EXHIBIT 10.8(h)
THIS AGREEMENT is made the 13th day of November 2000
BETWEEN:
(1) TELEMONDE, INC. (a Delaware Corporation); TELEMONDE NETWORKS LIMITED
(registered in England and Wales with no: 3714188); and TELEMONDE
INTERNATIONAL BANDWIDTH LIMITED (registered in the British Virgin Islands
with no: 303706); and
(2) MCI WORLDCOM GLOBAL NETWORKS U.S., INC (a Delaware Corporation), and MCI
WORLDCOM GLOBAL NETWORKS LIMITED (formerly MFS Cable Co (Bermuda) Limited)
(registered in Bermuda with no: 22409).
WHEREAS:
(A) The Telemonde Companies and MCI WorldCom entered into a standstill letter
dated 31 December 1999 as varied pursuant to agreements made as of 11 May
2000, 25 July 2000 and 19 September 2000 between the Telemonde Companies
and MCI WorldCom (the "Standstill Letter").
(B) Metrolinx (as defined in paragraph 7 of this Agreement) was incorporated on
27 September 2000 and is a New Telemonde Company.
(C) The Telemonde Companies and MCI WorldCom wish to vary the terms of the
Standstill Letter as set out in this Agreement, inter alia, to include
Metrolinx.
THIS AGREEMENT WITNESSETHS AS FOLLOWS:
1. Definitions
Save as otherwise provided herein or where the context otherwise requires,
defined terms and expressions used in this Agreement shall have the
meanings ascribed to them in the Standstill Letter.
2. Variation
This Agreement shall be deemed to amend and shall form part of the
Standstill Letter. Where inconsistent with the provisions of the
Standstill Letter, the terms set out herein shall prevail. Save to the
extent amended by this Agreement, and save as expressly provided herein,
the Standstill Letter shall remain in full force and effect.
3. Paragraph 4 of the Standstill Letter (Commencement and Further Obligations)
3.1 Sub-paragraph 4.11(b) of the Standstill Letter shall be deleted and the
following substituted therefor:
4.11 (b) The obligation of MCI WorldCom to enter into the Capacity Swap
Agreement is conditional in all respects upon (i) the first
Instalment and the First Service Fee having been received by
the Security Agent on or before 30 November 2000 and (ii) the
Standstill Period having not come to an end.
3.2 The following sub-paragraph shall be added as sub-paragraph 4.12 to the
Standstill Letter:-
4.12 By close of business on 10 November 2000, the Telemonde Companies
shall jointly and severally procure the execution and delivery in
favour of the Security Agent of a guarantee from Metrolinx in the
agreed form contained in the Seventeenth Schedule.
3.3 The following sub-paragraph shall be added as sub-paragraph 4.13 to the
Standstill Letter:
4.13 By close of business on 14 November 2000, the Telemonde Companies
shall jointly and severally procure receipt by the Security Agent of:
(i) a legal opinion in form and substance satisfactory to the
Security Agent in respect of Metrolinx confirming that the
representations and warranties in paragraph 9.1 (a) and 9.1(b)
are true;
(ii) a Directors' Certificate in form and substance satisfactory to
the Security Agent and a certified copy of the board resolutions
of Metrolinx evidencing due execution of the guarantee referred
to in paragraph 4.12.
4. Paragraph 8 of the Standstill Letter (Payment of Debt)
4.1 Sub-paragraph 8.2.3 shall be deleted and the following substituted
therefor:
8.2.3 In the event that Telemonde fails to pay to MCI WorldCom the balance
of the Non-Equity Debt and the First Service Fee (without prejudice to
the provisions of, inter alia, paragraphs 8.1 and 10.2.2) before 31
December 2000, there shall be added to the remaining balance of the
Non-Equity Debt and the First Service Fee, the Second Service Fee,
which shall become immediately due and payable.
4.2 The following sub-paragraph shall be added as sub-paragraph 8.5 to the
Standstill Letter:
8.5.1 In the event of all or any Telemonde Group Companies receiving from
time to time the Metrolinx Monies, each Telemonde Company shall (and
shall procure that the relevant Telemonde Group Companies shall) pay
to the Security Agent forthwith upon the receipt from time to time of
the Metrolinx Monies an amount equal to the lesser of:
(a) the total aggregate value of the Metrolinx Monies received from
time to time less the sum of US$1 million less the total
aggregate of any Metrolinx Monies paid to the Security Agent
pursuant to this sub-paragraph 8.5.1(a); and
(b) US$500,000.
8.5.2 For the avoidance of doubt the maximum aggregate amount which shall
be paid to the Security Agent pursuant to sub-paragraph 8.5.1 shall
be US$500,000.
8.5.3 Payments under this paragraph 8.5 are in addition to and shall not
prejudice payments due under paragraph 8.1 (or, where relevant 8.4).
5. Paragraph 10 of the Standstill Letter (Survival of Terms after Standstill)
5.1 Sub-paragraph 18 of the Standstill Letter shall also be cross-referred to
in sub-paragraphs 10.1 and 10.2.1 of the Standstill Letter.
5.2 Sub-paragraph 10.2.3 shall be deleted and the following substituted
therefor:-
10.2.3 Notwithstanding the cessation of the Standstill Period prior to:
(a) 30 November 2000, the First Service Fee shall not be payable
until 30 November;
(b) 31 December 2000, the Second Service Fee shall not be payable
until 31 December 2000;
whereupon the aforesaid First Service Fee and/or the Second Service
Fee shall be recoverable from Telemonde and the Telemonde Guarantee
Companies pursuant to the terms of the Guarantees and the TIBL
Security.
6. Paragraph 18 of the Standstill Letter (Metrolinx)
The following paragraph shall be added as paragraph 18 to the Standstill
Letter:
18.1 On or before 30 November 2000, the Telemonde Companies shall jointly
and severally procure receipt by the Security Agent of:
(i) a duly executed debenture in favour of the Security Agent from
Metrolinx in form and substance satisfactory to the Security
Agent;
(ii) a legal opinion in form and substance satisfactory to the
Security Agent in respect of the debenture referred to in
paragraph 18.1(i) together with a Director's Certificate and a
certified copy of the Board Resolution in form and substance
satisfactory to the Security Agent evidencing due execution of
the aforesaid debenture.
18.2 In consideration of the Security Agent providing such consents as are
required pursuant to the terms of the Standstill Letter to the closing
and implementation of the Metrolinx Project on terms to be agreed, the
Telemonde Companies hereby jointly and severally undertake to procure
receipt by the Security Agent of certain undertaking, covenants,
representations and warranties in form and substance satisfactory to
the Security Agent as set out in the Eighteenth Schedule subject to
any exceptions and qualifications thereto as may be agreed by the
Security Agent.
6.3 The Telemonde Companies hereby jointly and severally undertake that
Metrolinx and no other Telemonde Group Company or any person connected
therewith or any Management Parties or any person connected therewith
will enter into and/or implement and/or benefit from the Metrolinx
Project.
7. First Schedule to the Standstill Letter
7.1 The defined term "Service Fee" shall be deleted in the First Schedule:
7.2 The defined term "Total Service Fee" in the First Schedule shall be deleted
and the following substituted therefor:
"Total Service Fee" means the First Service Fee plus the Second
Service Fee representing a sum calculated at the rate of 3% above the
LIBOR Rate on the unpaid balance of the Non-Equity Debt calculated
from 30 June 1999 until 30 September 2000.
7.3 The defined term "Total Debt" in the First Schedule shall be deleted and
the following substituted therefor:
"Total Debt" means the Non-Equity Debt plus the First Service Fee and
the Second Service Fee (if any).
7.4 The following defined terms shall be included in the First Schedule:
7.4.1 "Metrolinx" means Metrolinx Limited, a company incorporated in
England and Wales with the registration no: 4078868.
7.4.2 "Metrolinx Monies" means any monies loaned to any Telemonde Group
Company by Global Switch or other third party relating to the
Metrolinx Project.
7.4.3 "Global Switch" means any person in the Global Switch Group including
without prejudice to the generality of the foregoing, any persons
which are connected to any person in the Global Switch Group.
7.4.4 "Metrolinx Project" means the transaction contemplated by or is the
subject matter of the draft Memorandum of Understanding entitled
"Memorandum of Understanding" : v3: 25.10.00 sent by e-mail to
Lovells by General Counsel at Telemonde on 27 October 2000.
8. Second Schedule to the Standstill Letter
Metrolinx shall be added to the companies listed in the Second Schedule.
9. Fifteenth Schedule to the Standstill Letter
The repayment terms of the Fifteenth Schedule shall be deleted and the
following substituted therefor:
REPAYMENT TERMS - NON-EQUITY DEBT
30 November 2000 US$4 million plus the First Service Fee.
31 December 2000 The balance of the Non-Equity Debt.
10. Seventeenth Schedule to the Standstill Letter
The attached Appendix 1 shall be added as the Seventeenth Schedule to the
Standstill Letter.
11. Eighteenth Schedule to the Standstill Letter
The attached Appendix 2 shall be added as the Eighteenth Schedule to the
Standstill Letter.
12. Representations and warranties
Each Telemonde Group Company hereby repeats the representations and
warranties set out in paragraphs 7 and 9 of the Standstill Letter and
confirms that the same are true speaking from the date of this Agreement.
13. Incorporation of clauses
Paragraphs 11-15 of the Standstill Letter shall apply to this Agreement
mutatis mutandis as if set out herein seriatim.
IN WITNESS the hands of the parties hereto the day and year first above written.
APPENDIX 1
SEVENTEENTH SCHEDULE
METROLINX GUARANTEE
DATED 2000
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METROLINX LIMITED (1)
- and -
MCI WORLDCOM GLOBAL NETWORKS U.S., INC. (2)
GUARANTEE (England and Wales)
relating to certain Capacity Agreements
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A1/DAG/697926
CONTENTS
Clause Page
1. Definitions and interpretation 1
2. Guarantee 4
3. Indemnity 4
4. Interest following demand 4
5. Continuing security and conditions for release 4
6. Termination and crystallisation 4
7. No competing 5
8. Suspense accounts 5
9. Demands 5
10. Waiver of defences 6
11. Discharge and release 6
12. Currency indemnity 7
13. Guarantor's covenants 7
14. Guarantor's representations and warranties 8
15. Determinations conclusive and demands 9
16. Confidentiality 9
17. Deductions 10
18. Expenses 10
19. Stamp duty 10
20. Notices 10
21. Set-off 11
22. Forbearance and partial invalidity 11
23. Governing law and jurisdiction 12
SCHEDULE 1 13
GUARANTEE
THIS GUARANTEE is made the day of 2000
BETWEEN:
(1) Metrolinx Limited (registered in England and Wales with no. 04078868, whose
registered office is at ▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇ (the "Guarantor")
(2) MCI WorldCom Global Networks U.S., Inc. (registered in Delaware) whose
registered office is at ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, acting in its capacity as security trustee on behalf of itself
and the beneficiaries under a security trust deed dated on or about the
date of this document as amended from time to time ("MCI WorldCom").
WHEREAS:
(A) MCI WorldCom, MCI WorldCom Global Networks Limited ("MCI Global")(formerly
MFS CableCo (Bermuda) Limited and Telemonde International Bandwidth Limited
(formerly "Equitel Bandwidth Limited") ("Telemonde") are parties to a
Transmission Capacity Agreement dated 24 December 1998 (the "First Capacity
Agreement").
(B) Telemonde, MCI WorldCom and MCI Global are parties to a Transmission
Capacity Agreement dated 31 March 1999 (the "Second Capacity Agreement").
(C) Telemonde is in breach of various provisions in both the First Capacity
Agreement and the Second Capacity Agreement including breach of payment
obligations and MCI WorldCom agreed to defer demanding immediate payment
subject to the terms of the Standstill Letter (as defined in clause 1.1).
(D) Pursuant to paragraph 3.1(g) of the Standstill Letter any New Telemonde
Company (as defined in the Standstill Letter) is required to execute a
legally binding guarantee of the Debt (as defined in the Standstill
Letter).
(E) At the request of Telemonde the Guarantor has agreed to enter into this
Guarantee.
(F) It is intended that this Guarantee shall take effect as a deed.
THIS DEED WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Guarantee unless the context otherwise requires the following words
and expressions shall have the meanings set out opposite them:
"Business Day" a day (other than a Saturday or Sunday) on which
banks in the City of London are generally open for
business;
"Capacity Agreements" the First Capacity Agreement, the Second Capacity
Agreement and any other transmission capacity
agreement or other contractual arrangements
entered into at any time between any entity in the
WorldCom Group and any entity in the Customer
Group relating to the sale of transmission
capacity (each a "Capacity Agreement");
"Customer Group" the companies listed in Schedule 1 and any other
company designated as a Customer by agreement in
writing between MCI WorldCom and the Guarantor
(each a "Customer");
"Encumbrance" includes any mortgage, pledge, lien,
hypothecation, charge, assignment or deposit by
way of security or any other agreement or
arrangement (whether conditional or not and
whether relating to existing or to future assets),
having the effect of providing a security or
preferential treatment to a creditor (including
set off, title retention, defeasance or reciprocal
fee arrangements) or any agreement or arrangement
to give any form of security or preferential
treatment to a creditor;
"Guaranteed Obligations" the obligations of each Customer expressed to be
guaranteed by the Guarantor under clause 2
(Guarantee);
"Indebtedness" at any time any obligation for the payment or
repayment of money, whether present or future,
actual or contingent as principal or surety and
whether solely or jointly with another;
"Prime Rate" the prime rate of interest per annum publicly
announced Bank of America, N.A. from time to time
as its "prime rate" for unsecured domestic
commercial loans in the U.S. at that time (or, if
MCI WorldCom determines that it cannot ascertain
this rate, the prime rate of such other American
bank as MCI WorldCom selects from time to time);
"Standstill Letter" the letter dated 31 December 1999 (as varied
pursuant to agreements made as of 11 May 2000, 25
July 2000, and 19 September 2000 from MCI WorldCom
and MCI Global to Telemonde, Inc., Telemonde
International Bandwidth Limited and Telemonde
Networks Limited;
"Subsidiaries" in respect of those companies incorporated in the
U.K. has the same meaning as in Section 736(2) of
the Companies ▇▇▇ ▇▇▇▇; in respect of those
companies incorporated outside the UK
"Subsidiaries" has the same meaning as in the
equivalent legislative provision in the relevant
jurisdiction;
"WorldCom Group" MCI WorldCom Inc. and its subsidiaries;
"US Dollars" or "$" the lawful currency of the United States of
America.
1.2 Interpretation
In this Guarantee, unless the context otherwise requires:
(a) references to this Guarantee or any other document include references
to this Guarantee or such other document as varied, supplemented,
restated and/or replaced in any manner from time to time;
(b) subject to clause 16 (Transfer and Disclosure), references to any
party shall, where relevant, be deemed to be references to or to
include, as appropriate, its lawful successors, assigns or
transferees;
(c) references to recitals, schedules, clauses, and paragraphs are
references to clauses, schedules and paragraphs of and recitals to,
this Guarantee;
(d) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended and any subordinate
legislation made from time to time under it;
(e) references to a "person" shall include any individual, company,
partnership, joint venture, association, organisation, institution,
trust or agency, whether or not having a separate legal personality;
(f) references to the "assets" of any person shall be construed as a
reference to the whole or any part of it's business, undertaking,
property, shareholdings, assets and revenues (including any right to
receive revenues and uncalled capital);
(g) references to the one gender include all genders, and references to
the singular shall include the plural and vice versa;
(h) headings are inserted for convenience only and shall be ignored in
construing this Guarantee;
(i) references to "including" shall not be construed restrictively but
shall be construed as meaning "including, without prejudice to the
generality of the foregoing";
(j) references to "law" shall be construed as including any present or
future common law, statute, statutory instrument, treaty, regulation,
directive, order, decree, other legislative measure, code, circular,
notice, demand, or injunction with which it is customary for persons
to whom such law is directed to comply, even if compliance is not
mandatory; and
(k) references to "writing" include telex and facsimile transmission
legibly received, except in relation to any certificate, forecast,
report, notice, resolution or other document which is expressly
required by this Guarantee to be signed, and "written" has a
corresponding meaning.
2. GUARANTEE
In consideration of MCI WorldCom agreeing to defer demanding immediate
payment in respect of breaches under the First Capacity Agreement and the
Second Capacity Agreement, the Guarantor irrevocably and unconditionally
guarantees to MCI WorldCom on demand the due and punctual observance and
performance by each Customer of all their obligations under each Capacity
Agreement including the payment or discharge of all Indebtedness under or
pursuant to each Capacity Agreement within five Business Days of such
demand.
3. INDEMNITY
The Guarantor agrees, as a separate and independent primary obligation, to
indemnify MCI WorldCom from time to time on demand from and against any
loss, cost, expense or liability of any kind incurred by MCI WorldCom as a
result of any Customer failing to perform the Guaranteed Obligations duly
and punctually or as a result of any of the Guaranteed Obligations being or
becoming void, voidable, unenforceable or ineffective against any Customer
for any reason whatsoever, whether known to MCI WorldCom or not.
4. INTEREST FOLLOWING DEMAND
The Guarantor agrees to pay interest to MCI WorldCom at a rate which is
four per cent over the Prime Rate on all sums demanded under this Guarantee
from the date of MCI WorldCom's demand under this Guarantee or, if earlier,
the date on which the relevant loss, cost or expenses arose in respect of
which such demand has been made, in each case until, but excluding, the
date of actual payment (after as well as before judgment). All such
interest shall accrue on a day-to-day basis and be calculated by MCI
WorldCom on the basis of a 365 day year and interest shall be compounded in
accordance with the usual practice of MCI WorldCom.
5. CONTINUING SECURITY AND CONDITIONS FOR RELEASE
This Guarantee shall be a continuing security and shall be in addition to
and independent of every other security or guarantee which MCI WorldCom may
hold for the Guaranteed Obligations. Notwithstanding any settlement of
account or intermediate payment this Guarantee shall continue in full force
and effect until both
(a) all amounts due from the Guarantor under this Guarantee have been paid
in full; and
(b) each Customer has no liability in respect of the Guaranteed
Obligations,
subject always to clause 11 (Discharge and Release).
6. TERMINATION AND CRYSTALLISATION
6.1 This Guarantee shall be irrevocable.
6.2 In the event of this Guarantee crystallising, being determined or ceasing
from any cause whatever to be binding as a continuing security, then,
(whether or not MCI WorldCom shall continue any then existing account with
the Customer) MCI WorldCom may open a new account or accounts in the name/s
of the Customer. If MCI WorldCom does not open a new account or accounts,
it shall nevertheless be treated as if it had done so at the time that this
Guarantee ceases to be continuing in relation to the Customer. As from that
time, all payments made to MCI WorldCom by or on behalf of the Customer
shall be
credited or be treated as having been credited to the new account or
accounts and no money paid to MCI WorldCom by or on behalf of the Customer
shall have the effect of reducing the liability of the Guarantor for the
money due from each Customer at the time when this Guarantee crystallised,
determined or ceased to be so binding (except to the extent that, before
proof by MCI WorldCom in the Guarantor's insolvency, the ultimate balance
due to MCI WorldCom from each Customer shall have been reduced by the
relevant payment).
7. NO COMPETING
7.1 The Guarantor undertakes to MCI WorldCom that so long as any Customer has
any actual or contingent liability to MCI WorldCom, the Guarantor shall not
exercise any rights which the Guarantor may at any time have whether by
reason of performance by it of its obligations under this Guarantee or
otherwise:
(a) to be indemnified by any Customer or to claim payment of any money
which may be due owing or incurred by any Customer to the Guarantor on
any account whatsoever, or exercise any other right, claim or remedy
in respect of such money;
(b) to claim any contribution from any other guarantor of any Customer's
obligations;
(c) to prove in any Customer's winding up; or
(d) to participate in any security held, or money received, by MCI
WorldCom on account of the Guaranteed Obligations or to stand in MCI
WorldCom's place in respect of any such security or money and the
liability of the Guarantor under this Guarantee will not be reduced or
discharged by any amount held by MCI WorldCom on account for any
Customer.
7.2 The Guarantor declares that it has not received any security from any
Customer or any other surety for the giving of this Guarantee and the
Guarantor undertakes not to take or receive any security in respect of the
Guarantor's liability under this Guarantee. If the Guarantor nevertheless
does take or receive any such security, it shall hold it on trust for MCI
WorldCom. The perpetuity period for any such trust shall be 80 years.
8. SUSPENSE ACCOUNTS
MCI WorldCom may hold any money received under or by virtue of this
Guarantee or under or by virtue of any other guarantee or security for the
Guaranteed Obligations on suspense account for so long and in such manner
as MCI WorldCom may determine without any obligation to apply such money or
any part of it in or towards discharging any money or liabilities or other
sums due, owing or incurred by any Customer.
9. DEMANDS
MCI WorldCom shall not be obliged before exercising any of the rights,
powers or remedies conferred upon it by this Guarantee or by law:
(a) to make any demand, or take any action or obtain judgment in any court
against any Customer;
(b) to make or file any claim or proof in the winding-up or dissolution of
any Customer; or
(c) to enforce or seek to enforce any other security it may hold for the
Guaranteed Obligations.
10. WAIVER OF DEFENCES
None of the events set out below shall discharge the liabilities or the
obligations of the Guarantor under this Guarantee or impair the rights,
powers and remedies of MCI WorldCom under this Guarantee:
(a) any amalgamation, merger or reconstruction between MCI WorldCom and
any other person or any sale or transfer of the whole or any part of
the assets of MCI WorldCom to any other person;
(b) the winding-up, dissolution, administration or reorganisation of any
Customer or any change in its constitution, status, function, control
or ownership;
(c) any amendment to, increase in, or variation, waiver or release of, any
of the Guaranteed Obligations or any other security or guarantee for
the Guaranteed Obligations;
(d) the existence of any claim or set-off or other rights which the
Guarantor may have against any Customer, MCI WorldCom or any other
person, or which any Customer may have at any time against MCI
WorldCom whether in connection with any Capacity Agreement or
otherwise;
(e) any failure by MCI WorldCom to take or perfect, or fully to take or
perfect, any other guarantee, indemnity or security intended to be
taken for the Guaranteed Obligations;
(f) the grant by MCI WorldCom to any Customer of any other transmission
capacity, financial accommodation or the withdrawal or restriction by
MCI WorldCom of any transmission capacity, financial accommodation or
the absence of any notice to the Guarantor of any such granting,
withdrawal or restriction;
(g) any failure by MCI WorldCom to realise, or fully to realise, the value
of, or any release, discharge, exchange or substitution of, any
security taken in respect of any Customers' obligations;
(h) any time or other indulgence being granted or being agreed to be
granted to any Customer or any other person, including any co-
guarantor, in respect of its obligations or under any other security
for such obligations or any arrangement or compromise entered into by
MCI WorldCom with any Customer or any other person, including any co-
guarantor;
(i) any of the obligations of the Guarantor or any other person under this
Guarantee or under any other document or security taken in respect of
any of its obligations being or becoming illegal, invalid,
unenforceable, impaired or ineffective in any respect; or
(j) any other act, event or omission which, but for this clause 10, might
operate to discharge, impair or otherwise affect any of the
obligations of the Guarantor under this Guarantee or any of the
rights, powers or remedies conferred upon MCI WorldCom by this
Guarantee or by law.
11. DISCHARGE AND RELEASE
11.1 Any settlement or discharge between MCI WorldCom and the Guarantor in
respect of the Guaranteed Obligations shall be subject to the condition
that no security or payment to MCI WorldCom by the Guarantor or any other
person shall be avoided or reduced by virtue of any provisions or
enactments relating to insolvency or otherwise. If any such security or
payment shall be so avoided or reduced, MCI WorldCom shall nevertheless be
entitled to recover the value or amount thereof subsequently from the
Guarantor and to exercise its rights under this Guarantee as if such
settlement or discharge had not been effected. MCI WorldCom may retain any
security held by it for the obligations of the Guarantor under this
Guarantee until the expiry of the period of one month plus the maximum
period within which such security or payment can be avoided, reduced or
invalidated by virtue of any such provision or enactment except where such
security is granted or payment made by the chargor.
11.2 In the event of any claim being made or proceedings being taken against
MCI WorldCom the effect of which, if successful, would be the avoidance or
reduction of any such security or payment and whether or not the Guarantor
shall have been made a party thereto, MCI WorldCom shall have absolute
discretion to concede or settle the same on such terms as it may think fit
whereupon clause 11.1 shall have the effect as if such concession or
settlement had been ordered by the Court (without possibility of appeal)
and the Guarantor shall in addition pay MCI WorldCom all costs and
expenses (on a full indemnity basis) arising out of or in connection with
any such claim or proceedings.
11.3 The paper on which this Guarantee is written shall remain at all
times the property of MCI WorldCom.
12. CURRENCY INDEMNITY
If:
(a) for any reason any amount payable under this Guarantee is paid or is
recovered by MCI WorldCom (in whatever manner) in a currency (the
"payment currency") other than that in which the Guaranteed
Obligations are denominated (the "contractual currency"); and
(b) the payment made in the payment currency to MCI WorldCom when
converted at the applicable rate of exchange into the contractual
currency is less than the amount payable hereunder,
then the Guarantor shall, as a separate and independent obligation, and
notwithstanding any previous such conversion, fully indemnify MCI WorldCom
against the amount of the shortfall. For the purposes of this clause, the
expression "applicable rate of exchange" means the rate at which MCI
WorldCom purchases the contractual currency with the payment currency,
taking into account any costs associated with the exchange.
13. GUARANTOR'S COVENANTS
The Guarantor undertakes to MCI WorldCom that so long as any Customer has
any actual or contingent liability to MCI WorldCom, the Guarantor shall
(save with MCI WorldCom's prior written consent):
(a) ensure that the liabilities (whether actual or contingent) of the
Guarantor under this Guarantee shall at all times constitute the
direct, unconditional obligations of the Guarantor and will rank at
least pari passu with all present and future indebtedness issued,
created, assumed or guaranteed by the Guarantor other than any
indebtedness the subject matter of any existing Encumbrance or any
Encumbrance which the Guarantor has created, agreed to create or
permitted to arise or subsist in compliance with the terms of the
Standstill Letter;
(b) subject to the terms of the Standstill Letter, not create or agree to
create or permit to arise or subsist any Encumbrance on its present or
future assets or any part of them and not sell or otherwise dispose of
any of its assets on terms which would result in any such asset being
leased to or re-acquired by the Guarantor or any of its subsidiaries;
(c) not make any material change to the nature of any business carried on
at the date of this Guarantee or discontinue any such business or a
material part of the Guarantor's businesses as a whole;
(d) not redeem or purchase any of its shares or otherwise reduce its share
capital;
(e) not enter into any material transaction or arrangement with any person
other than on arm's length terms and for full market value; and
(f) deliver to MCI WorldCom copies of:
(i) the audited consolidated profit and loss account and balance
sheet of each Guarantor and its subsidiaries for each accounting
reference period ending after the date of this Guarantee as soon
as the same has been approved by the board of directors of each
Guarantor (but in any event not later than 90 days from the end
of such accounting reference period); and
(ii) any information concerning the business or financial condition of
the Guarantor which MCI WorldCom may reasonably require from time
to time.
14. GUARANTOR'S REPRESENTATIONS AND WARRANTIES
14.1 The Guarantor hereby represents and warrants to MCI WorldCom that:
(a) it is a limited company duly incorporated, validly existing and
registered under the Companies ▇▇▇ ▇▇▇▇ and it has the power and all
necessary governmental and other consents, approvals, licences and
authorities under any applicable jurisdiction to own its assets and
carry on its business;
(b) it is empowered to enter into, exercise its rights and perform and
comply with its obligations contained in this Guarantee and no limits
on its powers will be exceeded as a result of its entering into this
Guarantee;
(c) all actions, conditions and things required to be taken, fulfilled and
done (including the obtaining of any necessary consents) in order to
enable it lawfully to enter into, exercise its rights and perform and
comply with its obligations contained in this Guarantee and to ensure
that those obligations are legally binding and enforceable have been
taken, fulfilled and done;
(d) the requisite resolutions of its board of directors have been duly and
properly passed at a duly convened and constituted meeting at which
all statutory and other relevant formalities were observed to
authorise its execution and performance of this Guarantee and such
resolutions are in full force and effect and have not been varied or
rescinded;
(e) the giving of this Guarantee constitutes the legal, valid and binding
obligations of the Guarantor enforceable in accordance with its terms,
except as such enforceability may be limited by:
(i) bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditors' rights;
(ii) application of equitable principles; and
(iii) the non-availability of the equitable remedies of specific
performance or injunctive relief;
(f) the giving of this Guarantee will not result in:
(i) any breach of any law to which the Guarantor is subject or of
any of the memorandum and articles of association or other
constitutional documents of the Guarantor; or
(ii) any breach of any deed, agreement or obligation of the Guarantor
made with or owed to any other person; or
(iii) any breach of any limits on any powers of the Guarantor;
(g) the giving of this Guarantee will not result in the existence of, or
oblige the Guarantor to create, any Encumbrance in favour of any
person (other than MCI WorldCom) over the whole or any part of the
undertaking or assets (present or future) of the Guarantor; and
(h) it nor Telemonde, Inc. has any Subsidiaries which have not been
disclosed to MCI WorldCom in Schedule 1.
15. DETERMINATIONS CONCLUSIVE AND DEMANDS
15.1 A certificate or determination of MCI WorldCom as to the Indebtedness for
the time being due to MCI WorldCom by any Customer or otherwise payable by
the Guarantor under this Guarantee, any admission or acknowledgement in
writing of such Indebtedness by any Customer or on its behalf, any
judgment or order obtained by MCI WorldCom against any Customer or any
proof by MCI WorldCom in winding up or bankruptcy which is admitted shall
be binding on the Guarantor and conclusive (save in the case of manifest
error).
15.2 The making of any one demand by MCI WorldCom under this Guarantee shall
not preclude it from making any further demands hereunder.
16. CONFIDENTIALITY
16.1 MCI WorldCom and the Guarantor shall not disclose the existence of this
Guarantee or the terms thereof to any other person except with the prior
written consent of each other, provided however, that MCI WorldCom and the
Guarantor may make such disclosure:
(a) to its professional advisers, and
(b) to the extent required by law or any regulatory or governmental
body or authority, and
(c) for the purpose of enforcing the provisions of this Guarantee.
16.2 No public announcement, statement or information which refers to this
Guarantee and/or to its terms may be made by
(a) MCI WorldCom without the prior written approval of the Guarantor, or
(b) the Guarantor without the prior written approval of MCI WorldCom.
17. DEDUCTIONS
17.1 Each payment to be made by any Guarantor to MCI WorldCom shall be made in
US Dollars, free and clear of, and without any withholding, deduction or
set-off whatsoever, including without prejudice to the generality of the
foregoing, for or on account of taxes unless the Guarantor is required by
law to make such a payment subject to deduction.
17.2 If any Guarantor is required by law to make a deduction or withholding
from such a payment, the relevant sum payable by the Guarantor shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, MCI WorldCom receives and retains (free from any
liability in respect of any such deduction or withholding) a net sum equal
to the sum which it would have received and so retained had no such
deduction or withholding been made or required to be made.
18. EXPENSES
The Guarantor shall reimburse MCI WorldCom on demand (on a full indemnity
basis) for all costs and expenses in any relevant jurisdiction (including,
without limitation legal fees, valuation, accountancy and consultancy fees
and communication and out-of-pocket expenses) and any value added or
similar tax thereon, incurred by MCI WorldCom in connection with the
enforcement or preservation of its rights under this Guarantee or any of
the documents referred to in this Guarantee in any jurisdiction.
19. STAMP DUTY
The Guarantor shall pay all present and future stamp, registration and
similar taxes or charges which may be payable or determined to be payable
in any jurisdiction in connection with the execution, delivery,
performance or enforcement of this Guarantee or any judgment given in
connection with this Guarantee and shall indemnify MCI WorldCom against
any and all liabilities including penalties with respect to or resulting
from its delay or omission to pay any such stamp, registration and similar
taxes or charges.
20. NOTICES
20.1 Any notice or other communication to be given under this Guarantee shall
be in writing and, in the case of any notice or communication to the
Guarantor, shall be deemed to have been duly served on, given to or made
if it is left at the authorised address of the Guarantor, posted by pre-
paid airmail or first class or registered post addressed to the Guarantor
at such address, or sent by facsimile transmission to a machine situated
at such address and shall if:
(a) personally delivered, be deemed to have been received at the time of
delivery;
(b) posted to an inland address in the United Kingdom, be deemed to have
been received on the second Business Day after the date of posting
and if posted to an overseas address, be deemed to have been received
on the fifth Business Day after the date of posting; or
(c) sent by facsimile transmission, be deemed to have been received upon
receipt by the sender of a facsimile transmission report (or other
appropriate evidence) that the facsimile has been transmitted to the
addressee,
Provided that where, in the case of delivery by hand or facsimile
transmission, delivery or transmission occurs after 6 pm on a Business Day
or on a day which is not a Business Day, receipt shall be deemed to occur
at 9 am on the next following Business Day.
20.2 For the purposes of this clause the authorised address of each party shall
be the address set out below (including the details of the facsimile
number and person for whose attention a notice or communication is to be
addressed) or such other address (and details) as that party may notify to
the other in writing from time to time in accordance with the requirements
of this clause:
(a) Company: Metrolinx Limited
Address: ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇
(b) MCI WorldCom
Address: c/o MCI WorldCom Limited
▇▇ ▇▇▇▇'▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax No: ▇▇▇ ▇▇▇▇ ▇▇▇▇
Attention: General Counsel
Copied to Account Manager (EquiTel)
Copied to: World Centre MCI - WorldCom
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax No: ▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
20.3 Any communication to MCI WorldCom shall be sent to MCI WorldCom at the
authorised address or facsimile number and marked for the attention of the
person referred to above and shall be deemed to have been given only on
actual receipt by MCI WorldCom.
21. SET-OFF
MCI WorldCom may retain any money standing to the credit of the Guarantor
with MCI WorldCom in any currency upon any account (whether or not in the
Guarantor's name) or otherwise as cover for any Guaranteed Obligations and
the Guarantor agrees that MCI WorldCom may at any time or times without
notice to it combine or consolidate any or all sums of money now or
subsequently standing to the Guarantor's credit upon any such account with
all or such part of the Guaranteed Obligations as MCI WorldCom may
determine (whether presently payable or not) and MCI WorldCom may purchase
with any such money any other currency required to effect such
combination.
22. FORBEARANCE AND PARTIAL INVALIDITY
22.1 No failure to exercise and no delay on the part of MCI WorldCom in
exercising any right, remedy, power or privilege under this Guarantee and
no course of dealing between the parties shall be construed or operate as
a waiver of that right, remedy, power or privilege, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude
any other or further exercise of it or the exercise of any other right,
remedy, power or privilege. The rights and remedies provided in this
Guarantee are cumulative and not exclusive of any rights or remedies
provided by law.
22.2 If any provision of this Guarantee is held to be illegal, invalid or
unenforceable in whole or in part this Guarantee shall continue to be
valid as to its other provisions and the remainder of the affected
provision.
23. GOVERNING LAW AND JURISDICTION
23.1 This Guarantee shall be governed by and construed in accordance with
English law.
23.2 For the benefit of MCI WorldCom, the Guarantor irrevocably agrees that
subject to clause 24.6, the Courts of England are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Guarantee and that accordingly any proceedings (referred to in this clause
24 as the "Proceedings") arising out of or in connection with this
Agreement may be brought in such Courts.
23.3 The Guarantor hereby designates, appoints and empowers Bird & Bird of ▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (Attention ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) to accept
service of process in such jurisdiction in any Proceedings and agrees that
failure by such firm to give notice of such service of process to the
Guarantor shall not impair or affect the validity of such service or any
judgment based on it.
23.4 The Guarantor irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any Proceedings in the Courts of
England and any claim that any such Proceedings have been brought in an
inconvenient forum and further irrevocably agrees that a judgment in any
such Proceedings brought in such Courts shall be conclusive and binding
upon it and may be enforced in any other jurisdiction.
23.5 Nothing contained in this clause 24 shall limit the right of MCI WorldCom
to take action against the Guarantor in any court of competent
jurisdiction nor shall the taking of Proceedings by MCI WorldCom against
the Guarantor in one or more jurisdictions preclude the taking of
Proceedings in any other jurisdiction whether concurrently or not.
23.6 The Guarantor further irrevocably consents to the service of process out
of the Courts of England in any such Proceedings by the mailing to it of
copies by registered or certified airmail, postage prepaid.
AS WITNESS the Guarantor has executed this Guarantee as a deed the day and year
first above written.
SCHEDULE 1
Customers
Telemonde, Inc.
▇▇▇▇▇▇▇▇▇.▇▇▇, S.A.
Telemonde Investments Limited
TGA (UK) Limited
Telecities Limited
EquiTel Communications Limited
Telemonde Networks Limited
EquiTel Card Services Limited
Metrolinx Limited
Teleroute Limited
Telesource Limited
Telemonde International Bandwidth Limited
Telemonde International Bandwidth (Bermuda) Limited
Telemonde Bandwidth (Bermuda) Limited
Desert Telecommunications Services, LLC
EXECUTED AND DELIVERED as a )
Deed by Metrolinx Limited )
(pursuant to a resolution of its Board )
of Directors) acting by: )
Director
Director/Secretary
SIGNED by )
for and on behalf of )
MCI WorldCom Global )
Networks U.S., Inc. )
APPENDIX 2
EIGHTEENTH SCHEDULE
(i) not to make early repayment of the Loans (as defined in the draft
Memorandum of Understanding referred to in the definition of "Metrolinx"
Project in Schedule 1 of the Standstill Letter (the "MOU"));
(ii) Metrolinx has not traded, has no liabilities and has no Encumbrances
over its assets;
(iii) the parties referred to in paragraph A1 of the MOU are not "connected"
to any Telemonde Group Company or any Management Party;
(iv) assignment is prohibited in all documentation relating to the Metrolinx
Project;
(v) the provision of services by any third party (including any Telemonde
Group Company) to Metrolinx is on arms length terms and no Management
Party shall benefit personally therefrom.
(vi) the Global Switch Group (including without prejudice to the generality
of the foregoing, Global Switch International and Global Switch Italia
S.p.A) have paid in full all outstanding invoices to the Telemonde Group
Companies.
Signed by )
Director, duly authorised ) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
on behalf of Telemonde Inc )
Signed by )
Director, duly authorised ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
on behalf of Telemonde )
Networks Limited )
Signed by )
Director, duly authorised ) /s/ ▇. ▇▇▇▇▇▇▇▇
on behalf of Telemonde )
International Bandwidth )
Limited )
Signed by )
Director, duly authorised ) /s/ ▇▇▇▇▇ ▇▇▇▇▇
on behalf of MCI WorldCom )
Global Networks U.S. Inc )
Signed by )
Director, duly authorised ) /s/ ▇▇▇▇▇ ▇▇▇▇▇
on behalf of MCI WorldCom )
Global Networks Limited )