SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): May 28, 1996
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EXECUTIVE TELECARD, LTD.
(Exact name of registrant as specified in its charter)
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Delaware 1-10210 13-3486421
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction) Identification No.)
8 Avenue C, Nanuet, New York 10954
(Address of principal executive offices)
Registrant's telephone number, including area code: (914) 627-2060
<PAGE>
ITEM 5 - Other Events
A small group of shareholders of the Company, who sometimes called
themselves the EXTL Shareholders Protective Committee, Walter K. Krauth,
Jr., William Miller and David Legere, brought a number of lawsuits against
the Company since October 1994.
The most recent action brought by them, which was commenced on June
1, 1995 and was the only one pending as of the date of this report, was
entitled Krauth, et al. v. Executive TeleCard, Ltd., 95 Civ. 3967 (RWS)
(the "Krauth Action"). Plaintiffs in the Krauth Action sought (1) to
preliminarily and permanently enjoin the Company's May and June 1995 proxy
efforts, and (2) damages of approximately $730,000, plus legal fees and
expenses, for breach of alleged settlement agreements reached "in
principle" with the Company. Plaintiffs also sought an order requiring
the Company to issue proxy materials backing the sale of directors
supported by them.
The proxy related claims in the Krauth Action were resolved on June
20, 1995, when the Honorable Robert W. Sweet denied plaintiffs' request
for injunctive relief, refused to order specific performance of the
aforementioned agreements in principle and allowed the Company to go
forward with its June 30, 1995 annual meeting of shareholders.
As of May 28, 1996, all of the plaintiffs claims against the Company
in the Krauth Action were settled. In May 1996, Messrs. Krauth, Miller
and Legere dismissed all of their claims against the Company with
prejudice. The Company paid no money in consideration for the dismissal
of those claims. Mr. Krauth, however, received 10,000 restricted shares
of the Company's common stock and will receive additional restricted
shares if the Company's stock is less than $11.00 per share on May 28,
1998. Plaintiffs also released all claims they have against the Company
under a March 1996 judgment for approximately $48,000 in interim
attorneys' fees.
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits.
10 Settlement Agreement and Mutual Release dated as of May 28, 1996
between Executive Telecard, Ltd. and Walter K. Krauth, Jr.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
EXECUTIVE TELECARD, LTD.
(Registrant)
Date: July 22, 1996 By:/s/ Robert N. Schuck
Robert N. Schuck
Executive Vice President
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- ----------------
10 Settlement Agreement and Mutual
Release dated as of May 28, 1996
between Executive Telecard, Ltd.
and Walter K. Krauth, Jr.
Filed herewith electronically
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (the "Agreement"),
dated as of May 28, 1996, is entered into by and between Executive
TeleCard, Ltd., a Delaware corporation with its principal executive
offices located at 8 Avenue C, Nanuet, New York 10954 ("EXTL"), on the one
hand, and Walter K. Krauth, Jr., 8705 North Shore Drive, Jonesboro,
Georgia 30236 ("Krauth"), on the other hand.
W I T N E S S E T H
WHEREAS, Krauth is a shareholder of EXTL and a plaintiff in an
action against EXTL entitled KRAUTH, ET AL. V. EXECUTIVE TELECARD, LTD.,
95 Civ. 3967 (RWS), which is presently pending in the United States
District Court for the Southern District of New York or is currently
before the Second Circuit Court of Appeals, Docket No. 96-7404 (the
"KRAUTH Action"); and
WHEREAS, EXTL is the plaintiff and Krauth a defendant in
another, separate action against Krauth and others entitled EXECUTIVE
TELECARD, LTD. V. ENGELMAN, ET AL., 95 Civ. 9505 (RWS), which is also
pending in the United States District Court for the Southern District of
New York (the "EXTL Action"); and
WHEREAS, Krauth is a putative member of the plaintiff class
certified in an action against EXTL and others entitled IN RE EXECUTIVE
TELECARD, LTD. SECURITIES LITIGATION, 94 Civ. 7846 (CLB), which is
presently pending in the United States District Court for the Southern
District of New York (the "Class Action"); and
WHEREAS, Krauth has determined that it is in his best interests
to withdraw all of the claims he has or may have in the KRAUTH Action and
release EXTL from all claims and potential claims he has or may have
against it, including but not limited to those claims made in the KRAUTH
Action and the Class Action; and
WHEREAS, EXTL has determined that it is in its best interests to
withdraw all of the claims asserted against Krauth in the EXTL Action and
release all of the claims and potential claims it has or may have against
Krauth, including but not limited to those claims made in the EXTL Action;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter set forth, and for other good and valuable
consideration, the parties hereto agree as follows:
1. CLOSING. The closing shall take place at 2:00 p.m. on
Tuesday, May 28, 1996, at the offices of Ziegler, Ziegler & Altman, 750
Lexington Avenue, Suite 1400, New York, New York 10022 (the "Closing").
2. DOCUMENTS TO BE EXECUTED AND DELIVERED BY KRAUTH AT
CLOSING. At Closing, Krauth shall deliver the following documents to
EXTL, each of which shall be originally signed by him:
(a) a release from Krauth in favor of EXTL and all others
provided for therein in the form annexed hereto as Exhibit A (the "Krauth
Release"), which release shall include, but not be limited to, all claims
Krauth has or may have against EXTL in the KRAUTH Action, the Class Action
and the EXTL Action;
(b) a stipulation of dismissal dismissing all of Krauth's
claims and potential claims against EXTL in the KRAUTH Action with
prejudice and without costs pursuant to Rule 41(a) of the Federal Rules of
Civil Procedure in the form annexed hereto as Exhibit B (the "KRAUTH
Stipulation of Dismissal");
(c) a stipulation of dismissal dismissing all of Krauth's
claims and potential claims against EXTL in the EXTL Action with prejudice
and without costs pursuant to Rule 41(a) of the Federal Rules of Civil
Procedure in the form annexed hereto as Exhibit C (the "EXTL Stipulation
of Dismissal");
(d) a letter from Mr. Krauth in the form annexed hereto as
Exhibit D stating, among other things, that he intends to hold all EXTL
stock acquired in connection with this Agreement solely for investment
purposes.
3. DOCUMENTS TO BE EXECUTED AND DELIVERED BY EXTL AT CLOSING.
At Closing, EXTL shall deliver to Krauth the following documents, each of
which shall be originally signed by a duly authorized officer of EXTL:
(a) a release from EXTL in favor of Krauth and all others
provided for therein in the form annexed hereto as Exhibit E (the "EXTL
Release");
(b) the Krauth Stipulation of Dismissal;
(c) The EXTL Stipulation of Dismissal; and
(d) a share certificate in the name of Walter K. Krauth, Jr.
for 10,000 shares of EXTL restricted common stock.
4. SATISFACTION OF THE JUDGMENT FILED MARCH 27, 1996. The
parties to this Agreement acknowledge that a personal judgment in favor of
the Plaintiffs was filed in the KRAUTH Action on March 27, 1996 (the
"Judgment"). The Judgment awarded Plaintiffs Forty-Eight Thousand Thirty
Eight Dollars and Ten Cents ($48,038.10) under Section 14(a) of the
Securities and Exchange Act of 1934 (the "Act"). EXTL has appealed the
Judgment to the United States Second Circuit Court of Appeals and the
appeal is pending as of the date of this Agreement (the "Appeal"). EXTL
agrees to use its best efforts to litigate the appeal and reduce the
Judgment. All cost of litigation, including but not limited to attorneys'
fees, shall be borne by EXTL. In the event EXTL is required to pay the
Judgment, Krauth agrees to reimburse EXTL up to Forty-Eight Thousand
Dollars ($48,000), payable within ten (10) business days from entry of a
non-appealable judgment by the trial or appellate court.
5. RIGHT TO ADDITIONAL SHARES. In the event the price of EXTL
common stock on May 28, 1998 (the "Release Date"), adjusted for any stock
splits or issuances between the date of this Agreement and the Release
Date, is less than $11.00 per share, then EXTL shall issue to Krauth
additional restricted shares (the "Additional Shares") of EXTL common
stock in such amount such that the market value of the Additional Shares
shall be equal to the difference between $11.00 and the offer price of
EXTL common stock on the Release Date. Such Additional Shares, if
required to be issued under this paragraph 5, shall be issued and
distributed to Krauth within 30 days of the Release Date. Krauth hereby
agrees that he shall execute any and all documentation reasonably
requested by EXTL at that time in order to effect the issuance of the
Additional Shares.
6. PRESS RELEASE. Following the Closing, EXTL may (but shall
not be required to) issue a press release or otherwise publicly disclose
the terms of this Agreement and any Exhibit to it. Krauth hereby agrees
that he has reviewed and approved the issuance of a press release
substantially in the form annexed hereto as Exhibit F. Krauth further
hereby agrees that he will use his best efforts to assist EXTL in its
efforts to issue a press release or otherwise disclose the terms of this
Agreement or any Exhibit to it to the extent reasonably requested by EXTL.
7. VALIDITY OF AGREEMENT. This Agreement is a valid
obligation legally binding on Krauth and EXTL. EXTL hereby represents and
warrants that the execution and delivery of this Agreement, including the
Exhibits hereto, and the consummation of the transactions contemplated in
it (i) are permissible under its Certificate of Incorporation and Bylaws,
(ii) have been duly and validly authorized by all necessary and
appropriate corporate action by its Board of Directors, (iii) does not
require any further approval or consent of any third party whatsoever.
Krauth hereby represents and warrants that (i) he has full legal power and
capacity to execute, deliver and perform this Agreement and all of the
terms and conditions set forth in this Agreement and all Exhibits to it;
and (ii) that he has not assigned or otherwise transferred any right he
has or may have against EXTL.
8. NON-ASSIGNMENT. This Agreement and any right, title or
interest in it may not be assigned, transferred, conveyed or otherwise
disposed of by either party.
9. AMENDMENT. This Agreement may not be amended or modified
in any way except in a writing signed by both parties to this Agreement.
10. ENTIRE AGREEMENT; SUPERSEDES PRIOR AGREEMENTS. This
Agreement (including all the Exhibits hereto) constitutes the entire
agreement between the parties with respect to the subject matter hereof
(including, but not limited to, the KRAUTH Action, the EXTL Action, the
Class Action and all prior actions and proceedings between the parties)
and supersedes all prior and contemporaneous agreements and understandings
of the parties. There are no representations, warranties, covenants,
conditions, agreements, understandings or arrangements, oral or written,
between or among the parties relating to the subject matter hereof which
are not fully expressed herein. No agent of any party is authorized to
make any representation, promise or warranty not contained in this
Agreement and the Exhibits hereto.
11. EXHIBITS. All of the Exhibits annexed hereto are
incorporated herein for all purposes.
12. LEGAL CONSTRUCTION. If any one or more provision of this
Agreement is, for any reason, held by a court of competent jurisdiction to
be unenforceable in any respect, such unenforceability shall not affect
any other provision hereof; and this Agreement shall be construed as if
such unenforceable provision were never contained herein.
13. NOTICES. All notices permitted or required under this
Agreement shall be deemed sufficient only if given in writing and (i)
delivered personally and mailed by certified mail, return receipt
requested, postage prepaid, or (ii) sent by telecopier and confirmed by
letter delivered on the same date by overnight mail service, properly
addressed to the appropriate party at the following addresses:
a. If to Krauth:
Walter K. Krauth, Jr.
8705 North Shore Drive
Jonesboro, Georgia 30236
With a Copy To:
Andrew C. Ausband, Esq.
Ausband & Associates
Tower Place, Suite 1800
3340 Peachtree Road, N.E.
Atlanta, Georgia 30327
b. If to EXTL:
John J. Gitlin, Esq.
Executive TeleCard, Ltd.
8 Avenue C
Nanuet, New York 10954
With a Copy To:
Steven Altman, Esq.
Ziegler, Ziegler & Altman
750 Lexington Avenue
New York, New York 10022
The above addresses for notice may be changed only by written
notice given to the other party in accordance with the provisions of this
paragraph.
14. RULE OF CONSTRUCTION. The parties each acknowledge and
represent that each party and its counsel has reviewed this Agreement,
including the Exhibits hereto, and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation or construction of this
Agreement or its Exhibits.
15. WAIVER. Any waiver by any party of any provision of this
Agreement shall not constitute or imply a subsequent or other waiver of
the same or any other provision of this Agreement.
16. GOVERNING LAW. All matters affecting this Agreement,
including the validity thereof, are to be governed by, and interpreted and
construed in accordance with, the laws of New York State applicable to
contracts executed in and to be performed in that State.
17. ENFORCEMENT/ATTORNEYS' FEES. The prevailing party in any
action or proceeding brought to enforce any term or provision of this
Agreement shall be entitled to reasonable attorneys' fees and expenses
from the other party, in addition to any other relief that party may be
entitled to receive.
18. DISPUTES; CONSENT TO JURISDICTION. Krauth and EXTL hereby
agree and consent to the exclusive jurisdiction of the United States
District Court for the Southern District of New York for all purposes of
enforcement of the terms and conditions of this Agreement.
19. CAPTIONS. The captions used in this Agreement are for
convenience of reference only, and do not form a part hereof, and do not
in any way modify, interpret limit, expand or construe the meaning or
intent of the parties hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
/s/Walter K. Krauth, Jr.
Walter K. Krauth, Jr.
[NOTARY]
EXECUTIVE TELECARD, LTD.
By:/s/Robert N. Schuck
Name:Robert N. Schuck
Title:Exec Vice Pres
[NOTARY]
<PAGE>
EXHIBIT A
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT
WALTER K. KRAUTH, JR., an individual, as RELEASOR (the "RELEASOR") in
consideration of the sum of ONE dollar ($1.00) and other good and valuable
consideration received from EXECUTIVE TELECARD, LTD., a Delaware
corporation, as RELEASEE (the "RELEASEE"), receipt of which is hereby
acknowledged, releases and discharges the RELEASEE, RELEASEE's officers,
directors, employees, shareholders, subsidiaries, affiliates, heirs,
executors, administrators, agents, attorneys, successors and assigns from
all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages,
judgments, extents, executions, claims and demands whatsoever, in law,
admiralty or equity, which against the RELEASEE, the RELEASOR, RELEASOR's
heirs, executors, administrators, agents, attorneys, successors and
assigns ever had, now have or hereafter can, shall or may have, for, upon,
or by reason of any injuries sustained or alleged injuries sustained from
the beginning of the world to the day of the date of this RELEASE.
The words "RELEASOR" and "RELEASEE" include all releasors and all
releasees under this RELEASE.
This RELEASE may not be changed orally.
/s/Walter N. Krauth, Jr.
WALTER K. KRAUTH, JR.
STATE OF GEORGIA, COUNTY OF ss.:
On 1995, before me personally came Walter K.
Krauth, Jr., to me known, did depose and say that deponent resides at
and that he did
execute the foregoing RELEASE.
<PAGE>
EXHIBIT B
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- --------------------------------------
WALTER K. KRAUTH, JR., WILLIAM
MILLER, and DAVID E. LEGERE, 95 Civ. 3967 (RWS)
Plaintiffs,
- against - STIPULATION
OF DISMISSAL
EXECUTIVE TELECARD, LTD.,
Defendants.
- --------------------------------------
IT IS HEREBY STIPULATED AND AGREED by and between plaintiff
Walter K. Krauth, Jr. ("Krauth") and defendant Executive TeleCard, Ltd.
("EXTL"), pursuant to Rule 41(a)(2) of the Federal Rules of Civil
Procedure, as follows:
1. All of plaintiff Krauth's claims in this action, including,
but not limited to, all claims in and to the judgment dated March 27, 1996
in the United States District Court for the Southern District of New York,
are hereby dismissed with prejudice and without costs to Krauth or EXTL.
2. Krauth waives all rights to make any application to vacate
or modify this Stipulation and Order of Dismissal or to appeal it at any
time.
Dated: May , 1996
New York, New York
LANDMAN CORSI BALLLAINE AUSBAND & ASSOCIATES
& FORD P.C.
By: By:
Mark S. Landman (ML-7654) Andrew C. Ausband
233 Broadway, 34th Floor Tower Place, Suite 1800
New York, New York 10279 3340 Peachtree Road, N.E.
(212) 238-4800 Atlanta, Georgia 30327
(404) 814-5299
Attorneys for Plaintiff
Walter K. Krauth, Jr.
ZIEGLER, ZIEGLER & ALTMAN
By:
Steven Altman (SA-5405)
750 Lexington Avenue
New York, New York 10022
(212) 319-7600
Attorneys for Defendant
Executive TeleCard, Ltd.
<PAGE>
EXHIBIT C
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- ------------------------------------
EXECUTIVE TELECARD, LTD.,
Plaintiff, 95 Civ. 9505 (RWS)
- against - STIPULATION
OF DISMISSAL
DARYL ENGELMAN, JOHN NUGENT
and WALTER KRAUTH,
Defendants.
- --------------------------------------
IT IS HEREBY STIPULATED and agreed by and between the
undersigned attorneys for plaintiff Executive TeleCard, Ltd. ("EXTL") and
defendant Walter Krauth ("Krauth") that all of EXTL's claims and potential
claims against Krauth and all of Krauth's claims and potential claims
against EXTL in this action are hereby dismissed with prejudice and
without costs, and
IT IS FURTHER STIPULATED and agreed that EXTL waives all rights
to make any application to vacate or modify this Stipulation and Order of
Dismissal or to appeal it at any time.
Dated: May , 1996
New York, New York
ZIEGLER, ZIEGLER & ALTMAN
By:
Steven Altman (SA-5405)
750 Lexington Avenue
New York, New York 10022
(212) 319-7600
Attorneys for Plaintiff Executive TeleCard, Ltd.
LANDMAN CORSI BALLLAINE AUSBAND & ASSOCIATES
& FORD P.C.
By: By:
Mark S. Landman (ML-7654) Andrew C. Ausband
233 Broadway, 34th Floor Tower Place, Suite 1800
New York, New York 10279 3340 Peachtree Road, N.E.
(212) 238-4800 Atlanta, Georgia 30327
(404) 814-5299
Attorneys for Defendant Walter K. Krauth, Jr.
<PAGE>
EXHIBIT D
WALTER K. KRAUTH, JR.
8705 North Shore Drive
Jonesboro, Georgia 30236
May , 1996
John J. Gitlin, Esq.
Executive TeleCard, Ltd.
8 Avenue C
Nanuet, New York 10954
Re: EXTL SETTLEMENT AGREEMENT AND RELEASE, Dated May , 1996
Gentlemen:
I, Walter K. Krauth, Jr. (the "Purchaser"), hereby represent and
warrant as follows with respect to all shares of common stock (the
"Shares") of Executive TeleCard, Ltd. (the "Company") acquired by me in
connection with the above-referenced agreement (the "Agreement"):
a. INVESTMENT INTENT. The Purchaser represents and warrants
to the Company that the Shares to be acquired by him in accordance with
the Agreement are being acquired for his own account for investment and
with no intention of distributing or reselling such Shares or any part of
either or interest therein in any transaction which would be in violation
of the securities laws of the United States of America or any State. The
Purchaser further represents that he does not have any contract, under-
taking, agreement or arrangement with any Person to sell, transfer or
grant participation to any Person with respect to any of the Shares.
Purchaser hereby agrees that, for a period of two years from the date
hereof, he will not transfer the Shares in reliance upon the exemption
from the registration requirements of the Securities Act provided by
Regulation S under the Securities Act.
b. TRANSFER RESTRICTIONS. If the Purchaser should decide to
dispose of any of the Shares to be acquired by him in connection with the
Agreement, the Purchaser understands and agrees that he may do so only (i)
pursuant to an effective registration statement under the Securities Act
and applicable State and foreign securities laws or (ii) upon receipt by
the Company of an opinion of counsel experienced in the area of United
States Federal and applicable state securities laws selected by the
transferor, which counsel and the form and substance of which opinion
shall be reasonably acceptable to the Company, to the effect that such
transfer does not require registration of such Shares, under the
Securities Act or any state securities laws; PROVIDED, HOWEVER, that
neither the Purchaser nor any other holder of the Shares shall be entitled
to rely on the exemption from registration provided by Regulation S under
the Securities Act.
The Purchaser agrees to the imprinting, so long as appropriate,
of the following legends on the Shares:
THESE RESTRICTED SHARES OF EXECUTIVE TELECARD, LTD.
("SHARES") HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
APPLICABLE STATE OR FOREIGN SECURITIES LAWS. BY ITS ACCEPTANCE HEREOF,
THE PURCHASER OF THE SHARES EVIDENCED HEREBY REPRESENTS THAT HE IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES
ACT AND THAT THE SHARES ARE NOT BEING ACQUIRED WITH A VIEW TO DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT). THESE SECURITIES MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE OR FOREIGN SECURITIES LAWS, (2) TO AN ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, OR (3) UPON RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY IN FORM AND SUBSTANCE
SATISFACTORY THERETO THAT SUCH REGISTRATION IS NOT REQUIRED.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THESE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT.
The legends set forth above may be removed if and when the
Shares are disposed of pursuant to an effective registration statement
under the Securities Act or in the opinion of counsel to the Company
experienced in the area of United States Federal and applicable state
securities laws such legends are no longer required under applicable
requirements of the Securities Act. The Shares shall also bear any other
legends required by applicable Federal or state securities laws, which
legends may be removed when, in the opinion of counsel to the Company
experienced in the applicable securities laws, the same are no longer
required under the applicable requirements of such securities laws. The
Company agrees that it will provide the Purchaser, upon request, with
substitute Shares not bearing such legend at such time as such legend is
no longer applicable. The Purchaser agrees that, in connection with any
transfer of Shares by him pursuant to an effective registration statement
under the Securities Act, the Purchaser will comply with all prospectus
delivery requirements of the Securities Act. The Company makes no
representation, warranty or agreement as to the availability of any
exemption from registration under the Securities Act with respect to any
resale of the Shares.
c. STOP TRANSFER INSTRUCTION. The Purchaser agrees that the
Company shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Shares in order to implement the
restrictions on transfer set forth herein.
d. PURCHASER STATUS. The Purchaser represents and warrants
to, and covenants and agrees with, the Company that (i) at the time he was
offered the Shares, he was, (ii) at the date hereof, he is, and (iii) at
the Closing, he will be, an "accredited investor" as defined in Rule
501(a) under the Securities Act, and has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Shares, the Purchaser having been represented by counsel, and have so
evaluated the merits and risks of such investment and are able to bear the
economic risk of such investment and, at the present time, is able to
afford a complete loss of such investment.
e. AUTHORITY. The Purchaser represents and warrants to the
Company that (i) his acquisition of the Shares has been duly and properly
authorized and this letter has been duly executed and delivered by the
Purchaser or on his behalf and constitutes a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applica-
bility relating to or affecting creditors' rights generally and to general
principles of equity; (ii) the acquisition of the Shares by him does not
conflict with or violate any law, regulation or court order applicable to
him; and (iii) the acquisition of the Shares by him does not impose any
penalty or other onerous condition on him pursuant to any applicable law
or governmental regulation.
f. ACCESS TO INFORMATION. The Purchaser acknowledges that he
has been afforded (i) the opportunity to ask such questions as he deemed
necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of his acquisition of the Shares and
the merits and risks of investing in the Shares and (ii) access to
information about the Company and the Company's financial condition,
results of operations, business, properties, management and prospects
sufficient to enable him to evaluate his investment in the Shares.
g. RELIANCE. The Purchaser understands and acknowledges that
(i) the Shares are being acquired by him without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such
exemption depends in part on, and the Company will rely upon, the accuracy
and truthfulness of the foregoing representations and the Purchaser hereby
consents to such reliance.
Very truly yours,
Walter K. Krauth, Jr.
cc: Andrew C. Ausband, Esq.
<PAGE>
EXHIBIT E
To all to whom these Presents shall come or may Concern, Know That
EXECUTIVE TELECARD, LTD., a Delaware corporation with its principal
executive offices at 8 Avenue C, Nanuet, New York 10954, as RELEASOR (the
"RELEASOR") in consideration of the sum of ONE dollar ($1.00) and other
good and valuable consideration received from WALTER K. KRAUTH, JR., as
RELEASEE (the "RELEASEE"), receipt of which is hereby acknowledged,
releases and discharges the RELEASEE, RELEASEE's heirs, executors,
administrators, successors and assigns from all actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, claims and
demands whatsoever, in law, admiralty or equity, which against the
RELEASEE, the RELEASOR, RELEASOR's officers, directors, employees,
shareholders, subsidiaries, affiliates, heirs, executors, administrators,
agents, attorneys, successors and assigns ever had, now have or hereafter
can, shall or may have, for, upon, or by reason of any injuries sustained
or alleged injuries sustained from the beginning of the world to the day
of the date of this RELEASE.
The words "RELEASOR" and "RELEASEE" include all releasors and all
releasees under this RELEASE.
This RELEASE may not be changed orally.
EXECUTIVE TELECARD, LTD.
By:
Name:
Title:
STATE OF , COUNTY OF ss.:
On 1995, before me personally came
, to me known, did depose and say that deponent resides at
and that he was authorized to and did
execute the foregoing RELEASE.
<PAGE>
EXHIBIT F
FOR IMMEDIATE RELEASE
May XX, 1996
EXECUTIVE TELECARD RESOLVES LITIGATION
COMPANY'S LARGEST INDIVIDUAL SHAREHOLDER
RE-AFFIRMS CONFIDENCE IN COMPANY
(Nanuet, NY) - Executive TeleCard (Nasdaq: EXTL) announced today
that all litigation issues surrounding Walter Krauth and last year's proxy
battle are resolved. In reaffirming his confidence in Executive Telecard
and its potential in the international telecommunications industry, Krauth
stated that "the unfortunate commencement and even more unfortunate
escalation of the proxy contest should never have occurred." Mr. Krauth
added that "I am personally gratified that this matter is behind us and
that the Company may continue in the rapid growth which it has been
experiencing in the last year and have renewed confidence in both Mr.
Robert Schuck and the Company's management team to lead the Company to its
full potential as a world class presence in the telecommunications
industry.
Executive TeleCard, founded in 1987, is an international
telecommunications company providing direct voice and data communications
services via World Direct, an unmatched global network. Executive
TeleCard's products and services include: revenue sharing partnership
opportunities, value-added telecommunications enhancements for carriers
and credit and card issuing companies, the only true global prepaid card
platform, global calling cards, global Internet access ("Project
Caspian"), international and domestic toll-free service ("Service 800"),
and a Colorado-based long-distance service ("TeleCall"). The key to
Executive TeleCard's ongoing success is its unique partnerships with PTTs
(Postal Telegraph and Telephone Authorities) around the world, that it has
been developing for more than 20 years. Executive TeleCard is the pioneer
of direct calling capabilities and currently provides direct
intra/intercountry long distance service from and within more than 63
countries/territories to virtually anywhere in the world.
INVESTOR CONTACT: Marlene Lombardi (914) 627-2060
