Document:

<PAGE>   1
                                                                   Exhibit 10.12

CORESTATES BANK, N.A.

<TABLE>
<CAPTION>
                                                            LETTER OF CREDIT
OUR CREDIT NO.         ISSUE DATE       EXPIRY DATE              AMOUNT
--------------         -----------      -----------      -----------------------
<S>                    <C>              <C>              <C>
401280P                14-OCT-1997      14-OCT-1998           USD50,000.00
</TABLE>

<TABLE>
<CAPTION>
BENEFICIARY                                                            APPLICANT
-----------                                                            ---------
<S>                                                      <C>
GULF INSURANCE COMPANY                                   MICHAEL A. KARP TRADING AS ATX
C/O AAA BOND/PROS INC.                                     TELECOMMUNICATIONS SERVICES
ONE DUPONT STREET                                        1062 LANCASTER AVENUE, SUITE 617
PLAINVIEW, NEW YORK 11803                                ROSEMONT, PA 19010
ATTN: TOBIN JACOBSON
</TABLE>

DEAR BENEFICIARY:

     WE HAVE ESTABLISHED THIS CLEAN, IRREVOCABLE, AND UNCONDITIONAL LETTER OF
CREDIT IN YOUR FAVOR AS BENEFICIARY FOR DRAWINGS UP TO USD50,000.00 (FIFTY
THOUSAND AND 00/100 U.S. DOLLARS) EFFECTIVE IMMEDIATELY. THIS LETTER OF CREDIT
IS ISSUED, PRESENTABLE AND PAYABLE AT OUR OFFICE AT P.O. BOX 13866, 530 WALNUT
STREET, LETTER OF CREDIT DEPARTMENT, SEVENTH FLOOR, FIND CODE 1-9-7-1,
PHILADELPHIA, PA. 19106 AND EXPIRES WITH OUR CLOSE OF BUSINESS ON OCTOBER 14,
1998.

     THE TERM "BENEFICIARY" INCLUDES ANY SUCCESSOR BY OPERATION OF LAW OF THE
NAMED BENEFICIARY INCLUDING WITHOUT LIMITATION ANY LIQUIDATOR, REHABILITATOR,
RECEIVER OR CONSERVATOR.

     WE HEREBY UNDERTAKE TO DULY HONOR YOUR SIGHT DRAFT(S) DRAWN ON US,
INDICATING OUR CREDIT NO. 401280P, FOR ALL OR ANY PART OF THIS CREDIT UPON
PRESENTATION OF YOUR DRAFT DRAWN ON US AT OUR OFFICE SPECIFIED IN PARAGRAPH ONE
(1) ON OR BEFORE THE EXPIRATION DATE HEREOF OR ANY AUTOMATICALLY EXTENDED EXPIRY
DATE.

     EXCEPT AS EXPRESSLY STATED HEREIN, THIS UNDERTAKING IS NOT SUBJECT TO ANY
AGREEMENT, REQUIREMENT OR QUALIFICATION. THE OBLIGATIONS OF CORESTATES BANK N.A.
UNDER THIS CREDIT IS THE INDIVIDUAL OBLIGATION OF CORESTATES BANK N.A. AND IS IN
NO WAY CONTINGENT UPON REIMBURSEMENT WITH RESPECT THERETO.

     THIS LETTER OF CREDIT IS DEEMED TO BE AUTOMATICALLY EXTENDED WITHOUT
AMENDMENT FOR ONE (1) YEAR FROM THE EXPIRATION DATE OR ANY FUTURE EXPIRATION
DATE, UNLESS THIRTY (30) DAYS PRIOR TO SUCH EXPIRATION DATE, WE NOTIFY YOU BY
REGISTERED MAIL THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED FOR ANY SUCH
ADDITIONAL PERIOD.
<PAGE>   2

     THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AND THE 1993 REVISION OF THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO.
500) AND IN THE EVENT OF ANY CONFLICT THE LAWS OF NEW YORK WILL CONTROL. IF THIS
CREDIT EXPIRES DURING AN INTERRUPTION OF BUSINESS AS DESCRIBED IN ARTICLE 19 OF
SAID PUBLICATION 500, THE BANK HEREBY SPECIFICALLY AGREES TO EFFECT PAYMENT IF
THIS CREDIT IS DRAWN AGAINST WITHIN THIRTY (30) DAYS AFTER THE RESUMPTION OF
BUSINESS.

     ALL INQUIRIES REGARDING THIS CREDIT SHOULD BE DIRECTED TO US AT OUR PHONE
NUMBERS (215) 973-5981; (215) 973-8157; (215) 973-1944.

                                          /s/ AUTHORIZED SIGNATURE
                                          --------------------------------------
                                          AUTHORIZED SIGNATURE<PAGE>   1
                                                                   Exhibit 10.13

                                 FIRSTRUST BANK

                                                                   Direct Dial#:
                                                                  (610) 238-5018

Irrevocable Letter of Credit No. 155

Issue Date:   October 19, 1999

Expiration Date:   October 19, 2000

Amount:   $122,000.00

<TABLE>
<S>                                                      <C>
Beneficiary                                              APPLICANT
COMMONWEALTH OF                                          MICHAEL A. KARP T/A
PENNSYLVANIA                                             ATX TELECOMMUNICATIONS
                                                         50 Monument Road
                                                         Bala Cynwyd, PA 19004
</TABLE>

     We hereby establish this Irrevocable Letter of Credit No. 155 in favor of
the aforesaid addressee ("Beneficiary") for drawings up to United States One
Hundred Twenty-Two Thousand and 00/100 (U.S. $122,000.00) Dollars effective
immediately. This Letter of Credit is issued, presentable and payable at our
office at Firstrust Savings Bank, 15 East Ridge Pike, Fourth Floor,
Conshohocken, Pennsylvania, 19428, and expires with our close of business on
October 19, 2000.

     The term "Beneficiary" includes any successor by operation of law of the
named Beneficiary including, without limitation, any liquidator, rehabilitator,
receiver or conservator.

     We hereby undertake to promptly honor your sight draft(s) drawn on us
accompanied by an Affidavit signed by the Prothonotary or other duly authorized
officer of Commonwealth Court, such that Applicant has failed to pay within ten
(10) days such sums of money due and owing pursuant to a final, non-appealable
Order of the Commonwealth Court and referencing our Letter of Credit No. 155,
for all or any part of this Credit if presented at our office specified in the
first paragraph hereof on or before the expiry date or any automatically
extended expiry date.

     Except as expressly stated herein, this undertaking is not subject to any
agreement, condition or qualification. The obligations of Firstrust Savings Bank
under this Letter of Credit is the individual obligation of Firstrust Savings
Bank and is in no way contingent upon reimbursement with respect thereto.

     It is a condition of this Letter of Credit that it is deemed to be
automatically extended without amendment for one year from the expiry date
hereof, or any future expiration date, unless thirty (30) days prior to any
expiration date, we notify you by registered mail that we elect not to consider
this Letter of Credit renewed for any such additional period.

     This Letter of Credit is subject to and governed by the laws of the
Commonwealth of Pennsylvania and the 1983 revision of the Uniform Customs and
Practice for
<PAGE>   2
Letter of Credit No. 155
Page Two

Documentary Credits of the International Chamber of Commerce (publication no.
400) and, in the event of any conflict, the Laws of the Commonwealth of
Pennsylvania will control. If this Letter of Credit expires during an
interruption of business as described in Article 19 of said Publication No. 400,
the bank hereby specifically agrees to effect payment if this Letter of Credit
is drawn against within thirty (30) days after the resumption of business.

Very truly yours,

<TABLE>
<S>                                                         <C>
                 /s/ CARL M. GRENEN                                        /s/ WILLIAM F. BRUCKNER
-----------------------------------------------------       -----------------------------------------------------
                   Carl M. Grenen                                            William F. Bruckner
             Sr. Vice President, Finance                             Vice President, Commercial Lending
</TABLE>
<PAGE>   3

                                 FIRSTRUST BANK

                                  AMENDMENT TO
                    IRREVOCABLE LETTER OF CREDIT NUMBER 155

<TABLE>
<S>                                              <C>
ORIGINAL ISSUE DATE:                             October 19, 1999

EXPIRATION DATE:                                 October 19, 2000

AMOUNT:                                          $122,000.00

BENEFICIARY                                      COMMONWEALTH OF PENNSYLVANIA

APPLICANT                                        MICHAEL A. KARP T/A ATX TELECOMMUNICATIONS
                                                 50 MONUMENT ROAD BALA CYNWYD, PA 19004
</TABLE>

     WE HEREBY AMEND THE ABOVE REFERENCED IRREVOCABLE LETTER OF CREDIT AS
FOLLOWS:

         It is a condition of this Letter of Credit that it shall continue
     automatically during the pendency of the case of Michael Karp, Thomas
     Gravina and Debra Buruchian t/a ATX Telecommunications Services, Ltd., No.
     426 F&R 1999. The pendency of this litigation shall be deemed to include
     appeals beyond Commonwealth Court. Once the above captioned case has been
     terminated, either through settlement, unappealed litigation or otherwise,
     the Letter of Credit may be returned through the filing of a motion with
     the Commonwealth Court and noticed to the Tax Litigation Section of the
     Office of Attorney General.

<TABLE>
<S>                                        <C>
      /s/ WILLIAM F. BRUCKNER                       /s/ CARL M. GRENEN
------------------------------------       ------------------------------------
        William F. Bruckner                           Carl M. Grenen
  Vice President, Commercial Loans            Senior Vice President, Finance
</TABLE><PAGE>   1
                                                                   Exhibit 10.14

                                 FIRSTRUST BANK
                        SERVING ITS CUSTOMERS SINCE 1934

                            STANDBY LETTER OF CREDIT

<TABLE>
<S>                                <C>
ISSUE DATE:                        October 30, 1998
EXPIRATION DATE:                   October 29, 1999
IRREVOCABLE LETTER OF CREDIT NO.:  134
AMOUNT:                            $315,000.00
BENEFICIARY:                       Union Mutual Insurance Company
APPLICANT:                         ATX Telecommunications Services, Ltd.
</TABLE>

     We have established this irrevocable letter of credit in your favor for
drawings up to U.S. Three Hundred Fifteen Thousand ---------xx/100 Dollars
($315,000.00), effective October 30, 1998 and expiring at our office located at
15 East Ridge Pike, Whitemarsh Plaza, Conshohocken, PA 19428 with our close of
business on October 29, 1999.

     We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit No. 134, for all or any part of this Credit if presented
at 15 East Ridge Pike, Whitemarsh Plaza, Conshohocken, PA 19428 on or before the
expiry date or an automatically extended date.

     Except as stated herein, this undertaking is not subject to any condition
or qualification. The obligation of the Bank under this Letter of Credit shall
be the individual obligation of the Bank, in no way contingent upon
reimbursement with respect thereto.

     It is a condition of this Letter of Credit that it shall be deemed
automatically extended without amendment for one year from the expiry date
hereof, or any future expiration date, unless sixty days prior to any expiration
date we shall notify you by Registered Mail that we elect not to consider this
Letter of Credit renewed for any such additional period.

     It is a further condition of this Letter of Credit that any interruptions
of the Bank's conduct of business caused by an Act of God, riot, civil
commotion, insurrection, war or other cause beyond the Bank's control, or by the
strike or Lockout, will automatically extend the expiry date hereof, as well as
future expiry date by the period of the interruption.

     Should you have occasion to communicate with us regarding this Credit,
kindly direct your communication to the attention of our Credit No. 134.
<PAGE>   2

Standby Letter of Credit
Page Two

     This Letter of Credit is subject to and governed by the Uniform Customs and
Practice for Documentary Credits of the International Chamber of Commerce
(Publication No. 500).

Very truly yours,

<TABLE>
<S>                                        <C>
       /s/ RICHARD E. MEYERS                      /s/ EDWARD A. D'ANCONA
------------------------------------       ------------------------------------
Richard E. Meyers                          Edward A. D'Ancona
Executive Vice President                   Executive Vice President
</TABLE>
<PAGE>   3

                                 FIRSTRUST BANK

                                  AMENDMENT TO
                      IRREVOCABLE LETTER OF CREDIT NO. 134

<TABLE>
<S>                             <C>
ORIGINAL ISSUE DATE:            October 30th, 1998
ORIGINAL EXPIRATION DATE:       October 29th, 1999
AMENDMENT EXPIRATION DATE:      October 27th, 2000
AMOUNT:                         $315,000.00
BENEFICIARY:                    Utica Mutual Insurance Company
</TABLE>

     The Letter of Credit's first paragraph beginning as "At the request" is
amended as follows:

         At the request and for the account of Michael Karp T/A ATX
     Telecommunications located at 50 Monument Road, Bala Cynwyd, Pennsylvania
     19004 (hereinafter called "Applicant"), we hereby establish our Irrevocable
     Letter of Credit No. 134 in your favor and authorize you to draw on us up
     to the aggregate amount of Three Hundred and Fifteen Thousand Dollars
     ($315,000.00) available by your draft(s) at sight drawn on us and expires
     on our close of business on October 27th, 2000, accompanied by the
     following:

     All other terms and conditions of our original Letter of Credit, attached
hereto, remain in effect.

Very truly yours,

<TABLE>
<S>                                        <C>
         /s/ CARL M. GRENEN                        /s/ EDWARD D'ANCONA
------------------------------------       ------------------------------------
Carl M. Grenen                             Edward D'Ancona
Sr. Vice President, Finance                Executive Vice President
</TABLE>

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