SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this 6th day of April, 1996, by and among Xxxxxx Xxxxxx ("Seller") and
Xxxxx Xxxx and Xxxxxxx Xxxxxx (collectively, the "Buyers").
RECITALS
A. Following the recapitalization of the Company of even date herewith,
the authorized capital stock of PhoneTime, Inc., a New York corporation
("PTI"), consists of 200 shares of common stock, no par value ("Common
Shares") of which 87 shares are issued and outstanding and 43.5 are held by
the Seller.
B. Concurrently herewith there shall be executed and delivered: a
Subscription Agreement by and among the Buyers and PTI ("Subscription
Agreement").
C. The Seller wishes to sell 3-3/14 Common Shares to Xxxxx Xxxx ("Vita
Shares") and 1-4/14 Common Shares to Xxxxxxx Xxxxxx ("Barley Shares") for the
consideration and under the terms and conditions set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged:
ARTICLE 1
DEFINITIONS
In addition to capitalized terms defined elsewhere in this Agreement, the
following terms have the meanings specified or referred to in this Article 1:
"Affiliate" means, with respect to any person, any other person who
directly or indirectly controls, is controlled by or is under common control
with such person, and in addition with respect to officers, directors and
stockholders of any person, any relative or spouse (or relative of such
spouse) who resides with any such officer, director or spouse.
"Encumbrance" means any lien, claim, charge, security interest, mortgage,
pledge, easement, conditional sale or other title retention agreement, defect
in title, covenant or other restrictions of any kind.
ARTICLE 2
SALE OF SHARES
2.1 Sale of Shares. Subject to the provisions of this Agreement (a)
the Seller agrees to sell, and Xxxxx Xxxx agrees to purchase, at Closing, the
Vita Shares, and (b) the Seller agrees to sell, and Xxxxxxx Xxxxxx agrees to
purchase, at Closing, the Barley Shares.
2.2 Purchase Price. The purchase price for the Common Shares shall be
as follows:
(a) With respect to the Vita Shares, one dollar per share, payable by
Xxxxx Xxxx at Closing; and
(b) With respect to the Barley Shares, one dollar per share, payable by
Xxxxxxx Xxxxxx at Closing.
2.3 Share Issuance Procedure. At Closing, the Buyers shall deliver to
the Seller the consideration set forth above, together with any documents
reasonably required by the Seller. At Closing, the Seller deliver to each
Buyer a certificates representing such Buyer's respective Shares duly endorsed
(or accompanied by duly executed stock powers) for transfer to Buyers.
2.4 Further Assurances. If at any time after the Closing, the Seller
or any of the Buyers shall consider or be advised that any agreements,
assurances or any other acts or things are necessary to implement the transfer
of shares hereunder, each party shall execute and deliver all such agreements
and assurances and do all such other acts and things reasonably necessary,
desirable or proper to carry out the purpose of this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
THE BUYERS
As an inducement to the Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Buyers, severally
and not jointly, represents and warrants to Seller as follows:
3.1 Authority of Buyers. This Agreement has been duly executed and
delivered by each Buyer and constitutes a valid and binding obligation of such
Buyer enforceable against him in accordance with its terms. Neither the
execution and delivery of this Agreement or any of the other agreements or
instruments contemplated hereby or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the
terms, conditions and provisions hereof or thereof does or will:
(a) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination or cancellation or a loss of
rights under, or result in the creation or imposition of any Encumbrance upon
any of the properties of the Buyer, or under any note, instrument, agreement,
mortgage, lease, license, franchise, permit, judgment, order, award, decree or
other authorization, right, restriction or obligation to which the Buyer is a
party or any of his properties is subject or by which the Buyer is bound, or
any law, rule, regulation or other legal requirement affecting the Buyer or
his properties, or
(b) require the approval, consent, authorization or act of, or the
making by the Buyer of any declaration, filing or registration with, any third
party or any foreign, federal, state or local court, governmental authority or
regulatory body.
3.2 Disclosure. None of the representations or warranties of the
Buyers contained herein and none of the other information or documents
furnished or to be furnished to Seller or any of its representatives by the
Buyers or their representatives pursuant to the terms of this Agreement, is
false or misleading in any material respect or omits to state a fact herein or
therein necessary to make the statements herein or therein not misleading in
any material respect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF SELLER
As an inducement to the Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, the Seller hereby represents
and warrants to the Buyers as follows:
4.1 Authority of The Seller. This Agreement has been duly executed and
delivered by the Seller and is the legal, valid and binding agreement of the
Seller, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement or any of the other agreements or instruments
contemplated hereby or the consummation of any of the transactions
contemplated hereby or thereby, nor compliance with or fulfillment of the
terms, conditions and provisions hereof or thereof will:
(a) conflict with the Certificate of Incorporation or By-Laws of
PTI, or result in a breach of the terms, conditions or provisions, or
constitute a default, or an event of default or an event creating rights of
acceleration, termination or cancellation or loss of rights under, or result
in the creation or imposition of any Encumbrance upon any of the properties of
the Seller, under any note, instrument, agreement, mortgage, lease, license,
franchise, permit, judgment, order, award, decree or other authorization,
right, restriction or obligation to which the Seller is a party, or any of its
properties is subject or by which the Seller is bound, or any statute, other
law or regulatory provision affecting the Seller or his properties; or
(b) require the approval, consent, authorization or act of, or the
making by the Seller of any declaration, filing or registration with, any
third party or any foreign, federal, state or local court, governmental
authority or regulatory body.
4.2 Disclosure. None of the representations or warranties of the
Seller contained herein and none of the other information or documents
furnished or to be furnished to the Buyers or any of their representatives by
the Seller or its representatives pursuant to the terms of this Agreement, is
false or misleading in any material respect or omits to state a fact herein or
therein necessary to make the statements herein or therein not misleading in
any material respect.
ARTICLE 5
ACTION PRIOR TO CLOSING
The respective parties hereto covenant and agree to take the following
actions between the date hereof and the Closing:
5.1 Preserve Accuracy of Representations and Warranties. Each of the
parties hereto shall refrain from taking any action which would render any
representation or warranty contained in Article 3 or 4 of this Agreement
inaccurate as of the Closing Date. Each party shall promptly notify the
others of any action, suit or proceeding that shall be instituted or
threatened against such party to restrain, prohibit or otherwise challenge the
legality of any transaction contemplated by this Agreement. Each party shall
promptly notify the other parties of any lawsuit, claim, proceeding or
investigation that may be threatened, brought, asserted or commenced against
such party that would have been listed in a Schedule hereto by such party if
such lawsuit, claim, proceeding or investigation had arisen prior to the date
hereof.
5.2 Consents and Approvals. Each party hereto shall cooperate in using
such party's best efforts promptly to obtain all consents and amendments from
parties to contracts, licenses, leases and other agreements and all consents,
amendments or permits from governmental authorities, which are required by the
terms thereof, this Agreement or otherwise for the due and punctual
consummation of the transactions contemplated by this Agreement.
5.3 No Public Announcement. No party hereto shall, without the
approval of the other parties hereto make any press release or other public
announcement concerning the transactions contemplated by this Agreement,
except as and to the extent that any such party shall be so obligated by law,
in which case PTI shall be advised and the parties shall use their best
efforts to cause a mutually agreeable release or announcement to be issued.
ARTICLE 6
CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE SELLER
The obligation of the Seller to consummate the sale of the Shares under
this Agreement shall, at the option of the Seller, be subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
6.1 No Misrepresentation or Breach of Covenants and Warranties. There
shall have been no material breach by any Buyer in the performance of any of
their respective covenants and agreements herein; each of the representations
and warranties of the Buyers contained or referred to herein shall be true and
correct in all material respects as of the Closing Date as though made on the
Closing Date, except for changes therein specifically permitted by this
Agreement or resulting from any transaction expressly consented to in writing
by the Seller.
6.2 No Restraint or Litigation. No action, suit, investigation or
proceeding shall have been instituted or threatened to restrain or prohibit or
otherwise challenge the legality or validity of the transactions contemplated
hereby.
6.3 Agreements. Xxxxx Xxxx, Xxxxxxx Xxxxxx and PTI shall have entered
into the Subscription Agreement and the transactions contemplated thereby
shall be consummated concurrently herewith.
6.4 Necessary Governmental Approvals. The parties shall have received
all governmental and regulatory approvals and actions necessary to consummate
the transactions contemplated hereby, which are required to be obtained prior
to the Closing Date by applicable law or regulation or which are necessary to
prevent a material adverse change in the properties, the business or the
operations, liabilities, profits, prospects or condition (financial or
otherwise) of PTI.
ARTICLE 7
CONDITIONS PRECEDENT TO
OBLIGATIONS OF BUYERS
The obligation of the Buyers to consummate the purchase of the Shares
under this Agreement shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions:
7.1 No Misrepresentation or Breach of Covenants and Warranties. There
shall have been no material breach by the Seller in the performance of any of
its covenants and agreements herein; each of the representations and
warranties of the Seller contained or referred to in this Agreement shall be
true and correct on the Closing Date as though made on the Closing Date.
7.2 No Restraint or Litigation. No action, suit or proceeding by any
governmental agency shall have been instituted or threatened to restrain,
prohibit or otherwise challenge the legality or validity of the transactions
contemplated hereby.
7.3 Necessary Governmental Approvals. The parties shall have received
all governmental and regulatory approvals and actions necessary to consummate
the transactions contemplated hereby, which are required to be obtained prior
to the Closing Date by applicable law or regulation or which are necessary to
prevent a material adverse change in the properties, the business or the
operations, liabilities, profits, prospects or condition (financial or
otherwise) of PTI.
7.4 Agreements. Xxxxx Xxxx, Xxxxxxx Xxxxxx and PTI shall have
entered into the Subscription Agreement.
ARTICLE 8
CLOSING
8.1 Time and Place. The closing (the "Closing") under this Agreement
shall be held on April 6, 1996 (the "Closing Date"), at the offices of PTI
or at such other time and place as shall be agreed upon by the Seller and the
Buyers.
8.2 Deliveries. At the Closing, each of the parties hereto shall
deliver to the other parties all of the documents and instruments required to
be delivered by such party pursuant to Articles 6 and 7 hereof.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Buyers. Each Buyer, severally but not jointly,
agrees to indemnify and hold harmless the Seller and his Affiliates (excluding
the Buyers), successors and assigns from and against any and all (a)
liabilities, losses, costs or damages ("Loss" or "Losses") and (b) reasonable
attorneys' and accountants' fees and expenses, court costs and all other
reasonable out-of-pocket expenses ("Expense" or "Expenses") incurred by the
Seller and his Affiliates (excluding the Buyers), successors and assigns in
connection with or arising from any material breach of any warranty or the
material inaccuracy of any representation of any Buyer contained in this
Agreement.
9.2 Indemnification by the Seller. The Seller agrees to indemnify and
hold harmless each Buyer from and against any and all Losses and Expenses
incurred by such Buyer in connection with or arising from any material breach
of any warranty or the material inaccuracy of any representation of the Seller
contained in this Agreement.
9.3 Notice of Claims. If the Seller or a Buyer believes that any of
the persons indemnified under this Article 9 has suffered or incurred any Loss
or incurred any Expense, the Seller or such Buyer shall so notify the other
promptly in writing describing such Loss or Expense, the amount thereof, if
known, and the method of computation of such Loss or Expense, all with
reasonable particularity and containing a reference to the provisions of this
Agreement or other agreement, instrument or certificate delivered pursuant
hereto in respect of which such Loss or Expense shall have occurred. If any
action at law or suit in equity is instituted by or against a third party with
respect to which any of the indemnified persons intends to claim any liability
or expense as Loss or Expense under this Article 9, any such indemnified
person shall promptly notify the indemnifying party of such action or suit.
9.4 Third Party Claims. (a) Subject to paragraph (b) of this Section
9.4, the persons indemnified under this Article 9 shall have the right to
conduct and control, through counsel (but no more than one law firm) of their
choosing, any third party claim, action or suit, and the persons indemnified
may compromise or settle the same, provided that any of the indemnified
persons shall give the indemnifying party advance notice of any proposed
compromise or settlement. The indemnified persons shall permit the
indemnifying party to participate in the defense of any such action or suit
through counsel chosen by it, provided that the fees and expenses of such
counsel shall be borne by the indemnifying party. Any compromise or
settlement with respect to a claim for money damages effected after the
indemnifying party by notice to the indemnified party shall have disapproved
such compromise or settlement shall discharge the indemnifying party from
liability with respect to the subject matter thereof, and no amount in respect
thereof shall be claimed as Loss or Expense under this Article 9; provided,
however, that if the indemnifying party has not elected to conduct and control
an action or suit subject to paragraph (b) of this Section 9.4, such
indemnifying party shall have no right to disapprove such compromise or
settlement or to be discharged from liability with respect to the subject
matter thereof.
(b) If the remedy sought in any action or suit referred to in
paragraph (a) of this Section 9.4 is solely money damages and will have no
continuing effect on the business of any indemnified person, the indemnifying
party shall have 5 business days after receipt of the notice referred to in
the last sentence of Section 9.3 to notify the indemnified persons that it
elects to conduct and control such action or suit. If the indemnifying party
does not give the foregoing notice, the indemnified persons shall have the
right to defend, contest, settle or compromise such action or suit in the
exercise of their exclusive discretion, and the indemnifying party shall, upon
request from any of the indemnified persons, promptly pay to such indemnified
persons in accordance with the other terms of this Article 9 the amount of any
Loss resulting from its liability to the third party claimant and all related
Expense. If the indemnifying party gives the foregoing notice, the
indemnifying party shall have the right to undertake, conduct and control,
through counsel of its own choosing and at the sole expense of the
indemnifying party, the conduct and settlement of such action or suit, and the
indemnified persons shall cooperate with the indemnifying party in connection
therewith; provided that (x) the indemnifying party shall not thereby permit
to exist any Encumbrance or other adverse charge upon any asset of any
indemnified person; (y) the indemnifying party shall permit the indemnified
persons to participate in such conduct or settlement through counsel chosen by
the indemnified persons, but the fees and expenses of such counsel shall be
borne by the indemnified persons except as provided in clause (z) below; and
(z) the indemnifying party shall agree promptly to reimburse to the extent
required under this Article 9 the indemnified persons for the full amount of
any Loss resulting from such action or suit and all related Expense incurred
by the indemnified persons, except fees and expenses of counsel for the
indemnified persons incurred after the assumption of the conduct and control
of such action or suit by the indemnifying party. So long as the indemnifying
party is contesting any such action or suit in good faith, the indemnified
persons shall not pay or settle any such action or suit without the express
prior written consent of the indemnifying party. Notwithstanding the
foregoing, the indemnified persons shall have the right to pay or settle any
such action or suit, provided that in such event the indemnified persons shall
waive any right to indemnity therefor by the indemnifying party, and no amount
in respect thereof shall be claimed as Loss or Expense under this Article 9.
ARTICLE 10
TERMINATION
10.1 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual consent of the parties hereto; and
(b) by the Seller or the Buyers if the Closing shall not have
occurred on or before April 30, 1996 (or such later date as may be mutually
agreed to by Seller and the Buyers).
In the event that this Agreement shall be terminated pursuant to this
Article 10, all further obligations of the parties under this Agreement (other
than Sections 5.3, 11.2 and 11.9) shall be terminated without further
liability of any party to the other, provided that nothing herein shall
relieve any party from liability for its breach of this Agreement.
ARTICLE 11
GENERAL PROVISIONS
11.1 Survival of Obligations. All representations, warranties,
covenants and obligations contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement.
11.2 Confidential Nature of Information. Each party agrees that it
will treat in confidence all documents, materials and other information that
it shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), and the
preparation of this Agreement and other related documents, and, in the event
the transactions contemplated hereby shall not be consummated, each party will
return to the other party all copies of non-public documents and materials
that have been furnished in connection therewith. The obligation of each
party to treat such documents, materials and other information in confidence
shall not apply to any information that (a) such party can demonstrate was
already lawfully in its possession prior to the disclosure thereof by the
other party, (b) is known to the public and did not become so known through
any violation of a legal obligation, (c) became known to the public through no
fault of such party, or (d) is later lawfully acquired by such party from
other sources.
11.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York, without regard to conflicts-of-laws
principles.
11.4 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed given or delivered
when delivered personally or when sent by registered or certified mail or by
private courier addressed as follows:
If to Vita, to:
Xxxxx Xxxx
c/o PhoneTime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
If to Barley, to:
Xxxxxxx Xxxxxx
c/o PhoneTime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
If to Seller, to:
Xxxxxx Xxxxxx
c/o PhoneTime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
or to such other address as such party may indicate by a notice delivered in
writing to the other parties hereto.
11.5 Successors and Assigns. (a) The rights and obligations of each
party under this Agreement shall not be assignable by such party hereto prior
to the Closing Date without the express prior written consent of the other
parties.
(b) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their successors and permitted assigns. Nothing in
this Agreement, expressed or implied, is intended or shall be construed to
confer upon any person other than the parties and successors and assigns
permitted by this Section 11.5 any right, remedy or claim under or by reason
of this Agreement.
11.6 Entire Agreement; Amendments. This Agreement and the Schedules
referred to herein and the documents delivered pursuant hereto contain the
entire understanding of the parties hereto with regard to the subject matter
contained herein or therein. This agreement supersedes all prior and
contemporaneous agreements, understandings or intents between or among any of
the parties hereto with respect to the subject matter contained herein or
therein. The parties hereto, by mutual agreement in writing, may amend,
modify and supplement this Agreement.
11.7 Interpretation. Article titles and headings to sections herein
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement. The
Schedules referred to herein shall be construed with and as an integral part
of this Agreement to the same extent as if they were set forth verbatim
herein. So long as the Schedules provide full and clear disclosure, any
matter disclosed on one Schedule shall be deemed disclosed on all other
relevant Schedules.
11.8 Waivers. Any term or provision of this Agreement may be waived in
writing, or the time for its performance may be extended in writing, by the
party or parties entitled to the benefit thereof. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach
of this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
11.9 Expenses. Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
11.10 Partial Invalidity. Whenever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never
been contained herein unless the deletion of such provision or provisions
would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
11.11 Execution in Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement,
and shall become binding when two or more counterparts have been signed by
each of the parties and delivered to each party hereto.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SELLER:
WITNESS:
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Name: Xxxxxx Xxxxxx
BUYERS:
WITNESS:
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Name: Xxxxx Xxxx
WITNESS:
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Name: Xxxxxxx Xxxxxx
