SETTLEMENT AGREEMENT
AGREEMENT, dated as of this 3rd day of April, 1996, by and between
Phonetime, Inc., New York Corporation with its principal place of business
located at 00-00 Xxxxxxxxxx Xxxxxxxxxx, Xxxxxxxx, XX 00000, ("PTI") Xxxxx
Xxxxxx and Xxxxxx X. Xxxxxx and The Interactive Telephone Company, a Delaware
Corporation with its principal place of business located at 00 Xxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 ("Interactive") and Xxxxxx Xxxxxxxx, (collectively the
"Parties Hereto").
WHEREAS, the Parties Hereto desire to settle the various claims asserted
against each other in the context of the ongoing action pending in Supreme
Court, Queens County, entitled The Interactive Telephone Company v. Phonetime,
Inc., and the discontinued action commenced in Supreme Court, Nassau County,
entitled: "Phonetime, Inc., v. The Interactive Telephone Company, et al", as
well as the claims each party may have against the other but not asserted in
those proceedings.
NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the adequacy and sufficiency of which is
hereby acknowledged, Interactive and PTI hereby agree as follows:
1. MUTUAL RELEASES BETWEEN THE PARTIES HERETO: Interactive and Xxxxxx
Xxxxxxxx shall release PTI, Xxxxx Xxxxxx and Xxxxxx X. Xxxxxx and PTI, Xxxxx
Xxxxxx and Xxxxxx X. Xxxxxx shall release Interactive and Xxxxxx Xxxxxxxx from
any and all liability arising out of, or in connection with, their business
relationship or any prior course of dealing, except those binding obligations
stated in this Agreement, as more fully defined in the Indemnification
Agreement (Schedule A) and the Mutual Release (Schedule B), both of which are
attached hereto and hereby made a part hereof.
2. OFFSET OF CERTAIN OBLIGATIONS BETWEEN THE PARTIES HERETO:
A. Interactive agrees to relinquish its rights or claims to: (i) a one-
third equity interest in PTI; (ii) any profits, drawings or other income which
Interactive may be entitled to; (iii) service fees of Interactive provided to
PTI; (iv) the security deposits which Interactive transferred over to PTI,
including: (a) Merit Tel; (b) Intellico, Inc./InterExchange, Inc.; (c)
Cherry; and (v) any other rights or claims Interactive may have, and
B. PTI, Xxxxx Xxxxxx and Xxxxxx X. Xxxxxx agree to: (i) relinquish any
rights they may have for any and all sums of money or other consideration
conveyed to Interactive, directly or indirectly; (ii) indemnify Interactive
and Xxxxxx Xxxxxxxx from certain Third Party Vendors claims, as set forth and
as that term is defined below: (iii) deliver, concurrent herewith, the sum of
thirty-one thousand two-hundred dollars ($31,200.00) dollars, in unendorsed
certified funds, payable directly to the order of Interactive; and (iv)
deliver an option to acquire five (5 percent) percent of all of the greater of
the current or then issued and outstanding shares of each class of stock of
PTI, as more fully defined in the Option Agreement (Schedule C), attached
hereto and hereby made a part hereof.
3. [INTENTIONALLY OMITTED]
4. CHEMICAL BANK ACCOUNTS OF PTI: PTI to deliver proof, reasonably
satisfactory to Xxxxxx Xxxxxxxx, that all such bank accounts have been duly
closed or that Xxxxxx Xxxxxxxx has been removed as a signatory, with not
outstanding obligations. This provision shall survive closing.
5. PTI OBLIGATIONS REGARDING THIRD PARTY VENDORS: PTI shall pay any
indebtedness or obtain or deliver general releases or indemnifications and
hold harmless protections, as the case may be, with respect to the following
Third Party Vendors, namely: the International Telecommunications Corporation
("Intelco"); Metropolitan Fiber Systems ("MFS"); Intellicom, Inc.;
InterExchange, Inc. ("InterExchange"); Merit Tel, Inc. ("Merit Tel") and LCI
International ("LCI"), (collectively the "Third Party Vendors") and provide
Interactive and Xxxxxx Xxxxxxxx, with the exception of MFS, with the general
unconditional releases and indemnifications and hold harmless protections as
more fully defined in the Indemnification Agreement:
(i) Intelco: PTI shall deliver, at closing, an unconditional release
of ITC and Xxxxxx Xxxxxxxx from Intelco, relating to any and all obligations
or claims whatsoever arising out of: (a) PTI billing codes; (b) Dedicated
"800" numbers of PTI used at Intelco; and (c) PTI phone traffic, installation,
recurring, service or related charges arising at any time, out of or accruing
during the period commencing July 10, 1995;
(ii) MFS: PTI shall deliver at closing the sum of eleven thousand
two-hundred dollars ($11,200.00) dollars, in unendorsed certified funds,
payable directly to the order of ITC (as part of, not in addition to, the
remuneration described in Section 2 B, hereof);
(iii) InterExchange: PTI shall deliver at closing, the
Indemnification Agreement, which shall specifically reference the
InterExchange Agreement, originally executed by Intellicom and assigned by
Intellicom to Interexchange (attached hereto as Exhibit I);
(iv) Merit Tel: PTI shall deliver at closing, the Indemnification
Agreement, which shall specifically reference the Merit Tel Agreement
(attached hereto as Exhibit II); and
(v) LCI: PTI shall deliver at closing: (i) the Indemnification
Agreement, which shall specifically reference LCI; and (ii) the sum of fifty
thousand dollars ($50,000.00) dollars, in unendorsed certified funds, payable
directly to the order of Xxxxxxxxx Xxxxxxxx and Xxxxxx, LLP, as Escrowee (the
"Escrowed Funds"), to be held in accordance with the Escrow Agreement
(Schedule D), which is attached hereto and made a part hereof. The Parties
hereto shall negotiate together in good faith on an expedited basis with the
principals or representatives of LCI regarding fully satisfying the
outstanding indebtedness (or a reduced amount acceptable to LCI), of ITC to
LCI which, it is agreed, arose out of , or accrued during ITC's dealings on
behalf of PTI during the period September 1995 through and including November,
1995, by way of the use of four (4) "800" numbers and four (4) "T1s". the
Escrowed Funds shall be disbursed by Escrowee as more fully defined in the
Escrow Agreement (Schedule D), attached hereto and hereby made a part hereof.
To the best of the parties' knowledge, LCI has claimed $319,000 as due or
owing.
6. CONFIDENTIALITY: All information contained herein and in the Related
Agreements, including but not limited to settlement terms, details of
contracts and other business affairs of the Parties Hereto, are and shall be
treated as confidential, unless required to be disclosed by applicable
statute, law or regulation. The parties Hereto agree for themselves and on
behalf of its directors, officers, employees and agents to whom such
information and materials are disclosed, that they shall keep such information
and materials confidential and retain them in the strictest confidence after
the term of this Agreement. The Parties Here to acknowledge and agree that
such unauthorized disclosure or other breach of this Section will cause
irreparable injury to the other parties hereto and that money damages will not
provide adequate remedy. Accordingly, the Parties Hereto shall be entitled to
recover from the breaching party, its costs, expenses and attorneys' fees
incurred in enforcing its rights hereunder. Because the parties agree that
breach of the provisions of this Section shall cause irreparable injury, for
which money damages shall be neither adequate or ascertainable, the non-
breaching party shall therefore be entitled to injunctive relief any such
breaches. The provisions of this Section shall survive the termination or
expiration of this Agreement and shall be deemed a separate and independent
agreement in consideration of, and fully vested upon, the Parties Hereto
making available to each other confidential information that is subject to
these provisions. Notwithstanding the foregoing the Parties Hereto may
disclose the terms of the Option Agreement which right shall in no way effect
or diminish the parties obligations as set forth in this Section 6.
7. FURTHER ASSURANCES: In the event any further documentation or
cooperation is required by the Parties Hereto to effectuate any of the
conditions or agreements enumerated herein, including, but not limited to
amendments, corrections, deletions, additions or modifications, the Parties
Hereto hereby agree to execute such documentation, to preserve and protect the
other parties rights. In the event either Party Hereto is required to furnish
such necessary documentation and the other party fails to do so within seven
(7) days of receipt of written demand, then such failure shall be an event of
default hereunder. PTI represents that since its date of incorporation, there
have been no sales, transfers, or exchanges of assets, other than in the
ordinary course of business and for good and fair consideration.
8. INDEMNIFICATION AND PRIORITY OF PAYMENT:
A. PTI acknowledges that Interactive had entered into certain contractual
relationships on behalf of PTI, with the Third Party Vendors. As further
security to Interactive for PTIs obligations to indemnify and hold harmless
Interactive and/or Xxxxxx Xxxxxxxx, PTI hereby grants and assigns to
Interactive the right to receive all funds received by PTI, including any and
all cash in hand, cash deposits, accounts receivable, bank deposits, income,
now or hereafter acquired, all of which shall be collectively known as
"Receivables", to be first applied by Interactive to satisfy any and all
indebtedness or open accounts incurred by Interactive on behalf of PTI.
Accordingly, and in the event of a breach of this Agreement or any of the
Schedules hereto (the "Related Agreements"), then within Forty-Eight (48)
hours of receipt of any such Receivables, by PTI, PTI shall forward such sums
to Interactive for use by Interactive in satisfying and paying down the
indebtedness and/or open accounts incurred on behalf of PTI. In such event,
Interactive will endeavor to provide PTI with statements on a weekly, but in
no event less frequently than monthly basis, evidencing the amounts paid and
to whom and setting forth the amounts remaining outstanding. In any action to
enforce PTIs obligations under this Agreement, the Parties Hereto waive their
rights to a jury trial and PTI waives any right to bring a counter-claim or
set-off in any such proceeding. This Assignment shall terminate upon the
satisfaction of PTI's obligations hereunder, or sooner, with regard to
MeritTel only, provided PTI deposits the sum of $20,000.00 with _________,
under terms substantially similar to those contained in Schedule D hereto.
Such satisfaction shall be in a form reasonably satisfactory to ITC.
9. DISCONTINUANCE OF ACTION: Interactive shall, by its attorney, prepare
and file a Stipulation of Discontinuance, without prejudice, of the action it
commenced namely: "The Interactive Telephone Company v. Phonetime, Inc."
Supreme Court, Queens County, Index Number: 96-3875.
10. DEFAULT: The failure of any of the Parties Hereto to act in
accordance, or comply with any of the obligations herein enumerated shall
constitute a material default and shall render this agreement null and void.
11. CONSENT TO THIS AGREEMENT: The Parties hereto consent to this
Agreement only to avoid further expense, inconvenience and litigation.
Nothing contained herein is intended, nor shall it be construed in any manner,
as an admission by any of the Parties hereto of any violation of law, or
liability or lack of merit to their respective claims or defenses.
12. LEGAL REPRESENTATIVES, SUCCESSORS, ETC.: This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their legal
representatives, executor, successors and assigns.
13. ENTIRE AGREEMENT: This Agreement contains the entire understanding of
the parties and supersedes and merges all prior and contemporaneous agreements
and discussions between the parties. Any and all representations or
agreements by any agent or representative of either party not contained in
this Agreement shall be null, void and of no effect. This Agreement may not
be changed in any way, except by an instrument in writing, signed by both
parties.
14. REVIEWED BY COUNSEL: The Parties hereto acknowledge that they have
had the opportunity to consult with counsel concerning this matter, that they
have read and fully understand the terms of this Agreement or have had it
analyzed by their counsel, with sufficient time and that they are fully aware
of its contents and of its legal effect. Because the respective counsel for
the Parties Hereto have participated in the drafting and revising of this
Agreement, the Parties Hereto agree that this Agreement shall not be construed
against either party on the grounds that such party drafted this Agreement.
The Parties Hereto enter into this Agreement freely and voluntarily and with a
full understanding of its terms.
15. CLOSING DATE: The closing shall occur on April 3, 1996 at 1:00 P.M.
at the law offices of Xxxxxxxxxxx X. Xxxxxxx, Esq. at: 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as
of the day and year above written.
AGREED AND ACCEPTED BY: AGREED AND ACCEPTED BY:
The Interactive Telephone Company Phonetime, Inc.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxx
-------------------------- --------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxx Xxxxxx
Title: President Title: President
/s/ Xxxxx Xxxxxx
---------------------------
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxx
---------------------------- ---------------------------
Xxxxxx Xxxxxxxx Xxxxxx X. Xxxxxx
[SCHEDULE B]
MUTUAL RELEASE
This mutual release is made this 3 day of April, 1996 by and among
Xxxxxx Xxxxxxxx and Interactive Telephone Company ("ITC"), on the one side,
and Xxxxx Xxxxxx, Xxxxxx Xxxxxx and Phonetime, Inc. ("PTI"), on the other
(collectively the "Parties Hereto").
WHEREAS, ITC and PTI are entering into an agreement of even date
herewith (the "Settlement Agreement") providing for a settlement of the all of
the claims of each respective party against the other, which agreement, among
other things, recognizes the concurrent execution and delivery by the Parties
Hereto of this release.
NOW THEREFORE, the Parties Hereto agree as follows:
1. Mutual Release of Claims. The Parties Hereto on behalf of
themselves, and their respective heirs, executors, officers, directors,
employees, partners, investors, shareholders, administrators, predecessor and
successor corporations, and assigns, hereby fully and forever release each
other and their respective heirs, executors, officers, directors, employees,
partners, investors, shareholders, administrators, predecessor and successor
corporations, and assigns, from, and agree not to xxx concerning any claim,
duty, obligation or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that any of them
may possess arising from any omissions, acts or facts that have occurred up
until and including the date hereof, including, without limitation, any claims
arising out of or based upon the business relationship or prior course of
dealings among the Parties Hereto with respect to Phonetime, Inc.
The Parties Hereto agree that the release set forth in this section
shall be and remain in effect in all respects as a complete general release as
to the matters released. Notwithstanding anything contained herein to the
contrary, this release does not extend to any of the following obligations:
(a) any obligations incurred hereunder or under the AGREEMENT;
and
(b) any obligation to defend and/or indemnify ITC in connection
with any claims against ITC brought by any Third Party Vendor, as the term is
defined in the Agreement.
2. Authority. The Parties Hereto represent and warrant that
they have the authority to act on their own behalf or on behalf of any entity
for which they are executing this instrument and to bind themselves and all
who may claim through them to the terms and conditions hereof.
3. No Representations. The Parties Hereto represent that they
have had the opportunity to consult with attorneys, and have carefully read
and understand the scope and effect of the provisions hereof. None of the
Parties Hereto has relied upon any representations or statements made by any
party which are not specifically set forth herein or in the Agreement.
4. Governing Law. This release shall be governed by the laws of
the State of New York.
5. Voluntary Execution. This release is executed voluntarily
and without any duress or undue influence on the part or behalf of the Parties
Hereto, with the full intent of releasing all claims. The Parties Hereto
acknowledge that (a) they have read this release; (b) they have been
represented in the preparation, negotiation, and execution of this release by
legal counsel of their own choice; (c) they understand the terms and
consequences of this instrument and of the releases it contains; and (d) they
are fully aware of the legal and binding effect of this release.
IN WITNESS WHEREOF, the Parties Hereto have executed this release as
of the date first written above.
The Interactive Telephone Company Phonetime, Inc.
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxx Xxxxxx
------------------------- -----------------------
By: By:
/s/ Xxxxx Xxxxxx
---------------------------
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxx X. Xxxxxx
---------------------------- ---------------------------
Xxxxxx Xxxxxxxx Xxxxxx X. Xxxxxx
OPTION TO PURCHASE COMMON STOCK OF PHONETIME, INC.
--------------------------------------------------
Phonetime, Inc., a New York corporation (the "Company" or "PTI"), hereby
grants to The Interactive Telephone Company, a Delaware corporation (together
with its successors, assigns and designees, the "Holder" or "ITC"), an option
to purchase from the Company, Five (5) shares of the Company's Common Stock,
par value $--0-- per share (the "Common Stock"), or such other number of
shares as the case may be, as more fully provided for in Section 4 hereof
(the "Shares"), or such other Securities referenced in Section 4, upon
presentation and surrender of this Option with a written notice of the Holder
of its intention to exercise this Option at any time from and after the Option
Effective Date (as defined in Section 1 hereof) and on or before April 2nd,
2001, at the offices of the attorneys for the Company located at c/o
Schupbach, Xxxxxxxx and Xxxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxx,
XX 00000 (or at such other office as hereafter shall have been designated by
the Company by notice pursuant hereto) and upon payment therefor of the
purchase price (herein called the "Purchase Price") in lawful money of the
United States of America of the greater of: (a) $0.25 per share; or (b) fifty
percent (50 percent) of the Best Office Price (as defined in Section 2
hereof). In the case of a purchase of "Other Securities," the Purchase Price
shall be equal to fifty percent (50 percent) of the price paid for such Other
Securities by unrelated third parties.
This Option is subject to the following terms and conditions:
1. TIME OF EXERCISE: The purchase rights represented by this Option
are exercisable at the option of the Holder hereof, in whole at any time, or
in part from time to time (but not as to a fractional share of Common Stock)
on or after the Option Effective Date and on or before the Expiration Date, as
that term is defined in Section 2 hereof. The term "Option Effective Date" as
used herein shall mean the earliest of the date on which: (1) the Company
consolidates with or merges with or into another corporation; (2) the
shareholders of the Company sell or otherwise issue any stock options or
warrants in the Company; (3) the Company sells all or substantially all of its
assets to a third party; 94) the Company pledges, mortgages, or otherwise
encumbers any or all of its assets in favor of a third party after the date
hereof; or (5) the Company closes a private placement or public offering of
its debt or equity securities. In the event of a consolidation or merger in
which the Company is not the surviving entity, the Holder hereof shall
thereafter receive, upon the exercise hereof, the securities or property to
which a Holder of the number of shares of Common Stock then deliverable upon
the exercise hereof would have been entitled upon such consolidation or
merger, and the Company shall take whatever steps necessary in connection with
such consolidation or merger as may be necessary to assure that the provisions
hereof shall thereafter be applicable in relation to any securities or
property thereafter deliverable upon the exercise of this Option.
2. BEST OFFER PRICE: For purposes hereof, the term "Best Offer
Price" shall mean the price paid for a share of Common Stock by an unrelated
third party in the most recent sale or other transaction by the Company, of
Common Stock, whether the price paid was in cash, cash equivalents or other
consideration tendered by an unrelated third party.
3. EXPIRATION DATE: The term "Expiration Date" shall mean the close
of business on April 2nd, 2001, or if said date shall in the State of New York
be a holiday or a day on which banks are authorized to close, then the next
following date which in the State of New York is not a holiday or a day on
which banks are authorized to close.
4. ANTIDILUTION: The number of shares of Common Stock covered by
this Option on the date hereof represent five percent (5 percent) of the fully
diluted shares of Common Stock currently issued and outstanding, taking into
consideration both all issued and outstanding shares as well as all shares
which are issuable upon the exercise of any outstanding options, warrants or
other rights issued by the Company, as well as, upon the conversion of any
debt, preferred or other securities (collectively, "Fully Diluted Shares").
If at any time or from time to time the Company shall by issuance,
subdivision, consolidation or reclassification of shares, or otherwise change
as a whole the outstanding shares of its Common Stock into a different number
of class of shares, the number and class of shares as so changed shall replace
the shares to which this Option is applicable immediately prior to such
change, and the number of shares purchasable under this Option shall be
increased or decreased as the case may be so that at all times this Option
shall cover five percent (5 percent) of the Fully Diluted Shares of the
Company. Similarly, if at any time the Company shall issue any securities
other than Common Stock which represent an equity interest in the Company or
may be converted into any equity interest in the Company ("Other Securities"),
this Option shall be deemed to cover five percent (5 percent) of the issued
and outstanding amount of such Other Securities. Irrespective of any
adjustments or change in the Options theretofore and thereafter issued in
replacement or substitution hereof, Holder may continue to express the
Purchase Price per share and the number of shares purchasable which were
expressed upon the Options when initially issued.
5. RESERVATION OF SHARES: The Company shall reserve and keep
available a sufficient number of shares of Common Stock (or, as the case may
be, Other Securities) to satisfy the requirements of this Option. The Company
will take all such action as may be necessary to insure that all shares of
capital stock issued upon exercise of the Option will be duly and validly
authorized and issued and fully paid and non-assessable.
6. EXCHANGE OF OPTIONS: This Option is exchangeable, upon the
surrender hereof by the Holder at the principal office of the Company, for new
Options of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Options
to represent the right to purchase such number of shares as shall be
designated by said Holder at the time of such surrender.
7. REPLACEMENT OF OPTIONS: Upon receipt by the Company of evidence
reasonable satisfactory to it of the loss, theft, destruction or mutilation of
this Option, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and
cancellation of this Option, if mutilated, the Company will make and deliver a
new Option of like tenor, in lieu of this Option.
8. REPURCHASE BY THE COMPANY: Provided the Company has not defaulted
with all of the terms and conditions of the Related Agreements, and has not
received notice from ITC, in writing, alleging a default as that term is
defined in the Settlement Agreement, the Company shall have the right at its
sole discretion, to repurchase this Option from the Holder hereof by paying
the Holder hereof ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000.00), if paid
prior to the twelve (12) month anniversary hereof; or TWO HUNDRED FIFTY
THOUSAND DOLLARS ($250,000.00), if paid after the twelve (12) month
anniversary hereof, payable by wire transfer or cashier's check to the Holder
in accordance with written instructions delivered by the Holder to the
Company. Further, with all of the terms and conditions of the Related
Agreements, the Company may exercise this right to repurchase at any time
prior to the Option Effective Date as defined in Section 1 hereof.
9. REPRESENTATIONS BY THE COMPANY: The Company represents,
knowing that it has induced the Holder based, inter alia hereon, that: (i)
the Company's Certificate of Incorporation ("Certificate"), authorizes the
issuance of 200 shares of common stock, par value: $--0-- per share, with no
other classes of stock authorized; (ii) the Company will not amend, change or
modify its Certificate to change or alter the number of authorized shares or
class of stock, without notifying Holder as set forth herein; (iii) the
Company shall notify Holder within twenty-four (24) hours of any event that
triggers the Option Effective Date, as defined in Section 1 hereof; (iv) that
Xxxxxx X. Xxxxxx and Xxxxx Xxxxxx are the sole shareholders of all of the
issued shares of the Company and that, with the exception of the rights
granted under this Agreement, there are no outstanding rights, options,
warrants or other interests convertable directly or indirectly into the equity
of the Company.
10. NOTICES: All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered, via certified mail, return receipt requested:
If to the Holder:
----------------
The Interactive Telephone Company
00 Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000;
and to
------
Xxxxxxxxxxx X. Xxxxxxx, Esq.
00 Xxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
or: at such other address as may have been furnished to the
Company in writing by the Holder.
If to the Company:
-----------------
Phonetime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, XX 00000
and to
------
Xxxx Xxxxxxxx, Esq.
Xxxxxxxxx, Xxxxxxxx and Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
or: at such other address as may have been furnished to the Holder
in writing by the Company.
11. SUCCESSORS AND ASSIGNS: This Option shall be binding upon any
successors or assigns of the Company.
12. GOVERNING LAW: This Option shall be construed in accordance with
and governed by the laws of the State of New York.
13. INJUNCTIVE RELIEF: Because of the nature of the damages which
the Parties Hereto would suffer as result of any breaches of this Agreement,
the Parties hereto may seek injunctive relief before a court of competent
jurisdiction to achieve all applicable equitable relief.
IN WITNESS WHEREOF, the parties hereto have caused this Option to be duly
executed as of the date set forth below.
PHONETIME, INC. THE INTERACTIVE TELEPHONE COMPANY
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx
-------------------- -------------------------
Name: Xxx Xxxxxx Name: X. Xxxxxxxx
Title:President Title: President
Date: 4/3/96 Date: 4/3/96
Witness: /s/ [illegible] Witness: /s/ [illegible]
Name: [illegible] Name: [illegible]
SCHEDULE D
ESCROW AGREEMENT
As further security for PTI's performance under the Indemnity
Agreement of even date herewith, and, in particular, with respect to the
payment and stipulation of the indebtedness to LCI, PTI has paid the sum of
$50,000.00 to Xxxxxxxxx, Xxxxxxxx and Xxxxxx LLP, receipt of which is hereby
acknowledges by the Escrow Agent. This sum shall beheld in escrow by
Escrow Agent pending the final payment and satisfaction of the amounts due to
LCI arising out of ITC's dealings on behalf of PTI during the period
September 15, 1995 through and including November, 1995, by way of the four
(4) "800" numbers and four (4) "TIs". The parties agree that this sum may be
released and paid over by Escrow Agent to LCI as part of the consideration for
any such payment and satisfaction. Escrow Agent agrees to provide to ITC or
its counsel written notice of any such payment. The parties further consent
to retention of funds in an interest bearing segregated bank account in the
name of Escrow Agent pending such payment and satisfaction. Upon final
settlement of the LCI indebtedness, any escrow balance remaining shall be
released to PTI.
The parties acknowledge that Escrow Agent is acting solely as a
stake Holder at their request and for their convenience and that Escrow Agent
shall not be liable to either party for any act or omission on its part unless
taken or suffered in bad faith or in willful disregard of this agreement or
involving gross negligence on the part of the Escrow Agent. PTI and ITC
jointly and severally agree to defend, indemnify and hold Escrow Agent
harmless from and against all costs, claims and expenses (including reasonable
attorneys' fees) incurred in connection with the performance of Escrow Agent's
duties hereunder, except with respect to actions or omissions taken or
suffered by Escrow Agent in bad faith or in willful disregard of this contract
or involving gross negligence on the part of the Escrow Agent.
Escrow Agent or any member of its firm shall be permitted to act as
counsel for PTI in any dispute as to the disbursement of the escrow funds or
any other dispute between the parties, whether or not Escrow Agent is in
possession of the escrow funds and continues to act as Escrow Agent.
PHONETIME, INC.
By: /s Xxxxx Xxxxxx
------------------------------
THE INTERACTIVE TELEPHONE COMPANY
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
SCHUPBACK, XXXXXXXX and XXXXXX LLP, Escrow Agent
By: /s/Shupback, Xxxxxxxx and Xxxxxx
-----------------------------------
