Settlement Agreement - Network Data Systems Ltd. and Executive TeleCard Ltd.
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Agreement") is entered into this
27th day of March, 1995, between Network Data Systems Limited, a Canadian
corporation with offices at 333 Denison Unit 4, Markham, Ontario L3R 2Z4
("NDS") and Executive TeleCard, Ltd., a Delaware corporation with its
principle offices at 4260 East Evans Avenue, Denver, Colorado 80222
("TeleCard").
1.0 BACKGROUND
1.1 NDS presently holds a shareholder interest in TeleCard of
approximately ten percent (10%) of all of the issued and outstanding
shares of the common stock of TeleCard. Certain claims may presently
exist as between the parties relating to NDS' shareholder interest in
TeleCard, and certain business relationships between the parties. It is
the intent of the parties to this Agreement to terminate all existing
agreements (written or otherwise) as between them and to settle any actual
or potential claims that the parties may have against the other.
1.2 Without admission of liability and for valuable
consideration, the sufficiency of which is hereby acknowledged, the
parties to this Agreement desire to settle all matters directly or
indirectly arising from or relating to the relationship of the parties in
accordance with the terms and conditions hereafter set forth as more
expressly provided for in this Agreement.
2.0 SETTLEMENT OF LIABILITIES
2.1 Contemporaneous with the execution and delivery of this
Agreement, NDS will deliver to TeleCard payment in the amount of Three
Hundred, Fifty Thousand Dollars ($350,000.00), less the sum of One
Hundred, Seventy-Three Thousand Dollars ($173,000.00) representing
advances made by NDS of Sixty-Three Thousand Dollars ($63,000.00) on or
about March 9, 1995 and Sixty Thousand Dollars ($60,000.00) made on March
16, 1995, and Fifty Thousand Dollars ($50,000.00) made on or about March
20, 1995. Payment by NDS of the balance of One Hundred, Seventy-Seven
Thousand Dollars ($177,000.00) shall be made by wire transfer to
TeleCard's bank account at:
First Bank
P.O. Box 5220
Arvada, CO 80005
Account Number: XXX XXX XXXX
A/B/A Number: XXXXX XXXX
Account Name: Executive TeleCard, Ltd.
Or such other bank as TeleCard may direct in writing.
As further consideration, NDS further covenants and agrees that for a
period of three (3) years from the date of this Agreement, it shall not
directly or indirectly in any manner whatsoever, engage in any business
which directly or indirectly competes with the business of TeleCard as it
presently exists and further covenants and agrees that it shall vote all
shares of TeleCard owned by it in favor of the director nominees proposed
and recommended to the shareholders by the Board of Directors of TeleCard
at any annual or other meeting of shareholders for a period of two (2)
years from the date of execution of this Agreement. NDS further covenants
and agrees that it shall use its best efforts to cause Residual
Corporation ("Residual") to vote any shares held by Residual in TeleCard
in favor of the director nominees proposed and recommended by the Board of
Directors of TeleCard at any annual or other meeting of the shareholders
for a period of two (2) years from the date of execution of this
Agreement.
2.2 Contemporaneous with the execution of this Agreement, all
agency and any other agreements which exists between the parties are
hereby terminated without any further liability of the parties hereunder.
3.0 RELEASES
3.1 In consideration of the foregoing covenants, agreements
and payment by NDS as contained in Paragraph 2.1 hereinabove, TeleCard, on
behalf of itself, its subsidiaries, their respective officers and
directors (acting in such capacity), successors and assigns hereby
releases and discharges NDS, its officers, directors and shareholders
(acting in such capacity), 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, judgements, extents, executions,
claims and demands whatsoever, in law, admiralty or equity which against
NDS, its subsidiaries, officers, directors and shareholders (acting in
such capacity), successors and assigns, TeleCard, its subsidiaries, their
respective officers and directors (acting in such capacity), successors
and assigns ever had, now have or hereafter can, shall or may, have for,
upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the day of the date of this Agreement.
3.2 In consideration of the agreements, covenants and releases
of TeleCard as contained in this Agreement, NDS on behalf of itself, its
subsidiaries, officers and directors (acting in such capacity), successors
and assigns releases and discharges TeleCard, its subsidiaries, their
respective officers, directors and shareholders (acting in such capacity),
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, judgements, extents, executions, claims and demands
whatsoever, in law, admiralty or equity which against TeleCard, its
subsidiaries, their respective officers, directors and shareholders
(acting in such capacity), successors and assigns, NDS, its officers and
directors (acting in such capacity), subsidiaries, successors and assigns
ever had, now have or hereafter can, shall or may, have for, upon, or by
reason of any matter, cause or thing whatsoever from the beginning of the
world to the day of the date of this Agreement. Notwithstanding the
foregoing or anything contained in this Agreement to the contrary, NDS
does not release Service 800 S.A. of and from any claims that it might
have against Service 800 S.A.
4.0 GENERAL CONDITIONS
4.1 This Agreement may not be amended or modified in any way
except in writing and signed by both parties to this Agreement.
4.2 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 or construe the meaning or intent of the parties
hereunder.
4.3 Whenever used herein, and the context requires it, the
singular and plural numbers shall each include the other, and the
masculine, feminine and neuter gender shall each include the other.
4.4 This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
4.5 This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings of
the parties in connection herewith. 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.
4.6 Each party to this Agreement agrees to perform any further
acts and to execute and deliver any further documents which may be
reasonably necessary to carry out the provisions of this Agreement.
4.7 This Agreement shall be binding on and inure to the
benefit of the parties hereto, their representatives, successors and
permitted assigns.
4.8 If any one or more provisions 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.
4.9 All notices permitted or required under this Agreement
shall be deemed sufficient only if given in writing and delivered
personally or mailed by certified mail, return receipt requested, postage
prepaid, or by telex (confirmed by letter), properly addressed to the
appropriate party at the following address:
(i) If to NDS:
Network Data Systems Limited
333 Denison Unit 4
Markham, Ontario L3R 2Z4
(ii) If to TeleCard:
Executive TeleCard, Ltd.
4260 East Evans Avenue
Denver, Colorado 80222
The above addresses for notice may be changed only by written
notice given in accordance with the provisions of this paragraph.
Personally delivered and telexed notices shall be deemed to be received
upon actual receipt; properly mailed notices shall be deemed to be
received three (3) days after mailing.
4.10 Nothing contained herein is intended to nor shall be
construed so as to limit the remedies which any party hereto may have
against any other party hereto in the event of a breach by any party of
any representation, warranty, covenant or agreement made under or pursuant
to this Agreement, it being intended that any remedies shall be cumulative
and not exclusive.
4.11 The parties acknowledge that each party and its counsel
has reviewed this Agreement 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.
4.12 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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement this 27th day of March, 1995.
NETWORK DATA SYSTEMS LIMITED
/s/William V. Moore
By: William V. Moore
Its: President
EXECUTIVE TELECARD, LTD.
/s/Edward J. Gerrity, Jr.
By: Edward J. Gerrity, Jr.
Its: Chairman of the Board
/s/Daryl Engelman
By: Daryl Engelman
Its: President and Director
/s/Allen Mandel
By: Allen Mandel
Its: Director
/s/Robert N. Schuck
By: Robert N. Schuck
Its: Director
/s/Carl J. Corcoran
By: Carl J. Corcoran
Its: Director
/s/Anthony Balinger
By: Anthony Balinger
Its: Director