EXHIBIT 10.2
AMENDMENT NO. 2 TO WORKOUT AGREEMENT
THIS AMENDMENT NO. 2 TO WORKOUT AGREEMENT (this "AMENDMENT') is entered
into as of this 18th day of August, 2000, by and between STAR
Telecommunications, Inc., a Delaware corporation ("DEBTOR"), PT-1
Communications, Inc. ("PT-1"), HelveyCom, 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").
WHEREAS, the parties entered into a Workout Agreement dated as of the
12th day of April 2000, as amended by Amendment No. 1 to Workout Agreement
dated as of June 30, 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, as amended by Amendment No. 1 to Standby Term
Loan Note dated as of July 31, 2000, as further amended by Amendment No. 2
to Standby Term Loan Note dated as of August 15, 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 in
this Amendment by reference.
2. AMENDMENT OF THE WORKOUT AGREEMENT. Section 14 of the Workout
Agreement is hereby amended and restated as follows:
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
Notes shall be be disbursed, without WorldCom's consent,
such consent not to be unreasonably withheld.
3. ACKNOWLEDGEMENT 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
Amendment and the Notes, including, without limitation, Amendment No. 1 to
Promissory Note, dated as of July 31, 2000, Amendment No. 2 to Promissory
Note, dated as of August 15, 2000, Amendment No. 1 to Standby Term Loan Note,
dated as of July 31, 2000, and Amendment No. 2 to Standby Term Loan Note,
dated as of August 15, 2000.
4. 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 Xxxxxx,
each dated as of April 12, 2000, as the same may be amended, modified of
supplemented from time to time, and the security provided therefor under the
respective Security Agreements and Pledge Agreements of the Debtor, PT-1 and
Xxxxxx, each dated as of April 12, 2000, as the same may be amended, modified
or supplemented from time to time.
5. 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, 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 negotiations 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.
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6. 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.
7. 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.
8. 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.
9. 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.
10. 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 process may be duly effected by service in
accordance with the provisions of the Uniform Interstate and International
Procedure Act.
11. 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
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RESPECT TO ANY SUCH DISPUTE AND CONSENT TO THOSE COURTS EXERCISING SUBJECT
MATTER AND PERSONAL JURISDICTION WITH RESPECT TO ANY SUCH DISPUTE.
12. 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.
13. 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," "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.
14. TERM OF AMENDMENT. This Amendment will terminate upon
termination of the Workout Agreement.
15. 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.
16. 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.
17. 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 the same Amendment.
18. 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.
19. 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.
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20. 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. 2 to Workout Agreement, as
of the day and year first above written.
STAR TELECOMMUNICATIONS, INC. LUCIUS ENTERPRISES, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: President Title: President
--------------------------- ----------------------------
PT-1 COMMUNICATIONS, INC. AS TELECOMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: CEO Title: CEO
--------------------------- ----------------------------
XXXXXX COM, LLC PT-1 LONG DISTANCE, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: MANAGER Title: CEO
--------------------------- ----------------------------
CEO TELECOMMUNICATIONS, INC. PT-1 HOLDINGS I, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: President Title: CEO
--------------------------- ----------------------------
CEO CALIFORNIA
TELECOMMUNICATIONS, INC. PT-1 HOLDINGS II, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: President Title: CEO
--------------------------- ----------------------------
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NATIONWIDE DISTRIBUTORS, INC. PT-1 COMMUNICATIONS PUERTO RICO,
TECHNOLOGY LEASING, INC. INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: CEO Title: CEO
--------------------------- ----------------------------
INVESTMENT SERVICES, INC. PHONETIME TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ -------------------------------
Name: Xxxx Xxxxx Name: Xxxx Xxxxx
---------------------------- -----------------------------
Title: CEO Title: CEO
--------------------------- ----------------------------
MCI WORLDCOM NETWORK SERVICES,
INC.
By: /s/ Xxxxxx X. Vetera 8/18/00
-------------------------------
Xxxxxx X. Vetera
Vice President, Corporate Credit
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