EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
May 12, 1997, is made and entered into by and between PHONETIME, INC., a New
York corporation (the "Company"), and XXXXXX XXXXXXXX (the "Executive").
RECITALS
WHEREAS, the Company desires to employ the Executive as Chief
Operating Officer on the terms and conditions hereinafter set forth and the
Executive desires to accept such employment on such terms and subject to such
conditions; and
WHEREAS, the Executive possesses an intimate knowledge of the
business and affairs of the Company and its policies, procedures, methods and
personnel;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties agree as follows:
1. Employment. Subject to and pursuant to the terms of this
Agreement, effective May 12, 1997 (the "Effective Date"), the Company shall
employ the Executive, and the Executive shall be employed by and shall serve
the Company, in the capacity of Chief Operating Officer reporting directly to
the Chief Executive Officer and the Board of Directors (the "Board"), or in
such other capacity as may be determined by the Board.
2. Term and Renewals. Subject to the provisions for earlier
termination provided herein, the term of this Agreement (the "Initial Term")
shall commence on the Effective Date and shall terminate on the three (3)-year
anniversary of the Effective Date. Following expiration of the Initial Term,
the Agreement shall be renewed for a one (1)-year period (the "Initial Renewal
Term") if at least one (1) month prior to the expiration of the Initial Term
either party hereto shall not have given the other party written notice not to
renew this Agreement. The Initial Renewal Term and each "Renewal Term" (as
defined in this Section 2) shall be renewed for successive one (1)-year
periods (each, a "Renewal Term," the Initial Term, the Initial Renewal Term,
if any, and each Renewal, if any, collectively, the "Term") if at least one
(1) month prior to the expiration of the Initial Renewal Term or a Renewal
Term, as the case may be, either party hereto shall not have given the other
party written notice of its intention not to renew this Agreement. Nothing in
this Agreement shall be construed to require either party hereto to renew this
Agreement and either party hereto has the sole discretion not to renew this
Agreement.
3. Duties. During the Term, the Executive shall be an executive
officer of the Company and shall report to the Chief Executive Officer of the
Company and the Board, and
shall have all duties and responsibilities assigned to the executive by the
President and the Board, as limited or expanded pursuant to this Agreement.
The Executive shall devote all of his working time and effort during normal
business hours to the business and affairs of the Company, and shall use his
reasonable best efforts to perform such duties and responsibilities faithfully
and efficiently.
4. Compensation. For services rendered by the Executive
pursuant to this Agreement, the Company shall pay or award compensation to the
Executive as follows:
(a) Base Compensation. The Company shall pay to the
Executive a base salary ("Base Compensation") of $125,000 per annum, payable
in accordance with the Company's customary practices for its officers. The
amount of Base Compensation shall be reviewed by the Board annually, provided,
however, that the first review should occur before the earlier of September
30,1997 or any major acquisition or financing by PTI or the addition of any
new directors to the PTI board, and may be increased to reflect inflation or
such other adjustments as it may deem appropriate; provided, however, that
Base Compensation, as increased, may not be decreased.
(b) Stock Options. The Company has adopted for its
employees an incentive and non-qualified stock option plan (the "Stock Option
Plan"). Promptly following execution of this Agreement, the Executive shall
be granted the right and option as of the Effective Date ("Initial Options")
pursuant to the Stock Option Plan to purchase up to that number of Common
Shares which is equal to 2.333 percent of the issued and outstanding common
stock of the Company (on a fully diluted basis). The Initial Options may be
exercised at any time or from time to time during the 10-year period following
the date the Initial Options are granted. The purchase price of the Initial
Option Shares shall be $.01 per share. The Initial Options are in addition to
any other rights and options which, at the Company's sole election and in its
sole discretion, may be granted to the Executive under any qualified, non-
qualified, incentive, bonus and other stock or stock option plans which may be
adopted by the Company.
(c) Bonus Compensation. In addition to the Base
Compensation, the Board of Directors may in its discretion award the Executive
a performance bonus (the "Performance Bonus") in cash or stock options.
(d) Withholding. The Company shall deduct and withhold
from the compensation payable to the Executive hereunder any and all
applicable federal, state and local income and employment withholding taxes
and any other amounts required to be deducted or withheld by the Company under
applicable statute or regulation.
5. Additional Benefits.
(a) Fringe Benefits; Reimbursement; Vacation. In
addition to Base Compensation and Bonus provided for in Section 4 above, in
connection with the Executive's employment by the Company, the Executive shall
be entitled to receive:
(i) all fringe benefits customarily offered by
the Company to its senior executive officers, including without
limitation, expense accounts, participation in any Company stock
compensation plan and the various employee benefit plans or programs
(collectively, the "Benefit Plans") provided to the employees of the
Company in general, subject to the eligibility requirements with respect
to each such Benefit Plan, and to such other benefits or perquisites as
may be approved by the Board during the Term;
(ii) reimbursement from the Company for all
customary, ordinary and necessary business expenses incurred by the
Executive in the performance of his duties and responsibilities
hereunder, provided that the Executive furnishes the Company with
vouchers, receipts and other substantiation of such expenses within
thirty (30) days after they are incurred; and
(iii) paid vacation benefits in accordance with
the Company's vacation policy in effect for its senior executive
officers.
6. Termination of Employment.
(a) Termination. Except as otherwise provided in this
Agreement, the Executive's employment by the Company hereunder shall terminate
upon the earliest to occur of the dates specified below (as applicable, the
"Termination Date"):
(i) The close of business on the date of
expiration of the Term.
(ii) The close of business on the date of the
Executive's death ("Death").
(iii) The close of business on the date specified
as the effective date of termination of the Executive's employment in a
"Notice of Termination" (as defined below) delivered by the Company to
the Executive due to the Executive's "Disability". For purposes of this
Agreement, the term "Disability" shall mean the inability or incapacity
of the Executive, due to any medically determined physical or mental
impairment, to perform his duties and responsibilities for the Company
for a total of sixty (60) calendar days in any twelve (12) month period
during the Term.
(iv) The close of business on the date specified
as the effective date of termination of the Executive's employment by the
Executive in a Notice of Termination delivered by the Executive to the
Company (a "Voluntary Termination").
(v) The close of business on the date specified as
the effective date of termination of the Executive's employment by the
Company for "Cause" (as defined below) in a Notice of Termination
delivered by the Company to the Executive. For purposes of this
Agreement, the term "Cause" shall mean termination based on (A) the
Executive's material breach of this Agreement; (B) conviction of the
Executive for (x) any crime constituting a felony in the jurisdiction in
which committed, (y) any crime involving moral turpitude (whether or not
a felony) or (z) any other criminal act against the Company involving
dishonesty or willful misconduct intended to injure the Company (whether
or not a felony); (C) substance abuse by the Executive which is repeated
after written notice to the Executive identifying such abuse; (D) the
failure or the refusal of the Executive to follow lawful and proper
directives of the Board; (E) willful malfeasance or misconduct by the
Executive which in connection with misappropriating any funds or property
of the Company or attempting to willfully obtain any personal profit from
any transaction in which the Executive has an interest which is adverse
to the interests of the Company or any other willful misconduct that
discredits or damages the Company; (F) indictment of the Executive by a
grand jury for a felony violation of the federal securities laws; or (G)
the engagement by the Executive in any "Prohibited Activity" or
"Competitive Activity" (as such terms respectively are defined in
Sections 9(c)(i) and 9(c)(ii) below) in violation of this Agreement.
(vi) The close of business on the date specified
as the effective date of termination of the Executive's employment by the
Company other than for Death, Disability or Cause in a Notice of
Termination delivered by the Company to the Executive.
(b) Notice of Termination. Any termination of the
Executive's employment hereunder (other than termination as a result of Death)
by the Company or by the Executive shall be communicated by a Notice of
Termination to the other party hereto given in accordance with the provisions
of Section 10(b) below. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, and (ii) if applicable,
sets forth the facts and circumstances claimed to provided a basis for
termination of the Executive's employment.
7. Payment Upon Termination of Employment.
(a) Voluntary Termination, Termination for Cause or
Expiration of Term. If the Executive's employment is terminated pursuant to a
Voluntary Termination, a termination for Cause or the expiration of the Term,
then, without limiting any other rights or remedies available to the Company
at law or in equity, the Company shall pay or provide to the
Executive, his legal representatives, heirs, eligible dependents, if any, or
permitted assigns, as applicable, (i) on the Termination Date, all
compensation earned but unpaid as of the Termination Date set forth in Section
4 above; and (ii) all benefits to which such persons may be entitled under any
of the Benefit Plans which provide for benefits after termination of
employment, in accordance with the terms thereof.
(b) Other Terminations. Subject to the provisions of
Section 8(c) below, if the Executive's employment is terminated other than
pursuant to a Voluntary Termination, a termination for Cause or the expiration
of the Term, (i) the Company shall pay to the Executive, his legal
representatives, heirs or permitted assigns, on the Termination Date, all
compensation earned but unpaid as of the Termination Date set forth in Section
4 above; (ii) during the period beginning on the Termination Date and
extending until the earlier to occur of the Executive's Death or the date this
Agreement otherwise would have terminated had the employment of the Executive
not been earlier terminated but, regardless of the Executive's Death, not less
than a period of six (6) months from the Termination Date (the "Remaining
Term"), the Company shall provide to the executive, his legal representatives,
heirs, eligible dependents, if any, or permitted assigns, as applicable, all
benefits to which such persons may be entitled under any of the Benefit Plans,
and specifically, without limitation, shall provide the Executive and his
eligible dependents, if any, with life, disability, accident and group health
insurance benefits substantially similar to those which the Executive and his
dependents were receiving immediately prior to the Notice of Termination,
provided the Executive or his legal
representatives, heirs or permitted assigns pay the regular premium required
of active employees for such coverage (following the expiration of the
Remaining Term, the Executive shall be eligible to purchase health insurance
benefits in accordance with applicable federal law); (iii) beginning with the
first day of the month on or following the Termination Date and continuing
until the expiration of the Remaining Term, the Company shall pay the
Executive in cash an amount equal to one-twelfth (1/12) of the Base
Compensation, less the amount, if any, of monthly disability income paid to
the Executive pursuant to any Company-sponsored long-term disability plan;
(iv) if on the termination Date the Executive has completed six (6) or more
months of the Company's then current fiscal year, the Company shall pay to the
Executive, his legal representatives, heirs or permitted assigns, a pro-rata
portion of his Bonus for such fiscal year (the "Pro Rata Bonus"), such payment
to be made within ten (10) days following the date on which a bonus in which
the Executive would have participated but for his termination is declared,
provided the criteria established by the Board for such Pro Rata Bonus have
been satisfied fully as of the Termination Date; and (v) all stock options,
warrants, rights and other Company stock-related awards granted to the
Executive by the Company (collectively, the "Stock Awards") that otherwise
would have vested and become exercisable during the fiscal year of the Company
in which the Executive has terminated, shall become upon the Termination Date
fully vested an nonforfeitable, all restrictions (except for restrictions
required by law), if any, thereon shall lapse, all performance goals, if any,
associated therewith shall be deemed met in full, an the Executive shall be
entitled to exercise any or all such Stock Awards in accordance with the terms
of the documentation pursuant to which such Stock Awards were granted.
(c) Exclusive Payments. The payments upon termination made
by the Company to the Executive pursuant to Sections 7(b) and (c) above shall
constitute the exclusive payments due to the Executive upon termination under
this Agreement; provided, however, that all monthly payments made pursuant to
Section 7(b)(iii) above, except as provided in Section 8(d), shall be reduced
or mitigated by the amount of any cash compensation secured or earned by the
Executive during such month for services rendered to another employer;
provided, further, that all benefits receivable by the Executive, his legal
representatives, heirs, eligible dependents, if any, or permitted assigns, as
applicable, shall be reduce to the extent comparable benefits actually are
received by the Executive, his legal representatives, heirs, eligible
dependents, if any, or permitted assigns, as applicable, during the Remaining
Term pursuant to similar plans or programs of another employer.
8 Executive Covenants.
(a) The Executive agrees and understands that due to the
Executive's position with the Company, both prior to, if applicable, and
subsequent to the Effective Date, the Executive has been and will be exposed
to, and has received and will receive confidential and proprietary information
of the Company or relating to the Company's business or affairs (collectively,
the "Trade Secrets"), including but not limited to technical information,
computer software (including source and object code data and related
documentation), research and development, know-how, product information,
formulae, processes, business and marketing plans, strategies, customer
information, other information concerning the Company's products, promotions,
development, financing, expansion plans, business policies and practices and
other forms of information considered by the Company to be proprietary and
confidential and in the nature of trade secrets. Except to the extent that
the proper performance of the Executive's duties and responsibilities
hereunder may require disclosure, and except as such information (i) was known
to the Executive prior to his employment by the Company or (ii) was or becomes
generally available to the public other than as a result of a disclosure by
the Executive in violation of the provisions of this Section 9(a), the
Executive agrees that during the Term and at all times thereafter the
Executive will keep such Trade Secrets confidential and will not disclose such
information, either directly or indirectly, to any third person or entity
without the prior written consent of the Company. This confidentiality
covenant has no temporal, geographical or territorial restriction. On the
Termination Date, the Executive promptly will supply to the Company all
property, keys, notes, memoranda, writings, lists, files, reports, customer
lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines,
technical data, formulae or any other tangible product or document
constituting Trade Secrets which have been produced by, received by or
otherwise submitted to the Executive during the course of his employment with
the Company, including the period during and prior to the Term. Any material
breach of the terms of this Section 9(a) shall be considered Cause.
(b) Inventions. Subject to Section 17.3 of the Software
License Agreement, the Executive agrees that any and all inventions,
discoveries, improvements, processes, formulae, business application software
patents, copyrights and trademarks made,
developed, discovered or acquired by him during his employment by the Company,
including the Term, solely or jointly with others or otherwise, which relate
to the business of the Company, and all knowledge possessed by the Executive
relating thereto (collectively, the "Inventions"), shall be fully and promptly
disclosed to the Board and to such person or persons as the Board shall
direct, and shall be the sole and absolute property of the Company and the
Company shall be the sole and absolute owner thereof. The Executive agrees
that he will at all times keep all Inventions secret from everyone except the
Company and such persons as the Board may from time to time direct. The
executive shall, as requested by the Company to effect disclosure and
assignment of the Inventions to the Company or its designees and any patent
applications (United States or foreign) and renewals with respect thereto,
including any other instruments deemed necessary by the Company for the
prosecution of patent applications or the acquisition of letters patent.
(c) Prohibited and Competitive Activities. The Executive
and the Company recognize that due to the nature of the Executive's engagement
hereunder and the relationship of the Executive to the Company, both prior and
subsequent to the Effective Date, the Executive has had and will have access
to, has had and will acquire, and has assisted and may continue to assist in
developing, confidential and proprietary information relating to the business
and operations of the Company and its affiliates, including Trade Secrets.
The Executive acknowledges that such information has been and will be of
central importance to the business of the Company and its affiliates and that
disclosure of it to, or its use by, others (including, without limitation, the
Executive (other than with respect to the Company's business and affairs))
could cause substantial loss to the Company. The Executive and the Company
also recognize that an important part of the Executive's duties and
responsibilities will be to develop good will for the Company and its
affiliates through his personal contact with "Clients" (as defined below),
employees and others having business relationships with the Company, and that
there is a danger that this good will, a proprietary asset of the Company, any
follow the Executive if and when his relationship with the Company is
terminated. The Executive accordingly agrees as follows:
(i) Prohibited Activities. The executive will not
at any time during the Term (A) other than in the course of his
employment, disclose or furnish to any other person or, directly or
indirectly, use for his own account or the account of any other person,
any Trade Secrets, and he shall retain all such Trade Secrets in trust
for the benefit of the Company, its affiliates and the successors and
assigns of any of them; (B) directly or through one or more
intermediaries, solicit for employment by a Competitor (as defined in
Section 9(c)(ii) below) any person who, at the time of such solicitation,
is employed by the Company or any affiliate thereof; (C) directly or
indirectly, whether for his own account or for the account of any other
person, solicit, divert or endeavor to entice away from the Company or
any entity controlled by the Company, or otherwise engage in any activity
intended to terminate, disrupt or interfere with, the Company's or any of
its affiliate's relationship with, Clients, or otherwise adversely affect
the Company's or any of its affiliate's relationship with clients or
other business relationships
of the Company or any affiliate thereof; or (D) publish or make any
statement critical of the Company or any shareholder or affiliate of the
Company, or in any way adversely affect or otherwise malign the business
or reputation of any of the foregoing persons (any activity described in
clause (A), (B), (C) or (D) of this Section 9(c)(i) being herein referred
to as a "Prohibited Activity"); provided, however, that if in the written
opinion of counsel, the Executive is legally compelled to disclose Trade
Secrets to any tribunal or else stand liable for contempt or suffer other
similar censure or penalty, then the disclosure to such tribunal of those
Trade Secrets which such counsel advises in writing legally are required
to be disclosed shall not constitute a Prohibited Activity, provided that
the Executive shall give the Company as much advance notice of such
disclosure as is reasonably practicable. For purposes of this Agreement,
"Clients" shall mean persons who, at any time during the Executive's
course of employment with the Company (including, without limitation,
prior to the Effective Date) are or were clients or customers of the
Company or any affiliate thereof or any predecessor of any of the
foregoing.
(ii) Non-Competition. By and in consideration of
the Company's entering into this Agreement and providing the compensation
and benefits to be provided by the Company to the Executive, and further
in consideration of the Executive's continued exposure to the
confidential and proprietary information of the Company (including,
without limitation, the Trade Secrets), the Executive agrees that the
Executive will not, from the Effective Date and until a period of one (1)
year after the Termination Date, engage in any "Competitive Activity" as
defined below. For purposes of this Agreement, the term "Competitive
Activity" shall mean engaging in any of the following activities: (A)
serving as a director of any "Competitor" (as defined below); (B)
directly or indirectly through one or more intermediaries, either (x)
controlling any Competitor or (y) owning any equity or debt interests in
any Competitor (other than equity or debt interests which are publicly
traded and, at the time of any acquisition, do not exceed 5% of the
particular class of interest outstanding) (it being understood that, if
interests in any Competitor are owned by an investment vehicle or other
entity in which the Executive owns an equity interest, a portion of the
interests in such competitor owned by such entity shall be attributed to
the Executive, such portion determined by applying the percentage of the
equity interest in such entity owned by the Executive to the interests in
such Competitor owned by such entity); (C) employment by (including
serving as an officer or partner of), providing consulting services to
(including, without limitation, as an independent contractor), or
managing or operating the business or affairs of, any Competitor; or (D)
participating in the ownership, management, operation or control of or
being connected in any manner with any Competitor. For purposes of this
Agreement, the term "Competitor" shall mean any person (other than the
Company or any affiliate thereof) that competes, either directly or
indirectly in any "Restricted Area" (as defined below) with "Licensee's
Field of Use (as defined in that certain Software License
Agreement of even date herewith between the Company, Executive and Godot
Soft, LLC, as amended from time to time, the Software License Agreement")
For purposes of this Agreement, the term "Restricted Area" shall mean any
state or territory of the United States, and any state or similar
subdivision of any foreign country in which the Company or any affiliate
thereof conducts business.
(iii) Remedies. The Executive agrees that any
breach of the terms of this Section 8 would result in irreparable injury
and damage to the Company for which the Company would have no adequate
remedy at law. The Executive therefore also agrees that in the event of
any such breach or any threat of such breach, the Company shall be
entitled to an immediate injunction and restraining order to prevent such
breach and/or threatened breach and/or continued breach by the Executive
and/or any and all persons and/or entities acting for and/or with the
Executive, without having to prove damages, in addition to any other
remedies to which the Company may be entitled at law or in equity. The
terms of this Section 8 shall not prevent the Company from pursuing any
other available remedies for any breach or threatened breach hereof,
including but not limited to the recovery of damages form the Executive.
The provisions of this Section 8 shall survive any termination of
this Agreement. The existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements set forth in this Section 8.
9. Miscellaneous.
(a) Binding Effect; Assignment. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties (including transferees of any shares of the Repurchase Shares).
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or be reason of this
Agreement, except as expressly provided in this Agreement. The Executive, or
any beneficiary or legal representative of the Executive, shall not assign all
or any portion of the Executive's rights or obligations under this Agreement
without the prior written consent of the Company.
(b) Notices. Any notice, request, instruction or other
document to be given hereunder by any party to any other party shall be in
writing and shall be deemed to have been given (i) if mailed with the United
States Postal Service by prepaid, first class, certified mail, return receipt
requested, at the time of receipt by the intended recipient, or (ii) if sent
by facsimile transmission, when so sent and receipt acknowledged by an
appropriate telephone or facsimile receipt addressed as follows:
If to the Company, addressed to:
PhoneTime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Corporate Secretary
Telecopier: (000) 000-0000
With a copy to:
Xxxxxxx & Berlin Chartered
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to the Executive:
Xx. Xxxxxx Xxxxxxxx
c/o PhoneTime, Inc.
00-00 Xxxxxxxxxx Xxxxxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
With a copy to:
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
or such other address as may be given from time to time under the terms of
this notice provision.
(c) Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to
any other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
(d) Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. No amendment or waiver may be charged against a party without
that party's prior written consent. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each transferee of any
party hereto.
(e) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) No Third Party Beneficiaries. This Agreement is not
intended to confer any rights or remedies on any person not a party to this
Agreement.
(g) Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
(h) Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of this Agreement shall
be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.
(i) Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without reference to the
conflict of laws provisions of such state.
(j) Survival of Certain Provisions. The Executive's
obligations under Section 8(c)(i)(A) shall survive without limitation as to
time. The Executive's obligations under Section 8(c)(i)(B) shall survive for
six months following the expiration of the Term or early termination of this
Agreement.
(k) Mediation and Arbitration. Except for breaches of the
Executive's obligations under Section 8(c)(i)(A) or Section 8(c)(i)(B) for
which the Company may seek injunctive and monetary relief in a court of law of
competent jurisdiction, any dispute which may arise between the parties hereto
as to the construction, interpretation or effect of this Agreement which is
not resolved by mutual agreement between the parties, shall first be submitted
to nonbinding mediation on terms and conditions to be mutually agreed upon by
the parties. In the event that a dispute is not resolved by nonbinding
mediation, the disputing party may give the other party notice of such party's
intention to cause the same to be submitted to arbitration. After fifteen
(15) days have elapsed from the giving of such notice, but not before such
time, the party
who gave such notice may cause any such dispute which then remains unresolved
to be submitted to arbitration by submitting the same to the New York, New
York office of the American Arbitration Association (the "AAA") (or any
successor thereto, but if no organization is then performing a function
reasonably similar to the AAA, then to a court of competent jurisdiction in
accordance with the rules of such court) with a request for arbitration to be
conducted in accordance with the rules thereof by one (1) arbitrator to be
jointly selected by the parties. The prevailing party's expenses, including
without limitation attorneys' fees, in connection with such arbitration shall
be borne by the losing party; provided, however, that if liability is
allocated by the arbitrator between the parties, the expenses of such
arbitration, including without limitation the parties' attorneys' fees, shall
be borne by the parties in proportion to their respective percentages or
proportions of liability assessed by the arbitrator. The decision of the
arbitrator as to all matters properly submitted to such arbitrator and as to
the apportionment of expenses of arbitration shall be conclusive and binding
upon the parties and judgment upon any award may be entered in any court of
competent jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Company:
PHONETIME, INC.
a New York corporation
WITNESS:
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxx
----------------------- -----------------------------
Name: Xxxxxxx Xxxxxx Name: Xxx Xxxxxx
Title: CEO & Chairman
EXECUTIVE:
WITNESS:
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxx
----------------------- -------------------------------
Name: Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx
