Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 1
As of August 14, 1996
Global Link Teleco Corporation
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
General Counsel
Global Telecommunication Solutions, Inc.
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
General Counsel
Re: Agreement, dated January 18, 1996 (the "Agreement"), by and between Peoples
Telephone Company, Inc., a New York corporation ("Peoples"), and Global
Link Teleco Corporation, a Delaware corporation ("Global Link")
Ladies and Gentlemen:
Reference is made to the captioned Agreement pursuant to which
Peoples and Global Link agreed to settle certain obligations and indebtedness
between them. In accordance with the provisions of the Agreement, a "Second Cash
Payment" in the amount of $500,000, together with interest thereon at the rate
of eight percent (8%) per annum, was due and payable by Global Link to Peoples
on June 28, 1996. The obligations and indebtedness of Global Link to make timely
payment of the Second Cash Payment pursuant to the provisions of the Agreement
have been absolutely and unconditionally guaranteed by Global Telecommunication
Solutions, Inc. ("GTS"), pursuant to the provisions of that certain Guaranty
Agreement, dated as of January 19, 1996 (the "Guaranty"), from GTS in favor of
Peoples. As of the date hereof, Global Link continues in default of the payment
of the Second Cash Payment, together with interest as aforesaid, all of which
was due and payable on June 28, 1996. Global Link and GTS have requested that
Peoples agree to waive such default and restructure the payment of the Second
Cash Payment, together with interest thereon as aforesaid, on the terms more
particularly set forth herein. Capitalized terms used herein and not defined
herein shall have the meanings given them in the Agreement.
Subject to the acceptance by Global Link and GTS of each of the
terms and conditions hereinafter set forth, Peoples hereby agrees to waive
Global Link's default in the payment of the Second Cash Payment on and as of
June 28, 1996, together with interest thereon.
The foregoing waiver is expressly limited to the matters stated
herein and shall not be deemed to constitute a waiver of or consent to the
non-compliance by Global Link or GTS with any other term or provision of the
Agreement or the Guaranty, nor shall it be deemed, except as expressly set forth
herein, to extend to or affect compliance by Global Link or GTS with any other
term or provision of the Agreement or the Guaranty.
By your acceptance of the terms of this letter by signing this
letter in the spaces provided therefor below, each of Global Link and GTS hereby
agree with Peoples as follows:
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 2
1 Global Link and GTS hereby covenant and agree that the Second Cash Payment,
together with accrued and unpaid interest thereon, shall be evidenced by
and shall be due and payable in accordance with the terms of a Promissory
Note, duly executed and completed by Global Link, substantially in the form
of Exhibit A attached hereto and made a part hereof (the "Second Cash
Payment Note"). An immediate payment of principal in the amount of $100,000
on the Second Cash Payment Note shall be a condition precedent to the
effectiveness of this waiver letter.
2. The Guaranty Agreement is hereby amended to guarantee, in addition to all
obligations presently guaranteed thereby, the full and timely performance
by Global Link of all of the obligations and indebtedness of Global Link
under the Second Cash Payment Note, all of which obligations shall be
equally guaranteed by the Guaranty Agreement with the same priority as the
obligations originally guaranteed thereby, provided that nothing herein
shall be deemed or construed to mean that the Guaranty Agreement by its own
terms does not presently guarantee such obligations and indebtedness.
3. As June 30, 1996, Global Link's receivable balance on the books of Peoples
(exclusive of the Trade Receivables hereinafter described) (the "Book
Receivables") equaled $97,742.01, plus certain uninvoiced charges for June
1996 as hereinafter provided (the parties agree that the Xxxx South - Local
Calling charges, LDDS Customer Service 800 number charges, the MCl 800
number charges for T-1 and the MCI T-1 outbound (customer service) charges
for June 1996 have not been received by Peoples or invoiced to Global Link,
but will be paid to Peoples by Global Link within thirty (30) days of
invoicing). Additional Book Receivables have arisen since June 30, 1996
through the date of this waiver letter, but have not yet been invoiced (all
such Book Receivables, together with the Book Receivables owing and unpaid
as of June 30, 1996 are collectively referred to herein as the "Present
Book Receivables"). An immediate payment in reduction of the Present Book
Receivables in the amount of $45,000 shall be a condition precedent to the
effectiveness of this waiver letter. The remaining unpaid balance of the
Present Book Receivables shall, unless sooner payable in accordance with
the provisions of this letter agreement, be due and payable in full on the
date which is three (3) months following the date of this letter agreement.
All Book Receivables arising subsequent to June 30, 1996 shall be paid
monthly on a current basis.
4. As of the date hereof, the full amount of Trade Receivables (as defined in
that certain Letter Agreement, dated as of January 18, 1996, between
Peoples and Global Link (the "Trade Receivable Letter")) remains
outstanding. Notwithstanding any provision of the Trade Receivable Letter
to the contrary, the entire unpaid balance of the Trade Receivables shall
be due and payable in the event, of the occurrence of a "Change of Control"
or an "Event of Default" (as such terms are hereinafter described);
provided that, absent the occurrence of a Change of Control or Event of
Default, the Trade Receivables shall otherwise be payable as set forth in
the Trade Receivable Letter.
5. That certain Guaranty Agreement, dated January 18, 1996 (the "Trade
Receivables Guaranty"), from GTS in favor of Peoples, is hereby amended to
guarantee, in addition to all obligations presently guaranteed thereby, the
full and timely performance by Global Link of the Trade Receivables and all
of the obligations and indebtedness of Global Link under the Trade
Receivables Letter, as amended hereby, all of which obligations shall be
equally guaranteed by the Trade Receivables Guaranty with the same priority
as the obligations originally guaranteed thereby, provided that nothing
herein shall be deemed or construed to mean that the Trade Receivables
Guaranty by its own terms does not presently guarantee such obligations and
indebtedness.
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 3
6. In addition to the scheduled payments set forth in the Second Cash Payment
Note and the foregoing scheduled payments of the Present Book Receivables
and the Trade Receivables, and notwithstanding the provisions of any other
document or agreement to the contrary (including, without limitation, the
Trade Receivables Letter), Global Link shall be required to prepay the
outstanding principal balance of the Second Cash Payment Note, together
with accrued and unpaid interest on the principal amount prepaid to the
date of prepayment, and the outstanding balance of the Present Book
Receivables and the Trade Receivables (the aggregate outstanding principal
balance of the Second Cash Payment Note and the outstanding balance of the
Present Book Receivables and the Trade Receivables, as of the date of any
determination thereof, is referred to herein as the "Aggregate Outstanding
Balance"), as follows:
(a) Global Link shall be required to make a prepayment of
the Aggregate Outstanding Balance (other than in respect
of the Trade Receivables) in an amount equal to thirty
percent (30%) of the Aggregate Outstanding Balance
(excluding the Trade Receivables), together with accrued
and unpaid interest on the principal portion of the
Second Cash Payment Note prepaid to the date of
prepayment, at such time as any Financing is completed
from and after the date of this Note for an amount less
than $1,000,000.00;
(b) Global Link shall be required to make a prepayment of
the Aggregate Outstanding Balance (other than in respect
of the Trade Receivables) in an amount equal to
forty-five percent (45%) of the Aggregate Outstanding
Balance (excluding the Trade Receivables), together with
accrued and unpaid interest on the principal portion of
the Second Cash Payment Note prepaid to the date of
prepayment, at such time as any Financing is completed
from and after the date of this Note for an amount equal
or greater than $1,000,000.00 but less than
$1,500,000.00;
(c) Global Link shall be required to make a prepayment of
the Aggregate Outstanding Balance (other than in respect
of the Trade Receivables) in an amount equal to sixty
percent (60%) of the Aggregate Outstanding Balance
(excluding the Trade Receivables), together with accrued
and unpaid interest on the principal portion of the
Second Cash Payment Note prepaid to the date of
prepayment, at such time as any Financing is completed
from and after the date of this Note for an amount equal
or greater than $1,500,000.00 but less than
$2,000,000.00;
(d) Global Link shall be required to prepay one hundred
percent (100%) of the Aggregate Outstanding Balance
(excluding the Trade Receivables), together with accrued
and unpaid interest on the principal portion of the
Second Cash Payment Note prepaid to the date of
prepayment, at such time as any Financing is completed
from and after the date of this Note for an amount equal
to or greater than $2,000,000.00;
(e) Immediately upon the receipt of $5,000,000.00 or more by
GTS subsequent to the completion of Global Link's merger
transaction with GTS from a Financing, Global Link shall
be required to prepay one hundred percent (100%) of the
Trade Receivables;
(f) Global Link shall be required to prepay one hundred
percent (100%) of the Aggregate Outstanding Balance,
together with accrued and unpaid interest on the
principal portion of the Second Cash Payment Note
prepaid to the date of prepayment, in the event of the
occurrence of any Change of Control; and
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 4
(g) Global Link shall be required to prepay one hundred
percent (100%) of the Aggregate Outstanding Balance,
together with accrued and unpaid interest on the
principal portion of the Second Cash Payment Note
prepaid to the date of prepayment, upon the occurrence
of an "Event of Default" (as such term is defined in the
Second Cash Payment Note).
Any prepayment of the Aggregate Outstanding Balance required
pursuant to the foregoing provision shall be made by Global Link
(w) within two (2) business days following the closing of any
Financing, or portion thereof, (x) in the case of the prepayment
of the Trade Receivables, immediately upon the occurrence of the
event described in clause (e) above, (y) within thirty (30) days
following the occurrence of any Change of Control, and (z)
immediately upon the occurrence of an "Event of Default" (as
defined in the Second Cash Payment Note), as the case may be.
Each such prepayment of the Aggregate Outstanding Balance shall
be applied proportionately to the outstanding principal balance
of the Second Cash Payment Note and the outstanding balance of
the Book Receivables and the Trade Receivables. All prepayments
of the Second Cash Payment Note shall be applied first to the
payment of all accrued and unpaid interest then due and owing
thereunder and thereafter to the payment of the installments of
principal thereunder in the inverse order of maturity.
For the purposes hereof, the following terms shall have
the following meanings:
"Affiliate" shall mean any person or entity who or which
controls, is controlled by, or is under common control with,
Global Link and GTS, or either of them.
"Change of Control" shall mean, in respect of either of
Global Link or GTS, the acquisition of beneficial ownership,
direct or indirect, of equity securities of Global Link or GTS by
any "person" (as that term is defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) which, when combined with all other securities of Global
Link or GTS, as the case may be, beneficially owned, directly or
indirectly by that person, equals or exceeds 50% of (i) either
the then outstanding shares of common stock of Global Link or
GTS, as the case may be (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding voting:
securities of Global Link or GTS, as the case may be, entitled to
vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control:
(i) any acquisition by GTS, any of its subsidiaries or any
"person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) or "group" (as defined in Section 13(d) of the Exchange Act)
which, as of the date of this waiver letter, owns five percent
(5%) or more of the outstanding common stock of GTS, (ii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by GTS or any of its subsidiaries or
(iii) any acquisition by any corporation with respect to which,
following such acquisition, more than 75% of, respectively, the
then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such acquisition in substantially
the same proportions as their ownership, immediately prior to
such acquisition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.
"Financing" shall mean any third party financing,
whether debt or lease financing or equity offering (but excluding
any operating or capital leases of equipment incurred in the
ordinary course of business and lines of credit to finance the
working capital requirements of Global Link, GTS and their
Affiliates, incurred
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 5
in the ordinary course of business), made to or for the benefit
of Global Link, GTS and their Affiliates, or any one or more of
them.
7. Notwithstanding the provisions of Section 8.4 of the Agreement or that
certain Lock-Up Agreement, dated as of January 18, 1996 (the "Lock-Up
Agreement"), between Peoples and GTS, to the contrary, Peoples shall be
permitted to sell, transfer or otherwise dispose of up to 25% of the shares
of GTS Common Stock during each of the three-month periods beginning on the
six-, nine-, twelve- and fifteen-month anniversaries of the Closing Date
(as defined in the Agreement); provided that if at any time during the
fifteen-month period following the Closing, Peoples wishes to sell,
transfer or otherwise dispose of any of the GTS Common Stock (such shares
being referred to herein as the "Offered Shares"), prior to selling,
transferring or otherwise disposing of any of the Offered Shares to any
party other than GTS, any of its Affiliates or any other person or entity
which GTS introduces to Peoples within such 10-day period for the purpose
of purchasing the Offered Shares, Peoples shall provide written or
telephonic (promptly confirmed in writing) notice thereof to GTS, following
which GTS, such Affiliate of GTS or such other person or entity which GTS
introduces to Peoples within such 10-day period for the purpose of
purchasing the Offered Shares, shall have ten (10) days in which to
purchase the Offered Shares for a purchase price, payable prior to the
close of business on the tenth (10th) day following the giving of such
notice in United States Dollars in immediately available funds, equal to
the average market closing price for the consecutive five-day period ending
on the date Peoples provides such notice with respect to the Offered Shares
multiplied by the number of Offered Shares.
The effectiveness of this waiver letter is expressly conditioned
upon the acceptance by Global Link and GTS of the terms and conditions of this
waiver letter and satisfaction of each of the following conditions, each of
which shall have been met or performed by Global Link and GTS to the
satisfaction of Peoples and Peoples' counsel in their sole and absolute
discretion:
A. Peoples shall have received this letter agreement, duly accepted and
agreed to by each of Global Link and GTS as evidenced by their
execution of this letter agreement in the spaces provided therefor
below.
X. Xxxxxxx shall have received the Second Cash Payment Note, duly
executed and completed by Global Link, substantially in the form of
Exhibit A attached hereto and made a part hereof; for the purposes
hereof, delivery of the Second Cash Payment Note shall be made to
XXxxxxxx Xxxxx, Esquire, Peoples' agent for acceptance of delivery of
the Second Cash Payment Note outside of the State of Florida, at the
following address:
Xxxxxxx Xxxxx, Esquire
Xxxxxxx Breed Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X. Xxxxxxx shall have received a payment in the amount of $100,000.00 in
respect of the Second Cash Payment Note and a payment in the amount of
$45,000.00 in respect of the Present Book Receivables, in each case in
United States Dollars in immediately available funds.
Each notice or other communication hereunder (other than telephonic
notices permitted pursuant to Section 7 above, provided that such telephonic
notices shall be promptly confirmed in writing) shall be in writing, shall be
sent by messenger, telecopy or by reputable overnight courier, and shall be
deemed to have been given or made the first business
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 6
day after the deposit thereof with a reputable overnight courier, delivery fees
prepaid, when telecopied with confirmation of delivery or when received if
delivered by hand, addressed to the appropriate party as follows:
If to Global Link or GTS: Global Link Teleco Corporation
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Global Telecommunication Solutions, Inc.
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Peoples: Peoples Telephone Company, Inc,
0000 Xxxxxxxxx 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Assistant General Counsel
Telephone: (000)000-0000
Extension 149
Telecopy: (000) 000-0000
or to such other address as any such party may designate to the others, by
written notice to the other as herein provided.
By your acceptance of the terms hereof, each of Global Link and GTS
hereby represent and warrant that, after giving effect to the provisions of this
waiver letter, each of the representations and warranties of each of them set
forth in the Agreement, the Guaranty, the Trade Receivables Letter, the Trade
Receivables Guaranty and the Lock-Up Letter is true and correct as of the date
hereof and no default or event of default, has occurred and is continuing under
the Agreement. By your acceptance of the terms hereof, Global Link and GTS
hereby further ratify and confirm each of Global Link's and GTS's respective
obligations and indebtedness in respect of the Book Receivables and the Trade
Receivables and under the Second Cash Payment Note, the Agreement, the Guaranty,
the Trade Receivables Letter, the Trade Receivables Guaranty and the Lock-Up
Letter, each as amended by this letter agreement, and represent and warrant to
Peoples that neither of Global Link nor GTS has or claims any defenses, offsets
or counterclaims to any of their respective obligations or indebtedness in
respect of the Book Receivables or the Trade Receivables or under the Second
Cash Payment Note, the Agreement, the Guaranty, the Trade Receivables Letter,
the Trade Receivables Guaranty or the LockUp Letter, each as amended by this
letter agreement.
BY YOUR ACCEPTANCE OF THE TERMS HEREOF, GLOBAL LINK AND GTS HEREBY, AND
PEOPLES HEREBY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS WAIVER LETTER OR ANY AGREEMENT
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, THE BOOK
RECEIVABLES, THE TRADE RECEIVABLES, THE SECOND
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 7
CASH PAYMENT NOTE OR IN CONJUNCTION WITH THE AGREEMENT, THE GUARANTY, THE TRADE
RECEIVABLES LETTER, THE TRADE RECEIVABLES GUARANTY OR THE LOCK-UP LETTER, EACH
AS AMENDED BY THIS LETTER AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO PEOPLES ENTERING INTO THIS WAIVER LETTER
AND MAKING THE ACCOMMODATIONS PROVIDED FOR HEREIN.
Except as expressly provided herein, all terms and conditions contained
in the Agreement, the Guaranty, the Trade Receivables Agreement, the Trade
Receivables Guaranty and the Lock-Up Letter shall remain unchanged and in full
force and effect in accordance with their respective terms.
If the foregoing terms and conditions are acceptable to you, please
indicate your acceptance and agreement by signing this letter in the space
provided therefor below and returning the same to Xxxxxxx X. Xxxxxxx, Xx.,
Esquire, Peoples Telephone Company, Inc., 0000 XX 00xx Xxxxx, Xxxxx, Xxxxxxx
00000 on or before the close of business on August 22, 1996. The foregoing
agreement shall not be effective until your accepted copy of this letter shall
be returned as aforesaid and each of the other conditions precedent to the
effectiveness of this waiver letter shall have been met or performed in
accordance with the provisions hereof. In the event that we shall have not
received this waiver letter, accepted by you as aforesaid, and each of the other
conditions precedent to the effectiveness of this waiver letter shall not have
been met or performed in accordance with the provisions hereof, on or before the
close of business on August 22, 1996, this waiver letter shall be void and of no
force or effect.
Very truly yours,
PEOPLES TELEPHONE COMPANY, INC.
Accepted and Agreed to this
____ day of August, 1996
GLOBAL LINK TELECO CORPORATION,
a Delaware corporation
By:______________________________
Its:
Accepted and Agreed to this
_____ day of August, 1996
GLOBAL TELECOMMUNICATION SOLUTIONS, INC.,
a Delaware corporation
By:_______________________________________
Its:
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 8
EXHIBIT A
SECOND CASH PAYMENT NOTE
$500,000 Dated as of January 18, 1996
For value received, GLOBAL LINK TELECO CORPORATION, a Delaware
corporation ("Global Link"), promises to pay to the order of PEOPLES TELEPHONE
COMPANY, INC., a New York corporation, its successors and assigns (together with
its successors and assigns, "Peoples"), at the office of Peoples at 0000 XX.
00xx Xxxxx, Xxxxx, Xxxxxxx 00000, the principal sum of FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($500,000,00), in installments as hereinafter provided, in lawful
money of the United States of America, and to pay interest on the unpaid
principal balance hereof in like money at such office from the date hereof until
the principal hereof shall have been paid in full, and at maturity (whether by
acceleration or otherwise), at a fixed rate per annum equal to eight percent
(8%) per annum.
Interest calculated as aforesaid shall be payable in arrears,
commencing on September 1, 1996, and continuing monthly on the first day of each
month thereafter, with all accrued and unpaid interest payable at maturity;
provided that all accrued and unpaid interest owing in respect of the principal
balance evidenced by this Note which accrued from and after January 18, 1996 to
the date of execution of this Note shall be due and payable in full on the final
maturity date hereof. Interest on this Note shall be computed on the actual
number of days elapsed over a 360-day year; i.e., 1/360th of a full year's
interest shall accrue for each day any portion of the loan evidenced by this
Note is outstanding.
Principal on this Note shall be due and payable in thirteen (13)
installments as follows: in one (1) installment of principal in the amount of
$100,000.00, due and payable on and as of the date of execution of this Note,
together with eleven (11) equal consecutive monthly installments of $33,333.33
each, commencing on November 1, 1996, and continuing monthly on the first day of
each month thereafter, together with a final installment of principal equal to
the entire unpaid principal balance hereof, due and payable on October 1, 1997.
The unpaid balance of this Note may be prepaid at any time and from
time to time without premium or penalty. All prepayments of this Note shall be
applied first to the payment of all accrued and unpaid interest then due and
owing hereunder and thereafter to the payment of the installments of principal
hereunder in the inverse order of maturity.
If the principal of this Note or any portion hereof and, to the extent
permitted by law, interest hereon shall not be paid when due, whether by
acceleration or otherwise, the same shall, or in the event of the occurrence of
an Event of Default (as hereinafter defined), the outstanding principal balance
of this Note shall, at the option of Peoples, thereafter bear interest for any
period during which the same shall be overdue, or during the pendency of any
such Event of Default, at a rate per annum equal to the maximum rate permitted
by applicable law, or, where no maximum rate is prescribed by law, at the rate
of eighteen percent (18%) per annum, and payable on demand.
Upon the happening of any of the following events, each of which shall
constitute a default hereunder (herein referred to as an "Event of Default"),
all liabilities of Global Link to Peoples, whether or not evidenced by this
Note, shall thereupon or thereafter, at the option of Peoples, without notice or
demand, become due and payable:
(a) failure of Global Link or Global Telecommunication
Solutions, Inc. ("GTS") to perform any agreement (other than to pay
money) hereunder or under any other instrument or agreement evidencing,
securing and/or guaranteeing the obligations and indebtedness of Global
Link to Peoples evidenced by this Note, which failure continues for a
period of five (5) days following written notice thereof from Peoples
to Global Link or GTS, as the case may be, or the failure to pay in
full, when due and payable, any liability whatsoever or any principal
installment of this Note or interest installment hereon, if such
failure shall continue for a period of one (1) day following written
notice thereof from Peoples to Global Link;
(b) failure of Global Link or GTS to perform any agreement
(other than to pay money) under that certain Letter Agreement, dated as
of August 14, 1996 (the "Letter Agreement"), which failure continues
for a period of five (5) days following written notice thereof from
Peoples to Global Link or GTS, as the case may be, or the failure to
pay in full, when due and payable, any obligation or indebtedness of
Global Link and/or GTS now or hereafter owed to Peoples, including,
without limitation, the Book Receivables and/or the Trade Receivables,
if such failure shall continue for a period of one (1) day following
written notice thereof from Peoples to Global Link;
(c) Global Link or GTS shall:
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 9
(i) make an assignment for the benefit of creditors,
petition or apply to any court or other tribunal for the appointment of
a custodian, receiver or any trustee or shall commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction
whether now or hereafter in effect; or if there shall have been filed
any such petition or application, or any such proceeding shall have
been commenced against Global Link or GTS in which an order for relief
is entered or which remains undismissed for a period of thirty (30)
days or more; Global Link or GTS, by any act or omission shall indicate
consent to, approval of or fail to timely object to any such petition,
application or proceeding or order for relief or the appointment of a
custodian, receiver or any trustee or shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for
a period of thirty (30) days or more;
(ii) admit in writing its inability to pay its debts generally as they
mature; or
(iii) have concealed, removed or permitted to be
concealed or removed any part of its properties or assets, with intent
to hinder, delay or defraud its creditors or any of them, or made or
suffered a transfer of any of its property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or shall
have made any transfer of its property to or for the benefit of a
creditor at a time when other creditors similarly situated have not
been paid; or
(iv) be "insolvent", as such term is defined in the federal bankruptcy
code;
(d) the issuing of any attachment or garnishment against any
property of Global Link or GTS pledged to secure the obligations of
Global Link and/or GTS to Peoples evidenced by this Note or otherwise,
or the filing of any lien against any property of Global Link or GTS
pledged to secure the obligations of Global Link and/or GTS to Peoples
evidenced by this Note or otherwise, in either of which case is not
cured, bonded or released within ten (10) days following notice thereof
from Peoples to Global Link or GTS or is not previously approved in
writing by Peoples;
(e) the taking of possession of any substantial part of the property
of Global Link or GTS at the instance of any governmental authority;
and
(f) the dissolution, merger, consolidation or reorganization
of Global Link or GTS (other than the merger or consolidation of Global
Link with or into GTS and other than the merger or consolidation of
subsidiaries of Global Link with or into Global Link where Global Link
is the surviving entity); and
(g) any warranty, representation, certificate or statement of
Global Link or GTS (whether contained in the Letter Agreement, this
Note or otherwise) made to Peoples is not true.
Global Link agrees to pay all reasonable costs incurred by any holder
hereof, including reasonable attorneys' fees (including those for appellate
proceedings), incurred in connection with any Event of Default, or in connection
with the collection or attempted collection or enforcement hereof, or in
connection with the protection of any collateral given as security for the
payment hereof, whether or not legal proceedings may have been instituted.
All parties to this Note, including Global Link and any sureties,
endorsers or guarantors, hereby waive presentment for payment, demand, protest,
notice of dishonor, notice of acceleration of maturity, and all defenses on the
ground of extension of time for payment hereof, and agree to continue and remain
bound for the payment of principal, interest and all other sums payable
hereunder, notwithstanding any change or changes by way of release, surrender,
exchange or substitution of any security for this Note or by way of any
extension or extensions of time for payment of principal or interest; and all
such parties waive all and every kind of notice of such change or changes and
agree that the same may be made without notice to or consent of any of them. The
rights and remedies of the holder as provided herein shall be cumulative and
concurrent and may be pursued singularly, successively or together at the sole
discretion of the holder, and may be exercised as often as occasion therefor
shall occur, and the failure to exercise any such right or remedy shall in no
event be construed as a waiver or release of the same.
Anything herein to the contrary notwithstanding, the obligations of
Global Link under this Note shall be subject to the limitation that payments of
interest to Peoples shall not be required to the extent that receipt of any such
payment by Peoples would be contrary to provisions of law applicable to Peoples
(if any) which limit the maximum rate of interest which may be charged or
collected by Peoples; provided, however, that nothing herein shall be construed
to limit Peoples to presently existing maximum rates of interest, if an
increased interest rate is hereafter permitted by reason of applicable federal
or state legislation. In the event that Global Link makes any payment of
interest, fees or other charges, however denominated, pursuant to this Note,
which payment results in the interest paid to Peoples to exceed the maximum rate
Global Link Teleco Corporation
Global Telecommunication Solutions, Inc.
As of August 14, 1996
Page 10
of interest permitted by applicable law, any excess over such maximum shall be
applied in reduction of the principal balance owed to Peoples as of the date of
such payment, or if such excess exceeds the amount of principal owed to Peoples
as of the date of such payment, the difference shall be paid by Peoples to
Global Link.
No delay or omission on the part of Peoples in exercising any right
hereunder shall operate as a waiver of such right or of any right under this
Note. No waiver shall be binding upon Peoples, unless in a writing signed by an
authorized officer of Peoples. The rights and remedies of Peoples under this
Note are cumulative and in addition to any other rights Peoples may have at law,
in equity or otherwise.
GLOBAL LINK HEREBY, AND PEOPLES BY ITS ACCEPTANCE OF THIS NOTE,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR, PEOPLES MAKING THE LOAN EVIDENCED BY
THIS NOTE.
The parties hereto hereby irrevocably submit in any suit, action or
proceeding arising out of or relating to this Note or any transactions
contemplated hereby to the exclusive jurisdiction of the United States District
Court for the Southern District of Florida or if jurisdiction is not available
therein the jurisdiction of any state court in Dade County, State of Florida,
and waive any and all objections to such jurisdiction or venue that they may
have under the laws of any state or country, including, without limitation, any
argument that jurisdiction, situs and/or venue are inconvenient or otherwise
improper. Each party further agrees that process may be served upon such party
in any manner authorized under the laws of the United States or Florida, and
waives any objections that such party may otherwise have to such process.
This Note shall be governed by and construed in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of laws thereunder.
IN WITNESS WHEREOF, Global Link has caused this Note to be effective as
of the date first above written, but has in fact caused this Note to be duly
executed and delivered as of this ___ day of August, 1996.
GLOBAL LINK TELECO CORPORATION, a
Delaware corporation
By:
Its:
STATE OF )
) SS:
COUNTY OF )
I HEREBY CERTIFY that on this day of August, 1996, before me, an officer duly
authorized in the State and in the County aforesaid to take acknowledgments,
personally appeared to me known to be the person who executed the attached
promissory note, dated as of January 18, 1996, in the maximum principal amount
of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00), on behalf of GLOBAL
LINK TELECO, INC., a Delaware corporation and acknowledged before me that he
executed the same.
----------------------------------------
Notary Public
Printed name:_____________________________
Commission #:______________________________
Expiration:________________________________
[SEAL]
