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AMENDMENT NO. 1 TO WORKOUT AGREEMENT
THIS AMENDMENT NO. 1 TO WORKOUT AGREEMENT (this "AMENDMENT") is entered
into as of this 30th day of June, 2000, by and between STAR Telecommunications,
Inc., a Delaware corporation ("DEBTOR"), PT-1 Communications, Inc. ("PT-1"),
Helvey Com, LLC ("HELVEY"), CEO California Telecommunications, Inc., CEO
Telecommunications, Inc., Lucius Enterprises, Inc., AS Telecommunications, Inc.;
PT-1 Long Distance, Inc., PT-1 Holdings I, Inc., Phonetime Technologies, Inc.,
PT-1 Holdings II, Inc., Nationwide Distributors, Inc., Technology Leasing, Inc.,
Investment Services, Inc., and PT-1 Communications Puerto Rico, Inc.
(collectively, the "DEBTOR ENTITIES") and MCI WORLDCOM NETWORK SERVICES, INC., a
Delaware corporation having a place of business located at 6929 North Lakewood
Avenue, M.D. 5.2-510, Tulsa, Oklahoma 74117 ("WORLDCOM").
WHEREAS, the parties entered into a Workout Agreement dated as of the 12th
day of April 2000 (the "Workout Agreement") providing for, INTER ALIA, the
restructuring of certain past due indebtedness of the Debtor Entities to
WorldCom; and
WHEREAS, the parties entered into other agreements incident and related to
the Workout Agreement which are included within the meaning of the term
"WorldCom Documents" as that term is defined in the Workout Agreement; and
WHEREAS, Debtor and WorldCom have entered into a Standby Term Loan Note
dated as of June 30th, 2000 (the "Term Note") for the purpose of, INTER ALIA,
providing certain credit to the Debtor Entities to be used for payment of fees,
charges and other amounts owed by the Debtor Entities to WorldCom under the
Service Agreements, as that term is defined in the Workout Agreement; and
WHEREAS, the parties are entering into this Amendment for the purpose of
memorializing their agreement and understanding that the Workout Agreement and
the security, guarantees and collateral provided by the other WorldCom Documents
shall also be applicable to the Term Note.
NOW THEREFORE, the parties hereto, in consideration of the promises
contained herein and intending to be legally bound hereby, agree as follows:
1. INCORPORATION OF RECITALS. The parties affirm and acknowledge that
the recitals herein set forth are true and correct and are incorporated into
this Amendment by reference.
2. AMENDMENT OF THE WORKOUT AGREEMENT. Section 30 of the Workout
Agreement is hereby amended in the following manner:
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(a) The following definitions are added, in proper alphabetical
order, as follows:
"NOTE" means the Promissory Note in the principal amount of
$56,017,698.87 dated April 12, 2000, executed and delivered by
Debtor to WorldCom, as the same may be amended, modified, or
supplemented from time to time, together with any extensions,
renewals or refinancings thereof, in whole or in part.
"NOTES" means the Note and the Term Note, and any other note
evidencing the obligations of any Debtor Entity to WorldCom,
as the same may be amended, modified, or supplemented from
time to time, together with any extensions, renewals or
refinancings thereof, in whole or in part.
"TERM NOTE" means the Standby Term Loan Note in the principal
amount of $30,000,000.00 dated June 30, 2000, executed and
delivered by Debtor to WorldCom, as the same may be amended,
modified, or supplemented from time to time, together with any
extensions, renewals or refinancings thereof, in whole or in
part.
(b) The definition of the term "WorldCom Documents", as set forth
in Section 30 of the Workout Agreement, shall be amended and
restated as follows:
"WORLDCOM DOCUMENTS" means, as each such document may be
amended, revised, renewed, extended, substituted, or replaced
from time to time: this Agreement, the Service Agreement, the
Note, the Security Agreement, the Pledge Agreement, the Term
Note, all other guarantees executed by any Person guaranteeing
payment of any portion of the Obligations; all security
agreements and pledge agreements granting any interest in any
of the Collateral, stock certificates and partnership
agreements constituting part of the Collateral; mortgages,
deeds of trust, financing statements, collateral assignments,
and other documents and instruments granting WorldCom an
interest in any portion of the Collateral or related to the
perfection of WorldCom's interest in any portion of the
Collateral and/or the transfer to WorldCom of an interest in
any portion of the Collateral; all collateral assignments or
other agreements granting to WorldCom a lien on any
intercompany note, including without limitation, all other
documents, instruments, agreements, or certificates executed
or delivered by Debtor or any other Obligor as security for
Debtor's obligations
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under the Note, the Term Note, the Service Agreements, or
otherwise.
3. AGREEMENT REGARDING THE AMENDMENT. The parties hereto understand and
agree that:
(a) the amendment of the term "WorldCom Documents" pursuant to
Section 2 hereof shall not limit the definition of that term in any way nor
shall such amendment be construed to mean or imply that Section 30 of the
Workout Agreement, or the definition of the term "WorldCom Documents" or any
other definition contained within Section 30 of the Workout Agreement, must
later be amended or replaced to include any agreement, contract, document or
instrument not specifically identified therein whether presently existing or
entered into or arising hereafter.
(b) the Term Note and the Debtor's obligations thereunder shall be
considered a part of the "Obligations" as that term is defined in Section 30 of
the Workout Agreement.
4. ACKNOWLEDGMENT AND AFFIRMATION. Each of the undersigned hereby
unconditionally consents to all of the provisions of the Workout Agreement, as
amended by this Amendment, and acknowledges receipt of a copy of this Amendments
and the Term Note.
5. CONFIRMATION AND RATIFICATION. Each of the undersigned hereby
confirms and ratifies their respective Security Agreements, Pledge Agreements,
Guarantys, and any other WorldCom Documents to which it is a party, in their
respective entirety and further agrees that the liabilities and obligations
evidenced by the Term Note, shall be considered as part of the Obligations, for
all purposes, including without limitation, the guaranty of such Obligations
under each of the Guarantys of PT-1 and Helvey, each dated as of April 12, 2000,
as the same may be amended, modified or supplemented from time to time, and the
security provided therefor under the respective Security Agreements and Pledge
Agreements of the Debtor, PT-1 and Helvey, each dated as of April 12, 2000, as
the same may be amended, modified or supplemented from time to time.
6. RELEASE OF WORLDCOM. Each of the Debtor Entities forever releases
and discharges WorldCom, its agents, servants, employees, directors, officers,
attorneys, branches, parent, affiliates, subsidiaries, successors and assigns
and all persons, firms, corporations, and organizations acting on WorldCom's
behalf (collectively referred to as the "WORLDCOM RELEASED ENTITIES") of and
from any and all losses, damages, claims, demands, liabilities, obligations,
actions and causes of action, of any nature whatsoever in law or in equity,
including, without limitation, any claims or joinders for sole liability,
contribution or indemnity (collectively, the "CLAIMS"), which one or more of the
Debtor Entities may have or claim to have against WorldCom or any one or more of
the WorldCom Released Entities, as of the date of this Amendment, whether
presently known or unknown, and of every nature and extent whatsoever,
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on account of or in any way touching, concerning, arising out of, founded
upon or relating to (i) the WorldCom Documents, (ii) the obligations of one
or more the Debtor Entities under the WorldCom Documents, (iii) this
Amendment, (iv) enforcement or negotiation of this Amendment or any of the
WorldCom Documents, and (v) the dealings of the parties to this Amendment
with respect to the obligations of the Debtor Entities to WorldCom under the
WorldCom Documents or one or more of them.
7. EFFECTUATION OF RELEASES. Each of the Debtor Entities agrees to
execute all appropriate and necessary documents to enable WorldCom or any of the
WorldCom Entities, to plead the effect of the releases contained in Section 5 of
this Amendment in any lawsuit. Each of the Debtor Entities also understands and
agrees that the covenants and consideration referred to in this Agreement are in
consideration for the continued forbearance by the parties in enforcing their
respective rights, including, without limitation, WorldCom's forbearance in
collecting or otherwise enforcing the Obligations owed to WorldCom, and said
forbearance by WorldCom shall not be construed as an admission of any liability
on the part of WorldCom or any WorldCom Released Entity, and the Debtor's have
not claimed any such liability.
8. CUMULATIVE NATURE OF RELEASE. Nothing contained in this Amendment
shall impair or be construed to impair the security of WorldCom or any of the
WorldCom Released Entities under the WorldCom Documents, nor affect nor impair
any rights or powers that WorldCom or any of the WorldCom Released Entities may
have under the WorldCom Documents for the recovery of the indebtedness of the
Debtor Entities to WorldCom in case of breach of the terms, provisions and
releases contained in this Amendment or breach or nonfulfillment of the terms,
agreements and covenants set forth in the WorldCom Documents. All rights, powers
and remedies of WorldCom or any of the WorldCom Released Entities under any
other agreement or release now or at any time in the future in force between
WorldCom and the Debtor with respect to the Obligations shall be cumulative and
not alternative and shall be in addition to all rights, powers and remedies
given to WorldCom or any of the WorldCom Released Entities by law.
9. BINDING RELEASE. The releases contained in Section 5 of this
Amendment shall be binding upon each of the Debtor Entities and shall inure to
the benefit of WorldCom and the WorldCom Released Entities, and any of their
respective successors and assigns.
10. SEVERABILITY. The provisions of this Amendment are intended to be
severable. If any provision of this Amendment shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of such provision in any other jurisdiction or the remaining provisions of this
Amendment in any jurisdiction.
11. GOVERNING LAW, ETC. This Amendment shall be governed by Oklahoma
law, without giving effect to principles of conflicts of laws. Each party agrees
that service of
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process may be duly effected by service in accordance with the provisions of the
Uniform Interstate and International Procedure Act.
12. CHOICE OF VENUE AND WAIVER OF JURY TRIAL. THE PARTIES AGREE THAT
ALL DISPUTES OF EVERY KIND AND NATURE ARISING UNDER OR IN CONNECTION WITH
THIS AMENDMENT SHALL BE RESOLVED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS
LOCATED IN TULSA, OKLAHOMA. THE PARTIES EACH WAIVE THEIR RIGHTS TO A JURY
TRIAL WITH RESPECT TO ANY SUCH DISPUTE AND CONSENT TO THOSE COURTS EXERCISING
SUBJECT MATTER AND PERSONAL JURISDICTION WITH RESPECT TO ANY SUCH DISPUTE.
13. EXECUTION OF RELEASE AND WAIVER. EACH OF THE PARTIES REPRESENTS AND
WARRANTS TO THE OTHER THAT IT HAS CAREFULLY READ THE FOREGOING TERMS AND
CONDITIONS OF THIS AMENDMENT, THAT IT KNOWS AND UNDERSTANDS THE CONTENTS AND
EFFECT OF THIS AMENDMENT, THAT THE LEGAL EFFECT OF THIS AMENDMENT, INCLUDING,
WITHOUT LIMITATION, THE RELEASE AND WAIVER OF JURY TRIAL PROVISIONS CONTAINED IN
THIS AMENDMENT, HAVE BEEN FULLY EXPLAINED TO ITS SATISFACTION BY ITS COUNSEL,
AND EXECUTION OF THIS AMENDMENT IS A VOLUNTARY ACT.
14. INTERPRETATION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the singular
includes the plural, the part includes the whole, "including" is not limiting,
and "or" has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Amendment
refer to this Amendment as a whole and not to any particular provision of this
Amendment. Terms not defined herein shall have the meaning as set forth in the
Workout Agreement.
15. TERM OF AMENDMENT. This Amendment will terminate upon termination of
the Workout Agreement.
16. HEADINGS. The headings of the sections in this Amendment are for
purposes of reference only, and shall not limit or affect the meaning of such
section.
17. NO PARTNERSHIP OR JOINT VENTURE. It is understood by the parties
that this Amendment shall not in any way be construed as an agreement of
partnership, general or limited, or of creating a joint venture between WorldCom
and any other party to this Agreement, or any one or more of them, or of
creating any relationship other than that of debtor and creditor.
18. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and
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the same Amendment.
19. JOINT PREPARATION. The preparation of this Amendment has been a
joint effort of the parties and the resulting document shall not, solely as a
matter of judicial construction, be construed more severely against one of the
parties than the other.
20. THIRD PARTY BENEFICIARIES. The terms and conditions of this
Amendment are not intended to affect or benefit in any way any third parties
other than the WorldCom Entities, all of which are explicitly intended to be
third party beneficiaries under this Amendment.
21. SUCCESSORS AND ASSIGNS. This Amendment will be binding upon and
inure to the benefit of the respective parties, and their respective successors
and assigns, including any bankruptcy trustee, except that neither party may
assign or transfer any of its rights or delegate any of its duties under this
Amendment without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto by their authorized representatives
have executed this Amendment No. 1 to Workout Agreement, as of the day and year
first above written.
STAR TELECOMMUNICATIONS, INC. CEO CALIFORNIA
TELECOMMUNICATIONS, INC.
By: By:
Name: Name:
Title: Title:
PT-1 COMMUNICATIONS, INC. LUCIUS ENTERPRISES, INC.
By: By:
Name: Name:
Title: Title:
HELVEY COM, LLC AS TELECOMMUNICATIONS, INC.
By: By:
Name: Name:
Title: Title:
CEO TELECOMMUNICATIONS, INC. PT-1 LONG DISTANCE, INC.
By: By:
Name: Name:
Title: Title:
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Title: INVESTMENT SERVICES, INC.
PT-1 HOLDINGS I, INC.
By: By:
Name: Name:
Title: Title:
PT-1 HOLDINGS II, INC.
By:
Name:
Title:
NATIONWIDE DISTRIBUTORS, INC.
TECHNOLOGY LEASING, INC.
By:
Name:
Title:
PT-1 COMMUNICATIONS PUERTO RICO, INC. PHONETIME TECHNOLOGIES, INC.
By: By:
Name: Name:
Title: Title:
MCI WORLDCOM NETWORK SERVICES, INC.
By:
Robert S. Vetera
Vice President, Corporate Credit
