DATED 2000
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Exhibit 10.12
(1) COMMUNICATIONS COLLATERAL LIMITED
(2) TELEMONDE INVESTMENTS LIMITED
(3) TELEMONDE INTERNATIONAL BANDWIDTH LIMITED
(4) TELEMONDE INC
(5) XXXXX XXXXXXX
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FORBEARANCE AGREEMENT
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THIS DEED is made the day of 2000
BETWEEN:
(1) COMMUNICATIONS COLLATERAL LIMITED ("CCL") a company registered in the
British Virgin Islands and having its registered office at XX Xxx 000, Xxxx
Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx;
(2) TELEMONDE INVESTMENTS LIMITED ("TIL") a company registered in the British
Virgin Islands and having its registered office at Craigmuir Xxxxxxxx, Road
Town, Tortola, British Virgin Islands;
(3) TELEMONDE INTERNATIONAL BANDWIDTH LIMITED ("TIBL") a company registered in
the British Virgin Islands and having its registered office at Lake
Building, 0/xx/ Xxxxx, Xxxxxxx'x Xxx 0, X X Xxx 0000, Xxxx Xxxx, Xxxxxxx,
Xxxxxxx Xxxxxx Xxxxxxx;
(4) TELEMONDE INC. a Delaware corporation ("Telemonde") whose office is at 000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000.
(5) XXXXX XXXXXXX of 00 Xxxxxxx Xxxxxx, Xxxxxx X0X 0XX
WHEREAS
(A) On 15 April 1999, TIL entered into a Capacity Option Agreement ("the Option
Agreement") with CCL under which TIL granted an option (the "Put Option")
to CCL to require TIL to purchase certain capacity on the Gemini System for
US$6,500,000.
(B) The Put Option has been exercised but the sale of the capacity pursuant to
that exercise has not yet been fully completed. TIL has paid US$2,500,000
of the purchase price on exercise of the Put Option but is in default in
respect of the balance of
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US$4,000,000 which remains outstanding together with all sums due and
accruing in respect of reasonable legal and other reasonable enforcement
costs. Interest at the rates varying from 10 to 12.5 per cent per annum
began running on the overdue balance on 15 April 1999 and as at 15 December
1999 interest of US$421,456.24 has accrued.
(C) On 15 April 1999 TIL and its subsidiaries entered into a Composite
Guarantee and Debenture with CCL and separate Debentures under the laws of
the British Virgin Islands and Bermuda respectively ("the Debentures")
under which they created security over all their assets in favour of CCL in
support of certain obligations including those in respect of the Put
Option.
(D) On 1 September 1999, Telemonde issued a warrant (the "Warrant") to CCL
under which CCL has the right to subscribe for 4,526,231 shares of common
stock, US$.001 par value in the capital of Telemonde in accordance with the
terms thereof.
(E) In view of TIL's default under the Put Option Telemonde, TIL and TIBL have
agreed terms of forbearance on the part of CCL under the documents referred
to above on the terms set out in this Deed.
NOW IT IS HEREBY AGREED as follows:
1. In consideration of CCL granting more time for TIL to pay the sums due
under the Option Agreement and forbearing to take action against TIL and
its subsidiaries pursuant to its rights under the Debentures, TIL and
Telemonde agree with CCL as follows:
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(a) On the date hereof Telemonde will procure that TIL will pay and TIL
covenants to pay the sum of US$500,000 (US$ Five hundred thousand) by
electronic fund transfer to CCL's bank account at
Barclays Bank Plc
00 Xxxx Xxxxxx
Xxx Xxxx,
XX 00000
XXX
ABA# 000-000-000
Swift Code: XXXXXX00
For credit to:
Barclays Bank Plc
P.O. Box 00
Xxxx Xxxx, Xxxxxxx
Xxxxxxx Xxxxxx Islands
Swift Code: BARCBBBBATOR
Account # 000-000-000
For further credit to: Communications Collateral Limited
Account #: 000-000-000
in partial settlement of the obligations of TIL in respect of the price
payable on the exercise of the Put Option;
(b) TIL and CCL hereby agree that, if the action and documents which are
required to be taken and/or delivered under Clauses 1(a), 2 and 3 of this
Agreement are taken and/or delivered in accordance with those Clauses, the
terms of the Option Agreement are amended so that the balance of the price
payable on the exercise of the Put Option remaining after the payment of
US$500,000 in (a) above (being US$3,921,456.24) plus interest on all
outstanding principal from 15 December 1999 until the date of payment
calculated pursuant to the Option Agreement and further sums due and
accruing in respect of the reasonable legal and other reasonable costs and
expenses of enforcement (the "Balance") will be paid as follows:
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(i) if Telemonde makes a private placement of shares or debt of less
than US$10 million and the proceeds are received by Telemonde
before 15 February 2000 TIL will pay to CCL on receipt of the
proceeds of that private placement a sum equal to the first US$2
million of those proceeds and 50 per cent of the excess of the
proceeds over US$4 million or if less a sum equal to the
Balance;
(ii) if Telemonde makes a private placement of shares or debt of
US$10 million or more and the proceeds are received by Telemonde
before 15 February 2000 TIL will pay to CCL on receipt of the
proceeds of that private placement a sum equal to the Balance;
(iii) any part of the Balance which has not been paid by 15 February
2000 under (i) or (ii) above will be paid by TIL to CCL on 15
February 2000.
Any part of the Balance which has not been paid by TIL to CCL by 15
February 2000 will continue to be an obligation under this Deed and the
Option Agreement and interest and expenses shall continue to accrue
thereon. Breach of any of the provisions of this Clause 1(b) will be a
breach for the purposes of Clauses 4(b) and 4(c) of this Deed.
2. If the registration statement referred to in sub-clause 5(a) below is not
filed and or the sums due in clause 1(b) are not paid on or before 15
February 2000 Telemonde will within seven days of such date procure the
issue of a number of fully paid and non-assessable shares of common stock
in the capital of Telemonde in the name of CCL on terms on which CCL will
not be required to make any payment to Telemonde for those shares other
than the consideration of its forbearance hereunder. The number of
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shares to be issued under this Clause 2 shall be calculated by dividing the
sum of US$500,000 by the Market Price Per Share (as such expression is
defined in the Warrant) on the last trading day immediately prior to the
date of registration provided that the provisions of this Clause 2 shall
constitute an agreed penalty in addition to the obligation to pay the
Balance (without prejudice to all CCL's rights arising by such a default
including (without limitation) rights under clauses 3.2, 4(b) and 4(c)
below)
3.1 On the execution of this deed:
(a) execute and deliver to CCL a corporate guarantee in agreed form under
which Xxxxxxxxx will agree to guarantee all of the obligations of TIL
under this Deed and in respect of the Put Option;
(b) execute a deed in favour of CCL in agreed form and deliver to CCL
under which Telemonde will undertake not to grant over its assets and
to procure that its subsidiaries will not grant over their assets any
security other than that which exists at the date hereof save for (i)
any security granted in order to raise funds for the purpose of
assisting Telemonde and its subsidiaries to fulfil the obligations
under this Deed or the Put Option and (ii) any security granted by
Equitel Communications Limited and its subsidiaries in the ordinary
course of their business;
3.2 On execution of this Deed Telemonde will procure that TIBL will provide and
TIBL covenants to provide CCL's solicitors with a letter on its headed
notepaper and Activation Request Form signed (and expressed to be signed)
by a duly authorised officer of TIBL and addressed to MCI WorldCom Global
Networks US Inc provided that CCL undertakes not to forward the letter
and/or Activation Request Form to MCI
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WorldCom except in the event of a breach of Clause 1(b) and/or Clauses 3.1,
3.3, 3.4 and/or 5(c) of this Deed.
For the avoidance of doubt, TIBL hereby acknowledges that in the
circumstances of such breach CCL will have the absolute right to transfer
the Capacity (as defined in the Capacity Agreement) in accordance with the
terms of the Capacity Agreement and TIBL agrees to provide all necessary
consents to such a transfer if so requested in writing by CCL.
3.3 Mr Xxxxx Xxxxxxx will on the date hereof execute and deliver a personal
guarantee in favour of CCL to CCL of the obligations of TIL under this Deed
and in respect of the Option Agreement in the agreed form under which Xx
Xxxxxxx'x liability will be capped at US$900,000.
3.4 On or before 21 January 2000 Telemonde shall procure the delivery of a
third party charge, substantially in the form annexed, in favour of CCL
under which 400,000 free trading fully paid and non-assessable shares of
common stock in the capital of Telemonde will be charged to CCL as security
for the obligations of TIL under this Deed and the Option Agreement under
which the rights of CCL under the charge cannot be enforced before 15
February 2000.
4. TIL, XXXX and Xxxxxxxxx agree that:
(a) nothing in this Deed is intended to or will affect the rights of CCL
against TIL under the Option Agreement (save as expressly amended in
this Deed) and/or the rights of CCL against TIL and its subsidiaries
(including TIBL) under the Debentures and
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(b) a default under clause 1(a) and/or clause 1(b) and/or a failure to
procure the delivery of the third party charge in clause 3.4 of this
Deed will be deemed to be an event of default under the Debentures
entitling CCL to exercise all its rights thereunder provided that
(c) CCL agrees not to enforce its rights under the Debentures (and any
other security given to CCL in respect of the obligations of TIL under
the Put Option) unless there is a breach of the provisions set out in
Clause 1(a) and/or 1(b) and/or Clause 3.4 and/or Clause 5(c) and/or
under any document or instrument referred to in Clauses 2 and 3 of
this Deed or any further breaches under the documentation which TIL
and/or its subsidiaries have entered into with CCL relating to the
Capacity;
5. (a) Telemonde will procure that (i) the registration statement referred to
in the Registration Rights Agreement between Telemonde and CCL dated 1
September 1999 will be filed with the Securities and Exchange
Commission by not later than 15 February 2000 or, if later, the first
date on which such a filing is lawfully permitted and thereafter shall
exercise all good faith efforts to have such registration statement
declared effective as soon as possible and (ii) such registration
statement will additionally apply to such number of shares as are to
be issued pursuant to Clause 5(c) less 1 million and Clause 2 (if
any).
(b) The definition of "Exercise Price" in the Warrant will be amended by
the replacement of the figures "5.25" by the figures "2.70".
(c) Telemonde will procure the issue of fully paid and non-assessable
shares of common stock in the capital of Telemonde in the name of CCL
on or before 17 January 2000 on terms on which CCL will not be
required to make any
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payment to Telemonde for these shares and the consideration for the
issue shall be its forbearance hereunder without prejudice to CCL's
rights arising under a default by TIL and/or any of its associated
companies. The number of shares to be issued under this Clause 5(c)
shall not be greater than 1.75 million and not less than 1.5 million
and shall be calculated by dividing the sum of US$1,350,000 by the
Market Price Per Share (as such expression is defined in the Warrant)
on the last trading day immediately prior to the date of issue and
adding one million to the result.
6. For the avoidance of doubt it is hereby agreed and declared:
(a) the Capacity Agreement and all CCL's and TIL's rights and obligations
under it remain in full force and effect save only as expressly
amended or modified by this Deed and
(b) unless and until all sums payable to CCL pursuant to the Option
Agreement (as amended by this Deed) are paid in full together with
interest and costs all CCL's rights under the Capacity Agreement will
remain in full force and effect save as specifically amended by this
Agreement and
(c) all amounts payable by TIL under this Deed are deemed to be Secured
Liabilities as defined in the Debentures and nothing in this Deed will
affect the security of CCL over the assets of TIL and its subsidiaries
contained in the Debentures save as expressly provided in this Deed.
7. This Agreement may only be varied by written document signed by all the
parties.
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8. The obligations and liabilities of any party hereto shall not be prejudiced
released or affected by any time or forbearance or indulgence, release or
compromise given or granted by any person to whom such obligations and
liabilities are owed or by any other person to such party or any other
party so obliged or liable nor by any other matter or circumstance which
(but for this provision) would operate to prejudice release or affect any
such obligations except an express written release by all the parties to
whom the relevant obligations and liabilities are owed or due.
9. This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby irrevocably submit themselves to the
non-exclusive jurisdiction of the English, New York and US Federal Courts.
IN WITNESS whereof this Agreement has been duly executed and delivered as a deed
by the parties the day and year first before written.
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EXECUTED and DELIVERED as a Deed )
by COMMUNICATIONS COLLATERAL )
LIMITED acting by its duly appointed attorney )
Xxxxxx Xxxxx )
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INVESTMENTS LIMITED )
acting by )
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INTERNATIONAL )
BANDWIDTH LIMITED )
acting by )
EXECUTED and DELIVERED as a Deed )
by XXXXXXXXX INC ) /s/ Xxxxx Xxxxxxx
acting by )
EXECUTED and DELIVERED as a Deed )
by XXXXX XXXXXXX in the presence of:- ) /s/ Xxxxx Xxxxxxx
/s/ X. Xxxxxx
XXXXX XXXXXX
FLAT 00,
XXX XXXXX
XXXXXX LANE
CHELMSFORD
ESSEX CM1 7UF
LEGAL SECRETARY
EXECUTED and DELIVERED as a Deed )
by COMMUNICATIONS COLLATERAL ) /s/ Xxxxxx X. Xxxxx
LIMITED acting by its duly appointed attorney )
Xxxxxx Xxxxx )
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INVESTMENTS LIMITED )
acting by )
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INTERNATIONAL )
BANDWIDTH LIMITED )
acting by )
EXECUTED and DELIVERED as a Deed )
by XXXXXXXXX INC )
acting by )
EXECUTED and DELIVERED as a Deed )
by XXXXX XXXXXXX in the presence of:- )
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CCL's rights under the Capacity Agreement will remain in full force
and effect save as specifically amended by this Agreement and
(c) all amounts payable by TIL under this Deed are deemed to be Secured
Liabilities as defined in the Debentures and nothing in this Deed will
affect the security of CCL over the assets of TIL and its subsidiaries
contained in the Debentures save as expressly provided in this Deed.
7. This Agreement may only be varied by written document signed by all the
parties.
8. The obligations and liabilities of any party hereto shall not be prejudiced
released or affected by any time or forbearance or indulgence, release or
compromise given or granted by any person to whom such obligations and
liabilities are owed or by any other person to such party or any other
party so obliged or liable nor by any other matter or circumstance which
(but for this provision) would operate to prejudice release or affect any
such obligations except an express written release by all the parties to
whom the relevant obligations and liabilities are owed or due.
9. This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby irrevocably submit themselves to the
non-exclusive jurisdiction of the English, New York and US Federal Courts.
IN WITNESS whereof this Agreement has been duly executed and delivered as a deed
by the parties the day and year first above written.
EXECUTED and DELIVERED as a Deed )
by COMMUNICATIONS COLLATERAL )
LIMITED acting by its duly appointed attorney )
Xxxxxx Xxxxx )
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INVESTMENTS LIMITED )
acting by X. Xxxxxxxx, Director ) /s/ S Xxxxxxxx
X. Xxxxx, Director ) /s/ X Xxxxx
EXECUTED and DELIVERED as a Deed )
by TELEMONDE INTERNATIONAL )
BANDWIDTH LIMITED )
acting by X. Xxxxxxxx, Director ) /s/ S Xxxxxxxx
X. Xxxxx, Director ) /s/ X Xxxxx
EXECUTED and DELIVERED as a Deed )
by XXXXXXXXX INC )
acting by )
EXECUTED and DELIVERED as a Deed )
by XXXXX XXXXXXX in the presence of:- )
