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EXHIBIT 10.16
November 30, 2000
TELEMONDE, INC.
TELEMONDE BANDWIDTH (BERMUDA) LTD.
GLOBAL CROSSING USA INC
GT U.K. LTD
GT LANDING CORP.
ATLANTIC CROSSING LTD.
__________________________________
STANDSTILL AGREEMENT
__________________________________
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CONTENTS
A. Main Agreement
B. Schedule 1 Details of Agreed Amount in respect of Drawn-Down Capacity
C. Schedule 2 Capacity Commitment Agreement
D. Schedule 3 Permitted Borrowings
E. Schedule 4 Permitted Encumbrances
F. Schedule 5 Registration Rights Agreement
G. Schedule 6 [Intentionally Omitted]
H. Schedule 7 Legal proceedings
I. Schedule 8 Telemonde Group Companies Giving Guarantees
J. Schedule 9 Certificate of Designation of Series A Convertible Preferred
Stock
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STANDSTILL AGREEMENT
Dated as of November 30, 2000
by and among
TELEMONDE, INC. ("TINC")
230 Park Avenue
10/th/ Floor
New York
New York 10169
TELEMONDE BANDWIDTH
(BERMUDA) LTD. ("TBBL")
Argonaut House
5 Park Road
Hamilton HM09
Bermuda
GLOBAL CROSSING USA INC ("Global Crossing USA")
GT U.K. LTD ("GT UK")
GT LANDING CORP. ("GT Landing")
c/o 360 North Crescent Drive
Beverly Hills
California 90210
ATLANTIC CROSSING LTD. ("Atlantic Crossing")
Wessex House
45 Reid Street
Hamilton HM12
Bermuda
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RECITALS
A. On 10/th/ June 1998, TBBL and Atlantic Crossing entered into the Atlantic
Capacity Agreement including a commitment on behalf of TBBL to acquire from
Atlantic Crossing a certain amount of transatlantic and other
telecommunications cable capacity on an indefeasible right of use basis for
an agreed sum.
B. TBBL has not drawn-down all the capacity that it agreed to under the
Atlantic Capacity Agreement. In addition, it owes sums to Atlantic Crossing
pursuant to that agreement for Drawn-Down Capacity and O&M Charges.
C. In December 1998, GT UK and TBBL entered into the UK Backhaul Agreement and
GT Landing and TBBL entered into the US Backhaul Agreement, pursuant to
which TBBL leased certain capacity in the US and the UK. TBBL owes GT UK
and GT Landing certain sums under each of these agreements.
D. On November 1, 1999, TINC entered into the IPL Agreement with Global
Crossing USA pursuant to which TINC leased certain capacity. TINC owes
Global Crossing USA certain sums under the IPL Agreement. The IPL Agreement
has been terminated by mutual consent of the parties thereto, effective as
of 31 October, 2000, and will be replaced by a new agreement with an
effective date of November 1, 2000 (which new agreement is outside the
scope of this Agreement), and by entering into such new agreement, the
parties to the IPL Agreement have agreed that no additional liabilities
will accrue under the IPL Agreement from and after November 1, 2000.
E. Atlantic Crossing, Global Crossing USA, GT UK and GT Landing are affiliated
companies. TBBL is an Affiliate of TINC.
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F. The parties have agreed to settle the terms of TBBL's liability to Atlantic
Crossing, GT UK and GT Landing pursuant to the Atlantic Capacity Agreement,
the US Backhaul Agreement and the UK Backhaul Agreement and TINC's
liability to Global Crossing USA pursuant to the IPL Agreement on the terms
set out herein.
[Remainder of page intentionally left blank.]
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AGREEMENT
1. Definitions
a) In this Agreement (including the Recitals) the following terms shall
have the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"Agreed Amount" means the sum to be paid pursuant to clause 5 (include
interest payable as provided in such clause), such amount being the
amount agreed between the parties as being TBBL and TINC's current
liability (other than in respect of Outstanding Drawdown Obligations)
under the Capacity Agreements outstanding as at the date hereof, as
set out in Schedule 1;
"Agreed Dates" means the dates for payment of the Agreed Amount as set
out in Clause 5(a);
"Agreement" means this agreement including the Schedules hereto;
"Atlantic Capacity Agreement" means the Capacity Purchase Agreement
between TBBL and Atlantic Crossing dated 10th June 1998 as amended
prior to the date hereof;
"Business Day" means a day (excluding Saturdays and Sundays) on which
banks are open for business in London;
"Capacity Agreements" means the Atlantic Capacity Agreement, the UK
Backhaul Agreement, the US Backhaul Agreement and the IPL Agreement;
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"Capacity Commitment Agreement" means the draft agreement attached
hereto at Schedule 2 between TINC and Global Crossing Bandwidth, Inc.;
"Common Shares" means common stock of Telemonde Inc;
"Drawn-Down Capacity" means telecommunications capacity drawn-down and
in service for TBBL pursuant to the Capacity Agreements;
"Effective Date" means the day on which all of the items set forth in
Clause 7.2 are delivered to Global Crossing;
"Global Crossing" means each of Atlantic Crossing, Global Crossing
USA, GT UK and GT Landing, and any agreement of "Global Crossing"
hereunder shall be the agreement of each of them individually;
"Insolvency Event" means: any dissolution, termination of existence,
insolvency, business failure, appointment of a receiver of any part of
the property of, assignment for the benefit of creditors of TINC or
any Telemonde Group Company, or commencement of any proceeding under
any bankruptcy or insolvency laws by any TINC or any Telemonde Group
Company, or commencement of such proceedings against TINC or any
Telemonde Group Company that remain uncured or undismissed for 60 days
after such commencement.
"IPL Agreement" means the International Private Line Services
Agreement between TINC and Global Crossing USA dated 1st November,
1999.
"Management Party" means Adam Bishop and Kevin Maxwell.
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"O&M Charges" means operations and maintenance charges in respect of
Drawn Down Capacity payable pursuant to the Capacity Agreements;
"Outstanding Draw-Down Obligations" means TBBL's outstanding
obligations to draw down and pay for further capacity pursuant to the
Atlantic Capacity Agreement;
"Permitted Borrowings" means the categories of borrowings set out in
Schedule 3;
"Permitted Encumbrances" means the categories of encumbrances set out
in Schedule 4;
"Preferred Shares" means 5,000,000 shares of Series A Convertible
Preferred Stock, which shares are designated by, issued pursuant to,
and are governed by the terms of, the Certificate of Designation of
Series A Convertible Preferred Stock of Telemonde, Inc. to be filed
with the Secretary of State of Delaware in the form attached hereto as
Schedule 9;
"Preferred Cash Equivalent" means a sum calculated by multiplying (i)
the lesser of (x) the closing bid price per share of common stock of
TINC on the Effective Date, (y) any higher price per share paid for
the purchase of shares of common stock of TINC in any transaction
effecting the purchase of over 5% of the then-outstanding shares of
common stock of TINC occurring between then Effective Date and May 30,
2000 (in either case as adjusted for splits, dividends, and other
adjustments), (ii) by 23,000,000, to be paid to Global Crossing
Limited immediately pursuant to a failure by TINC to cause 23,000,000
Common Shares to be authorized and reserved for issuance to permit the
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conversion of the Preferred Shares issued to Global Crossing Limited;
"Registration Rights Agreement" means an agreement providing for
Common Shares to be issued hereunder to be granted certain
registration rights in a form substantially similar to that set out in
Schedule 5;
"Standstill Period" means the period from the date on which the
standsill commences to the date on which the standstill expires, in
each case in accordance with Clause 7;
"Telemonde Group Company" means any Affiliate of TINC, including TBBL;
"TNL" means Telemonde Networks Limited;
"UK Backhaul Agreement" means the Lease Agreement in Inland Capacity
(United Kingdom) of December 1998 between GT UK and TBBL;
"US Backhaul Agreement" means the Lease Agreement in Inland Capacity
(United States) of December 1998 between GT Landing and TBBL.
b) In this Agreement, unless the context otherwise requires:
i) references to Recitals, Clauses and Schedules are references to
recitals of, clauses of and schedules to this Agreement;
ii) references to any party shall, where relevant, be deemed to be
references to or include, as appropriate, their respective lawful
successors, assigns or transferees;
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iii) references to one gender include all genders and references to
the singular include the plural and vice versa
2. Standstill Period and Agreement
In consideration for:
a) TINC agreeing (by means of its execution hereof) to pay the Agreed
Amount on the Agreed Dates;
b) TINC fulfilling its obligations pursuant to Clause 6;
c) TINC agreeing (by means of its execution hereof) to procure the
entering into of the Capacity Commitment Agreement by TNL;
d) TINC causing all of the items set forth in Clause 7.2 to be delivered
to Global Crossing (or any Global Crossing Affiliate noted therein) on
or before December 14, 2000; and
e) TINC and TBBL (by means of their respective execution hereof) agreeing
to the other matters contained in this Agreement, including their
performance thereof,
Global Crossing agrees that during the Standstill Period none of them shall:
a) make any demand for, or accept payment or discharge or claim or take
any proceedings or steps to enforce payment or discharge of or to
recover the Agreed Amount or in respect of the Outstanding Draw Down
Obligations;
b) take steps to enforce or make demand under any guarantee, indemnity,
security or other right of recourse in respect of
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the Agreed Amount or in respect of the Outstanding Draw Down
Obligations;
c) take any steps to wind up or appoint a receiver, administrative
receiver or administrator or other similar officer or commence any
other insolvency related proceedings or any analogous proceedings in
any other jurisdiction against any Telemonde Group Company or any
assets thereof in relation to the Agreed Amount or in respect of the
Outstanding Draw Down Obligations, and:
Global Crossing agrees further as set out in this Agreement. This Clause 2
shall not restrict or limit Global Crossing from taking any action with
respect to enforcing its rights under this Agreement during the Standstill
Period, enforcing its rights under the Capacity Agreements during the
Standstill Period, other than in relation to the Agreed Amount or in
respect of the Outstanding Draw Down Obligations, or enforcing its rights
under any other agreement to which it is party.
3. Outstanding Draw Down Obligations and Agreed Amount
3.1 Atlantic Crossing agrees that the issuing of the Preferred Shares on
the Effective Date to Global Crossing Limited (a Bermuda company with its
registered office at Wessex House, 45 Reid Street, Hamilton, Bermuda) and
the authorization and reservation of an additional number of Common Shares
in an amount sufficient to allow a full conversion of all of the Preferred
Shares (or the payment in full of the Preferred Cash Equivalent to Global
Crossing Limited) on or prior to May 30, 2001 shall be in full and final
settlement of any claims that Atlantic Crossing may have pursuant to or in
relation to the Atlantic Capacity Agreement arising on or prior to the date
hereof and in relation to the Outstanding Draw Down Obligations and that,
subject to termination of the Standstill Period pursuant to Clause 7.3(a),
such issuance and reservation (or
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payment) shall release TBBL from all such claims and obligations and in
such connection, following such issuance and reservation (or payment) and
termination of the Standstill Period it shall not:
a) make any demand for, accept payment or discharge for or make any claim
or take any proceedings or steps to enforce payment or discharge of or
to recover any sums in respect of the Outstanding Draw Down
Obligations;
b) take steps to enforce or make demand under any guarantee, indemnity,
security or other right of recourse in respect of the Outstanding Draw
Down Obligations; or
c) take any steps to wind up or appoint a receiver, administrative
receiver or other similar officer or commence any other insolvency
related proceedings or analogous proceedings in any other jurisdiction
against any Telemonde Group Company or any assets thereof in respect
of the Outstanding Draw Down Obligations.
This Clause 3.1 shall not restrict or limit Atlantic Crossing from taking
any action with respect to enforcing its rights under this Agreement
following such issue or payment, or enforcing its rights under the Atlantic
Capacity Agreement after such issue or payment, other than in respect of
the Outstanding Draw Down Obligations.
3.2 Global Crossing hereby confirms that, subject to (i) the issuing of
the Preferred Shares on the Effective Date to Global Crossing Limited and
the authorization and reservation of an additional number of Common Shares
in an amount sufficient to allow a full conversion of all of the Preferred
Shares (or the payment in full of the Preferred Cash Equivalent to Global
Crossing Limited) on or prior to May 30, 2001, and (ii) TINC's and TBBL's
compliance with their other obligations under this Agreement (including
termination of the Standstill Period pursuant to Clause
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7.3(a)), the Agreed Amount is and shall be the total outstanding liability
(subject to Clause 3.1) of any Telemonde Group Company to Global Crossing
as at the date hereof in respect of all liabilities and obligations of such
Telemonde Group Company accrued or outstanding as at the date hereof under
the Capacity Agreements (other than in respect of the Outstanding Draw Down
Obligations) and, during the term of the Standstill Period, and after
termination of the Standstill Period pursuant to Clause 7.3(a), Global
Crossing hereby expressly waives the right to recalculate such amount or
seek to charge any additional sums in respect of services supplied under
the Capacity Agreements prior to the date hereof. This Clause 3.2 shall not
restrict or limit Global Crossing from enforcing or pursuing (x) any claims
under any Capacity Agreement, including any claims in excess of the Agreed
Amount, upon termination of the Standstill Period other than pursuant to
Clause 7.3(a), or (y) any claims under any Capacity Agreement in respect of
services supplied after the date hereof.
4. TINC and TBBL Obligations
Each of TINC and TBBL agrees that during the Standstill Period it will not
and agrees to procure that no Telemonde Group Company shall without Global
Crossing's consent in writing:
a) save for Permitted Borrowings, borrow or raise money or credit of
whatever nature from any person;
b) save for Permitted Encumbrances, give, create or allow to subsist any
charge, lien, security or encumbrance whatsoever or any cash
collateral/cash cover or provide any preferential treatment to any
creditor or give or agree to give any guarantee or indemnity in
respect of any borrowings or liabilities in the nature of borrowings;
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c) enter into any transaction (including, but not limited to, a disposal,
but excluding a Permitted Borrowing) otherwise than on arm's length
terms in the ordinary course of business;
d) dispose of any interest in any asset, including (for the avoidance of
doubt) shares in a Telemonde Group Company;
e) declare or announce any dividend or make any other income distribution
to its shareholders;
f) purchase or redeem any of its issued shares or repurchase any debt in
TINC or a Telemonde Group Company;
g) issue and sell any equity securities for less than 85% of the then-
fair market value; and
h) prepay, or accelerate the due date of, any indebtedness to any person.
Each of TINC and TBBL agree that during the Standstill Period it will, and
agrees to cause each Telemonde Group Company to:
a) continue to have all current business conducted through a Telemonde
Group Company;
b) continue to cause each Management Party to devote his full time and
attention to the business of the Telemonde Group Companies;
c) provide Global Crossing, upon request, with financial information on
TINC and its Subsidiaries, including audited consolidated balance
sheets, statements of income and cash flow statements, by the 90th day
following the close of TINC's fiscal year, and with unaudited interim
consolidated
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balance sheets, statements of income and cash flow statements, by the
45th day following the close of TINC's fiscal year; provided, however,
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that TINC will be deemed to have satisfied this obligation by timely
providing filings containing such information that have been timely
filed under the Securities Exchange Act of 1934, as amended; and
d) provide Global Crossing, upon request and pursuant to a
confidentiality agreement in form and scope agreeable to the parties,
with such additional information about TINC's performance or
operations as Global Crossing may request.
5. Payment of Agreed Amount
a) TINC will pay or cause to be paid to Global Crossing the following
sums according by the dates indicated below:
i) December 14th, 2000 US$1.4 million
ii) 28th February 2001 US$0.5 million
iii) 30th November 2001 US$4.0 million
iv) 30th November 2002 US$6.0 million
Each payment shall be paid in cleared funds to Global Crossing's bank
account details as notified to TINC from time to time.
b) In addition, interest on each payment delineated in subclause 5(a),
above, shall accrue at a rate of 7.00% per annum, compounded annually,
which interest must be paid in full on or prior to 30th November 2002,
but may be prepaid in full or in part from time to time at the
election of TINC.
c) In the event that TINC raises additional funding by way of public
offering or investor financing it shall, where such sums are not
required for demonstrable working capital
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purposes, use such sums to pay all or part (as reasonable in the
circumstances) of the outstanding portion of the Agreed Amount.
6. Issuance of Preferred Shares
a) TINC shall on the Effective Date issue all 5,000,000 of the Preferred
Shares to Global Crossing Limited and shall enter into the
Registration Rights Agreement in respect of the Common Shares issuable
pursuant to a conversion of the Preferred Shares.
b) TINC agrees to call a meeting of holders of all holders of shares of
TINC stock prior to May 30, 2001 in order that a proxy vote may be put
forth to increase TINC's authorised but unissued share capital and
authorising the Directors and/or executives of TINC to allot such
Common Shares in order that it may meet its obligation pursuant to
clause (i) of Clause 6(c), below.
c) On or before May 30, 2001, TINC shall either (i) cause 23,000,000
Common Shares to have been authorized by all necessary corporate
action, and shall have reserved such Common Shares for issuance
pursuant to a conversion of the Preferred Shares, or (ii) pay a sum
equal to the Preferred Cash Equivalent to Global Crossing Limited.
d) If TINC, pursuant to clause c), above, causes 23,000,000 Common Shares
to have been authorized by all necessary corporate action, and shall
have reserved such Common Shares for issuance pursuant to a conversion
of the Preferred Shares, it will at all times continue to segregate
and reserve that number of Common Shares sufficient to allow all then-
outstanding Preferred Shares to be converted into Common Shares.
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e) If TINC pays the Preferred Cash Equivalent to Global Crossing Limited
on or before May 30, 2001, Global Crossing Limited shall (and Global
Crossing shall procure that Global Crossing Limited shall) surrender
the Preferred Shares to TINC forthwith. If TINC offers to pay the
Preferred Cash Equivalent to Global Crossing Limited after May 30,
2001, Global Crossing Limited may, at its sole option, surrender the
Preferred Shares to TINC in exchange for payment of the Preferred Cash
Equivalent.
f) Global Crossing Limited shall not (and Global Crossing shall procure
that Global Crossing Limited shall not) elect to convert or attempt to
convert any Preferred Shares prior to May 30, 2001.
7. Term of Standstill Period
7.1 The Standstill Period will commence upon the date hereof and will
continue until terminated pursuant to Clause 7.3, 7.4, or 8.
7.2 Telemonde agrees to deliver to Global Crossing (or any other entity
set forth below) on or prior to December 14, 2000:
a) (to Global Crossing Limited) share certificates representing all
5,000,000 of the Preferred Shares;
b) duly executed counterparts of the Registration Rights Agreement;
c) duly executed counterparts of the Capacity Commitment Agreement;
d) a certificate duly executed by an authorized officer of TINC and TBBL
certifying that the representations and warranties of TINC and TBBL
herein are true and correct as of such date;
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e) opinions of U.S. and Bermuda counsel, in form reasonably satisfactory
to Global Crossing, as to (A) TINC and TBBL's due incorporation and
good standing, (B) TINC and TBBL's due authorization, execution and
delivery of this Agreement and the Registration Rights Agreement and
the transactions contemplated hereby and thereby, (C) absence of
conflict with TINC and TBBL's charter documents and applicable laws,
(D) receipt of governmental approvals, (E) validity and enforceability
of this Agreement and the Registration Rights Agreement, and (F) the
Preferred Shares being validly issued, fully paid and nonassessable;
f) guarantees of the punctual observance and performance of TINC and TBBL
of their obligations hereunder, including TINC's obligation to pay the
Agreed Amount on the Agreed Dates, by the Telemonde Group Companies
listed in Schedule 8;
g) letter agreements (in form and substance reasonable to Global
Crossing) from each of the Managing Parties covenanting to devote his
respective full time and attention to the business of TINC and its
Affiliates;
h) any required third party consents and a written certification and
warranty from TINC and TBBL that no additional consents, approvals,
waivers, consents or clearances are required from any third party in
connection with the execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the Capacity Commitment
Agreement, the lease referred to in subclause i), below, and the
transactions contemplated hereby and thereby;
i) a lease, on a form provided by Global Crossing, and in form and
substance reasonably acceptable to Global Crossing
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providing for a two year lease of an London-New York STM-1 circuit at
an initial lease rate of $30,000 per month;
j) a summary of all indebtedness of TINC and of TBBL other than
indebtedness incurred on an arm's length basis in the ordinary course
of business disclosed in TINC's periodic filings pursuant to the
Securities Exchange Act of 1934, as amended, certified by an executive
officer of TINC; and
k) a copy of the Certificate of Designation of Series A Preferred Shares
attached hereto as Schedule 9, certified by the Secretary of State of
Delaware.
7.3 The Standstill Period will end upon the earliest to occur of the
following:
a) (i) Payment to Global Crossing of the Agreed Amount and all interest
due thereupon and (ii) TINC's performance of all actions contemplated
by Clause 6(a) and by Clause 6(c);
b) Forthwith upon any material breach by TINC of the terms of this
Agreement, including failure to pay any Agreed Amount on any Agreed
Date;
c) Forthwith if any Insolvency Event occurs or is found to exist in
respect of TINC or any Telemonde Group Company;
d) Forthwith upon (i) the default by TINC or any Telemonde Group Company
of any material indebtedness that results in such indebtedness being
due and payable, or (ii) the termination of any standstill agreement
or arrangement with respect to any material indebtedness of TINC or
any Telemonde Group Company (other than by reason of TINC's
satisfaction of all obligations thereunder), including
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termination of the standstill arrangements under that certain
Standstill letter dated 31 December 1999, as amended, between TINC,
TNL, and Telemonde International Bandwith Ltd. and MCI Worldcom Global
Networks U.S., Inc., and MCI Worldcom Global Networks Limited;
e) Failure of Telemonde to deliver the items set forth in Clause 7.2 in
the timescales set forth therein.
7.4 Notwithstanding anything to the contrary in this Agreement, Global
Crossing has the right to terminate this Agreement, and the Standstill
period, in its sole discretion, at any time prior to the Effective Date.
7.5 TINC shall promptly notify Global Crossing upon the occurrence of any
event or circumstance resulting in termination of the Standstill Period.
8. Effect of Termination of the Standstill Period
a) In the event of termination of the Standstill Period other than in
accordance with Clause 7.3(a) or Clause 7.4 above:
i) any outstanding part of the Agreed Amount (including any
interest thereon) shall become immediately due and payable;
ii) the Preferred Cash Equivalent shall become immediately due and
payable;
iii) interest may be charged on the total outstanding amount under
clause I) or clause ii) above, from the date of termination at
the rate of 3.5% above LIBOR.
Upon any such termination of the Standstill Period, Global Crossing
may take any action (including any action it agreed not to take during
the Standstill Period pursuant to Clause 2)
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to pursue or enforce any claims or rights under the Capacity
Agreements, including with respect to the Agreed Amount or the
Outstanding Draw Down Obligations.
b) In the event of termination of the Standstill Period in accordance
with Clause 7.3(a) above, Global Crossing shall make no demand for or
take or pursue any proceedings or other claims against TBBL, TINC or
any other Telemonde Group Company pursuant to or in relation to the
Capacity Agreements, and the payment of the Agreed Amount, the
issuance of the Preferred Shares (and the authorization and
reservation of the applicable number of Common Shares in respect of a
conversion thereof, or payment of the Preferred Cash Equivalent) and
the entering into of this Agreement and the Capacity Commitment
Agreement shall be in full and final settlement of any claims that
Global Crossing may have pursuant to or in relation to the Atlantic
Capacity Agreements relating to or arising out of services provided,
or events occurring, prior to the date hereof, SAVE THAT nothing in
this Clause shall apply to (i) TBBL's continuing obligation to pay
ongoing O&M Charges, and (ii) any obligation by TINC, TBBL or any
other Telemonde Group Company to pay ongoing lease or backhaul charges
related to activities conducted or services provided on or after the
date hereof pursuant to any of the Capacity Agreements.
c) In the event of a termination of the agreement and of the Standstill
Period pursuant to Clause 7.4, above, this Agreement will be void and
of no effect.
9. Ongoing Operations and Maintenance Charges; Survival of Representations and
Warranties; Losses
a) [Intentionally Omitted]
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b) All representations and warranties contained in this Agreement and all
documents delivered in connection with this Agreement shall survive the
termination of the Standstill Period.
c) TINC and TBBL shall jointly and severally indemnify, defend and hold
Global Crossing, its affiliates, and each of their respective officers,
directors, partners, managing directors, affiliates, employees, agents,
consultants, representatives, successors and assigns harmless from and
against all claims, losses, liabilities, obligations, payments, damages,
charges, judgments, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith), costs and expenses of investigation, action suits,
proceedings, demands, assessments and fees, reasonable expenses and
disbursements of counsel, consultants and other experts, incurred or
suffered by any of them in connection with the transactions contemplated by
this Agreement arising, directly or indirectly, from or in connection with:
(A) any breach of any representation or warranty made by any TINC,
TBBL or any Telemonde Group Company in this Agreement and any Registration
Rights Agreement entered into pursuant to Clause 6(a) or Clause 6(b); and
(B) any breach by TINC, TBBL or any Telemonde Group Company of any
covenant or obligation under this Agreement and any Registration Rights
Agreement.
The remedies provided in this Clause 9(c) shall not be exclusive of or
limit any other remedies that may be available to Global Crossing or any of
its affiliates.
10. Representations and warranties
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Each of TINC and TIBL jointly and severally represents and warrants for
itself and on behalf of the Telemonde Group Companies that :
a) Organization and Good Standing. It is a corporation duly organized,
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validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority
to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to
perform all its obligations under this Agreement. It and each
Telemonde Group Company is qualified to do business as a foreign
corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
b) Capitalization. The authorized equity securities of TINC consist of
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145,000,000 shares of common stock, par value $0.001 per share, of
which 102,575,493 shares are issued and outstanding and 5,000,000
shares of preferred stock, par value $0.01 per share of which 0 shares
are issued and outstanding. All of the outstanding equity securities
of TINC have been duly authorized and validly issued and are fully
paid and nonassessable. Upon issuance, the Preferred Shares, and all
Common Shares issued upon conversion thereof, shall be duly
authorized, validly issued, fully paid and nonassessable. Other than
this Agreement, and except as set forth in this clause b), there are
no contracts, agreements or other arrangements relating to the
issuance, sale or transfer of the Common Shares or Preferred Shares.
In addition to this Agreement, there are (i) pre-existing commitments
by TINC to sell 15,684,821Common Shares, and (ii) 6,250,000 Common
Shares reserved for possible conversion under indebtedness agreements
to which TINC is a party.
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c) Litigation. Save as set out in Schedule 7, there are no legal or
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other proceedings pending against it or any Telemonde Group Company
and so far as it is aware, no such claims are threatened, before any
court, tribunal, commission or regulatory authority.
d) Authority. It has the necessary powers and authority to enter into
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this Agreement and to perform its obligations hereunder. It will, as
of December 14, 2000, have the necessary powers and authority to enter
into the Registration Rights Agreement, as applicable, and to perform
its obligations hereunder. This Agreement and the Registration Rights
Agreement constitute (and in the case of the Registration Rights
Agreement, will constitute as of December 14, 2000) its legal, valid
and binding obligations, enforceable against it in accordance with its
terms, except as limited by (A) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws
relating to or affecting the rights and remedies of creditors and
debtors and (B) equitable principles generally, regardless of whether
such principles are considered in a proceeding at equity or at law.
e) Required Consents. It has obtained all consents, approvals, waivers,
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consents and clearances of all third parties, including all
governmental, judicial and regulatory bodies and authorities, required
in connection with the execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the transactions
contemplated hereby and thereby.
f) No Conflict. There is no law, decree or similar enactment binding
-----------
on it or any Telemonde Group Company and no provision in any charter
or corporate document, mortgage,
<PAGE>
debenture, trust deed, contract or agreement which would prevent or
affect it or any Telemonde Group Company from executing and
delivering, observing or performing any of its or their (as relevant)
obligations under, this Agreement and the Registration Rights.
g) Other Credit Facilities. There are no undrawn facilities available
-----------------------
to TINC or any Telemonde Group Company.
11. Assignment
Global Crossing may assign or transfer its obligations to any company that
is an Affiliate of Global Crossing , but not otherwise and Global Crossing
agrees to procure that the oligations and agreements herein on behalf of
Global Crossing apply to any such affiliate . TINC may not assign any of
its rights or obligations hereunder.
12. Notices
a) Notices for TINC and TBBL shall be sent to:
Telemonde Inc
40 Portman Square
London W1H 9FH
Fax: +44 (0)20 7487 4001
FAO: Director of Legal Services
b) Notices for Global Crossing shall be sent to:
Global Crossing USA Inc
Attention: General Counsel
360 N. Crescent Dr.
Beverly Hills, CA 90210
<PAGE>
TBBL hereby confirms that TINC at the address above is authorised to accept
notices on its behalf.
Global Crossing hereby confirms that Global Crossing USA at the address
above is authorised to accept notices on its behalf.
Notices may be delivered personally, sent by registered post or facsimile.
Any such notice shall be deemed to have been received:
a) If delivered personally, at the time of delivery
b) If communicated by facsimile, upon receipt by the sender of a
facsimile transmission report (or other appropriate evidence)
indicating successful transmission
c) If sent by registered post, at the time of receipt
PROVIDED THAT where in the case of delivery by hand or facsimile
transmission, receipt (or deemed receipt) occurs after 6.00pm on a Business
Day or on a day which is not a Business Day, receipt shall be deemed to
have occurred at 9.00am on the next following Business Day
13. Payments
If any payment under this Agreement falls on a day which is not a Business
Day, the payment shall be made on the next succeeding Business Day, save
where such day falls in the next month in which case, payment shall be made
on the immediately preceeding Business Day.
All payments shall be made in $US in immediately cleared funds into such
account as notified to TINC from time to time.
Each payment to be made to Global Crossing under this Agreement shall be
made free and clear of and without deduction, withholding
<PAGE>
or set-off whatsoever, including for or on account of taxes, unless the
payer is required by law to make such payment subject to a deduction or
withholding. If the payer is required by law to make a deduction or
withholding from such a payment, the relevant sum payable by the payer
shall be increased by an additional amount to the extent necessary to
ensure that, after the making of such deduction or withholding, Global
Crossing receives and retains (free from any liability in respect of any
such deduction or withholding) a net sum equal to that which it would have
received and so retained had no such deduction or withholding been made or
required to be made.
14. Variation; Waiver; Entire Agreement
No variation of this Agreement shall be effective unless such variation
shall have been made in writing and signed by a duly authorised officer of
each party. "Variation" shall include any variation, supplement, deletion,
replacement or amendment however effected. No waiver of a breach of the
terms of this Agreement or any default hereunder shall be deemed a waiver
of any subsequent breach or default or in any way affect any other terms of
this Agreement. This Agreement (along with the documents referred to in
this Agreement) constitutes a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter.
Global Crossing Limited is an intended third party beneficiary of this
Agreement.
15. Costs
Each party shall bear its own costs in connection with the negotiation,
preparation and execution and implementation of this Agreement (including,
without limitation, fees and disbursements of legal, accountancy and other
advisors).
<PAGE>
16. Confidentiality and announcements
a) Except as required by law, any regulatory or governmental body or
authority, or as made to professional advisers, no announcement,
statement or information shall be issued by either party save in terms
agreed by the other PROVIDED THAT each party agrees not to
unreasonably withhold or delay its consent to any press release
proposed to be issued by any other party to accompany any regulatory
filing required to be made following completion of this Agreement.
Any party may disclose the terms of this Agreement for the purpose of
enforcing its terms or the terms of any document referred to in or
contemplated by it.
b) Global Crossing jointly and severally agree to keep confidential any
information supplied to it or any of them in connection with the
matters herein contained or otherwise save (i) where such information
is or becomes in the public domain (other than by a breach of
confidentiality by Global Crossing); or (ii) where such disclosure is
required by law or any regulatory or governmental authority or body;
or (iii) where the disclosure is agreed by TINC in writing in advance;
or (iv) that it may disclose such information under professional
advisers who are under similar duties or obligations of
confidentiality.
17. Counterparts
This Agreement may be signed in any number of counterparts and by different
parties on separate counterparts which when taken together shall be deemed
to constitute one Agreement.
18. Law and Venue; Service of Process
<PAGE>
This Agreement will be governed by and construed and enforced in accordance
with the laws of the State of New York. Any action or proceeding seeking
to enforce any provision of, or based on any right arising out of, this
Agreement, may be brought against any of the parties in the courts of the
State of New York, County of New York, or, if it has or can acquire
jurisdiction, in the United States District Court for the Southern District
of New York, and each of the parties irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in
any such action or proceeding and waivers any objection to venue laid
therein. Any notice of legal process will be deemed sufficiently served
on TINC or any Telemonde Group Company if delivered to it at its address
for notices.
[Remainder of page intentionally left blank.]
EXECUTED BY THE PARTIES ON THE DAY AND DATE SET OUT ABOVE
/s/ Kevin Maxwell
.................................
For and on behalf of
Telemonde Inc
/s/ Michael Collins
...................................
For and on behalf of
Telemonde Bandwidth (Bermuda) Limited
<PAGE>
...................................
For and on behalf of
Global Crossing USA Inc
/s/ Jackie Armstrong
......................................
For and on behalf of
Atlantic Crossing Limited
/s/ Jackie Armstrong
......................................
For and on behalf of
GT UK Ltd
......................................
For and on behalf of
GT Lending Corp
