printer-friendly

Sample Business Contracts

Exchange Agreement [Amendment] - Tel-Save.com Inc., Mark Pavol and D&K Grantor Retained Annuity Trust

Sponsored Links

                     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 TEL-SAVE.com, INC., a
Delaware corporation (the "Company"), TEL-SAVE, INC., a Pennsylvania corporation
and a subsidiary of the Company (the  "Subsidiary"),  and MARK PAVOL, 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.


                                       1
<PAGE>


          (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.


                                       2

<PAGE>

          (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.


                                       3
<PAGE>

                                         Tel-Save.com, Inc.



                                         By
                                           ---------------------------
                                         Name
                                         Title

                                         The Subsidiary


                                         By
                                           ---------------------------
                                         Name
                                         Title

                                         The Participant


                                         ----------------------------
                                         Mark Pavol, as Trustee of the
                                         D&K Grantor Retained Annuity
                                         Trust dated June 15, 1998



                                       4