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INFINITY INVESTORS LIMITED
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0XX
August 19, 1998
Orix Global Communications, Inc.
000 Xxxx Xxxxxxxx Xxxx
Xxxx. X, Xxxxx 000
Xxx Xxxxx, XX 00000
Re: ADDITIONAL $850,000 LOAN
Gentlemen:
Reference is made to that certain Securities Purchase Agreement (the
"Purchase Agreement") by and between Orix Global Communications, Inc., a Nevada
corporation (the "Company"), and Infinity Investors Limited, a Nevis West Indies
corporation (the "Lender"), dated as of June 11, 1998, pursuant to which the
Lender issued a $6 million Debenture to Lender (the "Original Debenture").
Pursuant to the terms of this letter agreement (the "Letter
Agreement"), the Company and the Lender now desire to provide for the issuance
of an additional Debenture of $850,000 from the Company to the Lender, on the
terms specified herein (the "New Debenture"). Capitalized terms used herein and
otherwise defined shall have the meanings described thereto in the Purchase
Agreement.
Therefore, the Company and Lender agree as follows:
1. ISSUANCE OF DEBENTURE. On the date hereof, the Company shall issue
to the Lender the New Debenture in the form of Exhibit A attached hereto,
against delivery by the Lender to the Company of $850,000 (the "Loan Proceeds").
The Loan Proceeds shall be used exclusively by the Company as a cash collateral
account to secure the issuance of a Letter of Credit from Xxxxx Fargo (or a
similar financial institution) to Avantel, SA (the "Letter of Credit"). The
Letter of Credit will secure certain performance obligations by the Company
under its contractual agreement with Avantel, SA. The Company hereby
acknowledges and agrees that the New Debenture shall be treated as issued
pursuant to the terms of the Purchase Agreement and each Related Agreement,
including, without limitation, the Security Agreement. It is expressly agreed by
the Company that the Lender shall be provided the same rights, preferences,
privileges, causes of action, security, demands and any and other benefits under
the Purchase Agreement and each Related Agreement with respect to the New
Debenture as exists with respect to the Original Debenture.
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2. CONVERSION OF DEBENTURE/REPAYMENT. The New Debenture shall be
payable pursuant to its terms. Notwithstanding any provision of the Original
Debenture to the contrary, the Company shall be authorized to repay the New
Debenture prior to any payment by the Company of the Original Debenture;
provided, however, any repayment of the New Debenture following a Conversion
Date Event (as hereafter defined) shall be made only following ten (10) days
prior written notice to the Lender, during which period Lender shall be afforded
the conversion rights hereafter specified. In the event the Letter of Credit is
drawn upon (and the Company's cash collateral account diminished) by more than
$100,000, or in the event the New Debenture is not repaid in full on or before
November 19, 1998, then upon the occurrence of either such event (each, a
"Conversion Date Event") the New Debenture shall be convertible, in whole or in
part, at any time and from time to time, at the sole and exclusive option of the
Lender, in to such number of shares of common stock of the Company (the "Common
Stock") as set forth in the following formula: each $50,000 principal amount of
the New Debenture shall be convertible into 20 shares of Common Stock (such that
the entire $850,000 principal balance is convertible into 340 shares of Common
Stock). All accrued and unpaid interest shall be paid in cash upon any such
conversion. The conversion formula set forth above shall be subject to
adjustment on a customary basis for stock splits, stock dividends,
reorganizations and similar events.
3. STOCKHOLDER WAIVER AND AMENDMENT. Contemporaneous with the execution
of this Letter Agreement, the Company shall, and shall cause each of its
existing stockholders (collectively, the "Stockholders") to, execute and deliver
that certain First Amendment to Stockholders Agreement attached hereto as
Exhibit B, pursuant to which the Stockholders acknowledge and agree to waive any
preemptive rights associated with the issuance of any shares of Common Stock
upon conversion thereof.
4. PARTICIPATION RIGHT. Consistent with the terms of the Purchase
Agreement and the Related Agreements, the Company hereby acknowledges that the
Lender may participate or assign all or a portion of the New Debenture (and the
conversion rights or Common Stock issued upon conversion) to one or more
persons, each of which shall take the assigned or participated interest with the
same rights, preferences, privileges, causes of action, security and demands and
other benefits as exist with respect to the Lender.
5. GENERAL. The Company hereby agrees that, at any time, and from time
to time, upon request, it shall execute and deliver such further documents and
do such further acts and things as the Lender may reasonably request in order to
fully effect the purposes of this Letter Agreement. This Letter Agreement may be
executed by facsimile signature and in one or more counterparts and it is not
necessary that signatures of all parties appear on the same counterpart, but
such counterparts together shall constitute but one and the same agreement. This
Letter Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective successors.
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To set forth your agreement with the foregoing, please countersign this
Letter Agreement in the space provided below.
Very truly yours,
INFINITY INVESTORS LIMITED
By:
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Name:
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Title:
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ORIX GLOBAL COMMUNICATIONS, INC.
By:
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Name:
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Title:
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EXHIBIT A
FORM OF NEW DEBENTURE
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EXHIBIT B
FORM OF FIRST AMENDMENT TO
STOCKHOLDERS AGREEMENT
