation to be so
added or installed for the lawful use or operation of the Equipment.
7.5 Subject as provided herein, the Lessee may not, without the prior written
approval of the Lessor, permanently remove any part from, or alter or make
additions to, the Equipment. Such written approval shall be without
responsibility on the part of the Lessor for any interference with the
operation of the Equipment or impairment of its value.
7.6 The Lessee shall solely bear the responsibility for theft of the
Equipment, and all damage to the Equipment, whether caused by criminal
actions or vandalism or otherwise arising. If the Equipment is lost or
damaged in whole or in part, the Lessee shall promptly replace or repair
the Equipment as appropriate. Any insurance proceeds received by the
Lessor in respect of any such loss or damage shall be paid to the Lessee
when the Lessor has received satisfactory evidence that the Equipment has,
or will be, replaced or repaired in accordance with this Agreement
7.7 All alterations and additions to the Equipment and all replacements of the
Equipment shall, unless otherwise agreed in writing by the Lessor,
immediately upon installation or replacement, as the case may be, become
the property of the Lessor.
9(19)
7.8 The Lessee shall keep the Equipment at the Location and may not remove it
to a different location without the prior written approval of the Lessor.
The Lessee may not sublease or part with possession of the Equipment
without the prior written approval of the Lessor.
8 INDEMNITIES
8.1 The Lessee shall be liable for any personal injury or death or property
damage arising from or related to the possession, use or operation of the
Equipment.
8.2 The Lessee shall indemnify and hold the Lessor harmless from and against
any and all liabilities, claims, proceedings, costs and expenses
whatsoever arising out of or in any way connected with any breach of this
Agreement by the Lessee, or the possession, use or operation of the
Equipment or arising on the grounds that any part of the Equipment or the
use thereof constitutes an infringement of any patent, copyright design or
similar right.
8.3 The Lessee shall be responsible for and reimburse the Lessor against all
taxes, duties and other charges levied or imposed against the Lessor or
the Lessee and relating to this Agreement or the Equipment except for
taxes on the Lessor's overall income.
8.4 The indemnities contained in this Clause 8 shall not extend to any loss to
the extent that such loss is caused by the wilful misconduct or gross
negligence of the Lessor or the failure by the Lessor to comply with this
Agreement.
8.5 The indemnities contained in this Clause 8 shall continue in full force
and effect notwithstanding the expiry of the Lease Period or the
termination of this Agreement.
9 INSURANCES
9.1 From the Delivery Date until the Equipment has been returned to the Lessor
or purchased by the Lessee hereunder, the Lessee shall purchase and
maintain an all-risk insurance covering loss, damage or destruction of the
Equipment in an amount equal to or in excess of the Termination Value from
time to time, and all other risks normally covered by an insurance of
equipment of the same kind, including third party liability and product
liability. Should an Event of Loss occur, the procedure set forth in this
Article 9 below will apply.
9.2 All insurances shall be placed with an international insurer with
recognized reputation and responsibility satisfactory to Lessor.
Furthermore, the insurances shall name the Lessor as the owner of the
Equipment and shall be made payable, in the case of policies covering loss
or damage to the Equipment, to the Lessor.
9.3 The Lessee shall before each renewal date of an insurance furnish to the
Lessor evidence that the insurance required to be maintained hereunder
remains in full force and effect. On request, the Lessee shall provide the
Lessor with all other information about, or documents regarding, the
insurances maintained in respect of the Equipment.
9.4 If the Lessee does not provide evidence that the insurance coverage
complies with this Agreement, the Lessor shall be entitled to take out
such insurance, and all costs therefor shall be reimbursed by the Lessee
on demand.
10(19)
9.5 The Lessee will not do, or omit to do, or permit to be done anything
whereby any required insurance would be rendered invalid or unenforceable
or the Equipment in any respect not covered by the required insurance.
9.6 As between Lessor and Lessee, it is hereby agreed that all insurance
proceeds received under policies required hereby, with respect to the
Equipment, will be applied as follows:
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, judgement, settlement, insurance proceeds or payments
and all instalments thereof. 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 reimbursement for the amount of
such award, judgement, settlement, insurance proceeds or payments actually
received by Lessor upon the fulfilment of Lessee's obligation to pay any
amount stipulated under Subarticle 9.7 hereof
9.7 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 Termination Value 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, with
any applicable reduction where insurance proceeds have been applied to pay
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 Lessors right, title and interest, if any, in
and to the Equipment (except software which Lessee takes possession of but
not title, as fully described under the heading Software License of the
Supply Agreement). The balance, if any, of such insurance proceeds
remaining thereafter will be paid to the order of Lessee.
9.8 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, judgement, settlement, insurance
proceeds or payments and all instalments thereof with respect to such
damage, to the extent received by Lessor and as provided in this Article
9.
9.9 Notwithstanding anything to the contrary contained in this Article 9, 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
11(19)
such part of the Equipment were in the condition and repair as required by
Article 7 hereof prior to such Event of Loss.
10 INFORMATION
10.1 At the request of the Lessor, the Lessee shall promptly furnish to the
Lessor.
(a) a detailed inventory of the Equipment, specifying the condition;
(b) all records of the maintenance and use of the Equipment;
(c) all other information in the Lessee's possession regarding the
Equipment, its use, location and condition;
(d) certified copies or other satisfactory evidence of certificates,
licences permits and authorizations necessary or desirable in
connection with the possession or use of the Equipment or the due
performance by the Lessee of its obligations under this Agreement;
(e) a written confirmation, signed by a duly authorized officer of the
Lessee, confirming that no Default is subsisting;
(f) budget and projections for the Lessee's operations during the
current calendar year; and
(g) other information specified in the Special Terms.
10.2 The Lessee shall send to the Lessor within thirty (30) days of the
completion of the preparation of, but in any event not later than six
months after the expiry of the financial year, the annual financial report
of the Lessee and each Security Provider for the preceding financial year.
The Lessee shall also send to the Lessor within thirty (30) days of the
completion of the preparation of the quarterly financial reports of
Lessee.
10.3 The Lessee shall forthwith notify the Lessor of the occurrence of a
Default and of any other event which might adversely affect the Lessee's
ability to perform any of its obligations under this Agreement, or the
ability of any Security Provider to perform any of its obligations under
the Security Document to which it is a party, (including in particular
fire, theft, logistical problems, strikes, breakdown of any item of the
Equipment), and provide the Lessor with full details of any steps which
the Lessee (or the relevant Security Provider) is taking, or is
considering taking, in order to remedy or mitigate the effect of the
Default or otherwise in connection with such events.
10.4 The Lessee shall promptly inform the Lessor of the expiry, or termination
of any licence, consent or authorization which the Lessee is obliged to
maintain under this Agreement and provide the Lessor with evidence of any
new or renewed licences, consents and authorizations, as they become
effective.
11 OWNERSHIP AND MARKING
11.1 The Equipment shall at all times be and remain the sole and exclusive
property of the Lessor. The Lessee shall at its own cost and expense
protect and defend the ownership of the Lessor against all claims, liens
and legal proceedings of creditors of the Lessee and other persons, and
keep the Equipment free and clear from all claims, liens and proceedings
except for liens and charges created by or through
12(19)
the Lessor. The Lessee shall have no right, title or interest in or to the
Equipment, except as expressly set forth in this Agreement. The Lessee
shall not hold itself out as owner of the Equipment and the Lessee may not
in its accounts or in any other document treat, or account for, the
Equipment as assets of the Lessee.
11.2 On each part of Equipment there shall at all times be affixed, and shall
not be removed or covered up, a fireproof plate or another permanent
marking, specifically approved by the Lessor bearing the inscription in
the Language: "This equipment is owned by AB LM ERICSSON FINANS". The
Lessee shall ensure that such name plates are not, during the term of this
Agreement at any time obscured or removed.
12 EVENTS OF DEFAULT
12.1 The following events shall constitute Events of Default:
(a) the Lessee shall fail to pay any amount due under this Agreement
within three (3) Business Days after notice thereof has been given
to the Lessee;
(b) the Lessee shall fail to perform or observe any obligation, covenant
or agreement to be performed or observed by it hereunder (other than
the obligation to pay any amount due) and such failure shall, if
capable of being remedied, continue unremedied for a period of ten
(10) Business Days after notice of such breach has been given to the
Lessee;
(c) this Agreement for any reason shall become wholly or partially
unenforceable as against the Lessee;
(d) the Lessee or any Security Provider is or becomes insolvent or makes
a general assignment for the benefit of, or a composition with, its
creditors or any steps are taken or legal proceedings are started
for the bankruptcy or winding-up of the Lessee or any Security
Provider or for the appointment of a receiver, administrator or
similar officer of the Lessee or any Security Provider or all or any
of its assets;
(e) any officer of any court or any other person takes any step towards
attaching, sequestrating, requisitioning, seizing or levying
distress on any part of the Equipment, or any part of the Equipment
is in fact so attached, sequestrated, requisitioned, seized or
distrained upon;
(f) the Lessee shall do or permit any act or thing which may adversely
affect the ownership or the rights of the Lessor in the Equipment or
any part thereof;
(g) the Lessee or any Security Provider shall discontinue all or a
substantial part of its business operations or transfer or dispose
of all or a material part of its assets;
(h) any representation or warranty made or repeated by the Lessee herein
shall prove to be incorrect or misleading in any respect deemed
material by the Lessor;
(i) the Lessee or any Security Provider shall not pay any indebtedness
when due or any indebtedness of the Lessee or any Security
13(19)
Provider shall become prematurely due or placed on demand as a result of
an event of default (howsoever described);
(j) the Equipment, the Lessee, any Security Provider, the business of
the Lessee or any Security Provider or any substantial part thereof
shall become nationalized;
(k) the Equipment shall become subject to a lien, charge or encumbrance
of any kind which is not created by or by or through the Lessor;
(l) any event or series of event shall occur which, in the reasonable
opinion of the Lessor, might have a materially adverse effect on the
business or financial condition of the Lessee or any Security
Provider, or on its ability to fully perform its obligations under
this Agreement or the Security Document to which it is a party, as
the case may be;
(m) any decision or agreement being made or entered into to merge or
consolidate the Lessee or any Security Provider, or its business
with any other company or business;
(n) any Security Document shall not constitute a legally valid and
enforceable security or guarantee, as the case may be;
(o) the realizable value of the Collateral shall be less than the
Termination Value; or
(p) other Event(s) of Default specified in the Special Terms.
12.2 Upon the occurrence of any Event of Default and at any time thereafter so
long as the same shall be continuing, the Lessor may, at its option,
declare this Agreement to be in default and the Lessor may, in addition to
any other remedies provided herein or by applicable law, exercise one or
more of the following remedies, as the Lessor shall in its sole discretion
elect:
(a) enter the premises of the Lessee or any other place where the
Equipment may be located and repossess the Equipment, disconnecting
and separating all thereof from any other property and using all
means necessary to do so;
(b) terminate this Agreement, which termination shall be effective
immediately upon the Lessor having given notice of termination to
the Lessee, whereupon the Lessee's right to possess and use the
Equipment shall immediately cease;
(c) recover all Rent Payments and other payments due as of the date of
such default;
(d) request payment of the Termination Value for the Equipment, upon
payment of which the Lessor shall take all steps necessary for the
transfer of title to and ownership of the Equipment (except
software, which the Lessee takes possession of but not title to as
described in the Supply Agreement) "as is" and "where is" to the
Lessee;
(e) demand compensation against any loss, damage, cost, expense or
liability which the Lessor may sustain or incur as a consequence of
the occurrence of the Event of Default or in connection with the
14(19)
enforcement or preservation of any rights under this Agreement or
any Security Document,
12.3 The Lessee hereby waives any right of action against the Lessor arising
from the removal, repossession or retention of the Equipment following an
Event of Default. The Lessee undertakes to provide the Lessor with all
necessary assistance to perform the repossession of the Equipment
following an Event of Default
12.4 If the Lessee fails to perform any of its obligations under this Agreement
and continues to do so thirty (30) days from receipt of notice from the
Lessor or when an Event of Default has occurred and is continuing, the
Lessor may itself perform such obligations for the account of the Lessee
without thereby waiving any rights hereunder, and any amount paid or
expense incurred in connection with such performance shall be reimbursed
by the Lessee on demand.
13 PURCHASE OPTION
13.1 The Lessor hereby grants to the Lessee an option to purchase the Equipment
(except software, which the Lessee takes possession of but not title as
described in the Supply Agreement) on the terms and conditions set out in
this Clause 13 and upon exercise of such option agrees to transfer to the
Lessee or its nominee title to and ownership of the Equipment
13.2 The Lessee can exercise its purchase option on each Option Date, by paying
on the relevant Option Date the relevant Option Price to the Lessor, as
set forth in the Exhibit 2.
13.3 The right of the Lessee to exercise its purchase option is subject to the
following conditions:
(a) the Lessor shall have received, not later then three (3) months
prior to the relevant Option Date written notice of the Lessee's
intention to exercise the option; and
(b) no Default shall have occurred and be continuing when notice is
given or occur prior to the relevant Option Date or as a result of
the Lessee exercising the purchase option.
13.4 Once given, notice of the Lessee's intention to exercise the purchase
option shall be irrevocable.
13.5 When the Lessor has received the Option Price and all other amounts due
hereunder on the relevant Option Date, title to the Equipment (except
software which the Lessee takes possession of but not title as described
in the Supply Agreement) shall vest in the Lessee.
13.6 The Equipment is sold "as is" and "where is". The Lessor warrants that,
immediately prior to transferring title to the Equipment, the Lessor will
have good title to the Equipment free from any liens, charges or
encumbrances created by or through the Lessor other than such that have
been agreed to by the Lessee. Except as aforesaid, the Lessor makes no
warranties, express or implied, whether statutory or otherwise, whether as
to the state of quality of the Equipment or as to description, repair or
fitness for any purpose or otherwise, and all such warranties are hereby
expressly excluded.
13.7 The Lessee shall pay to the Lessor on demand all costs and expenses
incurred by Lessor in connection with the sale of the Equipment under this
Clause 13.
15(19)
13.8 Should the Lessee not exercise the purchase option, the Lessee may request
an extension of the Lease Period at market conditions to be agreed upon
between the parties. Such request shall be furnished to the Lessor in
writing six (6) months prior to the last day of the Lease Period. Should
the parties not have agreed on the conditions for the extension on the
last day of the Lease Period then the Equipment shall be returned in
accordance with Clause 14.
14 RETURN OF THE EQUIPMENT
14.1 On the last day of the Lease Period, the Lessee shall, unless the Lessee
has acquired title to the Equipment at its own risk and expense, forthwith
return the Equipment together with the Technical Documents unencumbered to
the location the Lessor designates. The Equipment shall be returned in
good repair, only ordinary wear and tear resulting from proper use in
compliance with this Agreement excepted. The Lessee shall have no right to
be reimbursed for any improvement of the Equipment.
14.2 The Lessee shall be responsible for the proper packing of the Equipment
and for shipment and delivery (including payment of freight and insurance)
of the Equipment to the place designated by the Lessor.
15 REPRESENTATIONS AND WARRANTIES
15.1 The Lessee represents and warrants to the Lessor that:
(a) it is duly organized and validly existing under the laws of the
relevant jurisdiction as a limited liability company or other kind
of business entity as described in the recital to this Agreement,
with full power, authority and legal right to carry on its business
as presently conducted, to own its property and to execute, and to
perform all of its obligations under, this Agreement, and all action
required to authorize such execution and performance has been duly
taken;
(b) its operations, and the execution and performance of this Agreement,
have not and will not violate any applicable law or regulation or
contravene any provision of its constituent documents;
(c) all governmental or other licences, consents and authorizations
necessary or desirable for the execution and performance of this
Agreement have been obtained and are in full force and effect;
(d) this Agreement constitutes legally valid and binding obligations of
the Lessee. enforceable in accordance with its terms;
(e) it is not in breach of or in default under any agreement to which it
is a party or by which it or any of its assets is bound, which
breach or default might have a materially adverse affect on the
business or financial condition of the Lessee;
(f) no litigation, arbitration or administrative proceedings are current
or pending or, to its knowledge threatened, which might, if
adversely determined, have a materially adverse effect on its
business or financial condition, or its ability to perform its
obligations under this Agreement;
16(19)
(g) no Default is subsisting;
(h) the latest annual financial report of the Lessee has been prepared
in accordance with law and generally accepted accounting principles
in the relevant jurisdiction and represents fairly its financial
condition;
(i) all information provided to the Lessor in connection with this
Agreement is true, complete and accurate in all respects and the
Lessee is not aware of any fact or circumstance which has not been
disclosed to the Lessor and which might, if disclosed, be reasonably
expected to adversely affect the decision of a person considering
whether or not to enter into an agreement of this type with the
Lessee;
(j) there are no deductions or withholdings whatsoever, which have to be
made by the Lessee in respect of any payments hereunder;
(k) the copy of the Supply Agreement provided to the Lessor is true,
correct and complete;
(l) the Supply Agreement is in full force and effect and constitutes
legally valid and enforceable obligations of both parties thereto;
(m) it has fully complied with, and duly performed, its obligations
under the Supply Agreement;
(n) other representations and warranties specified in the Special Terms.
15.2 The representations and warranties set out in Clause 15.1 shall survive
the execution of this Agreement and shall be deemed to be repeated on the
Delivery Date, on the Initial Rent Payment Date, on the Lease Commencement
Date and on each Rent Payment Date, with reference to the facts and
circumstances then existing, as made at each such time.
16 RIGHTS, REMEDIES AND WAIVERS
16.1 The rights and remedies of the Lessor in relation to any misrepresentation
or breach of warranty on the part of the Lessee shall not be prejudiced by
any investigation by or on behalf of the Lessor or any of its affiliates
into the affairs of the Lessee, by the execution or the performance of
this Agreement or by any other act or thing which may be done by or on
behalf of the Lessor or any of its affiliates in connection with this
Agreement.
16.2 No course of dealing or waiver by the Lessor in connection with any
provision in this Agreement shall impair any right, power or remedy of the
Lessor with respect to any other provision, or be construed to be a waiver
thereof.
16.3 No course of dealing and no delay in exercising, or omission to exercise,
any right, power or remedy accruing to the Lessor upon any default under
this Agreement or any other agreement shall impair any such right power or
remedy or be construed to be a waiver thereof or an acquiescence therein.
Nor shall the action of the Lessor in respect of any such default, or any
acquiescence by it therein, affect or impair any right, power or remedy of
the Lessor in respect of any other default.
17(19)
17 MISCELLANEOUS
17.1 The Lessor shall have the right to assign as security its rights under
this Agreement in whole or in part, and to pledge the Equipment as
security for any financing obtained by it. The Lessee undertakes to
respect and comply with any such assignment or pledge and to do all things
necessary or desirable to perfect and evidence any such assignment or
pledge.
17.2 Without prejudice to the Lessor's right to create a security over its
rights hereunder or over the Equipment, the Lessor may assign absolutely
its rights and obligations hereunder without the consent of the Lessee,
provided the Equipment is sold simultaneously to the assignee. The Lessee
shall at the request of the Lessor to take all action necessary or
desirable in connection with any such assignment and sale. The Lessee may
not without the prior written consent of the Lessor assign any rights or
obligations hereunder.
17.3 Each party shall appoint an authorized representative who shall be
entitled to deal with all makers arising under this Agreement and sign any
certificate hereunder or under the Supply Agreement Each authorized
representative may by notice in writing to the representative of other
party appoint a new authorized representative in his own place or as an
alternate for him.
17.4 All information, notices, communications, opinions and the like required
to be given by the Lessee or to be delivered to the Lessor hereunder, if
not in the English language, shall be accompanied by an English
translation. The English version of all such information, notices,
communications, opinions and other documents shall as between the parties
prevail in the event of any conflict with the non-English versions
thereof.
17.5 All notices and other communications under this Agreement shall be in
writing and either delivered by hand or sent by telex, telefax, registered
first-class mail or courier, in each case to the address, telex or telefax
number of the intended recipient as set out in the Special Terms or as
subsequently notified to the other party in accordance herewith. In case
of communication by telex or telefax, the original of the communication
shall be sent by first-class mail to the recipient. A notice delivered by
hand or sent by courier shall be effective when delivered at the address
specified for the recipient. A notice given by any other means shall be
effective when received by the recipient. A notice received on a
non-working day in the place of receipt or after office hours shall be
deemed to have been delivered on the following working day.
17.6 This Agreement supersedes all other agreements, oral or written, with
respect to the subject matter hereof, and contains the entire agreement
between the Lessor and the Lessee with respect to the transactions
contemplated hereunder.
17.7 The Lessee and the 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
purpose of this Agreement.
17.8 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 Clause 17.8 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.
18(19)
17.9 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 Subarticle
(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 Subarticle 17.9
the Lessee shall pay to the Lessor an amount equivalent to the Termination
Value.
If and when Lessor has received full payment under this Subarticle 17.9 in
respect of the Equipment, title to the Equipment (except Software, which
Lessee takes possession of but not title as described the Supply
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 8 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".
17.10 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.
(The following additional provisions shall only apply to this Agreement to
the extent provided in the Special Terms.)
17.11 At the request of the Lessor, the Lessee shall promptly sign and deliver
to the Lessor the required number of bills of exchange in the Language. In
the bills of exchange the date and the amount shall be left open. The
bills of exchange shall be in the form attached hereto as Exhibit 8. If
any amount hereunder is not paid when due, the Lessor shall be authorized
to date one or several of such bills of exchange, fill in the amount of
the overdue payment and to use such ▇▇▇▇(s) of exchange to recover the
overdue payment.
17.12 Without advance notice the Lessor (or its nominee) shall at any time
during working hours have the right to enter the premises of the Lessee or
any other place where the Equipment may be located for the purpose of
inspecting the same or observing its use. Upon the execution of this
Agreement the Lessee shall
19(19)
provide the Lessor with an authorization to this effect in the Language,
substantially in the form of Exhibit 9.
17.13 Upon the execution of this Agreement the Lessee shall provide the Lessor
with an unconditional authorization for the Lessor (or its nominee) to
repossess the Equipment in the Language. Such authorization shall be
substantially in the form attached hereto as Exhibit 10.
18. APPLICABLE LAW AND JURISDICTION
18.1 This Agreement shall in all respects be governed by and construed in
accordance with Swedish law.
18.2 Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof, shall be
finally settled by arbitration in accordance with the Rules of the
Arbitration Institute of the Stockholm Chamber of Commerce. The arbitral
tribunal shall be composed of three arbitrators. The proceedings shall
take place in Stockholm and be conducted in the English language.
18.3 Notwithstanding Clause 18.2, the Lessor shall be entitled to institute
proceedings for the payment of any amount due hereunder, to enforce its
rights hereunder to inspect the Equipment, to repossess the Equipment and
to enforce bills of exchange in any competent court of law.
Exhibit 1 Tranche 1 1(3)
1. UK AXE 1O AS36/43 node Unit Total
AXE10 core (inc AS36 & AS43 s/w) (pound) 618,811 2 618,811
BTC7 Interconnect trunk (pound) 2,805 52 145,860
ITUP/ISUP trunk with echo (pound) 11,944 20 238,880
ITUP/ISUP trunk without echo (pound) 2,805 30 84,150
BT C7 intermachine trunk (pound) 4,511 16 72,176
DASS2 trunk (pound) 4,400 16 70,400
DPNSS trunk (via sig con) (pound) 7,049 8 56,392
C7 signalling pairs (pound) 3,995 12 47,940
AXE 10 spares set (pound) 77,569 1 (pound) 77,569
AXE 10 documentation Included in core price
SMAS hardware (pound) 81,000 1 81,000
SMAS software (pound) 180,000 1 180,000
Access Screening Service (pound) 160,000 1 60,000
Billing interface processor (pound) 84,410 1 (pound) 84,410
Total (pound)1,917,588
6% discount (pound) 115,055
UK Grand total (pound)1,802,533
Exhibit 1 Tranche 1 2(3)
2. Sweden AXE 10 12.3 node
Unit Total
AXE 10 core (inc 12.3 software &
spare parts kit) SEK 7,822,O00 1 7,822,000
Initial 4K group switch SEK 1,040,000 1 1,040,000
Transit application package SEK 2,200,000 1 2,200,000
2Mb/s trunk including Echo
cancellor SEK 114,000 16 1,824,000
2Mb/s trunk excluding Echo
cancellor SEK 26,600 39 1,037,400
Signalling routes SEK 34,000 16 544,000
ISDN 2Mb/s PRA SEK 3O,000 5 150,000
Documentation SEK 5OO,000 1 500,000
Remote subscriber Multiplexer (RSM) SEK 72,500 1 72,500
(X/FN-95;293)
Total SEK 15,189,900
6% discount SEK 911,394
Sweden Grand total SEK 14,278,506
Exhibit 1 Tranche 1 3(3)
3. Finland Mini AXE10 12.3
Unit Total
AXE 10 core FIM 1,129,700 1 1,129,700
Remote subscriber stage (RSS) FIM 192,500 1 192,500
Basic AS33 software FIM 810,000 1 810,000
National ISUP signalling software FIM 125,000 1 125,000
International ISUP signalling software FIM 250,000 1 250,000
ISDN PRA software FIM 60,000 1 60,000
ISDN BRA software FIM 130,000 1 130,000
Creation of basic software and data FIM 68,000 1 68,000
Creation of Nat. and Intl. ISUP software
and data FIM 50,000 1 50,000
Creation of ISDN basic services,
software and data FIM 50,000 1 50,000
Power (main supply with back up) FIM 119,600 1 119,600
DC/AC convertors FIM 12,000 2 24,000
MDF and DDF FIM 18,350 1 18,350
AXE 10 documentation Included in core price
Total FIM 3,027,150
6% discount FIM 181,629
Finland Grand total FIM 2,845,521
1(1)
EXHIBIT 2
OPTION DATES AND PRICES
Rent Payment Date Option Price in per cent of the
----------------- -------------------------------
Purchase Price
--------------
8 71,63
12 40
16 25,81
19 14,12
1(1)
EXHIBIT 3
TERMINATION VALUE
Rent Payment Date Termination Value in
----------------- --------------------
percent of the
--------------
Purchase Price
--------------
1 100.00
2 100.00
3 100.00
4 100.00
5 93.19
6 86.20
7 79.01
8 71.63
9 64.04
10 56.24
11 48.23
12 40.00
13 36.60
14 33.10
15 29.51
16 25.81
17 20.02
18 18.12
19 14.12
20 10.00
If the Termination Value becomes due and payable on a Rent Payment Date,
it shall be the amount set out above. If the Termination Value becomes due
and payable on any other day, it shall be the amount set out above for the
preceding Rent Payment Date plus interest on such amount at the Interest
Rate from the preceding Rent Payment Date to the day when the Termination
Value becomes due and payable. If the Termination Value is not paid on the
due date, Default Interest will be payable on the Termination Value in
accordance with Clause 6.7.
1(3)
EXHIBIT 5
CONSENT AND AGREEMENT
relating to
a supply agreement made between Ericsson Ltd., UK (the "supplier") and RSL
Com Europe Ltd., UK (the "Assignor") and dated, December 6, 1995 (the
"Supply Agreement")
and
a lease agreement made between AB ▇ ▇ Ericsson Finans (the "Assignee") as
lessor and the Assignor as lessee and dated April 10, 1996 (the "Lease
Agreement").
Terms defined in the Lease Agreement and not otherwise defined herein
shall bear the same meaning when used herein.
1. Pursuant to Clause 3.1 of the Lease Agreement, the Assignor has
assigned to the Assignee all of the Assignor's rights and interest
in respect of the Equipment under the Supply Agreement, including in
particular the right to acquire title to and ownership of the
Equipment Pursuant to Clause 3.2 of the Lease Agreement, the
Assignee has assumed certain of the Assignor's obligations under the
Supply Agreement, including in particular the obligation to pay the
Purchase Price. The Supplier hereby acknowledges notice of and
consents to the aforementioned assignment and assumption and to all
terms of Clause 3 of the Lease Agreement
2. If the Lease Commencement Date has not occurred on or prior to the
Final Availability Date, the Assignee shall under Clause 3.6 of the
Lease Agreement be entitled to terminate the Lease Agreement by
giving written notice to the Supplier and the Assignor. Following
such notice, the Supplier agrees that the Supply Agreement shall
apply between the Assignor and the Supplier as if this Consent and
Agreement had never been executed and the Assignee shall have no
rights or obligations under the Supply Agreement.
3. The Supplier hereby acknowledges and accepts that the Assignor shall
prior to the Lease Commencement Date, in accordance with the Lease
Agreement and the authorities and instructions from time given by
the Assignee, be entitled to exercise certain of the rights under
the Supply Agreement assigned to the Assignee.
2(3)
4. The Supplier hereby acknowledges and accepts the assignment
contained in Clause 5.6 of the Lease Agreement, according to which
any and all guarantees, warranties and other rights (ownership
excluded) given in respect of the Equipment under the Supply
Agreement and assigned to the Assignee absolutely (as described in
paragraph 1 hereof) shall for the Lease Period be assigned to the
Assignor. Following written notice from the Assignee that the Lease
Period has expired or terminated otherwise than by the Assignor
purchasing the Equipment, the aforementioned assignment shall
immediately terminate.
5. Amendments to the Supply Agreement; [ ]
6. All notices and other communications under this consent and
Agreement shall be in writing and either delivered by hand or sent
by telex, telefax, registered first-class mail or courier, in case
of the Assignor or the signer to the address, telex or telefax
number set out in the Lease Agreement, and in case of the Supplier
to the address, telex or telefax number set out in the Supply
Agreement, or as subsequently notified by any party to the other
parties in accordance herewith. In case of communication by telex or
telefax, the original of the communication shall be sent by
first-class mail to the recipient. A notice delivered by hand or
sent by courier shall be effective when delivered at the address
specified for the recipient. A notice given by any other means shall
be effective when received by the recipient. A notice received on a
non-working day in the place of receipt or after office hours shall
be deemed to have been delivered on the following working day.
7. This Consent and Agreement shall in all respects be governed by and
construed in accordance with Swedish law.
8. Any dispute, controversy or claim arising out of or in connection
with this Consent and Agreement, or the breach, termination or
invalidity thereof, shall be finally settled by arbitration in
accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce (the "Institute"). The arbitral
tribunal shall be composed of three arbitrators. Unless the parties
agree otherwise all arbitrators shall be nominated by the Institute.
The proceedings shall take place in Stockholm and be conducted in
the English language.
9. The parties agree that in the event that there are, at the time any
party desires to initiate arbitration proceedings against any other
party hereunder, pending or contemplated proceedings under the Lease
Agreement or the Supply Agreement, all proceedings shall be
cumulated. If
3(3)
proceedings are pending under the Lease Agreement or the Supply
Agreement, the proceedings hereunder shall be referred to the
arbitral tribunal for such pending proceedings, unless the tribunal
decides that a cumulation is not expedient. If no proceedings are
pending, one arbitral tribunal shall be nominated for all
proceedings. All arbitrators in such tribunal shall, unless the
parties agree otherwise, be nominated by the Institute.
Date: 24/4/96 Date: 10/4/96
ERICSSON LTD. RS CM EUROPE LTD.
/s/ /s/ RS CM Europe Ltd.
--------------------------- --------------------------
Date: 10 April -96
AB LM ERICSSON FINANS
/s/ AB LM Ericsson Finans
---------------------------
EXHIBIT 6
CERTIFICATE OF DELIVERY/ACCEPTANCE*
LEASE AGREEMENT dated
We hereby confirm that the equipment is duly delivered to/accepted
by* us in accordance with and subject to the provisions of the
Supply Agreement, and that the conditions of such equipment in all
respects complies with the provisions of the Lease Agreement.
The equipment ______________________________________________________
was delivered to/Accepted by* us on ________________________________
in accordance with the invoice(s) No. ______________________________
_______________________ _______________________
(place) (Date)
RSL COM EUROPE LTD
_________________________
(Signature)
* Delete as appropriate.
1(1)
EXHIBIT 7
RENT PAYMENTS
(Lease Commencement Date 0)
Percent of the
Purchase Price Outstanding balance in
Rent Payment Date in each Rent Payment percent of the Purchase Price
----------------- -------------------- -----------------------------
1 0 100
2 0 100
3 0 100
4 0 100
5 6,81 93,19
6 6,99 86,20
7 7,19 79,01
8 7,38 71,63
9 7,59 64,04
10 7,80 56,24
11 8,01 48,23
12 8,23 40,00
13 3,40 36,60
14 3,50 33,10
15 3,59 29,51
16 3,69 25,81
17 3,79 22,02
18 3,90 18,12
19 4,01 14,12
20 4,12 10,00
EXHIBIT 11
DATED MAY ▇▇▇▇
▇▇▇ COM EUROPE LIMITED
to
AB LM ERICSSON FINANS
DEBENTURE
THIS DEBENTURE is made the day of May 1996
BETWEEN:
(1) RSL COM EUROPE LIMITED (registration number 3040192) whose registered
office is at ▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("the
Company");
and
(2) AB LM ERICSSON FINANS, a Swedish limited liability company ("the
Chargee").
NOW THIS DEED WITNESSETH as follows:
1. The Company hereby:
1.1 COVENANTS with the Chargee to pay and discharge as and when the same
fall due all its indebtedness and other obligations to the Chargee both present
and future and howsoever arising whether solely or jointly with any other
person and whether as principal or surety including interest thereon at such
rate as may be agreed in writing from time to time between the Company and the
Chargee and whether before or after the execution of this Debenture and together
also with all charges costs and expenses payable in connection therewith
(collectively "the Secured Liabilities"); and
1.2 with full title CHARGES in favour of the Chargee by way of floating
charge the whole of its undertaking and all its property assets and rights
(collectively "the Charged Property") as a continuing security for the payment
and discharge of the Secured Liabilities.
2. Power is hereby reserved to the Company to create or leave outstanding any
Debenture, fixed charge or other security of whatsoever kind over the whole or
any part of the Charged Property but not a floating charge, such Debenture,
charge or security but not a floating charge to rank in point of security in
priority to the floating charge hereby created and the Chargee agrees at the
cost of the Company to execute such documents as the Company may reasonably
request to give effect hereto.
3. The moneys hereby secured shall become payable and all rights of the
Company to deal for any purpose whatever with the Charged Property or any part
thereof shall forthwith cease on the happening of any of the following events:-
3.1 if an order is made or an effective resolution passed for winding up
the Company
3.2 if a petition is presented or an order is made against the Company for
the appointment of an administrator
3.3 if the Company stops payment or ceases to carry on its business or
substantially the whole of its business or threatens to cease to carry on the
same or if the Company without the prior consent in writing of the Chargee shall
sell assign, charge, hire, lease or part with or share possession of or
otherwise dispose of the Charged Property or any part thereof or any interest of
the Company therein or purport so to do
3.4 if any encumbrancer takes possession or a receiver administrative
receiver or manager is appointed of all or any part of the property of the
Company;
3.5 if the Company makes any agreement or composition with its creditors
4. Further, the Chargee may under the hand of any of its officers or managers
or by deed appoint a Receiver or Receivers of the whole or any part of the
Charged Property only if at the time of such appointment a petition shall have
been presented applying for an administration order to be made in respect of the
Company.
A Receiver so appointed may (subject to statute) be removed in like
manner.
5. Every such Receiver shall:-
5.1 be the agent of the Company (which shall be solely responsible for his
acts defaults expenses and remuneration);
5.2 be remunerated at such rate as the Chargee shall determine;
5.3 have (and if more than one may exercise severally or jointly) the
powers set out in Schedule 1 to the Insolvency ▇▇▇ ▇▇▇▇;
5.4 (subject to the discharge of liabilities having priority to the
Secured Liabilities and save insofar as otherwise directed by the Chargee) apply
all money received by him first in the payment and discharge of his borrowings,
expenses, other liabilities and remuneration secondly, in or towards discharge
of the Secured Liabilities in such order as the Chargee may require and thirdly
in payment of any surplus to the Company or other person entitled thereto.
6. 6.1 This Debenture shall be in addition to and shall be independent of
every other security which the Chargee may at any time hold for any of the
liabilities of the Company to the Chargee. No prior security held by the Chargee
over the whole or any part of the Charged Property shall merge in the security
hereby constituted.
6.2 This Debenture shall remain in shall force and effect as a continuing
security until discharge by the Chargee.
6.3 Noting contained in this Debenture is intended to, or shall operate so
as to, prejudice or affect any ▇▇▇▇, note, guarantee, Debenture, pledge, charge
or other security of any kind whatsoever which the Chargee may have for the
liabilities of the Company or any of them or any right, remedy or privilege of
the Chargee thereunder.
7. The Chargee shall not nor shall any Receiver appointed as aforesaid by
reason of him or the Receiver entering into possession of the Charged Property
or any part thereof be liable to account as chargee in possession or be liable
for any loss on realization or for any default or omission for which a chargee
in possession might be liable but every Receiver duly appointed by the Chargee
under the powers in that behalf hereinbefore contained shall be deemed to be the
agent of the Company for all purposes and shall as sub-agent for all purposes be
deemed to be in the same position as a Receiver duly appointed by a chargee
under the Law of Property ▇▇▇ ▇▇▇▇ and every such Receiver and the Chargee shall
be
entitled to all the rights powers privileges and immunities by the said Act
conferred on chargees and receivers when such receivers have been duly appointed
under the Act
8. No purchaser chargee or other person a company dealing with the Chargee
or the Receiver or their respective agents shall be concerned to enquire whether
the moneys hereby secured have become payable or whether the power which the
Receiver is purporting to exercise has become exercisable or whether any money
remains due on this Debenture or to see to the application of any money paid to
the Chargee or to such Receiver
9. The chargee and every Receiver attorney manager agent or other person
appointed by the Chargee hereunder shall be entitled to be indemnified out of
the Charged Property on a full indemnity basis in respect of all liabilities
and expenses incurred by him in the execution or purported execution of any of
the powers authorities or discretions vested in him pursuant to these conditions
and against all actions proceedings costs claims and demands in respect of any
matter or thing done or omitted in anywise relating to the Charged Property or
in connection with the perfection or enforcement or attempted enforcement of
the security hereby constituted or any other security held by the Chargee for
the liabilities of the Company to the Chargee or any guarantee to the Company in
respect thereof and the Chargee and any such Receiver may retain and pay all
sums in respect of the same out of any moneys received under the powers hereby
conferred
10. A notice may be served by leaving it at or by sending it through the post
to the registered office of the Company or to the Chargee at the address
hereinbefore set out (as the case may be) and any notice posted shall be deemed
to have been served at the expiration of seventy-two hours after it has been
posted and in proving service of such notice it shall be sufficient to prove
that the envelope containing the same was properly addressed stamped and posted
11. This Debenture shall be governed by and construed in accordance with
English law, and the Company hereby irrevocably submits to the non-exclusive
jurisdiction of the English courts.
12. Each of the provision contained in this Debenture shall be severable and
distinct from one another and if at any time any one or more of such provisions
is or becomes invalid, illegal or unenforceable, the validity, the legality and
unenforceability of each of the remaining provision of this Debenture shall not
in any way be affected, prejudiced or impaired thereby.
13. The Chargee shall have a full and unfettered right to assign the whole or
any part of the benefit of this Debenture and the expression "the Chargee"
wherever used herein shall he deemed to include the assignees and other
successors, whether immediate or derivative, of the Chargee, who shall be
entitled to enforce arid proceed upon this Debenture in the same manner as if
named herein. The Chargee shall be entitled to impart any information concerning
the Company to any such assignee or other successor or any participant or
proposed assignee, successor or participant.
14. 14.1 Any reference herein to any statute or to any provision of any
statute shall be construed as a reference to any statutory modification or
re-enactment thereof and to any regulations or orders made thereunder and from
time to time in force.
14.2 The Clause headings shall not affect the construction hereof.
15. The Company hereby certifies that its creation by this Debenture in favour
of the Chargee does not contravene any of the provisions of its Memorandum and
Articles of Association
IN WITNESS whereof the Company and the Chargee have executed this deed the day
and year first above written.
THE COMMON SEAL of )
RSL COM EUROPE LIMITED )
was hereunto affixed in )
the presence of: )
Director /s/ [ILLEGIBLE]
Secretary
SIGNED as a DEED by )
AB LM ERICSSON FINANS )
acting by )
)
Director /s/ [ILLEGIBLE]
Director /s/ [ILLEGIBLE]
