Modification Agreement to Amended and Restated Promissory Note between Telscape International, Inc. and James H. Dorsey III

Summary

Telscape International, Inc. and James H. Dorsey III have agreed to modify the terms of a previous promissory note. The agreement reduces the company's debt to $450,000 after partial payment in cash and preferred stock, extends the due date to April 22, 2001, and sets a 10% annual interest rate. If the company receives significant capital before the due date, it must repay the remaining debt early. The lender receives warrants to purchase company stock, with additional warrants if payment is not made by February 15, 2001. Texas law governs the agreement.

EX-10.61 23 0023.txt MODIFICATION OF PROMISSORY NOTE ------------------------------- THIS MODIFICATION OF PROMISSORY NOTE (this "MODIFICATION AGREEMENT") is ---------------------- made as of the 1st day of December, 2000, by and between, TELSCAPE INTERNATIONAL, INC., a Texas corporation (the "COMPANY"), and JAMES H. DORSEY ------- III ("LENDER"). ------ R E C I T A L S: - - - - - - - - WHEREAS, pursuant to that certain Amended and Restated Promissory Note (the "Note") dated April 22, 2000, the Company promised to pay Lender the entire - ------ unpaid balance owed under the Note plus all accrued interest thereon on October 22, 2000; WHEREAS, on December 1, 2000, the entire unpaid balance including all accrued interest due under the Note was $1,779,461.16 (the "Debt"); ---- WHEREAS, the Company and Lender desire to modify the Note and extend the due date of the Debt as hereinafter provided; NOW THEREFORE, the Company and Lender hereby agree as follows: 1. Modification of Note and Payment of Debt. Lender hereby agrees to ------------------------------------------ accept 7,500 shares of Class G Preferred Stock of the Company (the "Class G Stock") in payment of $750,000 of the Debt and acknowledges receipt of $579,461.16 in cash (which shall be applied against the Debt), which reduces the unpaid balance of the Debt to $450,000 as of the date hereof. 2. Maturity Date. The Company and Lender hereby agree that the -------------- remaining $450,000 of the Debt plus all accrued interest thereon shall be due April 22, 2001 (the "Maturity Date"). The Company and ------------------ Lender hereby agree that interest shall accrue at the rate of 10% per annum beginning on December 1, 2000. 3. Default. In the event the Company fails to pay the full amount due ------- on the Maturity Date, the Company shall be in default and Lender shall be entitled to pursue all legal and equitable remedies that may be available and this Note shall thereafter bear interest at the highest rate permitted by law. Such interest accrued pursuant to this Section shall be due and payable to Lender without demand. 4. Application of Payments/Expenses. All payments received by Lender ---------------------------------- shall be applied to the payment of accrued fees, charges, costs and expenses payable hereunder, to any interest due hereunder, or to the outstanding principal balance, as determined by Lender in his sole discretion. The Company shall be responsible for and hereby agrees to pay, without demand, all costs and expenses of enforcement and/or collection of this Modification Agreement, including reasonable attorney's fees, whether or not any suit or other legal proceedings be instituted hereon. 5. Early Re-Payment. The Company hereby agrees that if prior to the ----------------- Maturity Date the Company receives aggregate proceeds of $10,000,000 or more from any one or series of capital transaction not in the ordinary course of business (i.e., sale of securities, receipt of loan proceeds, asset sales or settlement proceeds from the Mastec lawsuit) (specifically excluding proceeds received from (i) the Company's sale of its Series G Senior Preferred Stock and the warrants to purchase Company common stock issued in conjunction therewith and (ii) Fermor Investments Limited's loan to the Company in the aggregate principal amount of $2,200,000), the Company shall pay Lender the remaining $450,000 of the Debt plus all accrued interest thereon as of the closing of such financing. 6. Warrants. The Company agrees to issue to Lender a Warrant to -------- purchase 50,000 shares of common stock of the Company in the form attached hereto as Exhibit A. The Company hereby agrees that if the remaining $450,000 of the Debt plus all accrued interest thereon is not paid to Lender by February 15, 2001, then the Company shall issue to Lender an additional Warrant to purchase 25,000 shares of common stock of the Company in the form attached hereto as Exhibit A. 7. Waiver. By entering into this Modification Agreement, Lender waives ------ any prior default by the Company under the Note or with regard to the Debt. 8. Amendment. This Modification Agreement, and any provisions hereof, --------- may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of the Company or Lender, except by an agreement in writing signed by the party against whom the enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. 9. Severability. If any term, covenant or condition of this ------------ Modification Agreement shall be held to be invalid, illegal or unenforceable in any respect, this Modification Agreement shall be construed without such provision. 10. Governing Law. This Modification Agreement shall be governed by -------------- and construed in accordance with the laws of the state of Texas and the applicable laws of the United States of America. 11. Successors and Assigns. This Modification Agreement shall bind the ---------------------- successors, and assigns of Lender and the Company. 12. Counterparts. This Modification Agreement may be executed in any ------------ number of facsimile counterparts, and each such counterpart shall be deemed to constitute but one and the same instrument. 13. Further Assurances. Upon the request of Lender, the Company ------------------- agrees to execute such other and further documents as may be reasonably necessary or appropriate to consummate the transactions contemplated herein or to perfect the liens and security interests intended to secure the payment of the Loan. IN WITNESS WHEREOF, the Company and Lender have duly executed this Modification Agreement the day and year first above written. THE COMPANY ------------ TELSCAPE INTERNATIONAL, INC., a Texas corporation By:______________________________________ Name:____________________________________ Title:_____________________________________ LENDER ------ _________________________________________ JAMES H. DORSEY III