Attachment 20170112154259-660.p

20170112154259-660.p

SUPPLEMENT

Supplement

1998-09-18

This document pretains to ITC-T/C-19980918-00650 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC1998091800650_1392986

—Tc—1(—199809/5—000650 Categories of Services for 214 Applications (Streamline/Non—streamline) nnnuupsmumymmmurnme—sogcedb ASSIGNMENT OF LICENSE a GLOBAL FACILITIES—BASED SERVICE 8 GLOBAL FACILITIES—BASED/GLOBAL RESALE SERVICE 8 80 GLOBAL RESALE SERVICE INDIVIDUAL FACILITIES—BASED SERVICE INTERCONNECTED PRIVATE LINE RESALE SERVICE i3 LIMITED GLOBAL FACILITIES—BASED SERVICE/LIMITED 9 GLOBAL RESALE SERVICE LIMITED GLOBAL FACILITIES—BASED SERVICE DD\DDDD LIMITED GLOBAL RESALE SERVICE INMARSAT AND MOBILE SATELLITE SERVICE SWITCHED RESALE SERVICE TRANSFER OF CONTROL SUBMARINE CABLE LANDING LICENSE INTERNATIONAL SPECIAL PROJECT Description of Application:

% BEFORE THE FEDERAL COMMUNICATIONS C( ISSION Nuwme! Nee‘ Noucer‘ Nee Suce? Sume! Suus! Nuws! Suu Ne Suad! In re Application of Strn ied ITC—T/C—19980918—00650 National Telephone & Communications, Inc. NA¥ INC L TELEPHONE & COMMUNICATIONS, for Authority Pursuant to Section 214of the Communications Act of 1934, as amended for Transfer of Control of Authorization to Provide International Resold Communications Services and Related Transactions APPLICATION National Telephone & Communications, Inc. ("NTC" | pplicant"), pursuant to Section 214 of the Communications Act of 1934, as amended, 47 U.S 214, and Section 63.18 of the Commission‘s Rules, 47 C.F.R. § 63.18, hereby requests aut for the transfer (3fcontrol, as defined under relevant Commission law and precedent, ofNTC 10n 214 authorization to reflect the proposed acquisition Qf control of the Board of NTC‘s ¢ and ultimate corporate parent Incomnet, inc. ("Incomnet") by Jf)hn P. Casey gnd, to the exter ired, an accompanying change in the structure ofIncomnet‘s Board ofDirectors (the "Transact The proposed Transaction will be completely transparent to NTC‘s customers, who will continue to receive the same high quality cost—efficient services that they currently receive. Applicant submits the following information in support of this Application: COPY

1. REQUEST FORAPPROVAL NTC is a privately held corporation organized under the laws ofthe State ofDelaware. holds global Section 214 authorization to provide resold international telecommunications serv: NTC is wholly owned by Incomnet, a publicly traded company organized under the laws ofthe of California. NTC is a reseller of telecommunications services, including interstate international long distanceservices, that relies exclusively on the facilities of other carriers | service offerings. Specifically, NTC acts as a supplier of long distance services and a mark agent for WorldCom Network Services, Inc. ("WorldCom"), one ofthe largest interexchange ca in the United States. Mr. Casey, a Senior Vice President of Meridian Investments, Inc. ("Meridian"), mait his business offices at 10220 River Road, Suite 115, Potomac, Maryland 20854. Mr. Case extensive experience in financial and marketing matters. Casey is also the largest sharehol« Incomnet who, over the course of the past year has steadily increased the size of his investm: Incomnet. Although Mr. Casey inte_:nds to exercise general oversight of the operation: management of NTCimmediately upon consummation of the proposed transaction, Mr. Case not yet assumed an active role in the oversight of NTC‘sactivities. _ NTC is currently substantially in arrears for payments for services repdered by World as well as for payments due its principal lender, First Bank & Trust Company of Newport Beach ("First Bank"). WorldCom and First Bank have questioned the ability of NTC to meet the terms of these outstanding liabilities and expressed reservations over the continuing viability of NTC. U National Telephone & Communications, Inc., ITC—95—093 (Feb. 3, 1995). F9 s

Accordingly, Worlc’lCom and First Bank recently announced their intention to cease prqviding service to and\to foreclose on certain of NTC‘s assets. In order to address the concerns raised by WorldCom and First Bank, Mr. Casey entered into negotiations with Incomnet, WorldCom andFirst Bank. As a result of these negotiations as well as the continuing negotiations with Incomnet, on August 21, 1998, Mr. Casey approved a non— binding Term Sheetto the Board of Directors of Incomnet setting forth non—binding terms of a proposal through which Mr. Casey would acquire control of the Board of Incomnet. On August 26, 1998, however, WorldCom and First Bank expressly indicated their intention to cease providing service to NTCand foreclose on certain ofNTC‘s assets umless, among other things a Board Change Agreement was entered into by August 28, 1998 (the “‘Boérd Change Agreement‘). The Board Change Agreement, which is subject to various conditions, was entered into on August 28, 1998. WorldCom and First Bank agreed to forbear until September 25, 1998, provided that, amongother things, certain payments to those secured creditors are made by September 25, 1998, and the Board Change Agreejment was entered into by August 28, 1998. The Board Change Agreement provides that Mr. Casey will use commercially reasonable efforts to provide additional debt or equity financing for the Company. Assuming that the conditions to the Board Change Agreement are satisfied, it is expected that the Board change will occur by the end of September 1998. Due to the extremely rapid development of the Transaction, NTC has sought Special Temporary Authority ("STA") to complete the transaction by letter filed herewith. II. DESIGNATED CONTACTS The designated contacts for correspondence and questions concerning this Application are:

Dale R. DeForge National Telephone & Communications, Inc. 2801 Main Street Irvine, CA 92614 (949) 224—7750 (Tel) (949) 224—7751 (Fax) with a copy to: John P. Casey 10220 River Road, Suite 115 Potomac, MD 20854 (301) 983—5000 (Tel) (301) 983—9012 (Fax) and: Phyllis A. Whitten Edward S. Quill, Jr. Swidler Berlin Shereff Friedman, LLP 3000 K. Street, NW, Suite 300 Washington, DC 20007 (202) 424—7500 (Tel) (202) 424—7645 (Fax) III. PUBLIC INTEREST The transfer of control of NTC to Mr. Casey, through NTC‘s parent Incomnet, serves the public interest. Applicant respectfully submits that the proposed transfer of control is necessary to permit NTC to continue to provide service to its existing customers and to prevent a sudden interruption in international service to NTC‘s customers. As explained above, Mr. Casey‘s assumption of control ofIncomnet is one ofthe explicit conditions imposed by WorldCom and First Bank to permit NTC to continue operating. Although the control ofNTC will be transferred to Mr. Casey, the Transaction will not affect the rates, terms or conditions of service or result in a change in the manner in which NTC provides — 4.

service to its international customers. NTC will continue to provide service under its own nam e and pursuant to its own grant of Section 214 authority. In addition, NTC will be led by a team of well— qualified telecommunications managers. As such, the Transaction has not caused inconvenienice or confusion to NTC‘s sustoriers or othewise iaidversely impacted the operations o NTC. While the Triinsact on will b : tr ans paren‘ to NT‘C‘s customers with regard to the service s that they receive, the Tiansac:ion i; a so expected to provide NTC with financial and mana zerial resources required to perim it it to ccentiauc offering service to its customers. As explained in 1etail above, the financial sxigencies faced ty NTU r:quire immediate resolution. IV. INFORMA‘[ION RIQUL ED UNDHR SECTION 63.18 The following info mition is subriitted, as required by Section 63.18 of the Commission‘s Rules, 47 C.F.R. §6:).13, i1 s ipport of Applicaint‘s request for authorization. (a) Names, adcresse:; ar d phone nuinbers of Applicant: Naticna! Telephcne & To: n unications, Inc. 2801 Miin St1eel Irvine, CA 92614 (949) 224—750 (Tel) (949) 224—,751 (Fa:) (b) NTC is a corpor: tio 1 o0 ganized under the laws of the State of Deaware. Incomnet is a public}, traded «corporation organized under the laws of the S :ate of California. Mr. Casey s ;. U.S. cit ze 1 resic ing in Potomac, Maryland. Mr. Casey, Incomnet, and the Board »flJircctors of: ncomnet, NTC‘s direct and ultimate corporate parent, have entered into an agreeinent, which is subject to satisfaction or waiver of various conditions, through which Mr. Casey is expected to acquire control of the Board of Incomnet by the end of September 1998, provided that certain conditions are met. As a result of the Transaction, the directors and officers of Incomnet and NTC will undergo substantial changes in composition. A list of the current officers and directors of Incomnet and NTC are included at Exhibit A. (c) Correspondence concerning this application should be sent to:

Dale R. DeForge National Telephone and Communications, Inc. 2801 Main Street Irvine, CA 92614 (949) 224—7750 (Tel) (949) 2224—7751 (Fax) with a copy to: John P. Casey 10220 River Road, Suite 115 Potomac, MD 20854 (301) 983—5000(Tel) (301) 983—9012 (Fax) and: Phyllis A. Whitten Edward S. Quill, Jr. Swidler Berlin Shereff Friedman, LLP 3000 K Street, NW, Suite 3000 _ Washington, DC 20007 (202) 424—7500 (Tel) (202) 424—7645 (Fax) (d) NTC holds Section 214 authority, granted by the Commission on February 3, 1995, to operate as a global international resale carrier of switched telecommunications services. See FCC File No. ITC—95—093. Neither Incomnet nor Mr. Casey holds Section 214 authority. (e) Mr. Casey and NTC‘s corporate parent (Incomnet) have executed and consummated an agreement through which Mr. Casey, subject to various conditions, will acquire control of the Board of Incomnet and therefore of NTC. (£) Not applicable. (g) Not applicable. (h) Neither Mr. Casey nor NTC are affiliated with any carrier that holds market power in a foreign destination market. NTC is a wholly owned subsidiary of Incomnet. The following entities hold a ten percent (10%) or greater ownership or management interest in Incomnet: —6—

Name/Adidre is .¥o|Teld ~df icipal Business John P. Cuse /; 30.7%2 | Jf ividual 10220 River Road . Suite 1 1 5 Potomic, M 20854 Cohen Srou; 208 64 198 [viduals 1500 Hemw ps ead T urr pil:e East M sacov, NY 11 35« Follo virg the completicn of the prop d tra isa m, no NTC directors wil hold interloc king positicns wi h any 0 her telec xm nu ations pr deis. (i) 4 pprlic int certiies that its 1 as no reed ind 11 not agree in the future to rccept aary diisci or irdirsct spzcial con sions fro i foreign carrier or admi aistration vitk re gaids to tra ‘fic or re renue ws be tw th: United States znd any foreign countriss ‘he ccmjpany is at thoriz to serve. ¥ Mi. C asey cur :er tly hclds an optio 1 (the »he n Opt ") 10 purchase Series 1\ a id series B Convertible Preferred ; itock wt ich is :ot ve‘tit nto ec m1 istock. If Incomnet hiid s ufficient authorizec¢ buit unissu:d :sommor stock: tc effec coiiversi of these preferred sh:ire:; and the other pref:rr:d shure ; tiat were tenderec for c ‘ersi0. 1 11 ine 1998, Mr. Casey would own approximitely 47 per:ert of the shires 0 the c tardit g | im>n stock of Incomumet. At this time, how »ver, ncom ne does no : have su ‘ficier m non s ¢ a ithorized to permit ccnversion of Incomn:t‘: preferred stock. Aia tern(fthe: rd Chan; \greement referred to ab ove , Mr. Casey is obli sat:d :o iss gn the C oh :n Op :i011 t« commnt 1 »r certain conditions ind , if those conditions are rot met, ‘he comino: sioc t issu : pirsual > tie conversion of the pre:‘erred stock that is subje:t :o he Cohin Dp:ion vill a >ro rata basis to all Incomnet offer »d shareholders at :i p ic re presenti ig no act 1al pr to M :. ( 3y. If Incomnet is no: firancially capable of redeeming the Cohen Preferred Stock on or before October 14, 1998, Mr. Casey will exercise the option and acquire the underlying Cohen Preferred Stock. 3/ The Cohen Group, comprised of twelve individual investors, holds Series A and Series B Convertible Preferred Stock, which if converted into common stock would total approximately 28 percent of the common stock of Incomnet. As noted above, Incomnet does not at this time have sufficient common stock authorized to permit the conversion of preferred shares into common stock. Also as cited above, Mr. Casey holds an option to purchase all of the preferred stock held by the Cohen Group. The Cohen Group also holds options to purchase an additional 1.5 percent of Incomnet. These options are not part of the Cohen Option. — 4.

(J) Applicant certifies that no party to this application has been denied federal benefits pursuant to Section 5301 of the Anti—Drug Abuse Act of 1988. Applicant‘s certification is attached. v. CONCLUSION For the reasons stated herein, Applicant respectfully submit that grant of this application serves the public interest. Applicant therefore respectfully request that the Commission grant approval to permit Mr. Casey to acquire control of NTC as set forth above. Jol Respectfully submitted, Dale R. DeForge ( National Telephone & Cominunications, Inc. 2801 Main Street Irvine, CA 92614 (949) 224—7750 (Tel) > (949) 224—7751 (Fax) Dated: September 17,1998 249779.1

EXHIBITS List of officers and directors of Incomnet, Inc. and National Telephone & Communications, Inc. .................................... A CERTIFICATION

EXHIBIT A Current Officers and Directors of Incomnet, Inc. Melvyn Reznick, President and Director Mark J. Richardson, Secretary Howard Silverman, Director David Wilstein, Director Nancy S. Zivitz, Director Richard M. Horowitz, Director Rolf Lesem, Director Current Officers and Directors of National Telephone & Communications, Inc. Michael J. Keebaugh, Executive Vice President Debra A. Chuckas, Senior Vice President Timothy M. Ciaccio, Vice President Gerald A. DeCiccio, Vice President Dale R. DeForge, Secretary James R. Quandt, Director Michael L. Tenzer, Director Fred G. Jager, Director Pamela Fanning Carter, Director

CERTIFICATION OF APPLICANT On behalf of National Telephone & Communications, Inc., and in accordance: w hi sct on 1.2001—1.2003 ofthe Commission‘s Rules, 47 C.F.R. §§ 1.2001—1.2003, I hereby certify th itn )p:; ty to this application is subject to a denial of Federal benefits that includes FCC benefits j irs an to Section 5301 of the Anti—Drug Abuse Act of 1988. See 21 U.S.C. § 853a.I also here‘y ert ‘y 1 at the statements in the foregoing request for Special Temporary Authority are true, con ple s, : ad correct to the best of my knowledge and are made in good faith. National Telephone & Communications, Inc. has not agreed to ar y concessions lir: :th or indirectly from any foreign carrier or administration with respect to traffic ind revenue fic vb tw en the United States and various international points under the authority graiited under Sec on 1« of the Communications Act of 1934, as ariended, and the Commission‘s Riles, and has nc ag ce« to enter into such agreements in the future. National Telephone & Communications , Inc. By: Y —{ \—/ > Name: Michael J. Keebaugh Title: _ COO0 and EVP Date: September 15, 1998


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