Global Link Teleco Corporation
Global Telecommunications Solutions, Inc.
As of November 27, 1996
Page 1
As of November 27, 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 and to that certain Letter Agreement, dated as of August 14, 1996 (the
"First Waiver Letter"), among Peoples, Global Link and Global Telecommunication
Services, Inc. ("GTS"). Capitalized terms used herein and not defined herein
shall have the meanings given them in the Agreement and in the First Waiver
Letter, as the case may be.
As of November 25, 1996, (a) the outstanding principal balance of the
Second Cash Payment Note equaled $366,666.67 and accrued and unpaid interest
thereon equaled $32,340.74, and (b) the aggregate amount of Book Receivables
currently received by Peoples and billed to Global Link due and owing equaled
$79,927.92 (certain invoices through September, 1996 may not yet have been
invoiced to Global Link by Peoples). Global Link and GTS have advised Peoples
that GTS anticipates that it will close one or more Financings prior to December
9, 1996 aggregating $3,000,000.00 in principal amount, which, pursuant to the
terms of the First Waiver Letter would require the prepayment in full of the
Aggregate Outstanding Balance (including the Trade Receivables). Notwithstanding
such requirement, Global Link and GTS have requested that Peoples waive the
right to accelerate payment of the Aggregate Outstanding Balance (including the
Trade Receivables) as set forth in the First Waiver Letter due to the Financing
described above and to accept a reduced prepayment of the Aggregate Outstanding
Balance in the amount of $300,000.00.
Subject to the acceptance by Global Link and GTS of each of the terms
and conditions hereinafter set forth and the satisfaction of each of the
conditions precedent to the effectiveness of this Agreement, Peoples agrees to
waive the right to accelerate payment of the Aggregate Outstanding Balance
(including the Trade Receivables) as set forth in the First Waiver Letter due to
the Financing described above and to accept such reduced prepayment subject to
the following terms and conditions:
1. On or before the close of business on November 29, 1996,
Peoples shall have received from Global Link and/or GTS at
least $300,000.00 in immediately available funds, which shall
be applied first to the payment of all outstanding Book
Receivables, then to accrued and unpaid interest due and owing
under the Second Cash Payment Note and thereafter to the
outstanding principal balance of the Second Cash Payment Note.
2. Notwithstanding the provisions of the Second Cash Payment
Note to the contrary,
Global Link Teleco Corporation
Global Telecommunications Solutions, Inc.
As of November 27, 1996
Page 2
the remaining outstanding principal balance thereof (after
giving effect to the prepayment described in item 1 above)
shall be repaid in three (3) equal installments of principal,
each equal to one-third (1/3) of the remaining outstanding
principal balance of the Second Cash Payment Note, together
with accrued and unpaid interest thereon at the rate set forth
in the Second Cash Payment Note, on December 27, 1996, January
27, 1997 and February 27, 1997. The entire outstanding
principal balance of the Second Cash Payment Note, together
with accrued and unpaid interest thereon, shall be due and
payable in full on February 27, 1997. Upon payment in
accordance with the provisions of this agreement of the full
amount of the outstanding principal balance of the Second Cash
Payment Note, together with all accrued and unpaid interest
thereon, Peoples agrees to cancel and return the original
Second Cash Payment Note to Global Link.
3. In addition to the payments of the Second Cash Payment Note
described in item 2 above and the scheduled payments of the
Trade Receivables set forth in the Trade Receivable Letter and
the First Waiver Letter, and notwithstanding the provisions of
any other document or agreement to the contrary (including,
without limitation, the Trade Receivable Letter), Global Link
shall be required to prepay the Aggregate Outstanding Balance,
as follows:
(a) Global Link shall be required to make a prepayment of the Aggregate
Outstanding Balance (including the Trade Receivables) in an amount equal to
thirty percent (30%) of the Aggregate Outstanding Balance (including 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 after December 9,
1996 for an amount less than $2,000,000.00;
(b) Global Link shall be required to make a prepayment of the Aggregate
Outstanding Balance (including the Trade Receivables) in an amount equal to
forty-five percent (45%) of the Aggregate Outstanding Balance (including
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 after December 9,
1996 for an amount equal or greater than $2,000,000.00 but less than
$3,000,000.00;
(c) Global Link shall be required to make a prepayment of the Aggregate
Outstanding Balance (including the Trade Receivables) in an amount equal to
sixty percent (60%) of the Aggregate Outstanding Balance (including 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 after December 9,
1996 for an amount equal or greater than $3,000,000.00 but less
Global Link Teleco Corporation
Global Telecommunications Solutions, Inc.
As of November 27, 1996
Page 3
than $4,000,000.00;
(d) Global Link shall be required to prepay one hundred percent (100%) of the
Aggregate Outstanding Balance (including 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 after December 9, 1996 for an amount equal to or
greater than $4,000,000.00;
(e) Global Link shall be required to prepay one hundred percent (100%) of the
Aggregate Outstanding Balance (including 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, in the event of the
occurrence of any Change of Control; and
(f) Global Link shall be required to prepay one hundred percent (100%) of the
Aggregate Outstanding Balance (including 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, upon the occurrence of
an "Event of Default" (as such term is defined in the Second Cash Payment
Note) or any failure of Global Link or GTS to timely pay or perform any
obligation or indebtedness under this agreement.
Any such prepayment of the Aggregate Outstanding Balance shall
be made at such times and applied in such manner as set forth
in Section 6 of the First Waiver Letter.
4. For the purposes of this agreement, "Book Receivables" shall
mean Global Link's present unpaid receivable balance on the
books of Peoples (exclusive of the Trade Receivables),
together with all other billed and unbilled receivable
balances of Global Link on the books of Peoples, whether
presently existing or from time to time hereafter created,
incurred or arising. Except as set forth in item 1 above, all
Book Receivables shall be paid monthly on a current basis.
The foregoing agreement 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, the Guaranty, the Trade Receivable Letter, the Trade Receivable
Guaranty, the Lock-Up Letter, the Second Cash Payment Note or the First Waiver
Letter, 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, the Guaranty, the Trade Receivable Letter, the Trade
Receivable Guaranty, the Lock-Up Letter, the Second Cash Payment Note or the
First Waiver Letter.
The effectiveness of this agreement is expressly conditioned upon the
acceptance by Global Link and GTS of the terms and conditions of this agreement
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 in
its sole
Global Link Teleco Corporation
Global Telecommunications Solutions, Inc.
As of November 27, 1996
Page 4
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.
B. On or before the close of business on November 29, 1996, Peoples shall
have received a prepayment of the Aggregate Outstanding Balance in the
amount of $300,000.00, in United States Dollars in immediately
available funds.
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
agreement, 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, the Lock-Up Letter, the First Waiver Letter and the Second
Cash Payment Note 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 represent and
warrant to Peoples that neither Global Link nor GTS has or claims any defenses,
offsets or counterclaims to any of their respective obligations or indebtedness
in respect of the Trade Receivables or under the Second Cash Payment Note, the
Agreement, the First Waiver Letter (as modified hereby), the Guaranty, the Trade
Receivables Letter, the Trade Receivables Guaranty or the Lock-Up Letter.
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 AGREEMENT OR ANY AGREEMENT
EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, THE TRADE
RECEIVABLES, THE SECOND CASH PAYMENT NOTE, THE FIRST WAIVER LETTER OR IN
CONJUNCTION WITH THE AGREEMENT, THE GUARANTY, THE TRADE RECEIVABLES LETTER, THE
TRADE RECEIVABLES GUARANTY OR THE LOCK-UP LETTER, 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
AGREEMENT 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, the Lock-Up Letter, the First Waiver Letter and the Second
Cash Payment Note 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 November 27, 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 agreement, accepted by you as aforesaid, on or before the close of
business on November 27, 1996, 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, this agreement shall be void and of no
force or effect.
Very truly yours,
PEOPLES TELEPHONE COMPANY, INC.
By:
Its:
Accepted and Agreed to this
day of November, 1996
GLOBAL LINK TELECO CORPORATION, a
Delaware corporation
By:
Its:
Accepted and Agreed to this
day of November, 1996
GLOBAL TELECOMMUNICATION SOLUTIONS,
INC., a Delaware corporation
By:
Its: