EXHIBIT 4.14
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AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 18th day
of June, 1998, by and between EXECUTIVE TELECARD, LTD., a Delaware corporation
(the "Company"), and XXXXXXX XXXXXX, resident of the State of New York with an
address at 0 Xxxxxxxxx Xxxx, Xxxxxxxx XX 00000 (the "Purchaser").
WHEREAS, the Company and Purchaser entered into an Agreement
whereby the Purchaser loaned the company $1,000,000 pursuant to a Promissory
Note dated as of June 18, 1998; and
WHEREAS, the Company and the Purchaser entered into a Warrant
dated as of June 18, 1998.
Now therefore, in consideration of the promises, the mutual
representations, warranties and covenants set forth herein, the Company and the
Purchaser hereby agree as follows:
1. Replacement and Extension of Warrants. As additional consideration of
the note, and the Warrant for 67,000 shares dated contemporaneously hereto,
Purchaser shall receive in exchange for his present Warrant currently
exercisable on February 28, 1999 at the price of $5.40, a replacement
Warrant for 55,000 shares exercisable on or before February 29, 2001 at an
exercise price of $3.75. All other terms of such Warrant shall remain the
same.
2. Conversion of the Loan. The outstanding principal and interest of the
Loan shall be convertible, at Purchaser's option, into shares of a new
security which borrower intends to issue (the "Convertible Security"). This
provision does not alter the Purchaser's rights to receive interest under
the terms of the Promissory Note.
3. IDT Preference. The Company is using best efforts to obtain IDT
Corporation's agreement that the indebtedness evidenced by Purchaser's
Promissory Note shall be pari passu with indebtedness to IDT. In the event
that IDT's agreement to this cannot be obtained, the loan from Purchaser
will be junior to IDT indebtedness.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as follows:
(a) Investment Intent, etc. The Purchaser is an "accredited
investor" as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. The Purchaser has received, examined and reviewed copies of
the Company's most recent reports, as amended, filed under the Exchange Act and
other publicly available documents requested by him and recognizes that the
investment in the Shares involves a high degree of risk. The Purchaser has been
advised that it may not be possible to readily liquidate this investment. The
Purchaser's overall commitment to the Shares (included in the term "Shares" is
common stock in the Company, the Convertible Security or any other security
which is created as a result of this agreement), which are not readily
marketable, is not disproportionate to his net worth, his investment in the
Company will not cause such overall commitment to become excessive, and he can
afford to bear the loss of his entire investment in the Company. The Purchaser
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in the Common Stock
of the Company. The Purchaser confirms that the Company has made available to
him the opportunity to ask questions of, and received answers from, the Company
concerning the Company and the activities of the Company and otherwise to obtain
any additional information, to the extent that the Company possesses such
information or could acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information conveyed to him. The
Purchaser hereby acknowledges that he has been advised that this offering of
Shares has not been registered with, or reviewed by, the Securities and Exchange
Commission because this offering is intended to be a non-public offering
pursuant to Section 4(2) of the Securities Act. The Purchaser represents that
the Shares are being purchased for this own account, for investment purposes
only and not with a view towards distribution or resale to others. The Purchaser
agrees that he will not attempt to sell, transfer, assign, pledge or otherwise
dispose the Shares unless they are registered under the Securities Act or
unless, in the opinion of counsel satisfactory to the Company, an exemption from
such registration is available. The Purchaser understands that no securities
administrator of any state has made any finding or determination relating to the
fairness of this investment and that no securities administrator of any state
has recommended or endorsed, or will recommend or endorse, the offering of the
Shares. The execution, delivery and performance by the Purchaser of this
Agreement will not constitute or result in a breach or default under, or
conflict with, any order, ruling or regulation of any court or other tribunal or
of any governmental commission or agency, or any agreement or other undertaking,
to which the Purchaser is a party or by which he is bound. The Purchaser has
relied solely upon the advice of its own tax and legal advisors with respect to
the tax and other legal aspects of this investment. The Purchaser is purchasing
the Shares for his account, and not in any agency, fiduciary or similar
capacity. The source of the funds evidencing the Purchase Price are from legally
available funds of the Purchaser.
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1. Miscellaneous.
(a) Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of the Purchaser and the
Company.
(b) Waiver. Any breach of any obligation, covenants, agreement
or condition contained herein shall be deemed waived by the non-breaching party,
only by a writing, setting forth with particularity the breach being waived and
the scope of the waiver, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other breach. No waiver shall be
implied from any conduct or action of the non-breaching party. No failure or
delay by any party in exercising any right, power or privilege hereunder or
under the Documents and no course of dealing by any party shall operate as a
waiver and any right, power or privilege hereunder or under any Document nor
shall any single or partial exercise thereof or the exercise of any other right,
power or privilege.
(c) Notices. All notices, requests, demand, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand:
If to the Company, to:
Executive TeleCard, Ltd.
0000 X. Xxxxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
With a copy to:
Executive TeleCard, Ltd.
0000 X. Xxxxxxxx Xxxxxx, #0000
Xxxxxx, Xxxxxxxx 00000
Attn: W. P. Xxxxx Xxxxx, Jr.
Vice President and General Counsel
If to Purchaser, to:
Xxxxxxx Xxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxxx XX 00000
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this paragraph 10(c).
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(d) Binding Nature Agreement. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties. Any such assignment without the prior written consent of all the
parties shall be invalid.
(e) Acknowledgment by the Purchaser. The Purchaser has been
informed that the Company's Common Stock is publicly-traded on the Nasdaq
National Market and that the Purchase Price for the Shares may bear no relation
to the future market value or book value of the Common Stock. The Purchaser
further acknowledges that he has reviewed such information, as he deems
appropriate to evaluate whether to enter into this Agreement. The Purchaser
further acknowledges that he is not relying on any oral information or
representations from the Company or any other person, including representatives
of the Company in connection with his decision to enter into this Agreement,
including the Company's financial condition, prospects, present or future
results of operations, business plans or the potential for future appreciation
in the Company's Common Stock.
(f) Governing Law. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and performed
therein.
(g) Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
(h) Counterparts. This Agreement may be signed in counterparts
with the same effect as if both parties had signed one and the same instrument.
(i) Form of Signature. The parties hereto agree to accept a
facsimile transaction copy of their respective signatures as evidence of their
respective actual signatures to this Agreement; PROVIDED, HOWEVER, that each
party who produces a facsimile signature agreement, by the express terms hereof,
to place, immediately after transmission of its signature by fax, a true and
correct original copy of its signature in overnight mail to the address of the
other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
EXECUTIVE TELECARD, LTD.
By:
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Xxxxxxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
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XXXXXXX XXXXXX
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