MODIFICATION OF PROMISSORY NOTE
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THIS MODIFICATION OF PROMISSORY NOTE (this "MODIFICATION AGREEMENT") is
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made as of the 1st day of December, 2000, by and between, TELSCAPE
INTERNATIONAL, INC., a Texas corporation (the "COMPANY"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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III ("LENDER").
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R E C I T A L S:
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WHEREAS, pursuant to that certain Amended and Restated Promissory Note (the
"Note") dated April 22, 2000, the Company promised to pay Lender the entire
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unpaid balance owed under the Note plus all accrued interest thereon on October
22, 2000;
WHEREAS, on December 1, 2000, the entire unpaid balance including all
accrued interest due under the Note was $1,779,461.16 (the "Debt");
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WHEREAS, the Company and Lender desire to modify the Note and extend the
due date of the Debt as hereinafter provided;
NOW THEREFORE, the Company and Lender hereby agree as follows:
1. Modification of Note and Payment of Debt. Lender hereby agrees to
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accept 7,500 shares of Class G Preferred Stock of the Company (the
"Class G Stock") in payment of $750,000 of the Debt and acknowledges
receipt of $579,461.16 in cash (which shall be applied against the
Debt), which reduces the unpaid balance of the Debt to $450,000 as
of the date hereof.
2. Maturity Date. The Company and Lender hereby agree that the
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remaining $450,000 of the Debt plus all accrued interest thereon
shall be due April 22, 2001 (the "Maturity Date"). The Company and
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Lender hereby agree that interest shall accrue at the rate of 10%
per annum beginning on December 1, 2000.
3. Default. In the event the Company fails to pay the full amount due
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on the Maturity Date, the Company shall be in default and Lender
shall be entitled to pursue all legal and equitable remedies that
may be available and this Note shall thereafter bear interest at the
highest rate permitted by law. Such interest accrued pursuant to
this Section shall be due and payable to Lender without demand.
4. Application of Payments/Expenses. All payments received by Lender
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shall be applied to the payment of accrued fees, charges, costs and
expenses payable hereunder, to any interest due hereunder, or to the
outstanding principal balance, as determined by Lender in his sole
discretion. The Company shall be responsible for and hereby agrees
to pay, without demand, all costs and expenses of enforcement and/or
collection of this Modification Agreement, including reasonable
attorney's fees, whether or not any suit or other legal proceedings
be instituted hereon.
5. Early Re-Payment. The Company hereby agrees that if prior to the
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Maturity Date the Company receives aggregate proceeds of $10,000,000
or more from any one or series of capital transaction not in the
ordinary course of business (i.e., sale of securities, receipt of
loan proceeds, asset sales or settlement proceeds from the Mastec
lawsuit) (specifically excluding proceeds received from (i) the
Company's sale of its Series G Senior Preferred Stock and the
warrants to purchase Company common stock issued in conjunction
therewith and (ii) Fermor Investments Limited's loan to the Company
in the aggregate principal amount of $2,200,000), the Company shall
pay Lender the remaining $450,000 of the Debt plus all accrued
interest thereon as of the closing of such financing.
6. Warrants. The Company agrees to issue to Lender a Warrant to
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purchase 50,000 shares of common stock of the Company in the form
attached hereto as Exhibit A. The Company hereby agrees that if the
remaining $450,000 of the Debt plus all accrued interest thereon is
not paid to Lender by February 15, 2001, then the Company shall
issue to Lender an additional Warrant to purchase 25,000 shares of
common stock of the Company in the form attached hereto as Exhibit
A.
7. Waiver. By entering into this Modification Agreement, Lender waives
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any prior default by the Company under the Note or with regard to
the Debt.
8. Amendment. This Modification Agreement, and any provisions hereof,
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may not be modified, amended, waived, extended, changed, discharged
or terminated orally or by any act or failure to act on the part of
the Company or Lender, except by an agreement in writing signed by
the party against whom the enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is
sought.
9. Severability. If any term, covenant or condition of this
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Modification Agreement shall be held to be invalid, illegal or
unenforceable in any respect, this Modification Agreement shall be
construed without such provision.
10. Governing Law. This Modification Agreement shall be governed by
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and construed in accordance with the laws of the state of Texas and
the applicable laws of the United States of America.
11. Successors and Assigns. This Modification Agreement shall bind the
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successors, and assigns of Lender and the Company.
12. Counterparts. This Modification Agreement may be executed in any
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number of facsimile counterparts, and each such counterpart shall be
deemed to constitute but one and the same instrument.
13. Further Assurances. Upon the request of Lender, the Company
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agrees to execute such other and further documents as may be
reasonably necessary or appropriate to consummate the transactions
contemplated herein or to perfect the liens and security interests
intended to secure the payment of the Loan.
IN WITNESS WHEREOF, the Company and Lender have duly executed this
Modification Agreement the day and year first above written.
THE COMPANY
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TELSCAPE INTERNATIONAL, INC.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:_____________________________________
LENDER
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
