EXHIBIT 10.34
MODIFICATION OF THE EXCHANGE AGREEMENT
THIS MODIFICATION OF THE EXCHANGE AGREEMENT (this "Agreement") is
entered into as of the __ day of _____, 1999, by and among XXX-XXXX.xxx, INC., a
Delaware corporation (the "Company"), TEL-SAVE, INC., a Pennsylvania corporation
and a subsidiary of the Company (the "Subsidiary"), and XXXX XXXXX, as Trustee
of that certain D&K Grantor Retained Annuity Trust dated June 15, 1998 (the
"Participant"). The Company, the Subsidiary, and the Participant shall sometimes
be referred to individually as a "Party" and two or more of them shall sometimes
be referred to collectively as the "Parties."
RECITALS
A. The Parties have entered into that certain Exchange Agreement dated as
of December 31, 1998 (the "Exchange Agreement").
B. The Parties desire to modify the Exchange Agreement in certain
respects and to enter into certain transactions related to the
Exchange Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set forth
below, and for other consideration the receipt and adequacy of which is hereby
acknowledged, the Parties hereby agree as follows:
1. Definitions. Terms in this Agreement with initial capital letters and
not otherwise defined herein shall have the meanings defined for such terms in
the Exchange Agreement. The WorldxChange Notes, the Security Agreement, the
Pledge Agreements, the stock certificates and stock powers delivered to the
Company pursuant to the Pledge Agreements, the Intercreditor Agreement, and the
Financing Statement that was filed in connection with the Security Agreement and
that showed CTS as the Debtor and Tel-Save as the Secured Party shall be
hereinafter referred to as the "Note Documents."
2. Transfer of Participation Interest and Note Documents.
(a) The Company represents and warrants to the Trust that the Company
is the owner and holder of the Company's Interest, the WorldxChange Notes, and
each of the Note Documents, free and clear of any and all liens, claims, and
encumbrances, except for rights and encumbrances granted under the Exchange
Agreement and except for restrictions imposed by applicable securities laws, and
that the Company is the sole Secured Party under the Security Agreement and
under the Pledge Agreements.
(b) The Company hereby transfers to the Trust all of the Company's
right, title, and interest in and to the Company's Interest and each of the Note
Documents.
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(c) Concurrently with the execution and delivery hereof, the Company
is delivering to the Trust the original of each Note Document and a Financing
Statement signed by the Company and referring to the assignment to the Trust of
the Company's interest under the Security Agreement. Concurrently with the
execution and delivery hereof, the Participant is delivering to the Company a
letter in the form required by Section 17 of the Intercreditor Agreement, which
letter is incorporated herein by this reference.
(d) Concurrently with the execution and delivery hereof, the Company
is paying to the Participant the amount of $1,627,222.22, being the amount of
accrued interest paid to the Company under the Accrued Interest Note and the
Notes from January 1, 1999, through February 28, 1999, plus an additional amount
of $__________, being the amount of accrued interest paid to the Company under
the Accrued Interest Note and the Notes and received by the Company from March
1, 1999, until the date immediately prior to the date hereof.
(e) The Company's Interest and the Note Documents are being acquired
by the Participant for investment for the Participant's account, not as an agent
or nominee, and not with a view to the resale or distribution thereof. The
Participant understands that neither the Company's Interest nor any of the Note
Docments has been registered or qualified under any applicable securities laws
and that the transfer of each thereof is restricted by such laws. The
Participant represents and warrants that it is experienced in evaluating and
investing in interests similar to the Company's Interest and the Note Documents
and has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of such investment, and that the
Trust has the ability to bear the economic risks of such investment.
(f) The Participant acknowledges that it has entered into this
Agreement in reliance upon its own independent investigation of all relevant
facts and circumstances, and not in reliance on any information, representation,
or advice provided by the Company or the Subsidiary. The Participant further
acknowledges that the Participant shall, independently and without reliance on
the Company or the Subsidiary and based on such documents and information as the
Participant deems appropriate at the time, continue to make its own independent
credit and other decisions in taking or not taking any action under this
Agreement.
3. Release of Limited Guaranty.
(a) The Participant hereby releases and forever discharges the
Subsidiary of any and all of the Subsidiary's duties and obligations under the
Limited Guaranty set forth in the Exchange Agreement, and Section 5 of the
Exchange Agreement is hereby terminated and of no further force or effect.
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(b) The Subsidiary hereby releases and forever discharges the Trust of
any and all of the Trust's duties and obligations under the Limited Guaranty Fee
set forth in the Exchange Agreement, and Section 4 of the Exchange Agreement is
hereby terminated and of no further force or effect.
4. Termination of Certain Provisions of the Exchange Agreement. The Parties
hereby terminate Sections 3.4-3.18 (inclusive), 4, and 5 of the Exchange
Agreement, and such Sections shall be of no further force or effect. Sections
6.1-6.5 (inclusive) and Sections 6.7-6.18 (inclusive) of the Exchange Agreement
are hereby incorporated herein by this reference and apply to this Agreement as
well as to the Exchange Agreement.
5. Miscellaneous.
(a) Each of the Parties represents and warrants to, and agrees with,
each of the other Parties that, at the date hereof: (i) such representing and
warranting Party is not in default under the Exchange Agreement; (b) such Party
has not suffered any damage under the Exchange Agreement and has no cause of
action, right of set-off or counterclaim, or any other claim of any nature
whatsoever against any of the other Parties or any director, officer, attorney,
agent, employee, or affiliate of any of such other Parties under the Exchange
Agreement or otherwise (collectively, "Claims"); and (c) such Party hereby
waives and relinquishes any and all Claims. Such Party further hereby agrees to
indemnify and hold harmless each of the other Parties and their respective
officers, directors, attorneys, agents, employees, and affiliates harmless from
any loss, damage, judgment, liability, and expense (including counsel fees)
suffered by or rendered against the other Parties or any of them on account of
anything arising out of the Exchange Agreement, this Agreement, or any other
document delivered pursuant hereto.
(b) Except as expressly modified by this Agreement, the Exchange
Agreement continues in full force and effect.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
above written.
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Xxx-Xxxx.xxx, Inc.
By
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Name
Title
The Subsidiary
By
---------------------------
Name
Title
The Participant
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Xxxx Xxxxx, as Trustee of the
D&K Grantor Retained Annuity
Trust dated June 15, 1998
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