EXHIBIT 10.75
WORKOUT AGREEMENT
THIS WORKOUT AGREEMENT (this "AGREEMENT") is entered into as
of this 12th day of April, 2000, by and between STAR Telecommunications, Inc., a
Delaware corporation ("DEBTOR"), PT-1 Communications, Inc. ("PT-1"), Xxxxxx Com,
LLC ("XXXXXX"), 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 0000 Xxxxx Xxxxxxxx Xxxxxx,
M.D. 5.2-510, Xxxxx, Xxxxxxxx 00000 ("WORLDCOM").
W I T N E S S E T H:
WHEREAS, WorldCom provides telecommunications services to
Debtor pursuant to certain services contracts now existing or hereafter executed
between such parties including, but not limited to, those carrier and other
agreements set forth on SCHEDULE A attached hereto as the same may have been
heretofore or may hereafter be amended, modified or supplemented from time to
time (collectively, the "Service Agreements"), pursuant to which WorldCom has
provided and continues to provide various switched telecommunications services
to and for the benefit of the Debtor, the Guarantors and their respective
Subsidiaries; and
WHEREAS, Debtor is in default to WorldCom for, INTER ALIA,
failure to pay its obligations to WorldCom in a timely manner (the "Past Due
Indebtedness"); and
WHEREAS, Debtor and WorldCom have agreed to restructure
certain of the Past Due Indebtedness due to WorldCom as of February 3, 2000, in
the form of a Promissory Note in the principal amount of $56,017,698.87 (the
"Workout Indebtedness"), of even date herewith (the "Note"), which has been
executed and delivered by Debtor to WorldCom; and
WHEREAS, Debtor has agreed to secure its performance and
payment of (a) all obligations for the provision of services by WorldCom to
Debtor pursuant to any, and all related notes, instruments, documents, or
agreements and any amendments, extensions, renewals or replacements to or of any
of the foregoing; and (b) all other obligations and indebtedness of Debtor to
WorldCom of whatever kind and however created, whether presently existing or
hereafter arising; and
WHEREAS, the Guarantors have agreed to guaranty and act as
surety for such obligations of the Debtor to WorldCom and to secure such
guaranty.
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 set forth above are true and correct and
are incorporated into this Agreement by reference.
2. WORLDCOM DOCUMENTS. Unless and until (if ever) WorldCom and
Debtor shall enter into a written modification agreement, the WorldCom
Documents, as currently in effect, shall remain in full force and effect,
without change, and each party shall be responsible and liable for the
performance of its respective agreements and obligations in accordance with the
WorldCom Documents.
3. EXISTING EVENTS OF DEFAULT AND FORBEARANCE WITH RESPECT
THERETO. Debtor agrees that the Service Agreements are currently in default in
various respects, including, but not limited to, those Events of Default listed
in EXHIBIT A (the "Existing Defaults") attached hereto and made a part hereof.
WorldCom agrees that it shall forbear from exercising its rights and remedies
with respect to the Existing Defaults until the earlier to occur of (a)
termination of the Agreement and Plan of Merger dated February 11, 2000, by and
between the Debtor, STI Merger Co. and World Access, Inc. (the "Merger
Agreement"); (b) consummation of the merger transaction contemplated by the
Merger Agreement; or (c) August 1, 2000,
4. ACKNOWLEDGMENT OF INDEBTEDNESS. Debtor acknowledges
that the Workout Indebtedness is fully due and owing under the Service
Agreements, without setoff, recoupment, counterclaims or defenses.
5. PAYMENT FOR USAGE OF WORLDCOM'S NETWORK. Debtor shall
pay for usage of WorldCom's telecommunications network for usage incurred
after February 3, 2000 (collectively, the "Ongoing Usage") in accordance with
the terms and conditions of the Service Agreements.
6. CONDITIONS PRECEDENT. Debtor shall execute and deliver (or
cause to be executed and delivered) the following documents to WorldCom on or
before April 14, 2000: (i) Security Agreement; (ii) the Note; (iii) Pledge
Agreement and pledge of 100% of the outstanding Capital Stock of CEO California
Telecommunications, Inc., CEO Telecommunications, Inc., PT-1 Communications,
Inc. ("PT-1"), Xxxxxx Com, LLC ("Xxxxxx"), 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. (iv) a Guaranty by each of PT-1 and Xxxxxx
(collectively, the "Guarantors"); (v) stock or membership assignments, executed
in blank, and certificates representing the equity interests in the foregoing
entities; (vi) Security Agreements of each of the Guarantors; and (vii) UCC-1
financing statements related to the foregoing.
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7. DEFAULT. A "DEFAULT" means the occurrence or existence
of one or more of the following events or conditions (whatever the reason for
such Default and whether voluntary, involuntary or effected by operation of
law):
(a) Debtor's or any Guarantor's breach of any of its
respective covenants, obligations or agreements contained in this Agreement,
including, without limitation, the covenants set forth in this Agreement; or
(b) The occurrence, existence or continuance of any
default or event of default under any of the WorldCom Documents, or the
Credit Agreement, other than the Debtor's failure to pay the Past Due
Indebtedness in a timely manner heretofore; or
(c) Any material representation or warranty made by
Debtor or any Guarantor in this Agreement, or any material statement made by
Debtor in any plan, certificate, report, document, exhibit or budget, as the
case may be, provided to WorldCom pursuant to this Agreement or the WorldCom
Documents proves to have been false or misleading in any material respect as
of the time when made; or
(d) Failure of Debtor to remain current with respect to
its Ongoing Usage; or
(e) Any material adverse change in the financial
condition, business, assets or operations of the Debtor or any of the
Guarantors occurs; or
(f) A proceeding shall be instituted in respect of the
Debtor or any Guarantor:
(i) seeking to have an order for relief entered in
respect of the Debtor or such Guarantor, or seeking a declaration or
entailing a finding that such entity is insolvent or a similar declaration or
finding, or seeking dissolution, winding-up, charter revocation or
forfeiture, liquidation, reorganization, arrangement, adjustment, composition
or other similar relief with respect to such entity, its assets or its debts
under any law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any other similar
law now or in the future in effect; or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other similar official for
the Debtor or any Guarantor, or for all or any substantial part of its
property; or
(g) Debtor or Guarantor, as the case may be, shall
become insolvent, shall become generally unable to pay its debts as they
become due, shall voluntarily suspend transaction of its business, shall make
a general assignment for the benefit of creditors, shall institute a
proceeding described in Section 7(f)(i) of this Agreement or shall consent to
any order for relief,
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declaration, finding or relief described in Section 7(f)(i) of this
Agreement, shall institute a proceeding described in Section 7(f)(ii) of this
Agreement or shall consent to the appointment or to the taking of possession
by any such official of all or any substantial part of its property whether
or not any proceeding is instituted, dissolves, winds-up or liquidates itself
or any substantial part of its property, or shall take any action in
furtherance of any of the foregoing.
8. CONSEQUENCES OF A DEFAULT.
(a) If a Default specified in subsections (a) through (e)
of Section 7 of this Agreement occurs and continues or exists, WorldCom may
demand the principal balance due under the Note, interest accrued on the
unpaid principal amount and all other amounts owing by Debtor under this
Agreement and the other WorldCom Documents to be immediately due and payable
without presentment, demand, protest or further notice of any kind, all of
which are expressly waived, and an action for any amounts due shall accrue
immediately.
(c) If a Default specified in subsections (f) or (g)
of Section 7 of this Agreement occurs and continues or exists, WorldCom will
be under no further obligation to provide telecommunications services to
Debtor, the outstanding principal and all unpaid interest and all other
amounts owing by Debtor under this Agreement, and the other WorldCom
Documents shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are expressly waived, and
an action for any amounts due shall accrue immediately.
(d) Notwithstanding anything in this
Agreement to the contrary, upon the occurrence of a Default, WorldCom shall
be permitted to exercise all of its rights under any one or more of the
WorldCom Documents at law or in equity against Debtor.
9. WRITTEN AMENDMENT ONLY. No modifications to the WorldCom
Documents shall be deemed to have been entered into until () the parties to
such WorldCom Documents shall have reached agreement on all issues, and ()
such agreement has been reduced to a written agreement signed by each of the
parties to each such WorldCom Document in question.
10. 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 Agreement,
whether presently known or unknown, and of every nature and extent whatsoever,
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
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Agreement, (iv) enforcement or negotiation of any of the foregoing WorldCom
Documents or this Agreement, and (v) the dealings of the parties to this
Agreement with respect to the obligations of the Debtor Entities to WorldCom
under the WorldCom Documents or one or more of them.
11. 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
10 of this Agreement 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.
12. CUMULATIVE NATURE OF RELEASE. Nothing contained in this
Agreement 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 Agreement 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.
13. BINDING RELEASE. The releases contained in Section 11 of this
Agreement 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.
14. CONSENT BY WORLDCOM TO SALE OF PT-1 OR ITS ASSETS.
Notwithstanding any provision in the WorldCom Documents to the contrary,
WorldCom consents to the sale of all of PT-1's stock or substantially all of its
assets. Notwithstanding the foregoing, WorldCom reserves any and all rights it
may have to the proceeds of any such sale and the Debtor Entities agree that an
aggregate amount of such proceeds equal to the obligations evidenced by the Note
shall not be disbursed, without WorldCom's consent, such consent not to be
unreasonably withheld.
15. REPRESENTATIONS AND WARRANTIES OF DEBTOR ENTITIES. To induce
WorldCom to agree to the financial restructuring of the Debtor's obligations
to WorldCom, each of the Debtor Entities hereby represents and warrants to
WorldCom that:
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(a) WorldCom has acted in good faith in the performance and
enforcement of its rights under the WorldCom Documents, the Obligations and
the negotiation of this Agreement; and
(b) Each of the Debtor Entities is a corporation, limited
liability company, partnership, or limited partnership that (i) is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable; (ii) is
qualified to do business in all jurisdictions where the nature of its
business or properties require such qualification; and (iii) is in compliance
in all material respects with all requirements under applicable laws, rules
and regulations. Set forth on SCHEDULE 15 hereto is a complete and accurate
listing with respect to Debtor, each of the Obligors and their respective
Subsidiaries, showing (1) the jurisdiction of its organization, and its
mailing address, which is the principal place of business and chief executive
office of each unless otherwise indicated; (2) the classes of Capital Stock
and shares of Capital Stock issued and outstanding in Debtor, and in each
such Subsidiary; and (3) with respect to Debtor's Subsidiaries, each record
and beneficial owner of outstanding Capital Stock on the date hereof,
indicating the ownership percentage.
(c) The board of directors (or group of similar authority)
of Debtor and each of its Subsidiaries that is an Obligor (or its general
partners or managing members, as applicable), have duly authorized the
execution, delivery, and performance of the WorldCom Documents to be executed
by Debtor and each such Subsidiary, as appropriate. Debtor and each such
Obligor has the full legal right, power, and authority to execute, deliver,
and perform the WorldCom Documents to which they are parties. The WorldCom
Documents constitute the legal, valid, and binding obligations of Debtor and
each such Obligor, as appropriate, enforceable in accordance with their terms
(subject as to enforcement of remedies to any applicable Debtor Relief Laws).
This Agreement and each other WorldCom Document have been duly executed and
delivered on behalf of Debtor or Subsidiaries of Debtor or any other Obligor,
as the case may be. This Agreement and each other WorldCom Document
constitutes a legal, valid, and binding obligation of Debtor and/or
Subsidiaries of Debtor and/or any other Obligor, as the case may be,
enforceable against such Person in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(d) The execution, delivery, and performance of the
WorldCom Documents, does not and will not (i) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination, or award presently in effect having applicability to Debtor or
any Subsidiary of Debtor or any other Obligor or the articles of
incorporation, bylaws or other organic documents of Debtor or any Subsidiary
of Debtor or any other Obligor; (ii) result in, or require, the creation or
imposition of any Lien on any of the properties or revenues of Borrower or
any Subsidiary of Debtor or any other Obligor pursuant to any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or
award; or (iii) result in a breach or constitute or cause a default under any
indenture, agreement, lease, or instrument to which Debtor or any
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Subsidiary of Debtor or any other Obligor is a party. Neither Debtor nor any
Subsidiary of Debtor nor any other Obligor is in default under any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination,
or award or any such indenture, agreement, lease, or instrument.
(e) No statement contained in this Workout Agreement or any
of the other WorldCom Documents, or in any certificate or other document
delivered to WorldCom by Debtor, any Obligor, or by any of Debtor's
Subsidiaries (or by any of their respective representatives) or any other
Obligor in connection with this Agreement or the transactions contemplated
hereby, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein or
herein not misleading.
16. REPRESENTATIONS AND WARRANTIES OF WORLDCOM. WorldCom represents
and warrants to each of the other parties to this Agreement as follows:
(a) each of the Debtor Entities have acted in good faith in
the performance of their duties under the WorldCom Documents, the Obligations
and the negotiation of this Agreement;
(b) it is duly incorporated, validly existing and in good
standing under the laws of its state of incorporation or organization, and it is
duly qualified to do business as a foreign corporation or entity and in good
standing in all jurisdictions in which the failure to do so would have a
material adverse effect on such party;
(c) it has corporate power, and each has authority to execute,
deliver and perform the provisions of this Agreement and all such action has
been duly and validly authorized by all necessary corporate or other proceedings
on its part;
(d) this Agreement has been duly and validly executed by it
and constitutes a legal, valid and binding obligation of it, enforceable in
accordance with the terms of this Agreement; and
(e) neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated in this Agreement nor the
performance of or compliance with the terms and conditions of this Agreement
will violate any law or court order.
17. RECORDS. The unpaid obligations of Debtor to WorldCom, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amounts and the duration of such applicability shall at all
times be ascertained from the records of WorldCom, which shall be conclusive
absent manifest error.
18. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of dealing
and no delay or failure of WorldCom in exercising any right, power or privilege
under this Agreement or any of the other WorldCom Documents will affect any
other or future exercise of any such right, power or privilege or exercise of
any other right, power or privilege except as and to the extent that
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the assertion of any such right, power or privilege shall be barred by an
applicable statute of limitations; nor shall any single or partial exercise
of any such right, power or privilege or any abandonment or discontinuance of
steps to enforce such a right, power or privilege preclude any further
exercise of such right, power or privilege or of any other right, power or
privilege. The rights and remedies of WorldCom under this Agreement or any of
the other WorldCom Documents are cumulative and not exclusive of any rights
or remedies which WorldCom would otherwise have.
19. SEVERABILITY. The provisions of this Agreement are intended
to be severable. If any provision of this Agreement 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
Agreement in any jurisdiction.
20. GOVERNING LAW, ETC. This agreement shall be governed by
Oklahoma law, without giving effect to principles of conflicts of laws. Each
party agrees that service of process may be duly effected by service in
accordance with the provisions of the Uniform Interstate and International
Procedure Act.
21. EFFECT OF RECOVERY OF PAYMENTS MADE TO WORLDCOM. If any
settlement, discharge, payment, fees, grant of security or transfer of property
relating to discharging any duty or liability to WorldCom created under this
Agreement or the WorldCom Documents is rescinded or avoided by virtue of any
provision of any bankruptcy, insolvency, or other similar law affecting
creditors' rights, WorldCom will be entitled to recover the value or amount of
any such settlement, discharge, payment, fees, grant of security or transfer of
property from the Debtor Entities under the WorldCom Documents or this
Agreement, as if such settlement, discharge, payment, grant of security or
transfer of property had not occurred, but only to the extent permitted by
applicable law.
22. 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 AGREEMENT 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.
23. 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 AGREEMENT, THAT IT KNOWS AND UNDERSTANDS THE
CONTENTS AND EFFECT OF THIS AGREEMENT, THAT THE LEGAL EFFECT OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, THE RELEASE AND WAIVER OF JURY TRIAL PROVISIONS
CONTAINED IN THIS
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AGREEMENT, HAVE BEEN FULLY EXPLAINED TO ITS SATISFACTION BY
ITS COUNSEL, AND EXECUTION OF THIS AGREEMENT IS A VOLUNTARY ACT.
24. 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 Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement.
25. MERGER. This Agreement and the WorldCom Documents are
intended by the parties as a final expression of their agreement and is intended
as a complete statement of the terms and conditions of their agreement and
supersedes all prior understandings and agreements, whether written or oral,
among the parties relating to the transactions provided for in this Agreement,
the Workout Note and the other WorldCom Documents. To the extent that this
Agreement conflicts with any of the WorldCom Documents, this Agreement shall
control.
26. DURATION; SURVIVAL. All representations and warranties of
Debtor contained in this Agreement or made in connection with this Agreement or
any of the other WorldCom Documents shall survive the making of and will not be
waived by the execution and delivery of this Agreement, the Note or any of the
other WorldCom Documents, or by any investigation by WorldCom. Notwithstanding
termination of this Agreement or a Default, all covenants and agreements of the
Debtor Entities will continue in full force and effect from and after the date
of this Agreement so long as any of the WorldCom Documents are in force, and
until payment in full of the Obligations, interest thereon, and all fees and
other obligations of the Debtor Entities under this Agreement and the other
WorldCom Documents. Without limitation, it is understood that all obligations of
Debtor to make payments to or indemnify WorldCom will survive the payment in
full of the Obligations and of all other obligations of the Debtor under this
Agreement and the other WorldCom Documents.
27. TERM OF AGREEMENT. This Agreement will terminate when all
indebtedness of the Debtor Entities to WorldCom is paid in full, and Debtor no
longer purchases telecommunications services from WorldCom, it being understood
that WorldCom has no obligation to continue providing telecommunications
services to Debtor under this Agreement after a Default.
28. NO WAIVER. No failure or delay on the part of any party in
exercising any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof or of any other right, remedy, power or privilege of
such party under this Agreement; nor shall any single or partial exercise of any
such right, remedy, power or privilege preclude any other right, remedy, power
or privilege or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges of the
parties under this Agreement are cumulative and not exclusive of any rights or
remedies which it may otherwise have.
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29. HEADINGS. The headings of the sections in this Agreement are
for purposes of reference only, and shall not limit or affect the meaning of
such section.
30. DEFINITIONS. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms have the following
meanings, respectively, unless the context otherwise clearly requires:
"BUSINESS DAY" means any day other than a Saturday, Sunday, public
holiday under the laws of the State of Oklahoma or other day on which the
banks are authorized or obligated to close in Tulsa, Oklahoma.
"CAPITAL STOCK" means, as to any Person, the equity interests in
such Person, including, without limitation, the shares of each class of
capital stock of any Person that is a corporation; each class of partnership
interests (including, without limitation, general, limited, and preference
units) in any Person that is a partnership; and membership interests in
limited liability companies.
"COLLATERAL" means all real and personal property, accounts,
accounts receivable, contract rights, indefeasible rights of use in
telecommunications cable systems, equipment, inventory, chattel paper,
general intangibles, Capital Stock and other assets of Debtor and/or any of
Debtor's affiliates or Subsidiaries which may be pledged as collateral for
the Obligations from time to time pursuant to any security agreement,
guaranty, pledge agreement or any such other security documents as may be
executed and delivered to WorldCom by or on behalf of Debtor and/or any of
Debtor's affiliates or Subsidiaries or any other Obligor from time to time,
including, without limitation, any property or assets referred to in any of
the WorldCom Documents as securing the Obligations.
"CREDIT AGREEMENT" means the Credit Agreement by and between Debtor
and World Access, Inc., dated as of April ___, 2000.
"DEBTOR RELIEF LAWS" means applicable bankruptcy,
reorganization, moratorium, or similar laws, or principles of equity, affecting
the enforcement of creditors' rights generally.
"LAW" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), claim, title
defect, restriction, easement, charge of any kind, or other security interest or
any preference, priority, or other security agreement of any kind or nature
whatsoever.
"OBLIGATIONS" means all present and future obligations,
indebtedness, and liabilities (whether such obligations, indebtedness, and
liabilities are direct, indirect, fixed, or contingent), and
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all renewals and extensions of all or any part thereof, of Debtor and each
other Obligor to MCI WorldCom, Inc., its subsidiaries and affiliates arising
from, by virtue of, or pursuant to this Agreement, any of the other WorldCom
Documents, and any and all renewals and extensions thereof or any part
thereof or future amendments thereto; all interest accruing on all or any
part thereof; and reasonable attorneys' fees incurred by WorldCom for the
administration of all or any part thereof, the execution of waivers,
amendments, and consents in connection with any part thereof, and in
connection with any restructuring, workouts, or in the enforcement or the
collection of all or any part thereof. Without limiting the generality of the
foregoing, "Obligations" includes all amounts which would be owed by Debtor,
each other Obligor and any other Person (other than WorldCom) to WorldCom
under any WorldCom Document but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization, or
similar proceeding involving Debtor, any other Obligor, or any other Person
(including all such amounts which would become due or would be secured but
for the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization, or like proceeding of the Debtor, any other
Obligor, or any other Person under any Debtor Relief Law).
"OBLIGOR" means Debtor and any other Person liable to the
WorldCom under any of the WorldCom Documents.
"OFFICIAL BODY" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, any supranational, national, state,
municipal, local, or non-U.S. government, any instrumentality, subdivision,
court, administrative agency, or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing, importing,
or other governmental or quasi-governmental authority, or other entity or group
of whatever nature.
"SUBSIDIARY" and "SUBSIDIARIES" of any Person means any
corporation, partnership, limited liability company, joint venture, trust, or
estate of which (or in which) more than fifty percent (50%) of:
(a) the outstanding Capital Stock having voting power to elect
a majority of the Board of Directors of such corporation (or other Persons
performing similar functions of such entity, and irrespective of whether at the
time Capital Stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture, or
(c) the beneficial interest of such trust or estate
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is at the time directly or indirectly owned by (i) such Person, (ii) such
Person and one or more of its Subsidiaries, or (iii) one or more of such
Person's Subsidiaries. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of Debtor.
"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, all other guarantys 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 under the Note,
the Service Agreements, or otherwise.
31. NO PARTNERSHIP OR JOINT VENTURE. It is understood by the
parties that this Agreement 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.
32. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same Agreement.
33. JOINT PREPARATION. The preparation of this Agreement 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.
34. NOTICES. Except as otherwise provided herein, whenever it is
provided in this Agreement, that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another, or whenever any of the parties desires to give or
serve upon another any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be delivered either in person, with receipt
acknowledged, or by certified or registered mail, postage prepaid, or by
telecopy and confirmed by telecopy answerback or sent by a nationally recognized
overnight air delivery service, shipping charges prepaid, addressed as follows:
If to Debtor or STAR Telecommunications, Inc.
any Debtor Entity: 000 Xxxx Xx Xx Xxxxxx
00
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxxx
with a copy to: Xxxxxxx & XxXxxxxx
Twenty-Ninth Floor
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to WorldCom: MCI WorldCom Network Services, Inc.
0000 X. Xxxxxxxx
Mail Drop: 5.2-510
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Vetera, Vice President Corporate
Credit Facsimile No.: (000) 000-0000
with copy to: Xxxxx Rooney Xxxxxx & Xxxxxxxxx, P.C.
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Many Emamzadeh, Esq.
Facsimile No. (000) 000-0000
35. THIRD PARTY BENEFICIARIES. The terms and conditions of this
Agreement 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 Agreement.
36. SUCCESSORS AND ASSIGNS. This Agreement 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 Agreement without the prior written consent of the other party.
IN WITNESS WHEREOF, the parties hereto by their authorized
representatives have executed this Workout Agreement as of the day and year
first above written.
STAR TELECOMMUNICATIONS, INC. By:__________________________
Name: _______________________
By:_________________________ Title:_______________________
Name:_______________________
Title:______________________ XXXXXX COM, LLC
PT-1 COMMUNICATIONS, INC. By:__________________________
13
Name:_______________________ PT-1 HOLDINGS II, INC.
Title:______________________
CEO TELECOMMUNICATIONS, INC. By:___________________________
Name:_________________________
Title:________________________
By:_________________________
Name:_______________________ NATIONWIDE DISTRIBUTORS, INC.
Title:______________________ TECHNOLOGY LEASING, INC.
CEO CALIFORNIA TELECOMMUNICATIONS, INC.
By:___________________________
By:_________________________ Name:_________________________
Name:_______________________ Title:________________________
Title:
INVESTMENT SERVICES, INC.
LUCIUS ENTERPRISES, INC.
By:___________________________
Name:_________________________
By:_________________________ Title:________________________
Name:_______________________
Title:______________________ PT-1 COMMUNICATIONS PUERTO RICO, INC.
AS TELECOMMUNICATIONS, INC. By:___________________________
Name:_________________________
By:_________________________ Title:________________________
Name:_______________________
Title:______________________ PHONETIME TECHNOLOGIES, INC.
PT-1 LONG DISTANCE, INC. By:___________________________
Name:_________________________
Title:________________________
By:_________________________
Name:_______________________
Title:______________________
PT-1 HOLDINGS I, INC.
By:_________________________
Name:_______________________
Title:______________________
14
MCI WORLDCOM NETWORK SERVICES,
INC.
By:__________________________
Xxxxxx Xxxxxx
Director of Workouts
EXHIBIT A
WORLDCOM DOCUMENTS
------------------------------------------------- ----------------- ------------------------------------------------
Document Date Parties
------------------------------------------------- ----------------- ------------------------------------------------
Wiltel, Inc. Carrier Digital Services Contract 8/1/95 Star Vending, Inc. dba Star Telecommunications
------------------------------------------------- ----------------- ------------------------------------------------
Assignment Agreement 2/18/95 PT-1 Communications, Inc. Assignor to Star
Telecommunications, Inc.
------------------------------------------------- ----------------- ------------------------------------------------
Digital Services Agreement 8/1/95
------------------------------------------------- ----------------- ------------------------------------------------
Wilmax, Inc Universal Telecom Services Agreement 1/27/97 Star Vending, Inc. dba Star
Telecommunications, Inc.
Amendment 3
Amendment 4 2/24/98
Amendment 5 2/18/98
Amendment 6- 3/5/98
Amendment 7 4/6/98
Amendment 10 4/22/98
Amendment 26 8/6/98
Amendment 46 3/29/99
Amendment 50 8/10/99
8/31/99
------------------------------------------------- ----------------- ------------------------------------------------
Transcend Telecommunications Services Agreement 2/21/96 CTN - Custom Telecommunications Network of
Arizona, Inc.
------------------------------------------------- ----------------- ------------------------------------------------
Wilmax, Inc. Telecommunications Service 10/28/94
Agreement
------------------------------------------------- ----------------- ------------------------------------------------
Digital Network Services, Inc
------------------------------------------------- ----------------- ------------------------------------------------
The parties acknowledge that this Exhibit A may be replaced by a
completed Exhibit A, without amending the Workout Agreement, and such
replacement, to the extent it is provided to WorldCom within ten (10)
Business Days of the date of this Agreement, shall be effective as of the
date of this Agreement.
2
SCHEDULE 15
INFORMATION RELATING TO DEBTOR, OBLIGORS AND SUBSIDIARIES THEREOF
