Exhibit 10.51
September 12, 2000
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
eGlobe, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
In re: Forbearance under Loan and Note Purchase Agreement
Dear ▇▇. ▇▇▇▇▇,
We are writing with regard to the Loan and Note Purchase Agreement, as amended,
entered into by and among eGlobe, Inc., a Delaware corporation ("eGlobe" or
"Parent"), eGlobe Financing Corporation, a Delaware corporation ("eGlobe
Financing"), IDX Financing Corporation, a Delaware corporation ("IDX
Financing"), Telekey Financing Corporation, a Delaware corporation ("Telekey
Financing" and together with eGlobe Financing and IDX Financing, the "Financing
Companies"), and EXTL Investors, LLC, a Nevada limited liability corporation
("EXTL Investors").
eGlobe, the Financing Companies and EXTL Investors entered into a Loan and Note
Purchase Agreement dated April 9, 1999, as amended by a letter agreement dated
June 16, 1999 and as further amended by Amendments No. 1 and 2 to Loan and Note
Purchase Agreement (collectively, the "Note Purchase Agreement"). Special
Investment Risks LLC has also loaned eGlobe funds and its notes and accrued
interest thereon are incorporated in the aforementioned restructuring Special
Investment Risks, LLC as merged into EXTL Investment LLC on this date and its
name changed to EXTL-Special Investments Risks LLC.
We have agreed with you to restructure the payment and other terms under the
Secured Notes, the A/R Note and the Special Investment Notes (collectively the
"Notes"). We have agreed to the attached set of terms (the "Term Sheet") for
restructuring the Notes and related agreements. In light of that and of our past
experience in concluding arrangements with eGlobe, and in recognition of our
substantial equity commitment to eGlobe as well as our extension of credit under
the Note Purchase Agreement, EXTL Investors LLC hereby commits to forbear,
during the period beginning today and ending on October 1, 2001, from exercising
its right to mandate eGlobe, Inc. to enter into an involuntary reorganization,
provided that eGlobe complies with the terms of the restructured lending as
reflected in the Term Sheet and that the operations of eGlobe, Inc. as conducted
at the date of this letter, do not change in a manner that is substantially
adverse to the investments of EXTL-Special Investments Risks LLC.
Sincerely,
EXTL-Special Investments Risks LLC
By:__________________________________
Name/Title:__________________________
Term Sheet
Facility: Amended and Restated Loan and Note Purchase Agreement,
amending the Loan and Note Purchase Agreement dated April
9,1999, as amended, and related Notes and documentation.
Creditors: EXTL Investors, LLC and Special Investment Risks, LLC - the
LLCs have merged into one company owned by ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇. The company name is EXTL - Special Investment Risks,
LLC.
Debtors: eGlobe, Inc.
IDX International, Inc.
eGlobe Financing Corporation
IDX Financing Corporation
Telekey Financing Corporation
eGlobe/Coast, Inc.
Indebtedness: The outstanding principal balance of the existing indebtedness
to EXTL Investors, LLC and Special Investment Risks, LLC in
the amount of $18,677,989, plus the accumulated and unpaid
interest and penalties of $1.000,000 (which will be reflected
as an accrual), for a total indebtedness of $19,677,989. All
payments since January 1, 2000 have been treated as a
reduction in principal, not as interest payments.
Reduction of Current Note effective September 15, 2000: EXTL will exercise its
warrant to purchase 5,000,000 shares of eGlobe Common Stock
contemporaneous with closing on the Amended and Restated Loan
and Note Purchase Agreement. It will fund the exercise through
a reduction of $3,677,989 in the principal amount of the
indebtedness, resulting in a remaining note indebtedness of
$15,000,000. The balance of accrued and unpaid interest at
September 15, 2000 is $1,000.000.
Maturity: July 1, 2002
Interest Rate: Annual rate equal to the Prime Interest Rate as published in
the Wall Street Journal plus 2%. This rate shall be added to
the unpaid principal of the note at the beginning of each
month (beginning October 1, 2000 on $15,000,000) at 1/12 of
the prime rate plus 2%. The same procedure shall apply to the
accrued interest amount (beginning October 1, 2000 on
$1,000.000).
Security Interest:Lien on substantially all of the assets of debtors -
substantially similar to existing security interest, including
receivables. A complete list of pledged assets as of August
31, 2000 to be provided for documentation; also a summary of
receivables by company at August 31, 2000.
Payment of Note Principal: (1) Monthly principal repayments of $50,000 on the
15th of each month, first payment on October 15, 2000; the
residual unpaid principal will be paid at maturity. Interest
will accrue monthly on the unpaid principal and on unpaid
Interest and be paid at maturity.
(2) Lender will receive 15% of the net cash proceeds from the
sale of the business and assets of Coast as paid by buyers of
Coast.
(3) Lender will receive 5% of the net cash proceeds from any
equity financing. Equity financing includes the current
$6,000,000 held in escrow pending registration of eGlobe
Securities.
(4) The $50,000 minimum payments per month may be offset
against payments made under 2 and 3 if these payments together
with $50,000 monthly payments previously made exceed the
cumulative monthly payments beginning October 15, 2000 times
the number of months required to be paid to date.
Waiver of Principal Payments: If the Gumowitz family forbears and defers rent
payments for the premises in New York used by the Company due
and payable from September 15 forward, then Lender will waive
principal payments required currently (deferring such payments
to July 1, 2002 or until ▇▇▇▇▇▇▇▇ family is paid the
forbearance, which ever comes first) in a ratio of the shares
owned by the Gumowitz family to the shares owned by the ▇▇▇▇▇▇
family.
Warrants: A Warrant to purchase 1,000,000 shares of eGlobe Common Stock
@1.94 per share expiring July 1, 2004. Warrant shall provide
for cashless exercise and shall be registered on a piggyback
basis beginning in 2001.
Events of Default:Parallel to existing Loan and Note Purchase Agreement, with
the addition of specific default provisions for failure to
provide required reports in a timely fashion.
Reporting: Quarterly un-audited Financial Statements
Annual audited Financial Statements
Monthly Reports:
Status of Security - all pledged Assets & additions
and deletions & Receivables
Compliance with Loan Provisions of This Loan
Compliance with any other Indebtedness
All Litigation
Monthly reports will be presented in writing and
signed by two of the three principal officers of the
Company (CEO, COO, CFO) and be due by the 20th of
each month following each month end beginning with
September, 2000.
Change of Control:
The lender will have the option to declare the
outstanding principal amount (together with accrued interest)
immediately due and payable in the event of a Change of
Control, as defined. A Change of Control will be deemed to
have occurred if any one or more of the following occurs: (i)
any person or group (as defined under applicable securities
laws) becomes the holder of 35% or more of the voting power or
equity interests of the Company on a fully diluted basis,
assuming the conversion of outstanding convertible securities
and exercise of outstanding warrants and options [other than
options granted under employee stock plans] which have an
exercise price less than or equal to the then market price of
the eGlobe common stock, (ii) two or more directors are not
Continuing Directors (defined for this purpose as directors
nominated for election by a majority of the existing
directors), or (iii) two or more of the Company's chief
executive officer, chief operating officer and chief financial
officer, or their successors who are approved by the lender in
writing for purposes of this provision, are removed or
replaced, or resign or decline to stand for re-appointment for
reasons unrelated to health or retirement.
Expenses: Borrower shall pay all costs and expenses of Lender in
connection with the preparation of the loan documents, or in
connection with the perfection and maintenance of any liens
thereunder.
Waiver of Past Defaults: All past defaults will be waived, all violations of
existing loan instruments cured.
eGlobe represents this term sheet has been approved by its Executive Committee
and represents the Committee has full power to act for the
Board of Directors of eGlobe, Inc. and for the debtor
subsidiaries of eGlobe, Inc. as set forth under "Debtors".
Documentation: Standard and customary for similarly situated transactions.
Documents satisfactory to Lender. eGlobe commits to prepare
and provide draft documentation to Lender on Monday, September
18, 2000; ▇▇▇▇▇▇ commits to have full and final comments to
eGlobe on Wednesday, September 20, 2000; the Parties commit to
a formal closing prior to October 1, 2000.
This term sheet has been approved 100% of the Members of the Lender.
Lender: EXTL - Special Investment Risks, LLC
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Member
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Member
For eGlobe, Inc.
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Name:
Title: