Settlement Agreement - West Nursery Land Holding LP and NCT Group Inc.
SETTLEMENT AGREEMENT
This Settlement Agreement, effective as of the 31st day of December 2002,
is by and between West Nursery Land Holding Limited Partnership ("West
Nursery"), duly organized and existing under the laws of the State of Maryland,
and NCT Group, Inc. ("NCT") a corporation duly organized and existing under the
laws of the State of Delaware and having their principal places of business at
20 Ketchum Street, Westport, Connecticut 06880. As used in this Settlement
Agreement, the term "party" means NCT or West Nursery, as the context indicates,
and the term "party" means NCT and West Nursery.
WHEREAS, there is an action currently pending in the Superior Court of the
State of Connecticut, Judicial District of Fairfield at Bridgeport, entitled
West Nursery Land Holding Limited Partnership v. NCT Group, Inc., Docket No. CV
02-0394383S (the "Action")
WHEREAS, in the Action, West Nursery, as plaintiff, has asserted claims
against NCT as defendant, that West Nursery is entitled to payment from NCT
under or in connection with two lease agreements as amended between West Nursery
and NCT relating to property located at 1025 West Nursery Road, Linthecum, MD
(the "Leases"), and a judgment obtained by West Nursery against NCT entered on
or about February 27, 2002 by the District Court of Maryland for Anne Arundel
County in the case entitled West Nursery Land Holding Limited Partnership vs.
NCT Group, Inc. Case No. - 07-02-2619-2002 (" Judgment");
WHEREAS, in the Action, NCT has denied West Nursery's allegations that it
is entitled to payment under the Leases and the Judgment and asserted several
affirmative defenses; and
WHEREAS, the parties, after due consideration, have determined to resolve
and settle any and all claims, controversies, disputes and causes of action,
whether asserted or unasserted, known or unknown, or whether in law, equity or
otherwise, relating to, arising out of, or in any way concerning the Action
and/or the Leases and/or the Judgment, without any admission of liability or
wrongdoing on the part of or on behalf of either party, pursuant to the terms
and conditions enumerated hereafter.
1. Consideration.
A. This Settlement Agreement must be approved by the Superior Court of
the State of Connecticut, Judicial District of Fairfield at Bridgeport (the
"Court") after a hearing which shall be scheduled as soon as is practicable
(the "Hearing"). If the Court fails or refuses to approve this Settlement
Agreement, it shall be of no force or effect on either party hereto.
B. Immediately upon the occurrence of the last of (a) Court approval
of this Settlement Agreement and (b) West Nursery's receipt of the shares
of stock described in paragraph 1 (C) below, NCT and West Nursery will (1)
take all steps necessary to withdraw the Action with prejudice and will
direct their respective attorneys to execute and file a withdrawal with
prejudice in the form attached as Exhibit A and (2) will direct the
attorneys to execute and file a Satisfaction of Judgment in the form
attached hereto as Exhibit B. Each party will bear its own costs and
expenses, including attorney fees.
C. Within ten (10) days of the occurrence of the last of (a) execution
and delivery of this Settlement Agreement by both parties and (b) Court
approval of this Settlement Agreement, NCT shall issue to West Nursery that
number of shares of NCT common stock, par value $ .01 per share (the
"Shares"), having the aggregate value of $55,918.00 based upon a price per
share which shall be the average of the closing prices of the shares on the
NASD Over -the- Counter Electronic Bulletin Board for each of the ten (10)
trading days immediately preceding the date of this Agreement.
D. In no event shall West Nursery sell or transfer, on any trading
day, a number of Shares that exceeds ten percent (10%) of the ten-day
average trading volume for the class of common stock of which the Shares
are a part, calculated as reported on the NASD Over -The-Counter Electronic
Bulletin Board for the ten trading days ending with the trading day
immediately preceding the day of West Nursery's sale or transfer.
E. It is the intent of the parties that, upon delivery of the Shares
to West Nursery, resale of the Shares in the United States by West Nursery
shall be exempt from registration under the Securities Act of 1933, as
amended (as so amended, the "Securities Act"), by virtue of Section
3(a)(10) of the Securities Act. In connection therewith, the parties intend
that the Court approval referred to in paragraph 1 of this Settlement
Agreement be after a hearing upon the fairness of the terms and conditions
of this Settlement Agreement.
F. West Nursery hereby represents to NCT that it is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D promulgated
under the Securities Act. West Nursery has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits
and risks of an investment in the Shares. West Nursery recognizes that NCT
has a limited financial and operating history and that an investment in any
of the Shares involves a high degree of risk. West Nursery acknowledges
receipt from NCT of information satisfactory to West Nursery regarding NCT
and the Shares. West Nursery has had an opportunity to review the books and
records of NCT and an opportunity to ask questions of and receive answers
from officers of NCT concerning the Shares and the terms and conditions of
this transaction, and all such questions have been answered to West Nursery
's satisfaction. Nothing in this Agreement shall affect in any way the
obligation of a holder of Shares to comply with all applicable Federal and
State securities laws upon any resale of Shares.
G. West Nursery and NCT agree that, notwithstanding any provision of
this Agreement to the contrary, at the option of West Nursery, its rights,
obligations and interests existing prior to the date of this Agreement
shall be reinstated to the extent that a court of competent jurisdiction
shall determine that (1) the transfer of the Shares to West Nursery was a
voidable preferential transfer or a fraudulent transfer or a fraudulent
conveyance under state or federal law or (2) for any other reason, such
transfer is rescinded, deemed to be rescinded or an amount is determined to
be payable by West Nursery by virtue thereof to NCT or its representatives,
successors, bankruptcy estate or federal or state receiver.
2. No Admission of Liability. Nothing in this Settlement Agreement
shall be construed as an acknowledgment, admission, concession, or
stipulation of liability or wrongdoing by either party.
3. Leases. The Leases and all obligations arising thereunder are
hereby terminated
4. Releases.
A. Release by West Nursery. In consideration of receipt of the Shares and
of the Companies entering into this Agreement, West Nursery agrees to, and
hereby does irrevocably, unconditionally and generally release and forever
discharge NCT and its affiliates, parents, subsidiaries, predecessors,
divisions, directors, officers, shareholders, employees, agents, attorneys, and
successors and assigns from any and 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, counterclaims and demands whatsoever, in
law, admiralty or equity, known or unknown, against NCT, which West Nursery ever
had, or which West Nursery now has as of the date of this Agreement including,
but not limited to, any and all claims arising out of the Leases and/or the
Judgment and/or which were asserted or could have been asserted in the Action.
B. Release by NCT. In consideration of West Nursery entering into this
Agreement, NCT agrees to, and hereby does irrevocably, unconditionally and
generally release and forever discharge West Nursery and its affiliates,
parents, subsidiaries, predecessors, divisions, directors, officers,
shareholders, employees, agents, attorneys, and successors and assigns from any
and 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, counterclaims and demands whatsoever, in law, admiralty or
equity, known or unknown, against West Nursery, which NCT ever had, or which NCT
now has as of the date of this Agreement including, but not limited to, any and
all claims arising out of the Leases and/or Judgment and/or which were asserted
or could have been asserted in the Action.
C. The parties declare that they fully understand the terms and scope of
the above releases and that they have had the opportunity to be, or have been,
advised by counsel in connection with the above releases and the settlement of
any and all potential disputes between them.
5. Modification & Amendments. This Settlement Agreement may not be
modified, altered, or amended except by written agreement of the parties.
6. Waiver. Any waiver of any provision of this Settlement Agreement must be
in writing. Any waiver or failure to enforce any provision of this Settlement
Agreement on one occasion will not be deemed a waiver of any other provision or
of such provision on any other occasion.
7. Binding Effect. This Settlement Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
8. Assignment of Claims. West Nursery represents and warrants that it has
not assigned any claim that it had or may have against NCT, its affiliates,
parents, subsidiaries, predecessors, divisions, directors, officers,
shareholders, employees, agents, attorneys, and successors and assigns,
including but not limited to the Judgment and/or those claims set forth in the
Action.
9. Choice of Law. This Settlement Agreement is made in the state of
Connecticut and will be construed and governed in accordance with Connecticut
law as applied to contracts made and performed entirely within Connecticut.
10. Severability. The provisions of this Settlement Agreement shall be
deemed severable. Therefore, if any part or provision of this Settlement
Agreement is rendered void, invalid, or unenforceable, in any jurisdiction, then
such part or provision shall be severed from the remainder of this Settlement
Agreement only as to such jurisdiction. Such severance shall not affect the
validity or enforceability of the remainder of this Settlement Agreement unless
the severance substantially impairs the value of the whole agreement to any
party.
11. Entire Agreement. NCT and West Nursery declare (a) that they have
carefully read this Settlement Agreement, (b) that they know and understand its
contents, (c) that its execution is a voluntary and authorized act, and (d) that
they have not been influenced to execute it by any representation of the other
party not contained in this Settlement Agreement. This Settlement Agreement has
resulted from negotiations between parties who are represented by counsel, who
have substantially equal bargaining power, and who are under no compulsion to
execute or deliver a disadvantageous agreement. No ambiguity or omission in this
Settlement
Agreement shall be construed or resolved against a party on the ground that this
Settlement Agreement or any of its provisions was drafted or proposed by that
party.
12. Counterparts.
A. This Settlement Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
B. This Settlement Agreement shall be binding upon the exchange of
facsimile copies of signature pages from separately signed originals, and
then subsequently formalized by the prompt exchange of the signed
originals.
IN WITNESS WHEREOF, the parties hereto have caused this Settlement
Agreement to be duly executed by their duly authorized representatives as
of the effective date set forth above.
WEST NURSERY LAND HOLDING
LIMITED PARTNERSHIP,
a Maryland limited partnership
By: CABOT INDUSTRIAL PROPERTIES, L.P.
a Delaware limited partnership, its Sole Member
By: RREEF MANAGEMENT COMPANY,
a Delaware e Corporation, its Authorized Agent
By: /s/ Laurie A. Marino
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Name: Laurie A. Marino
Title: District Manager
NCT GROUP, INC.
By: /s/
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Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Settlement
Agreement to be duly executed by their duly authorized representatives as of the
effective date set forth above.
WEST NURSERY LAND HOLDING
LIMITED PARTNERSHIP
a Maryland limited partnership
By: CABOT INDUSTRIAL PROPERTIES, L.P. a
Delaware limited partnership, its Sole Member
By: RREEF MANAGEMENT COMPANY, a
Delaware corporation, its Authorized Agent
By:
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Name:
Title:
NCT GROUP, INC.
By: /s/ Cy E. Hammond
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Name: Cy E. Hammond
Title: Sr. V.P. & C.F.O.