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EXHIBIT 10.1(c)
July 23, 1996
Global TeleSystems Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx 00xx Xxxxx
XxXxxx, Xxxxxxxx 00000
Global TeleSystems Group, Inc.
Ladies and Gentlemen:
We refer to (i) the Senior Note Purchase Agreement, dated as of
January 19, 1996, as amended by letter agreement, dated June 6, 1996 (as so
amended and as it may be further amended, supplemented or otherwise modified
from time to time, the "Initial Chatterjee Agreement"), between Global
TeleSystems Group, Inc. (the "Company") and The Open Society Institute ("OSI")
and Chatterjee Fund Management, L.P., as purchasers (the "Initial Chatterjee
Purchasers"); and (ii) the Senior Note Purchase Agreement, dated as of June 6,
1996 (as such agreement may be amended, supplemented or otherwise modified from
time to time, the "Additional Chatterjee Agreement"; the Initial Chatterjee
Agreement and the Additional Chatterjee Agreement being, collectively the
"Chatterjee Agreements"), between the Company and OSI, Winston Partners II LDC
and Winston Partners II LLC, as purchasers (the "Additional Chatterjee
Purchasers"; the Initial Chatterjee Purchasers and the Additional Chatterjee
Purchasers being, collectively, the "Chatterjee Purchasers"). Terms defined or
referenced in the Additional Chatterjee Agreement and not otherwise defined or
referenced herein are used herein as therein defined or referenced.
The Company and the Chatterjee Purchasers hereby agree as follows:
1. Each Chatterjee Agreement is hereby amended as set forth below
(the "Amendments"):
(a) The definition of "Equity Offering" contained in Section 1.1 of
such Chatterjee Agreement is amended by substituting for the period at the
end thereof the phrase "; provided, however, that the private placement of
the Company's common stock (expected, as of the date hereof, to become
effective in July 1996) shall not, with respect to proceeds thereof
received from July 1 to October 31, 1996, constitute an Equity Offering."
(b)(i) Clause (i) of Section 8.1(a) of such Chatterjee Agreement is
amended by substituting the phrase "each fiscal year of the Company (but, in
the case of fiscal year 1995, no later than August 23, 1996)" for the phrase
"each fiscal year of the Company" contained therein.
(ii) Clause (i) of Section 8.1(b) of such Chatterjee Agreement is
amended by substituting the phrase "each fiscal quarter of each year (but,
in the case of the fiscal quarter
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Global TeleSystems Group, Inc. 2 July 23, 1996
ending March 31, 1996, no later than September 16, 1996)" for the phrase
"each fiscal quarter of each year" contained therein.
(c) Section 9.9(d) of such Chatterjee Agreement is amended (i) by
substituting the phrase "any fiscal quarter ending after June 30, 1997" for
the phrase "any quarter" contained in the first sentence thereof; and by
substituting "N/A" for each ratio in the chart therein corresponding to any
of fiscal years 1995 and 1996 and the fiscal quarters ending March 31 and
June 30, 1997.
(d)(i) Section 9.11 of such Chatterjee Agreement is amended (A) by
redesignating clause (e) thereof as clause "(g)"; and (B) by inserting,
immediately after clause (d) thereof, the following:
"; (e) additional Investments in the Company's Subsidiaries, made on
or before December 31, 1996, reflected on Schedule 9.11 (under the
heading "Projected Intercompany Balance YE 1996" and not under the
heading "3/31/96 Balance") and consisting of Indebtedness the proceeds
of which are or will be used, directly or indirectly, for working
capital purposes of the Company's Subsidiaries, in each case in the
ordinary course of the business of such Subsidiaries; provided,
however, that the Company shall cause each of its U.S. Subsidiaries,
and shall use commercially reasonable efforts to cause each of its
Non-U.S. Subsidiaries, to repay (in each case, without duplication)
the Indebtedness incurred by it in accordance with this clause (e),
but only to the extent of net proceeds of the OPIC and the EBRD
financings (referred to in Schedule A under "Pending Financings") as
and when received by such Subsidiary and available to such Subsidiary
(under applicable laws and regulations and pursuant to the terms of
such financings) for application to such repayment (or reduction); (f)
additional Investments by the Company in its Subsidiaries, the
proceeds of which are used for payroll to employees of the Company and
its Subsidiaries;".
(ii) Section 9.3 of such Chatterjee Agreement is amended (A) in the case of
the Initial Chatterjee Agreement, by redesignating clause (e) thereof as
clause "(f)"; and (B) in the case of each Chatterjee Agreement, (1) by
redesignating clause (d) thereof as clause "(e)" and by substituting the
phrase "this clause (e)" for the phrase "this clause (d)" contained
therein, and (2) by inserting, immediately following clause (c) thereof,
the phrase: "(d) additional Indebtedness constituting Investments permitted
by clause (e) or (f) of Section 9.11;".
(iii) Such Chatterjee Agreement is amended by adding at the end thereof (in
appropriate numerical order of its Schedules) a new Schedule 9.11 in the
form of Schedule 9.11 hereto.
2. The Chatterjee Purchasers waive any and all Events of Default (as
defined in the Initial Transaction Documents and the Transaction Documents to
which they are respective parties) and any and all events ("Potential Defaults")
that, with the giving of notice or lapse of time or both, would constitute
Events of Default, to the extent that such Events of Default and Potential
Defaults (i) arose on or before the date hereof and before giving effect to the
Amendments and (ii) resulted from events, transactions, facts and circumstances
that, immediately after giving effect to the Amendments, would not constitute
Events of Default or Potential Defaults.
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Global TeleSystems Group, Inc. 3 July , 1996
3. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
4. This letter agreement becomes effective as of January 19, 1996,
on the date on which the Company and each Chatterjee Purchaser shall have
exercised and delivered a counterpart hereof. Upon the effectiveness of this
letter agreement, each reference in any Initial Transaction Document or
Transaction Document to either Chatterjee Agreement or any term or provision
thereof shall mean such Chatterjee Agreement, such term or such provision,
respectively, as amended hereby. Except as otherwise provided herein, the
Initial Transaction Documents and the Transaction Documents shall remain in
full force and effect and are hereby in all respects ratified and confirmed.
5. This letter agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same letter
agreement. Delivery of an executed counterpart of a signature page of this
letter agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this letter agreement.
Please indicate your agreement to the foregoing by executing a
counterpart of this letter agreement in the appropriate space provided below.
Very truly yours,
THE OPEN SOCIETY INSTITUTE WINSTON PARTNERS II LDC
By By /s/ [ILLEGIBLE]
------------------------------ --------------------------------------
Name: Name: Curacao Corporation Company N.V.
Title: Title: Sole Director
MJA
CHATTERJEE FUND MANAGEMENT, X.X. XXXXXXX PARTNERS II LLC
By By Chatterjee Advisors L.L.C.
------------------------------ Its Sole Manager
Its General Partner
By By
------------------------------ --------------------------------------
Name: Name:
Title: Title:
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Global TeleSystems Group, Inc. July 23 1996
3. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
4. This letter agreement becomes effective as of January 19, 1996,
on the date on which the Company and each Chatterjee Purchaser shall have
exercised and delivered a counterpart hereof. Upon the effectiveness of this
letter agreement, each reference in any Initial Transaction Document or
Transaction Document to either Chatterjee Agreement or any term or provision
thereof shall mean such Chatterjee Agreement, such term or such provision,
respectively, as amended hereby. Except as otherwise provided herein, the
Initial Transaction Documents and the Transaction Documents shall remain in
full force and effect and are hereby in all respects ratified and confirmed.
5. This letter agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same letter
agreement. Delivery of an executed counterpart of a signature page of this
letter agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this letter agreement.
Please indicate your agreement to the foregoing by executing a
counterpart of this letter agreement in the appropriate space provided below.
Very truly yours,
THE OPEN SOCIETY INSTITUTE WINSTON PARTNERS II LDC
By /s/ Xxxx Xxxxxxxxx By
-------------------------------- --------------------------------
Name: Name:
Title: Title:
CHATTERJEE FUND MANAGEMENT, X.X. XXXXXXX PARTNERS II LLC
By /s/ [ILLEGIBLE] By Chatterjee Advisors L.L.C.
-------------------------------- Its Sole Manager
Its General Partner
By /s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
-------------------------------- --------------------------------
Name: Name: [Illegible]
Title: Attorney-in-fact Title: Manager
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Global TeleSystems Group, Inc. 4 July 23 1996
Accepted and Agreed:
GLOBAL TELESYSTEMS GROUP, INC.
By /s/ [ILLEGIBLE]
-------------------------------------------
Name: XX Xxxxxxxxx
Title: Vice President - General Counsel
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Schedule 9.11
Additional Investments
for Working Capital Purposes
SCHEDULE OF INTERCOMPANY BALANCES (1)(2)(4)(9)
1996 FORECAST - ($ In 000's)
Projected Ye 96 Variance to Break Out of Variance
3/31/96 Intercompany 3/31/96 ----------------------------------------
Activity Related to: Balance Balance Ye 1996 Balance W/C GUP Ex Other(8) Re-class
-------------------- ------- --------------- ------- ------ ------ -------- --------
GTS Hermes(3) $16,003 $17,075 ($1,072) $ 1,072 $ - $ - $ -
GTS Europe South 4,438 5,226 (788) 788 - - -
GTS Hungaro 10,913 16,257 (5,344) 2,714 2,630 - -
GTS Czech 2,374 3,285 (911) 911 - - -
GTS Bulgaria 59 59 0 - - - -
Moscoregoff 1,501 3,209 (1,708) 1,708 - - -
GTS Cellular 6,192 12,485 (6,293) 4,963 1,330 - -
SFMT Rusnet 19,429 33,923 (14,494) 5,099 8,706 689 -
Vostok Mobile - 1,614 (1,614) 1,614 - - -
Sovintel - 5,791 (5,791) 231 - 5,560 0
SFMT Sovintel 1 7,338 - 7,338 - - (7,338) 0
Sovam 6,102 - 6,102 - - (6,102) 0
SFMT Datacom - 9,376 (9,376) 1,654 1,620 6,102 -
SFMT China(V-Tech)(6) 7,062 10,795 (3,733) 3,640 93 - -
GTS India 652 1,308 (656) 656 - - -
GTS Vox - 195 (195) 195 - - -
TCM 125 - 125 (125) - - -
SFIT - (689) 689 0 - (689) 0
ACIC(CITS)(7) - 10 (10) 10 - - -
Transpacific Ventures China Cellular - 54 (54) 54 - - -
San Francisco/Moscow Teleport - 1,778 (1,778) - - 1,778 -
Telecom Consulting & Advisory(5) - 4,381 (4,381) 4,381 - - -
Kiev - 4,800 (4,800) 1,988 2,862 - -
------- -------- --------- ------- ------- -------- -------
TOTAL $82,188 $130,932 ($48,744) $31,553 $17,241 $ - $ -
Notes:
(1) These amounts do not reflect the final adjustments associated with the
closing of the Fiscal Year 1995 and 1st and 2nd Quarters 1996 results.
(2) Excludes GTS Holding Company's equity investment in operating companies.
(3) Hermes includes shareholders note of $12M which will be converted to
equity before year end 1996.
(4) These amounts do not include payroll paid by GTS Group, Inc. on behalf of
GTS Inc. This entity is only set up for payment of U.S. payroll but does
create an intercompany account in order to facilitate the payment. YTD
May 1996 was approximately $2.5M and full year 1996 is estimated at $6.0M
(5) Payroll company for CIS operations (Expats).
(6) W/C includes investment in VSAT inventory for resale.
(7) Cash requirements for CITS are considered equity investment but may result
in an intercompany account.
(8) Represents a reclass between entities
(9) The amounts indicated opposite each subsidiary listed below reflect either
or both of the following: (a) direct or indirect (back-to-back) loans to
such Subsidiary by the Company or other Subsidiaries and (b) direct or
indirect (back-to-back) loans from such Subsidiary to any other Subsidiary.
The aggregate amount of these intercompany loans (determined, without
duplication, after giving effect to the loans described in the preceding
sentence) does not exceed the respective amounts indicated opposite
"TOTAL" below.
